INTERCAPITAL MANAGED MUNICIPAL TRUST, N-2, 1994-06-15

INTERCAPITAL MANAGED MUNICIPAL TRUST
N-2, 1994-06-15

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 15, 1994
SECURITIES ACT FILE NO. 33-
INVESTMENT COMPANY ACT FILE NO. 811-
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. [ ]
----------------
INTERCAPITAL MANAGED MUNICIPAL TRUST
(A MASSACHUSETTS BUSINESS TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

SHELDON CURTIS, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPIES TO:

FRANK P. BRUNO, Esq. CHRISTINE A. EDWARDS, Esq.
BROWN & WOOD TWO WORLD TRADE CENTER
ONE WORLD TRADE CENTER NEW YORK, NEW YORK 10048
NEW YORK, NEW YORK 10048
----------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of this registration statement
----------------

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
=====================================================================================================
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING AMOUNT BEING OFFERING PRICE OFFERING PRICE REGISTRATION
REGISTERED REGISTERED (1) PER UNIT (2) (2) FEE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Beneficial Interest,
$.01 par value ............... 8,050,000 Shares $15.00 $120,750,000 $41,637.93
=====================================================================================================
<FN>
(1) Includes 1,050,000 shares subject to the Underwriters' over-allotment
option.
(2) Estimated solely for the purpose of calculating the registration fee.
</TABLE>

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FUTURE AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

<PAGE>

INTERCAPITAL MANAGED MUNICIPAL TRUST
FORM N-2
CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
PARTS A AND B
ITEM NUMBER CAPTION PROSPECTUS CAPTION
- --------------------------------------------------------- ----------------------------------------------------
<S> <C> <C>
1. Outside Front Cover Page ........................ Cover Page
2. Inside Front and Outside Back Cover Pages ...... Cover Page; Underwriting
3. Fee Table and Synopsis .......................... Prospectus Summary; Summary of Fund Expenses
4. Financial Highlights ............................ Not Applicable
5. Plan of Distribution ............................ Cover Page; Prospectus Summary; Underwriting
6. Selling Shareholders ............................ Not Applicable
7. Use of Proceeds ................................. Use of Proceeds; Investment Objective and Policies
8. General Description of Registrant ............... The Trust and its Management; Description of Shares
9. Management ...................................... Trustees and Officers; The Trust and its Management;
Investment Management Agreement; Investment Objective
and Policies; Investment Practices; Investment
Restrictions; Portfolio Transactions and Brokerage; Cus-
todian, Transfer Agent and Dividend-Paying Agent.
10. Capital Stock, Long-Term Debt, and Other Description of Shares; Taxation
Securities ......................................
11. Defaults and Arrears on Senior Securities ...... Not Applicable
12. Legal Proceedings ............................... Not Applicable
13. Table of Contents of Statement of Additional Not Applicable
Information .....................................
14. Cover Page ...................................... Not Applicable
15. Table of Contents ............................... Not Applicable
16. General Information and History ................. Not Applicable
17. Investment Objectives and Policies .............. Investment Objective and Policies; Other Invest- ment
Policies; Investment Restrictions
18. Management ...................................... The Trust and its Management; Trustees and Officers;
Investment Management Agreement
19. Control Persons and Principal Holders of The Trust and its Management; Investment Management
Securities ...................................... Agreement
20. Investment Advisory and Other Services ......... Investment Management Agreement; Custodian, Transfer
Agent and Dividend-Paying Agent
21. Brokerage Allocations and Other Practices ...... Portfolio Transactions and Brokerage
22. Tax Status ...................................... Taxation
23. Financial Statements ............................ Statement of Assets and Liabilities
</TABLE>

PART C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

<PAGE>

Information contained herein is subject to completion of amendmant. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

<PAGE>

Subject to Completion
Dated June 15, 1994

7,000,000 SHARES OF BENEFICIAL INTEREST
INTERCAPITAL MANAGED MUNICIPAL TRUST
----------------
InterCapital Managed Municipal Trust (the "Trust") is a newly organized,
closed-end diversified management investment company which seeks to provide
current income exempt from federal income tax. The Trust will seek to achieve
its investment objective by investing primarily in a diversified portfolio of
Municipal Obligations which are rated in the four highest grades (investment
grade) by Moody's Investors Service, Inc. or Standard & Poor's Corporation
(Baa or BBB, respectively or higher) or, if not rated, are determined to be
of comparable quality. Certain Municipal Obligations in which the Trust may
invest without limit may be subject to the individual alternative minimum
tax. See "Investment Objective and Policies." No assurance can be given that
the Trust's investment objective will be achieved.
----------------
The address of the Trust is Two World Trade Center, New York, New York 10048,
and its telephone number is (212) 392-1600. The Prospectus sets forth the
information investors should know before investing in the Trust. Investors
are advised to read this Prospectus and retain it for future reference.
----------------
The Trust intends to apply for the listing of its Shares on the New York
Stock Exchange under the symbol " ." PRIOR TO THIS OFFERING, THERE HAS BEEN
NO PUBLIC MARKET FOR THE TRUST'S SHARES. SHARES OF CLOSED-END INVESTMENT
COMPANIES FREQUENTLY TRADE AT A DISCOUNT FROM THEIR NET ASSET VALUE. The risk
of loss may be greater for initial investors expecting to sell their shares
in a relatively short period after completion of the public offering. see
"Prospectus Summary--Special Risk Considerations."
----------------
The minimum purchase in this offering is 100 shares ($1,500).
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
PRICE TO SALES PROCEEDS TO
PUBLIC LOAD (1) THE TRUST (2)
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share $15.00 $ $
Total (3) $105,000,000 $ $
- ---------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<FN>
(1) The Trust and the Investment Manager have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933.

(2) Before deduction of offering expenses and organization costs payable
by the Trust from the proceeds of this offering, estimated at $ .
Organization costs (estimated at $ ) will be amortized over five
years and charged as an expense against the income of the Trust.
Offering expenses (estimated at $ ) will be reflected as a
reduction of the initial net assets of the Trust at the closing of this
offering. See "Statement of Assets and Liabilities at September ,
1994."

(3) The Trust has granted the several Underwriters a 45-day option to
purchase up to an additional 1,050,000 Shares to cover over-allotments,
if any. If all such Shares are purchased, the total price to public,
sales load and proceeds to the Trust will be $120,750,000, $
and $ , respectively. See "Underwriting."
----------------
</TABLE>

The Shares are offered by the several Underwriters named herein, when, as
and if delivered to and accepted by them, subject to their right to reject
orders in whole or in part and subject to certain other conditions. It is
expected that delivery of the Shares will be made in New York City on or
about September , 1994.
----------------

DEAN WITTER DISTRIBUTORS INC.

September , 1994

<PAGE>

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE TRUST OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Prospectus Summary .......................................... 3
Summary of Trust Expenses ................................... 7
The Trust and its Management ................................ 8
Use of Proceeds ............................................. 9
Investment Objective and Policies ........................... 9
Investment Practices ........................................ 14
Investment Restrictions ..................................... 19
Trustees and Officers ....................................... 21
Investment Management Agreement ............................. 24
Portfolio Transactions and Brokerage ........................ 25
Determination of Net Asset Value ............................ 26
Dividends and Distributions; Dividend Reinvestment Plan .... 27
Taxation .................................................... 29
Description of Shares ....................................... 31
Share Repurchases and Tenders ............................... 33
Custodian, Dividend Disbursing Agent and Transfer Agent .... 35
Underwriting ................................................ 36
Reports to Shareholders ..................................... 37
Legal Opinions and Experts .................................. 38
Further Information ......................................... 38
Report of Independent Accountants ........................... 39
Statement of Assets and Liabilities at September , 1994 .. 40
Appendix A .................................................. A-1
Appendix B .................................................. B-1
Appendix C .................................................. C-1
Appendix D .................................................. D-1
Appendix E .................................................. E-1
</TABLE>

UNTIL OCTOBER , 1994 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
TRUST'S SHARES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE
OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.

<PAGE>

PROSPECTUS SUMMARY

The following information is qualified in its entirety by reference to the
more detailed information included elsewhere in this Prospectus.

THE TRUST .............. InterCapital Managed Municipal Trust (the
"Trust") is a newly organized, closed-end
diversified management investment company
investing primarily in Municipal Obligations
which are rated in the four highest grades
(investment grade) by Moody's Investors
Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P") (Baa or BBB,
respectively, or higher) or, if not rated,
are determined to be of comparable quality.
See "The Trust and its Management."

THE OFFERING ........... The Trust is offering 7,000,000 shares of
beneficial interest (the "Shares"), of $.01
par value, at an offering price of $15.00
per share, through a group of underwriters
(the "Underwriters") represented by Dean
Witter Distributors Inc. The Underwriters
have been granted an option to purchase up
to 1,050,000 additional Shares to cover
over-allotments. See "Underwriting." The
minimum purchase is 100 shares ($1,500).

INVESTMENT OBJECTIVE ... The investment objective of the Trust is to
provide current income exempt from federal
income tax. The Trust will seek to achieve
its investment objective by investing at
least 80% of its total assets in Municipal
Obligations except during temporary
defensive periods. Under normal
circumstances, the Trust will invest at
least 70% of its total assets in a
diversified portfolio of Municipal
Obligations which are rated in the four
highest grades (investment grade) by Moody's
or S&P (Baa or BBB, respectively, or higher)
or, if not rated, are determined by the
Investment Manager to be of comparable
quality. Up to 30% of the Trust's total
assets may be invested in Municipal
Obligations which are rated below investment
grade or are unrated. As such, the Trust may
be invested in securities rated Ba or lower
by Moody's or BB or lower by S&P. Such
securities are considered to be speculative
investments. Municipal Obligations consist
of Municipal Bonds, Municipal Notes and
Municipal Commercial Paper, as well as lease
obligations. There can be no assurance that
the Trust's investment objective will be
achieved. See "Investment Objective and
Policies."

INVESTMENT MANAGER ..... Dean Witter InterCapital Inc. (the
"Investment Manager" or "InterCapital") is
the Investment Manager of the Trust. Dean
Witter InterCapital Inc. is a wholly-owned
subsidiary of Dean Witter, Discover & Co.
("DWDC"), a balanced financial services
organization providing a broad range of
nationally marketed credit and investment
products. In an internal reorganization
which took place in January, 1993, the
Investment Manager assumed the investment
advisory, management and administrative
activities previously performed by the
InterCapital Division of Dean Witter
Reynolds Inc. ("DWR"). As part of that
reorganization, the investment company share
distribution activities previously performed
by DWR were assumed by Dean Witter
Distributors Inc. a wholly-owned subsidiary
of DWDC and an affiliate of DWR and
InterCapital. The Investment Manager has
over twenty years of experi-

<PAGE>

ence managing investment companies.
InterCapital, and its wholly-owned
subsidiary, Dean Witter Services Company
Inc. ("DWSC") act as investment manager,
manager, investment adviser, sub-adviser,
administrator or sub- administrator to a
total of eighty-five investment companies,
thirty of which are listed on the New York
Stock Exchange, with combined assets of
approximately $70.8 billion as of April 30,
1994, including approximately $12 billion in
tax-exempt securities. See "The Trust and
its Management" and "Investment Management
Agreement."

MANAGEMENT FEE ......... The Trust will pay the Investment Manager a
monthly fee at the annual rate of % of
the Trust's average weekly net assets. See
"Investment Management Agreement."

DISTRIBUTIONS .......... The Trust's policy will be to make monthly
distributions to Shareholders of
substantially all net investment income of
the Trust. Initial distributions to
Shareholders are expected to be declared
within approximately 60 days and paid within
approximately 90 days from the completion of
this offering. Net capital gains, if any,
will be distributed at least annually. Each
Shareholder of record may elect to have all
dividends and distributions automatically
reinvested in Shares purchased in the open
market at the prevailing market price
pursuant to a dividend reinvestment plan.
See "Dividends and Distributions; Dividend
Reinvestment Plan" and "Taxation."

SHARE REPURCHASES AND
TENDERS ................ The Trustees may authorize the Trust to
repurchase the Shares in the open market or
to tender for the Shares at net asset value.
The Trustees have presently determined to
consider, on an annual basis, the making of
a tender offer for the Shares of the Trust.
See "Share Repurchases and Tenders."

LISTING ................ The Trust intends to apply for the listing
of its Shares on the New York Stock Exchange
under the symbol " ".

CUSTODIAN .............. The Bank of New York will serve as Custodian
of the Trust's assets. See "Custodian,
Dividend Disbursing Agent and Transfer
Agent."

SPECIAL RISK
CONSIDERATIONS ......... The Trust has no operating history. In
connection with the management of its
portfolio, the Trust may engage in certain
futures and options transactions for hedging
purposes and may purchase or sell options on
portfolio securities to achieve additional
return or to hedge its portfolio. The Trust
may also enter into repurchase agreements.
These investment practices may involve
special risks. In addition, the Trust may
borrow money for emergency purposes or for
repurchase of its shares provided that
immediately after such borrowing the amount
borrowed does not exceed 33 1/3 % of the
value of its total assets (including the
amount borrowed) less its liabilities (not
including any borrowings but including the
fair market value at the time of computation
of any other senior securities then
outstanding). The use of borrowed funds for
other than emergency purposes involves the
speculative factor known as "leverage." The
foregoing may involve risks greater than
those assumed by other investment companies
which do not engage in such techniques or
transactions. See "Investment Objective and
Policies" and "Investment Practices."

<PAGE>

The Trust may invest without limit in certain
Municipal Obligations which may be
subject to the individual alternative minimum
tax. Additionally, the Trust may invest
without limit in private activity bonds or
industrial development bonds, the interest on
which is not federally tax-exempt to
"substantial users" or "related persons."
Therefore, the Trust may not be a suitable
investment for such investors. See "Taxation."

The Trust may invest a portion of its assets
in Municipal Obligations which are
rated below investment grade. Non-investment
grade securities (Ba or lower by Moody's or BB
or lower by S&P) are regarded as predominantly
speculative with respect to the issuer's
capacity to pay interest and repay principal
in accordance with the terms of the
obligations. Such securities generally offer a
higher current yield than that available from
higher grade issuers but typically
involve greater risks such as greater market
risk in terms of deteriorating economic
conditions and a greater susceptibility to
adverse economic and industry conditions.
Additionally, the market for lower-rated
securities may be thinner and less active than
higher-rated securities which may in turn have
an effect on the ability to arrive at a fair
valuation of such securities. Some of
the lower-rated securities in which the Trust
may invest may not be currently
paying interest or may be in payment default.

The Trust reserves the right to invest 25% or
more of its total assets in certain types of
Municipal Obligations. See "Investment
Restrictions." A discussion of the risks
associated with investment in such obligations
is set forth in Appendix C.

Although the Investment Manager expects that
substantially all of the Trust's investments
will be in securities for which an established
resale market exists, there is no overall
limitation on the percentage of illiquid
securities which may be held by the Trust and
as such substantially all of the Trust's
assets may be invested in illiquid securities.

The value of the Trust's portfolio securities,
and therefore the Trust's net asset value per
share, will increase or decrease due to
various factors, principally changes in
prevailing interest rates and the ability of
the issuers of the Trust's portfolio
securities to pay interest and principal on
such obligations. Net asset value generally
increases when interest rates decline,
and decreases when interest rates rise,
although this is not always the case.
See "Determination of Net Asset Value."

Shares of closed-end investment companies
frequently trade at a discount to net
asset value, especially shortly after the
completion of the public offering.
This characteristic of shares of closed-end
funds is a risk separate and
distinct from the risk that a fund's net asset
value will decrease. It should be
noted, however, that in some cases, shares of
closed-end funds may trade at a
premium to net asset value. The Trust cannot
predict whether its own Common
Shares will trade at, below, or above net
asset value. The Trust is designed
primarily as a long-term investment and not as
a trading vehicle.

<PAGE>

The Shareholders will elect twelve Trustees at
the first annual meeting of
Shareholders. The Trust's Declaration of Trust
includes anti-takeover provisions, including a
staggered vote for Trustees, and the
requirement for an 80% shareholder vote for
certain mergers, share issuances and asset
acquisitions, that could have the effect of
limiting the ability of other entities or
persons to acquire control of the Trust. See
"Description of Shares."

<PAGE>

SUMMARY OF TRUST EXPENSES
- -----------------------------------------------------------------------------

The following table illustrates all expenses and fees that a shareholder
of the Trust will incur. The expenses and fees set forth in the table are for
the year ending October 31, 1994.

<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
Sales Load (as a Percentage of Offering Price) ............................... %
Dividend Reinvestment Plan ................................................... None
Annual Expenses (as a Percentage of Net Assets Attributable to the Shares)
Investment Management Fees* .................................................. %
Other Expenses* .............................................................. %
Total Annual Expenses* ....................................................... %
</TABLE>

* "Management Fees" as shown above is for the fiscal year of the Trust
ending October 31, 1994. "Other Expenses" as shown above is based upon
estimated amounts of expenses of the Trust for its fiscal period ending
October 31, 1994.

<TABLE>
<CAPTION>
EXAMPLE 1 Year 3 Years 5 Years 10 Years
---------- ----------- ----------- ------------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return: ............................... $ $ $ $

</TABLE>

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

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE TRUST MAY BE GREATER
OR LESS THAN THOSE SHOWN.

The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Trust will bear directly
or indirectly. For a more complete description of these costs and expenses,
see the cover page of this Prospectus and "Use of Proceeds" and "Investment
Management Agreement."

<PAGE>

THE TRUST AND ITS MANAGEMENT
- -----------------------------------------------------------------------------
InterCapital Managed Municipal Trust (the "Trust") is a newly organized,
closed-end diversified management investment company whose investment
objective is to provide current income which is exempt from federal income
tax. The Trust will seek to achieve its investment objective by investing
primarily in a diversified portfolio of Municipal Obligations which are rated
in the four highest grades (investment grade) by Moody's Investors Service,
Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") (Baa or BBB,
respectively, or higher) or, if not rated, are determined to be of comparable
quality. There can be no assurance that the Trust's investment objective will
be achieved.

The Trust is a trust of the type commonly known as a "Massachusetts
business trust" and was organized under the laws of the Commonwealth of
Massachusetts on June , 1994. As a newly organized entity, the Trust has no
operating history. The Trust's principal office is located at Two World Trade
Center, New York, New York 10048.

Investment in shares of the Trust is designed to offer several benefits.
The Trust offers investors the opportunity to receive income substantially
exempt from federal income taxes by investing in a professionally managed
portfolio of Municipal Obligations. The Trust also relieves the investor of
the burdensome administrative details involved in managing a portfolio of
Municipal Obligations. These benefits are at least partially offset by the
expenses involved in operating an investment company. Such expenses primarily
consist of the fee of the Investment Manager and the operational costs of the
Trust.

The Trust has been organized as a closed-end investment company.
Closed-end investment companies differ from open-end investment companies
(commonly referred to as "mutual funds") in that closed-end investment
companies have a permanent capital base and do not redeem their shares,
whereas open-end investment companies issue securities redeemable at net
asset value at any time at the option of the shareholder and typically engage
in a continuous offering of their shares. Accordingly, open-end companies are
subject to periodic asset in-flows and out-flows that can complicate
portfolio management. Closed-end investment companies do not face the
prospect of having to liquidate portfolio holdings in the event of net
redemptions or having to maintain cash positions to meet potential
redemptions. Shares of closed-end investment companies may trade at a
discount to net asset value. This characteristic of shares of closed-end
funds is a risk separate and distinct from the risk that the fund's net asset
value will decrease. The Trust cannot predict whether its own Shares will
trade at below or above net asset value. The Trust is designed primarily as a
long-term investment and not as a trading vehicle.

Dean Witter InterCapital Inc., whose address is Two World Trade Center,
New York, New York 10048, is the Trust's Investment Manager (the "Investment
Manager" or "InterCapital"), pursuant to an Investment Management Agreement
with the Trust. See "Investment Management Agreement." InterCapital is a
wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services organization providing a broad range of nationally
marketed credit and investment products.

InterCapital and its wholly-owned subsidiary Dean Witter Services Company
Inc., act as investment manager, manager, investment adviser, sub-adviser,
administrator or sub-administrator to a total of eighty-five investment
companies (the "Dean Witter Funds"), thirty of which are listed on the New
York Stock Exchange, and other portfolios, with combined total assets of
approximately $70.8 billion, including $12 billion of tax-exempt securities,
at April 30, 1994. The Investment Manager has over twenty years of experience
managing investment companies and currently advises or administers assets for
more than three million investor accounts. In an internal reorganization
which took place in January, 1993, the Investment Manager assumed the
investment advisory, management and administrative activities

<PAGE>

previously performed by the InterCapital Division of Dean Witter Reynolds
Inc. ("DWR"). As part of the January, 1993 reorganization, the investment
company underwriting activities previously performed by DWR were assumed by
Dean Witter Distributors Inc., a wholly-owned subsidiary of DWDC and an
affiliate of DWR and InterCapital. DWR is a major securities broker-dealer
and investment banker and is a member of the New York Stock Exchange, the
American Stock Exchange, the Chicago Board of Options Exchange and other
principal regional stock exchanges. DWR maintains its offices at Two World
Trade Center, New York, New York 10048.

USE OF PROCEEDS
- -----------------------------------------------------------------------------

The net proceeds of the offering will be approximately $
($ if the Underwriters exercise their over-allotment option in full)
after payment of the sales load and organization and offering expenses. A
portion of the organization and offering expenses have been advanced by the
Trust's Investment Manager.

Organization expenses relating to the Trust incurred and to be incurred by
the Investment Manager will be reimbursed by the Trust. Such expenses,
estimated at $ , will be deferred and amortized on the straight-line
method by the Trust against operations over a period not to exceed sixty
months from the commencement of operations of the Trust. Costs relating to
the public offering of its Shares, estimated to be $ , will be paid from
the proceeds of the offering and charged to capital at the time of issuance
of such shares.

The net proceeds of the offering will be invested in accordance with the
Trust's investment objective and policies. Investment of the net proceeds
will take place during a period which is not expected to exceed six months
from commencement of operations. Pending their investment, the proceeds of
the offering will be invested in high quality Municipal Obligations or high
quality short-term tax-exempt money market instruments, if available, or
otherwise in high quality taxable money market instruments, in any case as
described below under "Investment Objective and Policies."

INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------

The investment objective of the Trust is to provide current income which
is exempt from federal income tax. The Trust will invest at least 80% of its
total assets in Municipal Obligations, except during temporary defensive
periods. The remaining portion of the Trust's total assets may be invested in
"temporary investments" and in options and futures, all as described below.
Under normal circumstances, the Trust expects that substantially greater than
80% of its total assets will be invested in Municipal Obligations. "Municipal
Obligations" consist of Municipal Bonds, Municipal Notes, Municipal
Commercial Paper as well as lease obligations, including such obligations
purchased on a when-issued or delayed delivery basis. See "Investment
Practices." Certain Municipal Bonds in which the Trust may invest without
limit may subject certain investors to the alternative minimum tax and,
therefore, a substantial portion of the income produced by the Trust may be
taxable for such investors under the alternative minimum tax. The Trust,
therefore, may not ordinarily be a suitable investment for investors who are
subject to the alternative minimum tax. The suitability of the Trust for
these investors will depend upon a comparison of the after-tax yield likely
to be provided from the Trust to comparable tax-exempt investments not
subject to such tax and also to comparable fully taxable investments in light
of each such investor's tax position. See "Taxation." The foregoing
investment objective is a fundamental policy of the Trust and may not be
changed without the approval of a majority of the outstanding voting
securities of the Trust.

<PAGE>

Except during temporary defensive periods, the Trust will invest at least
70% of its total assets in: (a) Municipal Bonds which are rated at the time
of purchase within the four highest grades (investment grade) by Moody's
(Aaa, Aa, A, Baa) or S&P (AAA, AA, A, BBB) or, if not rated, are determined
by the Investment Manager to be of comparable quality; (b) Municipal Notes
which at the time of purchase are rated in the two highest grades by Moody's
(MIG 1, MIG 2) or in the three highest grades by S&P (SP-1, SP-2, SP-3) or,
if not rated, whose issuers have outstanding one or more issues of Municipal
Bonds rated as set forth in clause (a) of this paragraph; and (c) Municipal
Commercial Paper which at the time of purchase is rated P-1 or higher by
Moody's or A-1 or higher by S&P. For purposes of the foregoing percentage
limitation, any Municipal Bond or Municipal Note which depends directly or
indirectly on the credit of the federal government shall be considered to
have a Moody's rating of Aaa or an S&P rating of AAA. A general description
of Moody's and S&P ratings of Municipal Bonds, Notes and Commercial Paper is
set forth in Appendix A.

Up to 30% of the Trust's total assets may be invested in Municipal
Obligations which are rated below investment grade or are unrated. Therefore,
the Trust may invest in securities rated Ba or lower by Moody's or BB or
lower by S&P. Such securities are considered to be speculative investments.
Furthermore, the Trust does not have any minimum quality rating standard for
its downgraded or lower-rated investments. As such, the Trust may invest in
securities rated as low as Caa, Ca or C by Moody's or CCC, CC, C, Cl or D by
S&P. Bonds rated Caa or Ca by Moody's may already be in default on payment of
interest or principal, while bonds rated C by Moody's, their lowest bond
rating, can be regarded as having extremely poor prospects of ever attaining
any real investment standing. Bonds rated Cl or D by S&P, their lowest bond
rating, are no longer making interest payments or are in default.

Because of the special nature of securities which are rated below
investment grade by national credit rating agencies ("lower-rated
securities"), the Investment Manager must take account of certain special
considerations in assessing the risks associated with such investments. For
example, an economic downturn or increase in interest rates is likely to have
a negative effect on this market and on the value of the lower rated
securities held by the Fund, as well as on the ability of the securities'
issuers to repay principal and interest on their borrowings.

The prices of lower rated securities have been found to be less sensitive
to changes in prevailing interest rates than higher rated investments, but
are likely to be more sensitive to adverse economic changes or individual
corporate developments. During an economic downturn or substantial period of
rising interest rates, highly leveraged issuers may experience financial
stress which would adversely affect their ability to service their principal
and interest payment obligations, to meet their projected business goals or
to obtain additional financing. If the issuer of a fixed-income security
owned by the Trust defaults, the Trust may incur additional expenses to seek
recovery. In addition, periods of economic uncertainty and change can be
expected to result in an increased volatility of market prices of lower rated
securities and a concomitant volatility in the net asset value of a share of
the Trust.

The secondary market for lower rated securities may be less liquid than
the markets for higher quality securities and, as such, may have an adverse
effect on the market prices of certain securities. The limited liquidity of
the market may also adversely affect the ability of the Trust's Trustees to
arrive at a fair value for certain lower rated securities at certain times
and should make it difficult for the Trust to sell certain securities.

Laws and proposed new laws may have a potentially negative impact on the
market for lower rated securities. For example, federally-insured savings and
loan associations have been required by law to divest their investments in
lower rated securities. This legislation and other proposed legislation may
have an adverse effect upon the value of lower rated securities and a
concomitant negative impact upon the net asset value of a share of the Trust.

<PAGE>

The Trust intends to emphasize investments in Municipal Obligations with
long-term maturities because such long-term obligations generally produce a
higher yield than short-term obligations although such longer-term
obligations are more susceptible to market fluctuations resulting from
changes in interest rates than shorter-term obligations. The average weighted
maturity of the Trust's portfolio under normal circumstances is expected to
be in excess of 20 years, but the average maturity, as well as the emphasis
on longer-term obligations, may vary depending upon market conditions.

Except during temporary defensive periods, the Trust may not invest more
than 20% of its total assets in "temporary investments," the income from
which may be subject to federal income taxes. The Trust may invest more than
20% of its total assets in temporary investments for defensive purposes
(e.g., investments made during times where temporary imbalances of supply and
demand or other temporary dislocations in the Municipal Obligations market
adversely affect the price at which Municipal Bonds, Notes and Commercial
Paper are available), and in order to keep cash on hand fully invested.
Temporary investments are short-term, high quality securities which may be
either tax-exempt or taxable. The Trust will invest only in temporary
investments which are certificates of deposit of U.S. domestic banks,
including foreign branches of domestic banks, with assets of $1 billion or
more; bankers' acceptances; time deposits; U.S. Government securities; or
debt securities rated within the two highest grades by Moody's or S&P or, if
not rated, are of comparable quality as determined by the Investment Manager,
and which mature within one year from the date of purchase. See Appendix A
for a general description of Moody's and S&P's ratings of securities in such
categories. Temporary investments of the Trust may also include repurchase
agreements (see below).

The foregoing percentage and rating limitations apply at the time of
acquisition of a security based on the last previous determination of the
Trust's net asset value. Any subsequent change in any rating by a rating
service or change in percentages resulting from market fluctuations or other
changes in the Trust's total assets will not require elimination of any
security from the Trust's portfolio. However, any subsequent change in any
rating of any security below investment grade, which results in the Trust
having less than 70% of its total assets in investment grade Municipal
Obligations, will result in the elimination of that security from the Trust's
portfolio as soon as practicable without adverse market or tax consequences
to the Trust.

DESCRIPTION OF MUNICIPAL OBLIGATIONS

"Municipal Bonds" and "Municipal Notes" are debt obligations of states,
cities, counties, municipalities and state and local governmental agencies
which generally have maturities, at the time of their issuance, of either one
year or more (Bonds) or from six months to three years (Notes). "Municipal
Commercial Paper," as presently constituted, although issued under programs
having a final maturity of more than one year, is generally short-term paper
subject to periodic rate changes and maturities of less than one year
selected at the holder's option. Municipal Obligations in which the Trust
primarily will invest bear interest that, in the respective opinions of bond
counsel to the issuers at the time of original issuance of such obligations,
is not includible in the gross income of the holders thereof for federal
income tax purposes. See "Taxation."

Municipal Bonds are issued to raise funds for various public purposes,
including the construction of such public facilities as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets, electric
systems, solid waste disposal and water and sewer works. Other public
purposes for which Municipal Bonds may be issued include the refinancing of
outstanding obligations, the obtaining of funds for general operating
expenses and for loans to other public institutions and facilities. In
addition, certain private activity bonds, industrial development bonds and
pollution control bonds may be included

<PAGE>

within the term Municipal Bonds if the interest paid thereon, in the opinion
of bond counsel to the issuer, qualifies as not includible in the gross
income of the holders thereof for federal income tax purposes. The principal
types of Municipal Notes currently being issued include tax anticipation
notes, bond anticipation notes and revenue anticipation notes, although there
are other types of Municipal Notes in which the Trust may invest. Notes sold
in anticipation of collection of taxes, a bond sale or receipt of other
revenues are usually general obligations of the issuing state, municipality
or agency. Municipal Commercial Paper is likely to be used to meet seasonal
working capital needs of an issuer or interim construction financing and to
be paid from general revenues of the issuer or refinanced with long-term
debt. Municipal Commercial Paper may be backed by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks or other institutions.

The two principal classifications of Municipal Obligations are "general
obligation" and "revenue" bonds, notes or commercial paper. General
obligation bonds, notes or commercial paper are secured by the issuer's
pledge of its faith, credit and taxing power for the payment of principal and
interest. Issuers of general obligation bonds, notes or commercial paper
include states, counties, cities, towns and other governmental units. Revenue
bonds, notes or commercial paper are payable from the revenues derived from a
particular facility or class of facilities or, in some cases, from other
specific revenue sources. Revenue bonds, notes or commercial paper are issued
for a wide variety of purposes, including the financing of electric, gas,
water and sewer systems and other public utilities; industrial development
and pollution control facilities; single and multi-family housing units;
public buildings and facilities; air and marine ports; transportation
facilities such as toll roads, bridges and tunnels; and health and
educational facilities such as hospitals and dormitories. They rely primarily
on user fees to pay debt service, although the principal revenue source may
be supplemented by additional security features which are intended to enhance
the creditworthiness of the issuer's obligations. In some cases, particularly
revenue bonds issued to finance housing and public buildings, a direct or
implied "moral obligation" of a governmental unit may be pledged to the
payment of debt service. In other cases, a special tax or other charge may
augment user fees. Municipal bonds may also be classified as "tax allocation"
bonds, which are payable from tax increment revenues, that is, from collected
property taxes in the project area allocable to the increase in the assessed
valuation of land, improvements, and personal and public utility property due
to the project. There are, of course, variations in the security of Municipal
Bonds, Notes and Commercial Paper, both within a particular classification
and between classifications, depending on numerous factors.

Also included within the general category of Municipal Obligations are
participations in lease obligations or installment purchase contract
obligations (hereinafter collectively called "lease obligations") of
municipal authorities or entities. Although lease obligations do not
constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in any year
unless money is appropriated for such purpose for such year. In addition to
the "non-appropriation" risk, these securities represent a relatively new
type of financing that has not yet developed the depth of marketability
associated with more conventional Municipal Obligations and therefore certain
lease obligations may be considered to be illiquid securities. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of default and foreclosure might
prove difficult. The Trust will seek to minimize these risks by only
investing in those "non- appropriation" lease obligations where (1) the
nature of the leased equipment or property is such that its ownership or use
is essential to a governmental function of the municipality, (2) the lease
payments will

<PAGE>
APITAL PRINTING SYSTEMS]
<PAGE>

commence amortization of principal at an early date resulting in an average
life of seven years or less for the lease obligation, (3) appropriate
covenants will be obtained from the municipal obligor prohibiting the
substitution or purchase of similar equipment if lease payments are not
appropriated, (4) the investment is of a size that will be attractive to
institutional investors, and (5) the underlying leased equipment has elements
of portability or use that enhance its marketability in the event foreclosure
on the underlying equipment is ever required. The Trust may also purchase
"certificates of participation," which are securities issued by a particular
municipality or municipal authority to evidence a proportionate interest in
base rental or lease payments relating to a specific project to be made by a
municipality, agency or authority. The risks and characteristics of
investments in certificates of participation are similar to the risks and
characteristics of lease obligations discussed above.

Although the Investment Manager expects that substantially all of the
Trust's investments will be in securities for which an established resale
market exists, there is no overall limitation on the percentage of illiquid
securities which may be held by the Trust and as such substantially all the
Trust's assets may be invested in illiquid securities.

The yields on Municipal Obligations are dependent on a variety of factors,
including the condition of the general money market and the tax-exempt
market, changes in federal and state income taxes, the size of a particular
offering, the maturity of the obligation and the rating of the issue. The
ratings of Moody's and S&P represent their opinions as to the quality of the
securities which they undertake to rate. It should be emphasized, however,
that ratings are general and are not absolute standards of quality.
Consequently, Municipal Obligations with the same maturity, coupon and rating
may have different yields while obligations of the same maturity and coupon
with different ratings may have the same yield. The market value of the
Trust's portfolio securities, and therefore the Trust's net asset value per
share, will vary with changes in prevailing interest rate levels and as a
result of changing evaluations of the ability of issuers of the Trust's
portfolio securities to meet interest and principal payments on a timely
basis. Generally, a rise in interest rates will result in a decrease in the
Trust's net asset value per share, while a drop in interest rates will result
in an increase in the Trust's net asset value per share, although this is not
always the case.

Securities of issuers of Municipal Obligations are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the Bankruptcy Reform Act of 1978. In
addition, the obligations of such issuers may become subject to the laws
enacted in the future by Congress, state legislatures or referenda extending
the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon the ability of
municipalities to levy taxes. There is also the possibility that, as a result
of legislation or other conditions, the power or ability of any one or more
issuers to pay, when due, the principal of and interest on its, or their,
Municipal Obligations may be materially affected.

The Internal Revenue Code of 1986, as amended, limits the types and volume
of bonds qualifying for the federal income tax exemption on interest with the
result that in recent years the volume of new issues of Municipal Obligations
has declined substantially. As a result, this legislation, and legislation
which may be enacted in the future, may affect the availability of Municipal
Obligations for investment by the Trust.

As set forth in investment restriction 3 under "Investment Restrictions,"
the Trust reserves the right to invest 25% or more of its total assets in any
of the following types of Municipal Obligations provided that the percentage
of the Trust's total assets in private activity bonds in any one category
does not exceed 25% of the Trust's total assets: health facility obligations,
housing obligations, single family

<PAGE>

mortgage revenue bonds, industrial revenue obligations (including pollution
control obligations), electric utility obligations, airport facility revenue
obligations, water and sewer obligations, university and college revenue
obligations, bridge authority and toll road obligations and resource recovery
obligations. A discussion of the risks associated with investment in such
obligations is set forth in Appendix C.

INVESTMENT PRACTICES
- -----------------------------------------------------------------------------

The following investment practices apply to the portfolio investments of
the Trust and may be changed by the Trustees of the Trust without shareholder
approval, following written notice to the shareholders.

Futures Contracts and Options Thereon. The Trust may purchase and sell
financial futures contracts ("futures contracts") and may purchase and write
put and call options on such futures contracts only for the purpose of
hedging its portfolio (or anticipated portfolio) securities against changes
in prevailing interest rates.

If the Investment Manager anticipates that interest rates may rise, the
Trust may sell a futures contract to protect against the potential decline in
the value of the securities held by the Trust. If declining interest rates
are anticipated, the Trust may purchase a futures contract to protect against
a potential increase in the price of securities the Trust intends to
purchase.

As a futures contract purchaser, the Trust incurs an obligation to take
delivery of a specified amount of the obligation underlying the contract at a
specified time in the future for a specified price. As a seller of a futures
contract, the Trust incurs an obligation to deliver the specified amount of
the underlying obligation at a specified time in return for an agreed upon
price. The specific securities taken or delivered at the settlement date
would not be determined until or near that date. The determination would be
in accordance with the rules of the exchange on which the futures contract
sale or purchase was effected. Although the terms of futures contracts
specify actual delivery or receipt of securities, in most instances the
contracts are closed out before the settlement date without the making or
taking of delivery of the securities. Closing out a futures contract is
effected by entering into an offsetting purchase or sale transaction.

Unlike a futures contract, which requires the parties to buy and sell a
security on a set date, an option on a futures contract entitles its holder
to decide on or before a future date whether to enter into such a contract.
If the holder decides not to enter into the contract, the premium paid for
the option is lost. Since the value of the option is fixed at the point of
sale, there are no daily payments of cash to reflect the change in the value
of the underlying contract as there are by a purchaser or seller of a futures
contract. The value of the option does change and is reflected in the net
asset value of the Trust.

The Trust may not purchase and sell futures contracts or purchase related
options thereon if, immediately thereafter, the amount committed to initial
margin plus the amount paid for premiums for unexpired options on futures
contracts exceeds 5% of the value of the Trust's total assets.

Special Risk Considerations Relating to Futures and Options
Thereon. Certain risks are inherent in the Trust's use of futures contracts
and options on futures. One such risk arises because the correlation between
movements in the price of futures contracts or options on futures and
movements in the price of the securities hedged or used for cover will not be
perfect. Another risk is that the price of futures contracts or options on
futures may not move inversely with changes in interest rates. The risk of
imperfect correlations may be increased by the fact that the Trust may invest
in futures contracts on taxable securities and there is no guarantee that the
prices of taxable securities will move in a similar manner to the prices of
tax-exempt securities.

<PAGE>

The Trust's ability to establish and close out positions in futures
contracts and options on futures contracts will be subject to the development
and maintenance of a liquid secondary market. Although the Trust generally
will purchase only those futures contracts and options thereon for which
there appears to be a liquid market, there is no assurance that a liquid
market on an exchange will exist for any particular futures contract or
option or at any particular time.

Successful use of futures contracts and options thereon by the Trust is
subject to the ability of the Investment Manager to predict correctly
movements in the direction of interest rates and other factors affecting
markets for securities. These skills are different from those needed to
select portfolio securities. If the Investment Manager's expectations are not
met, the Trust will be in a worse position than if a hedging strategy had not
been pursued. For example, if the Trust has hedged against the possibility of
an increase in interest rates which would adversely affect the price of
securities in its portfolio and the price of such securities increases
instead, the Trust will lose part or all of the benefit of the increased
value of its securities because it will have offsetting losses in its futures
positions.

Certain federal income tax requirements may limit the Trust's ability to
engage in options and futures. Gains from transactions in options and futures
contracts distributed to shareholders will be taxable as ordinary income or,
in certain circumstances, as long-term capital gains to shareholders.

For a further discussion of the use, risks and costs of futures contracts
and options thereon, see Appendix B.

Municipal Bond Index Futures. The Trust may purchase and sell municipal
bond index futures contracts for hedging purposes. The Trust's strategies in
employing such contracts will be similar to that discussed above with respect
to financial futures and options thereon. A municipal bond index is a method
of reflecting in a single number the market value of many different municipal
bonds and is designed to be representative of the municipal bond market
generally. The index fluctuates in response to changes in the market values
of the bonds included within the index. Unlike futures contracts on
particular financial instruments, transactions in futures on a municipal bond
index will be settled in cash, if held until the close of trading in the
contract. However, like any other futures contract, a position in the
contract may be closed out by purchase or sale of an offsetting contract for
the same delivery month prior to expiration of the contract.

Options on Debt Securities. The Trust may purchase or sell (write) options
on debt securities as a means of achieving additional return or hedging the
value of the Trust's portfolio. The Trust will only write covered call or
covered put options, or buy call or put options, which are listed on national
securities exchanges. The Trust may not write covered options in an amount
exceeding 20% of the value of its total assets. The Trust will not purchase
options if, as a result, the aggregate cost of all outstanding options
exceeds 10% of the Trust's total assets.

A call option is a contract that gives the holder of the option the right
to buy from the writer (seller) of the call option, in return for a premium
paid, the security underlying the option at a specified exercise price at any
time during the term of the option. The writer of the call option has the
obligation upon exercise of the option to deliver the underlying security
upon payment of the exercise price during the option period. A put option is
a contract that gives the holder of the option, in return for a premium paid,
the right to sell to the writer (seller) the underlying security at a
specified price during the term of the option. The writer of the put option,
who receives the premium, has the obligation to buy the underlying security
upon exercise, at the exercise price during the option period.

<PAGE>

If the Trust has written an option, it may terminate its obligation by
effecting a closing purchase transaction. This is accomplished by purchasing
an option of the same series as the option previously written. There can be
no assurance that either a closing purchase or sale transaction can be
effected when the Trust so desires.

An option position may be closed out only on an exchange which provides a
secondary market for an option of the same series. Although the Trust will
generally purchase or write only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary
market on an exchange will exist for any particular option.

New options and futures contracts and other financial products and various
combinations thereof continue to be developed. The Trust may invest in any
such options, futures and products as may be developed to the extent
consistent with its investment objective and the regulatory requirements
applicable to investment companies.

For further discussion of the use, risks and costs of options trading, see
Appendix B.

Variable Rate Obligations. The interest rates payable on certain Municipal
Obligations are not fixed and may fluctuate based upon changes in market
rates or indices, such as a tax-exempt money market or bank prime index.
Municipal Obligations of this type are called "variable rate" obligations.
The interest rate payable on a variable rate obligation is adjusted either at
predesignated periodic intervals or whenever there is a change in the market
rate of interest or index on which the interest rate payable is based. There
is no limit on the percentage of the Trust's assets which may be invested in
variable rate obligations.

When-Issued and Delayed Delivery Securities. The Trust may purchase
tax-exempt securities on a when-issued or delayed delivery basis; i.e.,
delivery and payment can take place a month or more after the date of the
transaction. The securities so purchased are subject to market fluctuation
during this period and no interest accrues to the purchaser prior to the date
of settlement. At the time the Trust makes the commitment to purchase
securities on a when-issued or delayed delivery basis, it will record the
transaction and thereafter reflect the value, each day, of such security in
determining the net asset value of the Trust. At the time of delivery of the
securities, the value may be more or less than the purchase price. Since the
Trust is dependent on the party issuing the when-issued or delayed delivery
security to complete the transaction, failure by the other party to deliver
the securities as arranged would result in the Trust losing an investment
opportunity. The Trust will also establish a segregated account with its
custodian bank in which it will maintain cash or high grade tax-exempt debt
obligations equal in value to commitments for such when-issued or delayed
delivery securities; subject to this requirement, the Trust may purchase
securities on such basis without limit. An increase in the percentage of the
Trust's assets committed to the purchase of securities on a when-issued or
delayed delivery basis may increase the volatility of the Trust's net asset
value. The Investment Manager and the Trustees do not believe that the
Trust's net asset value or income will be adversely affected by its purchase
of securities on such basis.

Repurchase Agreements. When cash may be available for only a few days, it
may be invested by the Trust in repurchase agreements until such time as it
may otherwise be invested or used for payments of obligations of the Trust.
These agreements, which may be viewed as a type of secured lending by the
Trust, typically involve the acquisition by the Trust of debt securities from
a selling financial institution such as a bank, savings and loan association
or broker-dealer. The agreement provides that the Trust will sell back to the
institution, and that the institution will repurchase, the underlying
security ("collateral"), which is held by the Trust's Custodian, at a
specified price and at a fixed time in the future,

<PAGE>

usually not more than seven days from the date of purchase. The Trust will
accrue interest from the institution until the time when the repurchase is to
occur. Although such date is deemed by the Trust to be the maturity date of a
repurchase agreement, the maturities of securities subject to repurchase
agreements are not subject to any limits and may exceed one year. While
repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Trust will follow procedures designed to
minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions, whose financial condition will be continually monitored. In
addition, the value of the collateral underlying the repurchase agreement
will always be at least equal to the repurchase price, including any accrued
interest earned on the repurchase agreement. In the event of a default or
bankruptcy by a selling financial institution, the Trust will seek to
liquidate such collateral. However, the exercising of the Trust's right to
liquidate such collateral could involve certain costs or delays and, to the
extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Trust could suffer a
loss. In addition, to the extent that the Trust's security interest in the
collateral may not be properly perfected, the Trust could suffer a loss up to
the entire amount of the collateral. It is the current policy of the Trust
not to invest in repurchase agreements that do not mature within seven days
if any such investment amounts to more than 10% of its total assets.

Borrowing. The Trust may borrow money from a bank for temporary or
emergency purposes or for the repurchase of its shares provided that
immediately after such borrowing the amount borrowed does not exceed 33 1/3 %
of the value of its total assets (including the amount borrowed) less its
liabilities (not including any borrowings but including the fair market value
at the time of computation of any other senior securities then outstanding).
If, due to market fluctuations or other reasons, the value of the Trust's
assets falls below the foregoing required coverage requirement, the Trust,
within three business days, will reduce its bank debt to the extent necessary
to comply with such requirement. To achieve such reduction, it is possible
that the Trust may be required to sell portfolio securities at a time when it
may be disadvantageous to do so.

Borrowings other than for temporary or emergency purposes would involve
additional risk to the Trust, since the interest expense may be greater than
the income from or appreciation of the securities carried by the borrowing.
Investment activity will continue while the borrowing is outstanding. The
purchase of additional securities while any borrowing is outstanding involves
the speculative factor known as "leverage," and will result in increased
volatility of the Trust's net asset value. The increased volatility resulting
from the use of such borrowings could have a negative effect on the Trust's
net asset value greater than would be the case with other funds having
similar objectives and policies but which do not utilize such borrowings.

Lending of Portfolio Securities. Consistent with applicable regulatory
requirements, the Trust may lend its portfolio securities to brokers, dealers
and financial institutions, provided that such loans are callable at any time
by the Trust (subject to notice provisions described below), and are at all
times secured by cash or cash equivalents, which are maintained in a
segregated account pursuant to applicable regulations and that are equal to
at least 102% of the market value, determined daily, of the loaned
securities. The advantage of such loans is that the Trust continues to
receive the income on the loaned securities while at the same time earning
interest on the cash amounts deposited as collateral, which will be invested
in short-term obligations. The Trust will not lend its portfolio securities
if such loans are not permitted by the laws or regulations of any state in
which its shares are qualified for sale and will not lend more than 10% of
the value of its total assets.

A loan may be terminated by the borrower on one business day's notice, or
by the Trust on four business days' notice. If the borrower fails to deliver
the loaned securities within four days after receipt

<PAGE>

of notice, the Trust could use the collateral to replace the securities while
holding the borrower liable for any excess of replacement cost over
collateral. As with any extensions of credit, there are risks of delay in
recovery and in some cases even loss of rights in the collateral should the
borrower of the securities fail financially. However, these loans of
portfolio securities will only be made to firms deemed by the Trust's
management to be creditworthy and when the income which can be earned from
such loans justifies the attendant risks. Upon termination of the loan, the
borrower is required to return the securities to the Trust. Any gain or loss
in the market price during the loan period would inure to the Trust. The
creditworthiness of firms to which the Trust lends its portfolio securities
will be monitored on an ongoing basis by the Investment Manager pursuant to
procedures adopted and reviewed, on an ongoing basis, by the Trustees of the
Trust.

When voting or consent rights which accompany loaned securities pass to
the borrower, the Trust will follow the policy of calling the loaned
securities, to be delivered within one day after notice, to permit the
exercise of such rights if the matters involved would have a material effect
on the Trust's investment in such loaned securities. The Trust will pay
reasonable finder's, administrative and custodial fees in connection with a
loan of its securities.

Private Placements. The Trust may invest up to 15% of its total assets in
obligations customarily sold to institutional investors in private
transactions for which only a limited market may exist at the time of
purchase. This type of limited private offering is frequently utilized with
respect to smaller issues of Municipal Obligations or when issuers wish to
restrict the number of holders to reduce issuance costs and to permit maximum
flexibility in structuring the transactions and to facilitate the prompt
issuance of the securities. Although such securities are not restricted
securities unless they contain restrictions on resale, due to the limited
market for such issues, the Trust may be unable to dispose of such securities
promptly at reasonable prices. See "Determination of Net Asset Value."

Restricted Securities. The Trust may invest up to 15% of its total assets
in securities subject to contractual restrictions on resale. Contractual
limitations on the resale of such securities have an adverse effect on their
marketability and may prevent the Trust from disposing of them promptly.

Portfolio Management and Turnover Rate. The Trust's portfolio will be
managed by its Investment Manager with a view to achieving its investment
objective. Securities are purchased and sold principally in response to the
Investment Manager's current evaluation of an issuer's ability to meet its
debt obligations in the future, and the Investment Manager's current
assessment of future changes in the levels of interest rates on tax-exempt
securities of varying coupon rates and maturities. The Trust may engage in
short-term trading consistent with its investment objective. Securities may
be sold in anticipation of a market decline (a rise in interest rates) or
purchased in anticipation of a market rise (a decline in interest rates). In
addition, a security may be sold and another security of comparable quality
purchased at approximately the same time to take advantage of what the
Investment Manager believes to be a temporary disparity in the normal yield
relationship between the two securities. These yield disparities may occur
for reasons not directly related to the investment quality of particular
issues or the general movement of interest rates, such as changes in the
overall demand for, or supply of, various types of tax-exempt securities. In
general, purchases and sales may also be made to restructure the portfolio in
terms of average maturity, quality, coupon yield, or diversification for any
one or more of the following purposes: (a) to increase income, (b) to improve
portfolio quality, (c) to minimize capital depreciation, (d) to realize gains
or losses, or for such other reasons as the Investment Manager deems relevant
in light of economic and market conditions. Fluctuation in the supply of
Municipal Obligations at an acceptable price may affect the Trust's ability
to achieve its investment objective.

<PAGE>

Securities purchased by the Trust generally are sold by dealers acting as
principal for their own accounts. The Trust may incur brokerage commissions
on transactions conducted through DWR.

While it is not possible to predict turnover rates with any certainty, at
present it is anticipated that the Trust's portfolio turnover rate, under
normal circumstances, after the Trust's portfolio is invested in accordance
with its investment objective, will not exceed 100%. The Trust will incur
transaction costs commensurate with its portfolio turnover rate.
Additionally, see "Taxation" for a discussion of the tax policy of the Trust
and see "Portfolio Transactions and Brokerage" for a more extensive
discussion of the Trust's portfolio brokerage policies.

The portfolio manager of the Trust is Mr. James F. Willison and as such he
will be primarily responsible for the day-to-day management of the Trust's
portfolio. For a more detailed discussion of Mr. Willison's business
experience during the past five years, see "Trustees and Officers."

INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------

The investment restrictions listed below have been adopted by the Trust as
fundamental policies which may not be changed without the vote of a majority,
as defined in the Act, of the outstanding voting securities of the Trust. For
purposes of the restrictions: (a) an "issuer" of a security is the entity
whose assets and revenues are committed to the payment of interest and
principal on that particular security; (b) a "taxable security" is any
security the interest on which is subject to federal income tax (which does
not include "private activity bonds" subject to the alternative minimum tax
discussed under "Taxation"); and (c) all percentage limitations apply
immediately after a purchase or initial investment, and any subsequent change
in any applicable percentage resulting from market fluctuations or other
changes in the amount of total or net assets does not require elimination of
any security from the portfolio.

The Trust may not:

1. As to 75% of its total assets, invest more than 5% of the value of its
total assets in the securities of any one issuer. This limitation shall not
apply to obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or to the investment of 25% of the Trust's
total assets.

2. Purchase more than 10% of all outstanding taxable debt securities of
any one issuer (other than obligations issued, or guaranteed as to principal
and interest, by the U.S. Government, its agencies or instrumentalities).

3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry; provided, however, that such limitations shall
not be applicable to Municipal Obligations issued by governments or political
subdivisions of governments, and obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities. In addition, the
Trust reserves the right to invest 25% or more of its assets in any of the
following types of Municipal Obligations, provided that the percentage of the
Trust's total assets in private activity bonds in any one category does not
exceed 25% of the Trust's total assets: health facility obligations, housing
obligations, single family mortgage revenue bonds, industrial revenue
obligations (including pollution control obligations), electric utility
obligations, airport facility revenue obligations, water and sewer
obligations, university and college revenue obligations, bridge authority and
toll road obligations and resource recovery obligations. A discussion of
certain risks associated with investing in such obligations is set forth in
Appendix C.

4. Invest more than 5% of the value of its total assets in taxable
securities of issuers having a record, together with predecessors, of less
than three years of continuous operation. This restriction shall not apply to
any obligation of the United States Government, its agencies or
instrumentalities.

5. Invest in common stock.

<PAGE>

6. Invest in securities of any issuer, other than securities of the Trust,
if, to the knowledge of the Trust, any officer or trustee of the Trust or any
officer or director of the Investment Manager owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers, trustees and
directors who own more than 1/2 of 1% own in the aggregate more than 5% of
the outstanding securities of such issuer.

7. Purchase or sell real estate or interests therein, although it may
purchase securities secured by real estate or interests therein. This shall
not prohibit the Trust from purchasing, holding and selling real estate
acquired as a result of the ownership of such securities.

8. Purchase or sell commodities except that the Trust may purchase or sell
financial futures contracts and related options thereon.

9. Purchase oil, gas or other mineral leases, rights or royalty contracts,
or exploration or development programs.

10. Write, purchase or sell puts, calls, or combinations thereof, except
for options on futures contracts or options on debt securities.

11. Purchase securities of other investment companies, except in
connection with a merger, consolidation, reorganization or acquisition of
assets or, by purchase in the open market of securities of closed-end
investment companies where no underwriter's or dealer's commission or profit,
other than customary broker's commissions, is involved and only if
immediately thereafter not more than (i) 5% of the Trust's total assets,
taken at market value, would be invested in any one such company and (ii) 10%
of the Trust's total assets, taken at market value, would be invested in such
securities.

12. Borrow money, except that the Trust may borrow from a bank for
temporary or emergency purposes or for repurchase of its shares provided that
immediately after such borrowing the amount borrowed does not exceed 33 1/3 %
of the value of its total assets (including the amount borrowed) less its
liabilities (not including any borrowings but including the fair market value
at the time of computation of any other senior securities which are
outstanding at the time).

13. Pledge its assets or assign or otherwise encumber them except to
secure borrowings effected within the limitations set forth in Restriction
12. However, for the purpose of this restriction, collateral arrangements
with respect to the writing of options and collateral arrangements with
respect to initial margin for futures are not deemed to be pledges of assets.

14. Issue senior securities as defined in the Act, other than preferred
shares of beneficial interest (in accordance with the terms of the Act),
except insofar as the Trust may be deemed to have issued a senior security by
reason of: (a) entering into any repurchase agreement; (b) purchasing any
securities on a when-issued or delayed delivery basis; (c) purchasing or
selling any financial futures contracts; (d) borrowing money in accordance
with restrictions described above; or (e) lending portfolio securities.

15. Make loans of money or securities, except: (a) by the purchase of debt
obligations in which the Trust may invest consistent with its investment
objective and policies; (b) by investment in repurchase agreements (provided
that no more than 10% of the Trust's total assets will be invested in
repurchase agreements that do not mature within seven days); and (c) by
lending its portfolio securities (provided that the Trust may not lend its
portfolio securities in excess of 10% of its total assets).

16. Make short sales of securities.

17. Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of purchases of portfolio securities.

18. Engage in the underwriting of securities, except insofar as the Trust
may be deemed an underwriter under the Securities Act of 1933 in disposing of
a portfolio security.

19. Invest for the purpose of exercising control or management of any
other issuer.

<PAGE>

TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------------

The Trustees and Executive Officers of the Trust and their principal
occupations for at least the last five years and their affiliations, if any,
with InterCapital and with the Dean Witter Funds and with investment
companies to which TCW Funds Management, Inc. serves as investment adviser
and Dean Witter Services Inc. serves as manager (the "TCW/DW Funds") are set
forth below, with those Trustees who are "interested persons" of the Trust
(as defined in the Act) indicated by an asterisk.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
NAME, POSITION WITH THE TRUST AFFILIATIONS WITH INTERCAPITAL
AND ADDRESS AND THE DEAN WITTER FUNDS
- --------------------------------------- ------------------------------------------------------------------
<S> <C>
Charles A. Fiumefreddo* Chairman, Chief Executive Officer and Director of InterCapital,
Chairman of the Board, President, Dean Witter Distributors Inc. and Dean Witter Services Company
Chief Executive Officer and Trustee Inc. ("DWSC"); Executive Vice President and Director of DWR;
Two World Trade Center Chairman, Director and/or Trustee, President and Chief Executive
New York, New York Officer of the Dean Witter Funds; Chairman, Chief Executive
Officer and Trustee of the TCW/DW Funds; Chairman and Director of
Dean Witter Trust Company (since October, 1989); Director and/or
officer of various DWDC subsidiaries; formerly Executive Vice
President and Director of DWDC (until February, 1993).
</TABLE>

[copy to come]

<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
NAME, POSITION WITH THE TRUST AND AFFILIATIONS WITH INTERCAPITAL AND THE DEAN
ADDRESS WITTER FUNDS
- --------------------------------- -------------------------------------------------
<S> <C>

[copy to come]

</TABLE>
22

<PAGE>

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS;
NAME, POSITION WITH THE TRUST AFFILIATIONS WITH INTERCAPITAL
AND ADDRESS AND THE DEAN WITTER FUNDS
- --------------------------------- ------------------------------------------------------------------
<S> <C>
Sheldon Curtis Senior Vice President, Secretary and General Counsel of
Vice President, Secretary and InterCapital and DWSC; Senior Vice President, Assistant Secretary
General Counsel and Assistant General Counsel of Dean Witter Distributors Inc.;
Two World Trade Center Senior Vice President and Secretary of Dean Witter Trust Company
New York, New York (since October, 1989); Assistant Secretary of DWDC and DWR;
President, Secretary and General Counsel of the Dean Witter Funds
and the TCW/DW Funds.
James F. Willison Senior Vice President of InterCapital; Vice President of various
Vice President Dean Witter Funds.
Two World Trade Center
New York, New York
Thomas F. Caloia First Vice President (since May, 1991) and Assistant Treasurer
Treasurer (since January, 1993) of InterCapital; First Vice President and
Two World Trade Center Assistant Treasurer of DWSC and Treasurer of the Dean Witter Funds
New York, New York and the TCW/DW Funds; previously Vice President of InterCapital.
- ---------------
<FN>
* Denotes Trustees who are "interested persons" of the Trust, as defined
in the Act.
</TABLE>

In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital, and DWSC, Executive Vice President of Dean Witter Distributors
Inc. and DWTC and Director of DWTC, David A. Hughey, Executive Vice President
and Chief Administrative Officer of InterCapital, DWSC and Dean Witter
Distributors Inc. and President and Director of DWTC, Edmund C. Puckhaber,
Executive Vice President of InterCapital, and Peter Avelar and Jonathan R.
Page, Senior Vice Presidents of InterCapital, and Katherine H. Stromberg and
Joseph Arcieri, Vice Presidents of InterCapital, are Vice Presidents of the
Trust, and Barry Fink and Marilyn K. Cranney, First Vice Presidents and
Assistant General Counsels of InterCapital and DWSC, and Lawrence S. Lafer,
Lou Anne D. McInnis, and Ruth Rossi, Vice Presidents and Assistant General
Counsels of InterCapital and DWSC, are Assistant Secretaries of the Trust.

All Trustees will be subject to election by the shareholders at the first
meeting of shareholders. Thereafter, the Board of Trustees of the Trust will
be divided into three classes, each class having a term of three years. The
term of office of one class will expire each year. The Shareholders will have
the right to elect twelve Trustees of the Trust at the next annual meeting of
Shareholders. See "Description of Shares."

The Trust pays each Trustee who is not an employee or a retired employee
of the Investment Manager or an affiliated company, an annual fee of $
plus $ for each meeting of the Board of Trustees, the Audit Committee and
the Committee of the Independent Trustees attended by the Trustee in person
(the Trust pays the Chairman of the Audit Committee an additional annual fee
of $ and pays the Chairman of the Committee of Independent Trustees an
additional annual fee of $ , in each case inclusive of the Committee
meeting fees). The Trust also reimburses such Trustees for travel and other
out-of-pocket expenses incurred by them in connection with attending such
meetings. Trustees and officers of the Trust who are or have been employed by
the Investment Manager or an affiliated company, or are retired from such
employment, receive no compensation or expense reimbursement from the Trust.

<PAGE>

INVESTMENT MANAGEMENT AGREEMENT
- -----------------------------------------------------------------------------

The Trust has retained Dean Witter InterCapital Inc. (the "Investment
Manager" or "InterCapital"), to provide administrative services, manage its
business affairs and manage the Trust's assets, including the placing of
orders for the purchase and sale of portfolio securities, pursuant to an
Investment Management Agreement (the "Agreement").

The Investment Manager obtains and evaluates such information and advice
relating to the economy, securities markets, and specific securities as it
considers necessary or useful to continuously manage the assets of the Trust
in a manner consistent with its investment objective and policies. The
Trust's Board of Trustees reviews the various services provided by the
Investment Manager to ensure that the Trust's general investment policies and
programs are being properly carried out and that administrative services are
being provided to the Trust in a satisfactory manner.

Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books
and records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help, bookkeeping and certain legal services as the Trust
may reasonably require in the conduct of its business, including the
preparation of proxy statements and reports required to be filed with federal
and state securities commissions (except insofar as the participation or
assistance of independent accountants and attorneys is, in the opinion of the
Investment Manager, necessary or desirable). In addition, the Investment
Manager pays the salaries of all personnel, including officers of the Trust,
who are employees of the Investment Manager. The Investment Manager also
bears the cost of telephone service, heat, light, power and other utilities
provided to the Trust. InterCapital has retained Dean Witter Services Company
Inc., a wholly-owned subsidiary of InterCapital, to perform the
aforementioned administrative services for the Trust.

Expenses not expressly assumed by the Investment Manager under the
Agreement will be paid by the Trust. The expenses borne by the Trust include,
but are not limited to: charges and expenses of any registrar, custodian,
stock transfer and dividend disbursing agent; brokerage commissions; taxes;
engraving and printing of share certificates; registration costs of the Trust
and its shares under federal and state securities laws; all expenses of
shareholders' and Trustees' meetings and of preparing, printing and mailing
proxy statements and reports to shareholders; fees and travel expenses of
Trustees or members of any advisory board or committee who are not employees
or retired employees of the Investment Manager or any corporate affiliate of
either; all expenses incident to any dividend or distribution program;
charges and expenses of any outside service used for pricing of the Trust's
portfolio securities; fees and expenses of legal counsel, including counsel
to the Trustees who are not interested persons of the Trust or of the
Investment Manager (not including compensation or expenses of attorneys who
are employees of the Investment Manager) and independent accountants;
membership dues of industry associations; interest on Trust borrowings; fees
and expenses incident to the listing of the Trust's shares on any stock
exchange; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Trust which inure to its benefit; extraordinary
expenses (including, but not limited to, legal claims and liabilities and
litigation costs and any indemnification relating thereto); and all other
costs of the Trust's operation.

As full compensation for the services furnished to the Trust, the Trust
pays the Investment Manager monthly compensation calculated weekly by
applying the annual rate of % to the Trust's average weekly net assets.

The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder,
the Investment Manager is not liable to the Trust or any

<PAGE>

of its shareholders for any act or omission by the Investment Manager or for
any losses sustained by the Trust or its shareholders. The Agreement in no
way restricts the Investment Manager from acting as investment manager or
adviser to others.

The Agreement was initially approved by the Trustees on July , 1994, and
by InterCapital as the sole shareholder on September , 1994. The Agreement
may be terminated at any time, without penalty, on thirty days' notice by the
Trustees of the Trust, by the holders of a majority, as defined in the Act,
of the outstanding shares of the Trust, or by the Investment Manager. The
Agreement will automatically terminate in the event of its assignment (as
defined in the Act).

Under its terms, the Agreement will continue in effect until April 30,
1996, and from year to year thereafter, provided continuance of the Agreement
is approved at least annually by the vote of the holders of a majority, as
defined in the Act, of the outstanding voting securities of the Trust, or by
the Trustees of the Trust; provided that in either event such continuance is
approved annually by the vote of a majority of the Trustees of the Trust who
are not parties to the Agreement or "interested persons" (as defined in the
Act) of any such party (the "Independent Trustees"), which vote must be cast
in person at a meeting called for the purpose of voting on such approval.

PORTFOLIO TRANSACTIONS AND BROKERAGE
- -----------------------------------------------------------------------------
Subject to the general supervision of the Board of Trustees, the
Investment Manager is responsible for decisions to buy and sell securities
and futures contracts for the Trust, the selection of brokers and dealers to
effect the transactions, and the negotiation of brokerage commissions, if
any. The Trust expects that the primary market for the securities in which it
intends to invest will generally be the over-the-counter market. Securities
are generally traded in the over-the-counter market on a "net" basis with
dealers acting as principal for their own accounts without charging a stated
commission, although the price of the security usually includes a profit to
the dealer. Options and futures transactions will usually be effected through
a broker and a commission will be charged. The Trust also expects that
securities will be purchased at times in underwritten offerings, where the
price includes a fixed amount of compensation, generally referred to as the
underwriter's concession or discount. On occasion, the Trust may also
purchase certain money market instruments directly from an issuer, in which
case no commissions or discounts are paid.

The Investment Manager currently serves as investment manager to a number
of clients and may in the future act as investment manager or adviser to
others. It is the practice of the Investment Manager to cause purchase and
sale transactions to be allocated among the Trust and other investment
companies or other accounts whose assets it manages or advises in such manner
as it deems equitable. This allocation could adversely affect the size or
price of the position purchased or sold. In making such allocations among the
Trust and other client accounts, the main factors considered are the
respective investment objectives, the relative size of portfolio holdings of
the same or comparable securities, the availability of cash for investment,
the size of investment commitments generally held and the opinions of the
persons responsible for managing the portfolios of the Trust and other client
accounts.

The policy of the Trust regarding purchases and sales of securities and
futures contracts for its portfolio is that primary consideration will be
given to obtaining the most favorable prices and efficient execution of
transactions. In seeking to implement the Trust's policies, the Investment
Manager will effect transactions with those brokers and dealers who the
Investment Manager believes provide the most favorable prices and who are
capable of providing efficient executions. If the Investment Manager believes
such price and execution are obtainable from more than one broker or dealer,
it may give consideration to placing portfolio transactions with those
brokers and dealers who also furnish research

<PAGE>

and other services to the Trust or the Investment Manager. Such services may
include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investments;
wire services; and appraisals or evaluations of portfolio securities. The
Trust will not purchase at a higher price or sell at a lower price in
connection with transactions effected with a dealer, acting as principal, who
furnishes research services to the Trust than would be the case if no weight
were given by the Trust to the dealer's furnishing of such services.

The information and services received by the Investment Manager from
brokers and dealers may be of benefit to the Investment Manager and its
affiliates in the management of other accounts and may not in all cases
benefit the Trust directly. While the receipt of such information and
services is useful in varying degrees and would generally reduce the amount
of research or services otherwise performed by the Investment Manager and
thus reduce its expenses, it is of indeterminable value and the advisory fee
paid to the Investment Manager is not reduced by any amount that may be
attributable to the value of such services.

Pursuant to an order of the Securities and Exchange Commission, the Trust
may effect principal transactions in certain money market instruments with
DWR. The Trust will limit its transactions with DWR to U.S. Government and
Government agency securities, bank money instruments (i.e., certificates of
deposit and bankers' acceptances) and commercial paper (not including
tax-exempt municipal paper). Such transactions will be effected with DWR only
when the price available from DWR is better than that available from other
dealers.

Consistent with the policy described above, brokerage transactions in
securities and futures contracts listed on exchanges or admitted to unlisted
trading privileges may be effected through DWR. In order for DWR to effect
portfolio transactions for the Trust, the commissions, fees or other
remuneration received by DWR must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection
with comparable transactions involving similar securities being purchased or
sold on an exchange during a comparable period of time. This standard would
allow DWR to receive no more than the remuneration which would be expected to
be received by an unaffiliated broker in a commensurate arm's-length
transaction. Furthermore, the Trustees of the Trust, including a majority of
the independent Trustees, have adopted procedures which are reasonably
designed to provide that any commissions, fees or other remuneration paid to
DWR are consistent with the foregoing standard.

Section 11(a) of the Securities Exchange Act of 1934 which generally
prohibits members of United States national securities exchanges from
executing exchange transactions for their affiliates and institutional
accounts which they manage, permits such exchange members to execute
securities transactions on an exchange only if the affiliate or account
expressly consents. To the extent Section 11(a) would apply to DWR acting as
a broker for the Trust in any of its portfolio transactions executed on any
such securities exchange of which DWR is a member, appropriate written
consents have been given.

DETERMINATION OF NET ASSET VALUE
- -----------------------------------------------------------------------------
The net asset value per share of the Trust's Shares will be determined as
of 4:00 p.m., New York time, on the last day of each week on which the New
York Stock Exchange is open for trading by taking the value of all assets of
the Trust, subtracting its liabilities, dividing by the number of Shares
outstanding and adjusting to the nearest cent.

<PAGE>

In the calculation of the Trust's net asset value: (1) a portfolio
security listed or traded on the New York or American Stock Exchange is
valued at its last sale price on that exchange (if there were no sales that
day, the security is valued at the closing bid price); (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price; and (3) when market quotations
are not readily available, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under
the general supervision of the Trust's Board of Trustees (valuation of
securities for which market quotations are not readily available may be based
upon current market prices of securities which are comparable in coupon,
rating and maturity or an appropriate matrix utilizing similar factors).

Portfolio securities for which market quotations are not readily available
(other than short-term debt securities and futures and options) are valued
for the Trust by an outside independent pricing service approved by the Board
of Trustees. The pricing service has informed the Trust that in valuing the
Trust's portfolio securities it uses both a computerized grid matrix of
tax-exempt securities and evaluations by its staff, in each case based on
information concerning market transactions and quotations from dealers which
reflect the bid side of the market each day. The Trust's portfolio securities
are thus valued by reference to a combination of transactions and quotations
for the same or other securities believed to be comparable in quality,
coupon, maturity, type of issue, call provisions, trading characteristics and
other features deemed to be relevant. The Trustees believe that timely and
reliable market quotations are generally not readily available to the Trust
for purposes of valuing tax-exempt securities and that the valuations
supplied by the pricing service, using the procedures outlined above and
subject to periodic review, are more likely to approximate the fair value of
such securities. The Investment Manager will periodically review and evaluate
the procedures, methods and quality of services provided by the pricing
service then being used by the Trust and may, from time to time, recommend to
the Trustees the use of other pricing services or discontinuance of the use
of any pricing service in whole or in part. The Trustees may determine to
approve such recommendation or to make other provisions for pricing of the
Trust's portfolio securities.

Short-term taxable debt securities with remaining maturities of 60 days or
less at time of purchase are valued at amortized cost, unless the Trustees
determine such does not reflect the securities' fair value, in which case
these securities will be valued at their market value as determined by the
Trustees. Other short-term taxable debt securities will be valued on a
marked-to-market basis until such time as they reach a remaining maturity of
60 days, whereupon they will be valued at amortized cost using their value on
the 61st day unless the Trustees determine such does not reflect the
securities' fair value, in which case the securities will be valued at their
fair value as determined by the Trustees. Listed options are valued at the
latest sale price on the exchange on which they are listed unless no sales of
such options have taken place that day, in which case they will be valued at
the mean between their latest bid and asked prices. Unlisted options are
valued at the mean between their latest bid and asked prices. Futures are
valued at the latest sale price as of the close of the commodities exchange
on which they trade unless the Trustees determine that such price does not
reflect their fair value, in which case they will be valued at their fair
market value as determined by the Trustees. All other securities and other
assets are valued at their fair value as determined in good faith under
procedures established by and under the supervision of the Trustees.

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN
- -----------------------------------------------------------------------------
It is the Trust's present policy, which may be changed by the Board of
Trustees, to pay monthly dividends to Shareholders from net investment income
of the Trust. Initial distributions to Shareholders are expected to be
declared within approximately 60 days and paid within approximately 90 days
from

<PAGE>

the completion of this offering. Net investment income of the Trust consists
of all interest income accrued on portfolio assets less all expenses of the
Trust. Expenses of the Trust are accrued each day. The Trust will distribute
all of its net realized long-term and short-term capital gains, if any, at
least once per year but it may make such distributions on a more frequent
basis to comply with the distribution requirements of the Tax Reform Act of
1986, in all events in a manner consistent with the Act.

All persons becoming registered holders of Shares of the Trust (other than
brokers and nominees of banks or other financial institutions) may elect to
have all dividends and capital gains distributions automatically reinvested
in additional Shares pursuant to the Trust's Dividend Reinvestment Plan (the
"Plan"), and will be deemed to have appointed Dean Witter Trust Company (the
"Transfer Agent") as their Plan agent to act on their behalf under the Plan.
All distributions under the Plan will automatically be reinvested in Shares
of the Trust in full and fractional Shares as described below. Shareholders
who do not participate in the Plan will receive all distributions in cash
paid by check mailed directly to the shareholder of record by the Transfer
Agent as dividend disbursing agent.

DETAILS OF THE PLAN

Whenever the Trust declares a dividend or other distribution, it will pay
the amount thereof in cash to the Transfer Agent on behalf of Common
Shareholders participating in the Plan, which the Transfer Agent must use to
buy Shares in the open market for the participants' accounts. Market price
for the purpose of the Plan will be the market price of the Shares on a
national securities exchange, or in the event that the Shares are not listed
on a securities exchange at the time, market price will be the asked price,
or the mean of the asked prices if more than one is available, of the Shares
in the over-the-counter market.

Shareholders may terminate their participation in the Plan at any time and
elect to receive distributions in cash by notifying the Transfer Agent in
writing. Such notification must be received prior to the record date of any
distribution. There will be no charge or other penalty for such termination.

The Transfer Agent will maintain the Shareholder's account, hold the
certificates representing the additional Shares acquired through the Plan in
safekeeping and furnish the Shareholder with written confirmation of all
transactions in the account, including information needed for personal and
tax records. The Transfer Agent will vote shares in the Shareholder's account
in accordance with any proxy the Shareholder gives the Trust for Shares held
of record by him or her. On termination of the account, a certificate for
full shares in the account, plus a check for the market value of any
fractional interest, will be sent to the Shareholder.

Brokers and nominees of banks and financial institutions are advised to
contact the Transfer Agent to determine whether the beneficial holders of
Shares held in their names may participate in the Plan.

The automatic reinvestment of dividends and distributions will not relieve
participants of any income tax that may be payable on such dividends or
distributions. See "Taxation" for a discussion of the taxation of dividends
and distributions and for a discussion of certain possible tax consequences
of the Plan.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan.
There is no service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by
the participants to the Transfer Agent to cover its expenses in administering
the Plan. Each participant will pay a pro rata

<PAGE>

share of brokerage commissions incurred with respect to the Transfer Agent's
open market purchases in connection with the reinvestment of dividends or
capital gains distributions. All correspondence concerning the Plan should be
directed to Dean Witter Trust Company, Harborside Financial Center, Plaza
Two, Jersey City, New Jersey 07311.

TAXATION
- -----------------------------------------------------------------------------
Because the Trust intends to distribute all of its net investment income
and capital gains to shareholders and intends to otherwise comply with all
the provisions of Subchapter M of the Internal Revenue Code of 1986 (the
"Code"), it is not expected that the Trust will be required to pay any
federal income tax on such income and capital gains.

The Trust currently intends to qualify to pay "exempt-interest dividends"
to its shareholders by maintaining, as of the close of each quarter of its
taxable year, at least 50% of the value of its total assets in securities
exempt from federal income tax. If the Trust satisfies such requirement,
distributions from net investment income to shareholders will be excludable
from gross income for federal income tax purposes to the extent properly
designated as exempt-interest dividends and to the extent net investment
income is derived from tax-exempt securities. Exempt-interest dividends are
included, however, in determining what portion, if any, of a person's Social
Security and railroad retirement benefits are subject to federal income tax.
As discussed below, such dividends may also be subject to the alternative
minimum tax. Interest on indebtedness incurred by shareholders to purchase or
carry shares of an investment company paying exempt-interest dividends, such
as the Trust, will not be deductible by the investor for federal income tax
purposes to the extent attributable to exempt-interest dividends.

Taxpayers who may have alternative minimum tax liability should note that
interest received on certain otherwise tax-exempt securities will increase
alternative minimum taxable income and, as a result, may increase or create
alternative minimum tax liability for such taxpayers. This alternative
minimum tax applies to interest received on "private activity bonds" (in
general, bonds that benefit non-governmental entities) issued after August 7,
1986 which, although tax-exempt, are used for purposes other than those
generally performed by governmental units (e.g., bonds used for commercial or
housing purposes). Income received on such bonds is classified as a "tax
preference item," under the alternative minimum tax, for both individual and
corporate investors. The Trust may invest without limit in such "private
activity bonds" with the result that a substantial portion of the
exempt-interest dividends paid by the Trust may be an item of tax preference
to shareholders subject to the alternative minimum tax. The Trust will report
to shareholders the portion of its dividends declared during the year which
is a tax preference item for alternative minimum tax purposes, as well as the
overall percentage of dividend distributions which constitutes
exempt-interest dividends. Individual taxpayers are generally subject to the
alternative minimum tax if their "regular tax" liability is less than their
alternative minimum tax liability (which is based on graduated rates of 26%
and 28%) on their "alternative minimum taxable income" reduced by an
exemption amount ranging from $0 to $45,000 depending upon the taxpayer's
income and filing status. Alternative minimum taxable income is generally
equal to taxable income with certain adjustments and increased by certain
"tax preference items" which may include a portion of the Trust's dividends
as described above. In addition, the Code further provides that corporations
are subject to an alternative minimum tax based, in part, on 75% of any
excess of "adjusted current earnings" over taxable income as adjusted for
other tax preferences. Because an exempt-interest dividend paid by the Trust
will be included in computing adjusted current earnings, a corporate
shareholder may therefore be required to pay an increased alternative minimum
tax as the result of receiving exempt-interest dividends paid by the Trust.

<PAGE>

Dividends on the Shares, to the extent payable from tax-exempt income
earned on the Trust's investments, will be exempt from federal income tax in
the hands of holders of such Shares, subject to the possible application of
the alternative minimum tax. Shareholders will normally be subject to federal
income tax on dividends paid from interest income derived from taxable
securities and gains, if any, and on distributions derived from an excess of
net short-term capital gains over long-term capital losses. No part of the
distributions to shareholders will qualify for the dividends received
deduction for corporations. Taxable long-term or short-term capital gains may
be generated by the sale of portfolio securities and by transactions in
options and futures contracts engaged in by the Trust. Distributions of
long-term capital gains, if any, are taxable as long-term capital gains,
regardless of how long the shareholder has held the Trust Shares and
regardless of whether the distribution is received in additional Shares or in
cash. Under the Revenue Reconciliation Act of 1993, all or a portion of the
Trust's gain from the sale or redemption of tax-exempt obligations purchased
at a market discount will be treated as ordinary income rather than capital
gain. This rule may increase the amount of ordinary income dividends received
by shareholders. For federal income tax purposes, a capital gain distribution
with respect to Shares held for six months or less, however, will cause any
loss on a subsequent sale or exchange of such Shares to be treated as
long-term capital loss to the extent of such long-term capital gain
distribution. In addition, with respect to a shareholder who receives
exempt-interest dividends on Shares held for less than six months (unless
regulations provide for a shorter period), any loss on the sale or exchange
of such Shares will, to the extent of the amount of such exempt-interest
dividends, be disallowed. If the Trust pays a dividend in January which was
declared in the previous October, November or December to shareholders of
record on a specified date in one of such months, then such dividend or
distribution will be treated for tax purposes as being paid by the Trust and
received by its shareholders on December 31 of the year in which such
dividend was declared.

The Code requires each regulated investment company to pay a nondeductible
4% excise tax to the extent the company does not distribute, during each
calendar year, 98% of its ordinary income, determined on a calendar year
basis, and 98% of its capital gains, determined in general on an October 31
year end, plus certain undistributed amounts from previous years. The
required distributions, however, are based only on the taxable income of a
regulated investment company. The excise tax, therefore, will generally not
apply to the tax-exempt income of a regulated investment company such as the
Trust that pays exempt-interest dividends. The Trust anticipates that it will
make sufficient timely distributions to avoid imposition of the excise tax.

The Code provides that every person required to file a tax return must
include for information purposes on such return the amount of exempt-interest
dividends received from the Trust during the taxable year.

The Superfund Amendments and Reauthorization Act of 1986 (the "Superfund
Act") imposes a deductible tax on a corporation's alternative minimum taxable
income (computed without regard to the alternative minimum tax net operating
loss deduction) at a rate of $12 per $10,000 (0.12%) of alternative minimum
taxable income in excess of $2,000,000. The tax is imposed for taxable years
beginning after December 31, 1986 and before January 1, 1996. The tax is
imposed even if the corporation is not required to pay an alternative minimum
tax because the corporation's regular income tax liability exceeds its
minimum tax liability. Exempt-interest dividends paid by the Trust that
create alternative minimum tax preferences for corporate shareholders under
the Code (as described above) may be subject to the tax.

The tax treatment of listed put and call options written or purchased by
the Trust on debt securities and certain futures contracts and options
thereon entered into by the Trust will be governed by Section 1256 of the
Code. Absent a tax election to the contrary, each such position held by the
Trust will be

<PAGE>

marked-to-market (i.e., treated as if it were closed out) on the last
business day of each taxable year of the Trust, and all gain or loss
associated with transactions in such positions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss.
Positions of the Trust which consist of at least one debt security and at
least one option or futures contract which substantially diminishes the
Trust's risk of loss with respect to such debt security could be treated as
"mixed straddles" which are subject to the straddle rules of Section 1092 of
the Code, the operation of which may cause deferral of losses, adjustments in
the holding periods of debt securities and conversion of short-term capital
losses into long-term capital losses. Certain tax elections exist for mixed
straddles which reduce or eliminate the operation of the straddle rules.
Furthermore, as a regulated investment company, the Trust is subject to the
requirement that less than 30% of its gross income be derived from the sale
or other disposition of securities held for less than three months. This
requirement may limit the Trust's ability to engage in options and futures
transactions. The Trust will monitor its transactions in options and futures
contracts and may make certain tax elections in order to mitigate the effect
of these rules and prevent disqualification of the Trust as a regulated
investment company under Subchapter M of the Code. Such tax elections may
result in an increase in distributions of ordinary income (relative to
long-term capital gain) to shareholders.

Because the Trust may invest without limit in private activity bonds, or
industrial development bonds, the interest on which is not federally
tax-exempt to persons who are "substantial users" of the facilities financed
by such bonds or "related persons" of such "substantial users," the Trust may
not be an appropriate investment for shareholders who are considered either a
"substantial user" or a "related person." Such persons should consult their
tax advisers before investing in the Trust.

Under certain provisions of the Code, shareholders may be subject to 31%
withholding on reportable dividends, capital gains distributions and
redemption payments ("backup withholding"). Generally, shareholders subject
to backup withholding will be those for whom a taxpayer identification number
is not on file with the Trust or who, to the Trust's knowledge, have
furnished an incorrect number. When establishing an account, an investor must
certify under penalty of perjury that such number is correct and that he is
not subject to backup withholding.

Dividends paid by the Trust from its ordinary income and distributions of
the Trust's net short-term capital gains paid to shareholders who are
non-resident aliens or foreign entities will be subject to a 30% United
States withholding tax under existing provisions of the Code applicable to
foreign individuals and entities unless a reduced rate of withholding or a
withholding exemption is provided under applicable treaty law.

The exemption of interest income for federal income tax purposes does not
necessarily result in exemption under the income or other tax laws of any
state or local taxing authority. Thus, shareholders of the Trust may be
subject to state and local taxes on exempt-interest dividends.

Shareholders should consult their tax advisers as to the applicability of
the above to their own tax situation.

DESCRIPTION OF SHARES
- -----------------------------------------------------------------------------

GENERAL

The Trust's Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional Shares of Beneficial Interest, of
$.01 par value. Share certificates will be issued upon request to the holder
of record of Trust Shares.

<PAGE>

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for its
obligations. However, the Declaration of Trust contains an express disclaimer
of shareholder liability for acts or obligations of the Trust and provides
for indemnification and reimbursement of expenses out of the Trust's property
for any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations. Given the nature of the Trust's
assets and operations, the possibility of the Trust being unable to meet its
obligations is remote and, in the opinion of Massachusetts counsel to the
Trust, the risk to Trust shareholders is remote.

The Declaration of Trust further provides that obligations of the Trust
are not binding upon the Trus- tees individually but only upon the property
of the Trust and that the Trustees will not be liable for errors of judgment
or mistakes of fact or law, but nothing in the Declaration of Trust protects
a Trustee against any liability to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.

The Trust may be terminated (i) by the affirmative vote of the holders of
not less than 80% of its outstanding Shares or (ii) by an instrument signed
by a majority of the Trustees and consented to by the holders of not less
than a majority of the Trust's outstanding Shares. Upon termination of the
Trust, the Trustees will wind up the affairs of the Trust, the Trust's
business will be liquidated and the Trust's net assets will be distributed to
the Trust's Shareholders on a pro rata basis. If not so terminated, the Trust
will continue indefinitely.

The Trust's Declaration of Trust permits the Trustees to divide or combine
the Shares into a greater or lesser number of shares without thereby changing
the proportionate beneficial interests in the Trust. Each Share represents an
equal proportionate interest in the Trust with each other Share. The Trust
has no present intention of offering additional Shares. Other offerings of
its Shares, if made, will require approval of the Trust's Board of Trustees.
Any additional offering will be subject to the requirements of the Act that
Shares may not be sold at a price below the then current net asset value,
exclusive of underwriting discounts and commissions, except, among other
things, in connection with an offering to existing Shareholders or with the
consent of the holders of a majority of the outstanding Shares of the Trust.

Pursuant to the Declaration of Trust, the Trust will hold annual meetings
of shareholders. Shareholders are entitled to one vote for each Share held
and to vote in the election of Trustees and on other matters submitted to
meetings of shareholders. No material amendment may be made to the Trust's
Declaration of Trust without the affirmative vote of a majority or greater of
its Shares. Under certain circumstances the Trustees may be removed by action
of the Trustees. The shareholders also have the right under certain
circumstances to remove the Trustees. Shares have no pre-emptive or
conversion rights. Common Shares when issued are fully paid and
non-assessable.

ANTI-TAKEOVER PROVISIONS

The Trust presently has certain anti-takeover provisions in its
Declaration of Trust which could have the effect of limiting the ability of
other entities or persons to acquire control of the Trust, to cause it to
engage in certain transactions or to modify its structure. Following the
first meeting of Shareholders, the Board of Trustees will be divided into
three classes, each having a term of three years. Each year the term of one
class expires. This provision could delay for up to two years the replacement
of a majority of the Board of Trustees. See "Trustees and Officers." In
addition, the affirmative vote or consent of the

<PAGE>

holders of 80% of the shares of the Trust (a greater vote than that required
by the Act and greater than the required vote applicable to business
corporations under state law) is required to authorize the conversion of the
Trust from a closed-end to an open-end investment company, or generally to
authorize any of the following transactions:

(i) merger or consolidation of the Trust with or into any other
corporation;

(ii) issuance of any securities of the Trust to any person or entity for
cash;

(iii) sale, lease or exchange of all or any substantial part of the
assets of the Trust, to any entity or person (except assets having an
aggregate fair market value of less than $1,000,000);

(iv) sale, lease or exchange to the Trust, in exchange for securities of
the Trust, of any assets of any entity or person (except assets having an
aggregate fair market value of less than $1,000,000)

if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of 5% or more of the outstanding shares of
the Trust. However, such 80% vote or consent will not be required with
respect to the foregoing transactions where the Board of Trustees under
certain conditions approves the transaction, in which case, with respect to
(i) and (iii) above, a majority shareholder vote or consent will be required,
and, with respect to (ii) and (iv) above, no shareholder vote or consent
would be required. Furthermore, any amendment to the provisions in the
Declaration of Trust requiring an 80% shareholder vote or consent for the
foregoing transactions similarly requires an 80% shareholder vote or consent.
Reference is made to the Declaration of Trust of the Trust, on file with the
Securities and Exchange Commission, for the full text of these provisions.
See "Further Information."

The foregoing provisions will make more difficult a change in the Trust's
management, or consummation of the foregoing transactions without the
Trustees' approval, and could have the effect of depriving Shareholders of an
opportunity to sell their Shares at a premium over prevailing market prices
by discouraging a third party from seeking to obtain control of the Trust in
a tender offer or similar transaction. However, the Board of Trustees has
considered these anti-takeover provisions and believes that they are in the
shareholders' best interests and benefit shareholders by providing the
advantage of potentially requiring persons seeking control of the Trust to
negotiate with its management regarding the price to be paid and facilitating
the continuity of the Trust's management.

PRINCIPAL SHAREHOLDER

InterCapital provided the initial capital for the Trust by purchasing
Shares of the Trust for $ on September , 1994. As of the
date of this Prospectus, InterCapital owned 100% of the outstanding shares of
the Trust. InterCapital may be deemed to control the Trust until such time as
it owns less than 25% of the outstanding shares of the Trust.

SHARE REPURCHASES AND TENDERS
- -----------------------------------------------------------------------------
Shares of closed-end investment companies frequently trade at a discount
from net asset value. In recognition of the possibility that the Trust's
Shares might similarly trade at a discount, the Trustees have determined that
it would be in the interest of Shareholders for the Trust to take action to
attempt to reduce or eliminate a market value discount from net asset value.
To that end, the Trustees presently contemplate that the Trust would from
time to time take action either to repurchase or redeem its Shares in the
open market, or to tender for the Shares at net asset value. The Board
presently intends, on an annual basis, to consider the making of a tender
offer for the Shares. At no time, however, will the Trustees be required to
make such repurchases or tender offers.

<PAGE>

The Trust may repurchase its Shares in the open market or in privately
negotiated transactions, at a price not above market value, if any, or net
asset value, whichever is lower, at the time of such purchase. Such
repurchases will be done in accordance with applicable securities laws.

In addition, the Trustees have currently determined to consider, on an
annual basis, the making of an offer to each shareholder of record to
purchase shares owned by such shareholder at a price to be determined in
accordance with the terms and conditions described below.

There can be no assurance that repurchases and/or tenders will result in
the Trust's shares trading at a price which is equal to their net asset
value. The Trust anticipates that the market price of its Shares will vary
from time to time from net asset value. The market price of the Trust's
Shares will, among other things, be determined by the relative demand for and
supply of such Shares in the market, the Trust's investment performance, the
Trust's dividends and yield and investor perception of the Trust's overall
attractiveness as an investment as compared with other investment
alternatives. Nevertheless, the fact that the Trust's Shares may be the
subject of repurchases and/or tender offers from time to time may enhance
their attractiveness to investors and thus reduce the spread between market
price and net asset value that might otherwise exist. In the opinion of the
Investment Manager, sellers will be less inclined to accept a significant
discount if they have some prospect of being able to recover net asset value
in conjunction with a possible tender offer.

Although the Trustees believe that share repurchases and tenders generally
would have a favorable effect on the market price of the Trust's Shares, it
should be recognized that the acquisition of Shares by the Trust will
decrease the total assets of the Trust and therefore have the effect of
increasing the Trust's expense ratio. Because of the nature of the Trust's
investment objective, policies and portfolio, the Investment Manager does not
anticipate that repurchases and tenders should have an adverse effect on the
Trust's investment performance and does not anticipate any material
difficulty in disposing of portfolio securities in order to consummate share
repurchases and tenders.

Even if a tender offer has been made, it is the Trustees' announced
policy, which may be changed by the Trustees, not to accept tenders or effect
repurchases if (1) such transactions, if consummated, would (a) result in the
delisting of the Trust's Shares from the New York Stock Exchange (the
Exchange having advised the Trust that it would consider delisting if the
aggregate market value of the Trust's outstanding publicly held Shares is
less than $5,000,000, the number of publicly held Shares falls below 600,000
or the number of round lot holders falls below 1,200), or (b) impair the
Trust's status as a regulated investment company under the Code (which would
make the Trust a taxable entity, causing the Trust's income to be taxed at
the corporate level in addition to the taxation of shareholders who receive
dividends from the Trust); (2) the Trust would not be able to liquidate
portfolio securities in an orderly manner and consistent with the Trust's
investment objective and policies in order to repurchase Shares; or (3) there
is, in the judgment of the Trustees, any material (a) legal action or
proceeding instituted or threatened challenging such transactions or
otherwise materially adversely affecting the Trust, (b) suspension of or
limitation on prices for trading securities generally on the New York Stock
Exchange or any foreign exchange on which portfolio securities of the Trust
are traded, (c) declaration of a banking moratorium by federal, state or
foreign authorities or any suspension of payment by banks in the United
States, New York State or foreign countries in which the Trust invests, (d)
limitation affecting the Trust or the issuers of its portfolio securities
imposed by federal, state or foreign authorities on the extension of credit
by lending institutions or on the exchange of foreign currency, (e)
commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States or other
countries in which the Trust invests, or (f) other event or condition which
would have a material adverse effect on the Trust or its shareholders if
Shares were repurchased. The Trustees may modify these conditions in light of
experience.

<PAGE>

It is currently anticipated that any tender offer made by the Trust will
be at a price equal to the net asset value of the Shares on a date subsequent
to the Trust's receipt of all tenders. A procedure will be established
whereby the current net asset value of the Common Shares is readily
ascertainable to the Shareholders throughout the offering period. Each offer
will be made and Shareholders notified in accordance with the requirements of
the Securities Exchange Act of 1934 and the Act, either by publication or
mailing or both. Each offering document will contain such information as is
prescribed by such laws and the rules and regulations promulgated thereunder.
When a tender offer is authorized to be made by the Trustees, the terms of
such tender offer will set forth the maximum number of Shares (if less than
all) that the Trust is willing to purchase pursuant to the tender offer. The
Trust will purchase, subject to such maximum number of Shares tendered in
accordance with the terms of the offer, all Shares tendered in accordance
with the terms of the offer unless it determines to accept none of them. In
the event that a number of Shares in excess of such maximum number of
outstanding Shares are tendered in accordance with the Trust's tender offer,
the Trust intends to purchase, on a pro rata basis, an amount of tendered
Shares equal to such maximum amount of the outstanding Shares to the Trust
will be charged a service charge, currently expected to be $25.00, to help
defray certain costs, including the processing of tender forms, effecting
payment, postage and handling. In accordance with the current SEC staff
position, such service charge may not be deducted from the proceeds of the
tender. Accordingly, payment of the proceeds to Shareholders tendering their
shares will be delayed until payment of the service charge is received by the
Trust. The Trust's transfer agent will receive the fee as an offset to these
costs. The Trust expects the cost to the Trust of effecting a tender offer
will exceed the aggregate of all service charges received from those who
tender their Shares. These excess costs, if any, will be charged against
capital.

Subject to its investment restrictions, the Trust may borrow money to
finance the repurchase of its Shares in the open market or pursuant to any
tender offer. Interest on any borrowings to finance share repurchase
transactions will reduce the Trust's net income. See "Investment
Practices--Borrowing" and "Investment Restrictions."

Tendered Shares that have been accepted and purchased by the Trust will be
held in the treasury ("Treasury Shares") until retired by the Trustees.
Treasury Shares will be recorded and reported as an offset to shareholders'
equity, and accordingly will reduce the Trust's total net asset value. If
Treasury Shares are retired, Shares issued and outstanding and capital in
excess of par will be reduced.

CUSTODIAN, DIVIDEND DISBURSING AGENT AND TRANSFER AGENT
- -----------------------------------------------------------------------------
The Bank of New York, 110 Washington Street, New York, New York 10286 is
the Custodian of the Trust's assets. The Custodian has no part in choosing
the Trust's investment policies or in deciding which securities are to be
purchased or sold for the Trust's portfolio. Any Trust cash balances with the
Custodian in excess of $100,000 are unprotected by Federal deposit insurance.
Such amounts may, at times, be substantial.

Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311, an affiliate of Dean Witter InterCapital Inc., is the
Transfer Agent of the Trust's Shares, Dividend Disbursing Agent for payment
of dividends and distributions and Agent for Shareholders under the Plan. For
these services Dean Witter Trust Company receives an annual per shareholder
account fee from the Trust.

<PAGE>

UNDERWRITING
- -----------------------------------------------------------------------------

The Underwriters named below, for whom Dean Witter Distributors Inc., Two
World Trade Center, New York, New York 10048, is acting as Representative,
have severally agreed, subject to the terms and conditions of the
Underwriting Agreement (a copy of which has been filed as an exhibit to the
Registration Statement), to purchase from the Trust the respective number of
Shares set forth opposite their names in the table below:

<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
- ------ ----------------
<S> <C>
Dean Witter Distributors Inc.

----------------
Total ......................................... 7,000,000
================
</TABLE>

<PAGE>

The nature of the Underwriters' obligation is such that they must purchase
all of the Shares offered hereby (other than those covered by the
over-allotment option described below) if any are purchased.

The Representative has advised the Trust that the Underwriters propose to
offer the Shares to the public at the initial offering price set forth on the
cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $ per Share of which $ per Share may be
reallowed to other dealers. Additionally, the Representative has advised the
Trust that the Representative, at its discretion, may pay out of the
management fee portion of the sales load an additional fee, not in excess of
$ per Share, to each Underwriter which sells in excess of a specified
number of Shares as set forth in each Underwriter's underwriting syndicate
invitation. If an Underwriter sells in excess of the specified number of
Shares, this additional fee will be payable on all Shares sold by such
Underwriter. The sales load of $ per Share is equal to % of the initial
public offering price. After the initial public offering, the public offering
price, concession and reallowance may be changed.

All monies for Shares purchased by Shareholders in the underwriting must
be received by September , 1994, five business days from the date of this
Prospectus.

The Trust has granted to the Underwriters an option, exercisable not later
than 45 days after the date of this Prospectus, to purchase up to 1,050,000
additional Shares of the Trust at the same price per share as the Trust will
receive for the 7,000,000 Shares which the Underwriters have agreed to
purchase. The Underwriters may exercise such option only to cover
over-allotments, if any, of Shares made in connection with the sale of Shares
offered hereby. If the Underwriters exercise their over-allotment option,
they have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof that the number of Shares purchased
by each of them in the underwriting bears to the total number of Shares
indicated above. If purchased, the Underwriters will sell such additional
Shares on the same terms as those on which the initial Shares are being
offered.

The Trust and the Investment Manager have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may be
required to make in respect thereof.

Prior to this offering there has been no trading market for the Shares of
the Trust.

The Trust anticipates that certain Underwriters may from time to time act
as brokers or dealers in connection with the execution of the Trust's
portfolio transactions after they have ceased to be the Underwriters and,
subject to certain restrictions, may act as brokers while they are
Underwriters. An affiliate of the Representative is the Investment Manager of
the Trust and receives compensation from the Trust in connection with such
services. See "The Trust and its Management," "Investment Management
Agreement" and "Portfolio Transactions and Brokerage." Certain Trustees and
Executive Officers of the Trust are, or formerly were, officers and/or
directors of the Representative or DWR. See "Trustees and Officers."

The Trust intends to apply for the listing of its Shares on the New York
Stock Exchange under the symbol " ." In order to meet the requirements for
listing, the Underwriters will undertake to sell lots of 100 or more Shares
to a minimum of 2,000 beneficial owners.

REPORTS TO SHAREHOLDERS
- -----------------------------------------------------------------------------
The Trust will send to shareholders semi-annual reports showing the
Trust's portfolio and other information. An annual report, containing
financial statements audited by independent accountants, together with their
report thereon, will be sent to shareholders each year.

<PAGE>

LEGAL OPINIONS AND EXPERTS
- -----------------------------------------------------------------------------
Certain legal matters in connection with the Shares offered hereby will be
passed upon for the Trust by Sheldon Curtis, Esq., who is an officer and the
General Counsel of the Trust and of Dean Witter InterCapital Inc., and for
the Underwriters by Brown & Wood, New York, New York. Both Sheldon Curtis,
Esq. and Brown & Wood may rely upon the opinion of Lane & Altman, Boston,
Massachusetts as to matters of Massachusetts law.

The statement of assets and liabilities of the Trust at September , 1994
included herein has been so included in reliance upon the report of Price
Waterhouse, independent accountants, given on the authority of said firm as
experts in auditing and accounting.

FURTHER INFORMATION
- -----------------------------------------------------------------------------
This Prospectus does not contain all of the information set forth in the
Registration Statement that the Trust has filed with the Securities and
Exchange Commission. The complete Registration Statement may be obtained from
the Securities and Exchange Commission upon payment of the fee prescribed by
the Rules and Regulations of the Commission.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
To the Shareholder and Trustees of
InterCapital Managed Municipal Trust

In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of InterCapital
Managed Municipal Trust (the "Trust") at September , 1994, in conformity
with generally accepted accounting principles. This financial statement is
the responsibility of the Trust's management; our responsibility is to
express an opinion on this financial statement based on our audit. We
conducted our audit of this financial statement in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.

September , 1994

<PAGE>

INTERCAPITAL MANAGED MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES AT SEPTEMBER , 1994
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
Assets:
Cash .......................................................................$
Deferred organization expenses (Note 1) ....................................
------------
Total assets ..............................................................
Liabilities:
Organization expenses payable (Note 1) .....................................
Commitments (Notes 1 and 2) ................................................
------------

Net assets:
Shares of beneficial interest, $.01 par value; unlimited number of shares
authorized, shares issued and outstanding .............................
Paid-in surplus attributable to Shares ......................................
------------
$
============
Net asset value per Share ................................................... $
============
- ---------------
<FN>
Note 1--InterCapital Managed Municipal Trust (the "Trust") was organized
as a Massachusetts business trust on June , 1994 and has had no operations
other than those relating to organizational matters and the issuance of
Shares of beneficial interest for $ to Dean Witter InterCapital Inc.
(the "Investment Manager"). The Trust is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified closed-end
management investment company.
Organization expenses relating to the Trust incurred and to be incurred by
the Investment Manager will be reimbursed by the Trust. Such expenses,
estimated at $ , will be deferred and amortized on the straight-line
method by the Trust against operations over a period not to exceed sixty
months from the commencement of operations of the Trust. Costs relating to
the public offering of its common shares, estimated to be $ , will be
paid from the proceeds of the offering and charged to capital at the time of
issuance of such Shares.

Note 2--The Trust will enter into an Investment Management Agreement with
the Investment Manager. Certain officers and/or Trustees of the Trust are
officers and/or directors of the Investment Manager. The Investment Manager
is a wholly-owned subsidiary of Dean Witter, Discover & Co.
The Investment Management Agreement provides for the Investment Manager to
receive a fee computed weekly and payable monthly at the annual rate of %
of the Trust's average weekly net assets. The Investment Manager will provide
portfolio management and certain administrative, clerical and bookkeeping
services for the Trust.
</TABLE>

Dean Witter Trust Company (the "Transfer Agent"), an affiliate of the
Investment Manager, is the transfer agent of the Trust's Shares, Dividend
Disbursing Agent for payment of dividends and distributions and Agent for
shareholders under the Dividend Reinvestment Plan.

<PAGE>

APPENDIX A

RATINGS OF INVESTMENTS
- -----------------------------------------------------------------------------

MOODY'S INVESTORS SERVICE INC. ("MOODY'S")

MUNICIPAL BOND RATINGS

<TABLE>
<CAPTION>
<S> <C>
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa
group they comprise what are generally known as high grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.
A Bonds which are rated A possess many favorable investment attributes and are to be considered as
upper medium grade obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to impairment sometime in the
future.
Baa Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly
protected nor poorly secured. Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be characteristically unreliable over
any great length of time. Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Bonds rated Aaa, Aa, A and Baa are considered investment grade bonds.
Ba Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered
as well assured. Often the protection of interest and principal payments may be very moderate, and
therefore not well safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract over any long period
of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present
elements of danger with respect to principal or interest.
Ca Bonds which are rated Ca present obligations which are speculative in a high degree. Such issues are
often in default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
</TABLE>

A-1

<PAGE>

Conditional Rating: Bonds for which the security depends upon the
completion of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience,
(c) rentals which begin when facilities are completed, or (d) payments to
which some other limiting condition attaches. Parenthetical rating denotes
probable credit stature upon completion of construction or elimination of
basis of condition.

Rating Refinements: Moody's may apply numerical modifiers, 1, 2 and 3 in
each generic rating classification from Aa through B in its municipal bond
rating system. The modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and a modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.

MUNICIPAL NOTE RATINGS

Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). MIG 1 denotes best quality and
means there is present strong protection from established cash flows,
superior liquidity support or demonstrated broad-based access to the market
for refinancing. MIG 2 denotes high quality and means that margins of
protection are ample although not as large as in MIG 1. MIG 3 denotes
favorable quality and means that all security elements are accounted for but
that the undeniable strength of the previous grades, MIG 1 and MIG 2, is
lacking. MIG 4 denotes adequate quality and means that the protection
commonly regarded as required of an investment security is present and that
while the notes are not distinctly or predominantly speculative, there is
specific risk.

VARIABLE RATE DEMAND OBLIGATIONS

A short-term rating, in addition to the Bond or MIG ratings, designated
VMIG may also be assigned to an issue having a demand feature. The assignment
of the VMIG symbol reflects such characteristics as payment upon periodic
demand rather than fixed maturity dates and payment relying on external
liquidity. The VMIG rating criteria are identical to the MIG criteria
discussed above.

COMMERCIAL PAPER RATINGS

Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess
of nine months. These ratings apply to Municipal Commercial Paper as well as
taxable Commercial Paper. Moody's employs the following three designations,
all judged to be investment grade, to indicate the relative repayment
capacity of rated issuers: Prime-1, Prime-2, Prime-3.

Issuers rated Prime-1 have a superior capacity for repayment of short-term
promissory obligations. Issuers rated Prime-2 have a strong capacity for
repayment of short-term promissory obligations; and Issuers rated Prime-3
have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated Not Prime do not fall within any of the Prime
rating categories.

STANDARD & POOR'S CORPORATION ("STANDARD & POOR'S" OR "S&P")

MUNICIPAL BOND RATINGS

A Standard & Poor's municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers,
or lessees.

The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the
timely

A-2

<PAGE>

payment of interest and repayment of principal in accordance with the terms
of the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

Standard & Poor's does not perform an audit in connection with any rating
and may, on occasion, rely on unaudited financial information. The ratings
may be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other reasons.

<TABLE>
<CAPTION>
<S> <C>
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's. Capacity to pay interest and
repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay principal and differs from the
highest-rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas
it normally exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher-rated categories.
Bonds rated AAA, AA, A and BBB are considered investment grade bonds.
BB Debt rated "BB" has less near-term vulnerability to default than other speculative grade debt. However,
it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions
which could lead to inadequate capacity to meet timely interest and principal payment.
B Debt rated "B" has a greater vulnerability to default but presently has the capacity to meet interest
payments and principal repayments. Adverse business, financial or economic conditions would likely
impair capacity or willingness to pay interest and repay principal.
CCC Debt rated "CCC" has a current identifiable vulnerability to default, and is dependent upon favorable
business, financial and economic conditions to meet timely payments of interest and repayments of
principal. In the event of adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal.
CC The rating "CC" is typically applied to debt subordinated to senior debt which is assigned an actual or
implied "CCC" rating.
C The rating "C" is typically applied to debt subordinated to senior debt which is assigned an actual or
implied "CCC--" debt rating.
Cl The rating "Cl" is reserved for income bonds on which no interest is being paid.
D Debt rated "D" is in payment default. The 'D' rating category is used when interest payments or
principal payments are not made on the date due even if the applicable grace period has not expired,
unless S&P believes that such payments will be made during such grace period. The 'D' rating also will
be used upon the filing of a bankruptcy petition if debt service payments are jeopardized.

A-3

<PAGE>

<PAGE>
<S> <C>
NR Indicates that no rating has been requested, that there is insufficient information on which to base a
rating or that Standard & Poor's does not rate a particular type of obligation as a matter of policy.
Bonds rated "BB," "B," "CCC," "CC" and "C" are regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least
degree of speculation and "C" the highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by the addition of a plus or minus
sign to show relative standing within the major ratings categories.
The foregoing ratings are sometimes followed by a "p" which indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project being financed by bonds being rated
and indicates that payment of debt service requirements is largely or entirely dependent upon the
successful and timely completion of the project. This rating, however, while addressing credit quality
subsequent to completion of the project, makes no comment on the likelihood or risk of default upon
failure of such completion.
</TABLE>

MUNICIPAL NOTE RATINGS

Commencing on July 27, 1984, Standard & Poor's instituted a new rating
category with respect to certain municipal note issues with a maturity of
less than three years. The new note ratings denote the following:

SP-1 denotes a very strong or strong capacity to pay principal and
interest. Issues determined to possess overwhelming safety characteristics
are given a plus (+) designation (SP-1+).

SP-2 denotes a satisfactory capacity to pay principal and interest.

SP-3 denotes a speculative capacity to pay principal and interest.

COMMERCIAL PAPER RATINGS

Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to
purchase or sell a security. The ratings are based upon current information
furnished by the issuer or obtained by S&P from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into
group categories, ranging from "A" for the highest quality obligations to "D"
for the lowest. Ratings are applicable to both taxable and tax-exempt
commercial paper. The categories are as follows:

Issues assigned A ratings are regarded as having the greatest capacity for
timely payment. Issues in this category are further refined with the
designation 1, 2 and 3 to indicate the relative degree of safety.

A-1 indicates that the degree of safety regarding timely payment is very
strong.

A-2 indicates capacity for timely payment on issues with this designation
is strong. However, the relative degree of safety is not as overwhelming as
for issues designated "A-1."

A-3 indicates a satisfactory capacity for timely payment. Obligations
carrying this designation are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.

A-4

<PAGE>

APPENDIX B

FUTURES AND OPTIONS
- -----------------------------------------------------------------------------

Interest Rate Futures Contracts. The Trust may purchase and sell interest
rate futures contracts ("futures contracts") that are traded on U.S.
commodity exchanges on such underlying securities as U.S. Treasury bonds,
notes, and bills. As a futures contract purchaser, the Trust incurs an
obligation to take delivery of a specified amount of the obligation
underlying the contract at a specified time in the future for a specified
price. As a seller of a futures contract, the Trust incurs an obligation to
deliver the specified amount of the underlying obligation at a specified time
in return for an agreed upon price.

The Trust will purchase or sell futures contracts only for the purpose of
hedging its portfolio (or anticipated portfolio) securities against changes
in prevailing interest rates. If the Investment Manager anticipates that
interest rates may rise, the Trust may sell a futures contract to protect
against the potential decline in the value of the securities held by the
Trust. However, it is possible that the futures market may advance and the
value of securities held in the Trust's portfolio may decline. If this were
to occur, the Trust would lose money on the futures contracts and also
experience a decline in value in its portfolio securities. However, while
this could occur for a very brief period or to a very small degree, over time
the value of a diversified portfolio will tend to move in the same direction
as the futures contracts. If declining interest rates are anticipated, the
Trust may purchase a futures contract to protect against a potential increase
in the price of securities the Trust intends to purchase. If the Trust
purchases a futures contract to hedge against the increase in value of
securities it intends to buy, and the value of such securities decreases,
then the Trust may determine not to invest in the securities as planned and
will realize a loss on the futures contract that is not offset by a reduction
in the price of the securities.

Although most interest rate futures contracts call for actual delivery or
acceptance of debt securities, the contracts usually are closed out before
the settlement date without the making or taking of delivery. A futures
contract sale is closed out by effecting a futures contract purchase for the
same aggregate amount of the specific type of debt security and the same
delivery date. If the sale price exceeds the offsetting purchase price, the
seller would be paid the difference and would realize a gain. If the
offsetting purchase price exceeds the sale price, the seller would pay the
difference and would realize a loss. Similarly, a futures contract purchase
is closed out by effecting a futures contract sale for the same aggregate
amount of the specific type of debt security and the same delivery date. If
the offsetting sale price exceeds the purchase price, the purchaser would
realize a gain whereas if the purchase price exceeds the offsetting sale
price, the purchaser would realize a loss. There is no assurance that the
Trust will be able to enter into a closing transaction.

When the Trust enters into a futures contract it is initially required to
deposit with its Custodian, in a segregated account in the name of the broker
performing the transaction, an "initial margin" of cash, U.S. Government
securities or other high-grade short-term debt obligations equal to
approximately 2% of the contract amount. Initial margin requirements are
established by the Exchanges on which futures contracts trade and may, from
time to time, change. In addition, brokers may establish margin deposit
requirements in excess of those required by the Exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing
of funds by a broker's client but is, rather, a good faith deposit on the
futures contract which will be returned to the Trust upon the proper
termination of the futures contract. The margin deposits made are marked to
market daily and the Trust may be required to make

B-1

<PAGE>

subsequent deposits into the segregated account, maintained at its Custodian
for that purpose, of cash, U.S. Government securities or other high-grade
short-term debt obligations called "variation margin," in the name of the
broker, which are reflective of price fluctuations in the futures contract.

Options on Interest Rate Futures. The Trust may purchase and write call
and put options on futures contracts which are traded on an Exchange and
enter into closing transactions with respect to such options to terminate an
existing position. (Put and call options on financial futures have similar
characteristics as Exchange-traded options on debt securities. For a further
description of such options, see the "Options" section below.) Premiums
received from the writing of an option are included in initial margin
deposits. An option on a futures contract gives the purchaser the right, and
the writer the obligation, in return for the premium paid, to assume a
position in a futures contract (a long position if the option is a call and a
short position if the option is a put) at a specified exercise price at any
time during the term of the option. Upon exercise of the option, the delivery
of the futures position by the writer of the option to the holder of the
option is accompanied by delivery of the accumulated balance in the writer's
futures margin account, which represents the amount by which the market price
of the futures contract at the time of exercise exceeds, in the case of a
call, or is less than, in the case of a put, the exercise price of the option
on the futures contract. If the holder decides not to enter into the
contract, the premium paid for the contract is lost. Since the value of the
option is fixed at the point of sale, there are no daily payments of cash to
reflect the change in the value of the underlying contract, as discussed for
futures contracts. The value of the option changes and is reflected in the
net asset value of the Trust.

Limitations on Futures and Options Thereon. The Trust is required to
maintain margin deposits with brokerage firms through which it effects
futures contracts and options thereon. The initial margin requirements vary
according to the type of the underlying security. In addition, due to current
industry practice, daily variations in gains and losses on open contracts are
required to be reflected in cash in the form of variation margin payments.
The Trust may be required to make additional margin payments during the term
of the contract. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.

The Trust may not purchase and sell future contracts or purchase related
options thereon if, immediately thereafter, the amount committed to initial
margin plus the amount paid for premiums for unexpired options on futures
contracts for other than bona fide hedging purposes exceeds 5% of the value
of the Trust's total assets.

The Trust will only purchase and write options on futures contracts to
hedge a position or anticipated position in Municipal Obligations or to close
out a long or short position in futures contracts. If, for example, the
Investment Manager wished to protect against an increase in interest rates
and the resulting negative impact on the value of a portion of its portfolio,
it might write a call option on a futures contract, the underlying security
of which correlates with the portion of the portfolio the Investment Manager
seeks to hedge. Any premiums received in the writing of options on futures
contracts may, of course, augment the income of the Trust and thereby provide
a further hedge against losses resulting from price declines in portions of
the Trust's portfolio.

In instances involving the purchase of futures contracts by the Trust, an
amount of cash, Treasury bills or other high grade short-term debt
obligations equal to the market value of the futures contract will be
deposited in a segregated account with its custodian to collateralize the
position and thereby ensure that the use of such futures contract is
unleveraged. There is no overall limitation on the percentage of the Trust's
portfolio securities which may be subject to a hedge position. In addition,
the Trust will cover all purchases of futures contracts and options thereon
by maintaining a segregated account with its

B-2

<PAGE>

custodian consisting of cash, Treasury bills or other high grade short-term
debt obligations in an amount equal to the value of the futures or option
position less than the amount of initial or variation margin for the
contracts.

Options. The Trust may purchase or sell (write) options on debt securities
as a means of achieving additional return or hedging the Trust's portfolio
securities. The Trust will only write covered call or covered put options,
and will only purchase options, which are listed on national securities
exchanges. Listed options are issued by the Options Clearing Corporation
("OCC"). Ownership of a listed call option gives the Trust the right to buy
from the OCC the underlying security covered by the option at the stated
exercise price (the price per unit of the underlying security) by filing an
exercise notice prior to the expiration date of the option. The writer
(seller) of the option would then have the obligation to sell to the OCC the
underlying security at that exercise price prior to the expiration date of
the option, regardless of its then current market price. Ownership of a
listed put option would give the Trust the right to sell the underlying
security to the OCC at the stated exercise price. Upon notice of exercise of
the put option, the writer of the put would have the obligation to purchase
the underlying security from the OCC at the exercise price.

Covered Call Writing. The Trust may write covered call options on debt
securities only, in order to achieve additional return. As a writer of a call
option, the Trust has the obligation, upon notice of exercise of the option,
to deliver the security underlying the option prior to the expiration date of
the option. Generally, a call option is "covered" if the Trust owns, or has
the right to acquire, without additional cash consideration (or for
additional cash consideration held for the Trust by its Custodian in a
segregated account) the underlying security subject to the option. A call
option is also covered if the Trust holds a call on the same security as the
underlying security of the written option, where the exercise price of the
call used for coverage is equal to or less than the exercise price of the
call written or greater than the exercise price of the call written if the
marked-to-market difference is maintained by the Trust in cash, U.S.
Government securities or other high-grade short-term debt obligations which
the Trust may hold in its portfolio in a segregated account maintained with
the Trust's custodian.

The Trust will receive from the purchaser, in return for a call it has
written, a "premium"; i.e., the price of the option. Furthermore, the income
received from the premium will offset a portion of any potential loss
incurred by the Trust if the securities underlying the option are ultimately
sold by the Trust at a loss. The income received from premiums will fluctuate
with varying economic market conditions. If the market value of the
securities upon which call options have been written increases, the Trust may
receive less total return from the portion of its portfolio upon which calls
have been written than it would have had such calls not been written.

As regards listed options, during the option period the Trust may be
required, at any time, to deliver the underlying security against payment of
the exercise price on any calls it has written. This obligation is terminated
upon the expiration of the option period or at such earlier time when the
writer effects a closing purchase transaction. A closing purchase transaction
is accomplished by purchasing an option of the same series as the option
previously written. However, once the Trust has been assigned an exercise
notice, the Trust will be unable to effect a closing purchase transaction.

Closing purchase transactions are ordinarily effected to realize a profit
on an outstanding call option, to prevent an underlying security from being
called, to permit the sale of an underlying security or to enable the Trust
to write another call option on the underlying security with either a
different exercise price or expiration date or both. Also, effecting a
closing purchase transaction will permit the cash or proceeds from the
concurrent sale of any securities subject to the option to be used for other
investments

B-3

<PAGE>

by the Trust. The Trust may realize a net gain or loss from a closing
purchase transaction depending upon whether the amount of the premium
received on the call option is more or less than the cost of effecting the
closing purchase transaction. Any loss incurred in a closing purchase
transaction may be wholly or partially offset by unrealized appreciation in
the market value of the underlying security. Conversely, a gain resulting
from a closing purchase transaction could be offset in whole or in part or
exceeded by a decline in the market value of the underlying security.

If a call option expires unexercised, the Trust realizes a gain in the
amount of the premium on the option less the commission paid. Such a gain,
however, may be offset by depreciation in the market value of the underlying
security during the option period. If a call option is exercised, the Trust
realizes a gain or loss from the sale of the underlying security equal to the
difference between the purchase price of the underlying security and the
proceeds of the sale of the security plus the premium received on the option
less the commission paid.

Options written by the Trust will normally have expiration dates of up to
nine months from the date written. The exercise price of a call option may be
below, equal to or above the current market value of the underlying security
at the time the option is written.

Covered Put Writing. As a writer of covered put options, the Trust incurs
an obligation to buy the security underlying the option from the purchaser of
the put, at the option's exercise price at any time during the option period,
at the purchaser's election. A put is "covered" if, at all times, the Trust
maintains, in a segregated account maintained on its behalf at the Trust's
Custodian, cash, U.S. Government securities or other high-grade short-term
debt obligations, in an amount equal to at least the exercise price of the
option, at all times during the option period. In writing puts, the Trust
assumes the risk of loss should the market value of the underlying security
decline below the exercise price of the option. During the option period, the
Trust may be required, at any time, to make payment of the exercise price
against delivery of the underlying security. The operation of and limitations
on covered put options in other respects are substantially identical to those
of call options.

The Trust will write put options for two purposes: (1) to receive the
income derived from the premiums paid by purchasers; and (2) when the
Investment Manager wishes to purchase the security underlying the option at a
price lower than its current market price, in which case it will write the
covered put at an exercise price reflecting the lower purchase price sought.
The potential gain on a covered put option is limited to the premium received
on the option (less the commissions paid on the transaction) while the
potential loss equals the difference between the exercise price of the option
and the current market price of the underlying securities when the put is
exercised, offset by the premium received (less the commissions paid on the
transaction).

Purchasing Call and Put Options. The Trust may purchase listed call and
put options on debt securities. The Trust may purchase call options only in
order to close out a covered call position (see "Covered Call Writing"
above).

The Trust may purchase put options on securities which it holds (or has
the right to acquire) in its portfolio only to protect itself against a
decline in the value of the security. If the value of the underlying security
were to fall below the exercise price of the put purchased in an amount
greater than the premium paid for the option, the Trust would incur no
additional loss. The Trust may also purchase put options to close out written
put positions in a manner similar to call options closing purchase
transactions. In addition, the Trust may sell a put option which it has
previously purchased prior to the sale of the securities underlying such
option. Such a sale would result in a net gain or loss depending on whether

B-4

<PAGE>

the amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold. Any such gain or loss
could be offset in whole or in part by a change in the market value of the
underlying security. If a put option purchased by the Trust expired without
being sold or exercised, the premium would be lost.

Risks of Options and Futures Transactions. During the option period, the
covered call writer has, in return for the premium on the option, given up
the opportunity for capital appreciation above the exercise price should the
market price of the underlying security increase, but has retained the risk
of loss should the price of the underlying security decline. The secured put
writer also retains the risk of loss should the market value of the
underlying security decline below the exercise price of the option. In both
cases, the writer has no control over the time when it may be required to
fulfill its obligation as a writer of the option. Once an option writer had
received an exercise notice, it cannot effect a closing purchase transaction
in order to terminate its obligation under the option and must deliver the
underlying securities at the exercise price.

Prior to exercise or expiration, an option position can only be terminated
by entering into a closing purchase or sale transaction. If a covered call
option writer is unable to effect a closing purchase transaction, it cannot
sell the underlying security until the option expires or the option is
exercised. Accordingly, a covered call option writer may not be able to sell
an underlying security at a time when it might otherwise be advantageous to
do so. A secured put option writer who is unable to effect a closing purchase
transaction would continue to bear the risk of decline in the market price of
the underlying security until the option expires or is exercised. In
addition, a secured put writer would be unable to utilize the amount held in
cash, U.S. Government securities or other high-grade short-term debt
obligations as security for the put option for other investment purposes
until the exercise or expiration of the option.

The Trust may close out its position as writer of an option only if a
liquid secondary market exists on options exchanges for options of that
series. There is no assurance that such a market will exist. However, the
Trust may be able to purchase an offsetting option which does not close out
its position as a writer but constitutes an asset of equal value to the
obligation under the option written. If the Trust is not able to either enter
into a closing purchase transaction or purchase an offsetting position, it
will be required to maintain the securities subject to the call, or the
collateral underlying the put, even though it might not be advantageous to do
so, until a closing transaction can be entered into (or the option is
exercised or expires). Among the possible reasons for the absence of a liquid
secondary market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange;
(iii) trading halts, suspensions or other restrictions imposed with respect
to particular classes or series of options or underlying securities; (iv)
interruption of the normal operations on an exchange; (v) inadequacy of the
facilities of an exchange or the OCC to handle current trading volume; or
(vi) a decision by one or more exchanges to discontinue the trading of
options (or a particular class or series of options), in which event the
secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the OCC as a result of trades on that exchange would generally
continue to be exercisable in accordance with their terms.

There is similarly no assurance that a liquid secondary market will exist
for futures contracts and related options in which the Trust may invest. In
the event a liquid market does not exist, it may not be possible to close out
a futures position, and in the event of adverse price movements, the Trust
would continue to be required to make daily cash payments of variation
margin. In addition, limitations imposed by an exchange on which futures
contracts are traded may compel or prevent the Trust from closing out a
contract which may result in reduced gain or increased loss to the Trust. The
absence of a liquid market in futures contracts might cause the Trust to make
or take delivery of the underlying securities at a time when it may be
disadvantageous to do so.

B-5

<PAGE>

Exchanges may limit the amount by which the price of a futures contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit movements have ceased. In the event of adverse price movements,
the Trust would continue to be required to make daily cash payments of
variation margin on open futures positions. In such situations, if the Trust
has insufficient cash, it may have to sell portfolio securities to meet daily
variation margin requirements at a time when it may be disadvantageous to do
so. In addition, the Trust may be required to make or take delivery of the
instruments underlying interest rate futures contracts it holds at a time
when it is disadvantageous to do so. The inability to close options and
futures positions could also have an adverse impact on the Trust's ability to
effectively hedge its portfolio.

In the event of the bankruptcy of a broker through which the Trust engages
in transactions in options, futures or options thereon, the Trust could
experience delays and/or losses in liquidating open positions purchased or
sold through the broker and/or incur a loss of all or part of its margin
deposits with the broker. Transactions are entered into by the Trust only
with brokers or financial institutions deemed creditworthy by the Investment
Manager.

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security or futures
contract (whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or written
on one or more accounts or through one or more brokers). An exchange may
order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. These position limits may
restrict the number of listed options which the Trust may write.

While the futures contracts and options transactions to be engaged in by
the Trust for the purpose of hedging the Trust's portfolio securities are not
speculative in nature, there are risks inherent in the use of such
instruments. One such risk which may arise in employing futures contracts to
protect against the price volatility of portfolio securities is that the
prices of securities subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash
prices of the Trust's portfolio securities. The risk of imperfect correlation
may be increased by the fact that the Trust will invest in futures contracts
on taxable securities and there is no guarantee that the prices of taxable
securities will move in a similar manner to the prices of tax-exempt
securities. Another such risk is that the price of the futures contract may
not move in tandem with the change in prevailing interest rates against which
the Trust seeks a hedge. A correlation may be distorted by the fact that the
futures market is dominated by short-term traders seeking to profit from the
difference between a contract or security price objective and their cost of
borrowed funds. If participants in the futures market elect to close out
their contracts through offsetting transactions rather than meet margin
deposit requirements, distortions in the normal relationships between the
debt securities and futures market could result. Price distortions could also
result if investors in futures contracts opt to make or take delivery of
underlying securities rather than engage in closing transactions due to the
resultant reduction in the liquidity of the futures market. In addition, due
to the fact that, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin requirements
in the cash market, increased participation by speculators in the futures
market could cause distortions. Due to the possibility of price distortions
in the futures market and because of the imperfect correlation between
movements in the prices of debt securities and movements in the prices of
futures contracts, a correct forecast of interest rate trends by the
Investment Manager may still not result in a successful hedging transaction.
However, such distortions are generally minor and would diminish as the
contract approaches maturity.

Another risk is that the Investment Manager could be incorrect in its
expectations as to the direction or extent of various interest rate movements
or the time span within which the movements take place.

B-6

<PAGE>

For example, if the Trust sold futures contracts for the sale of securities
in anticipation of an increase in interest rates, and then interest rates
went down instead, causing bond prices to rise, the Trust would lose money on
the sale.

Compared to the purchase or sale of futures contracts, the purchase of
call or put options on futures contracts involves less potential risk to the
Trust because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances when a purchase
of a call or put option on a futures contract would result in a loss to the
Trust when the purchase or sale of a futures contract would not result in a
loss, such as when there is no movement in the prices of the underlying
securities. The writing of a put or call option on a futures contract
involves risks similar to those relating to transactions in futures contracts
as described above.

B-7

<PAGE>

APPENDIX C

RISKS OF CERTAIN MUNICIPAL OBLIGATIONS
- -----------------------------------------------------------------------------

The following is a summary of the risks associated with certain Municipal
Obligations in which the Trust reserves the right to invest more than 25% of
its total assets:

Health Care Facility Obligations. Some of the Municipal Obligations in
which the Trust may invest are obligations of issuers whose revenues are
derived from services provided by hospitals or other health care facilities,
including nursing homes. Ratings of bonds issued for health care facilities
are often based on feasibility studies that contain projections of occupancy
levels, revenues and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including, among other things, demand for services, the ability of the
facility to provide the services required, physicians' confidence in the
facility, management capabilities, economic developments in the service area,
competition from other similar providers, efforts by insurers and
governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance, and the termination or restriction
of governmental financial assistance, including that associated with
Medicare, Medicaid and other similar third party payor programs. Medicare
reimbursements are currently calculated on a prospective basis utilizing a
single nationwide schedule of rates and are not based on a provider's actual
costs. Such method of reimbursement may adversely affect reimbursements to
hospitals and other facilities for services provided under the Medicare
program and thereby may have an adverse effect on the ability of such
institutions to satisfy debt service requirements.

Certain health care facility bonds provide for redemption at par at any
time upon the sale by the issuer of the health care facilities to a
non-affiliated entity or in other special circumstances. In the event of a
default upon a bond secured by health care facilities, the limited
alternative uses for such facilities may result in the recovery upon such
collateral not providing sufficient funds to fully repay the bonds.

Various proposals for comprehensive changes in the national health care
system are pending before Congress and, if enacted, may materially effect the
sources of payment for health care facility obligations.

Housing Obligations. Some of the Municipal Obligations in which the Trust
may invest are obligations of issuers whose revenues are primarily derived
from mortgage loans to housing projects for low to moderate income families.
Such issues are generally characterized by mandatory redemption at par or
accreted value in the event of economic defaults and in the event of a
failure of the operator of a project to comply with certain covenants as to
the operation of the project. The ability of such issuers to make debt
service payments will be affected by events and conditions affecting financed
projects, including, among other things, the achievement and maintenance of
sufficient occupancy levels and adequate rental income, employment and income
conditions prevailing in local labor markets, increases in taxes, utility
costs and other operating expenses, the managerial ability of project
managers, changes in laws and governmental regulations, the appropriation of
subsidies and social and economic trends affecting the localities in which
the projects are located. Occupancy of such housing projects may be adversely
affected by high rent levels and income limitations imposed under federal and
state programs.

Single Family Mortgage Revenue Bonds. Some of the Municipal Obligations in
which the Trust may invest are single family mortgage revenue bonds, which
are issued for the purpose of making mortgages on or acquiring from
originating financial institutions notes secured by mortgages on, residences
located within the issuer's boundaries and owned by persons of low or
moderate income.

C-1

<PAGE>

Mortgage loans are generally partially or completely prepaid prior to their
final maturities as a result of events such as sale of the mortgaged
premises, default, condemnation or casualty loss. Because these bonds are
subject to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will
probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. Extraordinary mandatory redemption without premium
could also result from the failure of the issuer or the originating financial
institutions to make mortgage loans in sufficient amounts within a specified
time period. The redemption price of such issues may be more or less than the
offering price of such bonds. Additionally, unusually high rates of default
on the underlying mortgage loans may reduce revenues available for the
payment of principal of or interest on such mortgage revenue bonds.

Industrial Revenue Obligations. Some of the Municipal Obligations in which
the Trust may invest are industrial revenue bonds ("IRBs"), which are
tax-exempt securities issued by states, municipalities, public authorities or
similar entities to finance the cost of acquiring, constructing or improving
various industrial projects. These projects are usually operated by corporate
entities. Issuers are obligated only to pay amounts due on the IRBs to the
extent that funds are available from the unexpended proceeds of the IRBs or
receipts or revenues of the issuer under an arrangement between the issuer
and the corporate operator of a project. The arrangement may be in the form
of a lease, installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed to be
sufficient to meet the payments of amounts due on the IRBs. Regardless of the
structure, payment of IRBs is solely dependent upon the creditworthiness of
the corporate operator of the project and, if applicable, corporate
guarantor. Corporate operators or guarantors may be affected by many factors
which may have an adverse impact on the credit quality of the particular
company or industry. These include cyclicality of revenues and earnings,
regulatory and environmental restrictions, litigation resulting from
accidents or environmentally-caused illnesses, technological developments,
extensive competition and financial deterioration resulting from leveraged
buy-outs or takeovers. The IRBs may be subject to special or extraordinary
redemption provisions which may provide for redemption at par or accreted
value, plus, if applicable, a premium. The Trust cannot predict the causes or
likelihood of the redemption of IRBs prior to the stated maturity of such
bonds.

Electric Utility Obligations. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers whose revenues are primarily
derived from the sale of electric energy. The problems faced by such issuers
include the difficulty in obtaining approval for timely and adequate rate
increases from the applicable public utility commissions, the difficulty of
financing large construction programs, increased competition, reductions in
estimates of future demand for electricity in certain areas of the country,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely
affect the ability of the issuers of certain of the Municipal Obligations to
make payments on such bonds.

Airport Facility Revenue Bonds. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers which are payable from and
secured by revenues derived from the ownership and operation of airports,
including airports under construction. The major portion of an airport's
gross operating income is generally derived from landing fees or fees
received from signatory airlines pursuant to use agreements which consist of
annual payments for airport use, occupancy of certain terminal

C-2

<PAGE>

space, service fees and leases. Airport operating income may therefore be
affected by construction and operating costs and by local economic conditions
and air traffic or the ability of the airlines to meet their obligations
under the use agreements. The air transport industry is experiencing
significant variations in earnings and traffic, due to increased competition,
excess capacity, increased costs, deregulation, traffic constraints and other
factors, and several airlines are experiencing severe financial difficulties.
In particular, facilities with use agreements involving airlines experiencing
financial difficulty may experience a reduction in revenue due to the
possible inability of these airlines to meet their use agreement obligations
because of such financial difficulties and possible bankruptcy. The Trust
cannot predict what effect these industry conditions may have on airport
revenues which are dependent for payment on the financial condition of the
airlines and their usage of the particular airport facility.

Water and/or Sewerage Obligations. Some of the Municipal Obligations in
which the Trust may invest are obligations of issuers whose revenues are
derived from the sale of water and/or sewerage services. Such bonds are
generally payable from user fees. The problems of such issuers include the
ability to obtain timely and adequate rate increases, population decline
resulting in decreased user fees, the difficulty of financing large
construction programs, the limitations on operations and increased costs and
delays attributable to environmental considerations, the increasing
difficulty of obtaining or discovering new supplies of fresh water, the
effect of conservation programs and the impact of "no-growth" zoning
ordinances. All of such issuers have been experiencing certain of these
problems in varying degrees.

University and College Revenue Obligations. Some of the Municipal
Obligations in which the Trust may invest are obligations of issuers which
are, or which govern the operation of, colleges and universities and whose
revenues are derived mainly from tuition, dormitory revenues, grants and
endowments. General problems of such issuers include the prospect of a
declining percentage of the population consisting of "college" age
individuals, possible inability to raise tuitions and fees sufficiently to
cover increased operating costs, the uncertainty of continued receipt of
federal grants and state funding, and government legislation or regulations
which may adversely affect the revenues or costs of such issuers. All of such
issuers have been experiencing certain of these problems in varying degrees.

Bridge Authority and Tollroad Obligations. Some of the Municipal
Obligations in which the Trust may invest are obligations of issuers which
derive their payments from bridge, road or tunnel toll revenues. The problems
faced by such issuers include competition from toll-free vehicular
facilities, reduction in the availability of fuel to motorists or significant
increases in the costs thereof, increased costs and delays attributable to
environmental considerations and the difficulty in obtaining approval for
timely and adequate toll increases.

Resource Recovery Obligations. Some of the Municipal Obligations in which
the Trust may invest are obligations of issuers whose revenues are primarily
derived from the disposal of solid waste products and the sale of energy
generated by such disposal. Resource recovery plants in the United States
have experienced several well-publicized failures, in response to which
municipal entities wanting to solve their disposal problem by resource
recovery have been unwilling to accept the technological risk, turning
instead to equipment vendors to provide guarantees to cover that risk. The
municipal revenue streams pledged under these obligations can vary
considerably, and may involve a mixture of special taxes, user fees, and the
municipal entity's credit. Local ordinances attempting to control the flow of
solid waste are subject to constitutional limitations. A general fund pledge
can be equal to or less than a full faith and credit pledge. Economics and
financial feasibility of any project depend on a number of factors, including
whether (1) project cost estimates are commensurate with industry averages,
(2) solid waste to obtain full operating capacity is available, given
population growth and historical waste generation trends, (3)

C-3

<PAGE>

alternative disposal facilities will not pose any competitive threat to waste
flow, (4) the price at which energy produced by such facilities may be sold
is consistent with market assumptions, (5) facility and landfill options have
a useful life corresponding to the life of the bonds, and (6) management is
capable of construction, start-up, and plant operation. Judicial decisions
and changes in legislation and governmental regulations could affect the
continued operation of the resource recovery facilities.

C-4

<PAGE>

APPENDIX D

TAXABLE EQUIVALENT YIELDS FOR 1993
- -----------------------------------------------------------------------------

TAXABLE INCOME* A TAX-FREE YIELD OF
- ------------------------------------- --------------------------------
1994
FEDERAL % % % % %
SINGLE RETURN JOINT RETURN TAX BRACKET** IS EQUAL TO A TAXABLE YIELD OF
- ----------------- ------------------ --------------- --------------------------------
<S> <C> <C> <C>
$22,751 - $55,100 $ 38,001- $ 91,850 28.00% % % % % %
$55,101- $115,000 $ 91,851- $140,000 31.00% % % % % %
$115,001-$250,000 $140,001- $250,000 36.00% % % % % %
Over $250,000 Over $250,000 39.60% % % % % %
- ----------------- ------------------ --------------- ---------------------------------
<FN>
* The above table is based on the federal income tax brackets, which are
adjusted annually for inflation.

** The taxable yields shown above assume that an investor pays regular
Federal tax rather than the alternative minimum tax. The reduction, or
possible elimination, of the personal exemption deductions for
high-income taxpayers and the overall limit on itemized deductions may
cause an investor's actual marginal rate to exceed the rate used in the
above table for a particular range of taxable income. Additionally,
income may be subject to state and local taxes. The tax rates shown
above do not apply to corporate taxpayers. The tax characteristics of
the Trust are described more fully elsewhere in this Prospectus. Consult
your tax adviser for further details. This chart is for illustrative
purposes only and cannot be taken as an indication of anticipated Trust
performance.
</TABLE>

D-1

<PAGE>

APPENDIX E

COMPARISON OF COMPOUNDED YIELDS
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
% %
YEAR TAX-EXEMPT INVESTMENT TAXABLE INVESTMENT
------ ------------------------- ----------------------
<S> <C> <C>
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
</TABLE>

<TABLE>
<CAPTION>
ASSUMPTIONS
- -------------
<S> <C>
Yield and Reinvestment Rate on Tax-Exempt Investment ... %.
Yield and Reinvestment Rate on Taxable Investment ...... %.

</TABLE>

The % Taxable Investment column reflects a reduction for federal income
taxes at the 36% federal tax bracket. An investor's tax rate may differ from
the 36% rate assumption depending on the amount of the investor's income and
the reduction, or possible elimination, of the personal exemption deduction
for high-income taxpayers and an overall limit on itemized deductions.
Additionally, income may be subject to certain state and local taxes and the
federal alternative minimum tax. The tax characteristics of the Trust are
described more fully elsewhere in the Prospectus. Consult your tax adviser
for further details.

The above table does not apply to corporate investors.

E-1

<PAGE>

<PAGE>
INTERCAPITAL MANAGED
MUNICIPAL TRUST

7,000,000 SHARES OF
BENEFICIAL INTEREST

PROSPECTUS

DEAN WITTER DISTRIBUTORS INC.

SEPTEMBER , 1994
38579

<PAGE>

INTERCAPITAL MANAGED MUNICIPAL TRUST

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

i. Report of Independent Accountant (contained in
Prospectus)

ii. Statement on Assets and Liabilities as of September ,
1994

(b) Exhibits:
<TABLE>
<CAPTION>

Exhibit
Number Description
- ----- -----------
<S> <C>
1.(a) -- Declaration of Trust of Registrant

2. -- By-Laws of Registrant

3. -- None

4. -- Not Applicable

5. -- Copy of Trust's Dividend Reinvestment Plan*

6. -- Not Applicable
7. -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.*

8.(a) -- Form of Master Agreement Among Underwriters*

(b) -- Form of Underwriting Agreement*

9. -- Not Applicable

10.(a) -- Form of Custodian Agreement*

(b) -- Form of Amended and Restated Transfer Agency Agreement*

11. -- Not Applicable

<PAGE>

Exhibit
Number Description
- ------ ----------
<S> <C>
12. -- Opinion of Sheldon Curtis, Esq.*

13. -- Not Applicable

14. -- Consent of Price Waterhouse*

15. -- None

16. -- Investment Letter of Dean Witter InterCapital Inc.*

Other -- Powers of Attorney*
</TABLE>
- ---------------
[FN]
* To be filed by Amendment.

Item 25. Marketing Arrangements.

Reference is made to the Underwriting Agreement to be filed by
Amendment as Exhibit 8(b) to this Registration Statement.

Item 26. Other Expenses of Issuance and Distribution.

Securities and Exchange Commission
Registration Fee $ 41,637.93
New York Stock Exchange listed fee $

NASD registration fee $

Blue Sky Fees and Expenses $
(including fees of counsel)
Transfer Agent Fee $
Accounting fees and expenses $
Legal fees and expenses $
Printing and engraving $

Miscellaneous $
------------
$
============

Item 27. Persons Controlled by or Under Common Control With
Registrant.

<PAGE>

Prior to the effectiveness of this Registration Statement, the Registrant
will sell 7,113 of its shares of beneficial interest to Dean Witter
InterCapital Inc., a Delaware corporation. Dean Witter InterCapital Inc. is a
wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), a Delaware
corporation, that is a balanced financial services organization providing a
broad range of nationally marketed credit and investment products.
Item 28. Number of Holders of Securities.
<TABLE>
<CAPTION>
(1) (2)
Number of Record Holders
Title of Class at September , 1994
-------------- -------------------------
<S> <C>
Shares of Beneficial Interest 1
</TABLE>

Item 29. Indemnification.
Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the
Registrant's trustees, officers, employees and agents is permitted if it is
determined that they acted under the belief that their actions were in or not
opposed to the best interest of the Registrant, and, with respect to any
criminal proceeding, they had reasonable cause to believe their conduct was not
unlawful. In addition, indemnification is permitted only if it is determined
that the actions in question did not render them liable by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties
or by reason of reckless disregard of their obligations and duties to the
Registrant. Trustees, officers, employees and agents will be indemnified for
the expense of litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation. The
Registrant may also advance money for these expenses provided that they give
their undertakings to repay the Registrant unless their conduct is later
determined to permit indemnification.

Pursuant to Section 5.2 of the Registrant's Declaration of Trust and
paragraph 8 of the Registrant's Investment Management Agreement, neither the
Investment Manager nor any trustee, officer, employee or agent of the
Registrant shall be liable for any action or failure to act, except in the case
of bad faith, willful misfeasance, gross negligence or reckless disregard of
duties to the Registrant.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the

<PAGE>

foregoing provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer, or controlling person of the Registrant
in connection with the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such trustee, officer or controlling person
in connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act,
and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that it will apply the indemnification
provision of its by-laws in a manner consistent with Release 11330 of the
Securities and Exchange Commission under the Investment Company Act of 1940, so
long as the interpretation of Sections 17(h) and 17(i) of such Act remains in
effect.

Registrant, in conjunction with the Investment Manager, Registrant's
Trustees, and other registered investment management companies managed by the
Investment Manager, maintains insurance on behalf of any person who is or was a
Trustee, officer, employee, or agent of Registrant, or who is or was serving at
the request of Registrant as a trustee, director, officer, employee or agent of
another trust or corporation, against any liability asserted against him and
incurred by him or arising out of his position. However, in no event will
Registrant maintain insurance to indemnify any such person for any act for
which Registrant itself is not permitted to indemnify him.

Item 30. Business and Other Connections of Investment Adviser.

See "The Fund and Its Management" in the Prospectus regarding the business of
the investment adviser. The following information is given regarding officers
of Dean Witter InterCapital Inc. The term "Dean Witter Funds" used below
refers to the Registrant and the following other Funds: (1) InterCapital
Income Securities Inc., (2) High Income Advantage Trust, (3) High Income
Advantage Trust II, (4) High Income Advantage Trust III, (5) Municipal Income
Trust, (6) Municipal Income Trust II, (7) Municipal Income Trust III, (8) Dean
Witter Government Income Trust, (9) Municipal Premium Income Trust, (10)
Municipal Income Opportunities Trust, (11) Municipal Income Opportunities Trust
II, (12) Municipal Income Opportunities Trust III, (13) Prime Income Trust,
(14) InterCapital Insured Municipal Bond Trust, (15) InterCapital Quality
Municipal Income Trust, (16) InterCapital Quality Municipal Investment Trust,
(17) InterCapital Insured Municipal Income Trust, (18) InterCapital California
Insured Municipal Income Trust, (19) InterCapital

<PAGE>

Insured Municipal Trust, (20) InterCapital Quality Municipal Securities, (21)
InterCapital California Quality Municipal Securities, (22) InterCapital New
York Quality Municipal Securities, (23) InterCapital Insured Municipal
Securities and (24) InterCapital Insured California Municipal Securities,
registered closed-end investment companies, and (1) Dean Witter Global
Utilities Fund, (2) Dean Witter Tax-Exempt Securities Trust, (3) Dean Witter
Tax-Free Daily Income Trust, (4) Dean Witter Dividend Growth Securities Inc.,
(5) Dean Witter Convertible Securities Trust, (6) Dean Witter Liquid Asset Fund
Inc., (7) Dean Witter Developing Growth Securities Trust, (8) Dean Witter
Retirement Series, (9) Dean Witter Federal Securities Trust, (10) Dean Witter
World Wide Investment Trust, (11) Dean Witter U.S. Government Securities Trust,
(12) Dean Witter Select Municipal Reinvestment Fund, (13) Dean Witter High
Yield Securities Inc., (14) Dean Witter Intermediate Income Securities, (15)
Dean Witter New York Tax-Free Income Fund, (16) Dean Witter California Tax-Free
Income Fund, (17) Dean Witter Health Sciences Trust, (18) Dean Witter
California Tax-Free Daily Income Trust, (19) Dean Witter Managed Assets Trust,
(20) Dean Witter U.S. Government Money Market Trust, (21) Dean Witter American
Value Fund, (22) Dean Witter Strategist Fund, (23) Dean Witter Utilities Fund,
(24) Dean Witter Value-Added Market Series, (25) Dean Witter World Wide Income
Trust, (26) Dean Witter New York Municipal Money Market Trust, (27) Dean Witter
Capital Growth Securities, (28) Dean Witter Precious Metals and Minerals Trust,
(29) Dean Witter European Growth Fund Inc., (30) Dean Witter Global Short-Term
Income Fund Inc., (31) Dean Witter Pacific Growth Fund Inc., (32) Dean Witter
Multi-State Municipal Series Trust, (33) Dean Witter Premier Income Trust, (34)
Dean Witter Short-Term U.S. Treasury Trust, (35) Dean Witter Diversified Income
Trust, (36) Dean Witter Health Sciences Trust, (37) Dean Witter Global Dividend
Growth Securities, (38) Active Assets Tax-Free Trust, (39) Active Assets Money
Trust, (40) Active Assets Government Securities Trust, (41) Active Assets
California Tax-Free Income Trust, (42) Dean Witter Natural Resource Development
Securities Inc., (43) Dean Witter Variable Investment Series, (44) Dean Witter
Limited Term Municipal Trust, (45) Dean Witter Short-Term Bond Fund, (46) Dean
Witter National Municipal Trust, (47) Dean WItter High Income Securities and
(48) Dean Witter International SmallCap Fund, registered open-end investment
companies. InterCapital is a wholly-owned direct subsidiary of Dean Witter,
Discover & Co. The principal address of the Dean Witter Funds is Two World
Trade Center, New York, New York 10048. The term "TCW/DW Funds" refers to the
following Funds: (1) TCW/DW Core Equity Trust, (2) TCW/DW North American
Government Income Trust, (3) TCW/DW Latin American Growth Fund, (4) TCW/DW
Income and Growth Fund, (5) TCW/DW Small Cap Growth Fund, (6) TCW/DW Balanced
Fund and (7) TCW/DW North American Intermediate Income Trust, registered open-
end investment companies, and (8) TCW/DW Term Trust 2000, (9) TCW/DW Term Trust
2002, (10) TCW/DW Term Trust 2003 and (11) TCW/DW Emerging Markets
Opportunities Trust, registered closed-end investment companies.

<PAGE>

Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------ ---------------------
Charles A. Chairman, Chief Executive Vice
Fiumefreddo Executive Officer President and Director
and Director of Dean Witter Reynolds Inc. ("DWR");
Chairman, Director
or Trustee, President and Chief
Executive Officer of the Dean Witter
Funds; Chairman, Chief Executive
Officer and Trustee of the TCW/DW
Funds; Chairman and Director of Dean
Witter Trust Company("DWTC");
Chairman, Chief Executive Officer and
Director of Dean Witter Distributors
Inc. ("Distributors") and Dean Witter
Services Company Inc.("DWSC");
Formerly Executive Vice President and
Director of Dean Witter, Discover &
Co. ("DWDC"); Director and/or officer
of DWDC subsidiaries.

Philip J. Director Chairman, Chief
Purcell Executive Officer and Director of
DWDC and DWR; Director of DWSC
and Distributors.

<PAGE>

Richard M. Director President and Chief
DeMartini Operating Officer of
Dean Witter Capital
and Direector of DWR,
DWSC and Distributors.

James F. Director President and Chief
Higgins Operating Officer of
Dean Witter Financial;
Director of DWR, DWSC
and Distributors.

Thomas C. Executive Vice Executive Vice
Schneider President, Chief President, Chief
Financial Officer Financial Officer
and Director and Director of
DWR, DWSC and
Distributors.

Christine A. Director Executive Vice
Edwards President, Secretary,
General Counsel and
Director of DWR
DWSC and Distributors.

Robert M. Scanlan President and Vice President of
Chief Operating the Dean Witter Funds
Officer and the TCW/DW Funds;
President of DWSC;
Executive Vice
President of
Distributors;
Executive Vice
President and
Director of DWTC.

David A. Hughey Executive Vice Vice President of the
President and Dean Witter Funds and
Chief Administrative the TCW/DW Funds;
Officer Executive Vice
President, Chief

<PAGE>

Other Substantial
Business, Profession,
Position with Vocation or Employment,
Dean Witter including Name, Prin-
InterCapital cipal Address and
Name Inc. Nature of Connection
---- ------------- ----------------------
Administrative Officer
and Director of DWTC;
Executive Vice President
and Chief Administrative
Officer of Distributors.

Edmund C. Executive Vice Vice President of the
Puckhaber President Dean Witter Funds.

John Van Heuvelen Executive Vice President and Chief
President Executive Officer of
DWTC.

Sheldon Curtis Senior Vice Vice President,
President, Secretary and General
General Counsel Counsel of the
and Secretary Dean Witter Funds and
the TCW/DW Funds; Senior
Vice President and
Secretary of DWTC;
Assistant Secretary
of DWR and DWDC; Senior
Vice President, General
Counsel and Secretary of
DWSC; Senior Vice
President, Assistant
General Counsel and
Assistant Secretary
of Distributors.
Peter M. Avelar Senior Vice Vice President of
President various Dean Witter
Funds.

Mark Bavoso Senior Vice Vice President of
President various Dean Witter
Funds.

Thomas H. Connelly Senior Vice Vice President of
President various Dean Witter
Funds.

Edward Gaylor Senior Vice Vice President of
President various Dean Witter
Funds.

Rajesh K. Gupta Senior Vice Vice President of
President various Dean Witter
Funds.
8

<PAGE>

John B. Kemp, III Senior Vice Director of the
President Provident Savings
Bank, Jersey City,
New Jersey.

Anita Kolleeny Senior Vice Vice President of
President various Dean Witter
Funds.
Jonathan R. Page Senior Vice Vice President of
President various Dean Witter
Funds.
Ira Ross Senior Vice Vice President of
President various Dean Witter
Funds.

Rochelle G. Siegel Senior Vice Vice President of
President various Dean Witter
Funds.

Paul D. Vance Senior Vice Vice President of
President various Dean Witter
Funds.

Elizabeth A. Senior Vice
Vetell President

James F. Senior Vice Vice President of
Willison President various Dean Witter
Funds.

Ronald Worobel Senior Vice Vice President of
President various Dean Witter
Funds.
Thomas F. Caloia First Vice Treasurer of the
President and Dean Witter Funds
Assistant Treasurer and the TCW/DW Funds;
Assistant Treasurer
of DWSC; Assistant
Treasurer of
Distributors.

<PAGE>

Marilyn K. Cranney First Vice Assistant Secretary
President and of the Dean Witter
Assistant Funds and the TCW/DW
Secretary Funds; Vice President
and Assistant
Secretary of DWSC;
Assistant Secretary
of DWR and DWDC.

Barry Fink First Vice Assistant Secretary
President, of the Dean Witter
Assistant Funds and TCW/DW
General Counsel Funds; First Vice
and Assistant President and
Secretary Assistant Secretary
of DWSC.

Michael First Vice First Vice President
Interrante President and and Controller of
Controller DWSC; Assistant
Treasurer of
Distributors.

Robert Zimmerman First Vice
President

Joan G. Allman Vice President

Joseph Arcieri Vice President

Terence P. Brennan, II Vice President

Stephen Brophy Vice President

Douglas Brown Vice President

Rosalie Clough Vice President

B. Catherine Vice President
Connelly

Salvatore DeSteno Vice President Vice President of
DWSC.

Frank J. DeVito Vice President Vice President of
DWSC.

Dwight Doolan Vice President

Bruce Dunn Vice President
10

<PAGE>

Geoffrey D. Flynn Vice President Vice President of
DWSC.

Bette Freedman Vice President

Jeffrey D. Geffen Vice President

Deborah Genovese Vice President

Peter W. Gurman Vice President

Shant Harootunian Vice President

John Hechtlinger Vice President

Jack C. Henry Vice President

David T. Hoffman Vice President

David Johnson Vice President

Christopher Jones Vice President

Stanley Kapica Vice President

Konrad J. Krill Vice President

Paula LaCosta Vice President Vice President of
various Dean Witter
Funds.

Lawrence S. Lafer Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and Assistant
Secretary of DWSC.

Thomas Lawlor Vice President

Lou Anne D. McInnis Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and AssistantSecretary of DWSC.

Sharon K. Milligan Vice President

James Mulcahy Vice President

James Nash Vice President
11

<PAGE>

Ruth Rossi Vice President, Assistant Secretary
Assistant of the Dean Witter
General Counsel Funds and the TCW/DW
and Assistant Funds; Vice President
Secretary and Assistant
Secretary of DWSC.

Carl F. Sadler Vice President

Howard A. Schloss Vice President

Rafael Scolari Vice President

Rose Simpson Vice President

Stuart Smith Vice President

Diane Lisa Sobin Vice President Vice President of
various Dean Witter
Funds.

Kathleen Stromberg Vice President Vice President of
various Dean Witter
Funds.

Vinh Q. Tran Vice President Vice President of
various Dean Witter
Funds.

Alice Weiss Vice President Assistant Vice
President of various
Dean Witter Funds.

Jayne M. Wolff Vice President

Marianne Zalys Vice President
Item 31. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained by the Investment Manager at its offices, except records
relating to holders of shares issued by the Registrant, which are maintained by
the Registrant's Transfer Agent, at its place of business as shown in the
Statement of Additional Information.

<PAGE>

Item 32. Management Services

Registrant is not a party to any such management-related service
contract.
Item 33. Undertakings.

(a) Registrant undertakes to suspend offering of the shares covered hereby
until it amends its prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than 10 per cent from its net asset value per share as of the
effective date of this Registration Statement, or (2) its net asset value
increases to an amount greater than its net proceeds as stated in the
prospectus contained herein.

(b) Not applicable

The undersigned Registrant undertakes to assist shareholders in
communicating with other shareholders for the purpose of removing trustees by
providing the support specified in Section 16(c) of the 1940 Act as though such
Section applied.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
Registration Statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the Registration
Statement as of the time it was declared effective.

(2) For purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York and the State of New York on the 14th
day of June, 1994.

INTERCAPITAL MANAGED MUNICIPAL TRUST
By: /s/ Sheldon Curtis
----------------------------
Sheldon Curtis
Trustee, Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on 14th day of June, 1994.
Signatures Title Date
---------- ----- ----

By:/s/ Charles A. Fiumefreddo Chairman, President,
---------------------------- Trustee and 06/14/94
Charles A. Fiumefreddo Chief Executive Officer

By:/s/ David A. Hughey Trustee 06/14/94
---------------------------
David A. Hughey

Trustee, Vice President
By:/s/ Sheldon Curtis and Secretary 06/14/94
---------------------------
Sheldon Curtis

Treasurer, Chief Financial
By:/s/ Thomas F. Caloia Officer and Chief Accounting 06/14/94
---------------------------- Officer
Thomas F. Caloia

<PAGE>

Exhibit Index
1.(a) -- Declaration of Trust of Registrant

2. -- By-Laws of Registrant

3. -- None

4. -- Not Applicable

5. -- Copy of Trust's Dividend Reinvestment Plan*

6. -- Not Applicable
7. -- Form of Investment Management Agreement between
Registrant and Dean Witter InterCapital Inc.*

8.(a) -- Form of Master Agreement Among Underwriters*

(b) -- Form of Underwriting Agreement*

9. -- Not Applicable

10.(a) -- Form of Custodian Agreement*

(b) -- Form of Amended and Restated Transfer Agency Agreement*

11. -- Not Applicable

12. -- Opinion of Sheldon Curtis, Esq.*

13. -- Not Applicable

14. -- Consent of Price Waterhouse*

15. -- None

16. -- Investment Letter of Dean Witter InterCapital Inc.*

Other -- Powers of Attorney*

- ---------------
* To be filed by Amendment.

EXHIBIT 1(a)

INTERCAPITAL MANAGED MUNICIPAL TRUST

DECLARATION OF TRUST

Dated: June 9, 1994
Two World Trade Center
New York, NY 10048

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I NAME AND DEFINITIONS . . . . . . . . . . . . . . . . . 1

Section 1.1. Name . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Definitions. . . . . . . . . . . . . . . . . . . 1

ARTICLE II TRUSTEES . . . . . .. . . . . . . . . . . . . . . . . . 3

Section 2.1. Number of Trustees . . . . . . . . . . . . . . . 3
Section 2.2. Term of Office of Trustees . . . . . . . . . . . 3
Section 2.3. Resignation and Appointment of Trustees. . . . . 4
Section 2.4. Vacancies. . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Delegation of Power to Other Trustees. . . . . . 5

ARTICLE III POWERS OF TRUSTEES . . . . . . . . . . . . . . . . . . . . 5

Section 3.1. General. . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Investments. . . . . . . . . . . . . . . . . . . 5
Section 3.3. Legal Title. . . . . . . . . . . . . . . . . . . 6
Section 3.4. Issuance and Repurchase of Securities. . . . . . 6
Section 3.5. Borrowing Money; Lending Trust Assets. . . . . . 6
Section 3.6. Delegation; Committees . . . . . . . . . . . . . 7
Section 3.7. Collection and Payment . . . . . . . . . . . . . 7
Section 3.8. Expenses . . . . . . . . . . . . . . . . . . . . 7
Section 3.9. Manner of Acting; By-Laws. . . . . . . . . . . . 7
Section 3.10. Miscellaneous Powers . . . . . . . . . . . . . . 7
Section 3.11. Principal Transactions. . . . . . . . . . . . . 8
Section 3.12. Litigation . . . . . . . . . . . . . . . . . . . 8
Section 3.13. Trustees and Officers as Shareholders. . . . . . 8

ARTICLE IV INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT . . .. . . . . . . 9

Section 4.1. Investment Adviser . . . . . . . . . . . . . . . 9
Section 4.2. Administrative Services. . . . . . . . . . . . . 9
Section 4.3. Distributor. . . . . . . . . . . . . . . . . . . 9
Section 4.4. Transfer Agent . . . . . . . . . . . . . . . . . 9
Section 4.5. Custodian. . . . . . . . . . . . . . . . . . . . 10
Section 4.6. Parties to Contract. . . . . . . . . . . . . . . 10
Section 4.7. Compliance with the 1940 Act . . . . . . . . . . 10

(i)

<PAGE>

ARTICLE V LIMITATIONS OF LIABILITY OF
SHAREHOLDERS, TRUSTEES AND OTHERS. . . . . . . 10

Section 5.1. No Personal Liability of Shareholders,
Trustees, etc. . . . . . . . . . . . 11
Section 5.2. Non-Liability of Trustees, etc.. . . . . . . . . 12
Section 5.3. Indemnification. . . . . . . . . . . . . . . . . 11
Section 5.4. No Bond Required of Trustees . . . . . . . . . . 11
Section 5.5. No Duty of Investigation; Notice in
Trust Instruments, etc.. . . . . . . . 11
Section 5.6. Reliance on Experts, etc.. . . . . . . . . . . . 12

ARTICLE VI SHARES OF BENEFICIAL INTEREST. . . . . . . . . . . . . 12

Section 6.1. Beneficial Interest. . . . . . . . . . . . . . . 12
Section 6.2. Rights of Shareholders . . . . . . . . . . . . . 12
Section 6.3. Trust Only . . . . . . . . . . . . . . . . . . . 13
Section 6.4. Issuance of Shares . . . . . . . . . . . . . . . 13
Section 6.5. Register of Shares . . . . . . . . . . . . . . . 13
Section 6.6. Transfer of Shares . . . . . . . . . . . . . . . 13
Section 6.7. Notices. . . . . . . . . . . . . . . . . . . . . 14
Section 6.8. Voting Powers. . . . . . . . . . . . . . . . . . 14

ARTICLE VII DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS . . . . . . . . . 15

ARTICLE VIII DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC. . . . . . . . . . . . 15

Section 8.1. Duration . . . . . . . . . . . . . . . . . . . . 15
Section 8.2. Termination of the Trust . . . . . . . . . . . . 15
Section 8.3. Amendment Procedure. . . . . . . . . . . . . . . 16
Section 8.4. Merger, Consolidation and Sale
of Assets. . . . . . . . . . . . . . . 17
Section 8.5. Incorporation and Reorganization . . . . . . . . 17
Section 8.6. Conversion . . . . . . . . . . . . . . . . . . . 18
Section 8.7. Certain Transactions . . . . . . . . . . . . . . 18

ARTICLE IX REPORTS TO SHAREHOLDERS. . . . . . . . . . . . . .. . . 19
(ii)

<PAGE>

ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . 19

Section 10.1. Filing . . . . . . . . . . . . . . . . . . . . . 19
Section 10.2. Resident Agent . . . . . . . . . . . . . . . . . 20
Section 10.3. Governing Law. . . . . . . . . . . . . . . . . . 20
Section 10.4. Counterparts . . . . . . . . . . . . . . . . . . 20
Section 10.5. Reliance by Third Parties. . . . . . . . . . . . 20
Section 10.6. Provisions in Conflict with Law or
Regulations 20
Section 10.7. Use of the name "InterCapital" . . . . . . . . . 21
Section 10.8. Principal Place of Business. . . . . . . . . . . 21
(iii)

<PAGE>

DECLARATION OF TRUST
OF
INTERCAPITAL MANAGED MUNICIPAL TRUST

Dated: June 9, 1994
THE DECLARATION OF TRUST of InterCapital Managed Municipal
Trust is made the 9th day of June, 1994 by the parties signatory hereto, as
trustees (such persons, so long as they shall continue in office in accordance
with the terms of this Declaration of Trust, and all other persons who at the
time in question have been duly elected or appointed as trustees in accordance
with the provisions of this Declaration of Trust and are then in office, being
hereinafter called the "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the
laws of Massachusetts for the investment and reinvestment of funds contributed
thereto; and

WHEREAS, it is provided that the beneficial interest in the
trust assets be divided into transferable shares of beneficial interest as
hereinafter provided;

NOW, THEREFORE, the Trustees hereby declare that they will hold
in trust, all money and property contributed to the trust fund to manage and
dispose of the same for the benefit of the holders from time to time of the
shares of beneficial interest issued hereunder and subject to the provisions
hereof, to wit:
ARTICLE I

NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is
the "InterCapital Managed Municipal Trust," and so far as may be practicable
the Trustees shall conduct the Trust's activities, execute all documents and
sue or be sued under that name, which name (and the word "Trust" wherever
herein used) shall refer to the Trustees as Trustees, and not as individuals,
or personally, and shall not refer to the officers, agents, employees or
Shareholders of the Trust. Should the Trustees determine that the use of such
name is not advisable, they may use such other name for the Trust as they deem
proper and the Trust may hold its property and conduct its activities under
such other name.

Section 1.2. Definitions. Wherever they are used herein, the
following terms have the following respective meanings:

(a) "By-Laws" means the By-Laws referred to in Section 3.9
hereof, as from time to time amended.

(b) The terms "Commission," "Affiliated Person" and
"Interested Person," have the meanings given them in the 1940 Act.

(d) "Shares" means the shares of beneficial interest in the
Trust as described in Section 6.1 hereof and includes fractions of Shares as
well as whole Shares.

(e) "Declaration" means this Declaration of Trust as
amended from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein" and "hereunder" shall be deemed to refer to
this Declaration rather than the article or section in which such words appear.

(f) "Distributor" means the party, other than the Trust, to
the contract described in Section 4.3 hereof.

(g) "Fundamental Policies" shall mean the investment
policies and restrictions set forth in the Registration Statement and
designated as fundamental policies therein.

(h) "Investment Adviser" means any party, other than the
Trust, to a contract described in Section 4.1 hereof.

(i) "Majority Shareholder Vote" means the vote of the
holders of a majority of Shares, which shall consist of: (i) a majority of
Shares represented in person or by proxy and entitled to vote at a meeting of
Shareholders at which a quorum, as determined in accordance with the By-Laws,
is present; (ii) a majority of Shares issued and outstanding and entitled to
vote when action is taken by written consent of Shareholders; and (iii) a
"majority of the outstanding voting securities," as the phrase is defined in
the 1940 Act, when any action is required by the 1940 Act by such majority as
so defined.

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

(k) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
<PAGE>

or not legal entities, and governments and agencies and political subdivisions
thereof.

(l) "Registration Statement" means the Registration
Statement of the Trust under the Securities Act of 1933 as such Registration
Statement may be amended and filed with the Commission from time to time.

(m) "Shareholder" means a record owner of outstanding
Shares.

(n) "Shares" means the units of interest into which the
beneficial interest in the Trust shall be divided from time to time as
described in Section 6.1 and includes fractions of Shares as well as whole
Shares.

(o) "Transfer Agent" means the party, other than the Trust,
to the contract described in Section 4.4 hereof.

(p) "Trust" means the InterCapital Managed Municipal Trust.

(q) "Trust Property" means any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust or the Trustees.

(r) "Trustees" means the persons who have signed the
Declaration, so long as they shall continue in office in accordance with the
terms hereof, and all other persons who may from time to time be duly elected
or appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in their capacity as trustees hereunder.

ARTICLE II

TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall
be such number as shall be fixed from time to time by a written instrument
signed by a majority of the Trustees, provided, however, that the number of
Trustees shall in no event be less than three (3) nor more than fifteen (15).
No reduction in the number of Trustees shall have the effect of removing any
Trustee from office prior to the expiration of his term unless the Trustee is
specifically removed pursuant to Section 2.2 of this Article II at the time of
decrease.

Section 2.2. Term of Office of Trustees. The term of office
of all of the Trustees shall expire on the date of the first annual meeting of
Shareholders or special meeting in lieu thereof following the effective date of
the Registration Statement relating to the Shares under the Securities Act of
1933, as amended. Following the first annual or special meeting, the Board of
Trustees shall be divided into three classes. Within the limits above
specified, the number of Trustees in each class shall be determined by
resolution of the Board of Trustees. The term of office of the first class
shall expire on the date of the second annual meeting of Shareholders or
special meeting in lieu thereof. The term of office of the second class shall
expire on the date of the third annual meeting of Shareholders or special
meeting in lieu thereof. The term of office of the third class shall expire on
the date of the fourth annual meeting of Shareholders or special meeting in
lieu thereof. Upon expiration of the term of office of each class as set forth
above, the number of Trustees in such class, as determined by the Board of
Trustees, shall be elected for a term expiring on the date of the third annual
meeting of Shareholders or special meeting in lieu thereof following such
expiration to succeed the Trustees whose terms of office expire. The Trustees
shall be elected by a Majority Shareholder Vote at an annual meeting of
Shareholders or special meeting in lieu thereof called for that purpose, except
as provided in Section 2.3 of this Article. Each Trustee elected shall hold
office until his successor shall have been elected and shall have qualified;
except that (a) any Trustee may resign his trust (without need for prior or
subsequent accounting) by an instrument in writing signed by him or her and
delivered to the other Trustees, which shall take effect upon such delivery or
upon such later date as is specified therein; (b) any Trustee may be removed
(provided the aggregate number of Trustees after such removal shall not be less
than the number required by Section 2.1 hereof) with cause, at any time by
written instrument, signed by the remaining Trustees, specifying the date when
such removal shall become effective; (c) any Trustee who requests in writing to
be retired or who has become incapacitated by illness or injury may be retired
by written instrument signed by a majority of the other Trustees, specifying
the date of his retirement; and (d) a Trustee may be removed at any meeting of
Shareholders by a vote of eighty percent (80%) of the outstanding Shares. Upon
the resignation or removal of a Trustee, or his otherwise ceasing to be
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining
Trustees shall require as provided in the preceding sentence.

Section 2.3. Resignation and Appointment of Trustees. In case
of the declination, death, resignation, retirement, removal or inability of any
of the Trustees, or in case a vacancy shall, by reason of an increase in
number, or for any other reason, exist, the remaining Trustees or, prior to the
public offering of Shares of the Trust, if only one Trustee shall then remain
in office, the remaining Trustee, shall fill such vacancy by appointing such
other person as they or he, in their or his discretion, shall see fit. Such
<PAGE>

appointment shall be evidenced by a written instrument signed by a majority of
the remaining Trustees or by the remaining Trustee, as the case may be. Any
such appointment shall not become effective, however, until the person named in
the written instrument or appointment shall have accepted in writing such
appointment and agreed in writing to be bound by the terms of the Declaration.
Within twelve months of such appointment, the Trustees shall cause notice of
such appointment to be mailed to each Shareholder at his address as recorded on
the books of the Trust. An appointment of a Trustee may be made by the
Trustees then in office and notice thereof mailed to Shareholders as aforesaid
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. The power of
appointment is subject to the provisions of Section 16(a) of the 1940 Act.

Section 2.4. Vacancies. The death, declination, resignation,
retirement, removal or incapacity of the Trustees, or any one of them, shall
not operate to annul the Trust or to revoke any existing agency created
pursuant to the terms of this Declaration. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in Section 2.3,
the Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees shall be conclusive evidence
of the existence of such vacancy.
Section 2.5. Delegation of Power to Other Trustees. Subject
to the provisions of the 1940 Act, any Trustee may, by power of attorney,
delegate his power for a period not exceeding six (6) months at any one time to
any other Trustee or Trustees; provided that in no case shall less than two (2)
Trustees personally exercise the powers granted to the Trustees under the
Declaration except as herein otherwise expressly provided. Nothing in this
Section 2.5 shall apply to, or limit the ability of any Trustee to grant any
power of attorney for the purpose of executing any registration statement filed
with the Commission or thereto relating to Shares.

ARTICLE III

POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its
branches and maintain offices both within and without the Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities wheresoever
in the world they may be located and to do all such other things and execute
all such instruments as they deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of
the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of the Declaration, the presumption shall be in favor
of a grant of power to the Trustees.

The enumeration of any specific power herein shall not be
construed as limiting the aforesaid power. Such powers of the Trustees may be
exercised without order of or resort to any court.

Section 3.2. Investments. The Trustees shall have the power
to:

(a) conduct, operate and carry on the business of an
investment company;

(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute,
lend or otherwise deal in or dispose of negotiable or nonnegotiable
instruments, obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, reverse repurchase
agreements, options, commodities, commodity futures contracts and related
options, currencies, currency futures and forward contracts, and other
securities, investment contracts and other instruments of any kind, including,
without limitation, those issued, guaranteed or sponsored by any and all
Persons including, without limitation, states, territories and possessions of
the United States, the District of Columbia and any of the political
subdivisions, agencies or instrumentalities thereof, and by the United States
Government or its agencies or instrumentalities, foreign or international
instrumentalities, or by any bank or savings institution, or by any corporation
or organization organized under the laws of the United States or of any state,
territory or possession thereof, and of corporations or organizations organized
under foreign laws, or in "when issued" contracts for any such securities, or
retain Trust assets in cash and from time to time change the investments of the
assets of the Trust; and to exercise any and all rights, powers and privileges
of ownership or interest in respect of any and all such investments of every
kind and description, including, without limitation, the right to consent and
otherwise act with respect thereto, with power to designate one or more
persons, firms, associations or corporations to exercise any of said rights,
<PAGE>

powers and privileges in respect of any of said instruments; and the Trustees
shall be deemed to have the foregoing powers with respect to any additional
securities in which the Trust may invest should the Fundamental Policies be
amended.

The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees
be limited by any law limiting the investments which may be made by
fiduciaries.

Section 3.3. Legal Title. Legal title to all the Trust
Property shall be vested in the Trustees as joint tenants except that the
Trustees shall have power to cause legal title of any Trust Property to be held
by or in the name of one or more of the Trustees, or in the name of the Trust,
or in the name of any other Person as nominee, on such terms as the Trustees
may determine, provided that the interest of the Trust therein is appropriately
protected. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee.
Upon the resignation, removal or death of a Trustee, he shall automatically
cease to have any right, title or interest in any of the Trust Property, and
the right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered.

Section 3.4. Issuance and Repurchase of Securities. The
Trustees shall have the power to issue, sell, repurchase, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in
Shares and, subject to the provisions set forth in Articles VI, VII and VIII
hereof, to apply to any such repurchase, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of the Commonwealth of Massachusetts governing business corporations.

Section 3.5. Borrowing Money; Lending Trust Assets. Subject
to the Fundamental Policies, the Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, to endorse,
guarantee, or undertake the performance of any obligation, contract or
engagement of any other Person and to lend Trust assets.

Section 3.6. Delegation; Committees. The Trustees shall have
power, consistent with their continuing exclusive authority over the management
of the Trust and the Trust Property and applicable provisions of the 1940 Act,
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient.

Section 3.7. Collection and Payment. The Trustees shall have
power to collect all property due to the Trust; to pay all claims, including
taxes, against the Trust Property; to prosecute, defend, compromise or abandon
any claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.

Section 3.8. Expenses. The Trustees shall have the power to
incur and pay any expenses which in the opinion of the Trustees are necessary
or incidental to carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and
Trustees.

Section 3.9. Manner of Acting; By-Laws. Except as otherwise
provided herein or in the By-Laws or by any provision of law, any action to be
taken by the Trustees may be taken by a majority of the Trustees present at a
meeting of Trustees (a quorum being present), including any meeting held by
means of a conference telephone circuit or similar communications equipment by
means of which all persons participating in the meeting can hear each other, or
by written consents of all the Trustees. The Trustees may adopt By-Laws not
inconsistent with this Declaration to provide for the conduct of the business
of the Trust and may amend or repeal such By-Laws to the extent such power is
not reserved to the Shareholders.

Section 3.10. Miscellaneous Powers. The Trustees shall have
the power to:

(a) employ or contract with such Persons as the Trustees
may deem desirable for the transaction of the business of the Trust or any
Series thereof;

(b) enter into joint ventures, partnerships and any other
combinations or associations;

(c) remove Trustees or fill vacancies in or add to their
number, elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, and appoint from their own number, and
terminate, any one or more committees which may exercise some or all of the
power and authority of the Trustees as the Trustees may determine;

(d) purchase, and pay for out of Trust Property or the
property of the Trust, insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, distributors, selected
dealers or independent contractors of the Trust against all claims arising by
reason of holding any such position or by reason of any action taken or omitted
to be taken by any such Person in such capacity, whether or not constituting
<PAGE>

negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability;

(e) establish pension, profit-sharing, Share purchase, and
other retirement, incentive and benefit plans for any Trustees, officers,
employees and agents of the Trust;

(f) to the extent permitted by law, indemnify any person
with whom the Trust has dealings, including any Investment Adviser,
Distributor, Transfer Agent and selected dealers, to such extent as the
Trustees shall determine;

(g) guarantee indebtedness or contractual obligations of
others;

(h) determine and change the fiscal year of the Trust and
the method by which its accounts shall be kept; and

(i) adopt a seal for the Trust but the absence of such seal
shall not impair the validity of any instrument executed on behalf of the
Trust.

Section 3.11. Principal Transactions. Except in transactions
permitted by the 1940 Act or any rule or regulation thereunder, or any order of
exemption issued by the Commission, or effected to implement the provisions of
any agreement to which the Trust is a party, the Trustees shall not, on behalf
of the Trust, buy any securities (other than Shares) from or sell any
securities (other than Shares) to, or lend any assets of the Trust to, any
Trustee or officer of the Trust or any firm of which any such Trustee or
officer is a member acting as principal, or have any such dealings with any
Investment Adviser, Distributor or Transfer Agent or with any Affiliated Person
of such Person; but the Trust may employ any such Person, or firm or company in
which such Person is an Interested Person, as broker, legal counsel, registrar,
transfer agent, dividend disbursing agent or custodian upon customary terms.

Section 3.12. Litigation. The Trustees shall have the power
to engage in and to prosecute, defend, compromise, abandon, or adjust, by
arbitration, or otherwise, any actions, suits, proceedings, disputes, claims,
and demands relating to the Trust, and out of the assets of the Trust to pay or
to satisfy any debts, claims or expenses incurred in connection therewith,
including those of litigation, and such power shall include without limitation
the power of the Trustees or any appropriate committee thereof, in the exercise
of their or its good faith business judgment, to dismiss any action, suit,
proceeding, dispute, claim, or demand, derivative or otherwise, brought by any
person, including a Shareholder in its own name or the name of the Trust,
whether or not the Trust or any of the Trustees may be named individually
therein or the subject matter arises by reason of business for or on behalf of
the Trust.

Section 3.13. Trustees and Officers as Shareholders. No
officer or Trustee of the Trust, and no officer or director of the Investment
Adviser or the Distributor, and no Investment Adviser or Distributor of the
Trust, shall take a short position in Shares.

ARTICLE IV

INVESTMENT ADVISER, DISTRIBUTOR, CUSTODIAN AND TRANSFER AGENT
Section 4.1. Investment Adviser. Subject to approval by a
Majority Shareholder Vote, the Trustees may in their discretion from time to
time enter into one or more investment advisory or management contracts whereby
the other party or parties to any such contracts shall undertake to furnish the
Trust such management, investment advisory, administration, accounting, legal,
statistical and research facilities and services, promotional or marketing
activities, and such other facilities and services, if any, as the Trustees
shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of the Declaration, the Trustees may authorize the Investment
Advisers, or any of them, under any such contracts (subject to such general or
specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities and other
investments of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of such Investment Advisers, or any of
them (and all without further action by the Trustees). Any such purchases,
sales, loans and exchanges shall be deemed to have been authorized by all of
the Trustees.

Section 4.2. Administrative Services. The Trustees may in
their discretion from time to time contract for administrative personnel and
services whereby the other party shall agree to provide the Trustees or the
Trust administrative personnel and services to operate the Trust on a daily or
other basis, on such terms and conditions as the Trustees may in their
discretion determine. Such services may be provided by one or more persons or
entitles.

Section 4.3. Distributor. The Trustees may in their
discretion from time to time enter into one or more contracts, providing for
the sale of Shares whereby the Trust may either agree to sell the Shares to the
other parties to the contracts, or any of them, or appoint any such other party
its sales agent for such Shares. In either case, any such contract shall be on
such terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article IV or the By-Laws, including,
<PAGE>

without limitation, the provision for the repurchase or sale of Shares of the
Trust by such other party as principal or as agent of the Trust, and for entry
by the other parties to the contracts into selected dealer agreements with
registered securities dealers to further the purpose of distribution of the
Shares.

Section 4.4. Transfer Agent. The Trustees may in their
discretion from time to time enter into a transfer agency and shareholder
service contract whereby the other party to such contract shall undertake to
furnish transfer agency and shareholder services to the Trust. The contract
shall have such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the Declaration or the By-Laws. Such services
may be provided by one or more Persons.

Section 4.5. Custodian. The Trustees may appoint or otherwise
engage one or more banks or trust companies, each having an aggregate capital,
surplus and undivided profits (as shown in its last published report) of at
least five million dollars ($5,000,000) to serve as Custodian with authority as
its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the By-Laws of the Trust.

Section 4.6. Parties to Contract. Any contract of the
character described in Sections 4.1, 4.2, 4.3, 4.4, or 4.5 of this Article IV
and any other contract may be entered into with any Person, although one or
more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract, and no
such contract shall be invalidated or rendered voidable by reason of the
existence of any such relationship; nor shall any Person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Trust under or by reason of said contract or accountable for any
profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article IV.
The same Person may be the other party to any contracts entered into pursuant
to Sections 4.1, 4.2, 4.3, 4.4 or 4.5 above or otherwise, and any individual
may be financially interested or otherwise affiliated with Persons who are
parties to any or all of the contracts mentioned in this Section 4.6.

Section 4.7. Compliance with the 1940 Act. Any contract
entered into pursuant to Sections 4.1, 4.2 and 4.3 shall be consistent with and
subject to the requirements of Section 15 of the Investment Company Act of 1940
(including any amendment thereof or other applicable Act of Congress hereafter
enacted) with respect to its continuance in effect, its termination and the
method of authorization and approval of such contract or renewal thereof.

ARTICLE V

LIMITATIONS OF LIABILITY OF
SHAREHOLDERS, TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders, Trustees,
etc. No Shareholder shall be subject to any personal liability whatsoever to
any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust. No Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever to any Person, other than
the Trust or its Shareholders, in connection with the Trust Property or the
affairs of the Trust, save only that arising from bad faith, willful
misfeasance, gross negligence or reckless disregard for his duty to such
Person; and all such Persons shall look solely to the Trust Property for
satisfaction of claims of any nature arising in connection with the affairs of
the Trust. If any Shareholder, Trustee, officer, employee or agent, as such,
of the Trust is made a party to any suit or proceeding to enforce any such
liability, he shall not, on account thereof, be held to any personal liability.
The Trust shall indemnify and hold each Shareholder harmless from and against
all claims and liabilities to which such Shareholder may become subject by
reason of his being or having been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The rights accruing to a
Shareholder under this Section 5.1 shall not exclude any other right to which
such Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.

Section 5.2. Non-Liability of Trustees, etc. No Trustee,
officer, employee or agent of the Trust shall be liable to the Trust, its
Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence
or reckless disregard of his or her duties.

Section 5.3. Indemnification. (a) The Trustees shall provide
for indemnification by the Trust of any person who is, or has been, a Trustee,
officer, employee or agent of the Trust against all liability and against all
expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee, officer, employee or agent and
against amounts paid or incurred by him in the settlement thereof, in such
manner as the Trustees may provide from time to time in the By-Laws.

(b) The words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal, or
other, including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
<PAGE>

judgments, amounts paid in settlement, fines, penalties and other liabilities.

Section 5.4. No Bond Required of Trustees. No Trustee shall
be obligated to give any bond or other security for the performance of any of
his duties hereunder.

Section 5.5. No Duty of Investigation; Notice in Trust
Instruments, etc. No purchaser, lender, transfer agent or other Person dealing
with the Trustees or any officer, employee or agent of the Trust shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in connection
with the Trust shall be conclusively presumed to have been executed or done by
the executors thereof only in their capacity as officers, employees or agents
of the Trust. Every written obligation, contract, instrument, certificate,
Share, other security of the Trust or undertaking made or issued by the
Trustees shall recite that the same is executed or made by them not
individually, but as Trustees under the Declaration, and that the obligations
of the Trust under any such instrument are not binding upon any of the Trustees
or Shareholders, individually, but bind only the Trust Estate, and may contain
any further recital which they or he may deem appropriate, but the omission of
such recital shall not affect the validity of such obligation, contract,
instrument, certificate, Share, security or undertaking and shall not operate
to bind the Trustees or Shareholders individually. The Trustees may maintain
insurance for the protection of the Trust Property, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.

Section 5.6. Reliance on Experts, etc. Each Trustee and
officer or employee of the Trust shall, in the performance of his duties, be
fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Trust, upon an opinion of counsel, or upon reports made
to the Trust by any of its officers or employees or by any Investment Adviser,
Distributor, Transfer Agent, selected dealers, accountants, appraisers or other
experts or consultants selected with reasonable care by the Trustees, officers
or employees of the Trust, regardless of whether such counsel or expert may
also be a Trustee.

ARTICLE VI

SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the
beneficiaries hereunder shall be divided into transferable shares of beneficial
interest of $.01 par value. The Board of Trustees of the Trust may authorize
separate classes of shares together with such designations and powers,
preferences and rights, qualifications, limitations and restrictions as may be
determined from time to time by the Board of Trustees. The number of such
shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection
with a dividend in Shares or a split in Shares, shall be fully paid and
nonassessable.

Pursuant to the powers vested in the Board of Trustees by this
Section 6.1, the Board of Trustees hereby authorizes the issuance of an
unlimited number of Shares of beneficial interest, par value $.01 per share
(the "Shares").

The designations and powers, preferences and rights, and the
qualifications, limitations and restrictions of the Shares are as set forth in
this Declaration of Trust.

Section 6.2. Rights of Shareholders. The ownership of the
Trust Property of every description and the right to conduct any business
hereinbefore described are vested exclusively in the Trustees, and the
Shareholders shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the
Trust, nor can they be called upon to assume any losses of the Trust or suffer
an assessment of any kind by virtue of their ownership of Shares. The Shares
shall be personal property giving only the rights in the Declaration
specifically set forth. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights except as the Trustees may
determine with respect to any class or series of shares.

Section 6.3. Trust Only. It is the intention of the Trustees
to create only the relationship of Trustee and beneficiary between the Trustees
and each Shareholder from time to time. It is not the intention of the
Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment or any form of legal relationship other than
a trust. Nothing in the Declaration shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.

Section 6.4. Issuance of Shares. The Trustees, in their
discretion may, from time to time without vote of the Shareholders, issue
<PAGE>

Shares, in addition to the then issued and outstanding Shares and Shares held
in the treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem best, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with
the assumption of liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares or
any class or series thereof into a greater or lesser number without thereby
changing the proportionate beneficial interests in the Trust. Contributions to
the Trust may be accepted for whole Shares and/or 1/1,000ths of a Share of
integral multiples thereof.

Section 6.5. Register of Shares. A register shall be kept in
respect of the Trust at the principal office of the Trust or at an office of
the Transfer Agent which shall contain the names and addresses of the
Shareholders and the number of Shares held by them respectively and a record of
all transfers thereof. Such register may be in written form or any other form
capable of being converted into written form within a reasonable time for
visual inspection. Such register shall be conclusive as to who are the holders
of the Shares and who shall be entitled to receive dividends or distributions
or otherwise to exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive payment of any dividend or distribution, nor to
have notice given to him as herein or in the By-Laws provided, until he has
given his address to the Transfer Agent or such other officer or agent of the
Trustees as shall keep the said register for entry thereon. The Trustees, in
their discretion, may authorize the issuance of Share certificates and
promulgate appropriate rules and regulations as to their use.

Section 6.6. Transfer of Shares. Shares shall be transferable
on the records of the Trust only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon delivery to the Trustees or the
Transfer Agent of a duly executed instrument of transfer, together with such
evidence of the genuineness of each such execution and authorization and of
other matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made, the
Shareholder of record shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor any Transfer Agent or registrar
nor any officer, employee or agent of the Trust shall be affected by any notice
of the proposed transfer.

Any person becoming entitled to any Shares in consequence of
the death, bankruptcy, or incompetence of any Shareholder, or otherwise by
operation of law, shall be recorded on the register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or
the Transfer Agent, but until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law, except as may otherwise be provided by
the laws of the Commonwealth of Massachusetts.

Section 6.7. Notices. Any and all notices to which any
Shareholder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage pre-paid, addressed to any Shareholder of
record at his last known address as recorded on the register of the Trust.
Annual reports and proxy statements need not be sent to a Shareholder if: (i)
an annual report and proxy statement for two consecutive annual meetings, or
(ii) all, and at least two, checks (if sent by first class mail) in payment of
dividends or interest and Shares during a twelve-month period have been mailed
to such Shareholder's address and have been returned undelivered. However,
delivery of such annual reports and proxy statements shall resume once a
Shareholder's current address is determined.

Section 6.8. Voting Powers. The Shareholders shall have power
to vote only (i) for the election of Trustees as provided in Section 2.2
hereof, (ii) for the removal of Trustees as provided in Section 2.2 hereof,
(iii) with respect to any investment advisory or management contract as
provided in Section 4.1, (iv) with respect to termination of the Trust as
provided in Section 8.2, (v) with respect to any amendment of the Declaration
to the extent and as provided in Section 8.3, (vi) with respect to any merger,
consolidation, conversion or sale of assets as provided in Sections 8.4, 8.5
and 8.6, (vii) with respect to incorporation or reorganization of the Trust to
the extent and as provided in Section 8.5, (viii) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders
and (ix) with respect to such additional matters relating to the Trust as may
be required by law, the Declaration, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or as and
when the Trustees may consider necessary or desirable. Each whole Share shall
be entitled to one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate fractional vote,
except that Shares held in the treasury of the Trust as of the record date, as
determined in accordance with the By-Laws, shall not be voted. There shall be
no cumulative voting in the election of Trustees. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, the Declaration or the By-Laws to be taken by Shareholders.
The By-Laws may include further provisions for Shareholders' votes and meetings
and related matters.

<PAGE>

ARTICLE VII

DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may prescribe and
shall set forth in the By-Laws or in a duly adopted vote of the Trustees such
bases and times for determining the per share net asset value of the Shares or
net income or the declaration and payment of dividends and distributions as
they may deem necessary or desireable.
ARTICLE VIII

DURATION: TERMINATION OF TRUST: AMENDMENT: MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without
limitation of time but subject to the provisions of this Article VIII.

Section 8.2. Termination of the Trust. (a) The Trust may be
terminated (i) by the affirmative vote of the holders of not less than eighty
percent (80%) of the Shares outstanding and entitled to vote, at any meeting of
Shareholders of the Trust, or (ii) by an instrument in writing, without a
meeting, signed by a majority of the Trustees and consented to by a Majority
Shareholder Vote of such Shares of the Trust.

Upon the termination of the Trust:

(A) The Trust shall carry on no business except for
the purpose of winding up its affairs.

(B) The Trustees shall proceed to wind up the
affairs of the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of the Trust,
collect its assets, sell, convey, assign, exchange, transfer or otherwise
dispose of all or any part of the remaining Trust Property to one or more
persons at public or private sale for consideration which may consist in whole
or in part of cash, securities or other property of any kind, discharge or pay
its liabilities, and to do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange, transfer or
other disposition of all or substantially all the Trust Property shall require
Shareholder approval in accordance with Section 8.4 hereof.

(C) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the Trustees
may distribute the remaining Trust Property, in cash or in kind or partly each,
among the Shareholders of the Trust according to their respective rights.

(b) After termination of the Trust and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties with respect to the Trust, and the rights
and interests of all Shareholders of the Trust shall thereupon cease.

Section 8.3. Amendment Procedure. (a) Except as provided in
paragraph (c) of this Section 8.3, this Declaration may be amended by a vote of
a majority of Shares outstanding and entitled to vote at a meeting of
Shareholders, or by an instrument in writing, without a meeting signed by a
majority of the Trustees and consented to by the holders of not less than a
majority of Shares outstanding and entitled to vote. The Trustees may also
amend this Declaration without the vote or consent of Shareholders (i) to
change the name of the Trust, (ii) to supply any omission, or cure, correct or
supplement any ambiguous, defective or inconsistent provision hereof, (iii) if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
Internal Revenue Code, or to eliminate or reduce any federal, state or local
taxes which are or may be payable by the Trust or the Shareholders, but the
Trustees shall not be liable for failing to do so, or (iv) for any other
purpose which does not adversely affect the rights of any Shareholder with
respect to which the amendment is or purports to be applicable.

(b) No amendment may be made under this Section 8.3 which
would change any rights with respect to any Shares of the Trust by reducing the
amount payable thereon upon liquidation of the Trust or by diminishing or
eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the class of Shares of the Trust so
effected outstanding and entitled to vote. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair the
exemption from personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon Shareholders.

(c) No amendment may be made under this Section 8.3 which
shall amend, alter, change or repeal any of the provisions of Sections 8.3,
8.4, 8.6 or 8.7 unless the amendment affecting such amendment, alteration,
change or repeal shall receive the affirmative vote or consent of eighty
percent (80%) of the Shares outstanding and entitled to vote. Such affirmative
vote or consent shall be in addition to the vote or consent of the holders of
Shares otherwise required by law or by the terms of any class or series of
<PAGE>

preferred shares, whether now or hereafter authorized, or any agreement between
the Trust and any national securities exchange.

(d) A certificate signed by a majority of the Trustees or
by the Secretary or any Assistant Secretary of the Trust, setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees or certified by the Secretary or any Assistant
Secretary of the Trust, shall be conclusive evidence of such amendment when
lodged among the records of the Trust. Unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective when lodged among the records of the Trust.

Notwithstanding any other provision hereof, until such time as
a Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.

Section 8.4. Merger, Consolidation and Sale of Assets. The
Trust may merge or consolidate with any other corporation, association, trust
or other organization or may sell, lease or exchange all or substantially all
of the Trust Property, including its good will, upon such terms and conditions
and for such consideration when and as authorized, at any meeting of
Shareholders called for the purpose, by the affirmative vote of the holders of
not less than eighty percent (80%) the Shares of the Trust outstanding and
entitled to vote or by an instrument or instruments in writing without a
meeting, consented to by the holders of not less than eighty percent (80%) of
such Shares; provided, however, that, if such merger, consolidation, sale,
lease or exchange is recommended by the Trustees, the vote or written consent
of the holders of a majority of the Shares outstanding and entitled to vote
shall be sufficient authorization; and any such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been accomplished
under and pursuant to the laws of the Commonwealth of Massachusetts. Nothing
contained herein shall be construed as requiring approval of Shareholders for
any sale of assets in the ordinary course of business of the Trust.

Section 8.5. Incorporation and Reorganization. With the
approval of the holders of a majority of each of the Shares outstanding and
entitled to vote, the Trustees may cause to be organized or assist in
organizing a corporation or corporations under the laws of any jurisdiction or
any other trust, partnership, association or other organization to take over
all of the Trust Property or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, convey and transfer the
Trust Property to any such corporation, trust, partnership, association or
organization in exchange for the shares or securities thereof or otherwise, and
to lend money to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization in which the Trust holds or is about to acquire shares or any
other interest. Subject to Section 8.4 hereof, the Trustees may also cause a
merger or consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to
the extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling,
conveying or transferring a portion of the Trust Property to such organization
or entities.

Section 8.6. Conversion. Notwithstanding any other provision
of this Declaration, the conversion of the Trust from a "closed-end company" to
an "open-end company," as those terms are defined in Sections 5(a)(2) and
5(a)(1), respectively, of the 1940 Act as in effect on December 1, 1986, shall
require the affirmative vote or consent of the holders of eighty percent (80%)
of the Shares outstanding and entitled to vote. Such affirmative vote or
consent shall be in addition to the vote or consent of the holders of the
Shares otherwise required by law or by the terms of any class or series of
preferred shares, whether now or hereafter authorized, or any agreement between
the Trust and any national securities exchange.

Section 8.7. Certain Transactions. (a) Notwithstanding any
other provision of this Declaration and subject to the exceptions provided in
paragraph (d) of this Section, the types of transactions described in paragraph
(c) of this Section shall require the affirmative vote or consent of the
holders of eighty percent (80%) of the Shares outstanding and entitled to vote
when a Principal Shareholder (as defined in paragraph (b) of this Section) is a
party to the transaction. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of Shares otherwise required by
law or by the terms of any class or series of preferred shares, whether nor or
hereafter authorized, or any agreement between the Trust and any national
securities exchange.

(b) The term "Principal Shareholder" shall mean any
corporation, person or other entity which is the beneficial owner, directly or
indirectly, of more than five percent (5%) of the outstanding Shares and shall
include any affiliate or associate, as such terms are defined in clause (ii)
below, of a Principal Shareholder. For the purposes of this Section, in
addition to the Shares which a corporation, person or other entity beneficially
owns directly, any corporation, person or other entity shall be deemed to be
the beneficial owner of any Shares (i) which it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
otherwise (but excluding share options granted by the Trust or (ii) which are
beneficially owned, directly or indirectly (including Shares deemed owned
<PAGE>

through application of clause (i) above), by any other corporation, person or
entity with which its "affiliate" or "associate" (as defined below) has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of Shares, or which is its "affiliate" or "associate" as
those terms are defined in rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934 as in effect on December 1, 1986, and
(b) the outstanding Shares shall include Shares deemed owned through
application of clauses (i) and (ii) above but shall not include any other
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights or warrants, or otherwise.

(c) This Section shall apply to the following transactions:
(i) the merger or consolidation of the Trust or any subsidiary of the Trust
with or into any Principal Shareholder; (ii) the issuance of any securities of
the Trust to any Principal Shareholder for cash; (iii) the sale, lease or
exchange of all or any substantial part of the assets of the Trust to any
Principal Shareholder (except assets having an aggregate fair market value of
less than $1,000,000, aggregating for the purpose of such computation all
assets sold, leased or exchanged in any series of similar transactions within a
twelve-month period; (iv) the sale, lease or exchange to the Trust or any
subsidiary thereof, in exchange for securities of the Trust of any assets of
any Principal Shareholder (except assets having an aggregate fair market value
of less than $1,000,000, aggregating for the purposes of such computation all
assets sold, leased or exchanged in any series of similar transactions within a
twelve-month period).

(d) The provisions of this Section shall not be applicable
to (i) any of the transactions described in paragraph (c) of this Section if
the Board of Trustees of the Trust shall by resolution have approved a
memorandum of understanding with such Principal Shareholder with respect to and
substantially consistent with such transaction, or (ii) any such transaction
with any corporation of which a majority of the outstanding shares of all
classes of stock normally entitled to vote in elections of directors is owned
of record or beneficially by the Trust and its subsidiaries.

(e) The Board of Trustees shall have the power and duty to
determine for the purposes of this Section on the basis of information known to
the Trust, whether (i) a corporation, person or entity beneficially owns more
than five percent (5%) of the outstanding Shares, (ii) a corporation, person or
entity is an "affiliate" or "associate" (as defined above) of another, (iii)
the assets being acquired or leased to or by the Trust or any subsidiary
thereof, constitute a substantial part of the assets of the Trust and have an
aggregate fair market value of less than $1,000,000, and (iv) the memorandum of
understanding referred to in paragraph (d) hereof is substantially consistent
with the transaction covered thereby. Any such determination shall be
conclusive and binding for all purposes of this Section.

ARTICLE IX

REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit or cause the
officers of the Trust to submit to the Shareholders a written financial report
of the Trust, including financial statements which shall at least annually be
certified by independent public accountants.
ARTICLE X

MISCELLANEOUS
Section 10.1. Filing. This Declaration and any amendment
hereto shall be filed in the office of the Secretary of the Commonwealth of
Massachusetts and in such other places as may be required under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee or by the Secretary or any
Assistant Secretary of the Trust stating that such action was duly taken in a
manner provided herein. A restated Declaration( integrating into a single
instrument all of the provisions of the Declaration which are then in effect
and operative, may be executed from time to time by a majority of the Trustees
and shall, upon filing with the Secretary of the Commonwealth of Massachusetts,
be conclusive evidence of all amendments contained therein and may thereafter
be referred to in lieu of the original Declaration and the various amendments
thereto.

Section 10.2. Resident Agent. The Prentice-Hall Corporation
System, Inc., 84 State Street, Boston, Massachusetts 02109 is the resident
agent of the Trust in the Commonwealth of Massachusetts.

Section 10.3. Governing Law. This Declaration is executed by
the Trustees and delivered in the Commonwealth of Massachusetts and with
reference to the laws thereof and the rights of all parties and the validity
and construction of every provision hereof shall be subject to and construed
according to the laws of said state.

Section 10.4. Counterparts. The Declaration may be
simultaneously executed in several counterparts, each of which shall be deemed
to be an original, and such counterparts together, shall constitute one and the
same instrument, which shall be sufficiently evidenced by any such original
<PAGE>

counterpart.

Section 10.5. Reliance by Third Parties. Any certificate
executed by an individual who, according to the records of the Trust, appears
to be a Trustee hereunder, or Secretary or Assistant Secretary of the Trust,
certifying to: (a) the number or identity of Trustees or Shareholders, (b) the
due authorization of the execution of any instrument or writing, (c) the form
of any vote passed at a meeting of Trustees or Shareholders, (d) the fact that
the number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration, (e) the form
of any By-Laws adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their
successors.

Section 10.6. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provisions shall be deemed superseded by such law or regulation to
the extent necessary to eliminate such conflict; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.

(b) If any provision of the Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall pertain only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration in any jurisdiction.

Section 10.7. Use of the name "InterCapital". Dean Witter
InterCapital Inc. has consented to the use by the Trust of the identifying name
"InterCapital," which is a property right of Dean Witter InterCapital Inc. and
its parent. The Trust will only use the name as a component of its name and
for no other purpose, and will not purport to grant any third party the right
to use the name "InterCapital" for any purpose. Dean Witter InterCapital Inc.
and its parent, or any corporate affiliate of its parent, may use or grant to
others the right to use the name "InterCapital," or any combination or
abbreviation thereof, as all or a portion of a corporate or business name or
for any commercial purpose, including a grant of such right to any other
investment company. At the request of Dean Witter InterCapital Inc. or its
parent, the Trust will take such action as may be required to provide its
consent to the use by Dean Witter InterCapital Inc. and its parent, or by any
corporate affiliate of its parent, or by any person to whom Dean Witter
InterCapital Inc. or an affiliate of its parent shall have granted the right to
the use, of the name "InterCapital," or any combination or abbreviation
thereof. Upon the termination of any investment advisory agreement into which
Dean Witter InterCapital Inc. and the Trust may enter, the Trust shall, upon
request by Dean Witter InterCapital Inc. or its parent, cease to use the name
"InterCapital" as a component of its name, and shall not use the name, or any
combination or abbreviation thereof, as a part of its name or for any other
commercial purpose, and shall cause its officers, trustees and shareholders to
take any and all actions which Dean Witter InterCapital Inc. may request to
effect the foregoing and to reconvey to Dean Witter InterCapital Inc. any and
all rights to such name.
Section 10.8. Principal Place of Business. The principal
place of business of the Trust shall be Two World Trade Center, New York, New
York 10048, or such other location as the Trustees may designate from time to
time.

<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this
Declaration of Trust this 10th day of June, 1994.

/s/ Charles A. Fiumefreddo /s/ David A. Hughey
______________________________________ ____________________________
Charles A. Fiumefreddo, as David A. Hughey, as
Trustee and not individually Trustee and not
Two World Trade Center individually
New York, New York 10048 Two World Trade Center
New York, New York 10048

/s/ Sheldon Curtis
________________________________________
Sheldon Curtis, as Trustee
and not individually
Two World Trade Center
New York, New York 10048

STATE OF NEW YORK }
:ss.:
COUNTY OF NEW YORK }
On this 10th day of June, 1994, Charles A. Fiumefreddo, David A. Hughey
and Sheldon Curtis, known to me and known to be the individuals described in
and who executed the foregoing instrument, personally appeared before me and
they severally acknowledged the foregoing instrument to be their free act and
deed.

/s/ Marilyn K. Cranney
__________________________________________________
Notary Public

My commission expires: May 31, 1995

<PAGE>

IN WITNESS WHEREOF, the undersigned has executed this
Declaration of Trust this 10th day of June, 1994.

/s/ Joseph F. Mazzella
________________________
Joseph F. Mazzella, as
Trustee and not
individually
101 Federal Street
Boston, MA 02110

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS. Boston, MA
June 10, 1994
Then personally appeared before me the above-named Joseph F.
Mazzella, who acknowledged the foregoing instrument to be his free act and
deed.

/s/ Sheila McCarty
_________________________
Notary Public

My commission expires: May 31, 1996

<PAGE>

BY-LAWS

INTERCAPITAL MANAGED MUNICIPAL TRUST

ARTICLE I
DEFINITIONS

The terms "Commission", "Declaration", "Distributor", "Investment
Adviser", "Majority Shareholder Vote", "1940 Act", "Shareholder", "Shares",
"Transfer Agent", "Trust", "Trust Property", and "Trustees" have the
respective meanings given them in the Declaration of Trust of InterCapital
Managed Municipal Trust dated June 10, 1994.

ARTICLE II
OFFICES

SECTION 2.1. Principal Office. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.

SECTION 2.2. Other Offices. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.

ARTICLE III
SHAREHOLDERS' MEETINGS

SECTION 3.1. Place of Meetings. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

SECTION 3.2. Annual Meetings. An annual meeting of Shareholders, at which
the Shareholders shall elect Trustees and transact such other business as may
properly come before the meeting, shall be held, commencing in 1995, in June
of each year, the precise date during June to be fixed by the Board of
Trustees.

Section 3.3. Special Meetings. Special meetings of Shareholders of the
Trust shall be held whenever called by the Board of Trustees or the President
of the Trust. Special meetings of Shareholders shall also be called by the
Secretary upon the written request of the holders of Shares entitled to vote
not less than twenty-five percent (25%) of all the votes entitled to be cast
at such meeting or in the case of a meeting for the purpose of voting on the
removal of any Trustee or Trustees, upon written request of the Shareholders
entitled to vote on the removal of such Trustee or Trustees holding in the
aggregate not less than 10% of the outstanding shares. Such request for a
special meeting shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. The Secretary shall inform such
Shareholders of the reasonable estimated cost of preparing and mailing such
notice of the meeting, and, upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No special meeting need be called upon
the request of the holders of Shares entitled to cast less than a majority of
all votes entitled to be cast at such meeting, to consider any matter which
is substantially the same as a matter voted upon at any special meeting of
Shareholders held during the preceding twelve months.

SECTION 3.4. Notice of Meetings. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.

<PAGE>

SECTION 3.5. Quorum and Adjournment of Meetings. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders the holders of a majority of the Shares issued and outstanding
and entitled to vote thereat, present in person or represented by proxy,
shall be requisite and shall constitute a quorum for the transaction of
business. In the absence of a quorum, the Shareholders present or represented
by proxy and entitled to vote thereat shall have power to adjourn the meeting
from time to time. Any adjourned meeting may be held as adjourned without
further notice. At any adjourned meeting at which a quorum shall be present,
any business may be transacted as if the meeting had been held as originally
called.

SECTION 3.6. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, executed in writing by the Shareholder or his
duly authorized attorney-in-fact, for each Share of beneficial interest of
the Trust and for the fractional portion of one vote for each fractional
Share entitled to vote so registered in his name on the records of the Trust
on the date fixed as the record date for the determination of Shareholders
entitled to vote at such meeting. No proxy shall be valid after eleven months
from its date, unless otherwise provided in the proxy. At all meetings of
Shareholders, unless the voting is conducted by inspectors, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman of the
meeting. Pursuant to a resolution of a majority of the Trustees, proxies may
be solicited in the name of one or more Trustees or Officers of the Trust.

SECTION 3.7. Vote Required. Except as otherwise provided by law, by the
Declaration of Trust, these By-Laws or resolution of the Trustees specifying
a greater or lesser vote required for the transaction of any item of business
at any meeting of Shareholders, at each meeting of Shareholders at which a
quorum is present, all matters shall be decided by the vote of a majority of
the Shares present in person or represented by proxy and entitled to vote.

SECTION 3.8. Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.

SECTION 3.9. Inspection of Books and Records. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under the Corporations and Associations Law of
the State of Maryland.

SECTION 3.10. Action by Shareholders Without Meeting. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.

ARTICLE IV
TRUSTEES

SECTION 4.1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as

<PAGE>

shall be determined from time to time by the Trustees without further notice.
Special meetings of the Trustees may be called at any time by the President
and shall be called by the President or the Secretary upon the written
request of any two (2) Trustees.

SECTION 4.2. Notice of Special Meetings. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.

SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.

SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By- Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.

SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.

SECTION 4.6. Expenses and Fees. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.

SECTION 4.7. Execution of Instruments and Documents and Signing of Checks
and Other Obligations and Transfers. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the President, any Vice President or the
Treasurer or by any one or more officers or agents of the Trust as shall be
designated for that purpose by vote of the Trustees.

SECTION 4.8. Indemnification of Trustees, Officers, Employees and
Agents. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Trustee, officer, employee, or agent
of the Trust. The indemnification shall be against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement, actually
and reasonably incurred by him in connection with the action, suit, or
proceeding, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Trust, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere

<PAGE>

or its equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).

(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists
of Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person shall be
entitled to indemnification for any liability, whether or not there is an
adjudication of liability, arising by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 ("disabling
conduct"). A person shall be deemed not liable by reason of disabling conduct
if, either:

(i) a final decision on the merits is made by a court or other
body before whom the proceeding was brought that the person to be
indemnified ("indemnitee") was not liable by reason of disabling conduct;
or

(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--

(A) a majority of a quorum of Trustees who are neither
"interested persons" of the Trust, as defined in Section 2(a)(19)
of the Investment Company Act of 1940, nor parties to the action,
suit or proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:

<PAGE>

(1) authorized in the specific case by the Trustees; and

(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and

(3) either, (i) such person provides a security for his undertaking, or

(ii) the Trust is insured against losses by reason of any lawful
advances, or

(iii) a determination, based on a review of readily available facts,
that there is reason to believe that such person ultimately will be found
entitled to indemnification, is made by either--

(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.

(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

ARTICLE V
COMMITTEES

SECTION 5.1. Executive and Other Committees. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.

The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.

Section 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any

<PAGE>

security or other investment shall be purchased, sold or otherwise disposed
of by the Trust. The number of persons constituting any such advisory
committee shall be determined from time to time by the Trustees. The members
of any such advisory committee may receive compensation for their services
and may be allowed such fees and expenses for the attendance at meetings as
the Trustees may from time to time determine to be appropriate.

SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.

ARTICLE VI
OFFICERS

SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more
than one capacity. The executive officers of the Trust shall be elected
annually by the Trustees and each executive officer so elected shall hold
office until his successor is elected and has qualified.

SECTION 6.2. Other Officers and Agents. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the President the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.

SECTION 6.3. Term and Removal and Vacancies. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.

SECTION 6.4. Compensation of Officers. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the President to
the extent provided by the Trustees with respect to officers appointed by the
President.

SECTION 6.5. Power and Duties. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Trustees; provided, that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless he has
knowledge thereof.

SECTION 6.6. The Chairman. The Chairman shall preside at all meetings of
the Shareholders and of the Trustees, shall be a signatory on all Annual and
Semi-Annual Reports as may be sent to shareholders, and he shall perform such
other duties as the Trustees may from time to time prescribe.

SECTION 6.7. The President. (a) The President shall be the chief executive
officer of the Trust; he shall have general and active management of the
business of the Trust, shall see that all orders and resolutions of the
Trustees are carried into effect, and, in connection therewith, shall be
authorized to delegate to one or more Vice Presidents such of his powers and
duties at such times and in such manner as he may deem advisable.

(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees may from time to time prescribe.

<PAGE>

SECTION 6.8. The Vice Presidents. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there be more than one, the Vice
Presidents in the order of their seniority as may be determined from time to
time by the Trustees or the President, shall, in the absence or disability of
the President, exercise the powers and perform the duties of the President,
and he or they shall perform such other duties as the Trustees or the
President may from time to time prescribe.

SECTION 6.9. The Assistant Vice Presidents. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Trustees or the President.

SECTION 6.10. The Secretary. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or the
President, may from time to time prescribe. He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any instrument
requiring it, and, when so affixed, it shall be attested by his signature or
by the signature of an Assistant Secretary.

SECTION 6.11. The Assistant Secretaries. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Trustees or the President, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such duties and have such other powers as the Trustees or the
President may from time to time prescribe.

SECTION 6.12. The Treasurer. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Trustees and the President, whenever any of them
require it, an account of his transactions as Treasurer and of the financial
condition of the Trust; and he shall perform such other duties as the
Trustees, or the President, may from time to time prescribe.

SECTION 6.13. The Assistant Treasurers. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Trustees or the President, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the President, may from time to time prescribe.

SECTION 6.14. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS

Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.

Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.

ARTICLE VIII
CERTIFICATES OF SHARES

SECTION 8.1. Certificates of Shares. Certificates for Shares shall be in
such form and of such design as the Trustees shall approve, subject to the
right of the Trustees to change such form and design at any

<PAGE>

time or from time to time, and shall be entered in the records of the Trust
as they are issued. Each such certificate shall bear a distinguishing number;
shall exhibit the holders' name and certify the number of full Shares owned
by such holder; shall be signed by or in the name of the Trust by the
President, or a Vice President, and countersigned by the Secretary or an
Assistant Secretary or the Treasurer and an Assistant Treasurer of the Trust;
shall be sealed with the seal; and shall contain such recitals as may be
required by law. Where any certificate is signed by a Transfer Agent or by a
Registrar, the signature of such officers and the seal may be facsimile,
printed or engraved. The Trust may, at its option, determine not to issue a
certificate or certificates to evidence Shares owned of record by any
Shareholder.

In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.

No certificate shall be issued for any share until such share is fully
paid.

SECTION 8.2. Lost, Stolen, Destroyed and Mutilated Certificates. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.

ARTICLE IX
CUSTODIAN

SECTION 9.1. Appointment and Duties. The Trust shall at all times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:

(1) to receive and hold the securities owned by the Trust and deliver
the same upon written order;

(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct;

(3) to disburse such funds upon orders or vouchers;

all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.

The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.

SECTION 9.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by

<PAGE>

bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trust.

ARTICLE X
WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these By-
Laws, a waiver thereof in writing, signed by the person or persons entitled
to such notice and filed with the records of the meeting, whether before or
after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.

ARTICLE XI
MISCELLANEOUS

SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

SECTION 11.2. Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining Shareholders entitled to notice
of, or to vote at, any meeting of Shareholders, or Shareholders entitled to
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. Such
date, in any case, shall be not more than ninety (90) days, and in case of a
meeting of Shareholders not less than ten (10) days, prior to the date on
which particular action requiring such determination of Shareholders is to be
taken. In lieu of fixing a record date the Trustees may provide that the
transfer books shall be closed for a stated period but not to exceed, in any
case, twenty (20) days. If the transfer books are closed for the purpose of
determining Shareholders entitled to notice of a vote at a meeting of
Shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting.

SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.

SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.

SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.

ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS

The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

<PAGE>

ARTICLE XIII
AMENDMENTS

These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.

ARTICLE XIV
DECLARATION OF TRUST

The Declaration of Trust establishing InterCapital Managed Municipal
Trust, dated June 10, 1994, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name
InterCapital Managed Municipal Trust refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, Shareholder, officer, employee or agent of InterCapital
Managed Municipal Trust shall be held to any personal liability, nor shall
resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said
InterCapital Managed Municipal Trust, but the Trust Estate only shall be
liable.