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<SEC-DOCUMENT>0000950131-02-003753.txt : 20021004
<SEC-HEADER>0000950131-02-003753.hdr.sgml : 20021004
<ACCEPTANCE-DATETIME>20021004144308
ACCESSION NUMBER:		0000950131-02-003753
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20021004

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NUVEEN INSURED TAX FREE ADVANTAGE MUNICIPAL FUND
		CENTRAL INDEX KEY:			0001195737
		IRS NUMBER:				362639479
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-100320
		FILM NUMBER:		02781913

	BUSINESS ADDRESS:	
		STREET 1:		333 WEST WACKER DRIVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
		BUSINESS PHONE:		3129178146

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NUVEEN INSURED TAX FREE ADVANTAGE MUNICIPAL FUND
		CENTRAL INDEX KEY:			0001195737
		IRS NUMBER:				362639479
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21213
		FILM NUMBER:		02781914

	BUSINESS ADDRESS:	
		STREET 1:		333 WEST WACKER DRIVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
		BUSINESS PHONE:		3129178146
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>dn2.txt
<DESCRIPTION>NUVEEN INSURED TAX FREE ADV MUNI FD
<TEXT>
<PAGE>


   As filed with the Securities and Exchange Commission on October 4, 2002

================================================================================

                                                     1933 Act File No. 333-_____

                                                     1940 Act File No. 811-21213


                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   Form N-2

                        (Check appropriate box or boxes)


[X]  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ]  Pre-Effective Amendment No. __
[ ]  Post-Effective Amendment No. __

          and

[X]  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[ ]  Amendment No. __

                Nuveen Insured Tax-Free Advantage Municipal Fund
          Exact Name of Registrant as Specified in Declaration of Trust
                 333 West Wacker Drive, Chicago, Illinois 60606
 Address of Principal Executive Offices (Number, Street, City, State, Zip Code)
                                (800) 257-8787
              Registrant's Telephone Number, including Area Code

                             Gifford R. Zimmerman
                         Vice President and Secretary
                             333 West Wacker Drive
                            Chicago, Illinois 60606
 Name and Address (Number, Street, City, State, Zip Code) of Agent for Service
                         Copies of Communications to:

               Stacy H. Winick                   Thomas S. Harman
            Bell, Boyd & Lloyd LLC          Morgan, Lewis & Bockius LLP
               70 W. Madison St.                1800 M Street, N.W
              Chicago, IL 60602               Washington, D.C. 20036

                 Approximate Date of Proposed Public Offering:

 As soon as practicable after the effective date of this Registration Statement

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

     If any of the securities being registered on this form are offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. [ ]

     It is proposed that this filing will become effective (check appropriate
box)

     [X] when declared effective pursuant to section 8(c)

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

       CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

<TABLE>
<CAPTION>
==================================================================================================================
                                                                               Proposed Maximum
   Title of Securities Being          Amount           Proposed Maximum       Aggregate Offering      Amount of
          Registered             Being Registered   Offering Price Per Unit       Price (1)       Registration Fee
- ------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>                       <C>                 <C>
Common Shares, $0.01 par value    1,000 Shares      $15.00                    $15,000             $1.38
==================================================================================================================
</TABLE>


(1) Estimated solely for the purpose of calculating the registration fee.

     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 further amendment which specifically states 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 dates as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================

<PAGE>

The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

                 SUBJECT TO COMPLETION, DATED          , 2002

PROSPECTUS
                                         Shares

[LOGO] Nuveen Logo
                            Nuveen Insured Tax-Free
                           Advantage Municipal Fund

                                 Common Shares
                               $15.00 per share

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

   Investment Objectives. The Fund is a newly organized, diversified,
closed-end management investment company. The Fund's investment objectives are:
   . to provide current income exempt from regular federal income tax and the
     alternative minimum tax applicable to individuals; and
   . to enhance portfolio value relative to the municipal bond market by
     investing in tax-exempt municipal bonds that the Fund's investment adviser
     believes are underrated or undervalued or that represent municipal market
     sectors that are undervalued.
                                                  (continued on following page)

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

   Investing in common shares involves certain risks. See "Risks" beginning on
page 22.

   Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

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

<TABLE>
<CAPTION>
                                                          Per Share Total
                                                          --------- -----
       <S>                                                <C>       <C>
       Public Offering Price                               $15.000    $
       Sales Load/(1)/                                     $ 0.675    $
       Estimated Offering Expenses/(2) /                   $ 0.030    $
       Proceeds to the Fund                                $14.295    $
</TABLE>
- --------
(1)Certain underwriters that may also participate in any future offering of
   preferred shares of the Fund may receive additional compensation in that
   offering based on their participation in this offering. See "Underwriting."
(2)Total expenses of issuance and distribution (other than underwriting
   discounts and commissions) are estimated to be $       . Nuveen has agreed
   to reimburse offering expenses in excess of $0.03 per share.

   The underwriters expect to deliver the common shares to purchasers on or
about           , 2002.

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


                              Nuveen Investments

          , 2002

<PAGE>

   Portfolio Contents. Under normal circumstances, the Fund will invest at
least 80% of its net assets in a portfolio of municipal bonds that are exempt
from regular federal income tax, and the alternative minimum tax applicable to
individuals and that are covered by insurance guaranteeing the timely payment
of principal and interest therein. The Fund may at all times invest up to 20%
of its net assets in uninsured municipal bonds backed by an escrow or trust
account containing sufficient U.S. Government or U.S. Government agency
securities to ensure timely payment of principal and interest, or other
municipal bonds that are investment grade quality. The Fund cannot assure you
that it will achieve its investment objectives.

   No Prior History. Because the Fund is newly organized, its common shares
have no history of public trading. Shares of closed-end investment companies
frequently trade at a discount from their net asset value. This risk may be
greater for investors expecting to sell their shares in a relatively short
period after completion of the public offering. The common shares have been
approved for listing on the                       , subject to notice of
issuance. The trading or "ticker" symbol of the common shares is "    ".
   You should read this Prospectus, which contains important information about
the Fund, before deciding whether to invest and retain it for future reference.
A Statement of Additional Information, dated         , 2002 and as it may be
supplemented, containing additional information about the Fund, has been filed
with the Securities and Exchange Commission and is incorporated by reference in
its entirety into this Prospectus. You may request a free copy of the Statement
of Additional Information, the table of contents of which is on page 41 of this
Prospectus, by calling (800) 257-8787 or by writing to the Fund, or you may
obtain a copy (and other information regarding the Fund) from the Securities
and Exchange Commission web site (http://www.sec.gov).

   The Fund's common shares do not represent a deposit or obligation of, and
are not guaranteed or endorsed by, any bank or other insured depository
institution, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.

   The underwriters named in this Prospectus may purchase up to
additional common shares from the Fund under certain circumstances.

                                      2

<PAGE>

   You should rely only on the information contained or incorporated by
reference in this Prospectus. The Fund has not authorized anyone to provide you
with different information. The Fund is not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information contained in this Prospectus is accurate as of any date other than
the date on the front of this Prospectus.

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

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                     Page
                                                                     ----
       <S>                                                           <C>
       Prospectus Summary...........................................   4
       Summary of Fund Expenses.....................................  10
       The Fund.....................................................  12
       Use of Proceeds..............................................  12
       The Fund's Investments.......................................  12
       MuniPreferred Shares and Leverage............................  20
       Risks........................................................  22
       How the Fund Manages Risk....................................  24
       Management of the Fund.......................................  26
       Net Asset Value..............................................  28
       Distributions................................................  28
       Dividend Reinvestment Plan...................................  29
       Description of Shares........................................  30
       Certain Provisions in the Declaration of Trust...............  32
       Repurchase of Fund Shares; Conversion to Open-End Fund.......  33
       Tax Matters..................................................  34
       Other Matters................................................  35
       Underwriting.................................................  37
       Custodian and Transfer Agent.................................  40
       Legal Opinions...............................................  40
       Table of Contents for the Statement of Additional Information  41
</TABLE>

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

   Until         , 2002 (25 days after the date of this Prospectus), all
dealers that buy, sell or trade the common shares, whether or not participating
in this offering, may be required to deliver a Prospectus. This is in addition
to the dealers' obligation to deliver a Prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.

                                      3

<PAGE>

                              PROSPECTUS SUMMARY
   This is only a summary. You should review the more detailed information
contained elsewhere in this Prospectus and in the Statement of Additional
Information to understand the offering fully.

The Fund..............   Nuveen Insured Tax-Free Advantage Municipal Fund (the
                           "Fund") is a newly organized, diversified,
                           closed-end management investment company. See "The
                           Fund."

The Offering..........   The Fund is offering     common shares of beneficial
                           interest at $15.00 per share through a group of
                           underwriters (the "Underwriters") led by Nuveen
                           Investments ("Nuveen") and     . The common shares
                           of beneficial interest are called "Common Shares" in
                           the rest of this Prospectus. You must purchase at
                           least 100 Common Shares in this offering. The Fund
                           has given the Underwriters an option to purchase up
                           to     additional Common Shares to cover orders in
                           excess of     Common Shares. See "Underwriting."
                           Nuveen has agreed to pay (i) all organizational
                           expenses and (ii) offering costs (other than sales
                           load) that exceed $0.03 per Common Share.

Investment Objectives.   The Fund's investment objectives are to provide
                           current income exempt from regular federal income
                           tax and the alternative minimum tax applicable to
                           individuals and enhance portfolio value relative to
                           the municipal bond market by investing in tax-exempt
                           municipal bonds that the Fund's investment adviser
                           believes are underrated or undervalued or that
                           represent municipal market sectors that are
                           undervalued. Under normal circumstances, the Fund
                           will invest at least 80% of its net assets in a
                           portfolio of municipal bonds that:
                             .  are exempt from regular federal income tax;
                             .  do not pay interest subject to the federal
                                alternative minimum tax applicable to
                                individuals; and
                             .  are covered by insurance guaranteeing the
                                timely payment of principal and interest
                                thereon.

                           This insurance does not protect the market value of
                           portfolio holdings or the net asset value of the
                           Fund.

                         Under normal circumstances, the Fund expects to be
                           fully invested (at least 95% of its assets) in such
                           tax-exempt municipal bonds. The Fund will not invest
                           in bonds that pay interest subject to the federal
                           alternative minimum tax applicable to individuals
                           ("AMT Bonds").

                         The Fund may at all times invest up to 20% of its net
                           assets in (i) uninsured municipal bonds that are
                           backed by an escrow or trust account containing
                           sufficient U.S. Government or U.S. Government agency
                           securities to ensure timely payment of principal and
                           interest, or (ii) other municipal bonds that at the
                           time of investment are investment grade quality. An
                           investment grade quality bond is a bond rated within
                           the four highest grades (Baa or BBB or better by

                                      4

<PAGE>

                           Moody's Investors Service, Inc. ("Moody's"),
                           Standard & Poor's Corporation, a division of The
                           McGraw-Hill Companies ("S&P") or Fitch Ratings
                           ("Fitch")) by all nationally recognized statistical
                           rating organizations (each an "NRSRO") that rate the
                           bond or a bond that is unrated but judged to be of
                           comparable quality by the Fund's investment adviser.
                           The Fund cannot assure you that it will attain its
                           investment objectives. See "The Fund's Investments."

Special Considerations   Distributions of ordinary taxable income (including
                           any net short-term capital gain) will be taxable to
                           shareholders as ordinary income, and capital gain
                           dividends will be subject to capital gains taxes.
                           See "Tax Matters."

Proposed Offering of
MuniPreferred(R) Shares  Subject to market conditions, approximately one to
                           three months after completion of this offering, the
                           Fund intends to offer preferred shares of beneficial
                           interest ("MuniPreferred Shares") representing
                           approximately 35% of the Fund's capital after their
                           issuance. The issuance of MuniPreferred Shares will
                           leverage your investment in Common Shares. Leverage
                           involves special risks. There is no assurance that
                           the Fund will issue MuniPreferred Shares or that, if
                           issued, the Fund's leveraging strategy will be
                           successful. See "Risks--Leverage Risk." The money
                           the Fund obtains by selling the MuniPreferred Shares
                           will be invested in long-term municipal bonds, which
                           generally will pay fixed rates of interest over the
                           life of the bond. The MuniPreferred Shares will pay
                           dividends based on shorter-term rates, which will be
                           reset frequently. So long as the rate of return, net
                           of applicable Fund expenses, on the long-term bonds
                           purchased by the Fund exceeds MuniPreferred Share
                           dividend rates as reset periodically, the investment
                           of the proceeds of the MuniPreferred Shares will
                           generate more income than will be needed to pay
                           dividends on the MuniPreferred Shares. If so, the
                           excess will be used to pay higher dividends to
                           holders of Common Shares ("Common Shareholders").
                           However, the Fund cannot assure you that the
                           issuance of MuniPreferred Shares will result in a
                           higher yield on your Common Shares. Once
                           MuniPreferred Shares are issued, the net asset value
                           and market price of the Common Shares and the yield
                           to Common Shareholders will be more volatile. See
                           "MuniPreferred Shares and Leverage" and "Description
                           of Shares--MuniPreferred Shares."

Investment Adviser....   Nuveen Advisory Corp. ("Nuveen Advisory") will be the
                           Fund's investment adviser. Nuveen Advisory will
                           receive an annual fee, payable monthly, in a maximum
                           amount equal to .65% of the Fund's average daily net
                           assets (including assets attributable to any
                           MuniPreferred Shares that may be outstanding
                           (sometimes referred to herein as "Managed Assets")),
                           with lower fee levels for assets that exceed $125
                           million. Nuveen Advisory has contractually agreed to

                                      5

<PAGE>

                           reimburse the Fund for fees and expenses in the
                           amount of .32% of average daily Managed Assets of
                           the Fund for the first five full years of the Fund's
                           operations (through     , 2007), and for a declining
                           amount for an additional three years (through     ,
                           2010). Nuveen Advisory is a wholly owned subsidiary
                           of The John Nuveen Company. See "Management of the
                           Fund."

Distributions.........   Commencing with the Fund's first dividend, the Fund
                           intends to make regular monthly cash distributions
                           to Common Shareholders at a level rate (stated in
                           terms of a fixed cents per Common Share dividend
                           rate) based on the projected performance of the
                           Fund. The Fund's ability to maintain a level Common
                           Share dividend rate will depend on a number of
                           factors, including dividends payable on the
                           MuniPreferred Shares. As portfolio and market
                           conditions change, the rate of dividends on the
                           Common Shares and the Fund's dividend policy could
                           change. Over time, the Fund will distribute all of
                           its net investment income (after it pays accrued
                           dividends on any outstanding MuniPreferred Shares).
                           In addition, at least annually, the Fund intends to
                           distribute net capital gain and taxable ordinary
                           income, if any, to you so long as the net capital
                           gain and taxable ordinary income are not necessary
                           to pay accrued dividends on, or redeem or liquidate,
                           any MuniPreferred Shares. Your initial distribution
                           is expected to be declared approximately 45 days,
                           and paid approximately 60 to 90 days, from the
                           completion of this offering, depending on market
                           conditions. You may elect to automatically reinvest
                           some or all of your distributions in additional
                           Common Shares under the Fund's Dividend Reinvestment
                           Plan. See "Distributions" and "Dividend Reinvestment
                           Plan."

Listing...............   The Common Shares have been approved for listing on
                           the       , subject to notice of issuance. See
                           "Description of Shares--Common Shares." The trading
                           or "ticker" symbol of the Common Shares is "    ."
                           Because of this exchange listing, the Fund may
                           sometimes be referred to in public communications as
                           a "closed-end exchange-traded fund" or
                           "exchange-traded fund."

Custodian.............   State Street Bank and Trust Company will serve as
                           custodian of the Fund's assets. See "Custodian and
                           Transfer Agent."

Market Price of Shares   Shares of closed-end investment companies frequently
                           trade at prices lower than net asset value. Shares
                           of closed-end investment companies like the Fund
                           that invest predominately in investment grade
                           municipal bonds have during some periods traded at
                           prices higher than net asset value and have during
                           other periods traded at prices lower than net asset
                           value. The Fund cannot assure you that Common Shares
                           will trade at a price higher than net asset value in
                           the future. Net asset value will be reduced
                           immediately following the offering by the sales load
                           and the amount of organization and offering expenses
                           paid by the Fund. See "Use of Proceeds." In

                                      6

<PAGE>

                           addition to net asset value, market price may be
                           affected by such factors as dividend levels (which
                           are in turn affected by expenses), call protection,
                           dividend stability, portfolio credit quality and
                           liquidity and market supply and demand. See
                           "MuniPreferred Shares and Leverage," "Risks,"
                           "Description of Shares," "Repurchase of Fund Shares;
                           Conversion to Open-End Fund" and the Statement of
                           Additional Information under "Repurchase of Fund
                           Shares; Conversion to Open-End Fund." The Common
                           Shares are designed primarily for long-term
                           investors, and you should not view the Fund as a
                           vehicle for trading purposes.

Special Risk
Considerations........   No Operating History.  The Fund is a newly organized,
                           diversified, closed-end management investment
                           company with no history of operations.

                         Interest Rate Risk.  Generally, when market interest
                           rates fall, bond prices rise, and vice versa.
                           Interest rate risk is the risk that the municipal
                           bonds in the Fund's portfolio will decline in value
                           because of increases in market interest rates. The
                           prices of longer-term bonds fluctuate more than
                           prices of shorter-term bonds as interest rates
                           change. Conversely, the values of lower-rated and
                           comparable unrated debt securities are less likely
                           than those of investment grade and comparable
                           unrated debt securities to fluctuate inversely with
                           changes in interest rates. Because the Fund will
                           invest primarily in long-term bonds, the Common
                           Share net asset value and market price per share
                           will fluctuate more in response to changes in market
                           interest rates than if the Fund invested primarily
                           in shorter-term bonds. The Fund's use of leverage,
                           as described below, will tend to increase Common
                           Share interest rate risk. See "Risks--Interest Rate
                           Risk."

                         Credit Risk.  Credit risk is the risk that one or more
                           municipal bonds in the Fund's portfolio will decline
                           in price, or fail to pay interest or principal when
                           due, because the issuer of the bond experiences a
                           decline in its financial status.

                         Leverage Risk.  The use of leverage through the
                           issuance of MuniPreferred Shares creates an
                           opportunity for increased Common Share net income
                           and returns, but also creates special risks for
                           Common Shareholders. There is no assurance that the
                           Fund's leveraging strategy will be successful. It is
                           anticipated that MuniPreferred dividends will be
                           based on shorter-term municipal bond rates of return
                           (which would be redetermined periodically, pursuant
                           to an auction process), and that the Fund will
                           invest the proceeds of the MuniPreferred Shares
                           offering in long-term, typically fixed rate,
                           municipal bonds. So long as the Fund's municipal
                           bond portfolio provides a higher rate of return (net
                           of Fund expenses) than the MuniPreferred dividend
                           rate, as reset periodically, the leverage

                                      7

<PAGE>

                           will cause Common Shareholders to receive a higher
                           current rate of return than if the Fund were not
                           leveraged. If, however, long and/or short-term rates
                           rise, the MuniPreferred dividend rate could exceed
                           the rate of return on long-term bonds held by the
                           Fund that were acquired during periods of generally
                           lower interest rates, reducing return to Common
                           Shareholders. In addition, the Fund will pay
                           (and Common Shareholders will bear) any costs and
                           expenses relating to the issuance and ongoing
                           maintenance of MuniPreferred Shares (for example,
                           distribution related expenses such as a
                           participation fee paid at what the Fund expects will
                           be an annual rate of 0.25% of MuniPreferred Share
                           liquidation preference to broker-dealers
                           participating in MuniPreferred Share auctions).

                           Leverage creates two major types of risks for Common
                           Shareholders:

                            .   the likelihood of greater volatility of net
                                asset value and market price of Common Shares,
                                because changes in the value of the Fund's bond
                                portfolio (including bonds bought with the
                                proceeds of the MuniPreferred Shares offering)
                                are borne entirely by the Common Shareholders;
                                and

                            .   the possibility either that Common Share income
                                will fall if the MuniPreferred dividend rate
                                rises, or that Common Share income will
                                fluctuate because the MuniPreferred dividend
                                rate varies.

                           See "Risks--Leverage Risk."

                         Municipal Bond Market Risk.  The amount of public
                           information available about the municipal bonds in
                           the Fund's portfolio is generally less than that for
                           corporate equities or bonds, and the investment
                           performance of the Fund may therefore be more
                           dependent on the analytical abilities of Nuveen
                           Advisory than if the Fund were a stock fund or
                           taxable bond fund. The secondary market for
                           municipal bonds also tends to be less well-developed
                           or liquid than many other securities markets, which
                           may adversely affect the Fund's ability to sell its
                           bonds at attractive prices. See "Risks--Municipal
                           Bond Market Risk."

                         Municipal Bond Insurance.  In the event Moody's, S&P or
                           Fitch (or all of them) should downgrade its
                           assessment of the claims-paying ability of a
                           particular insurer, it (or they) could also be
                           expected to downgrade the ratings assigned to
                           municipal bonds insured by such insurer, and
                           municipal bonds insured under Portfolio Insurance
                           (as defined below) issued by such insurer also would
                           be of reduced quality in the portfolio of the Fund.
                           Any such downgrade could have an adverse impact on
                           the net asset value and market price of the Common
                           Shares.

                           In addition, the Fund may be subject to certain
                           restrictions on investments imposed by guidelines of
                           the insurance companies

                                      8

<PAGE>

                           issuing Portfolio Insurance. The Fund does not
                           expect these guidelines to prevent Nuveen Advisory
                           from managing the Fund's portfolio in accordance
                           with the Fund's investment objective and policies.

                         Anti-Takeover Provisions.  The Fund's Declaration of
                           Trust (the "Declaration") includes provisions that
                           could limit the ability of other entities or persons
                           to acquire control of the Fund or convert the Fund
                           to open-end status. The provisions of the
                           Declaration described above could have the effect of
                           depriving the Common Shareholders of opportunities
                           to sell their Common Shares at a premium over the
                           then current market price of the Common Shares. See
                           "Certain Provisions in the Declaration of Trust" and
                           "Risks--Anti-Takeover Provisions."

                                      9

<PAGE>

                           SUMMARY OF FUND EXPENSES

   The Annual Expenses table below assumes the issuance of MuniPreferred Shares
in an amount equal to 35% of the Fund's capital (after their issuance), and
shows Fund expenses as a percentage of net assets attributable to Common Shares.
<TABLE>
<S>                                                                             <C>
Shareholder Transaction Expenses
Sales Load Paid by You (as a percentage of offering price)..................... 4.50%
Offering Expenses Borne by the Fund (as a percentage of offering price)/(1)(2)/  .20%
Dividend Reinvestment Plan Fees................................................ None(3)
</TABLE>

<TABLE>
<CAPTION>
                                           Percentage of Net
                                          Assets Attributable
                                          to Common Shares(4)
                                          -------------------
<S>                                       <C>
Annual Expenses
Management Fees..........................            %
Other Expenses...........................            %

                                                 -----
Total Annual Expenses....................            %
Fee and Expense Reimbursement (Years 1-5)            (%)(5)

                                                 -----
Total Net Annual Expenses (Years 1-5)....            %(5)

                                                 =====
</TABLE>
- --------
(1)Nuveen has agreed to pay offering costs (other than sales load) that exceed
   $0.03 per Common Share.

(2)If the Fund offers MuniPreferred Shares, costs of that offering, estimated
   to be approximately   % of the total amount of the MuniPreferred Share
   offering, will effectively be borne by the Common Shareholders and result in
   a reduction of the net asset value of the Common Shares. Assuming the
   issuance of MuniPreferred Shares in the amount equal to 35% of the Fund's
   total capital (after issuance), those offering costs are estimated to be
   approximately $   per Common Share (  % of the offering price).

(3)You will be charged a $2.50 service charge and pay brokerage charges if you
   direct State Street Bank and Trust Company, as agent for the Common
   Shareholders (the "Plan Agent") to sell your Common Shares held in a
   dividend reinvestment account.

(4)Stated as percentages of net assets attributable to Common Shares. Assuming
   no issuance of MuniPreferred Shares, the Fund's expenses would be estimated
   to be as follows:

<TABLE>
<CAPTION>
                                                                        Percentage of Net
                                                                       Assets Attributable
                                                                        to Common Shares
                                                                       -------------------
<S>                                                                    <C>
Annual Expenses
Management Fees.......................................................           %
Other Expenses........................................................           %

                                                                               ---
Total Annual Expenses.................................................           %
Fees and Expense Reimbursement (Years 1-5)............................           (%)(5)

                                                                               ---
Total Net Annual Expenses (Years 1-5).................................           %(5)

                                                                               ===
</TABLE>

(5)Nuveen Advisory has contractually agreed to reimburse the Fund for fees and
   expenses in the amount of .32% of average daily Managed Assets for the first
   5 full years of the Fund's operations, .24% of average daily Managed Assets
   in year 6, .16% in year 7 and .08% in year 8. Assuming the

                                      10

<PAGE>

   issuance of MuniPreferred Shares in an amount equal to 35% of the Fund's
   total assets (including the amount obtained from leverage) and calculated as
   a percentage of net assets attributable to Common Shares, those amounts
   would be   % for the first 5 years,   % in year 6,   % in year 7 and   % in
   year 8. Without the reimbursement, "Total Net Annual Expenses" would be
   estimated to be 1.38% of average daily net assets attributable to Common
   Shares (or, assuming no issuance of MuniPreferred Shares,   % of average
   daily net assets).

   The purpose of the table above is to help you understand all fees and
expenses that you, as a Common Shareholder, would bear directly or indirectly.
The expenses shown in the table are based on estimated amounts for the Fund's
first year of operations and assume that the Fund issues approximately   Common
Shares. See "Management of the Fund" and "Dividend Reinvestment Plan."

   The following example illustrates the expenses (including the sales load of
$45, estimated offering expenses of this offering of $2 and the estimated
MuniPreferred Share offering costs assuming MuniPreferred Shares are issued
representing 35% of the Fund's total capital (after issuance) of $   ) that you
would pay on a $1,000 investment in Common Shares, assuming (1) total net
annual expenses of   % of net assets attributable to Common Shares in years 1
through 5, increasing to   % in years 9 and 10 and (2) a 5% annual return:/(1)/

                      1 Year 3 Years 5 Years 10 Years/(2)/
                      ------ ------- ------- ------------
                        $       $       $         $

   The example should not be considered a representation of future expenses.
Actual expenses may be higher or lower.
- --------
(1)The example assumes that the estimated Other Expenses set forth in the
   Annual Expenses table are accurate, that fees and expenses increase as
   described in note 2 below and that all dividends and distributions are
   reinvested at Common Share net asset value. Actual expenses may be greater
   or less than those assumed. Moreover, the Fund's actual rate of return may
   be greater or less than the hypothetical 5% return shown in the example.
(2)Assumes reimbursement of fees and expenses of .24% of average daily Managed
   Assets in year 6, .16% in year 7 and .08% in year 8. Nuveen Advisory has not
   agreed to reimburse the Fund for any portion of its fees and expenses beyond
                , 2010. See footnote 5 above and "Management of the
   Fund--Investment Management Agreement."

                                      11

<PAGE>

                                   THE FUND

   The Fund is a newly organized, diversified, closed-end management investment
company registered under the Investment Company Act of 1940 (the 1940 Act). The
Fund was organized as a Massachusetts business trust on April 9, 2002, pursuant
to a Declaration governed by the laws of the Commonwealth of Massachusetts. As
a newly organized entity, the Fund has no operating history. The Fund's
principal office is located at 333 West Wacker Drive, Chicago, Illinois 60606,
and its telephone number is (800) 257-8787.

                                USE OF PROCEEDS

   The net proceeds of the offering of Common Shares will be approximately
$           ($           if the Underwriters exercise the over-allotment option
in full) after payment of the estimated organization and offering costs. Nuveen
has agreed to pay (i) all organizational expenses and (ii) offering costs
(other than sales load) that exceed $0.03 per Common Share. The Fund will
invest the net proceeds of the offering in accordance with the Fund's
investment objectives and policies as stated below. It is presently anticipated
that the Fund will be able to invest substantially all of the net proceeds in
municipal bonds that meet those investment objectives and policies within three
months after the completion of the offering. Pending such investment, it is
anticipated that the proceeds will be invested in short-term, tax-exempt
securities.

                            THE FUND'S INVESTMENTS

Investment Objectives and Policies

   The Fund's investment objectives are:

  .  to provide current income exempt from regular federal income tax, and the
     alternative minimum tax applicable to individuals; and

  .  to enhance portfolio value relative to the municipal bond market by
     investing in tax-exempt municipal bonds that Nuveen Advisory believes are
     underrated or undervalued or that represent municipal market sectors that
     are undervalued.

   Underrated municipal bonds are those whose ratings do not, in Nuveen
Advisory's opinion, reflect their true creditworthiness. Undervalued municipal
bonds are bonds that, in Nuveen Advisory's opinion, are worth more than the
value assigned to them in the marketplace. Nuveen Advisory may at times believe
that bonds associated with a particular municipal market sector (for example,
electric utilities), or issued by a particular municipal issuer, are
undervalued. Nuveen Advisory may purchase such a bond for the Fund's portfolio
because it represents a market sector or issuer that Nuveen Advisory considers
undervalued, even if the value of the particular bond appears to be consistent
with the value of similar bonds. Municipal bonds of particular types (e.g.,
hospital bonds, industrial revenue bonds or bonds issued by a particular
municipal issuer) may be undervalued because there is a temporary excess of
supply in that market sector, or because of a general decline in the market
price of municipal bonds of the market sector for reasons that do not apply to
the particular municipal bonds that are considered undervalued. The Fund's
investment in underrated or undervalued municipal bonds will be based on Nuveen
Advisory's belief that their yield is higher than that available on bonds
bearing equivalent levels of interest rate risk, credit risk and other forms of
risk, and that their prices will ultimately rise (relative to the market) to
reflect their true value. The Fund attempts to increase its portfolio value
relative to the municipal bond market by prudent selection of municipal bonds
regardless of the direction the market may move. Any capital appreciation
realized by the Fund will generally result in the distribution of taxable
capital gains to Common Shareholders.

                                      12

<PAGE>

   Under normal market conditions, the Fund will invest at least 80% of its net
assets in a portfolio of municipal bonds that:

  .  are exempt from regular federal income tax;

  .  do not pay interest subject to the federal alternative minimum tax
     applicable to individuals; and

  .  are covered by insurance guaranteeing the timely payment of principal and
     interest thereon.

This insurance does not protect the market value of portfolio holdings or the
net asset value of the Fund.

   Under normal market conditions, the Fund expects to be fully invested (at
least 95% of its assets) in such tax-exempt municipal bonds. The Fund will not
invest in AMT Bonds. For more information, see the Statement of Additional
Information.

   The Fund may at all times invest up to 20% of its net assets in (i)
uninsured municipal bonds that are backed by an escrow or trust account
containing sufficient U.S. Government or U.S. Government agency securities to
ensure timely payment of principal and interest, or (ii) other municipal bonds
that, at the time of investment, are investment grade quality. Investment grade
quality means that such bonds are rated, at the time of investment, by all
NRSROs that rate the bond within the four highest grades (Baa or BBB or better
by Moody's, S&P or Fitch) or are unrated but judged to be of comparable quality
by Nuveen Advisory. The foregoing credit quality policy applies only at the
time a security is purchased, and the Fund is not required to dispose of a
security in the event that a rating agency downgrades its assessment of the
credit characteristics of a particular issue. In determining whether to retain
or sell such a security, Nuveen Advisory may consider such factors as Nuveen
Advisory's assessment of the credit quality of the issuer of such security, the
price at which such security could be sold and the rating, if any, assigned to
such security by other rating agencies. A general description of Moody's, S&P's
and Fitch's ratings of municipal bonds is set forth in Appendix A to the
Statement of Additional Information. The Fund may also invest in securities of
other open- or closed-end investment companies that invest primarily in
municipal bonds of the types in which the Fund may invest directly. See
"--Other Investment Companies."

   Each insured municipal bond that the Fund acquires will be (1) covered by an
insurance policy applicable to a specific security and obtained by the issuer
of the security or a third party at the time of original issuance ("Original
Issue Insurance"), (2) covered by an insurance policy applicable to a specific
security and obtained by the Fund or a third party subsequent to the time of
original issuance ("Secondary Market Insurance"), or (3) covered by a master
municipal insurance policy purchased by the Fund ("Portfolio Insurance"). The
Fund, as a non-fundamental policy that can be changed by the Board of Trustees,
only will buy Portfolio Insurance from insurers whose claims-paying ability
Moody's rates "Aaa" or S&P or Fitch rates "AAA."

   The credit quality of companies that provide insurance on bonds will affect
the value of those bonds. Although the insurance feature reduces certain
financial risks, the premiums for insurance and the higher market price paid
for insured obligations may reduce the Fund's income. Insurance generally will
be obtained from insurers with a claims-paying ability rated Aaa by Moody's or
AAA by S&P or Fitch. The insurance feature does not guarantee the market value
of the insured obligations or the net asset value of the Common Shares.

   The Fund may at all times invest up to 20% of its net assets in uninsured
municipal bonds that are entitled to the benefit of an escrow or trust account
that contains securities issued or guaranteed by the

                                      13

<PAGE>

U.S. Government or U.S. Government agencies backed by the full faith and credit
of the United States, and sufficient in amount to ensure the payment of
interest and principal on the original interest payment and maturity dates
("collateralized obligations"). These collateralized obligations generally will
not be insured and will include, but are not limited to, municipal bonds that
have been (1) advance refunded where the proceeds of the refunding have been
used to buy U.S. Government or U.S. Government agency securities that are
placed in escrow and whose interest or maturing principal payments, or both,
are sufficient to cover the remaining scheduled debt service on that municipal
bond; or (2) issued under state or local housing finance programs that use the
issuance proceeds to fund mortgages that are then exchanged for U.S. Government
or U.S. Government agency securities and deposited with a trustee as security
for those municipal bonds. These collaterlized obligations are normally
regarded as having the credit characteristics of the underlying U.S. Government
or U.S. Government agency securities.

   Upon Nuveen Advisory's recommendation, during temporary defensive periods
and in order to keep the Fund's cash fully invested, including the period
during which the net proceeds of the offering of Common Shares or MuniPreferred
Shares are being invested, the Fund may deviate from its investment objectives
and policies and invest up to 100% of its net assets in short-term investments
including high quality, short-term securities that may be either tax-exempt or
taxable. The Fund intends to invest in taxable short-term investments only in
the event that suitable tax-exempt short-term investments are not available at
reasonable prices and yields. Investment in taxable short-term investments
would result in a portion of your dividends being subject to regular federal
income tax, and the alternative minimum tax applicable to individuals. For more
information, see the Statement of Additional Information. Likewise, the Fund
may deviate from its normal investment policies and invest in taxable
fixed-income and equity securities of an issuer of minicipal bonds that the
Fund already owns for the purpose of acquiring control of that issuer when
Nuveen Advisory determines that such investment should enable the Fund to
better maximize the value of its existing investment. See "--Miscellaneous
Investments."

   The Fund cannot change its (i) fundamental investment restrictions set forth
in the Statement of Additional Information or (ii) policy to invest 80% of its
Managed Assets in a portfolio of municipal bonds that (a) are exempt from
regular federal income tax and (b) do not pay interest subject to the federal
alternative minimum tax applicable to individuals without the approval of the
holders of a "majority of the outstanding" Common Shares and, if issued,
MuniPreferred Shares voting together as a single class, and of the holders of a
"majority of the outstanding" MuniPreferred Shares voting as a separate class.
When used with respect to particular shares of the Fund, a "majority of the
outstanding" shares means (i) 67% or more of the shares present at a meeting,
if the holders of more than 50% of the shares are present or represented by
proxy, or (ii) more than 50% of the shares, whichever is less. See "Description
of Shares--MuniPreferred Shares--Voting Rights" and the Statement of Additional
Information under "Description of Shares--MuniPreferred Shares--Voting Rights"
for additional information with respect to the voting rights of holders of
MuniPreferred Shares. Other than as noted above, the investment objectives and
policies of the Fund may be changed by the Board without shareholder action.

Municipal Bonds

   Municipal bonds are either general obligation or revenue bonds and typically
are issued to finance public projects (such as roads or public buildings), to
pay general operating expenses, or to refinance outstanding debt. Municipal
bonds may also be issued for private activities, such as housing, medical

                                      14

<PAGE>

and educational facility construction, or for privately owned industrial
development and pollution control projects. General obligation bonds are backed
by the full faith and credit, or taxing authority, of the issuer and may be
repaid from any revenue source; revenue bonds may be repaid only from the
revenues of a specific facility or source. The Fund also may purchase municipal
bonds that represent lease obligations. These carry special risks because the
issuer of the bonds may not be obligated to appropriate money annually to make
payments under the lease. In order to reduce this risk, the Fund will only
purchase municipal bonds representing lease obligations where Nuveen Advisory
believes the issuer has a strong incentive to continue making appropriations
until maturity.

   The municipal bonds in which the Fund will invest are generally issued by
states, cities and local authorities and certain possessions and territories of
the United States (such as Puerto Rico or Guam), and pay interest that, in the
opinion of bond counsel to the issuer (or on the basis of other authority
believed by Nuveen Advisory to be reliable), is exempt from federal income tax
and the alternative minimum tax applicable to individuals. It is a fundamental
policy of the Fund that its investment in municipal bonds whose interest is not
taxable under regular federal income tax or the alternative minimum tax
applicable to individuals will, under normal circumstances, comprise at least
80% of the Fund's Managed Assets.

   Other than as permitted during this Invest-up Period and subject to board
approval, the Fund may invest up to 20% of its net assets (together with
taxable temporary investments) in AMT Bonds, although it has no present
intention to do so. As a result, a portion of the income produced by the Fund
may be includable in the calculation of federal alternative minimum taxable
income for individuals. In addition, interest on all municipal bonds is taken
into account to determine whether a corporation is subject to the federal
alternative minimum tax. See "Tax Matters." It is a fundamental policy of the
Fund that its investments in municipal bonds whose interest is not taxable
under regular federal income tax or the federal alternative minimum tax will,
under normal circumstances, comprise at least 80% of the Fund's Managed Assets.

   The yields on municipal bonds depend on a variety of factors, including
prevailing interest rates and the condition of the general money market and the
municipal bond market, the size of a particular offering, the maturity of the
obligation and the rating of the issue. The market value of municipal bonds
will vary with changes in interest rate levels and as a result of changing
evaluations of the ability of their issuers to meet interest and principal
payments.

   The Fund will primarily invest in municipal bonds with long-term maturities
in order to maintain a weighted average maturity of 15-30 years, but the
weighted average maturity of obligations held by the Fund may be shortened,
depending on market conditions.

Municipal Bond Insurance

   Each insured municipal bond the Fund acquires will be covered by Original
Issue Insurance, Secondary Market Insurance or Portfolio Insurance. The Fund
expects initially to emphasize investments in municipal bonds insured under
bond-specific insurance policies (i.e., Original Issue or Secondary Market
Insurance). The Fund may obtain Portfolio Insurance from the insurers described
in Appendix C to the Statement of Additional Information. The Fund, as a
non-fundamental policy that can be changed by the Board of Trustees, will only
obtain policies of Portfolio Insurance issued by insurers whose claims-paying
ability is rated "Aaa" by Moody's or "AAA" by S&P or Fitch. There is no limit
on the percentage of the Fund's assets that may be invested in municipal bonds
insured by any one insurer.

                                      15

<PAGE>

   Municipal bonds covered by Original Issue Insurance or Secondary Market
Insurance are themselves typically assigned a rating of "Aaa" or "AAA", as the
case may be, by virtue of the rating of the "Aaa" or "AAA" claims-paying
ability of the insurer and would generally be assigned a lower rating if the
ratings were based primarily upon the credit characteristics of the issuer
without regard to the insurance feature. By way of contrast, the ratings, if
any, assigned to municipal bonds insured under Portfolio Insurance will be
based primarily upon the credit characteristics of the issuer, without regard
to the insurance feature, and generally will carry a rating that is below "Aaa"
or "AAA." While in the portfolio of the Fund, however, a municipal bond backed
by Portfolio Insurance will effectively be of the same credit quality as a
municipal bond issued by an issuer of comparable credit characteristics that is
backed by Original Issue Insurance or Secondary Market Insurance.

   The Fund's policy of investing in municipal bonds insured by insurers whose
claims-paying ability is rated "Aaa" or "AAA" applies only at the time of
purchase of a security, and the Fund will not be required to dispose of the
securities in the event Moody's, S&P or Fitch, as the case may be, downgrades
its assessment of the claims-paying ability of a particular insurer or the
credit characteristics of a particular issuer. In this connection, it should be
noted that in the event Moody's, S&P or Fitch (or all of them) should downgrade
its assessment of the claims-paying ability of a particular insurer, it (or
they) could also be expected to downgrade the ratings assigned to municipal
bonds insured by such insurer, and municipal bonds insured under Portfolio
Insurance issued by such insurer also would be of reduced quality in the
portfolio of the Fund. Moody's, S&P and Fitch continually assess the
claims-paying ability of insurers and the credit characteristics of issuers,
and there can be no assurance that they will not downgrade their assessments
subsequent to the time the Fund purchases securities.

   The value of municipal bonds covered by Portfolio Insurance that are in
default or in significant risk of default will be determined by separately
establishing a value for the municipal bond and a value for the Portfolio
Insurance.

   Original Issue Insurance. Original Issue Insurance is purchased with respect
to a particular issue of municipal bonds by the issuer thereof or a third party
in conjunction with the original issuance of such municipal bonds. Under this
insurance, the insurer unconditionally guarantees to the holder of the
municipal bond the timely payment of principal and interest on such obligations
when and as these payments become due but not paid by the issuer, except that
in the event of the acceleration of the due date of the principal by reason of
mandatory or optional redemption (other than acceleration by reason of a
mandatory sinking fund payment), default or otherwise, the payments guaranteed
may be made in the amounts and at the times as payment of principal would have
been due had there not been any acceleration. The insurer is responsible for
these payments less any amounts received by the holder from any trustee for the
municipal bond issuer or from any other source. Original Issue Insurance does
not guarantee payment on an accelerated basis, the payment of any redemption
premium (except with respect to certain premium payments in the case of certain
small issue industrial development and pollution control municipal bonds), the
value of the Fund's shares, the market value of municipal bonds, or payments of
any tender purchase price upon the tender of the municipal bonds. Original
Issue Insurance also does not insure against nonpayment of principal or
interest on municipal bonds resulting from the insolvency, negligence or any
other act or omission of the trustee or other paying agent for these bonds.

   Original Issue Insurance remains in effect as long as the municipal bonds it
covers remain outstanding and the insurer remains in business, regardless of
whether the Fund ultimately disposes of these municipal bonds. Consequently,
Original Issue Insurance may be considered to represent an

                                      16

<PAGE>

element of market value with respect to the municipal bonds so insured, but the
exact effect, if any, of this insurance on the market value cannot be estimated.

   Secondary Market Insurance. Subsequent to the time of original issuance of a
municipal bond, the Fund or a third party may, upon the payment of a single
premium, purchase insurance on that security. Secondary Market Insurance
generally provides the same type of coverage as Original Issue Insurance and,
as with Original Issue Insurance, Secondary Market Insurance remains in effect
as long as the municipal bonds it covers remain outstanding and the insurer
remains in business, regardless of whether the Fund ultimately disposes of
these municipal bonds.

   One of the purposes of acquiring Secondary Market Insurance with respect to
a particular municipal bond would be to enable the Fund to enhance the value of
the security. The Fund, for example, might seek to purchase a particular
municipal bond and obtain Secondary Market Insurance, for it if, in Nuveen
Advisory's opinion, the market value of the security, as insured, less the cost
of the Secondary Market Insurance would exceed the current value of the
security without insurance. Similarly, if the Fund owns but wishes to sell a
municipal bond that is then covered by Portfolio Insurance, the Fund might seek
to obtain Secondary Market Insurance for it if, in Nuveen Advisory's opinion,
the net proceeds of the Fund's sale of the security, as insured, less the cost
of the Secondary Market Insurance would exceed the current value of the
security. In determining whether to insure municipal bonds the Fund owns, an
insurer will apply its own standards, which correspond generally to the
standards it has established for determining the insurability of new issues of
municipal bonds. See "--Original Issue Insurance" above.

   Portfolio Insurance. Portfolio Insurance guarantees the payment of principal
and interest on specified eligible municipal bonds purchased by the Fund.
Except as described below, Portfolio Insurance generally provides the same type
of coverage as is provided by Original Issue Insurance or Secondary Market
Insurance. Municipal bonds insured under a Portfolio Insurance policy would
generally not be insured under any other policy. A municipal bond is eligible
for coverage under a policy if it meets certain requirements of the insurer.
Portfolio Insurance is intended to reduce financial risk, but the cost thereof
and compliance with investment restrictions imposed under the policy will
reduce the yield to shareholders of the Fund.

   If a municipal bond is already covered by Original Issue Insurance or
Secondary Market Insurance, then the security is not required to be
additionally insured under any Portfolio Insurance that the Fund may purchase.
All premiums respecting municipal bonds covered by Original Issue Insurance or
Secondary Market Insurance are paid in advance by the issuer or other party
obtaining the insurance.

   Portfolio Insurance policies are effective only as to municipal bonds owned
by and held by the Fund, and do not cover municipal bonds for which the
contract for purchase fails. A "when-issued" municipal obligation will be
covered under a Portfolio Insurance policy upon the settlement date of the
issue of such "when-issued" municipal bond.

   In determining whether to insure municipal bonds held by the Fund, an
insurer will apply its own standards, which correspond generally to the
standards it has established for determining the insurability of new issues of
municipal bonds. See "--Original Issue Insurance" above.

   Each Portfolio Insurance policy will be noncancellable and will remain in
effect so long as the Fund is in existence, the municipal bonds covered by the
policy continue to be held by the Fund, and the

                                      17

<PAGE>

Fund pays the premiums for the policy. Each insurer will generally reserve the
right at any time upon 90 days' written notice to the Fund to refuse to insure
any additional bonds purchased by the Fund after the effective date of such
notice. The Fund generally will reserve the right to terminate each policy upon
seven days' written notice to an insurer if it determines that the cost of such
policy is not reasonable in relation to the value of the insurance to the Fund.

   Each Portfolio Insurance policy will terminate as to any municipal bond that
has been redeemed from or sold by the Fund on the date of redemption or the
settlement date of sale, and an insurer will not have any liability thereafter
under a policy for any municipal bond, except that if the redemption date or
settlement date occurs after a record date and before the related payment date
for any municipal bond, the policy will terminate for that municipal bond on
the business day immediately following the payment date. Each policy will
terminate as to all municipal bonds covered thereby on the date on which the
last of the covered municipal bonds mature, are redeemed or are sold by the
Fund.

   One or more Portfolio Insurance policies may provide the Fund, pursuant to
an irrevocable commitment of the insurer, with the option to exercise the right
to obtain permanent insurance ("Permanent Insurance") for a municipal bond that
is sold by the Fund. The Fund would exercise the right to obtain Permanent
Insurance upon payment of a single, predetermined insurance premium payable
from the sale proceeds of the municipal bond. The Fund expects to exercise the
right to obtain Permanent Insurance for a municipal bond only if, in Nuveen
Advisory's opinion, upon the exercise the net proceeds from the sale of the
municipal bond, as insured, would exceed the proceeds from the sale of the
security without insurance.

   The Permanent Insurance premium for each municipal bond is determined based
upon the insurability of each security as of the date of purchase and will not
be increased or decreased for any change in the security's creditworthiness
unless the security is in default as to payment of principal or interest, or
both. If such event occurs, the Permanent Insurance premium will be subject to
an increase predetermined at the date of the Fund's purchase.

   The Fund generally intends to retain any insured bonds covered by Portfolio
Insurance that are in default or in significant risk of default and to place a
value on the insurance, which ordinarily will be the difference between the
market value of the defaulted bond and the market value of similar bonds of
minimum investment grade (that is, rated "Baa" or "BBB") that are not in
default. In certain circumstances, however, Nuveen Advisory may determine that
an alternative value for the insurance, such as the difference between the
market value of the defaulted bond and either its par value or the market value
of similar bonds that are not in default or in significant risk of default, is
more appropriate. Except as described above for bonds covered by Portfolio
Insurance that are in default or subject to significant risk of default, the
Fund will not place any value on the Portfolio Insurance in valuing the
municipal bonds it holds.

   Because each Portfolio Insurance policy will terminate for municipal bonds
sold by the Fund on the date of sale, in which event the insurer will be liable
only for those payments of principal and interest that are then due and owing
(unless Permanent Insurance is obtained by the Fund), the provision for this
insurance will not enhance the marketability of the Fund's bonds, whether or
not the bonds are in default or in significant risk of default. On the other
hand, because Original Issue Insurance and Secondary Market Insurance generally
will remain in effect as long as the municipal bonds they cover are
outstanding, these insurance policies may enhance the marketability of these
bonds even when they are in default or in significant risk of default, but the
exact effect, if any, on marketability, cannot be

                                      18

<PAGE>

estimated. Accordingly, the Fund may determine to retain or, alternatively, to
sell municipal bonds covered by Original Issue Insurance or Secondary Market
Insurance that are in default or in significant risk of default.

   Premiums for a Portfolio Insurance policy are paid monthly, and are adjusted
for purchases and sales of municipal bonds covered by the policy during the
month. The yield on the Fund is reduced to the extent of the insurance premiums
it pays.

When-Issued and Delayed Delivery Transactions

   The Fund may buy and sell municipal bonds on a when-issued or delayed
delivery basis, making payment or taking delivery at a later date, normally
within 15 to 45 days of the trade date. This type of transaction may involve an
element of risk because no interest accrues on the bonds prior to settlement
and, because bonds are subject to market fluctuations, the value of the bonds
at time of delivery may be less (or more) than cost. A separate account of the
Fund will be established with its custodian consisting of cash, cash
equivalents, or liquid securities having a market value at all times at least
equal to the amount of the commitment.

Miscellaneous Investments

   The Fund, either singly or in conjunction with other funds advised or
subadvised by Nuveen Advisory or an affiliate thereof, may invest in taxable
fixed-income or equity securities, for the purposes of acquiring control of an
issuer whose municipal bonds (a) the Fund already owns and (b) have
deteriorated or are expected shortly to deteriorate significantly in credit
quality, provided Nuveen Advisory determines that such investment should enable
the Fund to better maximize its existing investment in such issuer. Investment
in taxable securities would result in a portion of your dividend being subject
to regular federal income tax.

Other Investment Companies

   The Fund may invest up to 10% of its net assets in securities of other open-
or closed-end investment companies that invest primarily in municipal bonds of
the types in which the Fund may invest directly. The Fund generally expects to
invest in other investment companies either during periods when it has large
amounts of uninvested cash, such as the period shortly after the Fund receives
the proceeds of the offering of its Common Shares or MuniPreferred Shares, or
during periods when there is a shortage of attractive, high-yielding municipal
bonds available in the market. As a stockholder in an investment company, the
Fund will bear its ratable share of that investment company's expenses, and
would remain subject to payment of the Fund's advisory and administrative fees
with respect to assets so invested. Common Shareholders would therefore be
subject to duplicative expenses to the extent the Fund invests in other
investment companies. Nuveen Advisory will take expenses into account when
evaluating the investment merits of an investment in the investment company
relative to available municipal bond investments. In addition, the securities
of other investment companies may also be leveraged and will therefore be
subject to the same leverage risks described herein. As described in the
section entitled "Risks," the net asset value and market value of leveraged
shares will be more volatile and the yield to Common Shareholders will tend to
fluctuate more than the yield generated by unleveraged shares.

                                      19

<PAGE>

                       MUNIPREFERRED SHARES AND LEVERAGE

   Subject to market conditions, approximately one to three months after the
completion of the offering of the Common Shares, the Fund intends to offer
MuniPreferred Shares representing approximately 35% of the Fund's capital
immediately after the issuance of the MuniPreferred Shares. The MuniPreferred
Shares will have complete priority upon distribution of assets over the Common
Shares. The issuance of MuniPreferred Shares will leverage the Common Shares.
Leverage involves special risks. There is no assurance that the Fund's
leveraging strategy will be successful. Although the timing and other terms of
the offering of the MuniPreferred Shares will be determined by the Fund's Board
of Trustees, the Fund expects to invest the proceeds of the MuniPreferred
Shares offering in long-term municipal bonds. The MuniPreferred Shares will pay
dividends based on shorter-term rates (which would be redetermined periodically
by an auction process). So long as the Fund's portfolio is invested in
securities that provide a higher rate of return than the dividend rate of the
MuniPreferred Shares (after taking expenses into consideration), the leverage
will cause you to receive a higher current rate of return than if the Fund were
not leveraged.

   Changes in the value of the Fund's bond portfolio (including bonds bought
with the proceeds of the MuniPreferred Shares offering) will be borne entirely
by the Common Shareholders. If there is a net decrease (or increase) in the
value of the Fund's investment portfolio, the leverage will decrease (or
increase) the net asset value per Common Share to a greater extent than if the
Fund were not leveraged. During periods in which the Fund is using leverage,
the fees paid to Nuveen Advisory for advisory services will be higher than if
the Fund did not use leverage because the fees paid will be calculated on the
basis of the Fund's total net assets, including the proceeds from the issuance
of MuniPreferred Shares.

   For tax purposes, the Fund is currently required to allocate net capital
gain and other taxable income, if any, between the Common Shares and
MuniPreferred Shares in proportion to total dividends paid to each class for
the year in which the net capital gain or other taxable income is realized. If
net capital gain or other taxable income is allocated to MuniPreferred Shares
(instead of solely tax-exempt income), the Fund will likely have to pay higher
total dividends to MuniPreferred Shareholders or make special payments to
MuniPreferred Shareholders to compensate them for the increased tax liability.
This would reduce the total amount of dividends paid to the Common
Shareholders, but would increase the portion of the dividend that is
tax-exempt. On an after-tax basis, Common Shareholders may still be better off
than if they had been allocated all of the Fund's net capital gain or other
taxable income (resulting in a higher amount of total dividends), but received
a lower amount of tax-exempt income. If the increase in dividend payments or
the special payments to MuniPreferred Shareholders are not entirely offset by a
reduction in the tax liability of, and an increase in the tax-exempt dividends
received by, the Common Shareholders, the advantage of the Fund's leveraged
structure to Common Shareholders will be reduced.

   Under the 1940 Act, the Fund is not permitted to issue preferred shares
unless immediately after such issuance, the value of the Fund's asset coverage
is at least 200% of the liquidation value of the outstanding preferred shares
(i.e., such liquidation value may not exceed 50% of the Fund's asset coverage).
In addition, the Fund is not permitted to declare any cash dividend or other
distribution on its Common Shares unless, at the time of such declaration, the
value of the Fund's asset coverage is at least 200% of such liquidation value.
If MuniPreferred Shares are issued, the Fund intends, to the extent possible,
to purchase or redeem MuniPreferred Shares from time to time to the extent
necessary in order to maintain coverage of any MuniPreferred Shares of at least
200%. If the Fund has MuniPreferred

                                      20

<PAGE>

Shares outstanding, two of the Fund's trustees will be elected by the holders
of MuniPreferred Shares, voting separately as a class. The remaining trustees
of the Fund will be elected by holders of Common Shares and MuniPreferred
Shares voting together as a single class. In the event the Fund failed to pay
dividends on MuniPreferred Shares for two years, MuniPreferred Shareholders
would be entitled to elect a majority of the trustees of the Fund.

   The Fund may be subject to certain restrictions imposed by guidelines of one
or more rating agencies which may issue ratings for MuniPreferred Shares issued
by the Fund. These guidelines may impose asset coverage or portfolio
composition requirements that are more stringent than those imposed on the Fund
by the 1940 Act. It is not anticipated that these covenants or guidelines will
impede Nuveen Advisory from managing the Fund's portfolio in accordance with
the Fund's investment objectives and policies.

   The Fund may also borrow money for repurchase of its shares or as a
temporary measure for extraordinary or emergency purposes, including the
payment of dividends and the settlement of securities transactions which
otherwise might require untimely dispositions of Fund securities.

   Assuming that the MuniPreferred Shares will represent in the aggregate
approximately 35% of the Fund's capital and pay dividends at an annual average
rate of  %, the incremental income generated by the Fund's portfolio (net of
estimated expenses) must exceed   % in order to cover such dividend payments
and other expenses specifically related to the MuniPreferred Shares. Of course,
these numbers are merely estimates, used for illustration. Actual MuniPreferred
Share dividend rates, interest or payment rates may vary frequently and may be
significantly higher or lower than the rate assumed above.

   The following table is furnished in response to requirements of the
Securities and Exchange Commission. It is designed to illustrate the effect of
leverage on Common Share total return, assuming investment portfolio total
returns (comprised of income and changes in the value of bonds held in the
Fund's portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative
of the investment portfolio returns expected to be experienced by the Fund. The
table further reflects the issuance of MuniPreferred Shares representing 35% of
the Fund's total capital, and the Fund's currently projected annual
MuniPreferred Share dividend rate of    %. See "Risks" and "MuniPreferred
Shares and Leverage."

<TABLE>
<S>                            <C>      <C>     <C>    <C>   <C>
Assumed Portfolio Total Return (10.00)% (5.00)% 0.00 % 5.00% 10.00%
Common Share Total Return.....    (  )%   (  )%  (  )%     %      %
</TABLE>

   Common Share total return is composed of two elements--the Common Share
dividends paid by the Fund (the amount of which is largely determined by the
net investment income of the Fund after paying dividends on MuniPreferred
Shares) and gains or losses on the value of the securities the Fund owns. As
required by Securities and Exchange Commission rules, the table assumes that
the Fund is more likely to suffer capital losses than to enjoy capital
appreciation. For example, to assume a total return of 0%, the Fund must assume
that the tax-exempt interest it receives on its municipal bond investments is
entirely offset by losses in the value of those bonds.

   Unless and until MuniPreferred Shares are issued, the Common Shares will not
be leveraged and this section will not apply.

                                      21

<PAGE>

                                     RISKS

   The net asset value of the Common Shares will fluctuate with and be affected
by, among other things, interest rate risk, credit risk, reinvestment risk and
leverage risk, and an investment in Common Shares will be subject to market
discount risk, inflation risk and municipal bond market risk, each of which is
more fully described below.

   Newly Organized. The Fund is a newly organized, diversified, closed-end
management investment company and has no operating history.

   Market Discount Risk. Shares of closed-end management investment companies
frequently trade at a discount from their net asset value.

   Interest Rate Risk. Interest rate risk is the risk that bonds (and the
Fund's net assets) will decline in value because of changes in interest rates.
Generally, municipal bonds will decrease in value when interest rates rise and
increase in value when interest rates decline. This means that the net asset
value of the Common Shares will fluctuate with interest rate changes and the
corresponding changes in the value of the Fund's municipal bond holdings. The
value of the longer-term bonds in which the Fund generally invests fluctuates
more in response to changes in interest rates than does the value of
shorter-term bonds. Conversely, the values of lower-rated and comparable
unrated debt securities are less likely than those of investment grade and
comparable unrated debt securities to fluctuate inversely with changes in
interest rates. Because the Fund will invest primarily in long-term bonds, the
Common Share net asset value and market price per share will fluctuate more in
response to changes in market interest rates than if the Fund invested
primarily in shorter-term bonds. The Fund's use of leverage, as described
below, will tend to increase Common Share interest rate risk.

   Credit Risk. Credit risk is the risk that one or more municipal bonds in the
Fund's portfolio will decline in price, or fail to pay interest or principal
when due, because the issuer of the bond experiences a decline in its financial
status. In general, lower-rated municipal bonds carry a greater degree of risk
that the issuer will lose its ability to make interest and principal payments,
which could have a negative impact on the Fund's net asset value or dividends.

   Municipal Bond Market Risk. Investing in the municipal bond market involves
certain risks. The amount of public information available about the municipal
bonds in the Fund's portfolio is generally less than that for corporate
equities or bonds, and the investment performance of the Fund may therefore be
more dependent on the analytical abilities of Nuveen Advisory than if the Fund
were a stock fund or taxable bond fund. The secondary market for municipal
bonds also tends to be less well-developed or liquid than many other securities
markets, which may adversely affect the Fund's ability to sell its bonds at
attractive prices or at prices approximating those at which the Fund currently
values them.

   The ability of municipal issuers to make timely payments of interest and
principal may be diminished during general economic downturns and as
governmental cost burdens are reallocated among federal, state and local
governments. In addition, laws enacted in the future by Congress or state
legislatures or referenda could extend the time for payment of principal and/or
interest, or impose other constraints on enforcement of such obligations, or on
the ability of municipalities to levy taxes. Issuers of municipal securities
might seek protection under the bankruptcy laws. In the event of bankruptcy of

                                      22

<PAGE>

such an issuer, the Fund could experience delays in collecting principal and
interest and the Fund may not, in all circumstances, be able to collect all
principal and interest to which it is entitled. To enforce its rights in the
event of a default in the payment of interest or repayment of principal, or
both, the Fund may take possession of and manage the assets securing the
issuer's obligations on such securities, which may increase the Fund's
operating expenses. Any income derived from the Fund's ownership or operation
of such assets may not be tax-exempt.

   Municipal Bond Insurance. In the event Moody's, S&P or Fitch (or all of
them) should downgrade its assessment of the claims-paying ability of a
particular insurer, it (or they) could also be expected to downgrade the
ratings assigned to municipal bonds insured by such insurer, and municipal
bonds insured under Portfolio Insurance issued by such insurer also would be of
reduced quality in the portfolio of the Fund. Any such downgrade could have an
adverse impact on the net asset value and market price of the Common Shares.

   In addition, the Fund may be subject to certain restrictions on investments
imposed by guidelines of the insurance companies issuing portfolio insurance.
The Fund does not expect these guidelines to prevent Nuveen Advisory from
managing the Fund's portfolio in accordance with the Fund's investment
objectives and policies.

   Reinvestment Risk. Reinvestment risk is the risk that income from the Fund's
bond portfolio will decline if and when the Fund invests the proceeds from
matured, traded or called bonds at market interest rates that are below the
portfolio's current earnings rate. A decline in income could affect the Common
Shares' market price or their overall returns.

   Leverage Risk. Leverage risk is the risk associated with the issuance of the
MuniPreferred Shares to leverage the Common Shares. There can be no assurance
that the Fund's leveraging strategy will be successful. Once the MuniPreferred
Shares are issued, the net asset value and market value of Common Shares will
be more volatile, and the yield to Common Shareholders will tend to fluctuate
with changes in the shorter-term dividend rates on the MuniPreferred Shares.
Long-term municipal bond rates of return are typically, although not always,
higher than shorter-term municipal bond rates of return. If the dividend rate
on the MuniPreferred Shares approaches the net rate of return on the Fund's
investment portfolio, the benefit of leverage to Common Shareholders would be
reduced. If the dividend rate on the MuniPreferred Shares exceeds the net rate
of return on the Fund's portfolio, the leverage will result in a lower rate of
return to Common Shareholders than if the Fund were not leveraged. Because the
long- term bonds included in the Fund's portfolio will typically pay fixed
rates of interest while the dividend rate on the MuniPreferred Shares will be
adjusted periodically, this could occur even when both long-term and short-term
municipal rates rise. In addition, the Fund will pay (and Common Shareholders
will bear) any costs and expenses relating to the issuance and ongoing
maintenance of the MuniPreferred Shares (for example, distribution related
expenses such as the participation fee paid at what it expects will be an
annual rate of 0.25% of MuniPreferred Share liquidation preference to
broker-dealers participating in MuniPreferred Share auctions). Accordingly, the
Fund cannot assure you that the issuance of MuniPreferred Shares will result in
a higher yield or return to Common Shareholders.

   Similarly, any decline in the net asset value of the Fund's investments will
be borne entirely by Common Shareholders. Therefore, if the market value of the
Fund's portfolio declines, the leverage will result in a greater decrease in
net asset value to Common Shareholders than if the Fund were not leveraged.
Such greater net asset value decrease will also tend to cause a greater decline
in the market

                                      23

<PAGE>

price for the Common Shares. The Fund might be in danger of failing to maintain
the required 200% asset coverage or of losing its expected AAA/Aaa ratings on
the MuniPreferred Shares or, in an extreme case, the Fund's current investment
income might not be sufficient to meet the dividend requirements on the
MuniPreferred Shares. In order to counteract such an event, the Fund might need
to liquidate investments in order to fund a redemption of some or all of the
MuniPreferred Shares. Liquidation at times of low municipal bond prices may
result in capital loss and may reduce returns to Common Shareholders.

   While the Fund may from time to time consider reducing leverage in response
to actual or anticipated changes in interest rates in an effort to mitigate the
increased volatility of current income and net asset value associated with
leverage, there can be no assurance that the Fund will actually reduce leverage
in the future or that any reduction, if undertaken, will benefit the Common
Shareholders. Changes in the future direction of interest rates are very
difficult to predict accurately. If the Fund were to reduce leverage based on a
prediction about future changes to interest rates, and that prediction turned
out to be incorrect, the reduction in leverage would likely operate to reduce
the income and/or total returns to Common Shareholders relative to the
circumstance where the Fund had not reduced leverage. The Fund may decide that
this risk outweighs the likelihood of achieving the desired reduction to
volatility in income and share price if the prediction were to turn out to be
correct, and determine not to reduce leverage as described above.

   The Fund may invest in the securities of other investment companies. Such
securities may also be leveraged and will therefore be subject to the leverage
risks described above. Such additional leverage may in certain market
conditions serve to reduce the net asset value of the Fund's Common Shares and
the returns to Common Shareholders.

   Inflation Risk. Inflation risk is the risk that the value of assets or
income from investment will be worth less in the future as inflation decreases
the value of money. As inflation increases, the real value of the Common Shares
and distributions can decline. In addition, during any periods of rising
inflation, MuniPreferred Share dividend rates would likely increase, which
would tend to further reduce returns to Common Shareholders.

   Anti-Takeover Provisions. The Fund's Declaration includes provisions that
could limit the ability of other entities or persons to acquire control of the
Fund or convert the Fund to open-end status. These provisions could have the
effect of depriving the Common Shareholders of opportunities to sell their
Common Shares at a premium over the then current market price of the Common
Shares.

                           HOW THE FUND MANAGES RISK

Investment Limitations

   The Fund has adopted certain investment limitations designed to limit
investment risk and maintain portfolio diversification. These limitations are
fundamental and may not be changed without the approval of the holders of a
"majority of the outstanding" Common Shares and, if issued, MuniPreferred
Shares voting together as a single class, and the approval of the holders of a
"majority of the outstanding" MuniPreferred Shares voting as a separate class.
When used with respect to particular shares of the Fund, a "majority of the
outstanding" shares means (i) 67% or more of the shares present at a meeting,
if the holders of more than 50% of the shares are present or represented by
proxy, or

                                      24

<PAGE>

(ii) more than 50% of the shares, whichever is less. Among other restrictions,
the Fund may not invest more than 25% of total Fund assets in securities of
issuers in any one industry, except that this limitation does not apply to
municipal bonds backed by the assets and revenues of governments or political
subdivisions of governments.

   The Fund may become subject to guidelines which are more limiting than the
investment restriction set forth above in order to obtain and maintain ratings
from Moody's or S&P on the MuniPreferred Shares that it intends to issue. The
Fund does not anticipate that such guidelines would have a material adverse
effect on the Fund's Common Shareholders or the Fund's ability to achieve its
investment objectives. See "Investment Objectives" in the Statement of
Additional Information for information about these guidelines and a complete
list of the fundamental and non-fundamental investment policies of the Fund.

   The Fund seeks to reduce credit risk by buying bonds that are either covered
by insurance or backed by an escrow or trust account, each with the purpose of
ensuring timely payment of principal and interest. However, these municipal
bonds remain subject to market risk.

Limited Issuance of MuniPreferred Shares

   Under the 1940 Act, the Fund could issue MuniPreferred Shares having a total
liquidation value (original purchase price of the shares being liquidated plus
any accrued and unpaid dividends) of up to one-half of the value of the asset
coverage of the Fund. If the total liquidation value of the MuniPreferred
Shares was ever more than one-half of the value of the Fund's asset coverage,
the Fund would not be able to declare dividends on the Common Shares until the
liquidation value, as a percentage of the Fund's assets, was reduced. The Fund
intends to issue MuniPreferred Shares representing about 35% of the Fund's
total capital immediately after the time of issuance. This higher than required
margin of net asset value provides a cushion against later fluctuations in the
value of the Fund's portfolio and will subject Common Shareholders to less
income and net asset value volatility than if the Fund were more leveraged. The
Fund intends to purchase or redeem MuniPreferred Shares, if necessary, to keep
the liquidation value of the MuniPreferred Shares below one-half of the value
of the Fund's asset coverage.

Management of Investment Portfolio and Capital Structure to Limit Leverage Risk

   The Fund may take certain actions if short-term interest rates increase or
market conditions otherwise change (or the Fund anticipates such an increase or
change) and the Fund's leverage begins (or is expected) to adversely affect
Common Shareholders. In order to attempt to offset such a negative impact of
leverage on Common Shareholders, the Fund may shorten the average maturity of
its investment portfolio (by investing in short-term, high quality securities)
or may extend the maturity of outstanding MuniPreferred Shares. The Fund may
also attempt to reduce the leverage by redeeming or otherwise purchasing
MuniPreferred Shares. As explained above under "Risks--Leverage Risk," the
success of any such attempt to limit leverage risk depends on Nuveen Advisory's
ability to accurately predict interest rate or other market changes. Because of
the difficulty of making such predictions, the Fund may never attempt to manage
its capital structure in the manner described above.

                                      25

<PAGE>

   If market conditions suggest that additional leverage would be beneficial,
the Fund may sell previously unissued MuniPreferred Shares or MuniPreferred
Shares that the Fund previously issued but later repurchased.

   Currently, the Fund may not invest in inverse floating rate securities,
which are securities that pay interest at rates that vary inversely with
changes in prevailing short-term tax-exempt interest rates and which represent
a leveraged investment in an underlying municipal bond. This restriction is a
non-fundamental policy of the Fund that may be changed by vote of the Fund's
Board of Trustees.

Hedging Strategies

   The Fund may use various investment strategies designed to limit the risk of
bond price fluctuations and to preserve capital. These hedging strategies
include using financial futures contracts, options on financial futures or
options based on either an index of long-term municipal securities or on
taxable debt securities whose prices, in the opinion of Nuveen Advisory,
correlate with the prices of the Fund's investments. Successful implementation
of most hedging strategies would generate taxable income, and the Fund has no
present intention to use these strategies.

                            MANAGEMENT OF THE FUND

Trustees and Officers

   The Board of Trustees is responsible for the management of the Fund,
including supervision of the duties performed by Nuveen Advisory. The names and
business addresses of the trustees and officers of the Fund and their principal
occupations and other affiliations during the past five years are set forth
under "Management of the Fund" in the Statement of Additional Information.

Investment Adviser

   Nuveen Advisory, 333 West Wacker Drive, Chicago, Illinois 60606, serves as
the investment adviser to the Fund. In this capacity, Nuveen Advisory is
responsible for the selection and on-going monitoring of the municipal bonds in
the Fund's investment portfolio, managing the Fund's business affairs and
providing certain clerical, bookkeeping and administrative services. Nuveen
Advisory serves as investment adviser to investment portfolios with more than
$   billion in assets under management. See the Statement of Additional
Information under "Investment Adviser."

   Nuveen Advisory is responsible for execution of specific investment
strategies and day-to-day investment operations. Nuveen Advisory manages the
Fund using a team of analysts and portfolio managers that focus on a specific
group of funds. Steven Krupa is the portfolio manager of the Fund and will
provide daily oversight for, and execution of, the Fund's investment
activities.            has been a portfolio manager and      of Nuveen Advisory
since      . Mr. Krupa currently manages investments for    Nuveen-sponsored
investment companies.

   Nuveen Advisory is a wholly owned subsidiary of The John Nuveen Company, 333
West Wacker Drive, Chicago, Illinois 60606. Founded in 1898, The John Nuveen
Company and its affiliates had over $   billion of net assets under management
or surveillance as of       , 2002. The John Nuveen Company is a majority-owned
subsidiary of The St. Paul Companies, Inc., a publicly-traded company which is
principally engaged in providing property-liability insurance through
subsidiaries.

                                      26

<PAGE>

Investment Management Agreement

   Pursuant to an investment management agreement between Nuveen Advisory and
the Fund, the Fund has agreed to pay for the services and facilities provided
by Nuveen Advisory an annual management fee, payable on a monthly basis,
according to the following schedule:

<TABLE>
<CAPTION>
                                                                    Management
        Average Daily Managed Assets                                   Fee
        ----------------------------                                ----------
<S>                                                                 <C>
        Up to $125 million.........................................   .6500%
        $125 million to $250 million...............................   .6375%
        $250 million to $500 million...............................   .6250%
        $500 million to $1 billion.................................   .6125%
        $1 billion to $2 billion...................................   .6000%
        $2 billion and over........................................   .5750%
</TABLE>

   If the Fund utilizes leverage through the issuance of MuniPreferred Shares
in an amount equal to 35% of the Fund's total assets (including the amount
obtained from leverage), the management fee calculated as a percentage of net
assets attributable to Common Shares would be as follows:

<TABLE>
<CAPTION>
                                                                    Management
        Net Assets Attributable to Common Shares                       Fee
        ----------------------------------------                    ----------
<S>                                                                 <C>
        Up to $125 million.........................................   1.0000%
        $125 million to $250 million...............................    .9808%
        $250 million to $500 million...............................    .9615%
        $500 million to $1 billion.................................    .9423%
        $1 billion to $2 billion...................................    .9231%
        $2 billion and over........................................    .8846%
</TABLE>

   In addition to the fee of Nuveen Advisory, the Fund pays all other costs and
expenses of its operations, including compensation of its trustees (other than
those affiliated with Nuveen Advisory), custodian, transfer agency and dividend
disbursing expenses, legal fees, expenses of independent auditors, expenses of
repurchasing shares, expenses of issuing any MuniPreferred Shares, expenses of
preparing, printing and distributing shareholder reports, notices, proxy
statements and reports to governmental agencies, and taxes, if any.

   For the first eight full years of the Fund's operation, Nuveen Advisory has
contractually agreed to reimburse the Fund for fees and expenses in the
amounts, and for the time periods, set forth below:

<TABLE>
<CAPTION>
                            Percentage                    Percentage
                            Reimbursed                    Reimbursed
                         (as a percentage              (as a percentage
                            of Managed                    of Managed
          Year Ending,       Assets)      Year Ending,     Assets)
         ------------    ---------------- ------------ ----------------
         <S>             <C>              <C>          <C>
            2002/(1)/...       .32%       2007........       .32%
            2003........       .32%       2008........       .24%
            2004........       .32%       2009........       .16%
            2005........       .32%       2010........       .08%
            2006........       .32%
</TABLE>
- --------
(1)From the commencement of operations.

                                      27

<PAGE>

   Nuveen Advisory has not agreed to reimburse the Fund for any portion of its
fees and expenses beyond                , 2010.

                                NET ASSET VALUE

   The Fund's net asset value per share is determined as of the close of
regular session trading (normally 4:00 p.m. eastern time) on each day the New
York Stock Exchange is open for business. Net asset value is calculated by
taking the fair value of the Fund's total assets, including interest or
dividends accrued but not yet collected, less all liabilities, and dividing by
the total number of shares outstanding. The result, rounded to the nearest
cent, is the net asset value per share.

   In determining net asset value, expenses are accrued and applied daily and
securities and other assets for which market quotations are available are
valued at market value. The prices of municipal bonds are provided by a pricing
service and based on the mean between the bid and asked price. When price
quotes are not readily available (which is usually the case for municipal
bonds), the pricing service establishes a fair market value based on prices of
comparable municipal bonds. All valuations are subject to review by the Fund's
Board of Trustees or its delegate, Nuveen Advisory.

                                 DISTRIBUTIONS

   Commencing with the first dividend, the Fund intends to make regular monthly
cash distributions to Common Shareholders at a level rate (stated in terms of a
fixed cents per Common Share dividend rate) that reflects the past and
projected performance of the Fund. Distributions can only be made from net
investment income after paying any accrued dividends to MuniPreferred
Shareholders. The Fund's ability to maintain a level dividend rate will depend
on a number of factors, including dividends payable on the MuniPreferred
Shares. The net income of the Fund consists of all interest income accrued on
portfolio assets less all expenses of the Fund. Expenses of the Fund are
accrued each day. Over time, all the net investment income of the Fund will be
distributed. At least annually, the Fund also intends to distribute net capital
gain and ordinary taxable income, if any, after paying any accrued dividends or
making any liquidation payments to MuniPreferred Shareholders. Initial
distributions to Common Shareholders are expected to be declared approximately
45 days, and paid approximately 60 to 90 days, from the completion of this
offering, depending on market conditions. Although it does not now intend to do
so, the Board of Trustees may change the Fund's dividend policy and the amount
or timing of the distributions, based on a number of factors, including the
amount of the Fund's undistributed net investment income and historical and
projected investment income and the amount of the expenses and dividend rates
on the outstanding MuniPreferred Shares.

   To permit the Fund to maintain a more stable monthly distribution, the Fund
will initially distribute less than the entire amount of net investment income
earned in a particular period. The undistributed net investment income would be
available to supplement future distributions. As a result, the distributions
paid by the Fund for any particular monthly period may be more or less than the
amount of net investment income actually earned by the Fund during the period.
Undistributed net investment income will be added to the Fund's net asset value
and, correspondingly, distributions from undistributed net investment income
will be deducted from the Fund's net asset value.

                                      28

<PAGE>

                          DIVIDEND REINVESTMENT PLAN

   You may elect to have all dividends, including any capital gain dividends,
on your Common Shares automatically reinvested by the Plan Agent in additional
Common Shares under the Dividend Reinvestment Plan (the "Plan"). You may elect
to participate in the Plan by completing the Dividend Reinvestment Plan
Application Form. If you do not participate, you will receive all distributions
in cash paid by check mailed directly to you by State Street Bank and Trust
Company as dividend paying agent.

   If you decide to participate in the Plan, the number of Common Shares you
will receive will be determined as follows:

      (1) If Common Shares are trading at or above net asset value at the time
   of valuation, the Fund will issue new shares at the then current market
   price; or

      (2) If Common Shares are trading below net asset value at the time of
   valuation, the Plan Agent will receive the dividend or distribution in cash
   and will purchase Common Shares in the open market, on
   the                         or elsewhere, for the participants' accounts. It
   is possible that the market price for the Common Shares may increase before
   the Plan Agent has completed its purchases. Therefore, the average purchase
   price per share paid by the Plan Agent may exceed the market price at the
   time of valuation, resulting in the purchase of fewer shares than if the
   dividend or distribution had been paid in Common Shares issued by the Fund.
   The Plan Agent will use all dividends and distributions received in cash to
   purchase Common Shares in the open market within 30 days of the valuation
   date. Interest will not be paid on any uninvested cash payments.

   You may withdraw from the Plan at any time by giving written notice to the
Plan Agent. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan and you will
receive a cash payment for any fraction of a share in your account. If you
wish, the Plan Agent will sell your shares and send you the proceeds, minus
brokerage commissions and a $2.50 service fee.

   The Plan Agent maintains all shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. Common Shares in your account will be held by the
Plan Agent in non-certificated form. Any proxy you receive will include all
Common Shares you have received under the Plan.

   There is no brokerage charge for reinvestment of your dividends or
distributions in Common Shares. However, all participants will pay a pro rata
share of brokerage commissions incurred by the Plan Agent when it makes open
market purchases.

   Automatically reinvesting dividends and distributions does not mean that you
do not have to pay income taxes due upon receiving dividends and distributions.

   The Fund reserves the right to amend or terminate the Plan if in the
judgment of the Board of Trustees the change is warranted. There is no direct
service charge to participants in the Plan; however, the Fund reserves the
right to amend the Plan to include a service charge payable by the
participants. Additional information about the Plan may be obtained from State
Street Bank and Trust Company, Attn: Equiserve Nuveen Investments,
P.O. Box 43071, Providence, Rhode Island 02940-3071, (800) 257-8787.

                                      29

<PAGE>

                             DESCRIPTION OF SHARES

Common Shares

   The Declaration authorizes the issuance of an unlimited number of Common
Shares. The Common Shares being offered have a par value of $0.01 per share
and, subject to the rights of holders of MuniPreferred Shares, if issued, have
equal rights to the payment of dividends and the distribution of assets upon
liquidation. The Common Shares being offered will, when issued, be fully paid
and, subject to matters discussed in "Certain Provisions in the Declaration of
Trust," non-assessable, and will have no pre-emptive or conversion rights or
rights to cumulative voting. Whenever MuniPreferred Shares are outstanding,
Common Shareholders will not be entitled to receive any cash distributions from
the Fund unless all accrued dividends on MuniPreferred Shares have been paid,
and unless asset coverage (as defined in the 1940 Act) with respect to
MuniPreferred Shares would be at least 200% after giving effect to the
distributions. See "--MuniPreferred Shares" below.

   The Common Shares have been approved for listing on the
                      , subject to notice of issuance. The Fund intends to hold
annual meetings of shareholders so long as the Common Shares are listed on a
national securities exchange and such meetings are required as a condition to
such listing.

   The Fund's net asset value per share generally increases when interest rates
decline, and decreases when interest rates rise, and these changes are likely
to be greater because the Fund intends to have a leveraged capital structure.
Net asset value will be reduced immediately following the offering by the
amount of the sales load and offering expenses paid by the Fund. Nuveen has
agreed to pay (i) all organizational expenses and (ii) offering costs (other
than sales load) that exceed $0.03 per Common Share. See "Use of Proceeds."

   Unlike open-end funds, closed-end funds like the Fund do not continuously
offer shares and do not provide daily redemptions. Rather, if a shareholder
determines to buy additional Common Shares or sell shares already held, the
shareholder may conveniently do so by trading on the exchange through a broker
or otherwise. Shares of closed-end investment companies may frequently trade on
an exchange at prices lower than net asset value. Shares of closed-end
investment companies like the Fund that invest predominately in investment
grade municipal bonds have during some periods traded at prices higher than net
asset value and have during other periods traded at prices lower than net asset
value. Because the market value of the Common Shares may be influenced by such
factors as dividend levels (which are in turn affected by expenses), call
protection, dividend stability, portfolio credit quality, net asset value,
relative demand for and supply of such shares in the market, general market and
economic conditions, and other factors beyond the control of the Fund, the Fund
cannot assure you that Common Shares will trade at a price equal to or higher
than net asset value in the future. The Common Shares are designed primarily
for long-term investors, and investors in the Common Shares should not view the
Fund as a vehicle for trading purposes. See "MuniPreferred Shares and Leverage"
and the Statement of Additional Information under "Repurchase of Fund Shares;
Conversion to Open-End Fund."

MuniPreferred Shares

   The Declaration authorizes the issuance of an unlimited number of
MuniPreferred Shares in one or more classes or series, with rights as
determined by the Board of Trustees, by action of the Board of Trustees without
the approval of the Common Shareholders.

                                      30

<PAGE>

   The Fund's Board of Trustees has authorized an offering of MuniPreferred
Shares (representing approximately 35% of the Fund's capital immediately after
the time the MuniPreferred Shares are issued) approximately one to three months
after completion of the offering of Common Shares. The Board has determined
that the MuniPreferred Shares, at least initially, would pay cumulative
dividends at rates determined weekly by providing for the periodic
redetermination of the dividend rate through an auction or remarketing
procedure. The Board of Trustees has indicated that the preference on
distribution, liquidation preference, voting rights and redemption provisions
of the MuniPreferred Shares will be as stated below.

   Limited Issuance of MuniPreferred Shares. Under the 1940 Act, the Fund could
issue MuniPreferred Shares with an aggregate liquidation value of up to
one-half of the value of the Fund's total net assets, measured immediately
after issuance of the MuniPreferred Shares. "Liquidation value" means the
original purchase price of the shares being liquidated plus any accrued and
unpaid dividends. In addition, the Fund is not permitted to declare any cash
dividend or other distribution on its Common Shares unless the liquidation
value of the MuniPreferred Shares is less than one-half of the value of the
Fund's total net assets (determined after deducting the amount of such dividend
or distribution) immediately after the distribution. If the Fund sells all the
Common Shares and MuniPreferred Shares discussed in this Prospectus, the
liquidation value of the MuniPreferred Shares is expected to be approximately
35% of the value of the Fund's total net assets. The Fund intends to purchase
or redeem MuniPreferred Shares, if necessary, to keep that fraction below
one-half.

   Distribution Preference. The MuniPreferred Shares have complete priority
over the Common Shares as to distribution of assets.

   Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Fund, holders of
MuniPreferred Shares will be entitled to receive a preferential liquidating
distribution (expected to equal the original purchase price per share plus
accumulated and unpaid dividends thereon, whether or not earned or declared)
before any distribution of assets is made to Common Shareholders.

   Voting Rights. MuniPreferred Shares are required to be voting shares and to
have equal voting rights with Common Shares. Except as otherwise indicated in
this Prospectus or the Statement of Additional Information and except as
otherwise required by applicable law, holders of MuniPreferred Shares will vote
together with Common Shareholders as a single class.

   Holders of MuniPreferred Shares, voting as a separate class, will be
entitled to elect two of the Fund's trustees (following the establishment of
the Fund by an initial trustee, the Declaration provides for a total of no less
than two and no more than twelve trustees). The remaining trustees will be
elected by Common Shareholders and holders of MuniPreferred Shares, voting
together as a single class. In the unlikely event that two full years of
accrued dividends are unpaid on the MuniPreferred Shares, the holders of all
outstanding MuniPreferred Shares, voting as a separate class, will be entitled
to elect a majority of the Fund's trustees until all dividends in arrears have
been paid or declared and set apart for payment. Under the 1940 Act, in order
for the Fund to take certain actions or enter into certain transactions (i.e.,
convert to an open-end investment company or effect a reorganization adversely
affecting the MuniPreferred Shares), a separate class vote of holders of
MuniPreferred Shares will be required, in addition to the single class vote of
the holders of MuniPreferred Shares and Common Shares. See the Statement of
Additional Information under "Description of Shares--MuniPreferred
Shares--Voting Rights."

                                      31

<PAGE>

   Redemption, Purchase and Sale of MuniPreferred Shares. The terms of the
MuniPreferred Shares provide that they may be redeemed by the issuer at certain
times, in whole or in part, at the original purchase price per share plus
accumulated dividends. Any redemption or purchase of MuniPreferred Shares by
the Fund will reduce the leverage applicable to Common Shares, while any
issuance of shares by the Fund will increase such leverage. See "MuniPreferred
Shares and Leverage."

   The discussion above describes the Board of Trustees' present intention with
respect to an offering of MuniPreferred Shares. The terms of the MuniPreferred
Shares may be the same as, or different from, the terms described above,
subject to applicable law and the Fund's Declaration.

                CERTAIN PROVISIONS IN THE DECLARATION OF TRUST

   Under Massachusetts law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Fund. However, the
Declaration contains an express disclaimer of shareholder liability for debts
or obligations of the Fund and requires that notice of such limited liability
be given in each agreement, obligation or instrument entered into or executed
by the Fund or the trustees. The Declaration further provides for
indemnification out of the assets and property of the Fund for all loss and
expense of any shareholder held personally liable for the obligations of the
Fund. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund would be
unable to meet its obligations. The Fund believes that the likelihood of such
circumstances is remote.

   The Declaration includes provisions that could limit the ability of other
entities or persons to acquire control of the Fund or to convert the Fund to
open-end status. Specifically, the Declaration requires a vote by holders of at
least two-thirds of the Common Shares and MuniPreferred Shares, voting together
as a single class, except as described below, to authorize (1) a conversion of
the Fund from a closed-end to an open-end investment company, (2) a merger or
consolidation of the Fund, or a series or class of the Fund, with any
corporation, association, trust or other organization or a reorganization or
recapitalization of the Fund, or a series or class of the Fund, (3) a sale,
lease or transfer of all or substantially all of the Fund's assets (other than
in the regular course of the Fund's investment activities), (4) in certain
circumstances, a termination of the Fund, or a series or class of the Fund, or
(5) a removal of trustees by shareholders, and then only for cause, unless,
with respect to (1) through (4), such transaction has already been authorized
by the affirmative vote of two-thirds of the total number of trustees fixed in
accordance with the Declaration or the By-laws, in which case the affirmative
vote of the holders of at least a majority of the Fund's Common Shares and
MuniPreferred Shares outstanding at the time, voting together as a single
class, is required, provided, however, that where only a particular class or
series is affected (or, in the case of removing a trustee, when the trustee has
been elected by only one class), only the required vote by the applicable class
or series will be required. Approval of shareholders is not required, however,
for any transaction, whether deemed a merger, consolidation, reorganization or
otherwise whereby the Fund issues Shares in connection with the acquisition of
assets (including those subject to liabilities) from any other investment
company or similar entity. None of the foregoing provisions may be amended
except by the vote of at least two-thirds of the Common Shares and
MuniPreferred Shares, voting together as a single class. In the case of the
conversion of the Fund to an open-end investment company, or in the case of any
of the foregoing transactions constituting a plan of reorganization which
adversely affects the holders of MuniPreferred Shares, the action in question
will also require the affirmative vote of the holders of at least two-thirds

                                      32

<PAGE>

of the Fund's MuniPreferred Shares outstanding at the time, voting as a
separate class, or, if such action has been authorized by the affirmative vote
of two-thirds of the total number of trustees fixed in accordance with the
Declaration or the By-laws, the affirmative vote of the holders of at least a
majority of the Fund's MuniPreferred Shares outstanding at the time, voting as
a separate class. The votes required to approve the conversion of the Fund from
a closed-end to an open-end investment company or to approve transactions
constituting a plan of reorganization which adversely affects the holders of
MuniPreferred Shares are higher than those required by the 1940 Act. The Board
of Trustees believes that the provisions of the Declaration relating to such
higher votes are in the best interest of the Fund and its shareholders. See the
Statement of Additional Information under "Certain Provisions in the
Declaration of Trust."

   The provisions of the Declaration described above could have the effect of
depriving the Common Shareholders of opportunities to sell their Common Shares
at a premium over the then current market price of the Common Shares by
discouraging a third party from seeking to obtain control of the Fund in a
tender offer or similar transaction. The overall effect of these provisions is
to render more difficult the accomplishment of a merger or the assumption of
control by a third party. They provide, however, the advantage of potentially
requiring persons seeking control of the Fund to negotiate with its management
regarding the price to be paid and facilitating the continuity of the Fund's
investment objectives and policies. The Board of Trustees of the Fund has
considered the foregoing anti-takeover provisions and concluded that they are
in the best interests of the Fund and its Common Shareholders.

   Reference should be made to the Declaration on file with the Securities and
Exchange Commission for the full text of these provisions.

            REPURCHASE OF FUND SHARES; CONVERSION TO OPEN-END FUND

   The Fund is a closed-end investment company and as such its shareholders
will not have the right to cause the Fund to redeem their shares. Instead, the
Common Shares will trade in the open market at a price that will be a function
of several factors, including dividend levels (which are in turn affected by
expenses), net asset value, call protection, dividend stability, portfolio
credit quality, relative demand for and supply of such shares in the market,
general market and economic conditions and other factors. Because shares of
closed-end investment companies may frequently trade at prices lower than net
asset value, the Fund's Board of Trustees has currently determined that, at
least annually, it will consider action that might be taken to reduce or
eliminate any material discount from net asset value in respect of Common
Shares, which may include the repurchase of such shares in the open market or
in private transactions, the making of a tender offer for such shares at net
asset value, or the conversion of the Fund to an open-end investment company.
The Fund cannot assure you that its Board of Trustees will decide to take any
of these actions, or that share repurchases or tender offers will actually
reduce market discount.

   If the Fund converted to an open-end investment company, it would be
required to redeem all MuniPreferred Shares then outstanding (requiring in turn
that it liquidate a portion of its investment portfolio), and the Common Shares
would no longer be listed on the                             . In contrast to a
closed-end investment company, shareholders of an open-end investment company
may require the company to redeem their shares at any time (except in certain
circumstances as authorized by or under the 1940 Act) at their net asset value,
less any redemption charge that is in effect at the time

                                      33

<PAGE>

of redemption. See the Statement of Additional Information under "Certain
Provisions in the Declaration of Trust" for a discussion of the voting
requirements applicable to the conversion of the Fund to an open-end investment
company.

   Before deciding whether to take any action if the Common Shares trade below
net asset value, the Board would consider all relevant factors, including the
extent and duration of the discount, the liquidity of the Fund's portfolio, the
impact of any action that might be taken on the Fund or its shareholders, and
market considerations. Based on these considerations, even if the Fund's shares
should trade at a discount, the Board of Trustees may determine that, in the
interest of the Fund and its shareholders, no action should be taken. See the
Statement of Additional Information under "Repurchase of Fund Shares;
Conversion to Open-End Fund" for a further discussion of possible action to
reduce or eliminate such discount to net asset value.

                                  TAX MATTERS

Federal Income Tax Matters

   The following discussion of federal income tax matters is based on the
advice of Bell, Boyd & Lloyd LLC, special counsel to the Fund.

   The discussions below and in the Statement of Additional Information provide
general tax information related to an investment in the Common Shares. Because
tax laws are complex and often change, you should consult your tax advisor
about the tax consequences of an investment in the Fund.

   The Fund intends to elect to be treated and to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and intends to distribute substantially all of its net
income and gains to its shareholders. Therefore, it is not expected that the
Fund will be subject to any federal income tax.

   The Fund primarily invests in municipal bonds issued by states, cities and
local authorities and certain possessions and territories of the United States
(such as Puerto Rico or Guam) or in municipal bonds whose income is otherwise
exempt from regular federal income tax, and the alternative minimum tax
applicable to individuals. Thus, substantially all of the Fund's dividends to
you will qualify as "exempt-interest dividends." A shareholder treats an
exempt-interest dividend as interest on state and local bonds exempt from
federal income tax. Different federal alternative minimum tax rules apply to
individuals and to corporations.

   Although the Fund does not seek to realize taxable income or capital gains,
the Fund may realize and distribute taxable income or capital gains from time
to time as a result of the Fund's normal investment activities. The Fund will
distribute at least annually any ordinary taxable income or net capital gain.
Distributions of net short-term capital gain are taxable as ordinary income.
Distributions of net capital gain (the excess of net long-term capital gain
over net short-term capital loss) are taxable as long-term capital gains
regardless of how long you have owned your investment. The Fund will allocate

                                      34

<PAGE>

distributions to shareholders that are treated as tax-exempt interest and as
long-term capital gain and ordinary income, if any, among the Common Shares and
MuniPreferred Shares in proportion to total dividends paid to each class for
the year. As long as the Fund qualifies as a regulated investment company,
distributions paid by the Fund generally will not be eligible for the dividends
received deduction allowed to corporations.

   Each year, you will receive a year-end statement that describes the tax
status of dividends paid to you during the preceding year, including the source
of investment income by state and the portion of income that is subject to the
federal alternative minimum tax. You will receive this statement from the firm
where you purchased your Common Shares if you hold your investment in street
name; the Fund will send you this statement if you hold your shares in
registered form.

   The tax status of your dividends is not affected by whether you reinvest
your dividends or receive them in cash.

   In order to avoid corporate taxation of its earnings and to pay tax-free
dividends, the Fund must meet certain Internal Revenue Service ("I.R.S.")
requirements that govern the Fund's sources of income, diversification of
assets and distribution of earnings to shareholders. The Fund intends to meet
these requirements. If the Fund failed to do so, the Fund would be required to
pay corporate taxes on its earnings and all your distributions would be taxable
as ordinary income to the extent of the Fund's earnings and profits. In
particular, in order for the Fund to pay exempt-interest dividends, at least
50% of the value of the Fund's total assets must consist of tax-exempt
obligations at the close of each quarter of its taxable year. The Fund intends
to meet this requirement. If the Fund failed to do so, it would not be able to
pay exempt-interest dividends and your distributions attributable to interest
received by the Fund from any source would be taxable as ordinary income.

   The sale or other disposition of Common Shares will result in capital gain
or loss to you if you hold such Common Shares as capital assets. Present law
taxes both long-term and short-term capital gains of corporations at the rates
applicable to ordinary income. For non-corporate taxpayers, however, long-term
capital gains are eligible for reduced rates of taxation.

   The Fund may be required to withhold a percentage of certain of your
dividends if you have not provided the Fund with your correct taxpayer
identification number (normally your Social Security number) and certain
certifications, or if you are otherwise subject to backup withholding. The
backup withholding percentage will be 30% in 2002 and 2003, 29% in 2004 and
2005, and 28% thereafter until 2011, when the percentage will revert to 31%
unless amended by Congress. If you receive Social Security benefits, you should
be aware that exempt-interest dividends are taken into account in calculating
the amount of these benefits that may be subject to federal income tax. If you
borrow money to buy Fund shares, you may not deduct the interest on that loan.
Under I.R.S. rules, Fund shares may be treated as having been bought with
borrowed money even if the purchase of the Fund shares cannot be traced
directly to borrowed money.

                                 OTHER MATTERS

   A lawsuit was brought in June 1996 (Green et al. v. Nuveen Advisory Corp.,
et al.) by certain individual common shareholders of six leveraged closed-end
funds sponsored by Nuveen in the federal district court for the Seventh Circuit
Court of Appeals. The suit was originally brought against Nuveen,

                                      35

<PAGE>

Nuveen Advisory, six Nuveen investment companies (the "leveraged closed-end
funds") managed by Nuveen Advisory and two of the leveraged closed-end funds'
former directors seeking unspecified damages, an injunction and other relief.
The suit also sought certification of a defendant class consisting of all
Nuveen-managed leveraged funds.

   The plaintiffs alleged that the leveraged closed-end funds engaged in
certain practices that violated various provisions of the 1940 Act and common
law. The plaintiffs also alleged, among other things, breaches of fiduciary
duty by the funds' directors and Nuveen Advisory and various misrepresentations
and omissions in prospectuses and shareholder reports relating to the use of
leverage through the issuance and periodic auctioning of preferred stock and
the basis of the calculation and payment of management fees to Nuveen Advisory
and Nuveen. Plaintiffs also filed a motion to certify defendant and plaintiff
classes.

   The defendants filed motions to dismiss the entire lawsuit asserting that
the claims are without merit and to oppose certification of any classes. On
March 30, 1999, the court entered a memorandum opinion and order (1) granting
the defendants' motion to dismiss all of plaintiffs' counts against the
defendants other than Nuveen Advisory, (2) granting Nuveen Advisory's motion to
dismiss all of plaintiffs' counts against it other than breach of fiduciary
duty under Section 36(b) of the 1940 Act, and (3) denying the plaintiffs'
motion to certify a plaintiff class and a defendant class. No appeal was made
by plaintiffs of this decision, and the remaining Section 36(b) count against
Nuveen Advisory is discussed below.

   As to alleged damages, plaintiffs have claimed as damages the portion of all
advisory compensation received by Nuveen Advisory from the funds during the
period from June 21, 1995 to the present that is equal to the proportion of
each of such fund's preferred stock to its total assets. The preferred stock
constitutes approximately one third of the funds' assets so the amount claimed
would equal approximately one third of management fees received by Nuveen
Advisory for managing the funds during this period. Nuveen Advisory believes
that it has no liability and the plaintiffs have suffered no damages and filed
a motion for summary judgment as to both liability and damages.

   Plaintiffs filed a motion for partial summary judgment as to liability only.
In a memorandum opinion and order dated September 6, 2001, the federal district
court granted Nuveen Advisory's motion for summary judgment and denied
plaintiffs' motion for partial summary judgment, thereby terminating the
litigation before the court. Plaintiffs appealed this decision on October 8,
2001. In an opinion dated July 8, 2002, the Seventh Circuit Court of Appeals
affirmed the opinion of the district court dismissing the plaintiffs' lawsuit.
Any petition for a writ of certiorari to the United States Supreme Court
seeking to appeal the Seventh Circuit opinion would need to be filed within
ninety days of the Seventh Circuit's July 8, 2002 opinion.

                                      36

<PAGE>

                                 UNDERWRITING

   Subject to the terms and conditions stated in the underwriting agreement
dated the date hereof, each Underwriter named below has severally agreed to
purchase, and the Fund has agreed to sell to such Underwriter, the number of
Common Shares set forth opposite the name of such Underwriter.

<TABLE>
<CAPTION>
                                                                       Number of
Underwriters                                                            Shares
- ------------                                                           ---------
<S>                                                                    <C>
Nuveen Investments....................................................

                                                                        =======
</TABLE>

   The underwriting agreement provides that the obligations of the several
Underwriters to purchase the Common Shares included in this offering are
subject to approval of certain legal matters by counsel and to certain other
conditions. The Underwriters are obligated to purchase all the Common Shares
(other than those covered by the over-allotment option described below) if they
purchase any of the Common Shares. The representatives described below have
advised the Fund that the Underwriters do not intend to confirm any sales to
any accounts over which they exercise discretionary authority.

   The Underwriters, for whom Nuveen Investments, are acting as
representatives, propose to offer some of the Common Shares directly to the
public at the public offering price set forth on the cover page of this
Prospectus and some of the Common Shares to certain dealers at the public
offering price less a concession not in excess of $0.45 per Common Share. The
sales load the Fund will pay of $0.675 per share is equal to 4.5% of the
initial offering price. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $0.10 per Common Share on sales to
certain other dealers. Certain dealers acting in the capacity of
sub-underwriters may receive additional compensation for acting in such a
capacity. If all of the Common Shares are not sold at the initial offering
price, the representatives may change the public offering price and other
selling terms. Investors must pay for any Common Shares purchased on or before
            , 2002. In connection with this offering, Nuveen may perform
clearing services without charge for brokers and dealers for whom it regularly
provides clearing services that are participating in the offering as members of
the selling group.

   The Fund has granted to the Underwriters an option, exercisable for 45 days
from the date of this Prospectus, to purchase up to         additional Common
Shares at the public offering price less the sales load. The Underwriters may
exercise such option solely for the purpose of covering over-allotments, if
any, in connection with this offering. To the extent such option is exercised,
each

                                      37

<PAGE>

Underwriter will be obligated, subject to certain conditions, to purchase a
number of additional Common Shares approximately proportionate to such
Underwriter's initial purchase commitment.

   The Fund and Nuveen Advisory have agreed that, for a period of 180 days from
the date of this Prospectus, they will not, without the prior written consent
of                          , on behalf of the Underwriters, dispose of or
hedge any Common Shares or any securities convertible into or exchangeable for
Common Shares.                          in its sole discretion may release any
of the securities subject to these agreements at any time without notice.

   Prior to the offering, there has been no public market for the Common
Shares. Consequently, the initial public offering price for the Common Shares
was determined by negotiation among the Fund, Nuveen Advisory and the
representatives. There can be no assurance, however, that the price at which
the Common Shares will sell in the public market after this offering will not
be lower than the price at which they are sold by the Underwriters or that an
active trading market in the Common Shares will develop and continue after this
offering. The Common Shares have been approved for listing on the
              , subject to official notice of issuance.

   The Fund and Nuveen Advisory have each agreed to indemnify the several
Underwriters or contribute to losses arising out of certain liabilities,
including liabilities under the Securities Act of 1933, as amended.

   Nuveen has agreed to pay (i) all organizational expenses and (ii) offering
costs (other than sales load) that exceed $0.03 per share.

   In addition, the Fund has agreed to reimburse the Underwriters for certain
expenses incurred by the Underwriters in the offering.

   Certain Underwriters participating in the Common Share offering may be
invited, some period of time after completion of this offering, to participate
in the offering of the MuniPreferred Shares and will receive compensation for
their participation in that MuniPreferred Share offering. The number of Common
Shares purchased by each Underwriter in this offering may be a factor in
determining (i) whether that Underwriter is selected to participate in the
offering of the MuniPreferred Shares, (ii) the number of MuniPreferred Shares
allocated to that Underwriter in that offering, and (iii) the amount of certain
additional MuniPreferred Share underwriting compensation available to that
Underwriter. The offering costs associated with the issuance of MuniPreferred
Shares are currently estimated to be approximately   % of the total amount of
the MuniPreferred Share offering. These costs will effectively be borne by the
Common Shareholders.

   In connection with the requirements for listing the Fund's Common Shares on
the                        , the Underwriters have undertaken to sell lots of
100 or more Common Shares to a minimum of    beneficial owners in the United
States. The minimum investment requirement is 100 Common Shares.

   Certain Underwriters may make a market in the Common Shares after trading in
the Common Shares has commenced on the                        . No Underwriter
is, however, obligated to

                                      38

<PAGE>

conduct market-making activities and any such activities may be discontinued at
any time without notice, at the sole discretion of the Underwriter. No
assurance can be given as to the liquidity of, or the trading market for, the
Common Shares as a result of any market-making activities undertaken by any
Underwriter. This Prospectus is to be used by any Underwriter in connection
with the offering and, during the period in which a prospectus must be
delivered, with offers and sales of the Common Shares in market-making
transactions in the over-the-counter market at negotiated prices related to
prevailing market prices at the time of the sale.

   The Underwriters have advised the Fund that, pursuant to Regulation M under
the Securities Exchange Act of 1934, as amended, certain persons participating
in the offering may engage in transactions, including stabilizing bids,
covering transactions or the imposition of penalty bids, which may have the
effect of stabilizing or maintaining the market price of the Common Shares on
the                         at a level above that which might otherwise prevail
in the open market. A "stabilizing bid" is a bid for or purchase of the Common
Shares on behalf of an Underwriter for the purpose of fixing or maintaining the
price of the Common Shares. A "covering transaction" is a bid for or purchase
of the Common Shares on behalf of an Underwriter to reduce a short position
incurred by the Underwriters in connection with the offering.  A "penalty bid"
is a contractual arrangement whereby if, during a specified period after the
issuance of the Common Shares, the Underwriters purchase Common Shares in the
open market for the account of the underwriting syndicate and the Common Shares
purchased can be traced to a particular Underwriter or member of the selling
group, the underwriting syndicate may require the Underwriter or selling group
member in question to purchase the Common Shares in question at the cost price
to the syndicate or may recover from (or decline to pay to) the Underwriter or
selling group member in question any or all compensation (including, with
respect to a representative, the applicable syndicate management fee)
applicable to the Common Shares in question. As a result, an Underwriter or
selling group member and, in turn, brokers may lose the fees that they
otherwise would have earned from a sale of the Common Shares if their customer
resells the Common Shares while the penalty bid is in effect. The Underwriters
are not required to engage in any of these activities, and any such activities,
if commenced, may be discontinued at any time.

   The underwriting agreement provides that it may be terminated in the
absolute discretion of the representatives without liability on the part of the
Underwriters to the Fund or Nuveen Advisory if, prior to the delivery of and
payment for the Common Shares, (i) trading in the Fund's Common Shares shall
have been suspended by the Securities and Exchange Commission or the
               or trading in securities generally on the New York Stock
Exchange or the American Stock Exchange shall have been suspended or limited or
minimum prices for trading in securities generally shall have been established
on either of such Exchanges, (ii) a commercial banking moratorium shall have
been declared by either federal or New York state authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets in the United States is such as to
make it, in the sole judgment of the representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Common Shares as
contemplated by the Prospectus (exclusive of any supplement thereto).

   The Fund anticipates that from time to time the representatives of the
Underwriters and certain other Underwriters may act as brokers or dealers in
connection with the execution of the Fund's portfolio transactions after they
have ceased to be Underwriters and, subject to certain restrictions, may act as
brokers while they are Underwriters.

                                      39

<PAGE>

   Prior to the public offering of Common Shares, Nuveen Advisory purchased
Common Shares from the Fund in an amount satisfying the net worth requirements
of Section 14(a) of the 1940 Act. As of the date of this Prospectus, Nuveen
Advisory owned 100% of the Fund's outstanding Common Shares. Nuveen Advisory
may be deemed to control the Fund until such time as it owns less than 25% of
the outstanding Common Shares which is expected to occur as of the completion
of the offering of Common Shares.

   Nuveen, 333 West Wacker Drive, Chicago, Illinois, 60606, one of the
representatives of the Underwriters, is the parent company of Nuveen Advisory.

   The principal business address of                          is
                    .

                         CUSTODIAN AND TRANSFER AGENT

   The custodian of the assets of the Fund is State Street Bank and Trust
Company, One Federal Street, Boston, Massachusetts 02110. The Custodian
performs custodial, fund accounting and portfolio accounting services. The
Fund's transfer, shareholder services and dividend paying agent is also State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.

                                LEGAL OPINIONS

   Certain legal matters in connection with the Common Shares will be passed
upon for the Fund by Bell, Boyd & Lloyd LLC, Chicago, Illinois, and for the
Underwriters by                                           . Bell, Boyd & Lloyd
LLC and                           may rely as to certain matters of
Massachusetts law on the opinion of Bingham McCutchen LLP, Boston,
Massachusetts.

                                      40

<PAGE>

                           TABLE OF CONTENTS FOR THE
                      STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
                                                                       Page
                                                                       ----
     <S>                                                               <C>
     Use of Proceeds..................................................   3
     Investment Objectives............................................   5
     Investment Policies and Techniques...............................  10
     Other Investment Policies and Techniques.........................  18
     Management of the Fund...........................................  21
     Investment Adviser...............................................  27
     Portfolio Transactions...........................................  28
     Distributions....................................................  29
     Description of Shares............................................  30
     Certain Provisions in the Declaration of Trust...................  33
     Repurchase of Fund Shares; Conversion to Open-End Fund...........  34
     Tax Matters......................................................  37
     Experts..........................................................  41
     Custodian........................................................  41
     Additional Information...........................................  41
     Report of Independent Auditors...................................  43
     Financial Statements.............................................  44
     Appendices
        Appendix A--Ratings of Investments............................ A-1
        Appendix B--Taxable Equivalent Yield Tables................... B-1
        Appendix C--Description of Insurers........................... C-1
        Appendix D--Hedging Strategies and Risks...................... D-1
        Appendix E--Performance Related and Comparative Information... E-1
</TABLE>

                                      41

<PAGE>

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

                                    Shares

               Nuveen Insured Tax-Free Advantage Municipal Fund

                                 Common Shares

                                   --------

                                  PROSPECTUS

                                         , 2002

                                   --------


                              Nuveen Investments


- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                                                    FRH-NA-1002

<PAGE>

     The information in this Statement of Additional Information is not complete
and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.

                  SUBJECT TO COMPLETION, DATED __________, 2002

                Nuveen Insured Tax-Free Advantage Municipal Fund

                      STATEMENT OF ADDITIONAL INFORMATION

     Nuveen Insured Tax-Free Advantage Municipal Fund (the "Fund") is a newly
organized, diversified closed-end management investment company.

     This Statement of Additional Information relating to common shares of the
Fund ("Common Shares") does not constitute a prospectus, but should be read in
conjunction with the Fund's Prospectus relating thereto dated __________, 2002
(the "Prospectus"). This Statement of Additional Information does not include
all information that a prospective investor should consider before purchasing
Common Shares. Investors should obtain and read the Fund's Prospectus prior to
purchasing such shares. A copy of the Fund's Prospectus may be obtained without
charge by calling (800) 257-8787. You may also obtain a copy of the Fund's
Prospectus on the Securities and Exchange Commission's web site
(http://www.sec.gov). Capitalized terms used but not defined in this Statement
of Additional Information have the meanings ascribed to them in the Prospectus.

                                       1

<PAGE>


                               TABLE OF CONTENTS
<TABLE>

<CAPTION>
                                                                  Page
                                                                --------
<S>                                                             <C>
Use of Proceeds                                                        3
Investment Objectives                                                  5
Investment Policies and Techniques                                    10
Other Investment Policies and Techniques                              18
Management of the Fund                                                21
Investment Adviser                                                    27
Portfolio Transactions                                                28
Distributions                                                         29
Description of Shares                                                 30
Certain Provisions in the Declaration of Trust                        33
Repurchase of Fund Shares; Conversion to Open-End Fund                34
Tax Matters                                                           37
Experts                                                               41
Custodian                                                             41
Additional Information                                                41
Report of Independent Auditors                                        43
Financial Statements                                                  44
Ratings of Investments (Appendix A)                                  A-1
Taxable Equivalent Yield Tables (Appendix B)                         B-1
Description of Insurers (Appendix C)                                 C-1
Hedging Strategies and Risks (Appendix D)                            D-1
Performance Related and Comparative Information (Appendix E)         E-1
</TABLE>


This Statement of Additional Information is dated ________, 2002

                                        2

<PAGE>


                                USE OF PROCEEDS

     The net proceeds of the offering of Common Shares of the Fund will be
approximately: $__________ ($__________ if the Underwriters exercise the
over-allotment option in full) after payment of organization and offering costs.

                                       3

<PAGE>


     For the Fund, Nuveen Advisory has agreed to pay (i) all organizational
expenses and (ii) offering costs (other than sales load) that exceed $0.03 per
Common Share.

     Pending investment in municipal bonds that meet the Fund's investment
objectives and policies, the net proceeds of the offering will be invested in
high quality, short-term tax-exempt money market securities or in high quality
municipal bonds with relatively low volatility (such as pre-refunded and
intermediate-term bonds), to the extent such securities are available. If
necessary to invest fully the net proceeds of the offering immediately, the Fund
may also purchase, as temporary investments, short-term taxable investments of
the type described under "Investment Policies and Techniques--Investment in
Municipal Bonds--Portfolio Investments," the income on which is subject to
regular federal income tax and securities of other open or closed-end investment
companies that invest primarily in municipal bonds of the type in which the Fund
may invest directly.

                                       4

<PAGE>


                             INVESTMENT OBJECTIVES

The Fund's investment objectives are to provide current income exempt from
regular federal income tax, and the alternative minimum tax applicable to
individuals, and to enhance portfolio value relative to the municipal bond
market by investing in tax-exempt municipal bonds that the Fund's investment
adviser believes are underrated or undervalued or that represent municipal
market sectors that are undervalued.

                                        5

<PAGE>

     The Fund's investment in underrated or undervalued municipal bonds will be
based on Nuveen Advisory's belief that their yield is higher than that available
on bonds bearing equivalent levels of interest rate risk, credit risk and other
forms of risk, and that their prices will ultimately rise (relative to the
market) to reflect their true value. The Fund attempts to increase its
portfolio value relative to the municipal bond market by prudent selection of
municipal bonds regardless of the direction the market may move. Any capital
appreciation realized by the Fund will

                                       6

<PAGE>


generally result in the distribution of taxable capital gains to holders of
Common Shares. The Fund's investment objectives are fundamental policies of the
Fund.

     Under normal circumstances, the Fund will invest at least 80% of its net
assets in a portfolio of municipal bonds that:

     .    are exempt from regular federal income tax;

     .    do not pay interest subject to the federal alternative minimum tax
          applicable to individuals; and

     .    are covered by insurance guaranteeing the timely payment of
          principal and interest thereon.

This insurance does not protect the market value of portfolio holdings or the
net asset value of the Fund.

     The Fund will not invest in bonds that pay interest subject to the federal
alternative minimum tax applicable to individuals ("AMT Bonds"). It is a
fundamental policy of the Fund that its investments in municipal bonds whose
interest is not taxable under regular federal income tax, and the alternative
minimum income tax applicable to individuals will, under normal circumstances,
comprise at least 80% of the Fund's Managed Assets. The Fund will notify
shareholders at least 60 days prior to any change in its policy to invest 80% of
its Managed Assets in bonds that are covered by insurance guaranteeing the
timely payment of principal and interest thereon.

     The Fund may at all times invest up to 20% of its net assets in (i)
uninsured municipal bonds that are backed by an escrow or trust account
containing sufficient U.S. Government or U.S. Government agency securities to
ensure timely payment of principal and interest, or (ii) other municipal bonds
that at the time of investment are investment grade quality. Investment grade
quality bonds are bonds rated by all NRSROs that rate the bond within the four
highest grades (Baa or BBB or better by Moody's, S&P or Fitch), or bonds that
are unrated but judged to be of comparable quality by Nuveen Advisory.

Investment Restrictions

     Except as described below, the Fund, as a fundamental policy, may not,
without the approval of the holders of a majority of the outstanding Common
Shares and, if issued, MuniPreferred Shares (as hereinafter defined) voting
together as a single class, and of the holders of a majority of the outstanding
MuniPreferred Shares voting as a separate class:

          (1) Under normal circumstances, invest less than 80% of the Fund's net
     assets (plus any borrowings for investment purposes) in investments the
     income from which is exempt from both regular federal income tax, and
     the alternative minimum income tax applicable to individuals;

          (2) Issue senior securities, as defined in the Investment Company Act
     of 1940, other than MuniPreferred Shares, except to the extent permitted
     under the Investment Company Act of 1940 and except as otherwise described
     in the Prospectus;

          (3) Borrow money, except from banks for temporary or emergency
     purposes or for repurchase of its shares, and then only in an amount not
     exceeding one-third of the value of the Fund's total assets (including the
     amount borrowed) less the Fund's liabilities (other than borrowings);

          (4) Act as underwriter of another issuer's securities, except to the
     extent that the Fund may be deemed to be an underwriter within the meaning
     of the Securities Act of 1933 in connection with the purchase and sale of
     portfolio securities;

          (5) Invest more than 25% of its total assets in securities of issuers
     in any one industry; provided, however, that such limitation shall not
     apply to municipal bonds other than those municipal bonds backed only by
     the assets and revenues of non-governmental users;

                                        7

<PAGE>


          (6) Purchase or sell real estate, but this shall not prevent the Fund
     from investing in municipal bonds secured by real estate or interests
     therein or foreclosing upon and selling such security;

          (7) Purchase or sell physical commodities unless acquired as a result
     of ownership of securities or other instruments (but this shall not prevent
     the Fund from purchasing or selling options, futures contracts, derivative
     instruments or from investing in securities or other instruments backed by
     physical commodities);

          (8) Make loans, other than by entering into repurchase agreements and
     through the purchase of municipal bonds or short-term investments in
     accordance with its investment objectives, policies and limitations; and

          (9) Invest more than 5% of its total assets in securities of any one
     issuer, except that this limitation shall not apply to bonds issued by the
     United States Government, its agencies and instrumentalities or to the
     investment of 25% of its total assets.

     For purposes of the foregoing and "Description of Shares--MuniPreferred
Shares--Voting Rights" below, "majority of the outstanding," when used with
respect to particular shares of the Fund, means (i) 67% or more of the shares
present at a meeting, if the holders of more than 50% of the shares are present
or represented by proxy, or (ii) more than 50% of the shares, whichever is
less.

     For the purpose of applying the limitation set forth in subparagraph (9)
above, an issuer shall be deemed the sole issuer of a security when its assets
and revenues are separate from other governmental entities and its securities
are backed only by its assets and revenues. Similarly, in the case of a non-
governmental issuer, such as an industrial corporation or a privately owned or
operated hospital, if the security is backed only by the assets and revenues of
the non-governmental issuer, then such non-governmental issuer would be deemed
to be the sole issuer. Where a security is also backed by the enforceable
obligation of a superior or unrelated governmental or other entity (other than a
bond insurer), it shall also be included in the computation of securities owned
that are issued by such governmental or other entity. Where a security is
guaranteed by a governmental entity or some other facility, such as a bank
guarantee or letter of credit, such a guarantee or letter of credit would be
considered a separate security and would be treated as an issue of such
government, other entity or bank. When a municipal bond is insured by bond
insurance, it shall not be considered a security that is issued or guaranteed by
the insurer; instead, the issuer of such municipal bond will be determined in
accordance with the principles set forth above. The foregoing restrictions do
not limit the percentage of the Fund's assets that may be invested in municipal
bonds insured by any given insurer.

     Under the Investment Company Act of 1940, the Fund may invest only up to
10% of its Managed Assets in the aggregate in shares of other investment
companies and only up to 5% of its Managed Assets in any one investment company,
provided the investment does not represent more than 3% of the voting stock of
the acquired investment company at the time such shares are purchased. As a
stockholder in any investment company, the Fund will bear its ratable share of

                                        8

<PAGE>


that investment company's expenses, and will remain subject to payment of the
Fund's management, advisory and administrative fees with respect to assets so
invested. Holders of Common Shares would therefore be subject to duplicative
expenses to the extent the Fund invests in other investment companies. In
addition, the securities of other investment companies may also be leveraged and
will therefore be subject to the same leverage risks described herein. As
described in the Prospectus in the section entitled "Risks", the net asset value
and market value of leveraged shares will be more volatile and the yield to
shareholders will tend to fluctuate more than the yield generated by unleveraged
shares.

     In addition to the foregoing fundamental investment policies, the Fund is
also subject to the following non-fundamental restrictions and policies, which
may be changed by the Board of Trustees. The Fund may not:

          (1) Sell securities short, unless the Fund owns or has the right to
     obtain securities equivalent in kind and amount to the securities sold at
     no added cost, and provided that transactions in options, futures
     contracts, options on futures contracts, or other derivative instruments
     are not deemed to constitute selling securities short.

          (2) Purchase securities of open-end or closed-end investment companies
     except in compliance with the Investment Company Act of 1940 or any
     exemptive relief obtained thereunder.

          (3) Enter into futures contracts or related options or forward
     contracts, if more than 30% of the Fund's net assets would be represented
     by futures contracts or more than 5% of the Fund's net assets would be
     committed to initial margin deposits and premiums on futures contracts and
     related options.

          (4) Purchase securities when borrowings exceed 5% of its total assets
     if and so long as MuniPreferred Shares are outstanding.

          (5) Purchase securities of companies for the purpose of exercising
     control, except that the Fund, either singly or in conjunction with other
     funds advised or subadvised by Nuveen Advisory or an affiliate thereof, may
     invest in taxable fixed-income or equity securities, for the purpose of
     acquiring control of an issuer whose municipal bonds (a) the Fund already
     owns and (b) have deteriorated or are expected shortly to deteriorate
     significantly in credit quality, provided Nuveen Advisory determines that
     such investment should enable the Fund to better maximize the value of its
     existing investment in such issuer.

          (6) Invest in inverse floating rate securities (which are securities
     that pay interest at rates that vary inversely with changes in prevailing
     short-term tax-exempt interest rates and which represent a leveraged
     investment in an underlying municipal bond).

     The restrictions and other limitations set forth above will apply only at
the time of purchase of securities and will not be considered violated unless an
excess or deficiency occurs or exists immediately after and as a result of an
acquisition of securities.

     The Fund intends to apply for ratings for its preferred shares (called
"MuniPreferred Shares" herein) from Moody's and/or S&P. In order to obtain and
maintain the required ratings, the Fund may be required to comply with
investment quality, diversification and other guidelines established by Moody's
or S&P. Such guidelines will likely be more restrictive than the restrictions
set forth above. The Fund does not anticipate that such guidelines would have a
material

                                       9

<PAGE>


adverse effect on its Common Shareholders or its ability to achieve its
investment objectives. The Fund presently anticipates that any MuniPreferred
Shares that it intends to issue would be initially given the highest ratings by
Moody's ("Aaa") or by S&P ("AAA"), but no assurance can be given that such
ratings will be obtained. No minimum rating is required for the issuance of
MuniPreferred Shares by the Fund. Moody's and S&P receive fees in connection
with their ratings issuances.

                      INVESTMENT POLICIES AND TECHNIQUES

     The following information supplements the discussion of the Fund's
investment objectives, policies, and techniques that are described in the Fund's
Prospectus.

Investment in Municipal Bonds

     Portfolio Investments

     Under normal circumstances, the Fund will invest at least 80% of its
Managed Assets in a portfolio of municipal bonds that (i) are exempt from
regular federal income tax; (ii) do not pay interest subject to the federal
alternative income tax applicable to individuals and (iii) are covered by
insurance guaranteeing the timely payment of principal and interest thereon.
This insurance does not protect the market value of portfolio holdings or the
net asset value of the Fund.

     The Fund will not invest in AMT Bonds.

     The Fund may at all times invest up to 20% of its net assets in (i)
uninsured municipal bonds that are backed by an escrow or trust account
containing sufficient U.S. Government or U.S. Government agency securities to
ensure timely payment of principal and interest, or (ii) other municipal bonds
that at the time of investment are investment grade quality. Investment grade
quality bonds are bonds rated by all NRSROs that rate the bond within the four
highest grades (Baa or BBB or better by Moody's, S&P or Fitch), or bonds that
are unrated but judged to be of comparable quality by Nuveen Advisory.

     Under normal circumstances, and except for the temporary investments
described below, the Fund expects to be fully invested (at least 95% of its
assets) in such tax-exempt municipal bonds described above.

                                      10

<PAGE>


     Municipal bonds rated Baa or BBB are considered "investment grade"
securities; municipal bonds rated Baa are considered medium grade obligations
which lack outstanding investment characteristics and have speculative
characteristics, while municipal bonds rated BBB are regarded as having adequate
capacity to pay principal and interest. Municipal bonds rated AAA in which the
Fund may invest may have been so rated on the basis of the existence of
insurance guaranteeing the timely payment, when due, of all principal and
interest.

     A general description of Moody's, S&P's and Fitch's ratings of municipal
bonds is set forth in Appendix A hereto. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the municipal bonds they rate. It
should be emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, municipal bonds 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.

     Each insured municipal bond that the Fund holds will either be (1) covered
by an insurance policy applicable to a specific security and obtained by the
issuer of the security or a third party at the time of original issuance
("Original Issue Insurance"), (2) covered by an insurance policy applicable to a
specific security and obtained by the Fund and/or a third party subsequent to
the time of original issuance ("Secondary Market Insurance"), or (3) covered by
a master municipal insurance policy purchased by the Fund ("Portfolio
Insurance"). The Fund, as a non-fundamental policy that can be changed by the
Board of Trustees, will only buy Portfolio Insurance from insurers whose
claims-paying ability Moody's rates "Aaa" or S&P or Fitch rates "AAA."

     Information about the various municipal bond insurers with whom the Fund
intends to maintain specific insurance policies for particular municipal bonds
or policies of Portfolio Insurance is set forth in Appendix C hereto.

     The Fund may at all times invest up to 20% of its net assets in uninsured
municipal bonds that are entitled to the benefit of an escrow or trust account
that contains securities issued or guaranteed by the U.S. Government or U.S.
Government agencies, backed by the full faith and credit of the United States,
and sufficient in amount to ensure the payment of interest and principal on the
original interest payment and maturity dates ("collateralized obligations").
These collateralized obligations generally will not be insured and will include,
but are not limited to municipal bonds that have been (1) advance refunded where
the proceeds of the refunding have been used to buy U.S. Government or U.S.
Government agency securities that are placed in escrow and whose interest or
maturing principal payments, or both, are sufficient to cover the remaining
scheduled debt service on that municipal bond; or (2) issued under state or
local housing finance programs that use the issuance proceeds to fund mortgages
that are then exchanged for U.S. Government or U.S. Government agency securities
and deposited with a trustee as security for those municipal bonds. These
collateralized obligations are normally regarded as having the credit
characteristics of the underlying U.S. Government or U.S. Government agency
securities.

                                      11

<PAGE>

     The Fund will primarily invest in municipal bonds with long-term maturities
in order to maintain a weighted average maturity of 15-30 years, but the average
weighted maturity of obligations held by the Fund may be shortened, depending on
market conditions. As a result, the Fund's portfolio at any given time may
include both long-term and intermediate-term municipal bonds. Moreover, during
temporary defensive periods (e.g., times when, in Nuveen Advisory's opinion,
temporary imbalances of supply and demand or other temporary dislocations in the
tax-exempt bond market adversely affect the price at which long-term or
intermediate-term municipal bonds are available), and in order to keep the
Fund's cash fully invested, including the period during which the net proceeds
of the offering are being invested, the Fund may invest any percentage of its
net assets in short-term investments including high quality, short-term
securities that may be either tax-exempt or taxable and up to 10% of its net
assets in securities of other open or closed-end investment companies that
invest primarily in municipal bonds of the type in which the Fund may invest
directly. The Fund intends to invest in taxable short-term investments only in
the event that suitable tax-exempt short-term investments are not available at
reasonable prices and yields. Tax-exempt short-term investments include various
obligations issued by state and local governmental issuers, such as tax-exempt
notes (bond anticipation notes, tax anticipation notes and revenue anticipation
notes or other such municipal bonds maturing in three years or less from the
date of issuance) and municipal commercial paper. The Fund will invest only in
taxable short-term investments which are U.S. Government securities or
securities rated within the highest grade by Moody's, S&P or Fitch, and which
mature within one year from the date of purchase or carry a variable or floating
rate of interest. See Appendix A for a general description of Moody's, S&P's and
Fitch's ratings of securities in such categories. Taxable short-term investments
of the Fund may include certificates of deposit issued by U.S. banks with assets
of at least $1 billion, or commercial paper or corporate notes, bonds or
debentures with a remaining maturity of one year or less, or repurchase
agreements. See "Other Investment Policies and Techniques--Repurchase
Agreements." To the extent the Fund invests

                                      12

<PAGE>

in taxable investments, the Fund will not at such times be in a position to
achieve its investment objective of tax-exempt income.

     The foregoing policies as to ratings of portfolio investments will apply
only at the time of the purchase of a security, and the Fund will not be
required to dispose of securities in the event Moody's, S&P or Fitch downgrades
its assessment of the credit characteristics of a particular issuer.

     Nuveen Advisory seeks to enhance portfolio value relative to the municipal
bond market by investing in tax-exempt municipal bonds that it believes are
underrated or undervalued or that represent municipal market sectors that are
undervalued. Underrated municipal bonds are those whose ratings do not, in
Nuveen Advisory's opinion, reflect their true creditworthiness. Undervalued
municipal bonds are bonds that, in Nuveen Advisory's opinion, are worth more
than the value assigned to them in the marketplace. Nuveen Advisory may at times
believe that bonds associated with a particular municipal market sector (for
example, electric utilities), or issued by a particular municipal issuer, are
undervalued. Nuveen Advisory may purchase such a bond for the Fund's portfolio
because it represents a market sector or issuer that Nuveen Advisory considers
undervalued, even if the value of the particular bond is consistent with the
value of similar bonds. Municipal bonds of particular types or purposes (e.g.,
hospital bonds, industrial revenue bonds or bonds issued by a particular
municipal issuer) may be undervalued because there is a temporary excess of
supply in that market sector, or because of a general decline in the market
price of municipal bonds of the market sector for reasons that do not apply to
the particular municipal bonds that are considered undervalued. The Fund's
investment in underrated or undervalued municipal bonds will be based on Nuveen
Advisory's belief that their yield is higher than that available on bonds
bearing equivalent levels of interest rate risk, credit risk and other forms of
risk, and that their prices will ultimately rise (relative to the market) to
reflect their true value.

     Likewise, the Fund may deviate from its normal investment policies and
invest in taxable fixed-income and equity securities of an issuer of municipal
bonds that the Fund already owns for the purpose of acquiring control of that
issuer when Nuveen Advisory determines that such investment should enable the
Fund to better maximize the value of its existing investment.

     Also included within the general category of municipal bonds described in
the Fund's Prospectus are participations in lease obligations or installment
purchase contract obligations (hereinafter collectively called "Municipal Lease
Obligations") of municipal authorities or entities. Although a Municipal Lease
Obligation does not constitute a general obligation of the municipality for
which the municipality's taxing power is pledged, a Municipal Lease Obligation
is ordinarily backed by the municipality's covenant to budget for, appropriate
and make the payments due under the Municipal Lease Obligation. However, certain
Municipal Lease Obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment purchase
payments in future years unless money is appropriated for such purpose on a
yearly basis. In the case of a "non-appropriation" lease, the Fund's ability to
recover under the lease in the event of non-appropriation or default will be
limited solely to the repossession of the leased property, without recourse to
the general credit of the lessee, and disposition or releasing of the property
might prove difficult. In order to reduce this risk, the Fund will only

                                      13

<PAGE>


purchase Municipal Lease Obligations where Nuveen Advisory believes the issuer
has a strong incentive to continue making appropriations until maturity.

     Upon Nuveen Advisory's recommendation, during temporary defensive periods
and in order to keep the Fund's cash fully invested, including the period during
which the net proceeds of the offering of Common Shares or MuniPreferred Shares
are being invested, the Fund may deviate from its investment objectives and
policies and invest up to 100% of its Managed Assets in short-term investments
including high quality, short-term securities that may be either tax-exempt or
taxable. To the extent the Fund invests in taxable short-term investments, the
Fund will not at such times be in a position to achieve that portion of its
investment objective of seeking current income exempt from regular federal
income tax. For further information, see, "Short-Term Investments" below.
Likewise, the Fund may deviate from its normal investment policies and invest in
taxable fixed-income and equity securities of an issuer of municipal bonds that
the Fund already owns for the purpose of acquiring control of that issuer when
Nuveen Advisory determines that such investment should enable the Fund to better
maximize the value of its existing investment.

     Obligations of issuers of municipal bonds 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 or interest, or both, or imposing other constraints upon enforcement
of such obligations or upon municipalities to levy taxes. There is also the
possibility that, as a result of legislation or other conditions, the power or
ability of any issuer to pay, when due, the principal of and interest on its
municipal bonds may be materially affected.

     The Fund also may invest up to 10% of its net assets in securities of other
open or closed-end investment companies that invest primarily in municipal bonds
of the type in which the Fund may invest directly. The Fund will generally
select obligations which may not be redeemed at the option of the issuer for
approximately seven to nine years.

Additional Information on Municipal Bond Insurance

     Original Issue Insurance. If interest or principal on a municipal bond is
due, but the issuer fails to pay it, the insurer will make payments in the
amount due to the fiscal agent no later than one business day after the insurer
has been notified of the issuer's nonpayment. The fiscal agent will pay the
amount due to the Fund after the fiscal agent receives evidence of the Fund's
right to receive payment of the principal and/or interest, and evidence that all
of the rights of payment due shall thereupon vest in the insurer. When the
insurer pays the Fund the payment due from the issuer, the insurer will succeed
to the Fund's rights to that payment.

     Portfolio Insurance. Each portfolio insurance policy will be noncancellable
and will remain in effect so long as the Fund is in existence, the Fund
continues to own the municipal bonds covered by the policy, and the Fund pays
the premiums for the policy. Each insurer generally will reserve the right at
any time upon 90 days' written notice to the Fund to refuse to insure any
additional bonds the Fund buys after the effective date of the notice. The
Fund's Board of Trustees will generally reserve the right to terminate each
policy upon seven day's written notice to an insurer if it determines that the
cost of the policy is not reasonable in relation to the value of the insurance
to the Fund.

                                      14

<PAGE>

Short-Term Investments

     Short-Term Taxable Fixed Income Securities

     For temporary defensive purposes or to keep cash on hand fully invested,
the Fund may invest up to 100% of its net assets in cash equivalents and short-
term taxable fixed-income securities, although the Fund intends to invest in
taxable short-term investments only in the event that suitable tax-exempt short-
term investments are not available at reasonable prices and yields. Short-term
taxable fixed income investments are defined to include, without limitation, the
following:

          (1)  U.S. government securities, including bills, notes and bonds
     differing as to maturity and rates of interest that are either issued or
     guaranteed by the U.S. Treasury or by U.S. government agencies or
     instrumentalities. U.S. government agency securities include securities
     issued by (a) the Federal Housing Administration, Farmers Home
     Administration, Export-Import Bank of the United States, Small Business
     Administration, and the Government National Mortgage Association, whose
     securities are supported by the full faith and credit of the United States;
     (b) the Federal Home Loan Banks, Federal Intermediate Credit Banks, and the
     Tennessee Valley Authority, whose securities are supported by the right of
     the agency to borrow from the U.S. Treasury; (c) the Federal National
     Mortgage Association, whose securities are supported by the discretionary
     authority of the U.S. government to purchase certain obligations of the
     agency or instrumentality; and (d) the Student Loan Marketing Association,
     whose securities are supported only by its credit. While the U.S.
     government provides financial support to such U.S. government-sponsored
     agencies or instrumentalities, no assurance can be given that it always
     will do so since it is not so obligated by law. The U.S. government, its
     agencies, and instrumentalities do not guarantee the market value of their
     securities. Consequently, the value of such securities may fluctuate.

          (2)  Certificates of Deposit issued against funds deposited in a bank
     or a savings and loan association. Such certificates are for a definite
     period of time, earn a specified rate of return, and are normally
     negotiable. The issuer of a certificate of deposit agrees to pay the amount
     deposited plus interest to the bearer of the certificate on the date
     specified thereon. Under current FDIC regulations, the maximum insurance
     payable as to any one certificate of deposit is $100,000; therefore,
     certificates of deposit purchased by the Fund may not be fully insured.

          (3)  Repurchase agreements, which involve purchases of debt
     securities. At the time the Fund purchases securities pursuant to a
     repurchase agreement, it simultaneously agrees to resell and redeliver such
     securities to the seller, who also simultaneously agrees to buy back the
     securities at a fixed price and time. This assures a predetermined yield
     for the Fund during its holding period, since the resale price is always
     greater than the purchase price and reflects an agreed-upon market rate.
     Such actions afford an opportunity for the Fund to invest

                                      15

<PAGE>


     temporarily available cash. The Fund may enter into repurchase agreements
     only with respect to obligations of the U.S. government, its agencies or
     instrumentalities; certificates of deposit; or bankers' acceptances in
     which the Fund may invest. Repurchase agreements may be considered loans to
     the seller, collateralized by the underlying securities. The risk to the
     Fund is limited to the ability of the seller to pay the agreed-upon sum on
     the repurchase date; in the event of default, the repurchase agreement
     provides that the Fund is entitled to sell the underlying collateral. If
     the seller defaults under a repurchase agreement when the value of the
     underlying collateral is less than the repurchase price, the Fund could
     incur a loss of both principal and interest. The investment adviser
     monitors the value of the collateral at the time the action is entered into
     and at all times during the term of the repurchase agreement. The Fund's
     investment adviser does so in an effort to determine that the value of the
     collateral always equals or exceeds the agreed-upon repurchase price to be
     paid to the Fund. If the seller were to be subject to a federal bankruptcy
     proceeding, the ability of the Fund to liquidate the collateral could be
     delayed or impaired because of certain provisions of the bankruptcy laws.

          (4) Commercial paper, which consists of short-term unsecured
     promissory notes, including variable rate master demand notes issued by
     corporations to finance their current operations. Master demand notes are
     direct lending arrangements between the Fund and a corporation. There is no
     secondary market for such notes. However, they are redeemable by the Fund
     at any time. Nuveen Advisory will consider the financial condition of the
     corporation (e.g., earning power, cash flow, and other liquidity measures)
     and will continuously monitor the corporation's ability to meet all of its
     financial obligations, because the Fund's liquidity might be impaired if
     the corporation were unable to pay principal and interest on demand.
     Investments in commercial paper will be limited to commercial paper rated
     in the highest categories by a major rating agency and which mature within
     one year of the date of purchase or carry a variable or floating rate of
     interest.

     Short-Term Tax-Exempt Fixed Income Securities

     Short-term tax-exempt fixed-income securities are securities that are
exempt from regular federal income tax and mature within three years or less
from the date of issuance. Short-term tax-exempt fixed income securities are
defined to include, without limitation, the following:

     Bond Anticipation Notes ("BANs") are usually general obligations of state
and local governmental issuers which are sold to obtain interim financing for
projects that will eventually be funded through the sale of long-term debt
obligations or bonds. The ability of an issuer to meet its obligations on its
BANs is primarily dependent on the issuer's access to the long-term municipal
bond market and the likelihood that the proceeds of such bond sales will be used
to pay the principal and interest on the BANs.

                                      16

<PAGE>

     Tax Anticipation Notes ("TANs") are issued by state and local governments
to finance the current operations of such governments. Repayment is generally to
be derived from specific future tax revenues. TANs are usually general
obligations of the issuer. A weakness in an issuer's capacity to raise taxes due
to, among other things, a decline in its tax base or a rise in delinquencies,
could adversely affect the issuer's ability to meet its obligations on
outstanding TANs.

     Revenue Anticipation Notes ("RANs") are issued by governments or
governmental bodies with the expectation that future revenues from a designated
source will be used to repay the notes. In general, they also constitute general
obligations of the issuer. A decline in the receipt of projected revenues, such
as anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and
interest on RANs.

     Construction Loan Notes are issued to provide construction financing for
specific projects. Frequently, these notes are redeemed with funds obtained from
the Federal Housing Administration.

     Bank Notes are notes issued by local government bodies and agencies, such
as those described above to commercial banks as evidence of borrowings.  The
purposes for which the notes are issued are varied but they are frequently
issued to meet short-term working capital or capital-project needs. These notes
may have risks similar to the risks associated with TANs and RANs.

     Tax-Exempt Commercial Paper ("Municipal Paper") represents very short-term
unsecured, negotiable promissory notes issued by states, municipalities and
their agencies. Payment of principal and interest on issues of municipal paper
may be made from various sources, to the extent the funds are available
therefrom. Maturities of municipal paper generally will be shorter than the
maturities of TANs, BANs or RANs. There is a limited secondary market for issues
of Municipal Paper.

     Certain municipal bonds may carry variable or floating rates of interest
whereby the rate of interest is not fixed but varies with changes in specified
market rates or indices, such as a bank prime rate or a tax-exempt money market
index.

     While the various types of notes described above as a group represent the
major portion of the short-term tax-exempt note market, other types of notes are
available in the marketplace and the Fund may invest in such other types of
notes to the extent permitted under its investment objectives, policies and
limitations. Such notes may be issued for different purposes and may be secured
differently from those mentioned above.

Hedging Strategies

     The Fund may periodically engage in hedging transactions. Hedging is a
term used for various methods of seeking to preserve portfolio capital value by
offsetting price changes in one investment through making another investment
whose price should tend to move in the opposite direction. It may be desirable
and possible in various market environments to partially hedge the portfolio
against fluctuations in market value due to interest rate fluctuations by
investment in

                                      17

<PAGE>


financial futures and index futures as well as related put and call options on
such instruments. Both parties entering into an index or financial futures
contract are required to post an initial deposit of 1% to 5% of the total
contract price. Typically, option holders enter into offsetting closing
transactions to enable settlement in cash rather than take delivery of the
position in the future of the underlying security. The Fund will only sell
covered futures contracts, which means that the Fund segregates assets equal to
the amount of the obligations.

     These transactions present certain risks. In particular, the imperfect
correlation between price movements in the futures contract and price movements
in the securities being hedged creates the possibility that losses on the hedge
by a Fund may be greater than gains in the value of the securities in the Fund's
portfolio. In addition, futures and options markets may not be liquid in all
circumstances. As a result, in volatile markets, the Fund may not be able to
close out the transaction without incurring losses substantially greater than
the initial deposit. Finally, the potential deposit requirements in futures
contracts create an ongoing greater potential financial risk than do options
transactions, where the exposure is limited to the cost of the initial premium.
Losses due to hedging transactions will reduce yield. Net gains, if any, from
hedging and other portfolio transactions will be distributed as taxable
distributions to shareholders. The Fund will not make any investment (whether an
initial premium or deposit or a subsequent deposit) other than as necessary to
close a prior investment if, immediately after such investment, the sum of the
amount of its premiums and deposits would exceed 5% of the Fund's net assets.
The Fund will invest in these instruments only in markets believed by Nuveen
Advisory to be active and sufficiently liquid. Successful implementation of most
hedging strategies would generate taxable income, and the Fund has no present
intention to use these strategies. For further information regarding these
investment strategies and risks presented thereby, see Appendix D to this
Statement of Additional Information.


                    OTHER INVESTMENT POLICIES AND TECHNIQUES

Illiquid Securities

     The Fund may invest in illiquid securities (i.e., securities that are not
readily marketable), including, but not limited to, restricted securities
(securities the disposition of which is restricted under the federal securities
laws), securities that may be resold only pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"); and repurchase
agreements with maturities in excess of seven days.

                                       18

<PAGE>

     Restricted securities may be sold only in privately negotiated transactions
or in a public offering with respect to which a registration statement is in
effect under the Securities Act. Where registration is required, the Fund may be
obligated to pay all or part of the registration expenses and a considerable
period may elapse between the time of the decision to sell and the time the Fund
may be permitted to sell a security under an effective registration statement.
If, during such a period, adverse market conditions were to develop, the Fund
might obtain a less favorable price than that which prevailed when it decided to
sell. Illiquid securities will be priced at a fair value as determined in good
faith by the Board of Trustees or its delegate.

Portfolio Trading and Turnover Rate

     Portfolio trading may be undertaken to accomplish the investment objectives
of the Fund in relation to actual and anticipated movements in interest rates.
In addition, a security may be sold and another of comparable quality purchased
at approximately the same time to take advantage of what Nuveen Advisory
believes to be a temporary price disparity between the two securities. Temporary
price disparities between two comparable securities may result from supply and
demand imbalances where, for example, a temporary oversupply of certain bonds
may cause a temporarily low price for such bonds, as compared with other bonds
of like quality and characteristics. The Fund may also engage to a limited
extent in short-term trading consistent with its investment objectives.
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) and later sold, but the Fund will not engage in trading solely to
recognize a gain.

     Subject to the foregoing, the Fund will attempt to achieve its investment
objectives by prudent selection of municipal bonds with a view to holding them
for investment. While there can be no assurance thereof, the Fund anticipates
that its annual portfolio turnover rate will generally not exceed 100%. However,
the rate of turnover will not be a limiting factor when the Fund deems it
desirable to sell or purchase securities. Therefore, depending upon market
conditions, the annual portfolio turnover rate of the Fund may exceed 100% in
particular years.

Other Investment Companies

     The Fund may invest in securities of other open or closed-end investment
companies that invest primarily in municipal bonds of the types in which the
Fund may invest directly. The Fund generally expects to invest in other
investment companies either during periods when it has large amounts of
uninvested cash, such as the period shortly after the Fund receives the proceeds
of the offering of its Common Shares or MuniPreferred Shares, or during periods
when there is a shortage of attractive, high-yielding municipal bonds available
in the market. As a stockholder in an investment company, the Fund will bear its
ratable share of that investment company's expenses and would remain subject to
payment of the Fund's management, advisory and administrative fees with respect
to assets so invested. Common Shareholders would therefore be subject to
duplicative expenses to the extent the Fund invests in other investment
companies. Nuveen Advisory will take expenses into account when evaluating the
investment merits of an investment in the investment company relative to
available municipal bond investments. In addition, the securities of other
investment companies may also be leveraged and will therefore be subject to the
same leverage risks described herein. As described in the Fund's Prospectus in
the section entitled "Risks," the net asset value and market value of leveraged
shares will be more

                                       19

<PAGE>


volatile and the yield to shareholders will tend to fluctuate more than the
yield generated by unleveraged shares.

When-Issued and Delayed Delivery Transactions

     The Fund may buy and sell municipal bonds on a when-issued or delayed
delivery basis, making payment or taking delivery at a later date, normally
within 15-45 days of the trade date. On such transactions the payment obligation
and the interest rate are fixed at the time the buyer enters into the
commitment. Beginning on the date the Fund enters into a commitment to purchase
securities on a when-issued or delayed delivery basis, the Fund is required
under rules of the Commission to maintain in a separate account liquid assets,
consisting of cash, cash equivalents or liquid securities having a market value
at all times of at least equal to the amount of the commitment. Income generated
by any such assets which provide taxable income for federal income tax purposes
is includable in the taxable income of the Fund. The Fund may enter into
contracts to purchase municipal bonds on a forward basis (i.e., where settlement
will occur more than 60 days from the date of the transaction) only to the
extent that the Fund specifically collateralizes such obligations with a
security that is expected to be called or mature within sixty days before or
after the settlement date of the forward transaction. The commitment to purchase
securities on a when-issued, delayed delivery or forward basis may involve an
element of risk because no interest accrues on the bonds prior to settlement and
at the time of delivery the market value may be less than cost.

Miscellaneous Investments

     The Fund, either singly or in conjunction with other funds advised or
subadvised by Nuveen Advisory or an affiliate thereof, may (1) invest in taxable
fixed-income or equity securities, and (2) invest for the purposes of acquiring
control of an issuer whose municipal bonds (a) the Fund already owns and (b)
have deteriorated or are expected shortly to deteriorate significantly in credit
quality, provided Nuveen Advisory determines that such investment should enable
the Fund to better maximize its existing investment in such issuer. Investment
in taxable securities would result in a portion of your dividend being subject
to regular federal income tax.

Repurchase Agreements

     As temporary investments, the Fund may invest in repurchase agreements. A
repurchase agreement is a contractual agreement whereby the seller of securities
(U.S. Government securities or municipal bonds) agrees to repurchase the same
security at a specified price on a future date agreed upon by the parties. The
agreed-upon repurchase price determines the yield during the Fund's holding
period. Repurchase agreements are considered to be loans collateralized by the
underlying security that is the subject of the repurchase contract. Income
generated from transactions in repurchase agreements will be taxable. See "Tax
Matters" for information relating to the allocation of taxable income between
Common Shares and MuniPreferred Shares, if any. The Fund will only enter into
repurchase agreements with registered securities dealers or domestic banks that,
in the opinion of Nuveen Advisory, present minimal credit risk. The risk to the
Fund is limited to the ability of the issuer to pay the agreed-upon repurchase
price on the delivery date; however, although the value of the underlying
collateral at the time the transaction is entered into always equals or exceeds
the agreed-upon repurchase price, if the value of the collateral declines there
is a risk of loss of both principal and interest. In the event of default, the
collateral may be sold but the Fund might incur a loss if the value of the
collateral declines, and might incur disposition costs or experience delays in
connection with liquidating the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization upon the collateral by the Fund may be delayed or limited. Nuveen
Advisory will monitor the value of the collateral at the time the transaction is
entered into and at all times subsequent during the term of the repurchase
agreement in an effort to determine that such value always equals or exceeds the
agreed-upon repurchase price. In the event the value of the collateral declines
below the repurchase price, Nuveen Advisory will

                                       20

<PAGE>


demand additional collateral from the issuer to increase the value of the
collateral to at least that of the repurchase price, including interest.

Zero Coupon Bonds


     The Fund may invest in zero coupon bonds. A zero coupon bond is a bond that
does not pay interest for its entire life. When held to its maturity, its return
comes from the difference between the purchase price and its maturity value. The
market prices of zero coupon bonds are affected to a greater extent by changes
in prevailing levels of interest rates and thereby tend to be more volatile in
price than securities that pay interest periodically and may be more speculative
than such securities. In addition, because the Fund accrues income with respect
to these securities prior to the receipt of such interest, it may have to
dispose of portfolio securities under disadvantageous circumstances in order to
obtain cash needed to pay income dividends in amounts necessary to avoid
unfavorable tax consequences.

                            MANAGEMENT OF THE FUND

Trustees and Officers


     The management of the Fund, including general supervision of the duties
performed for the Fund under the Management Agreement, is the responsibility of
the Board of Trustees of the Fund. The number of trustees of the Fund is
currently set at seven. None of the trustees who are not "interested" persons of
the Fund has ever been a director or employee of, or consultant to, Nuveen or
its affiliates. The names and business addresses of the trustees and officers of
the Fund, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.


<TABLE>
<CAPTION>
     Name, Birthdate        Positions and                   Principal Occupations                   Number of
     ---------------        -------------                   ---------------------                   ---------
       and Address         Offices with the              Including Other Directorships           Portfolios in
       -----------         ----------------              -----------------------------           -------------
                            Fund and Year                   During Past Five Years                Fund Complex
                            -------------                   ----------------------                ------------
                            First Elected                                                          Overseen by
                            -------------                                                          -----------
                            or Appointed                                                             Trustee
                            ------------                                                             -------
<S>                       <C>                   <C>                                               <C>
Trustee who is an interested person of the Fund:
- -----------------------------------------------

Timothy R. Schwertfeger*  Chairman of the       Chairman and Director (since 1996) of The                 130
3/28/49                    Board, President     John Nuveen Company, Nuveen Investments, Nuveen
333 West Wacker Drive      and Trustee          Advisory Corp. and Nuveen Institutional
Chicago, IL 60606               2002            Advisory Corp.; prior thereto, Executive Vice
                                                President and Director of The John Nuveen
                                                Company and Nuveen Investments; Director (since
                                                1992) and Chairman (since 1996) of Nuveen
                                                Advisory Corp. and Nuveen Institutional
                                                Advisory Corp.; Chairman and Director (since
                                                1997) of Nuveen Asset Management Inc.;
                                                Director (since 1996) of Institutional Capital
                                                Corporation; Chairman and Director (since 1999)
                                                of
</TABLE>

*  Mr. Schwertfeger is an "interested person" of the Fund, as defined in the
   Investment Company Act of 1940, because he is an officer and director of
   Nuveen Advisory.

                                       21

<PAGE>



<TABLE>
<CAPTION>
     Name, Birthdate        Positions and                    Principal Occupations                 Number of
     ---------------        -------------                    ---------------------                 ---------
       and Address         Offices with the              Including Other Directorships           Portfolios in
       -----------         ----------------              -----------------------------           -------------
                            Fund and Year                   During Past Five Years                Fund Complex
                            -------------                   ----------------------                ------------
                            First Elected                                                          Overseen by
                            -------------                                                          -----------
                            or Appointed                                                             Trustee
                            ------------                                                             -------
<S>                       <C>                   <C>                                              <C>
                                                Rittenhouse Financial Services Inc.; Chief
                                                Executive Officer (since 1999) of Nuveen
                                                Senior Loan Asset Management Inc.



Trustees who are not interested persons of the Fund:
- ---------------------------------------------------

Robert P. Bremner               Trustee         Private Investor and Management Consultant.            112
8/22/40                          2002
3725 Huntington Street,
  N.W.
Washington, D.C. 20015

Lawrence H. Brown**             Trustee         Retired (August 1989) as Senior Vice President         112
7/29/34                          2002           of The Northern Trust Company.
201 Michigan Avenue
Highwood, IL 60040

Anne E. Impellizzeri            Trustee         Retired, formerly, Executive Director (since           112
1/26/33                          2002           1998) of Manitoga (Center for Russel Wright's
3 West 29th Street                              Design with Nature); formerly, President and
New York, NY 10001                              Executive Officer of Blanton-Peale Institutes
                                                Chief of Religion and Health (since 1990); prior
                                                thereto, Vice President, Metropolitan Life
                                                Insurance Co.

Peter R. Sawers                 Trustee         Adjunct Professor of Business and Economics,           112
4/3/33                           2002           University of Dubuque, Iowa; formerly
22 The Landmark                                 (1991-2000) Adjunct Professor, Lake Forest
Northfield, IL 60093                            Graduate School of Management, Lake Forest,
                                                Illinois; prior thereto, Executive Director,
                                                Towers Perrin Australia, a management consulting
                                                firm; Chartered Financial Analyst; Certified
                                                Management Consultant.

William J. Schneider***         Trustee         Senior Partner and Chief Operating Officer,            112
9/24/44                          2002           Miller-Valentine Group, Vice President,
4000 Miller-Valentine Ct.                       Miller-Valentine Realty, a development and
P. O. Box 744                                   contract company; Chair, Miami Valley Hospital;
Dayton, OH 45401                                Chair, Miami Valley Economic Development
                                                Coalition; formerly, Member, Community Advisory
                                                Board, National City Bank, Dayton, Ohio and
                                                Business Advisory Council, Cleveland Federal
                                                Reserve Bank.

Judith M. Stockdale             Trustee         Executive Director, Gaylord and Dorothy                112
12/29/47                         2002           Donnelley Foundation (since 1994); prior
35 E. Wacker Drive                              thereto, Executive Director, Great Lakes
Suite 2600                                      Protection Fund (from 1990 to 1994).
Chicago, IL 60601

</TABLE>

** As a result of his ownership of fixed-income securities issued by         ,
one of the principal underwriters of the Fund, the Fund believes that Mr. Brown
may be deemed to be an interested person for as long as serves as principal
underwriter to the Fund and, therefore, for purposes of this offering he is
being treated as an interested person. Mr. Brown owns less than 1% of such
securities outstanding and has abstained from voting on any items involving the
appointment of as principal underwriter to the Fund.

*** As a result of his ownership of securities issued by the parent company of
              , one of the principal underwriters of the Fund, the Fund believes
that Mr. Schneider may be deemed to be an interested person for as long as
serves as principal underwriter to the Fund and, therefore, for purposes of this
offering he is being treated as an interested person. Mr. Schneider owns less
than 1% of such securities outstanding.


                                       22

<PAGE>


<TABLE>
<CAPTION>
     Name, Birthdate        Positions and                    Principal Occupations                  Number of
     ---------------        -------------                ----------------------------               ---------
       and Address         Offices with the              Including Other Directorships           Portfolios in
       -----------         ----------------              -----------------------------           -------------
                            Fund and Year                   During Past Five Years                Fund Complex
                            -------------                   ----------------------                ------------
                            First Elected                                                          Overseen by
                            -------------                                                          -----------
                            or Appointed                                                             Officer
                            ------------                                                             -------
<S>                       <C>                   <C>                                              <C>

Officers of the Fund:
- --------------------

Michael T. Atkinson       Vice President and    Vice President (since January 2002), formerly,         130
2/3/66                     Assistant Secretary  Assistant Vice President (since 2000),
333 W. Wacker Drive        2002                 previously, Associate of Nuveen Investments.
Chicago, IL  60606

Paul L. Brennan           Vice President        Vice President (since January 2002), formerly,         126
11/10/66                   2002                 Assistant Vice President (since 1997), of Nuveen
333 W. Wacker Drive                             Advisory Corp.; prior thereto, portfolio
Chicago, IL  60606                              manager of Flagship Financial Inc.;
                                                Chartered Financial Analyst and Certified
                                                Public Accountant.

Peter H. D'Arrigo         Vice President and    Vice President of Nuveen Investments (since            130
11/28/67                   Treasurer            1999), prior thereto, Assistant Vice
333 W. Wacker Drive        2002                 President (from 1997); Vice President and
Chicago, IL  60606                              Treasurer (since 1999) of Nuveen Senior Loan
                                                Asset Management Inc.; Chartered Financial
                                                Analyst.

Susan M. DeSanto          Vice President        Vice President of Nuveen Advisory Corp. (since         130
9/8/54                     2002                 2001); previously, Vice President of Van Kampen
333 W. Wacker Drive                             Investment Advisory Corp. (since 1998); prior
Chicago, IL  60606                              thereto, Assistant Vice President of Van Kampen
                                                Investment Advisory Corp. (since 1994).

Jessica R. Droeger        Vice President and    Vice President (since January 2002) and                130
9/24/64                    Assistant Secretary  Assistant General Counsel (since 1998);
333 W. Wacker Drive        2002                 formerly, Assistant Vice President (since
Chicago, IL  60606                              1998) of Nuveen Investments; Vice President
                                                (since May 2002), formerly Assistant Vice
                                                President and Assistant Secretary (since 1998)
                                                of Nuveen Advisory Corp. and Nuveen
                                                Institutional Advisory Corp.; prior
                                                thereto, Associate at the law firm D'Ancona
                                                Partners LLC.

Lorna C. Ferguson         Vice President        Vice President of Nuveen Investments; Vice             130
10/24/45                   2002                 President (since 1998) of Nuveen
333 W. Wacker Drive                             Advisory Corp. and Nuveen Institutional
Chicago, IL  60606                              Advisory Corp.

William M. Fitzgerald     Vice President        Managing Director (since 2002) of Nuveen               130
3/2/64                     2002                 Investments; Managing Director (since 2001),
333 W. Wacker Drive                             formerly Vice President of Nuveen Advisory Corp.
Chicago, IL  60606                              and Nuveen Institutional Advisory Corp. (since
                                                1995); Chartered Financial Analyst.

Stephen D. Foy            Vice President and    Vice President of Nuveen Investments and               130
5/31/54                    Controller           The John Nuveen Company; Vice President
333 W. Wacker Drive        2002                 (since 1999) of Nuveen Senior Loan Management
Chicago, IL  60606                              Inc.; Certified Public Accountant.

J. Thomas Futrell         Vice President        Vice President of Nuveen Advisory Corp.;               126
7/5/55                     2002                 Chartered Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
</TABLE>


                                       23

<PAGE>


<TABLE>
<CAPTION>
     Name, Birthdate        Positions and                   Principal Occupations                  Number of
     ---------------        -------------                   ---------------------                  ---------
       and Address         Offices with the              Including Other Directorships           Portfolios in
       -----------         ----------------              -----------------------------           -------------
                            Fund and Year                   During Past Five Years                Fund Complex
                            -------------                   ----------------------                ------------
                            First Elected                                                          Overseen by
                            -------------                                                          -----------
                            or Appointed                                                             Officer
                            ------------                                                             -------
<S>                       <C>                   <C>                                              <C>
Richard A. Huber            Vice President      Vice President of Nuveen Institutional Advisory        126
3/26/63                         2002            Corp. (since 1998) and Nuveen Advisory
333 W. Wacker Drive                             Corp. (since 1997); prior thereto, Vice
Chicago, IL 60606                               President and Portfolio Manager of Flagship
                                                Financial, Inc.

Steven J. Krupa             Vice President      Vice President of Nuveen Advisory Corp.                126
8/21/57                         2002
333 W. Wacker Drive
Chicago, IL 60606

David J. Lamb               Vice President      Vice President (since 2000) of Nuveen                  130
3/22/63                         2002            Investments, previously Assistant Vice
333 W. Wacker Drive                             President (since 1999); prior thereto,
Chicago, IL 60606                               Associate of Nuveen Investments; Certified
                                                Public Accountant.

Tina M. Lazar               Vice President      Vice President (since 1999), previously,               130
8/27/61                         2002            Assistant Vice President (since 1993) of
333 W. Wacker Drive                             Nuveen Investments.
Chicago, IL 60606

Larry W. Martin           Vice President and    Vice President, Assistant Secretary and                130
7/27/51                   Assistant Secretary   Assistant General Counsel of Nuveen
333 W. Wacker Drive             2002            Investments; Vice President and  Assistant
Chicago, IL 60606                               Secretary of Nuveen Advisory Corp. and Nuveen
                                                Institutional Advisory Corp.; Assistant
                                                Secretary of The John Nuveen Company and (since
                                                1997) Nuveen Asset Management Inc.;
                                                Vice President and Assistant Secretary (since
                                                1999) of Nuveen Senior Loan Asset
                                                Management Inc.

Edward F. Neild, IV         Vice President      Managing Director (since 2002) of Nuveen               130
7/7/65                          2002            Investments; Managing Director (since 1997),
333 W. Wacker Drive                             formerly Vice President (since 1996) of Nuveen
Chicago, IL 60606                               Advisory Corp. and Nuveen Institutional Advisory
                                                Corp.; Chartered Financial Analyst.

Thomas J. O'Shaughnessy     Vice President      Vice President (since January 2002),                   126
9/4/60                          2002            formerly, Assistant Vice President (since 1998),
333 W. Wacker Drive                             of Nuveen Advisory Corp.; prior thereto,
Chicago, IL 60606                               portfolio manager.
</TABLE>


                                       24

<PAGE>


<TABLE>
<CAPTION>
     Name, Birthdate        Positions and                   Principal Occupations                  Number of
     ---------------        -------------                   ---------------------                  ---------
       and Address         Offices with the              Including Other Directorships           Portfolios in
       -----------         ----------------              -----------------------------           -------------
                            Fund and Year                   During Past Five Years                Fund Complex
                            -------------                   ----------------------                ------------
                            First Elected                                                          Overseen by
                            -------------                                                          -----------
                            or Appointed                                                             Officer
                            ------------                                                             -------
<S>                       <C>                   <C>                                              <C>
Thomas C. Spalding        Vice President        Vice President of Nuveen Advisory Corp. and            126
7/31/51                    2002                 Nuveen Institutional Advisory Corp.; Chartered
333 W. Wacker Drive                             Financial Analyst.
Chicago, IL 60606

Gifford R. Zimmerman      Vice President and    Managing Director (since 2002), Assistant              130
9/9/56                     Secretary            Secretary and Associate General Counsel,
333 W. Wacker Drive        2002                 formerly, Vice President and Assistant General
Chicago, IL 60606                               Counsel of Nuveen Investments; Managing
                                                Director (since 2002), General Counsel and
                                                Assistant Secretary, formerly, Vice President
                                                of Nuveen Advisory Corp. and Nuveen Institutional
                                                Advisory Corp.;  Managing Director (since 2002),
                                                Assistant Secretary, formerly, Vice President
                                                (since 1999) of Nuveen Senior Loan Asset Management Inc.;
                                                Managing Director (since 2002), Assistant Secretary
                                                and Associate General Counsel, formerly, Vice President
                                                (since 2000), of Nuveen Asset Management Inc.;
                                                Vice President and Assistant Secretary of The John
                                                Nuveen Company (since 1994); Chartered Financial Analyst.
</TABLE>


     The Board of Trustees has five standing committees: the executive
committee, the audit committee, the nominating and governance committee, the
dividend committee and the valuation committee. Because the Fund is newly
organized, none of the committees have met during the Fund's last fiscal year.
The executive committee met once prior to the commencement of the Fund's
operations.

     Peter R. Sawers and Timothy R. Schwertfeger, Chair, serve as members of the
executive committee of the Board of Trustees of the Fund.  The executive
committee, which meets between regular meetings of the Board of Trustees, is
authorized to exercise all of the powers of the Board of Trustees.

     The audit committee monitors the accounting and reporting policies and
practices of the Funds, the quality and integrity of the financial statements of
the Funds, compliance by the Funds with legal and regulatory requirements and
the independence and performance of the external and internal auditors. The
members of the audit committee are William J. Schneider, Chair, Robert P.
Bremner, Lawrence H. Brown, Anne E. Impellizzeri, Peter R. Sawers and Judith M.
Stockdale.

     The nominating and governance committee is responsible for Board selection
and tenure; selection and review of committees; and Board education and
operations. In addition, the committee monitors performance of legal counsel and
other service providers; periodically reviews and makes recommendations about
any appropriate changes to trustee compensation; and has the resources and
authority to discharge its responsibilities--including retaining special counsel
and other experts or consultants at the expense of the Fund. In the event of a
vacancy on the Board, the nominating and governance committee receives
suggestions from various sources as to suitable candidates. Suggestions should
be sent in writing to Lorna Ferguson, Vice President for Board Relations, Nuveen
Investments, 333 West Wacker Drive, Chicago, IL 60606. The nominating and
governance committee sets appropriate standards and requirements for nominations
for new trustees and reserves the right to interview all candidates and to make
the final selection of any new trustees. The members of the nominating and
governance committee are Anne E. Impellizzeri, Chair, Robert P. Bremner,
Lawrence H. Brown, Peter R. Sawers, William J. Schneider and Judith M.
Stockdale.

     The dividend committee is authorized to declare distributions on the Fund's
shares including, but not limited to regular and special dividends, capital
gains and ordinary income distributions. The members of the dividend committee
are Timothy R. Schwertfeger, Chair, and Lawrence H. Brown.

     The valuation committee oversees the Fund's Pricing Procedures including,
but not limited to, the review and approval of fair value pricing determinations
made by Nuveen's Valuation Group. The members of the valuation committee are
Judith M. Stockdale and Lawrence H. Brown.

     The trustees of the Fund are also directors or trustees, as the case may
be, of 30 Nuveen open-end funds and 82 Nuveen closed-end funds advised by Nuveen
Advisory Corp. Mr. Schwertfeger is a director or trustee, as the case may be, of
18 Nuveen open-end and closed-end funds advised by Nuveen Institutional Advisory
Corp. None of the independent trustees, nor any of their immediate family
members, has ever been a director, officer, or employee of, or a consultant to,
Nuveen Advisory, Nuveen or their affiliates.

                                       25

<PAGE>


     The Common Shareholders of the Fund will elect trustees at the next annual
meeting of Common Shareholders, unless any MuniPreferred Shares are outstanding
at that time, in which event holders of MuniPreferred Shares, voting as a
separate class, will elect two trustees and the remaining trustees shall be
elected by Common Shareholders and holders of MuniPreferred Shares, voting
together as a single class. Holders of MuniPreferred Shares will be entitled to
elect a majority of the Fund's trustees under certain circumstances. See
"Description of Shares - MuniPreferred Shares - Voting Rights."

     The following table sets forth the dollar range of equity securities
beneficially owned by each trustee as of December 31, 2001:


<TABLE>
<CAPTION>
                                                      Aggregate Dollar Range of
                                                       Equity Securities in All
                                                        Registered Investment
                          Dollar Range of Equity        Companies Overseen by
                            Securities in the           Trustee in Family of
    Name of Trustee               Fund                  Investment Companies
    ---------------       ----------------------      -------------------------
<S>                       <C>                         <C>
Robert P. Bremner                     $   0             over $100,000
- -------------------------------------------------------------------------------
Lawrence H. Brown                     $   0             over $100,000
- -------------------------------------------------------------------------------
Anne E. Impellizzeri                  $   0             over $100,000
- -------------------------------------------------------------------------------
Peter R. Sawers                       $   0             over $100,000
- -------------------------------------------------------------------------------
William J. Schneider                  $   0             over $100,000
- -------------------------------------------------------------------------------
Timothy R. Schwertfeger               $   0             over $100,000
- -------------------------------------------------------------------------------
Judith M. Stockdale                   $   0             over $100,000
- -------------------------------------------------------------------------------
</TABLE>


     No trustee who is not an interested person of the Fund owns beneficially
or of record, any security of Nuveen Advisory, Nuveen or any person (other than
a registered investment company) directly or indirectly controlling, controlled
by or under common control with Nuveen Advisory or Nuveen.

     The following table sets forth estimated compensation to be paid by the
Fund projected during the Fund's first full fiscal year after commencement of
operation. The Fund does not have a retirement or pension plan. The officers and
trustees affiliated with Nuveen serve without any compensation from the Fund.
The Fund has a deferred compensation plan (the "Plan") that permits any trustee
who is not an "interested person" of the Fund to elect to defer receipt of all
or a portion of his or her compensation as a trustee. The deferred compensation
of a participating trustee is credited to a book reserve account of the Trust
when the compensation would otherwise have been paid to the trustee. The value
of the trustee's deferral account at any time is equal to the value that the
account would have had if contributions to the account had been invested and
reinvested in shares of one or more of the eligible Nuveen funds. At the time
for commencing distributions from a trustee's deferral account, the trustee may
elect to receive distributions in a lump sum or over a period of five years. The
Fund will not be liable for any other fund's obligations to make distributions
under the Plan.

<TABLE>
<CAPTION>
                                                                Amount of Total
                      Estimated Aggregate  Total Compensation  Compensation that
                       Compensation From     from Fund and         Has Been
   Name of Trustee       the Fund*           Fund Complex**        Deferred
   ---------------     ------------------  ------------------  -----------------
<S>                    <C>                 <C>                 <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Robert P. Bremner            $74                $ 72,500            $ 8,280
- --------------------------------------------------------------------------------
Lawrence H. Brown            $76                $ 78,500            $     0
- --------------------------------------------------------------------------------
Anne E. Impellizzeri         $74                $ 72,500            $55,200
- --------------------------------------------------------------------------------
Peter R. Sawers              $74                $ 73,000            $54,788
- --------------------------------------------------------------------------------
William J. Schneider         $74                $ 72,500            $55,200
- --------------------------------------------------------------------------------
Judith M. Stockdale          $74                $ 72,500            $13,800
- --------------------------------------------------------------------------------
</TABLE>

                                      26

<PAGE>


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

     *  Based on the estimated compensation to be earned by the independent
trustees for the period from inception through the end of the Fund's first full
fiscal year for services to the Fund.

     **Based on the compensation paid to the trustees for the one year period
ending 12/31/01 for services to the open-end and closed-end funds advised by
Nuveen Advisory.

     The Fund has no employees. Its officers are compensated by Nuveen Advisory
or The John Nuveen Company.

                              INVESTMENT ADVISER

     Nuveen Advisory acts as investment adviser to the Fund, with responsibility
for the overall management of the Fund. Its address is 333 West Wacker Drive,
Chicago, Illinois 60606. Nuveen Advisory is also responsible for managing the
Fund's business affairs and providing day-to-day administrative services to the
Fund. For additional information regarding the management services performed by
Nuveen Advisory, see "Management of the Fund" in the Fund's Prospectus.


     Nuveen Advisory is a wholly owned subsidiary of The John Nuveen Company.
Founded in 1898, The John Nuveen Company brings over a century of expertise to
the municipal bond market. According to data from Thomson Wealth Management,
Nuveen is the leading sponsor of exchange-traded municipal bond funds as
measured by number of funds (87) and fund assets under management ($33 billion)
as of August 31, 2002. Overall, The John Nuveen Company and its affiliates had
over $83 billion in assets under management or surveillance as of August 31,
2002. The John Nuveen Company is approximately 77% owned by The St. Paul
Companies, Inc. ("St. Paul"). St. Paul is a publicly-traded company


                                      27

<PAGE>


located in St. Paul, Minnesota, and is principally engaged in providing
property-liability insurance through subsidiaries.


     The John Nuveen Company, through Nuveen Investments, provides high-quality
investment services that are essential to building balanced core investment
portfolios. Nuveen Investments serves financial advisors, and their
high-net-worth clients, as well as a growing number of institutional clients.
The Company today markets its capabilities under four distinct brands: Nuveen,
NWQ, Rittenhouse and Symphony. In total, the Company now manages approximately
$74 billion in assets. The John Nuveen Company is listed on The New York Stock
Exchange and trades under the symbol "JNC".


     Pursuant to an investment management agreement between Nuveen Advisory and
the Fund, the Fund has agreed to pay for the services and facilities provided by
Nuveen Advisory an annual management fee, payable on a monthly basis, according
to the following schedule:

<TABLE>
<CAPTION>
Average Daily Managed Assets                                     Management Fee
- ----------------------------                                     --------------
<S>                                                              <C>
Up to $125 million                                                    .6500%
$125 million to $250 million                                          .6375%
$250 million to $500 million                                          .6250%
$500 million to $1 billion                                            .6125%
$1 billion to $2 billion                                              .6000%
$2 billion and over                                                   .5750%
</TABLE>

     If the Fund utilizes leverage through the issuance of MuniPreferred Shares
in an amount equal to 35% of the Fund's total assets (including the amount
obtained from leverage), the management fee calculated as a percentage of net
assets attributable to Common Shares would be as follows:


<TABLE>
<CAPTION>
Net Assets Attributable to Common Shares                          Management Fee
- ----------------------------------------                          --------------
<S>                                                               <C>
Up to $125 million.............................................      1.0000%
$125 million to $250 million...................................       .9808%
$250 million to $500 million...................................       .9615%
$500 million to $1 billion.....................................       .9423%
$1 billion to $2 billion.......................................       .9231%
$2 billion and over............................................       .8846%
</TABLE>


     In addition to the fee of Nuveen Advisory, the Fund pays all other costs
and expenses of its operations, including compensation of its trustees (other
than those affiliated with Nuveen Advisory), custodian, transfer agency and
dividend disbursing expenses, legal fees, expenses of independent auditors,
expenses of repurchasing shares, expenses of issuing MuniPreferred Shares,
expenses of preparing, printing and distributing shareholder reports, notices,
proxy statements and reports to governmental agencies and taxes, if any. All
fees and expenses are accrued daily and deducted before payment of dividends to
investors.


     For the first eight full years of the Fund's operation, Nuveen Advisory has
contractually agreed to reimburse the Fund for fees and expenses in the amounts,
and for the time periods, set forth below:


<TABLE>
<CAPTION>
                         Percentage                             Percentage
                         Reimbursed                             Reimbursed
      Year Ending    (as a percentage of     Year Ending   (as a percentage of
                      Managed Assets)                       Managed Assets)
      -----------    -------------------    -----------    -------------------
<S>                       <C>               <C>            <C>
         2002(1)             .32%               2008              .24%
         2003                .32%               2009              .16%
         2004                .32%               2010              .08%
         2005                .32%
         2006                .32%
         2007                .32%
</TABLE>
- -----------------------


     (1) From the commencement of operations.


     Reducing Fund expenses in this manner will tend to increase the amount of
income available for the Common Shareholders. Nuveen Advisory has not agreed to
reimburse the Fund for any portion of its fees and expenses beyond ____________,
2010.

     Unless earlier terminated as described below, the Fund's investment
management agreement with Nuveen Advisory (the "management agreement") will
remain in effect until ______, 2003. The management agreement continues in
effect from year to year so long as such continuation is approved at least
annually by (1) the Board of Trustees or the vote of a majority of the
outstanding voting securities of the Fund, and (2) a majority of the trustees
who are not interested persons of any party to the investment management
agreement, cast in person at a meeting called for the purpose of voting on such
approval. The investment management agreement may be terminated at any time,
without penalty, by either the Fund or Nuveen Advisory upon 60 days written
notice, and is automatically terminated in the event of its assignment as
defined in the 1940 Act.


     The management agreement has been approved by a majority of the independent
trustees of the Fund and the sole shareholder of the Fund. The independent
trustees have determined that the terms of the Fund's management agreement are
fair and reasonable and that the agreement is in the Fund's best interests. The
independent trustees believe that the management agreement will enable the Fund
to obtain high quality investment management services at a cost that they deem
appropriate, reasonable, and in the best interests of the Fund and its
shareholders. In making such determination, the independent trustees met
independently from the interested trustee of the Fund and any officers of Nuveen
Advisory and its affiliates. The independent trustees also relied upon the
assistance of counsel to the independent trustees.

     In evaluating the investment management agreement, the independent trustees
reviewed materials furnished by Nuveen Advisory, including information regarding
Nuveen Advisory, its affiliates and its personnel, operations and financial
condition. The independent trustees discussed with representatives of Nuveen
Advisory the Fund's operations and Nuveen Advisory's ability to provide advisory
and other services to the Fund. The independent trustees also reviewed, among
other things, the nature and quality of services to be provided by Nuveen
Advisory, the proposed fees to be charged by Nuveen Advisory for investment
management services, the profitability to Nuveen Advisory of its relationships
with the Fund, fall-out benefits to Nuveen Advisory from that relationship,
economies of scale achieved by Nuveen Advisory, the experience of the investment
advisory and other personnel providing services to the Fund, the historical
quality of the services provided by Nuveen Advisory and comparative fees and
expense ratios of investment companies with similar objectives and strategies
managed by other investment advisers, and other factors that the independent
trustees deemed relevant.

     The Fund, Nuveen Advisory, Nuveen, __________, and other related entities
have adopted codes of ethics which essentially prohibit certain of their
personnel, including the Nuveen fund portfolio manager, from engaging in
personal investments which compete or interfere with, or attempt to take
advantage of a client's, including the Fund's, anticipated or actual portfolio
transactions, and are designed to assure that the interests of clients,
including Fund shareholders, are placed before the interests of personnel in
connection with personal investment transactions. Text-only versions of the
codes of ethics of the Fund, Nuveen Advisory and Nuveen can be viewed online or
downloaded from the EDGAR Database on the SEC's internet web site at
www.sec.gov. You may also review and copy those documents by visiting the SEC's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 202-942-8090. In
addition, copies of the codes of ethics may be obtained, after mailing the
appropriate duplicating fee, by writing to the SEC's Public Reference Section,
450 5th Street, N.W., Washington, DC 20549-0102 or by e-mail request at
publicinfo@sec.gov.

                             PORTFOLIO TRANSACTIONS

     Nuveen Advisory is responsible for decisions to buy and sell securities for
the Fund and for the placement of the Fund's securities business, the
negotiation of the prices to be paid for principal trades and the allocation of
its transactions among various dealer firms. Portfolio securities will normally
be purchased directly from an underwriter or in the over-the-counter market from
the principal dealers in such securities, unless it appears that a better price
or

                                       28

<PAGE>


execution may be obtained through other means. Portfolio securities will not be
purchased from Nuveen or its affiliates except in compliance with the 1940 Act.

     The Fund expects that substantially all portfolio transactions will be
effected on a principal (as opposed to an agency) basis and, accordingly, does
not expect to pay any brokerage commissions. Purchases from underwriters will
include a commission or concession paid by the issuer to the underwriter, and
purchases from dealers will include the spread between the bid and asked price.
On occasion, the Fund may clear portfolio transactions through Nuveen. It is the
policy of Nuveen Advisory to seek the best execution under the circumstances of
each trade. Nuveen Advisory evaluates price as the primary consideration, with
the financial condition, reputation and responsiveness of the dealer considered
secondary in determining best execution. Given the best execution obtainable, it
will be Nuveen Advisory's practice to select dealers which, in addition, furnish
research information (primarily credit analyses of issuers and general economic
reports) and statistical and other services to Nuveen Advisory. It is not
possible to place a dollar value on information and statistical and other
services received from dealers. Since it is only supplementary to Nuveen
Advisory's own research efforts, the receipt of research information is not
expected to reduce significantly Nuveen Advisory's expenses. While Nuveen
Advisory will be primarily responsible for the placement of the business of the
Fund, the policies and practices of Nuveen Advisory in this regard must be
consistent with the foregoing and will, at all times, be subject to review by
the Board of Trustees of the Fund.

     Nuveen Advisory may manage other investment accounts and investment
companies for other clients which have investment objectives similar to those of
the Fund. Subject to applicable laws and regulations, Nuveen Advisory seeks to
allocate portfolio transactions equitably whenever concurrent decisions are made
to purchase or sell securities by the Fund and another advisory account. In
making such allocations the main factors to be considered will be the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment and the size of
investment commitments generally held. While this procedure could have a
detrimental effect on the price or amount of the securities available to the
Fund from time to time, it is the opinion of the Board of Trustees that the
benefits available from Nuveen Advisory's organization will outweigh any
disadvantage that may arise from exposure to simultaneous transactions.

                                 DISTRIBUTIONS

     As described in the Fund's Prospectus, initial distributions to Common
Shareholders are expected to be declared approximately 45 days, and paid
approximately 60 to 90 days, from the completion of the offering of the Common
Shares, depending on market conditions. To permit the Fund to maintain a

                                      29

<PAGE>

more stable monthly distribution, the Fund will initially (prior to its first
distribution), and may from time to time thereafter, distribute less than the
entire amount of net investment income earned in a particular period. Such
undistributed net investment income would be available to supplement future
distributions, including distributions that might otherwise have been reduced by
a decrease in the Fund's monthly net income due to fluctuations in investment
income or expenses, or due to an increase in the dividend rate on the Fund's
outstanding MuniPreferred Shares. As a result, the distributions paid by the
Fund for any particular period may be more or less than the amount of net
investment income actually earned by the Fund during such period. Undistributed
net investment income will be added to the Fund's net asset value and,
correspondingly, distributions from undistributed net investment income will be
deducted from the Fund's net asset value.

     For tax purposes, the Fund is currently required to allocate net capital
gain and other taxable income, if any, between Common Shares and MuniPreferred
Shares in proportion to total dividends paid to each class for the year in
which such net capital gain or other taxable income is realized. For information
relating to the impact of the issuance of MuniPreferred Shares on the
distributions made by a Fund to Common Shareholders, see the Fund's Prospectus
under "MuniPreferred Shares and Leverage."

     While any MuniPreferred Shares are outstanding, the Fund may not declare
any cash dividend or other distribution on its Common Shares unless at the time
of such declaration (1) all accumulated dividends on the MuniPreferred Shares
have been paid and (2) the net asset value of the Fund's portfolio (determined
after deducting the amount of such dividend or other distribution) is at least
200% of the liquidation value of any outstanding MuniPreferred Shares. This
latter limitation on the Fund's ability to make distributions on its Common
Shares could under certain circumstances impair the ability of the Fund to
maintain its qualification for taxation as a regulated investment company. See
"Tax Matters."

                             DESCRIPTION OF SHARES

Common Shares

     The Fund's Declaration of Trust (the "Declaration") authorizes the issuance
of an unlimited number of Common Shares. The Common Shares being offered have a
par value of $0.01 per share and, subject to the rights of holders of
MuniPreferred Shares, if issued, have equal rights as to the payment of
dividends and the distribution of assets upon liquidation of the Fund. The
Common Shares being offered will, when issued, be fully paid and, subject to
matters discussed in "Certain Provisions in the Declaration of Trust,"
non-assessable, and will have no pre-emptive or conversion rights or rights to
cumulative voting. At any time when the Fund's MuniPreferred Shares are
outstanding, Common Shareholders will not be entitled to receive any cash
distributions from the Fund unless all accrued dividends on MuniPreferred Shares
have been paid, and unless asset coverage (as defined in the 1940 Act) with
respect to MuniPreferred Shares would be at least 200% after giving effect to
such distributions. See "MuniPreferred Shares" below.



The Common Shares have been approved for listing on the _____________, subject
to notice of issuance. The Fund intends to hold annual meetings of shareholders
so long as the Common Shares are listed on a national securities exchange and
such meetings are required as a condition to such listing.

                                      30

<PAGE>


     Shares of closed-end investment companies may frequently trade at prices
lower than net asset value. Shares of closed-end investment companies like the
Fund that invest predominately in investment grade municipal bonds have during
some periods traded at prices higher than net asset value and during other
periods have traded at prices lower than net asset value. There can be no
assurance that Common Shares or shares of other municipal funds will trade at a
price higher than net asset value in the future. Net asset value will be reduced
immediately following the offering after payment of the sales load and
organization and offering expenses. Net asset value generally increases when
interest rates decline, and decreases when interest rates rise, and these
changes are likely to be greater in the case of a fund having a leveraged
capital structure. Whether investors will realize gains or losses upon the sale
of Common Shares will not depend upon a Fund's net asset value but will depend
entirely upon whether the market price of the Common Shares at the time of sale
is above or below the original purchase price for the shares. Since the market
price of the Fund's Common Shares will be determined by factors beyond the
control of the Fund, the Fund cannot predict whether the Common Shares will
trade at, below, or above net asset value or at, below or above the initial
public offering price. Accordingly, the Common Shares are designed primarily for
long-term investors, and investors in the Common Shares should not view the Fund
as a vehicle for trading purposes. See "Repurchase of Fund Shares; Conversion to
Open-End Fund" and the Fund's Prospectus under "MuniPreferred Shares and
Leverage" and "The Fund's Investments--Municipal Bonds."

MuniPreferred Shares

     The Declaration authorizes the issuance of an unlimited number of
MuniPreferred Shares in one or more classes or series, with rights as determined
by the Board of Trustees of the Fund, by action of the Board of Trustees without
the approval of the Common Shareholders.

     The Fund's Board of Trustees has authorized an offering of MuniPreferred
Shares (representing approximately 35% of the Fund's capital immediately after
the time the MuniPreferred Shares are issued) approximately one to three months
after completion of the offering of Common Shares. The Board has stated that the
initial series of MuniPreferred Shares would pay cumulative dividends at rates
determined weekly by providing for the periodic redetermination of the dividend
rate through an auction or remarketing procedure. The Board of Trustees of the
Fund has indicated that the liquidation preference, preference on distribution,
voting rights and redemption provisions of the MuniPreferred Shares will be as
stated below.

     Limited Issuance of MuniPreferred Shares.  Under the 1940 Act, the Fund
could issue MuniPreferred Shares with an aggregate liquidation value of up to
one-half of the value of the Fund's total net assets, measured immediately after
issuance of the MuniPreferred Shares. "Liquidation value" means the original
purchase price of the shares being liquidated plus any accrued and unpaid
dividends. In addition, the Fund is not permitted to declare any cash dividend
or other distribution on its Common Shares unless the liquidation value of the
MuniPreferred Shares is less than one-half of the value of the Fund's total net
assets (determined after deducting the amount of such dividend or distribution)
immediately after the distribution. If the Fund sells all the Common Shares and
MuniPreferred Shares discussed in this Prospectus, the liquidation value of the
MuniPreferred Shares is expected to be approximately 35% of the value of the
Fund's total net assets. The Fund intends to purchase or redeem MuniPreferred
Shares, if necessary, to keep that fraction below one-half.

     Distribution Preference.  The MuniPreferred Shares have complete priority
over the Common Shares as to distribution of assets.

                                      31

<PAGE>


     Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Fund, holders of
MuniPreferred Shares will be entitled to receive a preferential liquidating
distribution (expected to equal the original purchase price per share plus
accumulated and unpaid dividends thereon, whether or not earned or declared)
before any distribution of assets is made to holders of Common Shares. After
payment of the full amount of the liquidating distribution to which they are
entitled, holders of MuniPreferred Shares will not be entitled to any further
participation in any distribution of assets by the Fund. A consolidation or
merger of the Fund with or into any Massachusetts business trust or corporation
or a sale of all or substantially all of the assets of the Fund shall not be
deemed to be a liquidation, dissolution or winding up of the Fund.

     Voting Rights. In connection with any issuance of MuniPreferred Shares, the
Fund must comply with Section 18(i) of the 1940 Act which requires, among other
things, that MuniPreferred Shares be voting shares and have equal voting rights
with Common Shares. Except as otherwise indicated in this Statement of
Additional Information and except as otherwise required by applicable law,
holders of MuniPreferred Shares will vote together with Common Shareholders as a
single class.

     In connection with the election of the Fund's trustees, holders of
MuniPreferred Shares, voting as a separate class, will be entitled to elect two
of the Fund's trustees, and the remaining trustees shall be elected by Common
Shareholders and holders of MuniPreferred Shares, voting together as a single
class. In addition, if at any time dividends on the Fund's outstanding
MuniPreferred Shares shall be unpaid in an amount equal to two full years'
dividends thereon, the holders of all outstanding MuniPreferred Shares, voting
as a separate class, will be entitled to elect a majority of the Fund's trustees
until all dividends in arrears have been paid or declared and set apart for
payment.

     The affirmative vote of the holders of a majority of the Fund's outstanding
MuniPreferred Shares of any class or series, as the case may be, voting as a
separate class, will be required to, among other things, (1) take certain
actions which would affect the preferences, rights, or powers of such class or
series or (2) authorize or issue any class or series ranking prior to the
MuniPreferred Shares. Except as may otherwise be required by law, (1) the
affirmative vote of the holders of at least two-thirds of the Fund's
MuniPreferred Shares outstanding at the time, voting as a separate class, will
be required to approve any conversion of the Fund from a closed-end to an
open-end investment company and (2) the affirmative vote of the holders of at
least two-thirds of the outstanding MuniPreferred Shares, voting as a separate
class, shall be required to approve any plan of reorganization (as such term is
used in the 1940 Act) adversely affecting such shares, provided however, that
such separate class vote shall be a majority vote if the action in question has
previously been approved, adopted or authorized by the affirmative vote of
two-thirds of the total number of Trustees fixed in accordance with the
Declaration or the By-laws. The affirmative vote of the holders of a majority of
the outstanding MuniPreferred Shares, voting as a separate class, shall be
required to approve any action not described in the preceding sentence requiring
a vote of security holders under Section 13(a) of the 1940 Act including, among
other things, changes in a Fund's investment objectives or changes in the
investment restrictions described as fundamental policies under "Investment
Objectives and Policies--Investment Restrictions." The class or series vote of
holders of MuniPreferred Shares described

                                      32

<PAGE>

above shall in each case be in addition to any separate vote of the
requisite percentage of Common Shares and MuniPreferred Shares necessary to
authorize the action in question.

     The foregoing voting provisions will not apply with respect to the Fund's
MuniPreferred Shares if, at or prior to the time when a vote is required, such
shares shall have been (1) redeemed or (2) called for redemption and sufficient
funds shall have been deposited in trust to effect such redemption.

     Redemption, Purchase and Sale of MuniPreferred Shares by the Fund. The
terms of the MuniPreferred Shares provide that they are redeemable at certain
times, in whole or in part, at the original purchase price per share plus
accumulated dividends, that the Fund may tender for or purchase MuniPreferred
Shares and that the Fund may subsequently resell any shares so tendered for or
purchased. Any redemption or purchase of MuniPreferred Shares by the Fund will
reduce the leverage applicable to Common Shares, while any resale of shares by
the Fund will increase such leverage.

     The discussion above describes the Fund's Board of Trustees' present
intention with respect to an offering of MuniPreferred Shares. The terms of the
MuniPreferred Shares may be the same as, or different from, the terms described
above, subject to applicable law and the Fund's Declaration.

                 CERTAIN PROVISIONS IN THE DECLARATION OF TRUST

     Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the
Declaration contains an express disclaimer of shareholder liability for debts or
obligations of the Fund and requires that notice of such limited liability be
given in each agreement, obligation or instrument entered into or executed by
the Fund or the trustees. The Declaration further provides for indemnification
out of the assets and property of the Fund for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations. The Fund believes that the likelihood of such circumstances is
remote.

     The Declaration includes provisions that could limit the ability of other
entities or persons to acquire control of the Fund or to convert the Fund to
open-end status. Specifically, the Declaration requires a vote by holders of at
least two-thirds of the Common Shares and MuniPreferred Shares, voting together
as a single class, except as described below, to authorize (1) a conversion of
the Fund from a closed-end to an open-end investment company, (2) a merger or
consolidation of the Fund, or a series or class of the Fund, with any
corporation, association, trust or other organization or a reorganization or
recapitalization of the Fund, or a series or class of the Fund, (3) a sale,
lease or transfer of all or substantially all of the Fund's assets (other than
in the regular course of the Fund's investment activities), (4) in certain
circumstances, a termination of the Fund, or a series or class of the Fund or
(5) removal of trustees by shareholders, and then only for cause, unless, with
respect to (1) through (4), such transaction has already been authorized by the
affirmative vote of two-thirds of the total number of trustees fixed in
accordance with the Declaration or the By-laws, in which case the affirmative
vote of the holders of at least a majority of the Fund's Common Shares and
MuniPreferred Shares

                                       33

<PAGE>



outstanding at the time, voting together as a single class, is required,
provided, however, that where only a particular class or series is affected (or,
in the case of removing a trustee, when the trustee has been elected by only one
class), the required vote only by the applicable class or series will be
required. Approval of shareholders is not required, however, for any
transaction, whether deemed a merger, consolidation, reorganization or otherwise
whereby the Fund issues shares in connection with the acquisition of assets
(including those subject to liabilities) from any other investment company or
similar entity. None of the foregoing provisions may be amended except by the
vote of at least two-thirds of the Common Shares and MuniPreferred Shares,
voting together as a single class. In the case of the conversion of the Fund to
an open-end investment company, or in the case of any of the foregoing
transactions constituting a plan of reorganization which adversely affects the
holders of MuniPreferred Shares, the action in question will also require the
affirmative vote of the holders of at least two-thirds of the Fund's
MuniPreferred Shares outstanding at the time, voting as a separate class, or, if
such action has been authorized by the affirmative vote of two-thirds of the
total number of trustees fixed in accordance with the Declaration or the By-
laws, the affirmative vote of the holders of at least a majority of the Fund's
MuniPreferred Shares outstanding at the time, voting as a separate class. The
votes required to approve the conversion of the Fund from a closed-end to an
open-end investment company or to approve transactions constituting a plan of
reorganization which adversely affects the holders of MuniPreferred Shares are
higher than those required by the 1940 Act. The Board of Trustees believes that
the provisions of the Declaration relating to such higher votes are in the best
interest of the Fund and its shareholders.


     The provisions of the Declaration described above could have the effect of
depriving the Common Shareholders of opportunities to sell their Common Shares
at a premium over market value by discouraging a third party from seeking to
obtain control of the Fund in a tender offer or similar transaction. The overall
effect of these provisions is to render more difficult the accomplishment of a
merger or the assumption of control by a third party. They provide, however, the
advantage of potentially requiring persons seeking control of a Fund to
negotiate with its management regarding the price to be paid and facilitating
the continuity of the Fund's investment objectives and policies. The Board of
Trustees of the Fund has considered the foregoing anti-takeover provisions and
concluded that they are in the best interests of the Fund and its Common
Shareholders.

     Reference should be made to the Declaration on file with the Securities and
Exchange Commission for the full text of these provisions.

     The Declaration provides that the obligations of the Fund are not binding
upon the trustees of the Fund individually, but only upon the assets and
property of the Fund, and that the trustees shall not be liable for errors of
judgment or mistakes of fact or law. Nothing in the Declaration, however,
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.

             REPURCHASE OF FUND SHARES; CONVERSION TO OPEN-END FUND

     The Fund is a closed-end investment company and as such its shareholders
will not have the right to cause the Fund to redeem their shares.  Instead, the
Fund's Common Shares will trade in the open market at a price that will be a
function of several factors, including dividend levels (which are in turn
affected by expenses), net asset value, call protection, price, dividend
stability, relative demand for and supply of such shares in the market, general
market and economic

                                       34

<PAGE>


conditions and other factors. Because shares of a closed-end investment company
may frequently trade at prices lower than net asset value, the Fund's Board of
Trustees has currently determined that, at least annually, it will consider
action that might be taken to reduce or eliminate any material discount from net
asset value in respect of Common Shares, which may include the repurchase of
such shares in the open market or in private transactions, the making of a
tender offer for such shares at net asset value, or the conversion of the Fund
to an open-end investment company. There can be no assurance, however, that the
Board of Trustees will decide to take any of these actions, or that share
repurchases or tender offers, if undertaken, will reduce market discount.

     Notwithstanding the foregoing, at any time when the Fund's MuniPreferred
Shares are outstanding, the Fund may not purchase, redeem or otherwise acquire
any of its Common Shares unless (1) all accrued MuniPreferred Shares dividends
have been paid and (2) at the time of such purchase, redemption or acquisition,
the net asset value of the Fund's portfolio (determined after deducting the
acquisition price of the Common Shares) is at least 200% of the liquidation
value of the outstanding MuniPreferred Shares (expected to equal the original
purchase price per share plus any accrued and unpaid dividends thereon). The
staff of the Securities and Exchange Commission currently requires that any
tender offer made by a closed-end investment company for its shares must be at a
price equal to the net asset value of such shares on the close of business on
the last day of the tender offer. Any service fees incurred in connection with
any tender offer made by the Fund will be borne by the Fund and will not reduce
the stated consideration to be paid to tendering shareholders.

     Subject to its investment limitations, the Fund may borrow to finance the
repurchase of shares or to make a tender offer.  Interest on any borrowings to
finance share repurchase transactions or the accumulation of cash by the Fund in
anticipation of share repurchases or tenders will reduce the Fund's net income.
Any share repurchase, tender offer or borrowing that might be approved by the
Board of Trustees would have to comply with the Securities Exchange Act of 1934,
as amended, and the 1940 Act and the rules and regulations thereunder.

     Although the decision to take action in response to a discount from net
asset value will be made by the Board of the Fund at the time it considers such
issue, it is the Board's present policy, which may be changed by the Board, not
to authorize repurchases of Common Shares or a tender offer for such shares if
(1) such transactions, if consummated, would (a) result in the delisting of the
Common Shares from the                        , or (b) impair the Fund's status
as a regulated investment company under the Internal Revenue Code of 1986, as
amended (the "Code") (which would make the Fund a taxable entity, causing the
Fund's income to be taxed at the corporate level in addition to the taxation of
shareholders who receive dividends from the Fund) or as a registered closed-end
investment company under the 1940 Act; (2) the Fund would not be able to
liquidate portfolio securities in an orderly manner and consistent with the
Fund's investment objectives and policies in order to repurchase shares; or (3)
there is, in the Board's judgment, any (a) material legal action or proceeding
instituted or threatened challenging such transactions or otherwise materially
adversely affecting the Fund, (b) general suspension of or limitation on prices
for trading securities on the                        ,(c) declaration of a
banking moratorium by Federal or state authorities or any suspension of payment
by United States or state banks in which the Fund invests, (d) material
limitation affecting the Fund or the issuers of its portfolio securities by
Federal or state authorities on the extension of credit by lending institutions
or on the exchange of


                                       35

<PAGE>


foreign currency, (e) commencement of war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States, or (f) other event or condition which would have a material adverse
effect (including any adverse tax effect) on the Fund or its shareholders if
shares were repurchased. The Board of Trustees of the Fund may in the future
modify these conditions in light of experience.

     Conversion to an open-end company would require the approval of the holders
of at least two-thirds of the Fund's Common Shares and MuniPreferred Shares
outstanding at the time, voting together as a single class, and of the holders
of at least two-thirds of the Fund's MuniPreferred Shares outstanding at the
time, voting as a separate class, provided however, that such separate class
vote shall be a majority vote if the action in question has previously been
approved, adopted or authorized by the affirmative vote of two-thirds of the
total number of trustees fixed in accordance with the Declaration or By-laws.
See the Prospectus under "Certain Provisions in the Declaration of Trust" for a
discussion of voting requirements applicable to conversion of the Fund to an
open-end company. If the Fund converted to an open-end company, it would be
required to redeem all MuniPreferred Shares then outstanding, and the Fund's
Common Shares would no longer be listed on the ____________________________.
Shareholders of an open-end investment company may require the company to redeem
their shares on any business day (except in certain circumstances as authorized
by or under the 1940 Act) at their net asset value, less such redemption charge,
if any, as might be in effect at the time of redemption. In order to avoid
maintaining large cash positions or liquidating favorable investments to meet
redemptions, open-end companies typically engage in a continuous offering of
their shares. Open-end companies are thus subject to periodic asset in-flows and
out-flows that can complicate portfolio management. The Board of Trustees of the
Fund may at any time propose conversion of the Fund to an open-end company
depending upon their judgment as to the advisability of such action in light of
circumstances then prevailing.


     The repurchase by the Fund of its shares at prices below net asset value
will result in an increase in the net asset value of those shares that remain
outstanding. However, there can be no assurance that share repurchases or
tenders at or below net asset value will result in the Fund's shares trading at
a price equal to their net asset value. Nevertheless, the fact that the Fund's
shares may be the subject of repurchase or tender offers at net asset value from
time to time, or that the Fund may be converted to an open-end company, may
reduce any spread between market price and net asset value that might otherwise
exist.

     In addition, a purchase by the Fund of its Common Shares will decrease the
Fund's total assets which would likely have the effect of increasing the Fund's
expense ratio.  Any purchase by the Fund of its Common Shares at a time when
MuniPreferred Shares are outstanding will increase the leverage applicable to
the outstanding Common Shares then remaining.  See the Fund's Prospectus under
"Risks--Concentration Risk" and "Risks--Leverage Risk."

     Before deciding whether to take any action if the Fund's Common Shares
trade below net asset value, the Board of the Fund would consider all relevant
factors, including the extent and duration of the discount, the liquidity of the
Fund's portfolio, the impact of any action that might be taken on the Fund or
its shareholders and market considerations. Based on these considerations, even
if the Fund's shares should trade at a discount, the Board of Trustees may
determine that, in the interest of the Fund and its shareholders, no action
should be taken.

                                       36

<PAGE>

                                  TAX MATTERS

Federal Income Tax Matters

     The following discussion of federal income tax matters is based upon the
advice of Bell, Boyd & Lloyd LLC, special counsel to the Fund.


     The Fund intends to qualify under Subchapter M of the Code for tax
treatment as a regulated investment company and to satisfy certain conditions
which will enable interest from municipal obligations, which is exempt from
regular federal income taxes in the hands of the Fund, to qualify as "exempt-
interest dividends" when distributed to the Fund's shareholders. In order to
qualify for tax treatment as a regulated investment company, the Fund must
satisfy certain requirements relating to the source of its income,
diversification of its assets, and distributions of its income to shareholders.
First, the Fund must derive at least 90% of its annual gross income (including
tax-exempt interest) from dividends, interest, payments with respect to
securities loans, gains from the sale or other disposition of stock or
securities or foreign currencies, or other income (including but not limited to
gains from options, futures and forward contracts) derived with respect to its
business of investing in such stock, securities or currencies (the "90% gross
income test"). Second, the Fund must diversify its holdings so that, at the
close of each quarter of its taxable year, (i) at least 50% of the value of its
total assets is comprised of cash, cash items, United States Government
securities, securities of other regulated investment companies and other
securities limited in respect of any one issuer to an amount not greater in
value than 5% of the value of the Fund's total assets and to not more than 10%
of the outstanding voting securities of such issuer, and (ii) not more than 25%
of the value of its total assets is invested in the securities of any one issuer
(other than United States Government securities and securities of other
regulated investment companies) or two or more issuers controlled by the Fund
and engaged in the same, similar or related trades or businesses.

     As a regulated investment company, the Fund will not be subject to federal
income tax in any taxable year with respect to "net investment income" (i.e.,
its "investment company taxable income," as that term is defined in the Code,
determined without reference to the deduction for dividends paid) and "net
capital gain" (i.e., the excess of the Fund's net long-term capital gain over
its net short-term capital loss), provided that it distributes at least 90% of
the sum of (i) its investment company taxable income (which includes dividends,
taxable interest, taxable original issue discount and market discount income,
income from securities lending, net short-term capital gain in excess of net
long-term capital loss, and any other taxable income other than net capital gain
and is reduced by deductible expenses) and (ii) its net tax-exempt interest (the
excess of its gross tax-exempt interest income over certain disallowed
deductions). The Fund may retain for investment its net capital gain. However,
if the Fund retains any net capital gain or any investment company taxable
income, it will be subject to tax at regular corporate rates on the amount
retained. If the Fund retains any net capital gain, it may designate the
retained amount as undistributed capital gains in a notice to its shareholders
who, if subject to federal income tax on long-term capital gains, (i) will be
required to include in income for federal income tax purposes, as long-term
capital gain, their share of such undistributed amount, and (ii) will be
entitled to credit their proportionate shares of the tax paid by the Fund on
such undistributed amount against their federal income tax liabilities, if any,
and to claim refunds to the extent the credit exceeds such liabilities. For
federal income tax purposes, the tax basis of shares owned by a shareholder of
the Fund will be increased by an amount equal under current law to the
difference between the amount of undistributed capital gains included in the
shareholder's gross income and the tax deemed paid by the shareholder under
clause (ii) of the preceding sentence. The

                                      37

<PAGE>


Fund intends to distribute at least annually to its shareholders all or
substantially all of its net tax-exempt interest and any investment company
taxable income and net capital gain.

     Treasury regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain, to elect (unless it
has made a taxable year election for excise tax purposes) to treat all or part
of any net capital loss, any net long-term capital loss or any net foreign
currency loss incurred after October 31 as if it had been incurred in the
succeeding year.

     The Fund intends to qualify to pay "exempt-interest dividends" by
satisfying the requirement that at the close of each quarter of the Fund's
taxable year at least 50% of the value of its total assets consist of tax-exempt
municipal obligations. Distributions from the Fund will constitute exempt-
interest dividends to the extent of its tax-exempt interest income (net of
expenses and amortized bond premium). Exempt-interest dividends distributed to
Common Shareholders are excluded from gross income for federal income tax
purposes, although they are required to be reported on the Common Shareholders'
federal income tax returns. Gain from the sale or redemption of Common Shares,
however, will be taxable to the Common Shareholders as capital gain (provided
such Common Shares were held as capital assets) even though the increase in
value of such Common Shares is attributable to tax-exempt interest income. In
addition, gain realized by the Fund from the disposition of a tax-exempt
municipal obligation that was purchased at a price less than the principal
amount of the bond will be taxable to the Fund's shareholders as ordinary income
to the extent of accrued market discount. Under the Code, interest on
indebtedness incurred or continued to purchase or carry Common Shares, which
interest is deemed to relate to exempt-interest dividends, will not be
deductible by Common Shareholders for federal income tax purposes. Moreover,
while exempt-interest dividends are excluded from gross income for federal
income tax purposes, they may be subject to alternative minimum tax and may have
other collateral tax consequences. The Fund will not invest in AMT Bonds. See
"Investment Policies and Techniques." Different alternative minimum rules apply
to individuals and to corporations. Taxpayers that may be subject to the
alternative minimum tax should consult their advisers before investing in Common
Shares.

     Distributions by the Fund of net interest received from certain taxable
temporary investments (such as certificates of deposit, commercial paper and
obligations of the U.S. Government, its agencies and instrumentalities) and net
short-term capital gain realized by the Fund, if any, will be taxable to Common
Shareholders as ordinary income whether received in cash or additional shares.
Any net long-term capital gain realized by the Fund and distributed to Common
Shareholders in cash or additional shares will be taxable to Common Shareholders
as long-term capital gain regardless of the length of time investors have owned
shares of the Fund. Taxable distributions will not be eligible for the dividends
received deduction allowed to corporations. Distributions by the Fund to Common
Shareholders that do not constitute ordinary income dividends, capital gain
dividends or exempt-interest dividends will be treated as a return of capital to
the extent of (and in reduction of) the Common Shareholder's tax basis in his or
her shares. Any excess will be treated as gain from the sale of his or her
shares, as discussed below.

     The Internal Revenue Service's position in a published revenue ruling
indicates that the Fund is required to designate distributions paid with respect
to its Common Shares and its MuniPreferred Shares as consisting of a portion of
each type of income distributed by the Fund. The portion of each type of income
deemed received by the holders of each class of shares will be equal to the
portion of total Fund dividends received by such class. Thus, the Fund will
designate dividends paid as exempt-interest dividends in a manner that allocates
such dividends between the holders of the Common Shares and the holders of
MuniPreferred Shares, in proportion to the total dividends paid to each such
class during or with respect to the taxable year, or otherwise as required by
applicable law. Capital gain dividends and ordinary income dividends will
similarly be allocated between the two classes.

     If the Fund engages in hedging transactions involving financial futures and
options, these transactions will be subject to special tax rules, the effect of
which may be to accelerate income to the Fund, defer the Fund's losses, cause
adjustments in the holding periods of the Fund's securities, convert long-term
capital gains into short-term capital gains and convert short-term capital
losses into long-term capital losses.  These rules could therefore affect the
amount, timing and character of distributions to Common Shareholders.

     Prior to purchasing shares in the Fund, an investor should carefully
consider the impact of dividends or distributions which are expected to be or
have been declared, but not paid. Any dividend or distribution declared shortly
after a purchase of such shares prior to the record date will have the effect of
reducing the per share net asset value by the per share amount of the dividend
or distribution.

     Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in one of those months and paid during the following
January, will be treated as having been distributed by the Fund (and received by
the shareholders) on December 31.

     The sale or exchange of Common Shares normally will result in capital
gain or loss to the Common Shareholders who hold their Common Shares as capital
assets. However, any loss on the sale or exchange of a Common Share that has
been held for six months or less will be disallowed to the extent of any
distribution of exempt-interest dividends received with respect to such Common
Share. Generally, a Common Shareholder's gain or loss will be long-term gain or
loss if the shares have been held for more than one year. If a shareholder sells
or otherwise disposes of Common Shares before holding them for more than six
months, however, any loss on the sale or other disposition of such Common Shares
shall be treated as a long-term capital loss to the extent of any capital gain
dividends received by the Common Shareholder (or amounts credited to the Common
Shareholder as an undistributed capital gain) with respect to such Common
Shares. Present law taxes both long- and short-term capital gains of
corporations at the rates applicable to ordinary income. For non-corporate
taxpayers, however, net capital gain (i.e., the excess of net long-term capital
gain over net short-term capital loss) with respect to securities is taxed at a
maximum rate of 20%, while short-term capital gain and other ordinary income is
taxed at a maximum

                                      38

<PAGE>


rate of 38.6% in 2002 and 2003, 37.6% in 2004 and 2005, and 35% thereafter until
2011, when the maximum rate on ordinary income will revert to 39.6% unless
amended by Congress. The maximum long-term capital gain rate is 18% for capital
assets that are held for more than five years and whose holding periods begin
after December 31, 2000. Because of the limitations on itemized deductions and
the deduction for personal exemptions applicable to higher income taxpayers, the
effective tax rate may be higher in certain circumstances.

     All or a portion of a sales charge paid in purchasing Common Shares cannot
be taken into account for purposes of determining gain or loss on the redemption
or exchange of such shares within 90 days after their purchase to the extent
shares of the Fund or another fund are subsequently acquired without payment of
a sales charge pursuant to a reinvestment right. Any disregarded portion of such
charge will result in an increase in the Common Shareholder's tax basis in the
shares subsequently acquired. In addition, no loss will be allowed on the
redemption or exchange of Common Shares if the Common Shareholder purchases
other shares of the Fund (whether through reinvestment of distributions or
otherwise) or the Common Shareholder acquires or enters into a contract or
option to acquire securities that are substantially identical to shares of the
Fund within a period of 61 days beginning 30 days before and ending 30 days
after such redemption or exchange. If disallowed, the loss will be reflected in
an adjustment to the basis of the shares acquired.

     In order to avoid a 4% federal excise tax, the Fund must distribute or be
deemed to have distributed by December 31 of each calendar year at least 98% of
its taxable ordinary income for such year, at least 98% of its capital gain net
income (the excess of its realized capital gains over its realized capital
losses, generally computed on the basis of the one-year period ending on October
31 of such year) and 100% of any taxable ordinary income and any excess of
realized capital gains over realized capital losses for the prior year that was
not distributed during such year and on which the Fund paid no federal income
tax. For purposes of the excise tax, a regulated investment company may reduce
its capital gain net income (but not below its net capital gain) by the amount
of any net ordinary loss for the calendar year. The Fund intends to make timely
distributions in compliance with these requirements and consequently it is
anticipated that it generally will not be required to pay the excise tax.

     If in any year the Fund should fail to qualify under Subchapter M for tax
treatment as a regulated investment company, the Fund would incur a regular
corporate federal income tax upon its income for that year, and distributions to
its Common Shareholders would be taxable to Common Shareholders as ordinary
dividend income for federal income tax purposes to the extent of the Fund's
earnings and profits.

     The Fund is required in certain circumstances to withhold a percentage of
taxable dividends and certain other payments paid to non-corporate holders of
shares who have not furnished to the Fund their correct taxpayer identification
numbers (in the case of individuals, their Social Security number) and certain
certifications, or who are otherwise subject to backup withholding. The backup
withholding percentage will be 30% in 2002 and 2003, 29% in 2004 and 2005, and
28% thereafter until 2011, when the percentage will revert to 31% unless amended
by Congress. Backup withholding is not an additional tax and any amounts
withheld may be credited against the shareholder's federal income tax liability.

     The foregoing is a general and abbreviated summary of the provisions of the
Code and Treasury Regulations presently in effect as they directly govern the
taxation of the Fund and its Common Shareholders.  For complete provisions,
reference should be made to the pertinent Code sections and Treasury
Regulations.  The Code and Treasury Regulations are subject to change by
legislative or administrative action, and any such change may be retroactive
with respect to Fund transactions.  Common Shareholders are advised to consult
their own tax

                                      39

<PAGE>


advisors for more detailed information concerning the federal taxation of the
Fund and the income tax consequences to its Common Shareholders.



                                      40

<PAGE>


                                    EXPERTS


     The Financial Statements of the Fund as of             , 2002, appearing in
this Statement of Additional Information have been audited by
                              , independent auditors, as set forth in their
report thereon appearing elsewhere herein, and is included in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.                  provides accounting and auditing services to the
Fund.


                                    CUSTODIAN

     The custodian of the assets of the Fund is State Street Bank and Trust
Company, One Federal Street, Boston, Massachusetts 02110. The custodian performs
custodial, fund accounting and portfolio accounting services.


                            ADDITIONAL INFORMATION

     A Registration Statement on Form N-2, including amendments thereto,
relating to the shares of the Fund offered hereby, has been filed by the Fund
with the Securities and Exchange Commission (the "Commission"), Washington, D.C.
The Fund's Prospectus and this Statement of Additional Information do not
contain all of the information set forth in the Registration Statement,
including any exhibits and schedules thereto. For further information with
respect to the Fund and the shares offered hereby, reference is made to the
Fund's Registration Statement. Statements contained in the Fund's Prospectus and
this Statement of Additional Information as to the contents of any contract or
other document referred to are not

                                      41

<PAGE>


necessarily complete and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies of
the Registration Statement may be inspected without charge at the Commission's
principal office in Washington, D.C., and copies of all or any part thereof may
be obtained from the Commission upon the payment of certain fees prescribed by
the Commission.

                                      42

<PAGE>

                        REPORT OF INDEPENDENT AUDITORS


The Board of Trustees and Shareholder
Nuveen Insured Tax-Free Advantage Municipal Fund

                                   [TO COME]


                                      43

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
                              FINANCIAL STATEMENTS

                Nuveen Insured Tax-Free Advantage Municipal Fund
                       Statement of Assets and Liabilities

                                   [TO COME]



                                   44

<PAGE>

                                   APPENDIX A

Ratings of Investments


Standard & Poor's Corporation--A brief description of the applicable Standard &
Poor's Corporation, a division of The McGraw-Hill Companies ("Standard & Poor's"
or "S&P") rating symbols and their meanings (as published by S&P) follows:

A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation,
a specific class of financial obligations, or a specific financial program. It
takes into consideration the creditworthiness of guarantors, insurers, or other
forms of credit enhancement on the obligation. The issue credit rating is not a
recommendation to purchase, sell, or hold a financial obligation, inasmuch as it
does not comment as to market price or suitability for a particular investor.

Issue credit ratings are based on current information furnished by the obligors
or obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in connection with any credit rating
and may, on occasion, rely on unaudited financial information. Credit ratings
may be changed, suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or based on other circumstances.

Issue credit ratings can be either long-term or short-term. Short-term ratings
are generally assigned to those obligations considered short-term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days - including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term ratings address the put feature, in addition to
the usual long-term rating. Medium-term notes are assigned long-term ratings.

Long-term Issue Credit Ratings

Issue credit ratings are based in varying degrees, on the following
considerations:

      1.  Likelihood of payment - capacity and willingness of the obligor
          to meet its financial commitment on an obligation 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.

The issue ratings definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above.

AAA
An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial

                                    A-1






<PAGE>

     commitment on the obligation is extremely strong.

     AA

     An obligation rated `AA' differs from the highest-rated obligations only in
     small degree. The obligor's capacity to meet its financial commitment on
     the obligation is very strong.

     A

     An obligation rated `A' is somewhat more susceptible to the adverse effects
     of changes in circumstances and economic conditions than obligations in
     higher-rated categories. However, the obligor's capacity to meet its
     financial commitment on the obligation is still strong.

     BBB

     An obligation rated `BBB' exhibits adequate protection parameters. However,
     adverse economic conditions or changing circumstances are more likely to
     lead to a weakened capacity of the obligor to meet its financial commitment
     on the obligation.

     BB, B, CCC, CC, And C

     Obligations rated `BB', `B', `CCC', `CC', and `C' are regarded as having
     significant speculative characteristics. `BB' indicates the least degree of
     speculation and `C' the highest. While such obligations will likely have
     some quality and protective characteristics, these may be outweighed by
     large uncertainties or major exposures to adverse conditions.

     BB

     An obligation rated `BB' is less vulnerable to nonpayment than other
     speculative issues. However, it faces major ongoing uncertainties or
     exposure to adverse business, financial, or economic conditions, which
     could lead to the obligor's inadequate capacity to meet its financial
     commitment on the obligation.

     B

     An obligation rated `B' is more vulnerable to nonpayment than obligations
     rated `BB', but the obligor currently has the capacity to meet its
     financial commitment on the obligation. Adverse business, financial, or
     economic conditions will likely impair the obligor's capacity or
     willingness to meet its financial commitment on the obligation.

     CCC

     An obligation rated `CCC' is currently vulnerable to nonpayment and is
     dependent upon favorable business, financial, and economic conditions for
     the obligor to meet its financial commitment on the obligation. In the
     event of adverse business, financial, or economic conditions, the obligor
     is not likely to have the capacity to meet its financial commitment on the
     obligation.

     CC

     An obligation rated `CC' is currently highly vulnerable to nonpayment.



                                 A-2


<PAGE>


C

The `C' rating may be used to cover a situation where a bankruptcy petition has
been filed or similar action has been taken, but payments on this obligation are
being continued.

D

An obligation rated `D' is in payment default. The `D' rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's 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 or the taking of a similar action
if payments on an obligation are jeopardized.

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
rating categories.

c    The `c' subscript is used to provide additional information to investors
     that the bank may terminate its obligation to purchase tendered bonds if
     the long-term credit rating of the issuer is below an investment-grade
     level and/or the issuer's bonds are deemed taxable.

p    The letter `p' indicates that the rating is provisional. A provisional
     rating assumes the successful completion of the project financed by the
     debt being rated and indicates that payment of debt service requirements is
     largely or entirely dependent upon the successful, timely completion of the
     project. This rating, however, while addressing credit quality subsequent
     to completion of the project, makes no comment on the likelihood of or the
     risk of default upon failure of such completion. The investor should
     exercise his own judgment with respect to such likelihood and risk.

*    Continuance of the ratings is contingent upon Standard & Poor's receipt of
     an executed copy of the escrow agreement or closing documentation
     confirming investments and cash flows.

r    The `r' highlights derivative, hybrid, and certain other obligations that
     Standard & Poor's believes may experience high volatility or high
     variability in expected returns as a result of noncredit risks. Examples of
     such obligations are securities with principal or interest return indexed
     to equities, commodities, or currencies; certain swaps and options; and
     interest-only and principal-only mortgage securities. The absence of an `r'
     symbol should not be taken as an indication that an obligation will exhibit
     no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The ratings
measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

Bond Investment Quality Standards Under present commercial bank regulations
issued by the Comptroller of the Currency, bonds rated in the top four
categories (`AAA', `AA', `A', `BBB', commonly known as investment-grade ratings)
generally are regarded as eligible for bank investment. Also, the laws of
various states governing legal investments impose certain rating or other
standards for obligations eligible for investment by savings banks, trust
companies, insurance companies, and fiduciaries in general.

Short-Term Issue Credit Ratings

Notes

A Standard & Poor's note ratings reflects the liquidity factors and market
access risks unique to notes. Notes due in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making
that assessment:

     .  Amortization schedule -- the larger the final maturity relative to other
        maturities, the more likely it will be treated as a note; and

     .  Source of payment -- the more dependent the issue is on the market for
        its refinancing, the more likely it will be treated as a note.

Note rating symbols are as follows:

SP-1 Strong capacity to pay principal and interest. An issue determined to
     possess a very strong capacity to pay debt service is given a plus (+)
     designation.

SP-2 Satisfactory capacity to pay principal and interest, with some
     vulnerability to adverse financial and economic changes over the term of
     the notes.

SP-3 Speculative capacity to pay principal and interest.

                                      A-3


<PAGE>

A note rating is not a recommendation to purchase, sell, or hold a security
inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P 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 based on other circumstances.

Commercial Paper

An S&P 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.

Ratings are graded into several categories, ranging from `A-1' for the highest
quality obligations to `D' for the lowest. These categories are as follows:

A-1  A short-term obligation rated `A-1' is rated in the highest category by
     Standard & Poor's. The obligor's capacity to meet its financial commitment
     on the obligation is strong. Within this category, certain obligations are
     designated with a plus sign (+). This indicates that the obligor's capacity
     to meet its financial commitment on these obligations is extremely strong.

A-2  A short-term obligation rated `A-2' is somewhat more susceptible to the
     adverse effects of changes in circumstances and economic conditions than
     obligations in higher rating categories. However, the obligor's capacity to
     meet its financial commitment on the obligation is satisfactory.

A-3  A short-term obligation rated `A-3' exhibits adequate protection
     parameters. However, adverse economic conditions or changing circumstances
     are more likely to lead to a weakened capacity of the obligor to meet its
     financial commitment on the obligation.

B    A short-term obligation rated `B' is regarded as having significant
     speculative characteristics. The obligor currently has the capacity to meet
     its financial commitment on the obligation; however, it faces major ongoing
     uncertainties which could lead to the obligor's inadequate capacity to meet
     its financial commitment on the obligation.

C    A short-term obligation rated `C' is currently vulnerable to nonpayment and
     is dependent upon favorable business, financial, and economic conditions
     for the obligor to meet its financial commitment on the obligation.

D    A short-term obligation rated `D' is in payment default. The `D' rating
     category is used when payments on an obligation are not made on the date
     due even if the applicable grace period has not expired, unless Standard &
     Poor's 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
     or the taking of a similar action if payments on an obligation are
     jeopardized.

A commercial rating is not a recommendation to purchase, sell, or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P 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 based on other circumstances.

                                      A-4

<PAGE>

Moody's Investors Service, Inc.--A brief description of the applicable Moody's
Investors Service, Inc. ("Moody's") rating symbols and their meanings (as
published by Moody's) follows:

Municipal Bonds

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 edged." 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.

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 thereby 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' represent 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.

                                      A-5

<PAGE>


Issues that are secured by escrowed funds held in trust, reinvested in direct,
non-callable U.S. government obligations or non-callable obligations
unconditionally guaranteed by the U.S. Government or Resolution Funding
Corporation are identified with a # (hatchmark) symbol, e.g., #Aaa.

Con. (...):  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.
             The parenthetical rating denotes probable credit stature upon
             completion of construction or elimination of the basis of the
             condition.

Note:        Moody's applies numerical modifiers 1, 2 and 3 in each generic
             rating classification from Aa through Caa. The modifier 1 indicates
             that the obligation ranks in the higher end of its generic rating
             category; the modifier 2 indicates a mid-range ranking; and the
             modifier 3 indicates a ranking in the lower end of that generic
             rating category.

Short-Term Loans

MIG 1/VMIG 1  This designation denotes superior credit quality. Excellent
              protection is afforded by established cash flows, highly reliable
              liquidity support, or demonstrated broad-based access to the
              market for refinancing.

MIG 2/VMIG 2  This designation denotes strong credit quality. Margins of
              protection are ample, although not as large as in the preceding
              group.

MIG 3/VMIG 3  This designation denotes acceptable credit quality. Liquidity and
              cash-flow protection may be narrow, and market access for
              refinancing is likely to be less well-established.

SG            This designation denotes speculative-grade credit quality. Debt
              instruments in this category may lack sufficient margins of
              protection.

Commercial Paper

Issuers rated Prime-1 (or related supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will normally be evidenced by the following characteristics:

     --  Leading market positions in well-established industries.

     --  High rates of return on funds employed.

     --  Conservative capitalization structures with moderate reliance on debt
         and ample asset protection.

     --  Broad margins in earnings coverage of fixed financial charges and high
         internal cash generation.

                                      A-6

<PAGE>

     --   Well-established access to a range of financial markets and assured
          sources of alternate liquidity.

Issuers rated Prime-2 (or related supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or related supporting institutions) have an acceptable
ability for repayment of senior short-term debt obligations. The effect of
industry characteristics and market composition may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and the requirement for relatively high financial
leverage. Adequate alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating categories.


     Fitch Ratings--A brief description of the applicable Fitch Ratings
("Fitch") ratings symbols and meanings (as published by Fitch) follows:


Long-Term Credit Ratings

Investment Grade

AAA  Highest credit quality. `AAA' ratings denote the lowest expectation of
     credit risk. They are assigned only in case of exceptionally strong
     capacity for timely payment of financial commitments. This capacity is
     highly unlikely to be adversely affected by foreseeable events.

AA   Very high credit quality. `AA' ratings denote a very low expectation of
     credit risk. They indicate very strong capacity for timely payment of
     financial commitments. This capacity is not significantly vulnerable to
     foreseeable events.

A    High credit quality. `A' ratings denote a low expectation of credit risk.
     The capacity for timely payment of financial commitments is considered
     strong. This capacity may, nevertheless, be more vulnerable to changes in
     circumstances or in economic conditions than is the case for higher
     ratings.

BBB  Good credit quality. `BBB' ratings indicate that there is currently a low
     expectation of credit risk. The capacity for timely payment of financial
     commitments is considered adequate, but adverse changes in circumstances
     and in economic conditions are more likely to impair this capacity. This
     is the lowest investment-grade category.

Speculative Grade

BB   Speculative. `BB' ratings indicate that there is a possibility of credit
     risk developing, particularly as the result of adverse economic change over
     time; however, business or

                                      A-7

<PAGE>


     financial alternatives may be available to allow financial commitments to
     be met. Securities rated in this category are not investment grade.

B    Highly speculative. `B' ratings indicate that significant credit risk is
     present, but a limited margin of safety remains. Financial commitments are
     currently being met; however, capacity for continued payment is contingent
     upon a sustained, favorable business and economic environment.

CCC, CC, C High default risk. Default is a real possibility. Capacity for
     meeting financial commitments is solely reliant upon sustained, favorable
     business or economic developments. A `CC' rating indicates that default of
     some kind appears probable. `C' ratings signal imminent default.

DDD, DD, and D Default. The ratings of obligations in this category are based on
     their prospects for achieving partial or full recovery in a reorganization
     or liquidation of the obligor. While expected recovery values are highly
     speculative and cannot be estimated with any precision, the following serve
     as general guidelines. `DDD' obligations have the highest potential for
     recovery, around 90%-100% of outstanding amounts and accrued interest. `DD'
     indicates potential recoveries in the range of 50%-90%, and `D' the lowest
     recovery potential, i.e., below 50%. Entities rated in this category have
     defaulted on some or all of their obligations. Entities rated `DDD' have
     the highest prospect for resumption of performance or continued operation
     with or without a formal reorganization process. Entities rated `DD' and
     `D' are generally undergoing a formal reorganization or liquidation
     process; those rated `DD' are likely to satisfy a higher portion of their
     outstanding obligations, while entities rated `D' have a poor prospect for
     repaying all obligations.

Short-Term Credit Ratings

A short-term rating has a time horizon of less than 12 months for most
obligations, or up to three years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.

F1   Highest credit quality. Indicates the strongest capacity for timely payment
     of financial commitments; may have an added "+" to denote any exceptionally
     strong credit feature.

F2   Good credit quality. A satisfactory capacity for timely payment of
     financial commitments, but the margin of safety is not as great as in the
     case of the higher ratings.

F3   Fair credit quality. The capacity for timely payment of financial
     commitments is adequate; however, near-term adverse changes could result in
     a reduction to non-investment grade.

B    Speculative. Minimal capacity for timely payment of financial commitments,
     plus vulnerability to near-term adverse changes in financial and economic
     conditions.

                                      A-8

<PAGE>

C    High default risk. Default is a real possibility. Capacity for meeting
     financial commitments is solely reliant upon a sustained, favorable
     business and economic environment.

D    Default. Denotes actual or imminent payment default.

Notes:

"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the `AAA' long-term rating
category, to categories below `CCC', or to short-term ratings other than `F1'.


`NR' indicates that Fitch does not rate the issuer or issue in question.

`Withdrawn': A rating is withdrawn when Fitch deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.


Rating Watch: Ratings are placed on Rating Watch to notify investors that there
is a reasonable probability of a rating change and the likely direction of such
change. These are designated as "Positive", indicating a potential upgrade,
"Negative", for a potential downgrade, or "Evolving", if ratings may be raised,
lowered or maintained. Rating Watch is typically resolved over a relatively
short period.

A Rating Outlook indicates the direction a rating is likely to move over a one
to two year period. Outlooks may be positive, stable, or negative. A positive or
negative Rating Outlook does not imply a rating change is inevitable. Similarly,
companies whose outlooks are `stable' could be downgraded before an outlook
moves to positive or negative if circumstances warrant such an action.
Occasionally, Fitch may be unable to identify the fundamental trend. In these
cases, the Rating Outlook may be described as evolving.

                                      A-9

<PAGE>

                                  APPENDIX B

                        TAXABLE EQUIVALENT YIELD TABLES

     The taxable equivalent yield is the current yield you would need to earn on
a taxable investment in order to equal a stated tax-free yield on a municipal
investment. To assist you to more easily compare municipal investments like
the Fund with taxable alternative investments, the table below presents the
taxable equivalent yields for a range of hypothetical tax-free yields assuming
the stated marginal Federal tax rates for 2002 listed below:

Taxable Equivalent of Tax-Free Yields

Tax Free Yields

<TABLE>
Tax Rate       4.00%        4.50%       5.00%       5.50%      6.00%      6.50%
- -------------------------------------------------------------------------------
<S>            <C>          <C>         <C>         <C>        <C>       <C>
  10.00%       4.44%        5.00%       5.56%       6.11%      6.67%      7.22%
  15.00%       4.71%        5.29%       5.88%       6.47%      7.06%      7.65%
  27.00%       5.48%        6.16%       6.85%       7.53%      8.22%      8.90%
  30.00%       5.71%        6.43%       7.14%       7.86%      8.57%      9.29%
  35.00%       6.15%        6.92%       7.69%       8.46%      9.23%     10.00%
  38.60%       6.51%        7.33%       8.14%       8.96%      9.77%     10.59%
</TABLE>


                                      B-1


<PAGE>

                                  APPENDIX C

                            DESCRIPTION OF INSURERS

     Set forth below is information about the various municipal bond insurers
with whom the Fund intends to maintain specific insurance policies for
particular municipal bonds or policies of portfolio insurance. The information
in this Appendix is based on information supplied by the insurers, and the Fund
cannot verify its accuracy and completeness.

AMBAC ASSURANCE CORPORATION ("AMBAC ASSURANCE")


Payment Pursuant to Financial Guaranty Insurance Policy

Ambac Assurance has made a commitment to issue a financial guaranty insurance
policy (the "Financial Guaranty Insurance Policy") relating to the bonds
effective as of the date of issuance of the bonds. Under the terms of the
Financial Guaranty Insurance Policy, Ambac Assurance will pay to The Bank of New
York, in New York, New York or any successor thereto (the "Insurance Trustee")
that portion of the principal of and interest on the bonds which shall become
Due for Payment but shall be unpaid by reason of Nonpayment by the Obligor (as
such terms are defined in the Financial Guaranty Insurance Policy). Ambac
Assurance will make such payments to the Insurance Trustee on the later of the
date on which such principal and interest becomes Due for Payment or within one
business day following the date on which Ambac Assurance shall have received
notice of Nonpayment from the Trustee/Paying Agent. The insurance will
extend for the term of the bonds and, once issued, cannot be canceled by Ambac
Assurance.

     The Financial Guaranty Insurance Policy will insure payment only on stated
maturity dates and on mandatory sinking fund installment dates, in the case of
principal, and on stated dates for payment, in the case of interest. If the
bonds become subject to mandatory redemption and insufficient funds are
available for redemption of all outstanding bonds, Ambac Assurance will remain
obligated to pay principal of and interest on outstanding bonds on the
originally scheduled interest and principal payment dates including mandatory
sinking fund redemption dates. In the event of any acceleration of the principal
of the bonds, the insured payments will be made at such times and in such
amounts as would have been made had there not been an acceleration.

     In the event the Bond Registrar has notice that any payment of principal of
or interest on a bond which has become Due for Payment and which is made to a
Holder by or on behalf of the Obligor has been deemed a preferential transfer
and theretofore recovered from its registered owner pursuant to the United
States Bankruptcy Code in accordance with a final, nonappealable order of a
court of competent jurisdiction, such registered owner will be entitled to
payment from Ambac Assurance to the extent of such recovery if sufficient funds
are not otherwise available.

     The Financial Guaranty Insurance Policy does not insure any risk other than
Nonpayment, as defined in the Policy. Specifically, the Financial Guaranty
Insurance Policy does not cover:

          1. payment on acceleration, as a result of a call for redemption
     (other than mandatory sinking fund redemption) or as a result of any other
     advancement of maturity.

          2. payment of any redemption, prepayment or acceleration premium.

          3. nonpayment of principal or interest caused by the insolvency or
     negligence of any Trustee or Paying Agent, if any.

     If it becomes necessary to call upon the Financial Guaranty Insurance
Policy, payment of principal requires surrender of bonds to the Insurance
Trustee together with an appropriate instrument of assignment so as to permit
ownership of such bonds to be registered in the name of Ambac Assurance to the
extent of the payment under the Financial Guaranty Insurance Policy. Payment of
interest pursuant to the Financial Guaranty Insurance Policy requires proof of
Holder entitlement to interest payments and an appropriate assignment of the
Holder's right to payment to Ambac Assurance.

     Upon payment of the insurance benefits, Ambac Assurance will become the
owner of the bond, appurtenant coupon, if any, or right to payment of principal
or interest on such bond and will be fully subrogated to the surrendering
Holder's rights to payment.

Ambac Assurance

     Ambac Assurance Corporation ("Ambac Assurance") is a Wisconsin-domiciled
stock insurance corporation regulated by the Office of the Commissioner of
Insurance of the State of Wisconsin and licensed to do business in 50 states,
the District of Columbia, the Territory of Guam and the Commonwealth of Puerto
Rico, with admitted assets of approximately $5,587,000,000 (unaudited) and
statutory capital of approximately $3,453,000,000 (unaudited) as of June
30, 2002. Statutory capital consists of Ambac Assurance's policyholders' surplus
and statutory contingency reserve. Standard & Poor's Credit Markets Services, a
division of The McGraw-Hill Companies, Moody's Investors Service and Fitch, Inc.
have each assigned a triple-A financial strength rating to Ambac Assurance.
Ambac Assurance has obtained a ruling from the Internal Revenue Service to the
effect that the insuring of an obligation to Ambac Assurance will not affect the
treatment for federal income tax purposes of interest on such obligation and
that insurance proceeds representing maturing interest paid by Ambac Assurance
under policy provisions substantially identical to those contained in its
municipal bond insurance policy shall be treated for federal income tax purposes
in the same manner as if such payments were made by the issuer of the bonds.


     Ambac Assurance makes no representation regarding the bonds or the
advisability of investing in the bonds and makes no representation regarding,
nor has it participated in the preparation of, the Prospectus and Statement of
Additional Information, other than the information supplied by Ambac Assurance
and presented under this heading "Ambac Assurance Corporation."


Available Information

     The parent company of Ambac Assurance, Ambac Financial Group, Inc. (the
"Company"), is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). These reports, proxy statements
and other information may be inspected and copied at the SEC's public reference
facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference room. The
SEC maintains an internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding companies that
file electronically with the SEC, including the Company. In addition, the
aforementioned material may also be inspected at the offices of the New York
Stock Exchange, Inc. (the "NYSE") at 20 Broad Street, New York, New York 10005.

     Copies of Ambac Assurance's financial statements prepared in accordance
with statutory accounting standards are available from Ambac Assurance. The
address of Ambac Assurance's administrative offices and its telephone number are
One State Street Plaza, 19th Floor, New York, New York 10004 and (212) 668-0340.

Incorporation of Certain Documents by Reference

     The following documents filed by the Company with the Commission (File
No. 1-10777) are incorporated by reference in this Statement of Additional
Information:

     1)   The Company's Current Report on Form 8-K dated January 23, 2002 and
          filed on January 25, 2002;

     2)   The Company's Annual Report on Form 10-K for the fiscal year ended
          December 31, 2001 and filed on March 26, 2002;

     3)   The Company's Current Report on Form 8-K dated April 17, 2002 and
          filed on April 18, 2002;

     4)   The Company's Quarterly Report on Form 10-Q for the fiscal quarterly
          period ended March 31, 2002 and filed on May 13, 2002;

     5)   The Company's Current Report on Form 8-K dated July 17, 2002 and filed
          on July 19, 2002;

     6)   The Company's current Report on Form 8-K dated August 14, 2002 and
          filed on August 14, 2002; and

     7)   The Company's Quarterly Report on Form 10-Q for the fiscal quarterly
          period ended June 30, 2002 and filed on August 14, 2002.


     All documents subsequently filed by the Company pursuant to the
requirements of the Exchange Act after the date of this Statement of Additional
Information will be available for inspection in the same manner as described
above in "Available Information".


FINANCIAL SECURITY ASSURANCE INC. ("FINANCIAL SECURITY")


Bond Insurance Policy
- ---------------------

     Concurrently with the issuance of the bonds, Financial Security Assurance
Inc. ("Financial Security") will issue its Municipal Bond Insurance Policy for
the bonds (the "Policy"). The Policy guarantees the scheduled payment of
principal of and interest on the bonds when due.

     The Policy is not covered by any insurance security or guaranty fund
established under New York, California, Connecticut or Florida insurance law.

Financial Security Assurance Inc.
- ---------------------------------

     Financial Security is a New York domiciled insurance company and a wholly
owned subsidiary of Financial Security Assurance Holdings Ltd. ("Holdings").
Holdings is an indirect subsidiary of Dexia, S.A., a publicly held Belgian
corporation. Dexia, S.A., through its bank subsidiaries, is primarily engaged in
the business of public finance in France, Belgium and other European countries.
No shareholder of Holdings or Financial Security is liable for the obligations
of Financial Security.


     At June 30, 2002, Financial Security's total policyholders' surplus and
contingency reserves were approximately $1,710,044,000 and its total unearned
premium reserve was approximately $898,579,000 in accordance with statutory
accounting principles. At June 30, 2002, Financial Security's total
shareholders' equity was approximately $1,817,013,000 and its total net unearned
premium reserve was approximately $744,499,000 in accordance with generally
accepted accounting principles.

     The financial statements included as exhibits to the annual and quarterly
reports filed by Holdings with the Securities and Exchange Commission are hereby
incorporated herein by reference. Also incorporated herein by reference are any
such financial statements so filed from the date of this Statement of Additional
Information until the termination of the offering of the bonds. Copies of
materials incorporated by reference will be provided upon request to Financial
Security Assurance Inc.: 350 Park Avenue, New York, New York 10022, Attention:
Communications Department (telephone (212) 826-0100).

     The policy does not protect investors against changes in market value of
the bonds, which market value may be impaired as a result of changes in
prevailing interest rates, changes in applicable ratings or other causes.
Financial Security makes no representation regarding the bonds or the
advisability of investing in the bonds. Financial Security makes no
representation regarding the Prospectus or Statement of Additional Information,
nor has it participated in the preparation thereof, except that Financial
Security has provided to the Fund the information presented under this caption
for inclusion in the Statement of Additional Information.


                                      C-1

<PAGE>


MBIA INSURANCE CORPORATION ("MBIA")

The MBIA Insurance Corporation Insurance Policy

     The following information has been furnished by MBIA Insurance Corporation
("MBIA") for use in this Statement of Additional Information.

     MBIA's policy unconditionally and irrevocably guarantees the full and
complete payment required to be made by or on behalf of the Issuer to the Paying
Agent or its successor of an amount equal to (i) the principal of (either at the
stated maturity or by an advancement of maturity pursuant to a mandatory sinking
fund payment) and interest on, the bonds as such payments shall become due but
shall not be so paid (except that in the event of any acceleration of the due
date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
by MBIA's policy shall be made in such amounts and at such times as such
payments of principal would have been due had there not been any such
acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner of the bonds pursuant to a final judgment
by a court of competent jurisdiction that such payment constitutes an avoidable
preference to such owner within the meaning of any applicable bankruptcy law
(a "Preference").

     MBIA's policy does not insure against loss of any prepayment premium which
may at any time be payable with respect to any bonds. MBIA's policy does not,
under any circumstance, insure against loss relating to: (i) optional or
mandatory redemptions (other than mandatory sinking fund redemptions); (ii) any
payments to be made on an accelerated basis; (iii) payments on the purchase
price of bonds upon tender by an owner thereof; or (iv) any Preference relating
to (i) through (iii) above. MBIA's policy also does not insure against
nonpayment of principal of or interest on the bonds resulting from the
insolvency, negligence or any other act or omission of the Paying Agent or any
other paying agent for the bonds.

     Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of written
notice by registered or certified mail, by MBIA from the Paying Agent or any
owner of a bond the payment of an insured amount for which is then due, that
such required payment has not been made, MBIA on the due date of such payment or
within one business day after receipt of notice of such nonpayment, whichever is
later, will make a deposit of funds, in an account with State Street Bank and
Trust Company, N.A., in New York, New York, or its successor, sufficient for the
payment of any such insured amounts which are then due. Upon presentment and
surrender of such bonds or presentment of such other proof of ownership of the
bonds, together with any appropriate instruments of assignment to evidence the
assignment of the insured amounts due to the bonds as are paid by MBIA, and
appropriate instruments to effect the appointment of MBIA as agent for such
owners of the bonds in any legal proceeding related to payment of insured
amounts on the bonds, such instruments being in a form satisfactory to State
Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A.
shall disburse to such owners or the Paying Agent payment of the insured amounts
due on such bonds, less any amount held by the Paying Agent for the payment of
such insured amounts and legally available therefor.

MBIA

     MBIA Insurance Corporation ("MBIA") is the principal operating subsidiary
of MBIA Inc., a New York Stock Exchange listed company (the "Company"). The
Company is not obligated to pay the debts of or claims against MBIA. MBIA is
domiciled in the State of New York and licensed to do business in and subject to
regulation under the laws of all 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands,
the Virgin Islands of the United States and the Territory of Guam. MBIA has
three branches, one in the Republic of France, one in the Republic of Singapore
and one in the Kingdom of Spain. New York has laws prescribing minimum capital
requirements, limiting classes and concentrations of investments and requiring
the approval of policy rates and forms. State laws also regulate the amount of
both the aggregate and individual risks that may be insured, the payment of
dividends by MBIA, changes in control and transactions among affiliates.
Additionally, MBIA is required to maintain contingency reserves on its
liabilities in certain amounts and for certain periods of time.

     MBIA does not accept any responsibility for the accuracy or completeness of
this Prospectus or Statement of Additional Information or any information or
disclosure contained herein, or omitted herefrom, other than with respect to the
accuracy of the information regarding the policy and MBIA set forth under the
heading "MBIA Insurance Corporation". Additionally, MBIA makes no representation
regarding the bonds or the advisability of investing in the bonds.

     The Financial Guarantee Insurance Policies are not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.

MBIA Information

     The following documents filed by the Company with the Securities and
Exchange Commission (the "SEC") are incorporated herein by reference:

(1)  The Company's Annual Report on Form 10-K for the year ended December 31,
     2001; and

(2)  The Company's Quarterly Report on Form 10-Q for the quarter ended June
     30, 2002.

     Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act of 1934, as amended, after the date of this Statement
of Additional Information and prior to the termination of the offering of the
securities offered hereby shall be deemed to be incorporated by reference in
this Statement of Additional Information and to be a part hereof. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein, or contained in this Statement of Additional Information, shall be
deemed to be modified or superseded for purposes of this Statement of Additional
Information to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Statement of Additional Information.

     The Company files annual, quarterly and special reports, information
statements and other information with the SEC under File No. 1-9583. Copies of
the SEC filings (including (1) the Company's Annual Report on Form 10-K for the
year ended December 31, 2001, and, (2) the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002), are available (i) over the Internet
at the SEC's web site at http://www.sec.gov; (ii) at the SEC's public reference
room in Washington D.C.; (iii) over the Internet at the Company's web site at
http://www.mbia.com; and (iv) at no cost, upon request to MBIA Insurance
Corporation, 113 King Street, Armonk, New York 10504. The telephone number of
MBIA is (914) 273-4545.

     As of December 31, 2001, MBIA had admitted assets of $8.5 billion
(audited), total liabilities of $5.6 billion (audited), and total capital and
surplus of $2.9 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulaltory
authorities. As of June 30, 2002, MBIA had admitted assets of $8.7 billion
(unaudited), total liabilities of $5.7 billion (unaudited), and total capital
and surplus of $3.0 billion (unaudited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities.

Financial Strength Ratings of MBIA

     Moody's Investors Service, Inc. rates the financial strength of MBIA "Aaa."

     Standard & Poor's, a division of The McGraw-Hill Companies, Inc. rates the
financial strength of MBIA "AAA."

     Fitch Ratings. rates the financial strength of MBIA "AAA."

     Each rating of MBIA should be evaluated independently. The ratings reflect
the respective rating agency's current assessment of the creditworthiness of
MBIA and its ability to pay claims on its policies of insurance. Any further
explanation as to the significance of the above ratings may be obtained only
from the applicable rating agency.

     The above ratings are not recommendations to buy, sell or hold the bonds,
and such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of any of the above ratings
may have an adverse effect on the market price of the bonds. MBIA does not
guaranty the market price of the bonds nor does it guaranty that the ratings on
the bonds will not be revised or withdrawn.

                                      C-2

<PAGE>

FINANCIAL GUARANTY INSURANCE COMPANY ("FINANCIAL GUARANTY")

     Concurrently with the issuance of the Bonds, Financial Guaranty Insurance
Company ("Financial Guaranty") will issue its Municipal Bond New Issue Insurance
Policy (the "Policy") for the Bonds described in the Policy (as used under this
heading, the "Bonds"). The Policy unconditionally guarantees the payment of that
portion of the principal or accreted value (if applicable) of and interest on
the Bonds which has become due for payment, but shall be unpaid by reason of
nonpayment by the issuer of the Bonds (the "Issuer"). Financial Guaranty will
make such payments to State Street Bank and Trust Company, N.A., or its
successor as its agent (the "Fiscal Agent"), on the later of the date on which
such principal, accreted value or interest (as applicable) is due or on the
business day next following the day on which Financial Guaranty shall have
received telephonic or telegraphic notice, subsequently confirmed in writing, or
written notice by registered or certified mail, from an owner of Bonds or the
Paying Agent of the nonpayment of such amount by the Issuer. The Fiscal Agent
will disburse such amount due on any Bond to its owner upon receipt by the
Fiscal Agent of evidence satisfactory to the Fiscal Agent of the owner's right
to receive payment of the principal, accreted value or interest (as applicable)
due for payment and evidence, including any appropriate instruments of
assignment, that all of such owner's rights to payment of such principal,
accreted value or interest (as applicable) shall be vested in Financial
Guaranty. The term "nonpayment" in respect of a Bond includes any payment of
principal, accreted value or interest (as applicable) made to an owner of a Bond
which has been recovered from such owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with a final,
nonappealable order of a court having competent jurisdiction.

     The Policy is non-cancellable and the premium will be fully paid at the
time of delivery of the Bonds. The Policy covers failure to pay principal or
accreted value (if applicable) of the Bonds on their respective stated maturity
dates or dates on which the same shall have been duly called for mandatory
sinking fund redemption, and not on any other date on which the Bonds may have
been otherwise called for redemption, accelerated or advanced in maturity, and
covers the failure to pay an installment of interest on the stated date for its
payment.

                                      C-3

<PAGE>

     Generally, in connection with its insurance of an issue of municipal
securities, Financial Guaranty requires, among other things, (i) that it be
granted the power to exercise any rights granted to the holders of such
securities upon the occurrence of an event of default, without the consent of
such holders, and that such holders may not exercise such rights without
Financial Guaranty's consent, in each case so long as Financial Guaranty has not
failed to comply with its payment obligations under its insurance policy; and
(ii) that any amendment or supplement to or other modification of the principal
legal documents be subject to Financial Guaranty's consent. The specific rights,
if any, granted to Financial Guaranty in connection with its insurance of the
Bonds are set forth in the prospectus. Reference should be made as well to such
description for a discussion of the circumstances, if any, under which the Fund
will provide additional or substitute credit enhancement, and related matters.

     The Policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law or by the Florida
Insurance Guaranty Association (Florida Insurance Code, (S)(S) 631.50 et seq.).

     Financial Guaranty is a wholly-owned subsidiary of FGIC Corporation (the
"Corporation"), a Delaware holding company. The Corporation is a subsidiary of
General Electric Capital Corporation ("GE Capital"). Neither the Corporation nor
GE Capital is obligated to pay the debts of or the claims against Financial
Guaranty. Financial Guaranty is a monoline financial guaranty insurer domiciled
in the State of New York and subject to regulation by the State of New York
Insurance Department. As of March 31, 2002, the total capital and surplus of
Financial Guaranty was approximately $1.03 billion. Financial Guaranty prepares
financial statements on the basis of both statutory accounting principles and
generally accepted accounting principles. Copies of such financial statements
may be obtained by writing to Financial Guaranty at 125 Park Avenue, New York,
New York 10017, Attention: Communications Department (telephone number:
212-312-3000) or to the New York State Insurance Department at 25 Beaver Street,
New York, New York 10004-2319, Attention: Financial Condition Property/Casualty
Bureau (telephone number: 212-480-5187).

                                      C-4

<PAGE>

RATINGS

     The above municipal bond insurers have insurance claims-paying ability
ratings of AAA from S&P and Aaa from Moody's. Financial Guaranty also has an
insurance claims-paying ability rating of AAA from Fitch. An S&P insurance
claims-paying ability rating is an assessment of an operating insurance
company's financial capacity to meet obligations under an insurance policy in
accordance with its terms. An insurer with an insurance claims-paying ability
rating of AAA has the highest rating assigned by S&P. Capacity to honor
insurance contracts is adjudged by S&P to be extremely strong and highly likely
to remain so over a long period of time. A Moody's insurance claims-paying
ability rating is an opinion of the ability of an insurance company to repay
punctually senior policyholder obligations and claims. An insurer with an
insurance claims-paying ability rating of Aaa is adjudged by Moody's to be of
the best quality. In the opinion of Moody's, the policy obligations of an
insurance company with an insurance claims-paying ability rating of Aaa carry
the smallest degree of credit risk and, while the financial strength of these
companies is likely to change, such changes as can be visualized are most
unlikely to impair the company's fundamentally strong position.

     An insurance claims-paying ability rating by S&P or Moody's does not
constitute an opinion on any specific contract in that such an opinion can only
be rendered upon the review of the specific insurance contract. Furthermore, an
insurance claims-paying ability rating does not take into account deductibles,
surrender or cancellation penalties or the timeliness of payment, nor does it
address the ability of a company to meet nonpolicy obligations (i.e., debt
contracts).

     The assignment of ratings by S&P or Moody's to debt issues that are fully
or partially supported by insurance policies, contracts or guarantees is a
separate process from the determination of claims-paying ability ratings. The
likelihood of a timely flow of funds from the insurer to the trustee for the
bondholders is a key element in the rating determination for such debt issues.

     S&P's and Moody's ratings are not recommendations to buy, sell or hold the
municipal bonds insured by policies issued by AMBAC Assurance, Financial
Security, MBIA or Financial Guaranty and such ratings may be subject to revision
or withdrawal at any time by the rating

                                      C-5

<PAGE>

agencies. Any downward revision or withdrawal of either or both ratings may have
an adverse effect on the market price of the municipal bonds insured by policies
issued by AMBAC Assurance, Financial Security, MBIA or Financial Guaranty.

     S&P's ratings of AMBAC Assurance, Financial Security, MBIA and Financial
Guaranty should be evaluated independent of Moody's ratings. Any further
explanation as to the significance of the ratings may be obtained only from the
applicable rating agency. See Appendix A for more information about ratings by
Moody's and S&P.

                                      C-6

<PAGE>

                                   APPENDIX D

                          HEDGING STRATEGIES AND RISKS

     Set forth below is additional information regarding the various defensive
hedging techniques.

Futures and Index Transactions

 Financial Futures

     A financial future is an agreement between two parties to buy and sell a
security for a set price on a future date.  They have been designed by boards of
trade which have been designated "contracts markets" by the Commodity Futures
Trading Commission ("CFTC").

     The purchase of financial futures is for the purpose of hedging the Fund's
existing or anticipated holdings of long-term debt securities.  When the Fund
purchases a financial future, it deposits in cash or securities an "initial
margin" of between 1% and 5% of the contract amount.  Thereafter, the Fund's
account is either credited or debited on a daily basis in correlation with the
fluctuation in price of the underlying future or other requirements imposed by
the exchange in order to maintain an orderly market.  The Fund must make
additional payments to cover debits to its account and has the right to withdraw
credits in excess of the liquidity, the Fund may close out its position at any
time prior to expiration of the financial future by taking an opposite position.
At closing a final determination of debits and credits is made, additional cash
is paid by or to the Fund to settle the final determination and the Fund
realizes a loss or gain depending on whether on a net basis it made or received
such payments.

     The sale of financial futures is for the purpose of hedging the Fund's
existing or anticipated holdings of long-term debt securities.  For example, if
the Fund owns long-term bonds and interest rates were expected to increase, it
might sell financial futures.  If interest rates did increase, the value of
long-term bonds in the Fund's portfolio would decline, but the value of the
Fund's financial futures would be expected to increase at approximately the same
rate thereby keeping the net asset value of the Fund from declining as much as
it otherwise would have.

     Among the risks associated with the use of financial futures by the Fund as
a hedging device, perhaps the most significant is the imperfect correlation
between movements in the price of the financial futures and movements in the
price of the debt securities which are the subject of the hedge.

     Thus, if the price of the financial future moves less or more than the
price of the securities which are the subject of the hedge, the hedge will not
be fully effective.  To compensate for this imperfect correlation, the Fund may
enter into financial futures in a greater dollar amount than the dollar amount
of the securities being hedged if the historical volatility of the prices of
such securities has been greater than the historical volatility of the financial
futures.  Conversely, the Fund may enter into fewer financial futures if the
historical volatility of the price of the securities being hedged is less than
the historical volatility of the financial futures.

                                      D-1

<PAGE>

     The market prices of financial futures may also be affected by factors
other than interest rates. One of these factors is the possibility that rapid
changes in the volume of closing transactions, whether due to volatile markets
or movements by speculators, would temporarily distort the normal relationship
between the markets in the financial future and the chosen debt securities. In
these circumstances as well as in periods of rapid and large price movements.
The Fund might find it difficult or impossible to close out a particular
transaction.

 Options on Financial Futures

     The Fund may also purchase put or call options on financial futures which
are traded on a U.S. Exchange or board of trade and enter into closing
transactions with respect to such options to terminate an existing position.
Currently, options can be purchased with respect to financial futures on U.S.
Treasury Bonds on The Chicago Board of Trade. The purchase of put options on
financial futures is analogous to the purchase of put options by the Fund on its
portfolio securities to hedge against the risk of rising interest rates. As with
options on debt securities, the holder of an option may terminate his position
by selling an option of the Fund. There is no guarantee that such closing
transactions can be effected.

Index Contracts

 Index Futures

     A tax-exempt bond index which assigns relative values to the tax-exempt
bonds included in the index is traded on the Chicago Board of Trade. The index
fluctuates with changes in the market values of all tax-exempt bonds included
rather than a single bond. An index future is a bilateral agreement pursuant to
which two parties agree to take or make delivery of an amount of cash-rather
than any security-equal to a specified dollar amount times the difference
between the index value at the close of the last trading day of the contract and
the price at which the index future was originally written. Thus, an index
future is similar to traditional financial futures except that settlement is
made in cash.

 Index Options

     The Fund may also purchase put or call options on U.S. Government or tax-
exempt bond index futures and enter into closing transactions with respect to
such options to terminate an existing position.  Options on index futures are
similar to options on debt instruments except that an option on an index future
gives the purchaser the right, in return for the premium paid, to assume a
position in an index contract rather than an underlying security at a specified
exercise price at any time during the period 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 will be accompanied by delivery of the accumulated
balance of the writer's futures margin account which represents the amount by
which the market price of the index futures contract, at exercise, is less than
the exercise price of the option on the index future.

     Bond index futures and options transactions would be subject to risks
similar to transactions in financial futures and options thereon as described
above.  No series will enter into transactions in index or financial futures or
related options unless and until, in the Adviser's opinion, the market for such
instruments has developed sufficiently.

                                      D-2

<PAGE>

                                  APPENDIX E

                PERFORMANCE RELATED AND COMPARATIVE INFORMATION

     The Fund may be a suitable investment for a shareholder that is thinking of
adding bond investments to his portfolio to balance the appreciated stocks that
the shareholder is holding. Municipal bonds can provide double, tax-free income
(exempt from regular federal and state income taxes) for residents of that
state.


     The Fund may quote certain performance-related information and may compare
certain aspects of its portfolio and structure to other substantially similar
closed-end funds as categorized by Lipper, Inc. ("Lipper"), Morningstar or other
independent services. Comparison of the Fund to an alternative investment should
be made with consideration of differences in features and expected performance.
The Fund may obtain data from sources or reporting services, such as Bloomberg
Financial ("Bloomberg") and Lipper, that the Fund believes to be generally
accurate. According to Thomson Wealth Management, Nuveen is the leading sponsor
of municipal closed-end exchange-traded bond funds measured by the number of
funds (87) and fund assets under management ($33 billion) as of August 31, 2002.


                                      E-1

<PAGE>


     Past performance is not indicative of future results. At the time Common
Shareholders sell their shares, they may be worth more or less than their
original investment.



Features of Nuveen Municipal Closed-End ETFs


<TABLE>

<S>                                                   <C>
Monthly Dividends*
Enhanced income potential through leverage*
Automatic dividend reinvestment*
Exchange listing
Widespread price visibility
Convenient intra-day trading*
Professional management
Low minimum investment
</TABLE>


*As outlined elsewhere in this SAI, share prices will fluctuate. Systematic
reinvestment does not ensure a profit, nor does it protect you against a loss in
a declining market.




Municipal Bond/Equity Portfolios May
Provide Attractive Returns and Reduced Risk



Nuveen research shows that, over the past 20 years, a portfolio of 20% municipal
bonds and 80% equities produced 99% of the annual after-tax return of an
all-equity portfolio with measurably less risk.





These conclusions are based on research done by Nuveen Investments using the
following portfolio assumptions: Municipal bonds are represented by the Lehman
Brothers Long Municipal Index. Treasury Bonds are represented by Lehman Brothers
Long Treasury Index. Equities are the S&P 500 stocks as tracked by the Ibbotson
Associates Large Company Stock Index. It is not possible to invest directly in
any of these indexes. Hypothetical portfolios using varying percentages of
municipal bonds or Treasury bonds and equities, in each case totaling 100%, were
constructed, and the investment results and volatility determined, for every
year from 1982 through 2001.

All investment income generated by the portfolio was considered to be reinvested
annually, along with the after-tax proceeds of an arbitrarily assumed 20%
annualized turnover rate. The allocation between the two assets was allowed to
fluctuate within a 5% band around its target before rebalancing. No provision
was made for investment fees or commissions. Investment income was taxed at the
historically appropriate rate for an individual with $100,000 in taxable income
in 2001 dollars. Net capital gains taxes, if any, were deducted at the rate
appropriate for the period. At the end of 2001, the portfolios were fully
liquidated to recognize the existing tax liability.



This study was based on historical data gathered from sources Nuveen Investments
considers to be reliable and consistent. The results produced by this study in
no way should be considered representative of the past performance of any actual
investment product or predictive of future investment expectations and
performance for the municipal market or any actual investment products.

In particular, municipal bond rates during the early portion of the 20-year
period covered by this research were higher than current municipal rates, and
returns for municipal bonds going forward will likely be less than those shown
in the chart.


20 Yr. Horizon Data Tables 1-Balanced Portfolios with Large Cap Equities

After-Tax Returns


[GRAPH APPEARS HERE]


 Bond           Long Municipals         Long Treasuries         Long Corporates
Portion        Risk       Return       Risk       Return       Risk       Return
   0%         15.29%      11.94%      15.29%      11.94%      15.29%      11.94%
   5%         14.65%      11.94%      14.67%      11.82%      14.67%      11.81%
  10%         14.03%      11.89%      14.06%      11.66%      14.06%      11.65%
  15%         13.42%      11.85%      13.48%      11.50%      13.47%      11.49%
  20%         12.81%      11.79%      12.91%      11.33%      12.88%      11.31%
  25%         12.22%      11.74%      12.37%      11.16%      12.31%      11.14%
  30%         11.64%      11.67%      11.85%      10.98%      11.74%      10.96%
  35%         11.08%      11.61%      11.36%      10.79%      11.20%      10.77%
  40%         10.55%      11.54%      10.90%      10.60%      10.68%      10.58%
  45%         10.04%      11.46%      10.49%      10.40%      10.18%      10.39%
  50%          9.56%      11.38%      10.12%      10.20%       9.72%      10.19%
  55%          9.12%      11.30%       9.80%      10.00%       9.29%       9.99%
  60%          8.72%      11.21%       9.53%       9.79%       8.89%       9.79%
  65%          8.37%      11.12%       9.33%       9.58%       8.54%       9.58%
  70%          8.07%      11.03%       9.19%       9.37%       8.24%       9.38%
  75%          7.83%      10.94%       9.11%       9.15%       8.00%       9.17%
  80%          7.65%      10.84%       9.10%       8.94%       7.81%       8.96%
  85%          7.54%      10.74%       9.16%       8.72%       7.68%       8.75%
  90%          7.50%      10.64%       9.28%       8.50%       7.62%       8.54%
  95%          7.53%      10.54%       9.46%       8.28%       7.63%       8.34%
 100%          7.63%      10.43%       9.70%       8.05%       7.70%       8.11%

     Market price is affected by many factors, including market interest rates,
income tax rates, the common shares' net asset value and dividend stability, the
portfolio's duration, call protection and credit quality, analyst
recommendations, and other market factors. Any of these factors individually or
collectively may, at any given time, be as or more important to market price
than annualized dividend rates. A positive correlation does not necessarily mean
that higher dividends cause or result in higher market prices, and you should
not assume that any particular level of dividends will result in any particular
market price. In addition, the positive correlation between dividends and market
price of this group of funds does not necessarily mean that every fund in the
group exhibits a positive correlation between dividend and market price, and it
is possible that the Fund may not exhibit such a correlation. There can be no
assurance that the correlation suggested by the above data will continue in the
future.


On Average, Nuveen Funds Have Traded at Greater Premiums or Smaller Discounts
than Competing Funds




[Graph Appears Here]

25-Jul-97       0.038522115
 8-Aug-97       0.035379787
15-Aug-97       0.03273153
22-Aug-97       0.04029108
29-Aug-97       0.037233259
 5-Sep-97       0.041429825
12-Sep-97       0.042412528
19-Sep-97       0.042494317
26-Sep-97       0.043137061
 3-Oct-97       0.041079948
10-Oct-97       0.036549511
17-Oct-97       0.037820911
24-Oct-97       0.036572942
31-Oct-97       0.036296244
 7-Nov-97       0.036971035
14-Nov-97       0.037746733
21-Nov-97       0.036235724
28-Nov-97       0.034928058
 5-Dec-97       0.03759602
12-Dec-97       0.03694678
19-Dec-97       0.039660897
26-Dec-97       0.039236665
 2-Jan-98       0.039619687
 9-Jan-98       0.044366773
16-Jan-98       0.038933121
23-Jan-98       0.037478394
30-Jan-98       0.040981632
 6-Feb-98       0.044253503
13-Feb-98       0.048217687
20-Feb-98       0.045418904
27-Feb-98       0.045606483
 6-Mar-98       0.05044092
13-Mar-98       0.053888158
20-Mar-98       0.054673246
27-Mar-98       0.053675439
 3-Apr-98       0.055637624
 9-Apr-98       0.052235894
17-Apr-98       0.054192034
24-Apr-98       0.050518374
 8-May-98       0.049896385
15-May-98       0.051353821
22-May-98       0.051483104
29-May-98       0.045881903
 5-Jun-98       0.055602496
12-Jun-98       0.055573296
19-Jun-98       0.053353468
26-Jun-98       0.050081479
 2-Jul-98       0.050875309
10-Jul-98       0.05453185
17-Jul-98       0.049196788
24-Jul-98       0.048390204
31-Jul-98       0.051474744
 7-Aug-98       0.049411162
14-Aug-98       0.049813964
21-Aug-98       0.05188779
28-Aug-98       0.051906354
 4-Sep-98       0.050087127
11-Sep-98       0.04917935
18-Sep-98       0.046593528
25-Sep-98       0.047709123
 2-Oct-98       0.057751133
 9-Oct-98       0.054570175
16-Oct-98       0.056760965
23-Oct-98       0.048675439
30-Oct-98       0.049666667
 6-Nov-98       0.046473684
20-Nov-98       0.043697368
27-Nov-98       0.042625
 4-Dec-98       0.048682018
11-Dec-98       0.047938596
18-Dec-98       0.045574561
24-Dec-98       0.044484649
 8-Jan-99       0.040269737
15-Jan-99       0.032574561
22-Jan-99       0.032019737
29-Jan-99       0.032486842
 5-Feb-99       0.042296053
12-Feb-99       0.042750239
19-Feb-99       0.043902073
26-Feb-99       0.044498884
 5-Mar-99       0.04725933
19-Mar-99       0.054052316
26-Mar-99       0.053597122
 1-Apr-99       0.058263788
 9-Apr-99       0.049830129
16-Apr-99       0.059694926
23-Apr-99       0.060500788
30-Apr-99       0.059889169
 7-May-99       0.057512974
14-May-99       0.056063872
21-May-99       0.051220927
28-May-99       0.05302889
 4-Jun-99       0.05539521
11-Jun-99       0.057811171
18-Jun-99       0.06445
25-Jun-99       0.067863095
 2-Jul-99       0.068096429
 9-Jul-99       0.071166667
16-Jul-99       0.076167857
23-Jul-99       0.081947619
30-Jul-99       0.082119048
 6-Aug-99       0.077934884
20-Aug-99       0.07645155
27-Aug-99       0.074089922
 3-Sep-99       0.074571839
10-Sep-99       0.076186207
17-Sep-99       0.069099425
24-Sep-99       0.070118571
 1-Oct-99       0.055396667
 8-Oct-99       0.063321841
15-Oct-99       0.060172669
22-Oct-99       0.057560767
29-Oct-99       0.056708398
 5-Nov-99       0.057400231
12-Nov-99       0.052517238
19-Nov-99       0.052458398
26-Nov-99       0.050856895
10-Dec-99       0.029167111
17-Dec-99       0.022930972
23-Dec-99       0.031247988
31-Dec-99       0.030041852
 7-Jan-00       0.034098191
14-Jan-00       0.02985598
21-Jan-00       0.030763375
28-Jan-00       0.036890351
 4-Feb-00       0.043249219
11-Feb-00       0.042941578
18-Feb-00       0.037741596
25-Feb-00       0.037772843
 3-Mar-00       0.031488401
10-Mar-00       0.035108011
17-Mar-00       0.040553742
24-Mar-00       0.046507843
31-Mar-00       0.0504471
 7-Apr-00       0.047919915
14-Apr-00       0.045770233
20-Apr-00       0.041533157
28-Apr-00       0.041838665
 5-May-00       0.046265678
12-May-00       0.042325106
19-May-00       0.046130932
26-May-00       0.04666536
 2-Jun-00       0.047785911
 9-Jun-00       0.049809534
16-Jun-00       0.048623199
23-Jun-00       0.044137394
30-Jun-00       0.040320869
 7-Jul-00       0.045994597
14-Jul-00       0.038319492
21-Jul-00       0.037719386
28-Jul-00       0.042682839
 4-Aug-00       0.044612288
11-Aug-00       0.042435805
18-Aug-00       0.037838661
25-Aug-00       0.040834263
 1-Sep-00       0.043817958
 8-Sep-00       0.042935636
15-Sep-00       0.038175499
22-Sep-00       0.041251663
29-Sep-00       0.040976185
 6-Oct-00       0.04203186
13-Oct-00       0.031649968
20-Oct-00       0.034736966
27-Oct-00       0.044490667
 3-Nov-00       0.052386183
17-Nov-00       0.053132482
24-Nov-00       0.054112744
 1-Dec-00       0.023133662
 8-Dec-00       0.048791139
15-Dec-00       0.051525316
22-Dec-00       0.048712615
29-Dec-00       0.051922656
 5-Jan-01       0.058615104
12-Jan-01       0.056114246
19-Jan-01       0.054739501
26-Jan-01       0.055520134
 2-Feb-01       0.058139048
 9-Feb-01       0.051868149
16-Feb-01       0.051985582
23-Feb-01       0.054773168
 2-Mar-01       0.037264033
 9-Mar-01       0.056907458
16-Mar-01       0.05181887
23-Mar-01       0.046485198
30-Mar-01       0.051052429
 6-Apr-01       0.053114011
12-Apr-01       0.057032542
20-Apr-01       0.057815266
27-Apr-01       0.058606757
 4-May-01       0.073973346
11-May-01       0.047453979
18-May-01       0.072847939
25-May-01       0.068227804
 1-Jun-01       0.071706711
 8-Jun-01       0.071167402
15-Jun-01       0.062091156
22-Jun-01       0.072736735
29-Jun-01       0.060622449
 6-Jul-01       0.075916
13-Jul-01       0.061898
20-Jul-01       0.073488
27-Jul-01       0.072848
 3-Aug-01       0.072396
10-Aug-01       0.071645
17-Aug-01       0.069541
24_Aug-01       0.067018
31-Aug-01       0.056737
 7-Sep-01       0.061211
10-Sep-01       0.0605
21-Sep-01       0.055704
28-Sep-01       0.054845

 5-Oct-01       0.057874
12-Oct-01       0.053677
19-Oct-01       0.053425
26-Oct-01       0.056936
 2-Nov-01       0.055613
 9-Nov-01       0.053192
16-Nov-01       0.051534
23-Nov-01       0.056095
30-Nov-01       0.057148
 7-Dec-01       0.061395
14-Dec-01       0.064372
21-Dec-01       0.057279
28-Dec-01       0.055627
 4-Jan-02       0.051193
11-Jan-02       0.053965
18-Jan-02       0.053611
25-Jan-02       0.039327
 1-Feb-02       0.034753

 8-Feb-02       0.057732
15-Feb-02       0.054999
22-Feb-02       0.054658
 1-Mar-02       0.054265
 8-Mar-02       0.060019
15-Mar-02       0.060412
22-Mar-02       0.056865
28-Mar-02       0.054582
 5-Apr-02       0.048424
12-Apr-02       0.048736
19-Apr-02       0.049366
26-Apr-02       0.050541
 3-May-02       0.056629
10-May-02       0.056496
17-May-02       0.058598
24-May-02       0.055657
31-May-02       0.055425
 7-Jun-02       0.056835
14-Jun-02       0.055105
21-Jun-02       0.055471
28-Jun-02       0.054866
 5-Jul-02       0.054265
12-Jul-02       0.053863
19-Jul-02       0.048931
26-Jul-02       0.047383

This chart shows the week-by-week difference between the average premium or
discount for all Nuveen municipal closed-end funds and all non-Nuveen municipal
closed-end funds as reported by Lipper for the five-year period from July 25,
1997 through July 26, 2002. The weekly averages include all Nuveen and
non-Nuveen funds in existence during that week over the course of this
measurement period. As of July 26, 2002, there were 87 Nuveen funds and 144
non-Nuveen funds included in the Lipper database. Past trading history is no
guarantee of future results, and is no guarantee of how these new Funds may
trade.


                                     E-2

<PAGE>


<TABLE>
<S>                                                                      <C>

Nuveen Insured Tax-Free Advantage Municipal Fund                          Common Shares

</TABLE>



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

                      STATEMENT OF ADDITIONAL INFORMATION

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

                                __________, 2002

<PAGE>

                           PART C - OTHER INFORMATION

Item 24: Financial Statements and Exhibits

     1.  Financial Statements:



     Registrant has not conducted any business as of the date of this filing,
other than in connection with its organization. Financial Statements indicating
that the Registrant has met the net worth requirements of Section 14(a) of the
1940 Act will be filed by Pre-effective Amendment to the Registration
Statement.



     2.  Exhibits:


a.   Declaration of Trust dated July 29, 2002.

b.   By-Laws of Registrant.

c.   None.

d.   Form of Share Certificate.*

e.   Terms and Conditions of the Dividend Reinvestment Plan.*

f.   None.

g.   Investment Management Agreement between Registrant and Nuveen Advisory
     Corp. dated        , 2002.*

h.1  Form of Underwriting Agreement.*

h.2  Form of                      Master Selected Dealer Agreement.*

h.3  Form of Nuveen Master Selected Dealer Agreement.*

h.4  Form of Master Agreement Among Underwriters.*

h.5  Form of Dealer Letter Agreement.*

i.   Nuveen Open-End and Closed-End Funds Deferred Compensation Plan for
     Independent Directors and Trustees.*

j.   Master Custodian Agreement between Registrant and State Street
     Bank and Trust Company dated August 19, 2002.*

k.1  Transfer Agency and Service Agreement between Registrant and State Street
     Bank and Trust Company dated ___________, 2002.*

k.2  Expense Reimbursement Agreement between Registrant and Nuveen Advisory
     Corp. dated        , 2002.*

                                      C-1

<PAGE>


l.1  Opinion and consent of Bell, Boyd & Lloyd LLC.*

l.2  Opinion and consent of Bingham McCutchen LLP.*

m.   None.

n.   Consent of Auditors.*

o.   None.

p.   Subscription Agreement of Nuveen Advisory Corp. dated            , 2002.*

q.   None.

r.   Code of Ethics of Nuveen Advisory Corp.*

s.   Power of Attorney.
___________________
 * To be filed by amendment.




Item 25: Marketing Arrangements


See Sections 2, 3 and 5(n) of the Form of Underwriting Agreement to be filed as
Exhibit h.1 to this Registration Statement.

See the Introductory Paragraph and Sections 2 and 3(d) of the Salomon Smith
Barney Form of Master Selected Dealer Agreement to be filed as Exhibit h.2 to
this Registration Statement and the Introductory Paragraph and Sections 2 and 3
of the Form of Nuveen Master Selected Dealer Agreement to be filed as Exhibit
h.3 to this Registration Statement.

See Introductory Paragraph and Sections 1, 2, 3.1, 3.2, 3.4-3.8, 4.1, 4.2,
5.1-5.4,6.1, 10.9 and 10.10 of the Form of Master Agreement Among Underwriters
to be filed as Exhibit h.4 to this Registration Statement.

See Paragraph e of the Form of Dealer Letter Agreement between Nuveen and the
Underwriters to be filed as Exhibit h.5 to this Registration Statement.


Item 26: Other Expenses of Issuance and Distribution


<TABLE>


     <S>                                                              <C>
     Securities and Exchange Commission fees                       $  1.38
     National Association of Securities Dealers, Inc. fees          501.50
     Printing and engraving expenses                                     *
     Legal Fees                                                          *
                             listing fees                                *
     Accounting expenses                                                 *
     Blue Sky filing fees and expenses                                   *
     Underwriters' Reimbursement                                         *
     Miscellaneous expenses                                              *
                                                                   ----------
          Total                                                    $     *
                                                                   ==========
</TABLE>


                                      C-2

<PAGE>

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




     *To be completed by amendment. Nuveen Advisory has contractually agreed to
reimburse the Fund for fees and expenses in the amount of .32% of average daily
Managed Assets for the first 5 full years of the Fund's operations, .24% of
average daily Managed Assets in year 6, .16% in year 7 and .08% in year 8.
Without the reimbursement, "Total Net Annual Expenses" would be estimated to be
    % of average daily net assets attributable to Common Shares. Nuveen has
agreed to pay (i) all organizational expenses and (ii) offering costs (other
than sales load) that exceed $0.03 per Common Share (.20% of offering price).





Item 27: Persons Controlled by or under Common Control with Registrant

     Not applicable.

Item 28: Number of Holders of Securities




     At October 4, 2002




<TABLE>
<CAPTION>
                                                           Number of
                  Title of Class                         Record Holders
                  --------------                         --------------
       <S>                                               <C>
       Common Shares, $0.01 par value                            0
</TABLE>



Item 29: Indemnification

     Section 4 of Article XII of the Registrant's Declaration of Trust provides
as follows:

     Subject to the exceptions and limitations contained in this Section 4,
every person who is, or has been, a Trustee, officer, employee or agent of the
Trust, including persons who serve at the request of the Trust as directors,
trustees, officers, employees or agents of another organization in which the
Trust has an interest as a shareholder, creditor or otherwise (hereinafter
referred to as a "Covered Person"), shall be indemnified by the Trust to the
fullest extent permitted by law against 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 such a Trustee, director, officer, employee or agent and
against amounts paid or incurred by him in settlement thereof.

     No indemnification shall be provided hereunder to a Covered Person:

(a)  against any liability to the Trust or its Shareholders by reason of a final
     adjudication by the court or other body before which the proceeding was
     brought that he engaged in willful misfeasance, bad faith, gross negligence
     or reckless disregard of the duties involved in the conduct of his office;

(b)  with respect to any matter as to which he shall have been finally
     adjudicated not to have acted in good faith in the reasonable belief that
     his action was in the best interests of the Trust; or

                                      C-3

<PAGE>

(c)  in the event of a settlement or other disposition not involving a final
     adjudication (as provided in paragraph (a) or (b)) and resulting in a
     payment by a Covered Person, unless there has been either a determination
     that such Covered Person did not engage in willful misfeasance, bad faith,
     gross negligence or reckless disregard of the duties involved in the
     conduct of his office by the court or other body approving the settlement
     or other disposition or a reasonable determination, based on a review of
     readily available facts (as opposed to a full trial-type inquiry), that he
     did not engage in such conduct:

          (i)  by a vote of a majority of the Disinterested Trustees acting on
          the matter (provided that a majority of the Disinterested Trustees
          then in office act on the matter); or

          (ii) by written opinion of independent legal counsel.

     The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be such a Covered Person and shall
inure to the benefit of the heirs, executors and administrators of such a
person.  Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Covered Persons may be entitled by contract or
otherwise under law.

     Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under this Section 4
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Section 4, provided that either:

     (a)  such undertaking is secured by a surety bond or some other appropriate
     security or the Trust shall be insured against losses arising out of any
     such advances; or

     (b)  a majority of the Disinterested Trustees acting on the matter
     (provided that a majority of the Disinterested Trustees then in office act
     on the matter) or independent legal counsel in a written opinion shall
     determine, based upon a review of the readily available facts (as opposed
     to a full trial-type inquiry), that there is reason to believe that the
     recipient ultimately will be found entitled to indemnification.

     As used in this Section 4, a "Disinterested Trustee" is one (x) who is not
an Interested Person of the Trust (including anyone, as such Disinterested
Trustee, who has been exempted from being an Interested Person by any rule,
regulation or order of the Commission), and (y) against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending.

                                      C-4

<PAGE>

     As used in this Section 4, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits, proceedings (civil,
criminal, administrative or other, including appeals), actual or threatened; and
the words "liability" and "expenses" shall include without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.

     The trustees and officers of the Registrant are covered by Investment Trust
Directors and officers and Errors and Omission policies in the aggregate amount
of $50,000,000 against liability and expenses of claims of wrongful acts arising
out of their position with the Registrant, except for matters which involve
willful acts, bad faith, gross negligence and willful disregard of duty (i.e.,
where the insured did not act in good faith for a purpose he or she reasonably
believed to be in the best interest of Registrant or where he or she had
reasonable cause to believe this conduct was unlawful). The policy has a
$500,000 deductible, which does not apply to individual trustees or officers.



     Section 8 of the Underwriting Agreement to be filed as Exhibit h.1 to this
Registration Statement provides for each of the parties thereto, including the
Registrant and the Underwriters, to indemnify the others, their trustees,
directors, certain of their officers, trustees, directors and persons who
control them against certain liabilities in connection with the offering
described herein, including liabilities under the federal securities laws.



     Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the 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 Securities
Act of 1933 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 director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.

Item 30: Business and Other Connections of Investment Adviser

     Nuveen Advisory Corp. serves as investment adviser to the following open-
end management type investment companies: Nuveen Multistate Trust I, Nuveen
Multistate Trust II, Nuveen Multistate Trust III, Nuveen Multistate Trust IV
and Nuveen Municipal Trust. Nuveen Advisory Corp. also serves as investment
adviser to the following closed-end management type investment companies other
than the Registrant: Nuveen Municipal Value Fund, Inc., Nuveen California
Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen
Municipal Income Fund, Inc., Nuveen Premium Income Municipal Fund, Inc., Nuveen
Performance Plus Municipal Fund, Inc., Nuveen California Performance Plus
Municipal Fund, Inc., Nuveen New York Performance Plus Municipal Fund, Inc.,
Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund,
Inc., Nuveen California Municipal Market Opportunity Fund, Inc., Nuveen New York
Municipal Market Opportunity Fund, Inc., Nuveen Investment Quality Municipal
Fund, Inc., Nuveen California Investment Quality Municipal Fund, Inc., Nuveen
New York Investment Quality Municipal Fund, Inc., Nuveen Insured Quality
Municipal Fund, Inc., Nuveen Florida Investment Quality Municipal Fund, Nuveen
New Jersey Investment Quality Municipal Fund, Inc., Nuveen Pennsylvania
Investment Quality Municipal Fund, Nuveen Select Quality Municipal Fund, Inc.,
Nuveen California Select Quality Municipal Fund, Inc., Nuveen New York Select
Quality Municipal Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen
Insured Municipal Opportunity Fund, Inc., Nuveen Florida Quality Income
Municipal Fund, Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Ohio
Quality Income Municipal Fund, Inc., Nuveen Texas Quality Income Municipal Fund,

                                      C-5


<PAGE>


Nuveen California Quality Income Municipal Fund, Inc., Nuveen New York Quality
Income Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc., Nuveen
Premier Insured Municipal Income Fund, Inc., Nuveen Insured California Premium
Income Municipal Fund, Inc., Nuveen Insured New York Premium Income Municipal
Fund, Inc., Nuveen Premium Income Municipal Fund 2, Inc., Nuveen Select
Maturities Municipal Fund, Nuveen Arizona Premium Income Municipal Fund, Inc.,
Nuveen Insured Florida Premium Income Municipal Fund, Nuveen Michigan Premium
Income Municipal Fund, Inc., Nuveen Michigan Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 4, Inc., Nuveen Insured California
Premium Income Municipal Fund 2, Inc., Nuveen Insured New York Premium Income
Municipal Fund 2, Nuveen Michigan Premium Income Municipal Fund 2, Nuveen
Pennsylvania Premium Income Municipal Fund 2, Nuveen Maryland Premium Income
Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Connecticut Premium Income
Municipal Fund, Nuveen Georgia Premium Income Municipal Fund, Nuveen Missouri
Premium Income Municipal Fund, Nuveen North Carolina Premium Income Municipal
Fund, Nuveen California Premium Income Municipal Fund, Nuveen Insured Premium
Income Municipal Fund 2, Nuveen New York Dividend Advantage Municipal Fund,
Nuveen California Dividend Advantage Municipal Fund, Nuveen Dividend Advantage
Municipal Fund, Nuveen Arizona Dividend Advantage Municipal Fund, Nuveen
Connecticut Dividend Advantage Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund, Nuveen Massachusetts Dividend Advantage Municipal
Fund, Nuveen North Carolina Dividend Advantage Municipal Fund, Nuveen Virginia
Dividend Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2,
Nuveen California Dividend Advantage Municipal Fund 2, Nuveen New York Dividend
Advantage Municipal Fund 2, Nuveen New Jersey Dividend Advantage Municipal Fund,
Nuveen Ohio Dividend Advantage Municipal Fund, Nuveen Pennsylvania Dividend
Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 3, Nuveen
California Dividend Advantage Muncipal Fund 3, Nuveen Georgia Dividend Advantage
Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen
Michigan Dividend Advantage Municipal Fund, Nuveen Ohio Dividend Advantage
Municipal Fund 2, Nuveen North Carolina Dividend Advantage Municipal Fund 2,
Nuveen Virginia Dividend Advantage Municipal Fund 2, Nuveen Insured Dividend
Advantage Municipal Fund, Nuveen Insured California Dividend Advantage Municipal
Fund, Nuveen Insured New York Dividend Advantage Municipal Fund, Nuveen Arizona
Dividend Advantage Municipal Fund 2, Nuveen Connecticut Dividend Advantage
Municipal Fund 2, Nuveen New Jersey Dividend Advantage Municipal Fund 2, Nuveen
Pennsylvania Dividend Advantage Municipal Fund 2 and Nuveen Ohio Dividend
Advantage Municipal Fund 3.

     Nuveen Advisory Corp. has no other clients or business at the present time.
For a description of other business, profession, vocation or employment of a
substantial nature in which any director or officer of the investment adviser
has engaged during the last two years for his account or in the capacity of
director, officer, employee, partner or trustee, see the descriptions under
"Management of the Fund" in Part A of this Registration Statement. Such
information for the remaining senior officers of Nuveen Advisory Corp. appears
below:


<TABLE>
<CAPTION>
                                                  Other Business Profession, Vocation or
Name and Position with NAC                           Employment During Past Two Years
- --------------------------                        --------------------------------------
<S>                                             <C>
John P. Amboian, President....................  President, formerly Executive Vice President
                                                of The John Nuveen Company, Nuveen Investments,
                                                Nuveen Institutional Advisory Corp., Nuveen Asset
                                                Management, Inc. and Nuveen Senior Loan Asset
                                                Management, Inc. and Executive Vice President
                                                and Director of Rittenhouse Financial Services, Inc.

Alan G. Berkshire, Senior Vice President,
Secretary and General Counsel.................  Senior Vice President and General Counsel (since
                                                1997) and Secretary (since 1998) of The John Nuveen
                                                Company, Nuveen Investments, and Nuveen Institutional
                                                Advisory Corp. Senior Vice President and Secretary
                                                (since 1999) of Nuveen Senior Loan Asset Management
                                                Inc., prior  thereto, Partner in the law firm of
                                                Kirkland & Ellis.

Margaret E. Wilson, Senior Vice President,
Finance.......................................  Senior Vice President, Finance, of the John Nuveen
                                                Company, Nuveen Investments and Nuveen Institutional
                                                Advisory Corp. and Senior Vice President and Controller
                                                of Nuveen Senior Loan Asset Management, Inc.;
                                                formerly CFO of Sara Lee Corp., Bakery Division.
</TABLE>


Item 31: Location of Accounts and Records

     Nuveen Advisory Corp., 333 West Wacker Drive, Chicago, Illinois 60606,
maintains the Declaration of Trust, By-Laws, minutes of trustees and
shareholders meetings and contracts of the Registrant and all advisory material
of the investment adviser.

     State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, maintains all general and subsidiary ledgers, journals,
trial balances, records of all portfolio purchases and sales, and all other
required records not maintained by Nuveen Advisory Corp.

Item 32: Management Services

         Not applicable.

                                      C-6

<PAGE>

Item 33: Undertakings

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

     2.   Not applicable.

     3.   Not applicable.

     4.   Not applicable.

     5.   The Registrant undertakes that:

          a.  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 under Rule 497(h) under the
     Securities Act of 1933 shall be deemed to be part of the Registration
     Statement as of the time it was declared effective.

          b.  For the 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 the securities at that
     time shall be deemed to be the initial bona fide offering thereof.

     6.   The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of a written or oral request, any Statement of Additional Information.

                                      C-7

<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 this City of Chicago, and State of Illinois, on the 4th day of
October, 2002.



                                    NUVEEN INSURED TAX-FREE
                                    ADVANTAGE MUNICIPAL FUND

                                    /s/ Gifford R. Zimmerman

                                    ________________________________________
                                    Gifford R. Zimmerman, 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 the date indicated.


<TABLE>
<CAPTION>

        Signature                     Title                               Date
        ---------                     -----                               ----
<S>                         <C>                               <C>
/s/ Stephen D. Foy          Vice President and Controller           October 4, 2002
- --------------------        (Principal Financial and
    Stephen D. Foy          Accounting Officer)

                            Chairman of the Board and
Timothy R. Schwertfeger*    Trustee (Principal Executive      By: /s/ Gifford R. Zimmerman
                            Officer)                              --------------------------
                                                                      Gifford R. Zimmerman
                                                                      Attorney-In-Fact
                                                                      October 4, 2002

</TABLE>


    *Original power of attorney authorizing Jessica R. Droeger and Gifford R.
Zimmerman, among others, to execute this Registration Statement, and Amendments
thereto, for the sole trustee of Registrant on whose behalf this
Registration Statement is filed, has been executed and filed as an exhibit.

<PAGE>


                               INDEX TO EXHIBITS

a.   Declaration of Trust dated July 29, 2002.
b.   By-Laws of Registrant.
c.   None.
d.   Form of Share Certificate.*
e.   Terms and Conditions of the Dividend Reinvestment Plan.*
f.   None.
g.   Investment Management Agreement between Registrant and Nuveen
     Advisory Corp. dated ______, 2002.*
h.1  Form of Underwriting Agreement.*
h.2  Form of Master Selected Dealer Agreement.*
h.3  Form of Nuveen Master Selected Dealer Agreement.*
h.4  Form of __ Master Agreement Among Underwriters.*
h.5  Form of Dealer Letter Agreement.*
i.   Nuveen Open-End and Closed-End Funds Deferred Compensation Plan for
     Independent Directors and Trustees.*
j.   Master Custodian Agreement between Registrant and State Street
     Bank and Trust Company dated ________, 2002.*
k.1  Transfer Agency and Service Agreement between Registrant and State Street
     Bank and Trust Company dated ________, 2002.*
k.2  Expense Reimbursement Agreement between Registrant and Nuveen
     Advisory Corp. dated ________, 2002.*
l.1  Opinion and consent of Bell, Boyd & Lloyd LLC.*
l.2  Opinion and consent of Bingham McCutchen LLP.*
m.   None.
n.   Consent of Auditors.*
o.   None.
p.   Subscription Agreement of Nuveen Advisory Corp. dated ________, 2002.*
q.   None
r.   Code of Ethics of Nuveen Advisory Corp.*
s.   Power of Attorney.
___________________
  * To be filed by amendment


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A
<SEQUENCE>3
<FILENAME>dex99a.txt
<DESCRIPTION>DECLARATION OF TRUST
<TEXT>
<PAGE>


                              DECLARATION OF TRUST
                                       OF
                             NUVEEN INSURED TAX-FREE
                            ADVANTAGE MUNICIPAL FUND

     DECLARATION OF TRUST made this 29th day of July 2002 by the initial Trustee
hereunder.

     WHEREAS, the Trustee desires to establish a trust fund for the purposes of
carrying on the business of a management investment company; and

     WHEREAS, in furtherance of such purposes, the Trustee and any successor
Trustees elected in accordance with Article V hereof are acquiring and may
hereafter acquire assets and properties which they will hold and manage as
trustees of a Massachusetts business trust with transferable shares in
accordance with the provisions hereinafter set forth;

     NOW, THEREFORE, the Trustees and any successor Trustees elected in
accordance with Article V hereof hereby declare that they will hold all cash,
securities and other assets and properties, which they may from time to time
acquire in any manner as Trustees hereunder, IN TRUST, that they will manage and
dispose of the same upon the following terms and conditions for the pro rata
benefit of the holders from time to time of shares of beneficial interest in
this Trust as hereinafter set forth.

                                    ARTICLE I

                              NAME AND DEFINITIONS

Section 1. Name. This Trust shall be known as the "Nuveen Insured Tax-Free
Advantage Municipal Fund," and the Trustees shall conduct the business of the
Trust under that name or any other name as they may from time to time
determined.

Section 2. Definitions. Whenever used herein, unless otherwise required by the
context or specifically provided:

     (a) The "Trust" refers to the Massachusetts voluntary association
established by this Declaration of Trust, as amended from time to time, pursuant
to Massachusetts General Laws, Chapter 182;

<PAGE>

                                       -2-

     (b) "Trustee" or "Trustees" refers to each signatory to this Declaration of
Trust so long as such signatory shall continue in office in accordance with the
terms hereof, and all other individuals who at the time in question have been
duly elected or appointed and qualified in accordance with Article V hereof and
are then in office;

     (c) "Shares" mean the shares of beneficial interest described in Article IV
hereof and include fractions of Shares as well as whole Shares;

     (d) "Shareholder" means a record owner of Shares;

     (e) The "1940 Act" refers to the Investment Company Act of 1940 (and any
successor statute) and the Rules and Regulations thereunder, all as amended from
time to time;

     (f) The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Principal Underwriter" and "vote of a majority of the outstanding
voting securities" shall have the meanings given them in the 1940 Act;

     (g) "Declaration of Trust" or "Declaration" shall mean this Declaration of
Trust as amended or restated from time to time; and

     (h) "By-Laws" shall mean the By-laws of the Trust as amended from time to
time.

                                   ARTICLE II

                           NATURE AND PURPOSE OF TRUST

     The Trust is a voluntary association (commonly known as a business trust)
of the type referred to in Chapter 182 of the General Laws of the Commonwealth
of Massachusetts. The Trust is not intended to be, shall not be deemed to be,
and shall not be treated as, a general or a limited partnership, joint venture,
corporation or joint stock company, nor shall the Trustees or Shareholders or
any of them for any purpose be deemed to be, or be treated in any way whatsoever
as though they were, liable or responsible hereunder as partners or joint
venturers. The purpose of the Trust is to engage in, operate and carry on the
business of a closed-end management investment company and to do any and all
acts or things as are necessary, convenient, appropriate incidental or customary
in connection therewith, including, without limitation, the following:

          to hold, invest, and reinvest its funds, and in connection therewith
     to hold part of all of its funds in cash, and to purchase or

<PAGE>

                                      -3-

     otherwise sell, assign, negotiate, transfer, exchange or otherwise dispose
     of or turn to account or realize upon securities and other negotiable or
     non-negotiable instruments, obligations and evidences of indebtedness
     created or issued by any person, firms, associations, corporations,
     syndicates, combinations, and other negotiable or non-negotiable
     instruments, obligation and evidences of indebtedness; and to exercise, as
     owner or holder of any securities or other instruments, all rights, powers,
     and privileges in respect thereof; and to do any and all acts and things
     for the preservation, protection and improvement of any and all such
     securities or other instruments, and, in general, to conduct the business
     of a closed-end investment company as that term is defined in the 1940 Act;
     and

          To engage in any lawful act or activity for which business trusts may
     be organized under Massachusetts law.

          The Trust set forth in this instrument shall be deemed made in the
     Commonwealth of Massachusetts, and it is created under and is to be
     governed by and construed and administered according to the laws of said
     Commonwealth. The Trust shall be of the type commonly called a business
     trust, and without limiting the provisions hereof, the Trust may exercise
     all powers which are ordinarily exercised by such a trust. No provision of
     this Declaration shall be effective to require a waiver of compliance with
     any provision of the Securities Act of 1933, as amended, or the 1940 Act,
     or of any valid rule, regulation or order of the Commission thereunder.

          The enumeration herewith of the objects and purposes of the Trust
     shall be construed as powers as well as objects and purposes and shall not
     be deemed to exclude by inference any powers, objects or purposes which the
     Trust may lawfully pursue or exercise.

                                   ARTICLE III

                  REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS

     The name of the registered agent of the Trust is CT Corporation System at
101 Federal Street, Boston, Massachusetts. The principal place of business of
the Trust is 333 West Wacker Drive, Chicago, Illinois 60606. The Trustees may,
without the approval of Shareholders, change the registered agent of the Trust
and the principal place of business of the Trust.

<PAGE>

                                      -4-

                                   ARTICLE IV

                               BENEFICIAL INTEREST

Section 1. Shares of Beneficial Interest. The beneficial interest in the Trust
shall be divided into such transferable Shares of beneficial interest, of such
classes or series, and of such designations and par values (if any), and with
such rights, preferences, privileges and restrictions as shall be determined by
the Trustees in their sole discretion, without Shareholder approval, from time
to time. The number of Shares is unlimited and each Share shall be fully paid
and nonassessable. There shall be no cumulative voting. Subject to any provision
in a Statement (as defined in Section 2 below) to the contrary, the Trustees
shall have full power and authority, in their sole discretion and without
obtaining any prior authorization or vote of the Shareholders of the Trust or of
the Shareholders of any series or class of Shares, to create and establish (and
to change in any manner) Shares or any series or classes thereof with such
preferences, voting powers, rights and privileges as the Trustees may from time
to time determine; to divide or combine the Shares or the Shares of any series
or classes thereof into a greater or lesser number including, without
limitation, such a division or combination accomplished by means of a stock
split or a reverse stock split, without thereby changing their proportionate
beneficial interest in the Trust; to classify or reclassify any issued Shares
into one or more series or classes of Shares; to abolish any one or more series
or classes of Shares; and to take such other action with respect to the Shares
as the Trustees may deem desirable. The Shares shall initially be divided into
two classes, a class of an unlimited number of common Shares, $0.01 par value
(the "Common Shares"), and a class of an unlimited number of preferred Shares,
$0.01 par value (the "Preferred Shares"), each having the powers, preferences,
rights, qualifications, limitations and restrictions described below:

     (a) Preferred Shares. The Preferred Shares shall be issued from time to
time in one or more classes or series with such distinctive serial designations
and (i) may have such voting powers, full or limited; (ii) may be subject to
redemption at such time or times and at such price or prices; (iii) may be
entitled to receive dividends (which may be cumulative or noncumulative) at such
rate or rates, on such conditions, and at such times, and payable in preference
to, or in such relation to, the dividends payable on any other class or classes
of Shares; (iv) may have such rights upon the termination of, or upon any
distribution of the assets of, the Trust; (v) may be made convertible into, or
exchangeable for, Shares of any other class or classes or of any other series of
the same or any other class or classes of Shares of the Trust, at such price or
prices or at such rates of exchange and

<PAGE>

                                       -5-

with such adjustments; and (vi) shall have such other relative, participating,
optional or other special rights, qualifications, limitations or restrictions
thereof, all as shall hereafter be stated and expressed in the resolution or
resolutions providing for the issue of such Preferred Shares from time to time
adopted by the Trustees (or a Committee thereof) in accordance with Section 2 of
this Article IV. Any of such matters may be made dependent upon facts
ascertainable outside this Declaration of Trust, or outside the resolution or
resolutions providing for the issue of such Preferred Shares.

     (b) Common Shares.

          (i) Subject to the rights of the holders of the Preferred Shares, in
     the event of the termination of the Trust the holders of the Common Shares
     shall be entitled to receive pro rata the net distributable assets of the
     Trust.

          (ii) The holders of the Common Shares shall not, as such holders, have
     any right to acquire, purchase or subscribe for any Common Shares or
     securities of the Trust which it may hereafter issue or sell, other than
     such right, if any, as the Trustees in their discretion may determine.

          (iii) Subject to the rights of the holders of the Preferred Shares,
     dividends or other distributions, when, as and if declared by the Trustees,
     shall be shared equally by the holders of Common Shares on a share for
     share basis. The Trustees may direct that any dividends or other
     distributions or any portion thereof as declared and distributed shall be
     paid in cash to the holder, or, alternatively, may direct that any such
     dividends be reinvested in full and fractional Shares of the Trust [if such
     holder elects to have them reinvested.]

          (iv) The Trustees may hold as treasury shares (of the same or some
     other series), reissue for such consideration and on such terms as they may
     determine, or cancel any Common Shares of any series reacquired by the
     Trust at their discretion from time to time. Shares shall not entitle the
     Shareholder to any title in or to the whole or any part of the Trust.

          (v) Common Shares may be issued from time to time, without the vote of
     the Shareholders (or, if the Trustees in their sole discretion deem
     advisable, with a vote of Shareholders), either for cash or for such other
     consideration (which may be in any one or more instances a certain
     specified consideration or certain specified considerations) and on such
     terms as the Trustees, from time to time, may deem advisable, and the Trust
     may in such manner acquire other assets (including the

<PAGE>
                                       -6-

     acquisition of assets subject to, and in connection with the assumption of
     liabilities).

          (vi) The Trust may issue Common Shares in fractional denominations to
     the same extent as its whole Shares, and Shares in fractional denominations
     shall be Common Shares having proportionately to the respective fractions
     represented thereby all the rights of whole Shares, including, without
     limitation, the right to vote, the right to receive dividends and
     distributions and the right to participate upon termination of the Trust,
     but excluding the right to receive a certificate representing fractional
     Shares.

Section 2. Establishment of Class or Series of Shares. The establishment and
designation of any class or series of Shares, including any Preferred Shares
issued hereunder, shall be effective upon the adoption of a resolution by the
initial Trustee, or by a majority of the Trustees then in office (or a Committee
thereof) setting forth such establishment and designation and the relative
rights and preferences of the Shares of such class or series as set forth in a
written statement either executed by the President or a Vice President of the
Trust, or executed by a majority of the Trustees then in office (the
"Statement"). At any time that there are no Shares outstanding of any particular
class or series previously established and designated, the Trustees (or a
Committee thereof) may by a majority vote abolish that class or series and the
establishment and designation thereof. Notwithstanding any provision of this
Declaration of Trust to the contrary, no such Statement establishing and
designating any class or series of Shares shall constitute an amendment to or a
part of this Declaration of Trust.

Section 3. Ownership Of Shares. The ownership and transfer of Shares shall be
recorded on the books of the Trust or its transfer or similar agent. No
certificates certifying the ownership of Preferred Shares shall be issued except
as the Trustees may otherwise determine from time to time. The Trustees may make
such rules as they consider appropriate for the issuance of Share certificates,
transfer of Shares and similar matters. The record books of the Trust, as kept
by the Trust or any transfer or similar agent of the Trust, shall be conclusive
as to who are the holders of the Shares and as to the number of Shares held from
time to time by each Shareholder.

Section 4. No Preemptive Rights, Etc. The holders of Shares of any class or
series shall not, as such holders, have any right to acquire, purchase or
subscribe for any Shares or securities of the Trust which it may hereafter issue
or sell, other than such right, if any, as the Trustees in their discretion may
determine. The holders of Shares of any class or series shall have no appraisal
rights with respect to their Shares and, except as otherwise

<PAGE>

                                       -7-

determined by resolution of the Trustees in their sole discretion, shall have no
exchange or conversion rights with respect to their Shares.

Section 5. Status of Shares and Limitation of Personal Liability. Shares shall
be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms of this Declaration of
Trust and to have become a party thereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of property shall not
entitle the Shareholder to any title in or to the whole or any part of the Trust
Property or right to call for a partition or division of the same or for an
accounting. Neither the Trustees, nor any officer, employee or agent of the
Trust shall have any power to bind any Shareholder personally or to call upon
any Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally agree to pay by
way of subscription for any Shares or otherwise.

                                    ARTICLE V

                                  THE TRUSTEES

Section 1. Management of the Trust. The business and affairs of the Trust shall
be managed by the Trustees, and they shall have all powers necessary and
desirable to carry out that responsibility.

Section 2. Qualification and Number. Each Trustee shall be a natural person. A
Trustee need not be a shareholder, a citizen of the United States, or a resident
of the Commonwealth of Massachusetts. By the vote or consent of the initial
Trustee, or by a majority of Trustees as may subsequently then be in office, the
initial Trustee or any subsequent Trustees may fix the number of Trustees at a
number not less than two (2) nor more than twelve (12) and may fill the
vacancies created by any such increase in the number of Trustees. Except as
determined from time to time by resolution of the Trustees, no decrease in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term, but the number of Trustees may be decreased
in conjunction with the removal of a Trustee pursuant to Section 4 of Article V.

Section 3. Term and Election. Each Trustee shall hold office until the next
meeting of Shareholders called for the purpose of considering the election or
re-election of such Trustee or of a successor to such Trustee, and

<PAGE>

                                       -8-

until his successor is elected and qualified, and any Trustee who is appointed
by the Trustees in the interim to fill a vacancy as provided hereunder shall
have the same remaining term as that of his predecessor, if any, or such term as
the Trustees may determine. Any vacancy resulting from a newly created
Trusteeship or the death, resignation, retirement, removal, or incapacity of a
Trustee may be filled by the affirmative vote or consent of a majority of the
Trustees then in office.

Section 4. Resignation and Removal. Any Trustee may resign his trust or retire
as a Trustee (without need for prior or subsequent accounting except in the
event of removal) by an instrument in writing signed by him and delivered or
mailed to the Chairman, if any, the President or the Secretary and such
resignation or retirement shall be effective upon such delivery, or at a later
date according to the terms of the instrument. Any Trustee may be removed from
office only for "Cause" (as hereinafter defined) and only (i) by action of at
least sixty-six and two-thirds percent (66 2/3%) of the outstanding Shares of
the class or classes of Shares that elected such Trustee, or (ii) by written
instrument, signed by at least sixty-six and two-thirds percent (66 2/3%) of the
remaining Trustees, specifying the date when such removal shall become
effective. "Cause" shall require willful misconduct, dishonesty, fraud or a
felony conviction.

Section 5. 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 of Trust. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided herein, or the number of Trustees as
fixed is reduced, the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees, and during the period during which any
such vacancy shall occur, only the Trustees then in office shall be counted for
the purposes of the existence of a quorum or any action to be taken by such
Trustees.

Section 6. Ownership of Assets of the Trust. The assets of the Trust shall be
held separate and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor Trustees. All
of the assets of the Trust shall at all times be considered as automatically
vested in the Trustees as shall be from time to time in office. Upon the
resignation, retirement, removal, incapacity or death of a Trustee, such Trustee
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 without the execution or delivery of any
conveyancing or other instruments. No Shareholder shall be

<PAGE>

                                      -9-

deemed to have a severable ownership in any individual asset of the Trust or any
right of partition or possession thereof.

Section 7. Voting Requirements. In addition to the voting requirements imposed
by law or by any other provision of this Declaration of Trust, the provisions
set forth in this Article V may not be amended, altered or repealed in any
respect, nor may any provision inconsistent with this Article V be adopted,
unless such action is approved by the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the outstanding Common
Shares and outstanding Preferred Shares, voting together as a single class. In
the event the holders of Common Shares or the holders of Preferred Shares, as
the case may be, are required by law or by any other provision of this
Declaration of Trust to approve such an action by a class vote of such holders,
such action must be approved by the holders of at least sixty-six and two-thirds
percent (66 2/3%) of such holders or such lower percentage as may be required by
law or by any other provision of this Declaration of Trust.


                                   ARTICLE VI

                               POWERS OF TRUSTEES

Section 1. Powers. The Trustees in all instances shall have full, absolute and
exclusive power, control and authority over the Trust assets and the business
and affairs of the Trust to the same extent as if the Trustees were the sole and
absolute owners thereof in their own right. The Trustees shall have full power
and authority to do any and all acts and to make and execute any and all
contracts and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid powers. In
construing the provisions of this Declaration of Trust, there shall be a
presumption in favor of the grant of power and authority to the Trustees.
Subject to any applicable limitation in this Declaration or any Statement
relating to the issuance of Preferred Shares, the Trustees shall have power and
authority:

         (a) To invest and reinvest in, to buy or otherwise acquire, to hold,
for investment or otherwise, to sell or otherwise dispose of, to lend or to
pledge, to trade in or deal in securities or interests of all kinds, however
evidenced, or obligations of all kinds, however evidenced, or rights, warrants,
or contracts to acquire such securities, interests, or obligations, of any
private or public company, corporation, association, general or limited
partnership, trust or other enterprise or organization, foreign or domestic, or
issued or guaranteed by any national or state government, foreign or domestic,
or their

<PAGE>

                                      -10-

agencies, instrumentalities or subdivisions (including but not limited to,
bonds, debentures, bills, time notes and all other evidences of indebtedness);
negotiable or non-negotiable instruments; any and all options and futures
contracts; derivatives or structured securities; government securities and money
market instruments (including but not limited to, bank certificates of deposit,
finance paper, commercial paper, bankers acceptances, and all kinds of
repurchase agreements) and, without limitation, all kinds and types of financial
instruments;

     (b) To adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders;

     (c) To elect and remove such officers and appoint and terminate such agents
as they consider appropriate;

     (d) To employ one or more banks or trust companies as custodian of any
assets of the Trust subject to any conditions set forth in this Declaration of
Trust or in the By-Laws;

     (e) To retain one or more transfer agents and shareholder servicing agents;

     (f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or by the
Trust itself or both;

     (g) To set record dates for any purposes;

     (h) To delegate such authority as they consider desirable to any officers
of the Trust and to any investment adviser, investment subadviser, transfer
agent, custodian or underwriter or other independent contractor of agent;

     (i) Subject to Article IX, Section 1 hereof, to merge, or consolidate the
Trust with any other corporation, association, trust or other organization; or
to sell, convey, transfer, or lease all or substantially all of the assets of
the Trust;

     (j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;

<PAGE>

                                      -11-

     (k) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;

     (l) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form; or either in their or
the Trust's name or in the name of a custodian or a nominee or nominees;

     (m) To authorize the issuance from time to time of one or more classes or
series of Shares, and to issue, sell, repurchase, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer and otherwise deal in Shares and in any
options, warrants or other rights to purchase Shares or any other interests in
the Trust other than Shares;

     (n) To set apart, from time to time, out of any funds of the Trust a
reserve or reserves for any proper purpose, and to abolish any such reserve;

     (o) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or property
of which is held in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security held in the Trust;

     (p) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes;

     (q) To make distributions of income and of capital gains to shareholders;

     (r) To borrow money and to pledge, mortgage, or hypothecate the assets of
the Trust;

     (s) To establish, from time to time, a minimum total investment for
shareholders, and to require the redemption of the Shares of any shareholders
whose investment is less than such minimum upon such terms as shall be
established by the Trustees;

     (t) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of

<PAGE>

                                      -12-

the expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;

     (u) To purchase and pay for out of Trust property such insurance as they
may deem necessary or appropriate for the conduct of the business of the Trust,
including, without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio investments,
and insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers or managers, principal underwriters, or independent
contractors of the Trust individually against all claims and liabilities of
every nature arising by reason of holding, being or having held any such office
or position, or by reason of any action alleged to have been taken or omitted by
any such person as Shareholder, Trustee, officer, employee, agent, investment
adviser or manager, principal underwriter, or independent contractor, whether or
not any such action may be determined to constitute negligence, and whether or
not the Trust would have the power to indemnify such person against such
liability; and

     (v) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust.

     Any determination made by or pursuant to the direction of the Trustees in
good faith and consistent with the provisions of this Declaration of Trust shall
be final and conclusive and shall be binding upon the Trust and every holder at
any time of Shares, including, but not limited to the following matters: the
amount of the assets, obligations, liabilities and expenses of the Trust; the
amount of the net income of the Trust from dividends, capital gains, interest or
other sources for any period and the amount of assets at any time legally
available for the payment of dividends or distributions; the amount, purpose,
time of creation, increase or decrease, alteration or cancellation of any
reserves or charges and the propriety thereof (whether or not any obligation or
liability for which such reserves or charges were created shall have been paid
or discharged); the market value, or any quoted price to be applied in
determining the market value, of any security or any other asset owned or held
by the Trust; the fair value of any security for which quoted prices are not
readily available, or of any other asset owned or held by the Trust; the number
of Shares of the Trust issued or issuable; the net asset value per Share; any
matter relating to the acquisition, holding and depositing of securities and
other assets by the Trust; any question as to

<PAGE>

                                      -13-

whether any transaction constitutes a purchase of securities on margin, a short
sale of securities, a borrowing, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with the public
distribution of, any securities, and any matter relating to the issue, sale,
redemption, repurchase, and/or other acquisition or disposition of Shares of the
Trust. No provision of this Declaration of Trust shall be effective to protect
or purport 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.

Section 2. Manner of Acting, By-Laws. The By-Laws shall make provision from time
to time for the manner in which the Trustees may take action, including, without
limitation, at meetings within or without Massachusetts, including meetings held
by means of a conference telephone or other communications equipment, or by
written consents, the quorum and notice, if any, that shall be required for any
meeting or other action, and the delegation of some or all of the power and
authority of the Trustees to any one or more committees which they may appoint
from their own number, and terminate, from time to time.

                                   ARTICLE VII

                              EXPENSES OF THE TRUST

The Trustees shall have the power to reimburse themselves from the Trust
property for their expenses and disbursements, to pay reasonable compensation to
themselves from the Trust property, and to incur and pay out of the Trust
property any other expenses which in the opinion of the Trustees are necessary
or incidental to carry out any of the purposes of this Declaration of Trust, or
to exercise any of the powers of the Trustees hereunder.

                                  ARTICLE VIII

                 INVESTMENT ADVISER, PRINCIPAL UNDERWRITERS AND
                                  TRANSFER AGE

Section 1. Investment Adviser. The Trust may enter into a written contract with
one or more persons (which term shall include any firm corporation, trust or
association), hereinafter referred to as the "Investment Adviser", to act as
investment adviser to the Trust and as such to perform

<PAGE>

                                      -14-

such functions as the Trustees may deem reasonable and proper, including,
without limitation, investment advisory, management, research, valuation of
assets, clerical and administrative functions. Any such contract shall be
subject to the approval of those persons required by the 1940 Act to approve
such contract, and shall be terminable at any time upon not more than 60 days'
notice by resolution of the Trustees or by vote of a majority of the outstanding
voting shares.

         Subject to the provisions of Section 4 of this Article VIII, any such
contract may be made with any firm or corporation in which any Trustee of the
Trust may be interested. The compensation of the Investment Adviser may be based
upon a percentage of the net proceeds of the initial public offering of the
Shares after payment of underwriting discounts and organization and offering
costs, a percentage of the income or gross realized or unrealized gain of the
Trust, or a combination thereof, or otherwise, as may be provided in such
contract.

         Upon the termination of any contract with Nuveen Advisory Corp., or any
corporation affiliated with Nuveen Investments, acting as investment adviser or
manager, the Trustees are hereby authorized to promptly change the name of the
Trust to a name which does not include "Nuveen" or any approximation or
abbreviation thereof.

         The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to shareholder approval, authorize the investment
adviser to employ one or more subadvisers from time to time to perform such of
the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and subadviser.

Section 2. Principal Underwriter. The Trust may enter into a written contract or
contracts with an underwriter or underwriters or distributor or distributors
whereby the Trust may either agree to sell Shares to the other party or parties
to the contract or appoint such other party or parties its sales agent or agents
for such Shares. Any such contract may provide that the Trust shall pay such
other party or parties such amounts as the Trustees may in their discretion deem
reasonable and proper, and may also provide that such other party or parties may
enter into selected dealer agreements with registered securities dealers to
further the purpose of the distribution of the Shares. Subject to the provisions
of Section 4 of this Article VIII, any such contract may be made with any firm
or corporation, including, without limitation, the Investment Adviser or an
affiliate of the Investment Advisor, or any firm or corporation in which any
Trustee of the Trust or the Investment Adviser may be interested.

<PAGE>

                                      -15-

Section 3. Transfer Agent. The Trustees may in their discretion from time to
time enter into one or more transfer agency and shareholder service contract(s,)
whereby the other party shall undertake, to furnish the Trustees with transfer
agency and shareholder services. The contract shall be on such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the provisions of this Declaration or Trust or of the By-Laws. Such
services may be provided by one or more entities.

Section 4. Parties To Contract. Any contract of the character described in
Sections 1 and 2 of this Article VIII or in Article X hereof may be entered into
with any corporation, firm, partnership, trust or association, including,
without limitation, the investment adviser, any investment subadviser or an
affiliate of the investment adviser or investment subadviser, 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, or
otherwise interested in such 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 VIII, Article X, or the By-Laws. The same
person (including a firm, corporation, partnership, trust or association) may be
the other party to contracts entered into pursuant to Sections 1, 2 and 3 above
or Article X, 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.

                                   ARTICLE IX

                    SHAREHOLDERS' VOTING POWERS AND MEETINGS

Section 1. Voting Powers. The Shareholders shall have power to vote only: (a)
for the election or removal of Trustees as provided in Article V, (b) with
respect to any investment advisory or management contract as provided in Article
VIII, Sections 1 and 5, (c) with respect to any termination of the Trust or any
series or class thereof to the extent and as provided in Article XIII, Section
1, (d) with respect to any amendment of this Declaration of Trust to the extent
and as provided in Article XIII, Section 4, (e) with respect to a merger or
consolidation of the Trust or any series or class thereof with any corporation,
association, trust or other organization or a reorganization or recapitalization
of the Trust or class or series thereof, or a sale, lease or transfer of all or
substantially all of the assets of the Trust or any series thereof (other than
in the regular course of the Trust's investment activities)

<PAGE>

                                      -16-

to the extent and as provided in this Article IX, Section 1, (f) to the same
extent as the shareholders of a Massachusetts business corporation as to whether
or not a court action, proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the shareholders,
provided, however that a shareholder of a particular class or series shall not
be entitled to bring any derivative or class action on behalf of any other class
or series of the Trust, and (g) with respect to such additional matters relating
to the Trust as may be required by law, the 1940 Act, this Declaration of Trust,
the By-Laws of the Trust, any Statement relating to the issuance of classes or
series of shares, or any registration of the Trust with the Commission or any
State, or otherwise as the Trustees may consider necessary or desirable.

         The affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the outstanding Common Shares and outstanding
Preferred Shares, voting as a single class, shall be required to approve, adopt
or authorize (i) a conversion of the Trust from a closed-end investment company
to an open-end investment company, (ii) a merger or consolidation of the Trust
or a series or class of the Trust with any corporation, association, Trust or
other organization or a reorganization or recapitalization of the Trust or a
series of class of the Trust, (iii) a sale, lease or transfer of all or
substantially all of the assets of the Trust (other than in the regular course
of the Trust's investment activities), or (iv) a termination of the Trust or a
class or a series of the Trust (other than a termination by the Trustees as
provided for in Section 1 of Article XIII hereof), unless in each and every case
such action has previously been approved, adopted or authorized by the
affirmative vote of two-thirds of the total number of Trustees fixed in
accordance with this Declaration of Trust or the By-Laws, in which case the
affirmative vote of the holders of at least a majority of the outstanding Common
Shares and outstanding Preferred Shares, voting as a single class, shall be
required, provided however, that where only a particular class or series is
effected, only the required vote by the applicable class or series shall be
required, and provided further that except as may otherwise be required by law,
in the case of the conversion of the Trust from a closed-end investment company
to an open-end investment company, or in the case of any of the foregoing
transactions constituting a plan or reorganization (as such term is used in the
1940 Act) which adversely affects the Preferred Shares within the meaning of
Section 18(a)(2)(D) of the 1940 Act, approval, adoption or authorization of the
action in question will also require the affirmative vote of the holders of
sixty-six and two-thirds percent (66-2/3%) of the Preferred Shares voting as a
separate class; provided, however, that such separate class vote shall be a
majority vote if the action in question has previously been approved, adopted or
authorized by the affirmative vote of two-thirds of the total number of Trustees
fixed in accordance with this

<PAGE>

                                      -17-

Declaration of Trust or the By-Laws. Nothing contained herein shall be construed
as requiring approval of Shareholders for any transaction, whether deemed a
merger, consolidation, reorganization or otherwise whereby the Trust issues
Shares in connection with the acquisition of assets (including those subject to
liabilities) from any other investment company or similar entity).

         In addition to the voting requirements imposed by law or by any other
provision of this Declaration of Trust, the provisions set forth in this Article
IX may not be amended, altered or repealed in any respect, nor may any provision
inconsistent with this Article IX be adopted, unless such action is approved by
the affirmative vote of the holders or at least sixty-six and two-thirds percent
(66-2/3%) of the outstanding Common Shares and outstanding Preferred Shares,
voting as a single class. In the event the holders of Common Shares or the
holders of Shares of Preferred Shares, as the case may be, are required by law
to approve such an action by a class vote of such holders, such action must be
approved by the, holders of at least sixty-six and two-thirds percent (66 2/3%)
of (such holders or such lower percentage as may be required by law. Any series
of a class which is adversely affected in a manner different from other series
of the same class shall together with any other series of the same class
adversely affected in the same manner, be treated as a separate class under this
Section 1.

Section 2. Meetings. Meetings of the Shareholders may be called and held from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Meetings of the
Shareholders shall be held at such place within the United States as shall be
fixed by the Trustees, and stated in the notice of the meeting. Meetings of the
Shareholders may be called by the Trustees and shall be called by the Trustees
upon the written request of Shareholders owning at least one-tenth of the
outstanding Shares entitled to vote. Shareholders shall be entitled to at least
ten days' written notice of any meeting, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of the adjournment.

Section 3. Quorum and Action. (a) The Trustees shall set in the By-Laws the
quorum required for the transaction of business by the Shareholders at a
meeting, which quorum shall in no event be less than thirty percent (30%) of the
Shares entitled to vote at such meeting. If a quorum is present when a duly
called or held meeting is convened, the Shareholders present may continue to
transact business until adjournment, even though the withdrawal of a number of
Shareholders originally present

<PAGE>

                                      -18-

leaves less than the proportion or number otherwise required for a quorum.
Notwithstanding the foregoing, when holders of Preferred Shares are entitled to
elect any of the Trustees by class vote of such holders, the holders of 33 1/3%
of such Shares entitled to vote at a meeting shall constitute a quorum for the
purpose of such an election.

         (b) The Shareholders shall take action by the affirmative vote of the
holders of a majority, except in the case of the election of Trustees which
shall only require a plurality, of the Shares present in person or by proxy and
entitled to vote at a meeting of Shareholders at which a quorum is present,
except as may be otherwise required by, any provision of this Declaration of
Trust, any resolution of the Trustees which authorizes the issuance of Preferred
Shares, or the By-Laws.

Section 4. Voting. 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 shall not be voted. There shall be no cumulative voting in
the election of Trustees or on any other matter submitted to a vote of the
Shareholders. Shares may be voted in person or by proxy. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required or permitted by law, this Declaration of Trust or the By-Laws of
the Trust to be taken by Shareholders.

Section 5. Action by Written Consent in Lieu of Meeting of Shareholders. Any
action required or permitted to be taken at a meeting of the Shareholders may be
taken without a meeting by written action signed by all of the Shareholders
entitled to vote on that action. The written action is effective when it has
been signed by all of those Shareholders, unless a different effective time is
provided in the written action.

                                    ARTICLE X

                                    CUSTODIAN

         All securities and cash of the Trust shall be held by one or more
custodians and subcustodians, each meeting the requirements for a custodian
contained in the 1940 Act, or shall otherwise be held in accordance with the
1940 Act. 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-custodians, and approved by the Trustees, provided that
in every case such sub-custodian shall meet the requirements for a custodian
contained in the 1940 Act and the rules and

<PAGE>

                                      -19-

regulations thereunder and in any applicable state Securities or blue sky laws.

                                   ARTICLE XI

                                  DISTRIBUTIONS

         The Trustees may in their sole discretion from time to time declare and
pay such dividends and distributions to shareholders as they may deem necessary
or desirable, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in accordance
with this Declaration of Trust and good accounting practices.

                                   ARTICLE XII

                   LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 1. Limitation of Liability. No personal liability for any debt or
obligation of the Trust shall attach to any Trustee of the Trust. Without
limiting the foregoing, a Trustee shall not be responsible for or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, investment
adviser, subadviser, principal underwriter or custodian of the Trust, nor shall
any Trustee be responsible or liable for the act or omission of any other
Trustee. Nothing contained herein shall protect any Trustee against any
liability to which such Trustee 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.

         Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his capacity as Trustees or Trustee and neither such
Trustees or Trustee nor the Shareholders shall be personally liable thereon.

         Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of State of the
Commonwealth of Massachusetts, shall recite that the same was executed or made
by or on behalf of the Trust by them as Trustees or Trustee or as officers or
officer and not individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but are binding only
upon the assets and property of the Trust, and may contain such further recitals
as they or he may deem appropriate,

<PAGE>

                                      -20-

but the omission thereof shall not operate to bind any Trustees or Trustee or
officers or officer or Shareholders or Shareholder individually.

     All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Trust for payment under
such credit, contract or claim; and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.

Section 2. Trustees' Good Faith Action, Expert Advice, No Bond or Surety. The
exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable only for his own
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee, and for nothing else,
and shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust and their duties as Trustees
hereunder, and shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. In discharging their
duties, the Trustees, when acting in good faith, shall be entitled to rely upon
the books of account of the Trust and upon written reports made to the Trustees
by any officer appointed by them, any independent public accountant and (with
respect to the subject matter of the contract involved) any officer, partner or
responsible employee of any other party to any contract entered into hereunder.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.

Section 3. Liability of Third Persons Dealing with Trustees. No person dealing
with the Trustees shall be bound to make any inquiry concerning the validity of
any transaction made or to be made by the Trustees or to see to the application
of any payments made or property transferred to the Trust or upon its order.

Section 4. Indemnification. Subject to the exceptions and limitations contained
in this Section 4, every person who is, or has been, a Trustee, officer,
employee or agent of the Trust, including persons who serve at the request of
the Trust as directors, trustees, officers, employees or agents of another
organization in which the Trust has an interest as a shareholder, creditor or
otherwise (hereinafter referred to as a "Covered Person"), shall be indemnified
by the Trust to the fullest extent permitted by law against 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 such a

<PAGE>

                                      -21-

Trustee, director, officer, employee or agent and against amounts paid or
incurred by him in settlement thereof.

     No indemnification shall be provided hereunder to a Covered Person:

     (a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the proceeding was
brought that he engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office;

     (b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Trust; or

     (c) in the event of a settlement or other disposition not involving a final
adjudication (as provided in paragraph (a) or (b)) and resulting in a payment by
a Covered Person, unless there has been either a determination that such Covered
Person did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or a
reasonable determination, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that he did not engage in such conduct:

          (i) by a vote of a majority of the Disinterested Trustees acting on
     the matter (provided that a majority of the Disinterested Trustees then in
     office act on the matter); or

          (ii) by written opinion of independent legal counsel.

     The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be such a Covered Person and shall
inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Covered Persons may be entitled by contract or
otherwise under law.

     Expenses of preparation and presentation of a defense to any claim, action,
suit or proceeding subject to a claim for indemnification under this Section 4
shall be advanced by the Trust prior to final disposition thereof upon receipt
of an undertaking by or on behalf of the recipient to repay such

<PAGE>

                                      -22-

amount if it is ultimately determined that he is not entitled to indemnification
under this Section 4, provided that either:

     (a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of any such
advances; or

     (b) a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the matter)
or independent legal counsel in a written opinion shall determine, based upon a
review of the readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will be found
entitled to indemnification.

     As used in this Section 4, a "Disinterested Trustee" is one (x) who is not
an Interested Person of the Trust (including anyone, as such Disinterested
Trustee, who has been exempted from being an Interested Person by any rule,
regulation or order of the Commission), and (y) against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending.

     As used in this Section 4, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits, proceedings (civil,
criminal, administrative or other, including appeals), actual or threatened; and
the words "liability" and "expenses" shall include without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.

Section 5. Shareholders. No personal liability for any debt or obligation of the
Trust shall attach to any Shareholder or former Shareholder of the Trust. In
case any Shareholder or former Shareholder of the Trust shall be held to be
personally liable solely by reason of his being or having been a Shareholder and
not because of his acts or omissions, or for some other reason, the Shareholder
or former Shareholder (or his heirs, executors, administrators or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled out of the assets of the Trust to
be held harmless from and indemnified against all loss and expense arising from
such liability; provided, however, there shall be no liability or obligation of
the Trust arising hereunder to reimburse any Shareholder for taxes paid by
reason of such Shareholder's ownership of any Share or for losses suffered by
reason of any changes in value of any Trust assets. The Trust shall, upon
request by the Shareholder or former Shareholder, assume the defense of any
claim made against the Shareholder for any act or obligation of the Trust and
satisfy any judgment thereon.

<PAGE>

                                      -23-

                                  ARTICLE XIII

                                 MISCELLANEOUS

Section 1. Termination of Trust. (a) Unless terminated as provided herein, the
Trust shall continue, without limitation of time. Except as may be set forth in
any Statement relating to the issuance of Shares, the Trust, or any class or
series thereof may be terminated at any time by the Trustees by written notice
to the Shareholders without a vote of the shareholders of the Trust, or the
class or series as the case may be, or by the affirmative vote of the
shareholders entitled to vote at least sixty-six and two-thirds percent
(66 2/3%) of the outstanding Common Shares and Preferred Shares, voting as a
single class, in the case of the termination of the Trust, or by the effected
class or series as the case may be in the event of the termination of a class or
series, unless such action has previously been approved, adopted or authorized
by the affirmative vote of two-thirds of the total number of Trustees fixed in
accordance with this Declaration of Trust or the By-Laws, in which case the
affirmative vote of the holders of at least a majority of the outstanding Common
Shares and Preferred Shares, voting as a single class or the applicable class or
series as the case may be, shall be required.

     Upon termination of the Trust or any series or class thereof, after paying
or otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets of the Trust or the applicable series or class to
distributable form in cash or other securities, or any combination thereof, and
distribute the proceeds to the holders of Preferred Shares in the manner set
forth by resolution of the Trustees, and to the holders of Common Shares held by
such holders on the date of termination in the event of a termination of the
Trust, or to Shareholders of the applicable series or class, as the case may be.

Section 2. Filing of Copies, References, Headings. The original or a copy of
this instrument, each amendment hereto and any Statement authorized by Article
III, Section 2 hereof shall be kept in the office of the Trust where it may be
inspected by any Shareholder. A copy of this Declaration and of each amendment
and Statement shall be filed by the Trustees with the Secretary of State of the
Commonwealth of Massachusetts, as well as any other governmental office where
such filing may from time to time be required, provided, however, that the
failure to so file will not invalidate this Declaration or an properly
authorized amendment or Statement. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether or not any such
amendments

<PAGE>
                                      -24-

have been made or Statements authorized and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a copy of
this instrument or of any such amendments or Statements. In this instrument or
in any such amendment, references to this instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this instrument
as a whole and as amended or affected by any such amendment. Headings are placed
herein for convenience of reference only, and in case of any conflict, the text
of this instrument, rather than the headings, shall control. This instrument may
be executed in any number of counterparts, each of which shall be deemed an
original.

Section 3. Trustees May Resolve Ambiguities. The Trustees may construe any of
the provisions of this Declaration insofar as the same may appear to be
ambiguous or inconsistent with any other provisions hereof, and any such
construction hereof by the Trustees in good faith shall be conclusive as to the
meaning to be given to such provisions.

Section 4. Amendments. Except as otherwise specifically provided in this
Declaration of Trust, this Declaration of Trust may be amended at any time by
vote of a majority of the then Trustees with the consent of shareholders holding
more than fifty percent (50%) of Shares entitled to vote. In addition,
notwithstanding any other provision to the contrary contained in this
Declaration of Trust, the Trustees may amend this Declaration of Trust without
the vote or consent of shareholders (i) at any time if the Trustees deem it
necessary in order for the Trust or any series or class thereby to meet the
requirements of applicable Federal or State laws or regulations, or the
requirements of the regulated investment company provisions of the Internal
Revenue Code, (ii) change the name of the Trust or to supply any omission, cure
any ambiguity or cure, correct or supplement any defective or inconsistent
provision contained herein, or (iii) for any reason at any time before a
registration statement under the Securities Act of 1933, as amended, covering
the initial public offering of Shares has become effective. A certification in
recordable form signed by a majority of the Trustees or by the Secretary or any
Assistant Secretary of the Trust setting forth such 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, in recordable form, 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.

<PAGE>

                                      -25-

IN WITNESS WHEREOF, the undersigned, being a majority of the Trustees of the
Trust, have executed this instrument as of this 29th day of July 2002.

<PAGE>

                                      -26-

/s/ Timothy R. Schwertfeger                  /s/ Robert P. Bremner
- ---------------------------------           ---------------------------------
Timothy R. Schwertfeger,                    Robert P. Bremner,
 as Trustee                                  as Trustee
333 West Wacker Drive                       333 West Wacker Drive
Chicago, Illinois 60606                     Chicago, Illinois  60606


/s/ Lawrence H. Brown                       /s/ Anne E. Impellizzeri
- ---------------------------------           ---------------------------------
Lawrence H. Brown,                          Anne E. Impellizzeri,
 as Trustee                                  as Trustee
333 West Wacker Drive                       333 West Wacker Drive
Chicago, Illinois 60606                     Chicago, Illinois  60606


/s/ Peter R. Sawers                         /s/ Judith M. Stockdale
- ---------------------------------           ---------------------------------
Peter R. Sawers,                            Judith M. Stockdale,
 as Trustee                                  as Trustee
333 West Wacker Drive                       333 West Wacker Drive
Chicago, Illinois 60606                     Chicago, Illinois  60606


/s/ William J. Schneider
- ---------------------------------
William J. Schneider,
 as Trustee
333 West Wacker Drive
Chicago, Illinois 60606

<PAGE>

                                      -27-

STATE OF ILLINOIS )
                  )SS.
COUNTY OF COOK    )

     Then personally appeared the above-named person(s) who are known to me to
be Trustee(s) of the Trust whose name(s) and signature(s) are affixed to the
foregoing instrument and who acknowledged the same to be his/her free act and
deed, before me this 29th day of July 2002.

"OFFICIAL SEAL"
Virginia L. Corcoran                               /s/Virginia L. Corcoran
Notary Public, State of Illinois                   -----------------------
My Commission Expires:  10/27/05                   Notary Public

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.B
<SEQUENCE>4
<FILENAME>dex99b.txt
<DESCRIPTION>BY-LAWS OF REGISTRANT
<TEXT>
<PAGE>

                                     BY-LAWS
                                       OF
                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

                                    ARTICLE I

                              DECLARATION OF TRUST
                                       AND
                                     OFFICES

         Section 1.1. Declaration of Trust. These By-Laws shall be subject to
the Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of Nuveen Insured Tax-Free Advantage Municipal Fund, the Massachusetts
business trust established by the Declaration of Trust (the "Trust").

         Section 1.2. Registered Agent. The registered agent of the Trust in the
Commonwealth of Massachusetts shall be CT Corporation System, 101 Federal
Street, Boston, Massachusetts, or such other agent as may be fixed by the Board
of Trustees.

         Section 1.3 Other Offices. The Trust may have such other offices and
places of business within or without the Commonwealth of Massachusetts as the
Board of Trustees shall determine.

                                   ARTICLE II

                                  SHAREHOLDERS

         Section 2.1. Place of Meetings. Meetings of the Shareholders may be
held at such place or places within or without the Commonwealth of Massachusetts
as shall be fixed by the Board of Trustees and stated in the notice of the
meeting.

         Section 2.2. Regular Meeting. Regular meetings of the Shareholders for
the election of Trustees and the transaction of such other business as may
properly come before the meeting shall be held on an annual or other less
frequent periodic basis at such date and time as the Board of Trustees by
resolution shall designate, except as otherwise required by applicable law.

         Section 2.3. Special Meeting. Special meetings of the Shareholders for
any purpose or purposes may be called by the Chairman of the Board, the
President or two or more Trustees, and must be called at the written request
stating the purpose or purposes of the meeting, of Shareholders entitled to cast
at least l0 percent of all the votes entitled to be cast at the meeting.

<PAGE>

                                      -2-

         Section 2.4. Notice of Meetings. Notice stating the time and place of
the meeting and in the case of a special meeting the purpose or purposes thereof
and by whom called, shall be delivered to each Shareholder not less than ten nor
more than ninety days prior to the meeting, except where the meeting is an
adjourned meeting and the date, time and place of the meeting were announced at
the time of the adjournment.

         Section 2.5. Quorum and Action. (a) The holders of a majority of the
voting power of the shares of beneficial interest of the Trust (the "Shares")
entitled to vote at a meeting are a quorum for the transaction of business. If a
quorum is present when a duly called or held meeting is convened, the
Shareholders present may continue to transact business until adjournment, even
though the withdrawal of a number of Shareholders originally present leaves less
than the proportion or number otherwise required for a quorum. Notwithstanding
the foregoing, when the holders of Preferred Shares are entitled to elect any of
the Trust's Trustees by class vote of such holders, the holders of 33 1/3% of
the Shares entitled to vote at a meeting shall constitute a quorum for the
purpose of such an election.

         (b) The Shareholders shall take action by the affirmative vote of the
holders of a majority, except in the case of the election of Trustees which
shall only require a plurality, of the voting power of the Shares present and
entitled to vote at a meeting of Shareholders at which a quorum is present,
except as may be otherwise required by the Investment Company Act of 1940, as
amended (the "1940 Act"), the Declaration of Trust or any resolution of the
Trustees which authorizes the issuance of Preferred Shares.

         Section 2.6. Voting. At each meeting of the Shareholders, every, holder
of Shares then entitled to vote may vote in person or by proxy and, except as
otherwise provided by the 1940 Act, the Declaration of Trust or any resolution
of the Trustees which authorizes the issuance of Preferred Shares, shall have
one vote for each Share registered in his name.

         Section 2.7. Proxy Representation. A Shareholder may cast or authorize
the casting of a vote by filing a written appointment of a proxy with an officer
of the Trust at or before the meeting at which the appointment is to be
effective. The placing of a Shareholder's name on a proxy pursuant to telephonic
or electronically transmitted instructions obtained pursuant to procedures which
are reasonably designed to verify that such instructions have been authorized by
such Shareholder, shall constitute execution of such proxy by or on behalf of
such Shareholder. The appointment of a proxy is valid for eleven months, unless
a longer period is expressly provided in the appointment. No appointment is
irrevocable unless the appointment is coupled with an interest in the Shares or
in the Trust. Any copy, facsimile telecommunication or other reliable
reproduction of a proxy may be substituted for or used in lieu of the original
proxy for any and all purposes for which the original proxy could be used,
provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original proxy.

<PAGE>

                                      -3-

         Section 2.8. Adjourned Meetings. Any meeting of Shareholders may, by
announcement thereat, be adjourned to a designated time and place by the vote of
the holders of a majority of the Shares present and entitled to vote thereat
even though less than a quorum is so present. An adjourned meeting may reconvene
as designed, and when a quorum is present any business may be transacted which
might have been transacted at the meeting as originally called.

         Section 2.9. Action by Written Consent in Lieu of Meeting of
Shareholders. See Section 6.3 of these By-Laws.

                                   ARTICLE III

                                    TRUSTEES

         Section 3.1. Qualifications and Number: Vacancies. Each Trustee shall
be a natural person. A Trustee need not be a Shareholder, a citizen of the
United States, or a resident of the Commonwealth of Massachusetts. The number of
Trustees of the Trust, their term and election and the filling of vacancies,
shall be as provided in the Declaration of Trust.

         Section 3.2. Powers. The business and affairs of the Trust shall be
managed under the direction of the Board of Trustees. All powers of the Trust
may be exercised by or under the authority of the Board of Trustees, except
those conferred on or reserved to the Shareholders by statute, the Declaration
of Trust or these By-Laws.

         Section 3.3. Investment Policies. It shall be the duty of the Board of
Trustees to ensure that the purchase, sale, retention and disposal of portfolio
securities and the other investment practices of the Trust are at all times
consistent with the investment objectives, policies and restrictions with
respect to securities investments and otherwise of the Trust filed from time to
time with the Securities and Exchange Commission and as required by the 1940
Act, unless such duty is delegated to an investment adviser pursuant to a
written contract, as provided in the Declaration of Trust. The Trustees,
however, may delegate the duty of management of the assets of the Trust and may
delegate such other of their powers and duties to the Executive Committee or any
other committee, or to an individual or corporate investment adviser to act as
investment adviser or subadviser pursuant to a written contract.

         Section 3.4. Meetings. Regular meetings of the Trustees may be held
without notice at such times as the Trustees shall fix. Special meetings of the
Trustees may be called by the Chairman of the Board or the President, and shall
be called at the written request of two or more Trustees. Unless waived by each
Trustee, three days' notice of special meetings shall be given to each Trustee
in person, by mail, by telephone, or by telegram or cable, or by any other means
that reasonably may be expected to provide similar notice. Notice of special
meetings need not state the purpose or purposes thereof. Meetings of the
Trustees may be held at any place within or outside the Commonwealth

<PAGE>

                                      -4-

of Massachusetts. A conference among Trustees by any means of communication
through which the Trustees may simultaneously hear each other during the
conference constitutes a meeting of the Trustees or of a committee of the
Trustees, if the notice requirements have been met (or waived) and if the number
of Trustees participating in the conference would be sufficient to constitute a
quorum at such meeting. Participation in such meeting by that means constitutes
presence in person at the meeting.

         Section 3.5. Quorum and Action. A majority of the Trustees currently
holding office, or in the case of a meeting of a committee of the Trustees, a
majority of the members of such committee, shall constitute a quorum for the
transaction of business at any meeting. If a quorum is present when a duly
called or held meeting is convened, the Trustees present may continue to
transact business until adjournment, even though the withdrawal of a number of
Trustees originally present leaves less than the proportion or number otherwise
required for a quorum. At any duly held meeting at which a quorum is present,
the affirmative vote of the majority of the Trustees present shall be the act of
the Trustees or the committee, as the case may be, on any question, except where
the act of a greater number is required by these By-Laws or by the Declaration
of Trust.

         Section 3.6. Action by Written Consent in Lieu of Meetings of Trustees.
See Section 6.3 of these By-Laws.

         Section 3.7. Committees. The Trustees, by resolution adopted by the
affirmative vote of a majority of the Trustees, may designate from their members
an Executive Committee, an Audit Committee (whose function shall be to advise
the Trustees as to the selection of and review of the work of the independent
public accountants of the Trust) and any other committee or committees, each
such committee to consist of two or more Trustees and to have such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Any such committee may be terminated at any time by the affirmative
vote of a majority of the Trustees.

                                   ARTICLE IV

                                    OFFICERS

         Section 4.1. Number and Qualifications. The officers of the Trust shall
include a Chairman of the Board, a President, a Controller, one or more Vice
Presidents (one of whom may be designated Executive Vice President), a
Treasurer, and a Secretary. Any two or more offices may be held by the same
person. Unless otherwise determined by the Trustees, each officer shall be
appointed by the Trustees for a term which shall continue until the meeting of
the Trustees following the next regular meeting of Shareholders and until his
successor shall have been duly elected and qualified, or until his death, or
until he shall have resigned or have been removed, as hereinafter provided in
these By-Laws. The Trustees may from time to time elect, or delegate to the
Chairman of the Board or the President, or both, the power to appoint, such
officers (including one or more Assistant Vice Presidents, one or more Assistant
Treasurers and one or more Assistant Secretaries) and such agents as may be
necessary or desirable for the business of the Trust. Such

<PAGE>

                                      -5-

other officers shall hold office for such terms as may be prescribed by the
Trustees or by the appointing authority.

         Section 4.2. Resignations. Any officer of the Trust may resign at any
time by giving written notice of his resignation to the Trustees, the Chairman
of the Board, the President or the Secretary. Any such resignation shall take
effect at the time specified therein or, if the time when it shall become
effective shall not be specified therein, immediately upon its receipt, and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.

         Section 4.3. Removal. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a majority of
the Trustees present at a duly convened meeting of the Trustees.

         Section 4.4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause, may be filled for the
unexpired portion of the term by the Trustees, or in the manner determined by
the Trustees.

         Section 4.5. The Chairman of the Board. The Chairman of the Board shall
be elected from among the Trustees. He shall be the chief executive officer of
the Trust and shall:

                  (a) have general active management of the business of the
         Trust;

                  (b) when present, preside at all meetings of the Trustees and
         of the Shareholders;

                  (c) see that all orders and resolutions of the Trustees are
         carried into effect;

                  (d) sign and deliver in the name of the Trust any deeds,
         mortgages, bonds, contracts or other instruments pertaining to the
         business of the Trust, except in cases in which the authority to sign
         and deliver is required by law to be exercised by another person or is
         expressly delegated by the Declaration of Trust or By-Laws or by the
         Trustees to some other officer or agent of the Trust; and

                  (e) maintain records of and, whenever necessary, certify all
         proceedings of the Trustees and the Shareholders.

         The Chairman of the Board shall be authorized to do or cause to be done
all things necessary or appropriate, including preparation, execution and filing
of any documents, to effectuate the registration from time to time of the Common
Shares or Preferred Shares of the Trust with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended. He shall perform
all duties incident to the office of Chairman of the

<PAGE>

                                       -6-

Board and such other duties as from time to time may be assigned to him by the
Trustees or by these By-Laws.

         Section 4.6. The President. The President shall be the chief operating
officer of the Trust and, subject to the Chairman of the Board, he shall have
general authority over and general management and control of the business and
affairs of the Trust. In general, he shall discharge all duties incident to the
office of the chief operating officer of the Trust and such other duties as may
be prescribed by the Trustees and the Chairman of the Board from time to time.
In the absence of the Chairman of the Board or in the event of his disability,
or inability to act or to continue to act, the President shall perform the
duties of the Chairman of the Board and when so acting shall have all the powers
of, and be subject to all the restrictions upon, the Chairman of the Board.

         Section 4.7. Executive Vice-President. In the case of the absence or
inability to act of the President and the Chairman of the Board, the Executive
Vice-President shall perform the duties of the President and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. The Executive Vice-President shall perform all duties incident to the
office of Executive Vice-President and such other duties as from time to time
may be assigned to him by the Trustees, the President or these By-Laws.

         Section 4.8. Vice Presidents. Each Vice-President shall perform all
such duties as from time to time may be assigned to him by the Trustees, the
Chairman of the Board or the President.

         Section 4.9.   Controller.  The Controller shall:

                  (a)   keep accurate financial records for the Trust;

                  (b)   render to the Chairman of the Board, the President and
         the Trustees, whenever requested, an account of all transactions by and
         of the financial condition of the Trust; and

                  (c)   in general, perform all the duties incident to the
         office of Controller and such other duties as from time to time may be
         assigned to him by the Trustees, the Chairman of the Board or the
         President.

         Section 4.10.  Treasurer.  The Treasurer shall:

                  (a)   have charge and custody of, and be responsible for, all
         the funds and securities of the Trust, except those which the Trust has
         placed in the custody of a bank or trust company pursuant to a written
         agreement designating such bank or trust company as custodian of the
         property of the Trust, as required by Section 6.6 of these By-Laws;

<PAGE>

                                      -7-

                  (b) deposit all money, drafts, and checks in the name of and
         to the credit of the Trust in the banks and depositories designated by
         the Trustees;

                  (c) endorse for deposit all notes, checks, and drafts received
         by the Trust making proper vouchers therefor:

                  (d) disburse corporate funds and issue checks and drafts in
         the name of the Trust, as ordered by the Trustees; and

                  (e) in general, perform all the duties incident to the office
         of Treasurer and such other duties as from time to time may be assigned
         to him by the Trustees, the Chairman of the Board or the President.

         Section 4.11. Secretary. The Secretary shall:

                  (a) keep or cause to be kept in one or more books provided for
         the purpose, the minutes of all meetings of the Trustees, the
         committees of the Trustees and the Shareholders;

                  (b) see that all notices are duly given in accordance with the
         provisions of these By-Laws and as required by statute;

                  (c)      be custodian of the records of the Trust;

                  (d) see that the books, reports, statements, certificates and
         other documents and records required by statute to be kept and filed
         are properly kept and filed; and

                  (e) in general, perform all the duties incident to the office
         of Secretary and such other duties as from time to time may be assigned
         to him by the Trustees, the Chairman of the Board or the President.

Section 4.12. Salaries. The salaries of all officers shall be fixed by the
Trustees and the Trustees have the authority by majority vote to reimburse
expenses and to establish reasonable compensation of all Trustees for services
to the Trust as Trustees, officers, or otherwise.

                                    ARTICLE V

                                     SHARES

         Section 5.1. Share Certificates. Each owner of Common Shares of the
Trust shall be entitled upon request to have a certificate, in such form as
shall be approved by the Trustees, representing the number of Common Shares of
the Trust owned by him. Certificates representing fractional Common Shares shall
not be issued. The certificates

<PAGE>

                                      -8-

representing Common Shares shall be signed in the name of the Trust by the
Chairman of the Board, the President, the Executive Vice President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer (which signatures may be either manual or facsimile,
engraved or printed). In case any officer who shall have signed such certificate
shall have ceased to be such officer before such certificates shall be issued,
they may nevertheless be issued by the Trust with the same effect as if such
officer were still in office at the date of their issuance. No certificates
representing Preferred Shares shall be issued except as the Trustees may
otherwise authorize.

         Section 5.2. Books and Records; Inspection. The Trust shall keep at its
principal executive office, or at another place or places within the United
States determined by the Trustees, a share register not more than one year old,
containing the names and addresses of the shareholders and the number of Shares
held by each Shareholder. The Trust shall also keep, at its principal executive
office, or at another place or places within the United States determined by the
Trustees, a record of the dates on which certificates representing Shares were
issued.

         Section 5.3. Share Transfers. Upon compliance with any provisions
restricting the transferability of Shares that may be set forth in the
Declaration of Trust, these By-Laws, or any resolution or written agreement in
respect thereof, transfers of Shares of the Trust shall be made only on the
books of the Trust by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with an
officer of the Trust, or with a transfer agent or a registrar and on surrender
of any certificate or certificates for such Shares properly endorsed and the
payment of all taxes thereon. Except as may be otherwise provided by law or
these By-Laws, the person in whose name Shares stand on the books of the Trust
shall be deemed the owner thereof for all purposes as regards the Trust;
provided that whenever any transfer of Shares shall be made for collateral
security, and not absolutely, such fact, if known to an officer of the Trust,
shall be so expressed in the entry of transfer.

         Section 5.4. Regulations. The Trustees may make such additional rules
and regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the issue, certification, transfer and registration of Shares of the
Trust. They may appoint, or authorize any officer or officers to appoint, one or
more transfer agents or one or more transfer clerks and one or more registrars
and may require all certificates for Shares to bear the signature or signatures
of any of them.

         Section 5.5. Lost, Destroyed or Mutilated Certificates. The holder of
any certificate representing Shares of the Trust shall immediately notify the
Trust of any loss, destruction or mutilation of such certificate, and the Trust
may issue a new certificate in the place of any certificate theretofore issued
by it which the owner thereof shall allege to have been lost or destroyed or
which shall have been mutilated, and the Trustees may, in their discretion,
require such owner or his legal representatives to give to the Trust a bond in
such sum, limited or unlimited, and in such form and with such surety or
sureties as the

<PAGE>

                                       -9-

Trustees in their absolute discretion shall determine, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate, or the issuance of a new certificate.
Anything herein to the contrary notwithstanding, the Trustees, in their absolute
discretion, may refuse to issue any such new certificate, except as otherwise
required by law.

         Section 5.6. Record Date; Certification of Beneficial Owner. (a) The
Trustees may fix a date not more than ninety (90) days before the date of a
meeting of Shareholders as the date for the determination of the holders of
Shares entitled to notice of and entitled to vote at the meeting or any
adjournment thereof.

         (b) The Trustees may fix a date for determining Shareholders entitled
to receive payment of any dividend or distribution or allotment of any rights or
entitled to exercise any rights in respect of any change, conversion or exchange
of Shares.

         (c) In the absence of such fixed record date, (i) the date for
determination of Shareholders entitled to notice of and entitled to vote at a
meeting of Shareholders shall be the later of the close of business on the day
on which notice of the meeting is mailed or the thirtieth day before the
meeting, and (ii) the date for determining Shareholders entitled to receive
payment of any dividend or distribution or an allotment of any rights or
entitled to exercise any rights in respect of any change, conversion or exchange
of Shares shall be the close of business on the day on which the resolution of
the Trustees is adopted.

         (c) A resolution approved by the affirmative vote of a majority of the
Trustees present may establish a procedure whereby a Shareholder may certify in
writing to the Trust that all or a portion of the Shares registered in the name
of the Shareholder are held for the account of one or more beneficial owners.
Upon receipt by the Trust of the writing, the persons specified as beneficial
owners, rather than the actual Shareholders, are deemed the Shareholders for the
purposes specified in the writing.

                                   ARTICLE VI

                                  MISCELLANEOUS

         Section 6.1. Fiscal Year. The fiscal year of the Trust shall be as
fixed by the Trustees of the Trust.

         Section 6.2. Notice and Waiver of Notice. (a) Any notice of a meeting
required to be given under these By-Laws to Shareholders or Trustees, or both,
may be waived by any such person (i) orally or in writing signed by such person
before, at or after the meeting or (ii) by attendance at the meeting in person
or, in the case of a Shareholder, by proxy.

         (b) Except as otherwise specifically provided herein, all notices
required by these By-Laws shall be printed or written, and shall be delivered
either personally, by

<PAGE>

                                      -10-

telecopy, telegraph or cable, or by mail or courier or delivery service, and, if
mailed, shall be deemed to be delivered when deposited in the United States
mail, postage prepaid, addressed to the Shareholder or Trustee at his address as
it appears on the records of the Trust.

         Section 6.3 Action by Written Consent in Lieu of Meeting. (a) An action
required or permitted to be taken at a meeting of the Shareholders may be taken
without a meeting by written action signed by all of the Shareholders entitled
to vote on that action. The written action is effective when it has been signed
by all of those Shareholders, unless a different effective time is provided in
the written action.

         (b) An action which requires Shareholder approval and which is required
or permitted to be taken at a meeting of Trustees may be taken by written action
signed by all of the Trustees. An action which does not require Shareholder
approval and which is required or permitted to be taken at a meeting of the
Trustees or a Committee of the Trustees may be taken by written action signed by
the number of Trustees that would be required to take the same action at a
meeting of the Trustees or Committee, as the case may be, at which all Trustees
were present. The written action is effective when signed by the required number
of Trustees, unless a different effective time is provided in the written
action. When written action is taken by less than all Trustees, all Trustees
shall be notified immediately of this text and effective date.

         Section 6.4 Reports to Shareholders. The books of account of the Trust
shall be examined by an independent firm of public accountants at the close of
each annual period of the Trust and at such other times, if any, as may be
directed by the Trustees. A report to the Shareholders based upon such
examination shall be mailed to each Shareholder of the Trust of record at his
address as the same appears on the books of the Trust. Each such report shall
show the assets and liabilities of the Trust as of the annual or other period
covered by the report and the securities in which the funds of the Trust were
then invested; such report shall also show the Trust's income and expenses for
the period from the end of the Trust's preceding fiscal year to the close of the
annual or other period covered by the report and any other information required
by the 1940 Act, and shall set forth such other matters as the Trustees or such
independent firm of public accountants shall determine.

         Section 6.5 Approval of Firm of Independent Public Accountants. At any
regular meeting of the Shareholders of the Trust there may be submitted, for
ratification or rejection, the name of the firm of independent public
accountants which has been selected for the fiscal year in which such meeting is
held by a majority of those members of the Trustees who are not investment
advisers of, or affiliated persons of an investment adviser of, or officers or
employees of, the Trust, as such terms are defined in the 1940 Act.

         Section 6.6 Custodian. All securities and cash of the Trust shall be
held by a custodian meeting the requirements for a custodian contained in the
1940 Act and the

<PAGE>

                                  -11-

rules and regulations thereunder and in any applicable state securities or blue
sky laws. The Trust shall enter into a written contract with the custodian
regarding the powers, duties and compensation of the custodian with respect to
the cash and securities of the Trust held by the custodian. Said contract and
all amendments thereto shall be approved by the Trustees of the Trust. The Trust
shall upon the resignation or inability to serve of the custodian obtain a
successor custodian and require that the cash and securities owned by the Trust
be delivered to the successor custodian.

         Section 6.7 Prohibited Transactions. No officer or Trustee of the Trust
or of its investment adviser shall deal for or on behalf of the Trust with
himself, as principal or agent, or with any corporation or partnership in which
he has a financial interest. This prohibition shall not prevent: (a) officers or
Trustees of the Trust from having a financial interest in the Trust, its
principal underwriter or its investment adviser; (b) the purchase of securities
for the portfolio of the Trust or the sale of securities owned by the Trust
through a securities dealer, one or more of whose partners, officers or
directors is an officer or Trustee of the Trust, provided such transactions are
handled in the capacity of broker only and provided commission charged do not
exceed customary brokerage charges for such service; (c) the purchase or sale of
securities for the portfolio of the Trust pursuant to a rule under the 1940 Act
or pursuant to an exemptive order of the Securities and Exchange Commission; or
(d) the employment of legal counsel, registrar, transfer agent, dividend
disbursing agent, or custodian having a partner, officer or director who is an
officer or Trustee of the Trust, provided only customary fees are charged for
services rendered to or for the benefit of the Trust.

         Section 6.8 Bonds. The Trustees may require any officer, agent or
employee of the Trust to give a bond to the Trust, conditioned upon the faithful
discharge of his duties, with one or more sureties and in such amount as may be
satisfactory to the Trustee. The Trustees shall, in any event, require the Trust
to provide and maintain a bond issued by a reputable fidelity insurance company,
authorized to do business in the place where the bond is issued, against larceny
and embezzlement, covering each officer and employee of the Trust, who may
singly, or jointly with others, have access to securities or funds of the Trust,
either directly or through authority to draw upon such funds or to direct
generally the disposition of such securities, such bond or bonds to be in such
reasonable form and amount as a majority of the Trustees who are not "interested
persons" of the Trust as defined in the 1940 Act shall approve not less than
once every twelve months, with due consideration to all relevant factors
including, but not limited to, the value of the aggregate assets of the Trust to
which any such officer or employee may have access, the type and terms of the
arrangements made for the custody and safekeeping of such assets, and the nature
of the securities in the Trust's portfolio, and as meet all requirements which
the Securities and Exchange Commission may prescribe by order, rule or
regulation.

                                   ARTICLE VII

                                   AMENDMENTS

<PAGE>
                                      -12-

         Section 7.1. These By-Laws may be amended or repealed, or new By-Laws
may be adopted, by the Trustees at any meeting thereof provided that notice of
such meeting shall have been given if required by these By-Laws, which notice,
if required, shall state that amendment or repeal of the By-Laws or adoption of
new By-Laws, is one of the purposes of such meeting, or by action of the
Trustees by written consent in lieu of a meeting.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.S
<SEQUENCE>5
<FILENAME>dex99s.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints JESSICA R.
DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and each of them (with full
power to each of them to act alone) his true and lawful attorney-in-fact and
agent, for him on his behalf and in Registration Statements on Form N-2 under
the Securities Act of l933 and the Investment Company Act of l940, including any
amendment or amendments thereto, with all exhibits, and any and all other
documents required to be filed with any regulatory authority, federal or state,
relating to the registration thereof, or the issuance of shares thereof, without
limitation, granting unto said attorneys, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same as fully to
all intents and purposes as he might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set his hand this 12th day of August, 2002.


                                               /s/ Timothy R. Schwertfeger
                                         ---------------------------------------
                                                   Timothy R. Schwertfeger

STATE OF    ILLINOIS          )
        ----------------      )
                              )SS
COUNTY OF     COOK            )
         ---------------      )

On this 12th day of August, 2002, personally appeared before me, a Notary
Public in and for said County and State, the person named above who is known to
me to be the person whose name and signature is affixed to the foregoing Power
of Attorney and who acknowledged the same to be his voluntary act and deed for
the intent and purposes therein set forth.

  "OFFICIAL SEAL"
Virginia L. Corcoran                           /s/Virginia L. Corcoran
                                               -----------------------
Notary Public, State of Illinois               Notary Public
                                            My Commission Expires: 10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) her true and lawful
attorney-in-fact and agent, for her on her behalf and in her name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set her hand this 30th day of July, 2002.

                                               /s/ Anne E. Impellizzeri
                                         ------------------------------------
                                                   Anne E. Impellizzeri

STATE OF    ILLINOIS          )
        ----------------      )
                              )SS
COUNTY OF      COOK           )
          --------------      )

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                           /s/Virginia L. Corcoran
                                               -----------------------
Notary Public, State of Illinois               Notary Public
My Commission Expires:  10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him on his behalf and in his name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set his hand this 30th day of July, 2002.

                                                    /s/ Peter R. Sawers
                                               ------------------------------
                                                        Peter R. Sawers

STATE OF      ILLINOIS                 )
         ------------------            )
                                       )SS
COUNTY OF       COOK                   )
          -----------------            )

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                           /s/ Virginia L. Corcoran
                                               ------------------------------
Notary Public, State of Illinois               Notary Public
My Commission Expires:  10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him on his behalf and in his name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set his hand this 30th day of July, 2002.

                                                  /s/ William J. Schneider
                                             ----------------------------------
                                                      William J. Schneider

STATE OF    ILLINOIS         )
        ----------------     )
                             )SS
COUNTY OF     COOK           )
          --------------     )

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                                     /s/Virginia L. Corcoran
                                                         -----------------------
Notary Public, State of Illinois                         Notary Public
My Commission Expires:  10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY


KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) her true and lawful
attorney-in-fact and agent, for her on her behalf and in her name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set her hand this 30th day of July, 2002.

                                                   /s/ Judith M. Stockdale
                                             -----------------------------------
                                                       Judith M. Stockdale

STATE OF     ILLINOIS         )
         ----------------     )
                              )SS
                              )
COUNTY OF      COOK           )
          ---------------

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                                    /s/ Virginia L. Corcoran
                                                        ------------------------
Notary Public, State of Illinois                        Notary Public
My Commission Expires:  10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him on his behalf and in his name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set his hand this 30th day of July, 2002.

                                                      /s/ Lawrence H. Brown
                                                 -------------------------------
                                                          Lawrence H. Brown

STATE OF      ILLINOIS          )
         ------------------     )
                                )SS
COUNTY OF       COOK            )
          -----------------     )

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                                    /s/ Virginia L. Corcoran
                                                        ------------------------
Notary Public, State of Illinois                        Notary Public
My Commission Expires:  10/27/05

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
           NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
            NUVEEN INSURED NEW YORK TAX-FREE ADVANTAGE MUNICIPAL FUND

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a trustee of the
above-referenced organizations, hereby constitutes and appoints TIMOTHY R.
SCHWERTFEGER, JESSICA R. DROEGER, LARRY W. MARTIN and GIFFORD R. ZIMMERMAN, and
each of them (with full power to each of them to act alone) his true and lawful
attorney-in-fact and agent, for him on his behalf and in his name, place and
stead, in any and all capacities, to sign and file one or more Registration
Statements on Form N-2 under the Securities Act of l933 and the Investment
Company Act of l940, including any amendment or amendments thereto, with all
exhibits, and any and all other documents required to be filed with any
regulatory authority, federal or state, relating to the registration thereof, or
the issuance of shares thereof, without limitation, granting unto said
attorneys, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he might
or could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.

IN WITNESS WHEREOF, the undersigned trustee of the above-referenced
organizations has hereunto set his hand this 30th day of July, 2002.

                                                        /s/ Robert P. Bremner
                                                      --------------------------
                                                            Robert P. Bremner

STATE OF      ILLINOIS          )
         ------------------     )
                                )SS
COUNTY OF       COOK            )
          -----------------     )

On this 30th day of July, 2002, personally appeared before me, a Notary Public
in and for said County and State, the person named above who is known to me to
be the person whose name and signature is affixed to the foregoing Power of
Attorney and who acknowledged the same to be his voluntary act and deed for the
intent and purposes therein set forth.

"OFFICIAL SEAL"
Virginia L. Corcoran                                  /s/ Virginia L. Corcoran
                                                      --------------------------
Notary Public, State of Illinois                      Notary Public
My Commission Expires:  10/27/05

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
