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<SEC-DOCUMENT>0000950131-02-004572.txt : 20021120
<SEC-HEADER>0000950131-02-004572.hdr.sgml : 20021120
<ACCEPTANCE-DATETIME>20021120172558
ACCESSION NUMBER:		0000950131-02-004572
CONFORMED SUBMISSION TYPE:	N-2/A
PUBLIC DOCUMENT COUNT:		17
FILED AS OF DATE:		20021120

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/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-100320
		FILM NUMBER:		02835250

	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/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21213
		FILM NUMBER:		02835251

	BUSINESS ADDRESS:	
		STREET 1:		333 WEST WACKER DRIVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
		BUSINESS PHONE:		3129178146
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>dn2a.txt
<DESCRIPTION>NUVEEN INSURED TAX-FREE ADVANTAGE MUNI FD
<TEXT>
<PAGE>



   As filed with the Securities and Exchange Commission on November 20, 2002


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

                                                    1933 Act File No. 333-100320

                                                    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

[X]  Pre-Effective Amendment No. 2

[ ]  Post-Effective Amendment No. __


          and

[X]  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X]  Amendment No. 3

                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

                               Jessica R. Droeger
                         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:

<TABLE>
<CAPTION>
<S>                             <C>                                <C>
   Stacy H. Winick                   Thomas S. Harman                    Cynthia Cobden
Bell, Boyd & Lloyd LLC          Morgan, Lewis & Bockius LLP        Simpson Thacher & Bartlett
   70 W. Madison St.                1800 M Street, N.W                 425 Lexington Ave.
  Chicago, IL 60602               Washington, D.C. 20036               New York, NY 10017
</TABLE>

                 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 (2)
- ----------------------------------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                       <C>                 <C>
Common Shares, $0.01 par value   20,000,000 Shares           $15.00                $300,000,000          $27,600
=======================================================================================================================
</TABLE>




(1) Estimated solely for the purpose of calculating the registration fee.
(2) $4,140.00 of which has already been paid.

     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.

   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.
                                                  (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/(3)/
                                                       --------- ---------
    <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.

(3)The Fund has granted the underwriters an option to purchase up to
   additional common shares at the Public Offering Price less the Sales Load,
   solely to cover over-allotments, if any. If such option is exercised in
   full, the total Public Offering Price, Sales Load, Estimated Offering
   Expenses and Proceeds to the Fund will be $     , $    , $     and $    ,
   respectively. See "Underwriting."


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

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

           Salomon Smith Barney                   Nuveen Investments
           A.G. Edwards & Sons, Inc.           Prudential Securities
           H&R Block Financial Advisors, Inc.  Fahnestock & Co. Inc.
                                              Legg Mason Wood Walker
           Janney Montgomery Scott LLC             Incorporated
           Quick & Reilly, Inc.                        Raymond James
           RBC Capital Markets                       Ryan Beck & Co.
           SunTrust Robinson Humphrey            Wachovia Securities
                        Wedbush Morgan Securities Inc.
          , 2002

<PAGE>

   The common shares have been approved for listing on the American Stock
Exchange, subject to notice of issuance. The trading or "ticker" symbol of the
common shares is "NEA".

   Portfolio Contents. Under normal circumstances, the Fund will invest at
least 80% of its net assets in a portfolio of municipal bonds that pay interest
that is 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 thereon. 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.

   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 42 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.



                                      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....................................  25
       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.......  34
       Tax Matters..................................................  34
       Other Matters................................................  36
       Underwriting.................................................  38
       Custodian and Transfer Agent.................................  41
       Legal Opinions...............................................  41
       Table of Contents for the Statement of Additional Information  42
</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 Salomon
                           Smith Barney Inc., Nuveen Investments ("Nuveen"),
                           A.G. Edwards & Sons, Inc., Prudential Securities
                           Incorporated, H&R Block Financial Advisors, Inc.,
                           Fahnestock & Co. Inc., Janney Montgomery Scott LLC,
                           Legg Mason Wood Walker, Incorporated, Quick &
                           Reilly, Inc. A FleetBoston Financial Company,
                           Raymond James & Associates, Inc., RBC Dain Rauscher,
                           Inc., Ryan Beck & Co., SunTrust Capital Markets,
                           Inc., Wachovia Securities, Inc. and Wedbush Morgan
                           Securities Inc. 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:
                             .  pay interest that is exempt from regular
                                federal income tax and from 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.


                         With respect to its entire portfolio, the Fund will
                           invest only in bonds and other eligible investments,
                           whether or not insured, that at the time of
                           investment are investment grade quality. Under
                           normal circumstances, the Fund (i) expects to be
                           fully invested (at least 95% of its assets) in
                           municipal bonds that pay interest that is exempt
                           from regular federal income tax and (ii) will not
                           invest in bonds that pay


                                      4

<PAGE>

                           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
                           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 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. The Fund cannot assure you that it will
                           attain its investment objectives. See "The Fund's
                           Investments."


Tax 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

                                      5

<PAGE>

                           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
                           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 November 30, 2007), and for a
                           declining amount for an additional three years
                           (through November 30, 2010). Nuveen Advisory is a
                           wholly owned subsidiary of The John Nuveen Company.
                           For more information on fees and expenses, including
                           fees attributable to Common Shares, 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 American Stock Exchange, subject to notice of
                           issuance. See "Description of Shares--Common
                           Shares." The trading or "ticker" symbol of the

                                      6

<PAGE>

                           Common Shares is "NEA". 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 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. Market interest rates for
                           investment grade municipal bonds in which the Fund
                           will primarily invest have recently declined
                           significantly below the recent historical

                                      7

<PAGE>

                           average rates for such bonds. This decline may have
                           increased the risk that these rates will rise in the
                           future (which would cause the value of the Fund's
                           net assets to decline) and the degree to which asset
                           values may decline in such event; however,
                           historical interest rate levels are not necessarily
                           predictive of future interest rate levels. 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. See "Risks--Credit
                           Risk."

                         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 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.

                                      8

<PAGE>

                           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 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.

                         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..........................         1.00%
Other Expenses...........................          .23%
                                                  ----
Total Annual Expenses....................         1.23%
Fee and Expense Reimbursement (Years 1-5)         (.49%)/(5)/
                                                  ----
Total Annual Expenses (Years 1-5)........          .74%/(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 2.1% 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 $0.17 per Common Share (1.13% 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.......................................................          .65%
Other Expenses........................................................          .15%
                                                                              -----
Total Annual Expenses.................................................          .80%
Fees and Expense Reimbursement (Years 1-5)............................         (.32%)/(5)/
                                                                              -----
Total Annual Expenses (Years 1-5).....................................          .48%/(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,

                                      10

<PAGE>

   .24% of average daily Managed Assets in year 6, .16% in year 7 and .08% in
   year 8. Assuming the 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 .49% for the first 5 years, .37% in year 6, .25% in
   year 7 and .12% in year 8. Without the reimbursement, "Total Annual
   Expenses" would be estimated to be 1.23% of average daily net assets
   attributable to Common Shares (or, assuming no issuance of MuniPreferred
   Shares, .80% 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
30,000,000 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 $11) that you
would pay on a $1,000 investment in Common Shares, assuming (1) total annual
expenses of .74% of net assets attributable to Common Shares in years 1 through
5, increasing to 1.23% in years 9 and 10 and (2) a 5% annual return:/(1)/

                      1 Year 3 Years 5 Years 10 Years/(2)/
                      ------ ------- ------- ------------
                       $65     $80     $97       $167

   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
   November 30, 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 July 29, 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 in accordance with the Fund's investment policies.

                            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

                                      12

<PAGE>


municipal bond market by prudent selection of municipal bonds regardless of the
direction the market may move. There can be no assurance that the Fund's
attempt to increase its portfolio value relative to the municipal bond market
will succeed. To the extent that it does succeed, however, such success would
increase the amount of net capital gains or reduce the amount of net capital
losses that the Fund would otherwise have realized. While this incremental
increase in net realized capital gains due to successful value investing, if
any, is expected to be modest over time, it would tend to result in the
distribution, over time, of a modestly greater amount of taxable capital gains
to Common Shareholders.


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

  .  pay interest that is exempt from regular federal income tax and from 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.


   With respect to its entire portfolio, the Fund will invest only in bonds and
other eligible investments, whether or not insured, that at the time of
investment are investment grade quality. Under normal circumstances, the Fund
(i) expects to be fully invested (at least 95% of its assets) in municipal
bonds that pay interest that is exempt from regular federal income tax and (ii)
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 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"). See
"--Municipal Bond Insurance." The Fund, as non-fundamental policies that can be
changed by the Board of Trustees, (A) will only buy Portfolio Insurance from

                                      13

<PAGE>

insurers whose claims-paying ability Moody's rates "Aaa" or S&P or Fitch rates
"AAA" and (B) will maintain at least 80% of its total Managed Assets in
municipal bonds covered by insurance from insurers with a claims-paying ability
rated, at the time of the bond's purchase, "Aaa" by Moody's or "AAA" by S&P or
Fitch.

   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. 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 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.


   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 such 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 up to 5% of its net
assets in tax-exempt or taxable fixed-income or 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.
The Fund does not intend to change this policy without prior notification to
shareholders. See the Statement of Additional Information under "Other
Investment Policies and Techniques--Miscellaneous Investments."


   The Fund cannot change (i) its fundamental investment restrictions set forth
in the Statement of Additional Information or (ii) its policy to invest 80% of
its Managed Assets in a portfolio of municipal bonds that pay interest that is
exempt from regular federal income tax and 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%

                                      14

<PAGE>

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 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 on which the 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.

   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>

   A municipal bond covered by Original Issue Insurance or Secondary Market
Insurance is itself typically assigned the same rating as that of the insurer.
For example, if the insurer has a rating of "Aaa" or "AAA" a bond covered by an
Original Issue Insurance or Secondary Market Insurance policy from that insurer
would also typically be assigned the same rating. Such a municipal bond would
generally be assigned a lower rating if the ratings were based instead upon the
credit characteristics of the issuer without regard to the insurance feature.
By way of contrast, the ratings, if any, assigned to a municipal bond insured
under Portfolio Insurance will be based primarily upon the credit
characteristics of the issuer, without regard to the insurance feature, and
therefore will generally carry a rating that is below "Aaa" or "AAA." While in
the portfolio of the Fund, however, a municipal bond backed by Portfolio
Insurance from a particular insurer 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 from that insurer.

   The Fund's policy of investing primarily 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 the event
Moody's, S&P or Fitch (or all of them) should downgrade its (or their) rating
of a particular insurer, it (or they) could also be expected to downgrade the
ratings assigned to municipal bonds insured under Original Issue Insurance or
Secondary Market Insurance policies 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.

                                      16

<PAGE>

   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 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.

                                      17

<PAGE>

   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 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

                                      18

<PAGE>

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 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 may invest up to 5% of its net assets in tax-exempt or 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 its existing investment in such issuer. Investment
in such securities would result in a portion of your dividend being subject to
regular federal income tax or the alternative minimum tax applicable to
individuals.

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 taxable 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 1.60%, the incremental income generated by the Fund's portfolio (net of
estimated expenses) must exceed .56% 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 net of expenses) 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 1.60%. See
"Risks--Leverage Risk."



<TABLE>
<S>                                              <C>      <C>     <C>     <C>   <C>
Assumed Portfolio Total Return (Net of Expenses) (10.00)% (5.00)%  0.00 % 5.00% 10.00%
Common Share Total Return....................... (16.25)% (8.55)% (0.86)% 6.83% 14.52%
</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, among
other things, 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. Market interest
rates for investment grade municipal bonds in which the Fund will primarily
invest have recently declined significantly below the recent historical average
rates for such bonds. This decline may have increased the risk that these rates
will rise in the future (which would cause the value of the Fund's net assets
to decline) and the degree to which asset values may decline in such event;
however, historical interest rate levels are not necessarily predictive of
future interest rate levels.

   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

                                      22

<PAGE>

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 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.

                                      23

<PAGE>

   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 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.

   Derivatives Risk. The Fund may utilize a variety of derivative instruments
solely for risk management purposes. As explained under "How the Fund Manages
Risk--Hedging Strategies," the Fund does not intend to use derivatives to
increase leverage or to enhance current income. These derivatives may include
such instruments as options contracts, futures contracts, options on futures
contracts, swap agreements, short sales and delayed delivery and forward
commitment transactions. Derivatives are subject to a number of risks described
elsewhere in this Prospectus, such as liquidity risk, interest rate risk,
credit risk and management risk. Derivatives also involve the risk of
mispricing or improper valuation, the risk of ambiguous documentation, and the
risk that changes in the value of a derivative may not correlate perfectly with
an underlying asset, interest rate or index. Suitable derivative transactions
may not be available in all circumstances and there can be no assurance that
the Fund will engage in these transactions to reduce exposure to other risks
when that would be beneficial.

                                      24

<PAGE>

   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.

   Certain Affiliations. Certain broker-dealers may be considered to be
affiliated persons of the Fund, Nuveen Advisory and/or Nuveen. Absent an
exemption from the Securities and Exchange Commission or other regulatory
relief, the Fund is generally precluded from effecting certain principal
transactions with affiliated brokers, and its ability to purchase securities
being underwritten by an affiliated broker or a syndicate including an
affiliated broker, or to utilize affiliated brokers for agency transactions, is
subject to restrictions. This could limit the Fund's ability to engage in
securities transactions and take advantage of market opportunities. In
addition, unless and until the underwriting syndicate is broken in connection
with the initial public offering of the Common Shares, the Fund will be
precluded from effecting principal transactions with brokers who are members of
the syndicate.

                           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 (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

                                      25

<PAGE>

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.

   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. The Fund does not intend
to use derivatives to increase leverage or to enhance current income.
Successful implementation of most hedging strategies would generate taxable
income.

                            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

                                      26

<PAGE>

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
$43.6 billion in assets under management as of October 31, 2002. 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. Mr. Krupa has been a portfolio manager and Vice President of Nuveen
Advisory since 1990. Mr. Krupa currently manages investments for 9
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 $84 billion of assets under management or
surveillance as of October 31, 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.


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>

                                      27

<PAGE>

   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
          Year Ending,      of Managed    Year Ending,    of Managed
          November 30        Assets)      November 30      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.

   Nuveen Advisory has not agreed to reimburse the Fund for any portion of its
fees and expenses beyond November 30, 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

                                      28

<PAGE>

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.

                          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 American Stock
   Exchange 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.

                                      29

<PAGE>

   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.

                             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 American Stock
Exchange, 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

                                      30

<PAGE>

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.


   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.

                                      31

<PAGE>

   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."

   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

                                      32

<PAGE>

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. 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. 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. 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.

                                      33

<PAGE>

            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 American Stock Exchange. 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 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

                                      34

<PAGE>

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 Common Shares. The Fund will
allocate dividends with respect to a taxable year to shareholders that are
treated as exempt-interest dividends 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 such taxable 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
exempt-interest 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 dividends
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 dividends 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 generally 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.

                                      35

<PAGE>

   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 (for individuals, 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, and ultimately heard in the federal district court
for the Northern District of Illinois. The suit was originally brought against
Nuveen, 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 were 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.

                                      36

<PAGE>

   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.
Plaintiffs filed a petition for a writ of certiorari with the United States
Supreme Court on October 1, 2002 seeking to appeal the Seventh Circuit opinion.
The defendants intend to file a brief in opposition to the petition.

                                      37

<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>
Salomon Smith Barney Inc..............................................
Nuveen Investments....................................................
A.G. Edwards & Sons, Inc..............................................
Prudential Securities Incorporated....................................
H&R Block Financial Advisors, Inc.....................................
Fahnestock & Co. Inc..................................................
Janney Montgomery Scott LLC...........................................
Legg Mason Wood Walker, Incorporated..................................
Quick & Reilly, Inc. A FleetBoston Financial Company..................
Raymond James & Associates, Inc.......................................
RBC Dain Rauscher, Inc................................................
Ryan Beck & Co........................................................
SunTrust Capital Markets, Inc.........................................
Wachovia Securities, Inc..............................................
Wedbush Morgan Securities Inc.........................................
                                                                        -------
   Total..............................................................

                                                                        =======
</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 Salomon Smith Barney Inc., Nuveen Investments,
A.G. Edwards & Sons, Inc., Prudential Securities Incorporated, H&R Block
Financial Advisors, Inc., Fahnestock & Co. Inc., Janney Montgomery Scott LLC,
Legg Mason Wood Walker, Incorporated, Quick & Reilly, Inc. A FleetBoston
Financial Company, Raymond James & Associates, Inc., RBC Dain Rauscher, Inc.,
Ryan Beck & Co., SunTrust Capital Markets, Inc., Wachovia Securities, Inc. and
Wedbush Morgan Securities Inc. 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. 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

                                      38

<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 Salomon Smith Barney Inc., on behalf of the Underwriters, dispose of or
hedge any Common Shares or any securities convertible into or exchangeable for
Common Shares. Salomon Smith Barney Inc. 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 American
Stock Exchange, 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 2.1% 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 American Stock Exchange, the Underwriters have undertaken to sell lots of
100 or more Common Shares to a minimum of 400 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 American Stock Exchange. No Underwriter
is, however, obligated to 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

                                      39

<PAGE>

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 American Stock Exchange 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 American
Stock Exchange 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. Certain of the Underwriters are active
underwriters of, and dealers in, securities and act as market makers in a
number of such securities, and therefore can be expected to engage in portfolio
transactions with, and perform services for, the Fund. Nuveen may engage in
these transactions only in compliance with the 1940 Act.


                                      40

<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 an affiliate of Nuveen Advisory.

   The principal business address of Salomon Smith Barney Inc. is 388 Greenwich
Street, New York, New York 10013.

                         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 Simpson Thacher & Bartlett, New York, New York. Bell, Boyd &
Lloyd LLC and Simpson Thacher & Bartlett may rely as to certain matters of
Massachusetts law on the opinion of Bingham McCutchen LLP, Boston,
Massachusetts.

                                      41

<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>

                                      42

<PAGE>

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


                                          Shares


               Nuveen Insured Tax-Free Advantage Municipal Fund

                                 Common Shares

                                   --------

                                  PROSPECTUS

                                         , 2002

                                   --------

                             Salomon Smith Barney
                              Nuveen Investments
                           A.G. Edwards & Sons, Inc.
                             Prudential Securities
                      H&R Block Financial Advisors, Inc.
                             Fahnestock & Co. Inc.
                          Janney Montgomery Scott LLC
                            Legg Mason Wood Walker
                                 Incorporated
                             Quick & Reilly, Inc.
                                 Raymond James
                              RBC Capital Markets
                                Ryan Beck & Co.
                          SunTrust Robinson Humphrey
                              Wachovia Securities
                        Wedbush Morgan Securities Inc.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                                                    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 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. There can be no assurance
that the Fund's attempt to increase its portfolio value relative to the
municipal bond market will succeed. To the extent that it does succeed, however,
such success would increase the amount of net capital gains or reduce the
amount of net capital losses that the Fund would otherwise have realized. While
this incremental increase in net realized capital gains due to successful value
investing, if any, is expected to be modest over time, it would tend to result
in the distribution, over time, of a modestly greater amount of taxable capital
gains to Common Shareholders.


                                       6

<PAGE>

     The Fund's investment objectives are fundamental policies of the Fund.

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


     .    pay interest that is exempt from regular federal income tax and from
          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.


     With respect to its entire portfolio, the Fund will invest only in bonds
and other eligible investments, whether or not insured, that at the time of
investment are investment grade quality. Under normal circumstances, the Fund
(i) expects to be fully invested (at least 95% of its assets) in municipal bonds
that pay interest that is exempt from regular federal income tax and (ii) will
not invest in AMT Bonds.



     It is a fundamental policy of the Fund that its investments in municipal
bonds the interest on which 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 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 may invest up to 5% of its net assets in
     tax-exempt or 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) pay interest that is
exempt from regular federal income tax and from the federal alternative minimum
tax applicable to individuals and (ii) 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 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.



     With respect to its entire portfolio, the Fund will invest only in bonds
and other eligible investments, whether or not insured, that at the time of
investment are investment grade quality. Under normal circumstances, and except
for the temporary investments described below, the Fund (i) expects to be fully
invested (at least 95% of its assets) in municipal bonds that pay interest that
is exempt from regular federal income tax and (ii) will not invest in AMT Bonds.




                                      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 non-fundamental policies that can be changed by the
Board of Trustees, (A) will only buy Portfolio Insurance from insurers whose
claims-paying ability Moody's rates "Aaa" or S&P or Fitch rates "AAA", and (B)
will maintain at least 80% of its total Managed Assets in municipal bonds
covered by insurance from insurers with a claims-paying ability rated, at the
time of the bond's purchase, "Aaa" by Moody's or "AAA" by S&P or Fitch.


     Information about the primary 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 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 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 up to 5% of its net assets in tax-exempt or taxable fixed-income or
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.


     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 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. The Fund does not intend to use
derivatives to increase leverage or to enhance current income. Successful
implementation of most hedging strategies would generate taxable income. 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 may invest up to 5% of its net assets in tax-exempt or 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 its existing investment in such issuer. Investment in such securities
would result in a portion of your dividend being subject to regular federal
income tax or the alternative minimum tax applicable to individuals.


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 between Nuveen Advisory
and the Fund, 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                 135
3/28/49                    Board and            John Nuveen Company, Nuveen Investments, Nuveen
333 West Wacker Drive      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.            117
8/22/40                          2002
3725 Huntington Street,
  N.W.
Washington, D.C. 20015

Lawrence H. Brown               Trustee         Retired (August 1989) as Senior Vice President         117
7/29/34                          2002           of The Northern Trust Company.
201 Michigan Avenue
Highwood, IL 60040

Anne E. Impellizzeri            Trustee         Retired, formerly, Executive Director (since           117
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,           117
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,            117
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                117
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>


                                       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:
- --------------------
Gifford R. Zimmerman      Chief Administrative  Managing Director (since 2002), Assistant              135
9/9/56                     Officer              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.

Michael T. Atkinson       Vice President and    Vice President (since January 2002), formerly,         135
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,         130
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            135
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         135
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                135
9/24/64                    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             135
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               135
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               135
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.;               130
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        130
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.                130
8/21/57                         2002
333 W. Wacker Drive
Chicago, IL 60606

David J. Lamb               Vice President      Vice President (since 2000) of Nuveen                  135
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,               135
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                135
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               135
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),                   130
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            130
7/31/51                    2002                 Nuveen Institutional Advisory Corp.; Chartered
333 W. Wacker Drive                             Financial Analyst.
Chicago, IL 60606
</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 87 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, Salomon Smith Barney Inc. 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, Salomon Smith Barney Inc.
or any person (other than a registered investment company) directly or
indirectly controlling, controlled by or under common control with Nuveen
Advisory, Nuveen or Salomon Smith Barney Inc.

     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 Fund
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            $79                $ 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 12 month period ending 10/31/04, representing the Fund's first
full fiscal year end, 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 an affiliate, 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 (92) and fund assets under management ($33 billion)
as of October 31, 2002. Overall, The John Nuveen Company and its affiliates
had over $84 billion in assets under management or surveillance as of
October 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.

     Nuveen Investments, a unit of The John Nuveen Company, provides investment
management services for advisors serving high-net-worth and institutional
clients. The Company today markets its capabilities--which include tax-free
investing, separately managed accounts and market neutral alternative investment
portfolios--under four distinct brands: Nuveen, NWQ, Rittenhouse, and Symphony.
The John Nuveen Company and its affiliates had over $77 billion of assets under
management as of October 31, 2002. The John Nuveen Company, an affiliate of
The St. Paul Companies (NYSE:SPC), 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
      November 30     Managed Assets)        November 30    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 November 30,
2010.

     Unless earlier terminated as described below, the Fund's investment
management agreement with Nuveen Advisory (the "management agreement") will
remain in effect until July 1, 2004. 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 at the annual advisory contract
renewal meeting held in April, 2002, including information regarding Nuveen
Advisory, its affiliates and its personnel, operations and financial condition.
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
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 Fund, Nuveen Advisory, Nuveen, Salomon Smith Barney Inc., 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 American Stock Exchange,
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 American Stock Exchange, 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 American Stock Exchange, (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 American Stock Exchange.
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 has elected and 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 consists 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. See "Investment Policies and Techniques."
Different alternative minimum tax rules apply to individuals and to
corporations. Among other things, interest on all municipal bonds is taken into
account to determine whether a corporation is subject to the alternative minimum
tax. 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 dividends 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 for a taxable year will
be equal to the portion of total Fund dividends received by such class with
respect to such taxable year. 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 the holding periods of which
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 to the extent that 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 November 4, 2002, appearing in
this Statement of Additional Information have been audited by Ernst & Young LLP,
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. Ernst & Young LLP provides
accounting and auditing services to the Fund. The principal business address of
Ernst & Young LLP is 233 South Wacker Drive, Chicago, Illinois 60606.



                                    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

We have audited the accompanying statement of assets and liabilities of Nuveen
Insured Tax-Free Advantage Municipal Fund (the "Fund") as of November 4, 2002
and the related statement of operations for the period from July 29, 2002 (date
of organization) through November 4, 2002. These financial statements are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Fund at November 4, 2002,
and results of its operations for the period from July 29, 2002 (date of
organization) through November 4, 2002, in conformity with accounting principles
generally accepted in the United States.


                                      /s/ ERNST & YOUNG LLP

Chicago, Illinois
November 5, 2002


                                      43

<PAGE>


                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND
                              FINANCIAL STATEMENTS

                Nuveen Insured Tax-Free Advantage Municipal Fund
                       Statement of Assets and Liabilities
                                November 4, 2002

<TABLE>
<S>                                                                       <C>
Assets:
    Cash................................................................. $100,275
    Offering costs.......................................................  735,000
    Receivable from Adviser..............................................   11,500
                                                                          --------
       Total assets......................................................  846,775
                                                                          --------

Liabilities:
    Accrued offering costs...............................................  735,000
    Payable for organization costs.......................................   11,500
                                                                          --------
       Total liabilities.................................................  746,500
                                                                          --------
MuniPreferred Shares, $25,000 liquidation value; unlimited
       number of shares authorized, no shares outstanding................        -
                                                                          --------
Net assets applicable to Common Shares................................... $100,275
                                                                          ========

Net asset value per Common Share outstanding ($100,275 divided
    by 7,000 Common Shares outstanding).................................. $ 14.325
                                                                          ========
Net Assets Applicable to Common Shares Represent:
    Common Shares, $.01 par value; unlimited number of shares
       authorized, 7,000 shares outstanding..............................       70
    Paid-in surplus......................................................  100,205
                                                                          --------
                                                                          $100,275
                                                                          ========
</TABLE>

                                   44

<PAGE>


                Nuveen Insured Tax-Free Advantage Municipal Fund
                            Statement of Operations
   Period from July 29, 2002 (date of organization) through November 4, 2002

<TABLE>
<S>                                                                   <C>
Investment income.................................................... $      -
                                                                      --------

Expenses:
   Organization costs................................................   11,500
   Expense reimbursement.............................................  (11,500)
                                                                      --------
      Total expenses.................................................        -
                                                                      --------
Net investment income................................................ $      -
                                                                      ========
</TABLE>

Note 1: Organization

The Fund was organized as a Massachusetts business trust on July 29, 2002, and
has been inactive since that date except for matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended, and the sale of 7,000 Common Shares to Nuveen Advisory
Corp., the Fund's investment adviser (the "Adviser"), a wholly owned subsidiary
of The John Nuveen Company.

Nuveen Investments, also a wholly owned subsidiary of The John Nuveen Company,
has agreed to reimburse all organization expenses (approximately $11,500) and
pay all Common Share offering costs (other than the sales load) that exceed $.03
per Common Share.

The Fund seeks to provide current income exempt from regular federal income tax
and the alternative minimum tax applicable to individuals.

The Fund is authorized by its Declaration of Trust to issue Preferred Shares
("MuniPreferred Shares") having a liquidation value of $25,000 per share in one
or more classes or series, with dividend, liquidation preference and other
rights as determined by the Fund's Board of Trustees without approval of the
Common Shareholders.

Note 2: Significant Accounting Policies

The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the use of
management estimates. Actual results may differ from those estimates.

The Fund's share of Common Share offering costs will be recorded as a reduction
of the proceeds from the sale of Common Shares upon the commencement of Fund
operations.

If the Fund offers MuniPreferred Shares, the offering costs will be borne by
Common Shareholders as a direct reduction to paid-in capital.

Note 3: Investment Management Agreement

Pursuant to an investment management agreement between the Adviser and the Fund,
the Fund, upon commencement of Fund operations, has agreed to pay a management
fee, payable on a monthly basis, at an annual rate ranging from .6500% of the
first $125 million of the average daily net assets (including net assets
attributable to MuniPreferred Shares ("Managed Assets")) to .5750% of the
average daily Managed Assets in excess of $2 billion.

In addition to the reimbursement and waiver of organization and Common Share
offering costs discussed in Note 1, the Adviser has contractually agreed to
reimburse the Fund for fees and expenses in the amount of .32% of average daily
Managed Assets for the first five full years of the Fund's operations, .24% in
year 6, .16% in year 7 and .08% in year 8. The Adviser has not agreed to
reimburse the Fund for any portion of its fees and expenses beyond November 30,
2010.

Note 4: Income Taxes

The Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions.


                                       45

<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
(including ratings on medium term note programs and commercial paper programs).
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>



# (hatchmark): Represents issues that are secured by escrowed funds held in
               cash, held in trust, invested and reinvested in direct,
               non-callable, non-prepayable United States government obligations
               or non-callable, non-prepayable obligations unconditionally
               guaranteed by the U.S. Government, Resolution Funding Corporation
               debt obligations.

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.

(P):           When applied to forward delivery bonds, indicates that the rating
               is provisional pending delivery of the bonds. The rating may be
               revised prior to delivery if changes occur in the legal documents
               or the underlying credit quality of the bonds.

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 issue ranks in the higher end of its generic
               rating category; the modifier 2 indicates a mid-range ranking;
               and the modifier 3 indicates that the issue ranks in the lower
               end of its 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 (or supporting institutions) rated Prime-1 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 (or supporting institutions) rated Prime-2 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, may be more subject to variation than
is the case for Prime-2 securities. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

Issuers (or supporting institutions) rated Prime-3 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 to Long-term and Short-term ratings:

"+" 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 Ratings does not rate the issuer or issue in question.

`Withdrawn': A rating is withdrawn when Fitch Ratings 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,
ratings for which outlooks are `stable' could be downgraded before an outlook
moves to positive or negative if circumstances warrant such an action.
Occasionally, Fitch Ratings 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.



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 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.

     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 June 30, 2002, the total capital and surplus of
Financial Guaranty was approximately $1.01 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 tax-free income (exempt
from regular federal income tax).


     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 (92) and fund assets under management ($33 billion) as of
October 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


Many investors have found municipal closed-end exchange-traded funds to be a
versatile addition to their overall portfolios. Their features include:
<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.










Over time, the existing Nuveen municipal closed-end exchange-traded funds have
generally traded at greater premiums or smaller discounts than funds of other
sponsors. This has translated into share prices that were higher for Nuveen
Fund shareholders, as compared to the prices of other sponsors' funds.

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




[Graph Appears Here]

Average Nuveen Municipal Closed-End
ETF Premium/Discount Advantage

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
 2-Aug-02       0.051048
 9-Aug-02       0.047639
16-Aug-02       0.043032
23-Aug-02       0.038564
30-Aug-02       0.036177
 6-Sep-02       0.035623
13-Sep-02       0.033754
20-Sep-02       0.030352
27-Sep-02       0.03362
Source: Lipper

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 September
26, 1997 through September 27, 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 September 27, 2002, there were 87 Nuveen funds and 170
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.

The Fund will invest at least 80% of its net assets in a portfolio of municipal
bonds that are covered by insurance guaranteeing the timely payment of principal
and interest thereon. For the remaining portion, the Fund will invest
approximately 15% in Baa/BBB rated municipal bonds, and the balance in A rated
municipal bonds.

Tax-Free Income Is Very Attractive But AMT Liability May Reduce The Benefits Of
Tax-Free Income

The true yield of a municipal bond investment may be reduced after adjusting for
the impact of the federal alternative minimum tax (AMT). Even a relatively small
amount of income subject to AMT can have a measurable impact on the real,
after-tax yield of a municipal bond investment. For example, investors subject
to the AMT who own shares in a municipal bond fund with a 5% nominal yield and
20% of its portfolio invested in AMT bonds would see their after-tax yield
reduced by about 0.25%.

AMT Exposure Is Expected To Grow Dramatically

According to a recent report from the Urban-Brookings Tax Policy Center,
liability for the federal AMT may grow to affect 1 in 3 American taxpayers by
the end of the decade. The Center concludes that if there are no changes in
current tax laws, approximately 95% of all taxpayers with incomes between
$100,000 and $500,000 will be subject to the AMT by 2010.

The information in the paragraph above and the chart below are taken from "The
AMT: Out of Control" by Leonard E. Burman, William G. Gale, Jeffrey Rohaly and
Benjamin H. Harris. The report was published in September 2002 by the Urban
Brookings Tax Policy Center, a joint venture of the Urban Institute and the
Brookings Institution.

AMT Exposure May Grow If Current Tax Laws Don't Change

[Chart]
         Adjusted Gross Income          % of Total Taxpayers in Bracket
           (in 2001 dollars)            Expected to be Subject to AMT

                                            2002           2010
          $75,0000 - $100,000                3%             79%
          $100,000 - $200,000               11%             94%
          $200,000 - $500,000               36%             97%

Source: Urban-Brookings Tax Policy Center.

A Nuveen Municipal Closed-End Exchange-Traded Fund May Help Diversify A
Portfolio

Historically, investment-grade quality municipal bonds have shown low return
correlations with a number of other asset classes commonly found in individual
investors' portfolios. We believe that adding a low correlation investment such
as quality municipal bonds to an equity-oriented portfolio has the potential to
enhance the capital preservation by reducing the standard deviation of returns
of your overall portfolio over time.

Low Correlations between Municipal Bonds and Other Asset Classes May Enable a
Municipal Investment to Help Investors Reduce the Risk of Their Overall
Portfolio


                         September 1997 - September 2002
                    Correlation of Monthly Returns
Municipal Bonds               1.00
Government Bonds              0.76
Preferred Stocks              0.50
REITs                        -0.05
S&P 500                      -0.21

Source: Ibbotson Associates, Lehman Brothers, Merrill Lynch, NAREIT.

Correlation coefficients are based on monthly return data from September 1997
through September 2002. Past correlations are not necessarily predictive of
future correlations between any of these asset classes and the Fund. Municipal
Bonds are represented by the Lehman Brothers Municipal Bond Index, an unmanaged
index comprised of bonds issued after December 31, 1990, with a minimum credit
rating of at least Baa, an outstanding par value of at least $5 million and a
remaining maturity of at least one year. Government Bonds are represented by the
Lehman Brothers Government Bond Index, an unmanaged index that includes all
public obligations of the U.S. Treasury and all publicly issued debt of U.S.
Government agencies and quasi-federal corporations, and corporate debt
guaranteed by the U.S. Government, excluding foreign-targeted issues. Preferred
stocks are represented by the Merrill Lynch Hybrid Preferred Stock Index, an
unmanaged index of all investment-grade, non-dividend received deduction
eligible preferred stock with outstanding par values of $100 million or more.
REITs are represented by the NAREIT Equity REIT Index, an unmanaged index of
publicly-traded U.S. tax-qualified REITs that have 75% or more of their invested
book assets invested in the equity ownership of real estate. The S&P 500 is an
unmanaged index of 500 large-capitalization, publicly-traded stocks representing
various industries. It is not possible to invest directly in any of these
indexes.

What Is The Alternative Minimum Tax And Why Does It Impact Certain Municipal
Bonds?

The federal alternative minimum tax (AMT) was introduced in 1969 in an effort to
prevent wealthy taxpayers from completely avoiding all federal income tax
liability. The AMT provides an alternate methodology to calculate tax liability,
and requires certain deductions, adjustments and preferences that are permitted
under regular income tax laws to be added back to gross income for the purpose
of determining AMT liability.

One of the items that must be added back to gross income for the purpose of AMT
calculation is income received from "private activity" municipal bonds.
Generally, private activity bonds are issued for the benefit of a private
company or organization such as an airline or power producer.

The Funds will not invest in AMT bonds.


                                     E-2

<PAGE>


Nuveen Insured Tax-Free Advantage Municipal Fund _________ Common Shares



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

                      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 are filed with this Pre-effective Amendment to the Registration
Statement.



     2.  Exhibits:



a.   Declaration of Trust dated July 29, 2002. Filed on October 4, 2002 as
     Exhibit a to Registrant's Registration Statement on Form N-2 (File No.
     333-100320) and incorporated herein by reference.*


b.   By-Laws of Registrant. Filed on October 4, 2002 as Exhibit b to
     Registrant's Registration Statement on Form N-2 (File No. 333-100320) and
     incorporated herein by reference.*


c.   None.


d.   Form of Share Certificate. Filed on October 24, 2002 as Exhibit d to
     Pre-Effective Amendment No. 1 to Registrant's Registration Statement on
     Form N-2 (File No. 333-100320) and incorporated herein by reference.*

e.   Terms and Conditions of the Dividend Reinvestment Plan.


f.   None.


g.   Investment Management Agreement between Registrant and Nuveen Advisory
     Corp. dated November 14, 2002.

h.1  Form of Underwriting Agreement.

h.2  Form of Salomon Smith Barney 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 November 4, 2002.

k.1  Transfer Agency and Service Agreement between Registrant and State Street
     Bank and Trust Company dated October 7, 2002.

k.2  Expense Reimbursement Agreement between Registrant and Nuveen Advisory
     Corp. dated November 14, 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 Ernst & Young LLP.

o.   None.


p.   Subscription Agreement of Nuveen Advisory Corp. dated November 4, 2002.


q.   None.


r.   Code of Ethics of Nuveen Advisory Corp. Filed on October 24, 2002 as
     Exhibit r to Pre-Effective Amendment No. 1 to Registrant's Registration
     Statement on Form N-2 (File No. 333-100320) and incorporated herein by
     reference.*

s.   Powers of Attorney.

___________________

  * Previously filed.



Item 25: Marketing Arrangements


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

See the Introductory Paragraph and Sections 2 and 3(d) of the Form of Salomon
Smith Barney Master Selected Dealer Agreement 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 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
filed as Exhibit h.4 to this Registration Statement.

See Paragraph e of the Form of Dealer Letter Agreement between Nuveen and the
Underwriters 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                       $ 27,600
     National Association of Securities Dealers, Inc. fees           30,500
     Printing and engraving expenses                                428,000
     Legal Fees                                                      98,000
     American Stock Exchange listing fees                             5,125
     Blue Sky filing fees and expenses                                5,000
     Underwriters' Reimbursement                                     65,000
     Miscellaneous expenses                                           5,775
                                                                   --------
          Total                                                    $665,000
                                                                   ========
</TABLE>


                                      C-2

<PAGE>

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




     *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
Annual Expenses" would be estimated to be 1.23% 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 November 20, 2002





<TABLE>
<CAPTION>
                                                           Number of
                  Title of Class                         Record Holders
                  --------------                         --------------
       <S>                                               <C>
       Common Shares, $0.01 par value                            1
</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 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, Nuveen Ohio Dividend Advantage
Municipal Fund 3, Nuveen Arizona Dividend Advantage Municipal Fund 3, Nuveen
Connecticut Dividend Advantage Municipal Fund 3, Nuveen Georgia Dividend
Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3
and Nuveen North Carolina 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 B 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, General Counsel and Secretary
                                                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 20th day of
November, 2002.




                                    NUVEEN INSURED TAX-FREE
                                    ADVANTAGE MUNICIPAL FUND

                                    /s/ Jessica R. Droeger

                                    ______________________________________
                                    Jessica R. Droeger, 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           November 20, 2002
- --------------------        (Principal Financial and
    Stephen D. Foy          Accounting Officer)

/s/ Gifford R. Zimmerman    Chief Administrative Officer
- ------------------------    (Principal Executive Officer)
    Gifford R. Zimmerman

Timothy R. Schwertfeger*    Chairman of the Board and         By: /s/ Gifford R. Zimmerman
                            Trustee                               --------------------------
                                                                      Gifford R. Zimmerman
Robert P. Bremner*          Trustee                                   Attorney-In-Fact
                                                                      November 20, 2002
Lawrence H. Brown*          Trustee

Anne E. Impellizzeri*       Trustee

Peter R. Sawers*            Trustee

William J. Schneider*       Trustee

Judith M. Stockdale*        Trustee
</TABLE>


     *Original powers of attorney authorizing Jessica R. Droeger and Gifford R.
Zimmerman, among others, to execute this Registration Statement, and Amendments
thereto, for each of the trustees of Registrant on whose behalf this
Registration Statement is filed, have 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 November 14, 2002.
h.1  Form of Underwriting Agreement.
h.2  Form of Salomon Smith Barney 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 November 4, 2002.
k.1  Transfer Agency and Service Agreement between Registrant and State Street
     Bank and Trust Company dated October 7, 2002.
k.2  Expense Reimbursement Agreement between Registrant and Nuveen
     Advisory Corp. dated November 14, 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 Ernst & Young LLP.
o.   None.
p.   Subscription Agreement of Nuveen Advisory Corp. dated November 4, 2002.
q.   None
r.   Code of Ethics of Nuveen Advisory Corp.*
s.   Powers of Attorney.


___________________

  * Previously filed.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.E
<SEQUENCE>3
<FILENAME>dex99e.txt
<DESCRIPTION>TERMS OF DIVIDEND REINVESTMENT PLAN
<TEXT>
<PAGE>


                          NUVEEN EXCHANGE-TRADED FUNDS
                   (except Nuveen Municipal Value Fund, Inc.)

             Terms and Conditions of the Dividend Reinvestment Plan
             ------------------------------------------------------


This Dividend Reinvestment Plan for the Nuveen Exchange-Traded Funds set forth
on Exhibit A attached hereto (each, a "Fund") provides for reinvestment of Fund
distributions, consisting of income dividends, returns of capital and capital
gain distributions paid by the Fund, on behalf of Fund shareholders electing to
participate in the Plan ("Participants") by State Street Bank ("State Street"),
the Plan Agent, in accordance with the following terms:

1. State Street will act as Agent for Participants and will open an account for
each Participant under the Dividend Reinvestment Plan in the same name as the
Participant's shares are registered, and will put into effect for each
Participant the distribution reinvestment option of the Plan as of the first
record date for a distribution to shareholders after State Street receives the
Participant's authorization so to do, either in writing duly executed by the
Participant or by telephone notice satisfying such reasonable requirements as
State Street and the Fund may agree. In the case of shareholders who hold shares
for others who are the beneficial owners, State Street will administer the Plan
on the basis of the number of Shares certified from time to time by the record
shareholder as representing the total amount registered in the record
shareholder's name and held for the account of beneficial owners who are
Participants.

2. Whenever the Fund declares a distribution payable in shares or cash at the
option of the shareholders, each Participant shall take such distribution
entirely in shares and State Street shall automatically receive such shares,
including fractions, for the Participant's account, except in circumstances
described in Paragraph 3 below. Except in such circumstances, the number of
additional shares to be credited to each Participant's account shall be
determined by dividing the dollar amount of the distribution payable on the
Participant's shares by the current market price per share on the payable date
for such distribution.

3. Should the net asset value per Fund share exceed the market price per share
on the day for which trades will settle on the payment date for such
distribution (the "Valuation Date") for a distribution payable in shares or in
cash at the option of the shareholder, or should the Fund declare a distribution
payable only in cash, each Participant shall take such distribution in cash and
State Street shall apply the amount of such distribution to the purchase on the
open market of shares of the Fund for the Participant's account. Such Plan
purchases shall be made as early as the Valuation Date, under the supervision of
the investment adviser. State Street shall complete such Plan purchases no more
than 30 days after the Valuation Date, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of
federal securities law.

4. For the purpose of this Plan, the market price of the Fund's shares on a
particular date shall be the last sale price on the Exchange where it is traded
on that date, or if there is no sale on such

<PAGE>

Exchange on that date, then the mean between the closing bid and asked
quotations for such shares on such Exchange on such date.

5. Open-market purchases provided for above may be made on any securities
exchange where the Fund's shares are traded, in the over-the-counter market or
in negotiated transactions and may be on such terms as to price, delivery and
otherwise as State Street shall determine. Participants' funds held uninvested
by State Street will not bear interest, and it is understood that, in any event,
State Street shall have no liability in connection with any inability to
purchase shares within 30 days after the Valuation Date as herein provided, or
with the timing of any purchases affected. State Street shall have no
responsibility as to the value of the Fund's shares acquired for Participants'
accounts. State Street may commingle all Participants' amounts to be used for
open-market purchases of Fund shares and the price per share allocable to each
Participant in connection with such purchases shall be the average price
(including brokerage commissions and other related costs) of all Fund shares
purchased by State Street as Agent.

6. State Street may hold each Participant's shares acquired pursuant to this
Plan, together with the shares of other Participants, in non-certificated form
in State Street's name or that of its nominee. State Street will forward to each
Participant any proxy solicitation material and will vote any shares so held
only in accordance with proxies returned to the Fund.

7. State Street will confirm to each Participant each acquisition made for the
Participant's account as soon as practicable but not later than 60 days after
the date thereof. State Street will deliver to any Participant upon request,
without charge, a certificate or certificates for his full shares. Although a
Participant may from time to time have an undivided fractional interest
(computed to three decimal places) in a share of the Fund, and distributions on
fractional shares will be credited to the Participant's account, no certificates
for a fractional share will be issued. In the event of termination of a
Participant's account under the Plan, State Street will adjust for any such
undivided fractional interest at the market value of the Fund's shares at the
time of termination.

8. Any stock dividends or split shares distributed by the Fund on full and
fractional shares held by State Street for a Participant will be credited to the
Participant's account. In the event that the Fund makes available to its
shareholders rights to purchase additional shares or other securities, the
shares held for each Participant under the Plan will be added to other shares
held by the Participant in calculating the number of rights to be issued to that
Participant.

9. State Street's service fee for handling reinvestment of distributions
pursuant hereto will be paid by the Fund. Participants will be charged their pro
rata shares of brokerage commissions on all open market purchases.

                                  2

<PAGE>

10. Each Participant may terminate his account under the Plan by notifying State
Street of his intent so to do, such notice to be provided either in writing duly
executed by the Participant or by telephone in accordance with such reasonable
requirements as State Street and the Fund may agree. Such termination will be
effective immediately if notice is received by State Street not less than ten
days prior to any distribution record date for the next succeeding distribution;
otherwise such termination will be effective shortly after the investment of
such distribution with respect to all subsequent distributions. The Plan may be
terminated by the Fund or State Street upon at least 90 days prior notice. Upon
any termination, State Street will cause a certificate or certificates for the
full shares held for each Participant under the Plan and cash adjustment for any
fraction to be delivered to the Participant without charge. If any Participant
elects in advance of such termination to have State Street sell part or all of
his shares, State Street is authorized to deduct from the proceeds a $2.50 fee
plus the brokerage commissions incurred for the transaction.

11. These terms and conditions may be amended or supplemented by State Street or
the Fund at any time or times but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 90 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, State Street receives
notice of the termination of such Participant's account under the Plan in
accordance with the terms hereof. Any such amendment may include an appointment
by State Street in its place and stead of a successor Agent under these terms
and conditions. Upon any such appointment of any Agent for the purpose of
receiving distributions, the Fund will be authorized to pay to such successor
Agent, for each Participant's account, all dividends and distributions payable
on shares of the Fund held in the Participant's name or under the Plan for
retention or application by such successor Agent as provided in these terms and
conditions.

12. State Street shall at all times act in good faith and agree to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement and to comply with applicable law, but assumes no
responsibility and shall not be liable for loss or damage due to errors unless
such error is caused by its negligence, bad faith or willful misconduct or that
of its employees.

13. These terms and conditions shall be governed by the laws of the Commonwealth
of Massachusetts.

                                       3

<PAGE>

                                                                       Exhibit A

                 Nuveen Municipal Income Fund, Inc.
                 Nuveen California Municipal Income Fund, Inc.
                 Nuveen New York Municipal Income Fund, Inc.
                 Nuveen Premium Income Municipal Fund, Inc.
                 Nuveen Performance Plus Municipal Fund, Inc.
                 Nuveen Municipal Advantage Fund, Inc.
                 Nuveen Municipal Market Opportunity Fund, Inc.
                 Nuveen Investment Quality Municipal Fund, Inc.
                 Nuveen Insured Quality Municipal Fund, Inc.
                 Nuveen Select Quality Municipal Fund, Inc.
                 Nuveen Quality Income Municipal Fund, Inc.
                 Nuveen Insured Opportunity Municipal Fund, Inc.
                 Nuveen Premier Municipal Income Fund, Inc.
                 Nuveen Premier Insured Municipal Income Fund, Inc.
                 Nuveen Premium Income Municipal Fund 2, Inc.
                 Nuveen Premium Income Municipal Fund 4, Inc.
                 Nuveen Insured Premium Income Municipal Fund, Inc.
                 Nuveen Insured Premium Income Municipal Fund 2
                 Nuveen Dividend Advantage Municipal Fund
                 Nuveen Dividend Advantage Municipal Fund 2
                 Nuveen Dividend Advantage Municipal Fund 3
                 Nuveen Insured Dividend Advantage Municipal Fund
                 Nuveen Select Maturities Fund
                 Nuveen California Municipal Value Fund, Inc.
                 Nuveen California Performance Plus Municipal Fund, Inc.
                 Nuveen California Municipal Market Opportunity Fund, Inc.
                 Nuveen California Investment Quality Municipal Fund, Inc.
                 Nuveen California Select Quality Municipal Fund, Inc.
                 Nuveen California Quality Income Municipal Fund, Inc.
                 Nuveen Insured California Premium Income Municipal Fund, Inc.
                 Nuveen Insured California Premium Income Municipal Fund 2, Inc.
                 Nuveen Insured California Dividend Advantage Municipal Fund
                 Nuveen California Premium Income Municipal Fund
                 Nuveen California Dividend Advantage Municipal Fund
                 Nuveen California Dividend Advantage Municipal Fund 2
                 Nuveen California Dividend Advantage Municipal Fund 3
                 Nuveen Florida Investment Quality Municipal Fund
                 Nuveen Florida Quality Income Municipal Fund
                 Nuveen Insured Florida Premium Income Municipal Fund
                 Nuveen New Jersey Investment Quality Municipal Fund, Inc.
                 Nuveen New Jersey Premium Income Municipal Fund, Inc.
                 Nuveen New Jersey Dividend Advantage Municipal Fund
                 Nuveen New Jersey Dividend Advantage Municipal Fund 2
                 Nuveen New York Municipal Value Fund, Inc.
                 Nuveen New York Performance Plus Municipal Fund, Inc.
                 Nuveen New York Investment Quality Municipal Fund, Inc.
                 Nuveen New York Select Quality Municipal Fund, Inc.
                 Nuveen New York Quality Income Municipal Fund, Inc.
                 Nuveen Insured New York Premium Income Municipal Fund, Inc.
                 Nuveen Insured New York Dividend Advantage Municipal Fund
                 Nuveen New York Dividend Advantage Municipal Fund
                 Nuveen New York Dividend Advantage Municipal Fund 2
                 Nuveen Pennsylvania Investment Quality Municipal Fund
                 Nuveen Pennsylvania Premium Income Municipal Fund 2
                 Nuveen Pennsylvania Dividend Advantage Municipal Fund
                 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2
                 Nuveen Arizona Premium Income Municipal Fund, Inc.
                 Nuveen Arizona Dividend Advantage Municipal Fund
                 Nuveen Arizona Dividend Advantage Municipal Fund 2
                 Nuveen Arizona Dividend Advantage Municipal Fund 3

<PAGE>


                 Nuveen Connecticut Premium Income Municipal Fund
                 Nuveen Connecticut Dividend Advantage Municipal Fund
                 Nuveen Connecticut Dividend Advantage Municipal Fund 2
                 Nuveen Connecticut Dividend Advantage Municipal Fund 3
                 Nuveen Georgia Premium Income Municipal Fund
                 Nuveen Georgia Dividend Advantage Municipal Fund
                 Nuveen Georgia Dividend Advantage Municipal Fund 2
                 Nuveen Maryland Premium Income Municipal Fund
                 Nuveen Maryland Dividend Advantage Municipal Fund
                 Nuveen Maryland Dividend Advantage Municipal Fund 2
                 Nuveen Maryland Dividend Advantage Municipal Fund 3
                 Nuveen Massachusetts Premium Income Municipal Fund
                 Nuveen Massachusetts Dividend Advantage Municipal Fund
                 Nuveen Michigan Quality Income Municipal Fund, Inc.
                 Nuveen Michigan Premium Income Municipal Fund, Inc.
                 Nuveen Michigan Dividend Advantage Municipal Fund
                 Nuveen Missouri Premium Income Municipal Fund
                 Nuveen North Carolina Premium Income Municipal Fund
                 Nuveen North Carolina Dividend Advantage Municipal Fund
                 Nuveen North Carolina Dividend Advantage Municipal Fund 2
                 Nuveen North Carolina Dividend Advantage Municipal Fund 3
                 Nuveen Ohio Quality Income Municipal Fund, Inc.
                 Nuveen Ohio Dividend Advantage Municipal Fund
                 Nuveen Ohio Dividend Advantage Municipal Fund 2
                 Nuveen Ohio Dividend Advantage Municipal Fund 3
                 Nuveen Texas Quality Income Municipal Fund
                 Nuveen Virginia Premium Income Municipal Fund
                 Nuveen Virginia Dividend Advantage Municipal Fund
                 Nuveen Virginia Dividend Advantage Municipal Fund 2
                 Nuveen Select Tax-Free Income Portfolio
                 Nuveen Select Tax-Free Income Portfolio 2
                 Nuveen Select Tax-Free Income Portfolio 3
                 Nuveen California Select Tax-Free Income Portfolio
                 Nuveen New York Select Tax-Free Income Portfolio
                 Nuveen Insured Tax-Free Advantage Municipal Fund
                 Nuveen Insured California Tax-Free Advantage Municipal Fund
                 Nuveen Insured Florida Tax-Free Advantage Municipal Fund
                 Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund
                 Nuveen Insured New York Tax-Free Advantage Municipal Fund

                                        2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.G
<SEQUENCE>4
<FILENAME>dex99g.txt
<DESCRIPTION>INVESTMENT MANAGEMENT AGREEMENT
<TEXT>
<PAGE>

                         INVESTMENT MANAGEMENT AGREEMENT

AGREEMENT made this 14th day of November, 2002, by and between NUVEEN INSURED
TAX-FREE ADVANTAGE MUNICIPAL FUND, a Massachusetts business trust (the "Fund"),
and NUVEEN ADVISORY CORP., a Delaware corporation (the "Adviser").

                               W I T N E S S E T H

In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:

1.   The Fund hereby employs the Adviser to act as the investment adviser for,
and to manage the investment and reinvestment of the assets of the Fund in
accordance with the Fund's investment objective and policies and limitations,
and to administer the Fund's affairs to the extent requested by and subject to
the supervision of the Board of Trustees of the Fund for the period and upon the
terms herein set forth. The investment of the Fund's assets shall be subject to
the Fund's policies, restrictions and limitations with respect to securities
investments as set forth in the Fund's then current registration statement under
the Investment Company Act of l940, and all applicable laws and the regulations
of the Securities and Exchange Commission relating to the management of
registered closed-end management investment companies.

The Adviser accepts such employment and agrees during such period to render such
services, to furnish office facilities and equipment and clerical, bookkeeping
and administrative services (other than such services, if any, provided by the
Fund's transfer agent) for the Fund, to permit any of its

<PAGE>

                                        2

officers or employees to serve without compensation as trustees or officers of
the Fund if elected to such positions, and to assume the obligations herein set
forth for the compensation herein provided. The Adviser shall, for all purposes
herein provided, be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for nor
represent the Fund in any way, nor otherwise be deemed an agent of the Fund.

2.   For the services and facilities described in Section l, the Fund will pay
to the Adviser, at the end of each calendar month, an investment management fee
computed by applying the following annual rate to the average daily net assets
of the Fund:

                      RATE               AVERAGE DAILY NET ASSETS/(1)/
                     -----               -----------------------------

                     .6500%              Up to $125 million
                     .6375%              $125 to $250 million
                     .6250%              $250 to $500 million
                     .6125%              $500 million to $1 billion
                     .6000%              $1 billion to $2 billion
                     .5750%              $2 billion and over

/(1)/Including net assets attributable to MuniPreferred Shares.

For the month and year in which this Agreement becomes effective, or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement shall have been in effect during the month and year, respectively.
The services of the Adviser to the Fund under this Agreement are not to be
deemed exclusive, and the Adviser shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby.

<PAGE>

                                        3

3.   The Adviser shall arrange for officers or employees of the Adviser to
serve, without compensation from the Fund, as trustees, officers or agents of
the Fund, if duly elected or appointed to such positions, and subject to their
individual consent and to any limitations imposed by law.

4.   Subject to applicable statutes and regulations, it is understood that
officers, trustees, or agents of the Fund are, or may be, interested in the
Adviser as officers, directors, agents, shareholders or otherwise, and that the
officers, directors, shareholders and agents of the Adviser may be interested in
the Fund otherwise than as trustees, officers or agents.

5.   The Adviser shall not be liable for any loss sustained by reason of the
purchase, sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon the investigation and research made by
any other individual, firm or corporation, if such recommendation shall have
been selected with due care and in good faith, except loss resulting from
willful misfeasance, bad faith, or gross negligence on the part of the Adviser
in the performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.

6.   The Adviser currently manages other investment accounts and funds,
including those with investment objectives similar to the Fund, and reserves the
right to manage other such accounts and funds in the future. Securities
considered as investments for the Fund may also be appropriate for other
investment accounts and funds that may be managed by the Adviser. Subject to
applicable laws and regulations, the Adviser will attempt to allocate equitably
portfolio transactions among the portfolios of its other investment accounts and
funds purchasing securities whenever decisions are

<PAGE>

                                        4

made to purchase or sell securities by the Fund and one or more of such other
accounts or funds simultaneously. In making such allocations, the main factors
to be considered by the Adviser will be the respective investment objectives of
the Fund and such other accounts and funds, the relative size of portfolio
holdings of the same or comparable securities, the availability of cash for
investment by the Fund and such other accounts and funds, the size of investment
commitments generally held by the Fund and such accounts and funds, and the
opinions of the persons responsible for recommending investments to the Fund and
such other accounts and funds.

7.   This Agreement shall continue in effect until July l, 2004, unless and
until terminated by either party as hereinafter provided, and shall continue in
force from year to year thereafter, but only as long as such continuance is
specifically approved, at least annually, in the manner required by the
Investment Company Act of l940.

     This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time without the payment of any penalty
by the Fund or by the Adviser upon sixty (60) days' written notice to the other
party. The Fund may effect termination by action of the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund, accompanied
by appropriate notice.

<PAGE>

                                        5

     This Agreement may be terminated, at any time, without the payment of any
penalty, by the Board of Trustees of the Fund, or by vote of a majority of the
outstanding voting securities of the Fund, in the event that it shall have been
established by a court of competent jurisdiction that the Adviser, or any
officer or director of the Adviser, has taken any action which results in a
breach of the covenants of the Adviser set forth herein.

     Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation, described in Section
2, earned prior to such termination.

8.   If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.

9.   Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for receipt of such notice.

<PAGE>

                                        6

10.  The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.

     IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed on the day and year above written.

                                          NUVEEN INSURED TAX-FREE
                                          ADVANTAGE MUNICIPAL FUND


by:                                       /s/ Jessica R. Droeger
                                          ----------------------
                                               Vice President


Attest:  /s/ Virginia L. O'Neal
         ----------------------
        Assistant Secretary


                                          NUVEEN ADVISORY CORP.


                                          by:    /s/ William M. Fitzgerald
                                              -------------------------------
                                                     Managing Director


Attest:  /s/ Larry Martin
         ----------------
         Assistant Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H.1
<SEQUENCE>5
<FILENAME>dex99h1.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>

                                _________ Shares

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

                                  COMMON STOCK

                             UNDERWRITING AGREEMENT

                                                               November __, 2002

Salomon Smith Barney Inc.
Nuveen Investments
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
H&R Block Financial Advisors, Inc.
Fahnestock & Co. Inc.
Janney Montgomery Scott LLC
Legg Mason Wood Walker, Incorporated
Quick & Reilly, Inc. A FleetBoston Financial Company
Raymond James & Associates, Inc.
RBC Dain Rauscher, Inc.
Ryan Beck & Co.
SunTrust Capital Markets, Inc.
Wachovia Securities, Inc.
Wedbush Morgan Securities Inc.

As Representatives of the Several Underwriters

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

     The undersigned, Nuveen Insured Tax-Free Advantage Municipal Fund, a
Massachusetts business trust (the "Fund"), and Nuveen Advisory Corp., a Delaware
corporation (the "Manager"), address you as Underwriters and as the
representatives (the "Representatives") of each of the other persons, firms and
corporations, if any, listed in Schedule I hereto (herein collectively called
"Underwriters"). The Fund proposes to issue and sell an aggregate of _______
shares (the "Firm Shares") of its common shares of beneficial interest, $.01 par
value per share (the "Common Shares"), to the several Underwriters. The Fund
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 2 hereof, up to an additional _______ Common Shares (the
"Additional Shares"). The Firm Shares and Additional Shares are hereinafter
collectively referred to as the "Shares".

<PAGE>

     The Fund and the Manager wish to confirm as follows their agreements with
you and the other several Underwriters on whose behalf you are acting in
connection with the several purchases of the Shares by the Underwriters.

     The Fund is entering into an investment management agreement with the
Manager dated _______, 2002, a master custodian agreement with State Street Bank
and Trust Company dated _______, 2002 and a transfer agency and service
agreement with State Street Bank and Trust Company dated _______, 2002 and such
agreements are herein referred to as the "Management Agreement", the "Custodian
Agreement" and the "Transfer Agency Agreement", respectively. Collectively, the
Management Agreement, the Custodian Agreement and the Transfer Agency Agreement
are herein referred to as the "Fund Agreements". This Underwriting Agreement is
herein referred to as the "Agreement".

     1.   Registration Statement and Prospectus.The Fund has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended (the "1933 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
and regulations of the Commission under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File Nos. 333-100320 and 811-21213) under
the 1933 Act and the 1940 Act and may pursuant to the Rules and Regulations
prepare and file an additional registration statement relating to a portion of
the Shares pursuant to Rule 462(b) of the 1933 Act Rules and Regulations (a
"462(b) Registration Statement") (collectively, the "registration statement"),
including a prospectus (including any statement of additional information)
relating to the Shares and a notification of registration of the Fund as an
investment company under the 1940 Act on Form N-8A (the "1940 Act
Notification"). The term "Registration Statement" as used in this Agreement
means the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933 Act or, if
the registration statement became effective under the 1933 Act prior to the
execution of this Agreement, as amended or supplemented at the time it became
effective prior to the execution of this Agreement, and includes any information
deemed to be included by Rule 430A under the 1933 Act Rules and Regulations. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed under the
1933 Act and must be declared effective before the offering of the Shares may
commence, the term "Registration Statement" as used in this Agreement means the
registration statement as amended by said post-effective amendment. For the
avoidance of doubt, if the Fund has filed a 462(b) Registration Statement, the
term "Registration Statement" as used in this Agreement shall include such
462(b) Registration Statement. The term "Prospectus" as used in this Agreement
means the prospectus (including the statement of additional information) in the
form included in the Registration Statement or, if the prospectus (including the
statement of additional information) included in the Registration Statement
omits information in reliance on Rule 430A and such information is included in a
prospectus (including the statement of additional information) filed with the
Commission pursuant to Rule 497(h) under the 1933 Act Rules and Regulations, the
term "Prospectus" as used in this Agreement means the prospectus (including the
statement of additional information) in the form included in the Registration
Statement as

                                        2

<PAGE>

supplemented by the addition of the information contained in the prospectus
(including the statement of additional information) filed with the Commission
pursuant to Rule 497(h). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus (including the statement of additional
information) subject to completion in the form included in the registration
statement at the time of the initial filing of the registration statement with
the Commission and as such prospectus (including the statement of additional
information) shall have been amended from time to time prior to the date of the
Prospectus, together with any other prospectus (including any other statement of
additional information) relating to the Fund other than the Prospectus.

     The Fund has furnished the Representatives with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.

     2.   Agreements to Sell and Purchase. The Fund hereby agrees, subject to
all the terms and conditions set forth herein, to issue and to sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Fund and the Manager herein contained and subject to all of
the other terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund at a purchase price per
share of $14.325 per Share (the "purchase price per share"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 10 hereof).

     The Fund also agrees, subject to all the terms and conditions set forth
herein, to issue and to sell to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Fund and the Manager herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right to purchase from the Fund, at the purchase
price per share, pursuant to an option (the "over-allotment option") which may
be exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 45th day after the date of the Prospectus (or if such 45th day
shall be a Saturday or a Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange (the "NYSE") is open for trading) up
to an aggregate of _______ Additional Shares. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. Upon any exercise of the over-allotment option,
upon the basis of the representations, warranties and agreements of the Fund and
the Manager herein contained and subject to all of the other terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Fund the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears the
same proportion to the number of Additional Shares to be purchased by the
Underwriters as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I (or such number of Firm Shares increased as set forth
in Section 10 hereof) bears to the aggregate number of Firm Shares.

     3.   Terms of Public Offering.The Fund and the Manager have been advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Firm

                                        3

<PAGE>

Shares as soon after the Registration Statement and this Agreement have become
effective as in your judgment is advisable and initially to offer the Firm
Shares upon the terms set forth in the Prospectus.

     4.   Delivery of Shares and Payments Therefor.

               (a)  Delivery to the Underwriters of and payment to the Fund for
     the Firm Shares shall be made at the office of Salomon Smith Barney Inc.,
     388 Greenwich Street, New York, New York 10013 or through the facilities of
     the Depository Trust Company or another mutually agreeable facility, at
     9:00 A.M., New York City time, on November __, 2002 (the "Closing Date").
     The place of closing for the Firm Shares and the Closing Date may be varied
     by agreement between you and the Fund.

               (b)  Delivery to the Underwriters of and payment to the Fund for
     any Additional Shares to be purchased by the Underwriters shall be made at
     the aforementioned office of Salomon Smith Barney Inc., or through the
     facilities of the Depository Trust Company or another mutually agreeable
     facility, at such time on such date (an "Option Closing Date"), which may
     be the same as the Closing Date, but shall in no event be earlier than the
     Closing Date nor earlier than two nor later than three business days after
     the giving of the notice hereinafter referred to, as shall be specified in
     a written notice from you on behalf of the Underwriters to the Fund of the
     Underwriters' determination to purchase a number, specified in said notice,
     of Additional Shares. The place of closing for any Additional Shares and
     the Option Closing Date for such Additional Shares may be varied by
     agreement between you and the Fund.

               (c)  Certificates for the Firm Shares and for any Additional
     Shares shall be registered in such names and in such denominations as you
     shall request prior to 1:00 P.M., New York City time, (i) in respect of the
     Firm Shares, on the second business day preceding the Closing Date and (ii)
     in respect of Additional Shares, on the day of the giving of the written
     notice in respect of such Additional Shares. Such certificates will be made
     available to you in New York City for inspection and packaging not later
     than 9:00 A.M., New York City time, on the business day next preceding the
     Closing Date or any Option Closing Date, as the case may be. The
     certificates evidencing the Firm Shares and any Additional Shares to be
     purchased hereunder shall be delivered to you on the Closing Date or the
     Option Closing Date, as the case may be, through the facilities of the
     Depository Trust Company or another mutually agreeable facility, against
     payment of the purchase price therefor in immediately available funds to
     the order of the Fund.

     5.   Agreements of the Fund and the Manager. The Fund and the Manager,
jointly and severally, agree with the several Underwriters as follows:

               (a)  If, at the time this Agreement is executed and delivered, it
     is necessary for the Registration Statement or a post-effective amendment
     thereto to be declared effective under the 1933 Act before the offering of
     the Firm Shares may commence, the Fund will use its reasonable best efforts
     to cause the Registration Statement or such post-effective amendment to
     become effective under the 1933 Act as soon as possible. If the

                                        4

<PAGE>

     Registration Statement has become effective and the Prospectus contained
     therein omits certain information at the time of effectiveness pursuant to
     Rule 430A of the 1933 Act Rules and Regulations, the Fund will file a
     Prospectus including such information pursuant to Rule 497(h) of the 1933
     Act Rules and Regulations, as promptly as practicable, but no later than
     the second business day following the earlier of the date of the
     determination of the offering price of the Shares or the date the
     Prospectus is first used after the effective date of the Registration
     Statement. If the Registration Statement has become effective and the
     Prospectus contained therein does not so omit such information, the Fund
     will file a Prospectus pursuant to Rule 497 (c) or (j) of the 1933 Act
     Rules and Regulations as promptly as practicable, but no later than the
     fifth business day following the date of the later of the effective date of
     the Registration Statement or the commencement of the public offering of
     the Shares after the effective date of the Registration Statement. The Fund
     will advise you promptly and, if requested by you, will confirm such advice
     in writing (i) when the Registration Statement or such post-effective
     amendment has become effective, (ii) when the Prospectus has been timely
     filed pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
     Regulations or the certification permitted pursuant to Rule 497(j) of the
     1933 Act Rules and Regulations has been timely filed, whichever is
     applicable.

               (b)  The Fund will advise you promptly and, if requested by you,
     will confirm such advice in writing: (i) of any request made by the
     Commission for amendment of or a supplement to the Registration Statement,
     any Prepricing Prospectus or the Prospectus (or any amendment or supplement
     to any of the foregoing) or for additional information, (ii) of the
     issuance by the Commission, the National Association of Securities Dealers,
     Inc. (the "NASD"), any state securities commission, any national securities
     exchange, any arbitrator, any court or any other governmental, regulatory,
     self-regulatory or administrative agency or any official of any order
     suspending the effectiveness of the Registration Statement, prohibiting or
     suspending the use of the Prospectus, any Prepricing Prospectus or any
     sales material (as hereinafter defined), of any notice pursuant to Section
     8(e) of the 1940 Act, of the suspension of qualification of the Shares for
     offering or sale in any jurisdiction, or the initiation or contemplated
     initiation of any proceeding for any such purposes, (iii) of receipt by the
     Fund, the Manager, any affiliate of the Fund or the Manager or any
     representative or attorney of the Fund or the Manager of any other material
     communication from the Commission, the NASD, any state securities
     commission, any national securities exchange, any arbitrator, any court or
     any other governmental, regulatory, self-regulatory or administrative
     agency or any official relating to the Fund (if such communication relating
     to the Fund is received by such person within three years after the date of
     this Agreement), the Registration Statement, the 1940 Act Notification, the
     Prospectus, any Prepricing Prospectus, any sales material (as hereinafter
     defined) (or any amendment or supplement to any of the foregoing), this
     Agreement or any of the Fund Agreements and (iv) within the period of time
     referred to in paragraph (f) below, of any material adverse change in the
     condition (financial or other), business, prospects, properties, net assets
     or results of operations of the Fund or the Manager or of the happening of
     any event which makes any statement of a material fact made in the
     Registration Statement, the Prospectus, any Prepricing Prospectus or any

                                        5

<PAGE>

     sales material (as hereinafter defined) (or any amendment or supplement to
     any of the foregoing) untrue or which requires the making of any additions
     to or changes in the Registration Statement, the Prospectus, any Prepricing
     Prospectus or any sales materials (as hereinafter defined) (or any
     amendment or supplement to any of the foregoing) in order to state a
     material fact required by the 1933 Act, the 1940 Act or the Rules and
     Regulations to be stated therein or necessary in order to make the
     statements therein (in the case of a prospectus, in light of the
     circumstances under which they were made) not misleading or of the
     necessity to amend or supplement the Registration Statement, the
     Prospectus, any Prepricing Prospectus or any sales material (as hereinafter
     defined) (or any amendment or supplement to any of the foregoing) to comply
     with the 1933 Act, the 1940 Act, the Rules and Regulations or any other law
     or order of any court or regulatory body. If at any time the Commission,
     the NASD, any state securities commission, any national securities
     exchange, any arbitrator, any court or any other governmental, regulatory,
     self-regulatory or administrative agency or any official shall issue any
     order suspending the effectiveness of the Registration Statement,
     prohibiting or suspending the use of the Prospectus, any Prepricing
     Prospectus or any sales material (as hereinafter defined) (or any amendment
     or supplement to any of the foregoing) or suspending the qualification of
     the Shares for offering or sale in any jurisdiction, the Fund will use its
     reasonable best efforts to obtain the withdrawal of such order at the
     earliest possible time.

               (c)  The Fund will furnish to you, without charge, three signed
     copies of the registration statement and the 1940 Act Notification as
     originally filed with the Commission and of each amendment thereto,
     including financial statements and all exhibits thereto (except any
     post-effective amendment required by Rule 8b-16 of the 1940 Act Rules and
     Regulations which is filed with the Commission after the later of (x) one
     year from the date of this Agreement and (y) the date on which the
     distribution of the Shares is completed) and will also furnish to you,
     without charge, such number of conformed copies of the registration
     statement as originally filed and of each amendment thereto (except any
     post-effective amendment required by Rule 8b-16 of the 1940 Act Rules and
     Regulations which is filed with the Commission after the later of (x) one
     year from the date of this Agreement and (y) the date on which the
     distribution of the Shares is completed), with or without exhibits, as you
     may reasonably request.

               (d)  The Fund will not (i) file any amendment to the Registration
     Statement or make any amendment or supplement to the Prospectus, any
     Prepricing Prospectus or any sales material (as hereinafter defined) (or
     any amendment or supplement to any of the foregoing) of which you shall not
     previously have been advised or to which you shall reasonably object within
     a reasonable time after being so advised or (ii) so long as, in the opinion
     of counsel for the Underwriters, a Prospectus is required to be delivered
     in connection with sales by any Underwriter or dealer, file any
     information, documents or reports pursuant to the Securities Exchange Act
     of 1934, as amended (the "1934 Act"), without delivering a copy of such
     information, documents or reports to you, as Representatives of the
     Underwriters, prior to or concurrently with such filing.

                                        6

<PAGE>

               (e)  Prior to the execution and delivery of this Agreement, the
     Fund has delivered to you, without charge, in such quantities as you have
     reasonably requested, copies of each form of any Prepricing Prospectus. The
     Fund consents to the use, in accordance with the provisions of the 1933 Act
     and with the securities or Blue Sky laws of the jurisdictions in which the
     Shares are offered by the several Underwriters and by dealers, prior to the
     date of the Prospectus, of each Prepricing Prospectus so furnished by the
     Fund.

               (f)  As soon after the execution and delivery of this Agreement
     as possible and thereafter from time to time, for such period as in the
     opinion of counsel for the Underwriters a prospectus is required by the
     1933 Act to be delivered in connection with sales of Shares by any
     Underwriter or dealer, the Fund will expeditiously deliver to each
     Underwriter and each dealer, without charge, as many copies of the
     Prospectus (and of any amendment or supplement thereto) as you may
     reasonably request. The Fund consents to the use of the Prospectus (and of
     any amendments or supplements thereto) in accordance with the provisions of
     the 1933 Act and with the securities or Blue Sky laws of the jurisdictions
     in which the Shares are offered by the several Underwriters and by all
     dealers to whom Shares may be sold, both in connection with the offering or
     sale of the Shares and for such period of time thereafter as the Prospectus
     is required by law to be delivered in connection with sales of Shares by
     any Underwriter or dealer. If during such period of time any event shall
     occur that in the judgment of the Fund or in the opinion of counsel for the
     Underwriters is required to be set forth in the Prospectus (as then amended
     or supplemented) or should be set forth therein in order to make the
     statements therein, in light of the circumstances under which they were
     made, not misleading or if it is necessary to supplement or amend the
     Prospectus to comply with the 1933 Act, the 1940 Act, the Rules and
     Regulations or any other law, rule or regulation, the Fund will forthwith
     prepare and, subject to the provisions of paragraph (d) above, file with
     the Commission an appropriate amendment or supplement thereto and will
     expeditiously furnish to the Underwriters and dealers, without charge, such
     number of copies thereof as they shall reasonably request. In the event
     that the Prospectus is to be amended or supplemented, the Fund, if
     requested by you, will promptly issue a press release announcing or
     disclosing the matters to be covered by the proposed amendment or
     supplement.

               (g)  The Fund will cooperate with you and with counsel for the
     Underwriters in connection with the registration or qualification of the
     Shares for offering and sale by the several Underwriters and by dealers
     under the securities or Blue Sky laws of such jurisdictions as you may
     designate and will file such consents to service of process or other
     documents necessary or appropriate in order to effect such registration or
     qualification; provided that in no event shall the Fund be obligated to
     qualify to do business in any jurisdiction where it is not now so qualified
     or to take any action which would subject it to service of process in
     suits, other than those arising out of the offering or sale of the Shares,
     in any jurisdiction where it is not now so subject.

                                        7

<PAGE>

               (h)  The Fund will make generally available to its security
     holders an earnings statement, which need not be audited, covering a
     twelve-month period commencing after the effective date of the Registration
     Statement and ending not later than 15 months thereafter, as soon as
     practicable after the end of such period, which earnings statement shall
     satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 of the
     1933 Act Rules and Regulations.

               (i)  The Fund will comply with the undertaking set forth in
     paragraph 6 of Item 33 of Part C of the Registration Statement.

               (j)  During the period of five years hereafter, the Fund will
     furnish to you (i) as soon as available, a copy of each report of the Fund
     mailed to shareholders or filed with the Commission and (ii) from time to
     time such other information concerning the Fund as you may reasonably
     request.

               (k)  If this Agreement shall terminate or shall be terminated
     after execution pursuant to any provisions hereof (other than pursuant to
     the second paragraph of Section 10 hereof or by notice given by you
     terminating this Agreement pursuant to Section 10 or Section 11 hereof) or
     if this Agreement shall be terminated by the Underwriters because of any
     failure or refusal on the part of the Fund or the Manager to comply with
     the terms or fulfill any of the conditions of this Agreement, the Fund and
     the Manager, jointly and severally, agree to reimburse the Representatives
     for all out-of-pocket expenses (including fees and expenses of counsel for
     the Underwriters) incurred by you in connection herewith, but the Fund and
     the Manager shall in no event be liable for any internal cost of the
     Underwriters or any loss of anticipated profits or speculative,
     consequential or similar damages for such termination.

               (l)  The Fund will direct the investment of the net proceeds of
     the offering of the Shares in such a manner as to comply with the
     investment objectives, policies and restrictions of the Fund as described
     in the Prospectus.

               (m)  The Fund will file the requisite copies of the Prospectus
     with the Commission in a timely fashion pursuant to Rule 497(c) or Rule
     497(h) of the 1933 Act Rules and Regulations, whichever is applicable or,
     if applicable, will file in a timely fashion the certification permitted by
     Rule 497(j) of the 1933 Act Rules and Regulations and will advise you of
     the time and manner of such filing.

               (n)  Except as provided in this Agreement or pursuant to any
     dividend reinvestment plan of the Fund in effect on the date hereof, the
     Fund will not sell, contract to sell or otherwise dispose of, any Common
     Shares or any securities convertible into or exercisable or exchangeable
     for Common Shares or grant any options or warrants to purchase Common
     Shares, for a period of 180 days after the date of the Prospectus, without
     the prior written consent of Salomon Smith Barney Inc.

               (o)  Except as stated in this Agreement and in the Prospectus,
     neither the Fund nor the Manager has taken, nor will it take, directly or
     indirectly, any action designed to

                                        8

<PAGE>

     or that might reasonably be expected to cause or result in stabilization or
     manipulation of the price of the Common Shares.

               (p)  The Fund will use its reasonable best efforts to have the
     Common Shares listed, subject to notice of issuance, on the American Stock
     Exchange (the "AMEX") concurrently with the effectiveness of the
     Registration Statement and to comply with the rules and regulations of such
     exchange.

     6.   Representations and Warranties of the Fund and the Manager. The Fund
and the Manager, jointly and severally, represent and warrant to each
Underwriter that:

               (a)  Each Prepricing Prospectus included as part of the
     registration statement as originally filed or as part of any amendment or
     supplement thereto complied when so filed in all material respects with the
     provisions of the 1933 Act, the 1940 Act and the Rules and Regulations.

               (b)  The Registration Statement, in the form in which it became
     or becomes effective and also in such form as it may be when any
     post-effective amendment thereto shall become effective and the Prospectus
     and any amendment or supplement thereto when filed with the Commission
     under Rule 497 of the 1933 Act Rules and Regulations and the 1940 Act
     Notification when originally filed with the Commission and any amendment or
     supplement thereto when filed with the Commission complied or will comply
     in all material respects with the provisions of the 1933 Act, the 1940 Act
     and the Rules and Regulations and did not or will not at any such times
     contain an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein (in the case of a prospectus, in light of the circumstances under
     which they were made) not misleading; except that this representation and
     warranty does not apply to statements in or omissions from the Registration
     Statement or the Prospectus (or any amendment or supplement thereto) made
     in reliance upon and in conformity with information relating to any
     Underwriter furnished to the Fund in writing by or on behalf of any
     Underwriter through you expressly for use therein.

               (c)  All the outstanding Common Shares of the Fund have been duly
     authorized and validly issued, are fully paid and, except as described in
     the Registration Statement, nonassessable and are free of any preemptive or
     similar rights; the Shares have been duly authorized and, when issued and
     delivered to the Underwriters against payment therefor in accordance with
     the terms hereof, will be validly issued, fully paid and, except as
     described in the Registration Statement, nonassessable and free of any
     preemptive or similar rights and the capital stock of the Fund conforms to
     the description thereof in the Registration Statement and the Prospectus
     (and any amendment or supplement to either of them).

               (d)  The Fund has been duly formed and is validly existing in
     good standing as a business trust under the laws of The Commonwealth of
     Massachusetts, with full power and authority to own, lease and operate its
     properties and to conduct its business as

                                        9

<PAGE>

     described in the Registration Statement and the Prospectus (and any
     amendment or supplement to either of them) and is duly registered and
     qualified to conduct business and is in good standing in each jurisdiction
     or place where the nature of its properties or the conduct of its business
     requires such registration or qualification, except where the failure so to
     register or to qualify does not have a material, adverse effect on the
     condition (financial or other), business, properties, net assets or results
     of operations of the Fund. The Fund has no subsidiaries.

               (e)  There are no legal or governmental proceedings pending or,
     to the knowledge of the Fund, threatened, against the Fund or to which the
     Fund or any of its properties is subject, that are required to be described
     in the Registration Statement or the Prospectus (or any amendment or
     supplement to either of them) but are not described as required by the 1933
     Act, the 1940 Act or the Rules and Regulations and there are no agreements,
     contracts, indentures, leases or other instruments that are required to be
     described in the Registration Statement or the Prospectus (or any amendment
     or supplement to either of them) or to be filed as an exhibit to the
     Registration Statement that are not described or filed as required by the
     1933 Act, the 1940 Act or the Rules and Regulations.

               (f)  The Fund is not in violation of its Declaration of Trust or
     By-Laws or in material violation of any material law, ordinance,
     administrative or governmental rule or regulation applicable to the Fund or
     of any material decree of the Commission, the NASD, any state securities
     commission, any national securities exchange, any arbitrator, any court or
     any other governmental, regulatory, self-regulatory or administrative
     agency or any official having jurisdiction over the Fund or in breach or
     default in any material respect in the performance of any obligation,
     agreement or condition contained in any material bond, debenture, note or
     any other evidence of indebtedness or in any agreement, indenture, lease or
     other instrument to which the Fund is a party or by which it or any of its
     properties may be bound.

               (g)  Neither the issuance and sale of the Shares, the execution,
     delivery or performance of this Agreement nor any of the Fund Agreements by
     the Fund, nor the consummation by the Fund of the transactions contemplated
     hereby or thereby (A) requires any consent, approval, authorization or
     other order of or registration or filing which has not yet been obtained or
     made with the Commission, the NASD, any national securities exchange, any
     arbitrator, any court or any other governmental, regulatory,
     self-regulatory or administrative agency or any official (except compliance
     with the securities or Blue Sky laws of various jurisdictions which have
     been or will be effected in accordance with this Agreement and except for
     compliance with the filing requirements of the NASD Division of Corporate
     Finance) or conflicts or will conflict with or constitutes or will
     constitute a breach of the Declaration of Trust or By-Laws of the Fund or
     (B) conflicts or will conflict with or constitutes or will constitute a
     breach of or a default under, any material agreement, indenture, lease or
     other instrument to which the Fund is a party or by which it or any of its
     properties may be bound or materially violates or will materially violate
     any material statute, law, regulation or filing or judgment, injunction,
     order or decree applicable to the Fund or any of its properties or will
     result in

                                       10

<PAGE>

     the creation or imposition of any material lien, charge or encumbrance upon
     any property or assets of the Fund pursuant to the terms of any agreement
     or instrument to which it is a party or by which it may be bound or to
     which any of the property or assets of the Fund is subject.

               (h)  Since the date as of which information is given in the
     Registration Statement and the Prospectus (and any amendment or supplement
     to either of them), except as otherwise stated therein, (A) there has been
     no material, adverse change in the condition (financial or other),
     business, properties, net assets or results of operations of the Fund or
     business prospects (other than as a result of a change in the financial
     markets generally) of the Fund, whether or not arising in the ordinary
     course of business, (B) there have been no transactions entered into by the
     Fund which are material to the Fund other than those in the ordinary course
     of its business as described in the Prospectus (and any amendment or
     supplement thereto) and (C) there has been no dividend or distribution of
     any kind declared, paid or made by the Fund on any class of its common
     stock.

               (i)  The accountants, Ernst & Young LLP, who have audited or
     shall audit the Statement of Net Assets included in the Registration
     Statement and the Prospectus (and any amendment or supplement to either of
     them), are an independent public accounting firm as required by the 1933
     Act, the 1940 Act and the Rules and Regulations.

               (j)  The financial statements, together with related schedules
     and notes, included in the Registration Statement and the Prospectus (or
     any amendment or supplement to either of them) present fairly the financial
     position of the Fund on the basis stated in the Registration Statement and
     the Prospectus at the respective dates or for the respective periods to
     which they apply; such statements and related schedules and notes have been
     prepared in accordance with generally accepted accounting principles
     consistently applied throughout the periods involved except as disclosed
     therein; and the other financial and statistical information and data
     included in the Registration Statement or the Prospectus (or any amendment
     or supplement thereto) are accurately derived from such financial
     statements and the books and records of the Fund.

               (k)  The Fund, subject to the Registration Statement having been
     declared effective and the filing of the Prospectus under Rule 497 under
     the Rules and Regulations, has taken all required action under the 1933
     Act, the 1940 Act and the Rules and Regulations to make the public offering
     and consummate the sale of the Shares as contemplated by this Agreement.

               (l)  The execution and delivery of and the performance by the
     Fund of its obligations under this Agreement and the Fund Agreements have
     been duly and validly authorized by the Fund and this Agreement and the
     Fund Agreements have been duly executed and delivered by the Fund and
     constitute the valid and legally binding agreements of the Fund,
     enforceable against the Fund in accordance with their terms, except as
     rights to indemnity and contribution hereunder may be limited by federal or
     state securities laws and subject to the qualification that the
     enforceability of the Fund's obligations hereunder and thereunder may be
     limited by bankruptcy, insolvency,

                                       11

<PAGE>

     reorganization, moratorium and other laws relating to or affecting
     creditors' rights generally and by general equitable principles.

               (m)  Except as disclosed in the Registration Statement and the
     Prospectus (and any amendment or supplement to either of them), subsequent
     to the respective dates as of which such information is given in the
     Registration Statement and the Prospectus (and any amendment or supplement
     to either of them), the Fund has not incurred any liability or obligation,
     direct or contingent, that is material to the Fund and there has not been
     any change in the capital stock or material increase in the short-term debt
     or long-term debt of the Fund.

               (n)  The Fund has not distributed and, prior to the later to
     occur of (i) the Closing Date or (ii) completion of the distribution of the
     Shares, will not distribute to the public in either printed or electronic
     form any offering material in connection with the offering and sale of the
     Shares other than the Registration Statement, the Prepricing Prospectus
     included in Pre-Effective Amendment No. 1 to the Registration Statement,
     the Prospectus and the advertisements/sales literature filed by Nuveen
     Investments with the NASD on _______, 2002.

               (o)  The Fund has such licenses, permits, and authorizations of
     governmental or regulatory authorities ("permits") as are necessary to own
     its property and to conduct its business in the manner described in the
     Prospectus (and any amendment or supplement thereto); the Fund has
     fulfilled and performed all its material obligations with respect to such
     permits and no event has occurred which allows or, after notice or lapse of
     time, would allow, revocation or termination thereof or results in any
     other material impairment of the rights of the Fund under any such permit,
     subject in each case to such qualification as may be set forth in the
     Prospectus (and any amendment or supplement thereto); and, except as
     described in the Prospectus (and any amendment or supplement thereto), none
     of such permits contains any restriction that is materially burdensome to
     the Fund.

               (p)  The Fund maintains and will maintain a system of internal
     accounting controls sufficient to provide reasonable assurances that (i)
     transactions are executed in accordance with management's general or
     specific authorization and with the investment policies and restrictions of
     the Fund and the applicable requirements of the 1940 Act, the 1940 Act
     Rules and Regulations and the Internal Revenue Code of 1986, as amended
     (the "Code"); (ii) transactions are recorded as necessary to permit
     preparation of financial statements in conformity with generally accepted
     accounting principles, to calculate net asset value, to maintain
     accountability for assets and to maintain material compliance with the
     books and records requirements under the 1940 Act and the 1940 Act Rules
     and Regulations; (iii) access to assets is permitted only in accordance
     with management's general or specific authorization; and (iv) the recorded
     account for assets is compared with existing assets at reasonable intervals
     and appropriate action is taken with respect to any differences.

                                       12

<PAGE>

               (q)  The conduct by the Fund of its business (as described in the
     Prospectus) does not require it to be the owner, possessor or licensee of
     any patents, patent licenses, trademarks, service marks or trade names
     which it does not own, possess or license.

               (r)  Except as stated in this Agreement and in the Prospectus
     (and any amendment or supplement thereto), the Fund has not taken and will
     not take, directly or indirectly, any action designed to or which should
     reasonably be expected to cause or result in or which will constitute
     stabilization or manipulation of the price of the Common Shares in
     violation of federal securities laws and the Fund is not aware of any such
     action taken or to be taken by any affiliates of the Fund.

               (s)  The Fund is duly registered under the 1940 Act as a
     closed-end, diversified management investment company and the 1940 Act
     Notification has been duly filed with the Commission and, at the time of
     filing thereof and at the time of filing any amendment or supplement
     thereto, conformed in all material respects with all applicable provisions
     of the 1940 Act and the 1940 Act Rules and Regulations. The Fund has not
     received any notice from the Commission pursuant to Section 8(e) of the
     1940 Act with respect to the 1940 Act Notification or the Registration
     Statement (or any amendment or supplement to either of them).

               (t)  All advertising, sales literature or other promotional
     material (including "prospectus wrappers" and "broker kits"), whether in
     printed or electronic form, authorized in writing by or prepared by the
     Fund or the Manager for use in connection with the offering and sale of the
     Shares (collectively, "sales material") complied and comply in all material
     respects with the applicable requirements of the 1933 Act, the 1933 Act
     Rules and Regulations and the rules and interpretations of the NASD and if
     required to be filed with the NASD under the NASD's conduct rules were so
     filed. No sales material contained or contains an untrue statement of a
     material fact or omitted or omits to state a material fact required to be
     stated therein or necessary to make the statements therein, in light of the
     circumstances under which they were made, not misleading.

               (u)  This Agreement and each of the Fund Agreements complies in
     all material respects with all applicable provisions of the 1940 Act, the
     1940 Act Rules and Regulations, the Investment Advisers Act of 1940, as
     amended (the "Advisers Act") and the rules and regulations adopted by the
     Commission under the Advisers Act (the "Advisers Act Rules and
     Regulations").

               (v)  No holder of any security of the Fund has any right to
     require registration of Common Shares or any other security of the Fund
     because of the filing of the registration statement or consummation of the
     transactions contemplated by this Agreement.

               (w)  The Shares have been duly approved for listing upon notice
     of issuance on the AMEX and the Fund's registration statement on Form 8-A,
     under the 1934 Act, has become effective.

                                       13

<PAGE>

               (x)  The Fund intends to direct the investment of the proceeds of
     the offering of the Shares in such a manner as to comply with the
     requirements of Subchapter M of the Code.

     7.   Representations and Warranties of the Manager. The Manager represents
and warrants to each Underwriter as follows:

               (a)  The Manager is a corporation duly organized and validly
     existing in good standing under the laws of the State of Delaware, with
     full corporate power and authority to own, lease and operate its properties
     and to conduct its business as described in the Registration Statement and
     the Prospectus (and any amendment or supplement to either of them) and is
     duly registered and qualified to conduct business and is in good standing
     in each jurisdiction or place where the nature of its properties or conduct
     of its business requires such registration or qualification, except where
     the failure so to register or to qualify would not have a material, adverse
     effect on the condition (financial or other), business, properties, net
     assets or results of operations of the Manager.

               (b)  The Manager is duly registered as an investment adviser
     under the Advisers Act and is not prohibited by the Advisers Act, the 1940
     Act, the Advisers Act Rules and Regulations or the 1940 Act Rules and
     Regulations from acting under the Management Agreement for the Fund as
     contemplated by the Registration Statement and the Prospectus (or any
     amendment or supplement thereto).

               (c)  The Manager has full power and authority to enter into this
     Agreement and the Management Agreement, the execution and delivery of, and
     the performance by the Manager of its obligations under, this Agreement and
     the Management Agreement have been duly and validly authorized by the
     Manager and this Agreement and the Management Agreement have been duly
     executed and delivered by the Manager and constitute the valid and legally
     binding agreements of the Manager, enforceable against the Manager in
     accordance with their terms, except as rights to indemnity and contribution
     hereunder may be limited by federal or state securities laws and subject to
     the qualification that the enforceability of the Manager's obligations
     hereunder and thereunder may be limited by bankruptcy, insolvency,
     reorganization, moratorium and other laws relating to or affecting
     creditors' rights generally and by general equitable principles.

               (d)  The Manager has the financial resources available to it
     necessary for the performance of its services and obligations as
     contemplated in the Registration Statement, the Prospectus (or any
     amendment or supplement thereto) and under this Agreement and the
     Management Agreement.

               (e)  The description of the Manager and its business, and the
     statements attributable to the Manager, in the Registration Statement and
     the Prospectus (and any amendment or supplement thereto) complied and
     comply in all material respects with the provisions of the 1933 Act, the
     1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act
     Rules and Regulations and did not and will not contain an untrue

                                       14

<PAGE>

     statement of a material fact or omit to state a material fact required to
     be stated therein or necessary to make the statements therein (in the case
     of a prospectus, in light of the circumstances under which they were made)
     not misleading.

               (f)  There are no legal or governmental proceedings pending or,
     to the knowledge of the Manager, threatened against the Manager or to which
     any of its properties is subject, that are required to be described in the
     Registration Statement or the Prospectus (or any amendment or supplement to
     either of them) but are not described as required or that reasonably should
     be expected to result in any material, adverse change in the condition
     (financial or other), business, properties, net assets or results of
     operations of the Manager or that reasonably should be expected to have a
     material, adverse effect on the ability of the Manager to fulfill its
     obligations hereunder or under the Management Agreement.

               (g)  Since the date as of which information is given in the
     Registration Statement and the Prospectus (and any amendment or supplement
     to either of them), except as otherwise stated therein, (A) there has been
     no material, adverse change in the condition (financial or other),
     business, properties, net assets or results of operations or business
     prospects of the Manager, whether or not arising from the ordinary course
     of business and (B) there have been no transactions entered into by the
     Manager which are material to the Manager other than those in the ordinary
     course of its business as described in the Prospectus.

               (h)  The Manager has such licenses, permits and authorizations of
     governmental or regulatory authorities ("permits") as are necessary to own
     its property and to conduct its business in the manner described in the
     Prospectus; the Manager has fulfilled and performed all its material
     obligations with respect to such permits and no event has occurred which
     allows, or after notice or lapse of time would allow, revocation or
     termination thereof or results in any other material impairment of the
     rights of the Manager under any such permit.

               (i)  This Agreement and the Management Agreement comply in all
     material respects with all applicable provisions of the 1940 Act, the 1940
     Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and
     Regulations.

               (j)  Neither the execution, delivery or performance of this
     Agreement or the Management Agreement by the Manager, nor the consummation
     by the Manager of the transactions contemplated hereby or thereby (A)
     requires any consent, approval, authorization or other order of or
     registration or filing with the Commission, the NASD, any state securities
     commission, any national securities exchange, any arbitrator, any court or
     any other governmental, regulatory, self-regulatory or administrative
     agency or any official (except compliance with the securities or Blue Sky
     laws of various jurisdictions which have been or will be effected in
     accordance with this Agreement and except for compliance with the filing
     requirements of the NASD Division of Corporate Finance) or conflicts or
     will conflict with or constitutes or will constitute a breach of or a
     default under, the Certificate of Incorporation or By-Laws of the Manager
     or (B) conflicts

                                       15

<PAGE>

     or will conflict with or constitutes or will constitute a breach of or a
     default under, any material agreement, indenture, lease or other instrument
     to which the Manager is a party or by which it or any of its properties may
     be bound or materially violates or will materially violate any material
     statute, law, regulation or filing or judgment, injunction, order or decree
     applicable to the Manager or any of its properties or will result in the
     creation or imposition of any material lien, charge or encumbrance upon any
     property or assets of the Manager pursuant to the terms of any agreement or
     instrument to which it is a party or by which it may be bound or to which
     any of the property or assets of the Manager is subject.

               (k)  Except as stated in this Agreement and in the Prospectus
     (and in any amendment or supplement thereto), the Manager has not taken and
     will not take, directly or indirectly, any action designed to or which
     should reasonably be expected to cause or result in or which will
     constitute, stabilization or manipulation of the price of the Common Shares
     in violation of federal securities laws and the Manager is not aware of any
     such action taken or to be taken by any affiliates of the Manager.

               (l)  In the event that the Fund or the Manager makes available
     any promotional materials intended for use only by qualified broker-dealers
     and registered representatives thereof by means of an Internet web site or
     similar electronic means, the Manager will install and maintain
     pre-qualification and password-protection or similar procedures which are
     reasonably designed to effectively prohibit access to such promotional
     materials by persons other than qualified broker-dealers and registered
     representatives thereof.

     8.   Indemnification and Contribution.

               (a)  The Fund and the Manager, jointly and severally, agree to
     indemnify and hold harmless each of you and each other Underwriter and each
     person, if any, who controls any Underwriter within the meaning of Section
     15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and
     all losses, claims, damages, liabilities and expenses, joint or several
     (including reasonable costs of investigation) arising out of or based upon
     any untrue statement or alleged untrue statement of a material fact
     contained in the Registration Statement, the Prospectus, any Prepricing
     Prospectus, any sales material (or any amendment or supplement to any of
     the foregoing) or arising out of or based upon any omission or alleged
     omission to state therein a material fact required to be stated therein or
     necessary to make the statements therein (in the case of a prospectus, in
     light of the circumstances under which they were made) not misleading,
     except insofar as such losses, claims, damages, liabilities or expenses
     arise out of or are based upon any untrue statement or omission or alleged
     untrue statement or omission which has been made therein or omitted
     therefrom in reliance upon and in conformity with the information relating
     to such Underwriters furnished in writing to the Fund by or on behalf of
     any Underwriter through you expressly for use in connection therewith;
     provided, however, that the foregoing indemnity with respect to the
     Registration Statement, the Prospectus or any Prepricing Prospectuses (or
     any amendment or supplement to any of the foregoing)

                                       16

<PAGE>

     shall not inure to the benefit of any Underwriter from whom the person
     asserting any loss, claim, damage, liability or expense purchased Shares,
     if it is shown that a copy of the Prospectus, as then amended or
     supplemented, which would have cured any defect giving rise to such loss,
     claim, damage, liability or expense was not sent or delivered to such
     person by or on behalf of such Underwriter, if required by law to be so
     delivered, at or prior to the confirmation of the sale of such Shares to
     such person and such Prospectus, amendments and supplements had been
     provided by the Fund to the Underwriters in the requisite quantity and on a
     timely basis to permit proper delivery. The foregoing indemnity agreement
     shall be in addition to any liability which the Fund or the Manager may
     otherwise have.

               (b)  If any action, suit or proceeding shall be brought against
     any Underwriter or any person controlling any Underwriter in respect of
     which indemnity may be sought against the Fund or the Manager, such
     Underwriter or such controlling person shall promptly notify the Fund or
     the Manager and the Fund or the Manager shall assume the defense thereof,
     including the employment of counsel and the payment of all fees and
     expenses. Such Underwriter or any such controlling person shall have the
     right to employ separate counsel in any such action, suit or proceeding and
     to participate in the defense thereof, but the fees and expenses of such
     counsel shall be at the expense of such Underwriter or controlling person
     unless (i) the Fund or the Manager have agreed in writing to pay such fees
     and expenses, (ii) the Fund and the Manager have failed within a reasonable
     time to assume the defense and employ counsel or (iii) the named parties to
     any such action, suit or proceeding (including any impleaded parties)
     include both such Underwriter or such controlling person and the Fund or
     the Manager and such Underwriter or such controlling person shall have been
     advised by its counsel that representation of such indemnified party and
     the Fund or the Manager by the same counsel would be inappropriate under
     applicable standards of professional conduct (whether or not such
     representation by the same counsel has been proposed) due to actual or
     potential differing interests between them (in which case the Fund and the
     Manager shall not have the right to assume the defense of such action, suit
     or proceeding on behalf of such Underwriter or such controlling person). It
     is understood, however, that the Fund and the Manager shall, in connection
     with any one such action, suit or proceeding or separate but substantially
     similar or related actions, suits or proceedings in the same jurisdiction
     arising out of the same general allegations or circumstances be liable for
     the reasonable fees and expenses of only one separate firm of attorneys (in
     addition to any local counsel if there is any action, suit or proceeding in
     more than one jurisdiction) at any time for all such Underwriters and
     controlling persons not having actual or potential differing interests with
     you or among themselves, which firm shall be designated in writing by
     Salomon Smith Barney Inc. and that, subject to the requirements of 1940 Act
     Release No. 11330, all such fees and expenses shall be reimbursed promptly
     as they are incurred. The Fund and the Manager shall not be liable for any
     settlement of any such action, suit or proceeding effected without the
     written consent of the Fund or the Manager, but if settled with such
     written consent or if there be a final judgment for the plaintiff in any
     such action, suit or proceeding, the Fund and the Manager agree to
     indemnify and hold harmless any Underwriter, to the extent provided in the
     preceding

                                       17

<PAGE>

     paragraph, and any such controlling person from and against any loss,
     liability, damage or expense by reason by such settlement or judgment.

               (c)  Each Underwriter agrees, severally and not jointly, to
     indemnify and hold harmless the Fund and the Manager, their trustees,
     directors, any officers of the Fund who sign the Registration Statement and
     any person who controls the Fund or the Manager within the meaning of
     Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
     extent as the foregoing indemnity from the Fund and the Manager to each
     Underwriter, but only with respect to information relating to such
     Underwriter furnished in writing by or on behalf of such Underwriter
     through you expressly for use in the Registration Statement, the Prospectus
     or any Prepricing Prospectus (or any amendment or supplement to any of the
     foregoing). If any action, suit or proceeding shall be brought against the
     Fund or the Manager, any of their trustees, directors, any such officer or
     any such controlling person, based on the Registration Statement, the
     Prospectus or any Prepricing Prospectus (or any amendment or supplement to
     any of the foregoing) and in respect of which indemnity may be sought
     against any Underwriter pursuant to this paragraph (c), such Underwriter
     shall have the rights and duties given to the Fund and the Manager by
     paragraph (b) above (except that if the Fund or the Manager shall have
     assumed the defense thereof such Underwriter shall not be required to do
     so, but may employ separate counsel therein and participate in the defense
     thereof, but the fees and expenses of such counsel shall be at such
     Underwriter's expense) and the Fund and the Manager, their trustees,
     directors, any such officer and any such controlling person shall have the
     rights and duties given to the Underwriters by paragraph (b) above. The
     foregoing indemnity agreement shall be in addition to any liability which
     the Underwriters may otherwise have.

               (d)  If the indemnification provided for in this Section 8 is
     unavailable to an indemnified party under paragraphs (a) or (c) hereof in
     respect of any losses, claims, damages, liabilities or expenses referred to
     therein, then an indemnifying party, in lieu of indemnifying such
     indemnified party, shall contribute to the amount paid or payable by such
     indemnified party as a result of such losses, claims, damages, liabilities
     or expenses (i) in such proportion as is appropriate to reflect the
     relative benefits received by the Fund and the Manager on the one hand
     (treated jointly for this purpose as one person) and the Underwriters on
     the other hand from the offering of the Shares or (ii) if the allocation
     provided by clause (i) above is not permitted by applicable law, in such
     proportion as is appropriate to reflect not only the relative benefits
     referred to in clause (i) above but also the relative fault of the Fund and
     the Manager on the one hand (treated jointly for this purpose as one
     person) and of the Underwriters on the other hand in connection with the
     statements or omissions which resulted in such losses, claims, damages,
     liabilities or expenses, as well as any other relevant equitable
     considerations. The relative benefits received by the Fund and the Manager
     on the one hand (treated jointly for this purpose as one person) and the
     Underwriters on the other hand shall be deemed to be in the same proportion
     as the total net proceeds from the offering (before deducting expenses)
     received by the Fund as set forth in the table on the cover page of the
     Prospectus bear to the total payments received by the Underwriters with
     respect to the Firm Shares as set

                                       18

<PAGE>

     forth in the table on the cover page of the Prospectus. The relative fault
     of the Fund and the Manager on the one hand (treated jointly for this
     purpose as one person) and of the Underwriters on the other hand shall be
     determined by reference to, among other things, whether the untrue or
     alleged untrue statement of a material fact or the omission or alleged
     omission to state a material fact relates to information supplied by the
     Fund and the Manager on the one hand (treated jointly for this purpose as
     one person) or by the Underwriters on the other hand and the parties'
     relative intent, knowledge, access to information and opportunity to
     correct or prevent such statement or omission.

               (e)  The Fund, the Manager and the Underwriters agree that it
     would not be just and equitable if contribution pursuant to this Section 8
     were determined by pro rata allocation (even if the Underwriters were
     treated as one entity for such purpose) or by any other method of
     allocation that does not take account of the equitable considerations
     referred to in paragraph (d) above. The amount paid or payable by an
     indemnified party as a result of the losses, claims, damages, liabilities
     and expenses referred to in paragraph (d) above shall be deemed to include,
     subject to the limitations set forth above, any legal or other expenses
     reasonably incurred by such indemnified party in connection with defending
     any such action, suit or proceeding. Notwithstanding the provisions of this
     Section 8, no Underwriter shall be required to contribute any amount in
     excess of the amount by which the total price of the Shares underwritten by
     it and distributed to the public exceeds the amount of any damages which
     such Underwriter has otherwise been required to pay by reason of such
     untrue or alleged untrue statement or omission or alleged omission. No
     person guilty of fraudulent misrepresentation (within the meaning of
     Section 11(f) of the 1933 Act) shall be entitled to contribution from any
     person who was not guilty of such fraudulent misrepresentation. The
     Underwriters' obligations to contribute pursuant to this Section 8 are
     several in proportion to the respective number of Firm Shares set forth
     opposite their names in Schedule I (or such numbers of Firm Shares
     increased as set forth in Section 10 hereof) and not joint.

               (f)  No indemnifying party shall, without the prior written
     consent of the indemnified party, effect any settlement of any pending or
     threatened action, suit or proceeding in respect of which any indemnified
     party is or could have been a party and indemnity could have been sought
     hereunder by such indemnified party, unless such settlement includes an
     unconditional release of such indemnified party from all liability from
     claimants on claims that are the subject matter of such action, suit or
     proceeding.

               (g)  Any losses, claims, damages, liabilities or expenses for
     which an indemnified party is entitled to indemnification or contribution
     under this Section 8 shall be paid by the indemnifying party to the
     indemnified party as such losses, claims, damages, liabilities or expenses
     are incurred. The indemnity and contribution agreements contained in this
     Section 8 and the representations and warranties of the Fund and the
     Manager set forth in this Agreement shall remain operative and in full
     force and effect, regardless of (i) any investigation made by or on behalf
     of any Underwriter or any person controlling any Underwriter, the Fund, the
     Manager or their trustees, directors or officers or any person controlling
     the Fund or the Manager, (ii) acceptance of any Shares and payment

                                       19

<PAGE>

     therefor hereunder and (iii) any termination of this Agreement. A successor
     to any Underwriter or to the Fund, the Manager or their trustees, directors
     or officers or any person controlling any Underwriter, the Fund or the
     Manager shall be entitled to the benefits of the indemnity, contribution
     and reimbursement agreements contained in this Section 8.

     9.   Conditions of Underwriters' Obligations.The several obligations of the
Underwriters to purchase any Shares hereunder are subject to, in the good faith
judgment of the Underwriters, the accuracy of and compliance with the
representations, warranties and agreements of and by the Fund and the Manager
contained herein on and as of the date hereof, the date on which the
Registration Statement becomes or became effective, the date of the Prospectus
(and of any amendment or supplement thereto), the Closing Date and, with respect
to any Additional Shares, any Option Closing Date; to the accuracy and
completeness of all statements made by the Fund, the Manager or any of their
officers in any certificate delivered to the Representatives or their counsel
pursuant to this Agreement and to the following conditions:

               (a)  If, at the time this Agreement is executed and delivered, it
     is necessary for the Registration Statement or a post-effective amendment
     thereto to be declared effective before the offering of the Shares may
     commence, the Registration Statement or such post-effective amendment shall
     have become effective not later than 5:30 p.m., New York City time, on the
     date hereof or at such later date and time as shall be consented to in
     writing by you and all filings, if any, required by Rules 497 and 430A
     under the 1933 Act Rules and Regulations shall have been timely made; no
     order suspending the effectiveness of the Registration Statement shall have
     been issued and no proceeding for that purpose shall have been instituted
     or, to the knowledge of the Fund, the Manager or any Underwriter,
     threatened by the Commission and any request of the Commission for
     additional information (to be included in the Registration Statement or the
     Prospectus or otherwise) shall have been complied with to your
     satisfaction.

               (b)  You shall have received on the Closing Date an opinion of
     Bell, Boyd & Lloyd LLC, special counsel for the Fund and Manager, dated the
     Closing Date and addressed to you, as Representatives of the several
     Underwriters, to the effect that:

                    (i)     The Fund is a business trust duly established,
               validly existing and in good standing under the laws of The
               Commonwealth of Massachusetts with full power and authority to
               own, lease and operate its properties and to conduct its business
               as described in the Registration Statement and the Prospectus
               (and any amendment or supplement thereto through the date of the
               opinion) and is duly registered and qualified to conduct its
               business and is in good standing in each jurisdiction where the
               nature of its properties or the conduct of its business requires
               such registration or qualification, except where the failure so
               to register or to qualify does not have a material, adverse
               effect on the condition (financial or other), business,
               properties, net assets or results of operations of the Fund;

                    (ii)    The authorized and outstanding capital stock of the
               Fund is as set forth in the Registration Statement and Prospectus
               (or any amendment or

                                       20

<PAGE>

               supplement thereto through the date of the opinion); and the
               description of the authorized capital stock of the Fund contained
               in the Prospectus (or any amendment or supplement thereto through
               the date of the opinion) under the caption "Description of
               Shares" conforms in all material respects as to legal matters to
               the terms thereof contained in the Fund's Declaration of Trust;

                    (iii)   All of the shares of capital stock of the Fund
               outstanding prior to the issuance of the Shares have been duly
               authorized and validly issued and are fully paid and
               nonassessable, except that, as described in the Prospectus under
               the heading, "Certain Provisions in the Declaration of Trust,"
               shareholders of the Fund may under certain circumstances be held
               personally liable for its obligations;

                    (iv)    The Shares have been duly authorized and, when
               issued and delivered to the Underwriters against payment therefor
               in accordance with the terms hereof, will be validly issued,
               fully paid and nonassessable and not subject to any preemptive
               rights that entitle or will entitle any person to acquire any
               Shares upon the issuance thereof by the Fund, except that, as
               described in the Prospectus under the heading, "Certain
               Provisions in the Declaration of Trust," shareholders of the Fund
               may under certain circumstances be held personally liable for its
               obligations;

                    (v)     The form of certificate for the Shares is in due and
               proper form and complies with the requirements of all applicable
               laws and the AMEX;

                    (vi)    The Fund has the power and authority to enter into
               this Agreement and the Fund Agreements and to issue, sell and
               deliver the Shares to the Underwriters as provided herein and
               this Agreement and each of the Fund Agreements have been duly
               authorized, executed and delivered by the Fund and assuming due
               authorization, execution and delivery by the other parties
               thereto and that the performance of this Agreement and the Fund
               Agreements by such other parties will not violate law, agreements
               to which such other parties or their properties are subject or
               orders applicable to such other parties, constitute the valid,
               legal and binding agreements of the Fund, enforceable against the
               Fund in accordance with their terms, except as enforcement of
               rights to indemnity hereunder may be limited by federal or state
               securities laws or principles of public policy and subject to the
               qualification that the enforceability of the Fund's obligations
               hereunder and thereunder may be limited by bankruptcy,
               insolvency, reorganization, moratorium and other laws relating to
               or affecting creditors' rights generally and by general equitable
               principles, whether enforcement is considered in a proceeding in
               equity or at law;

                    (vii)   This Agreement constitutes a valid, legal and
               binding agreement of the Manager, enforceable against the Manager
               in accordance with its terms, except as enforcement of rights to
               indemnity hereunder may be limited by federal or state securities
               laws or principles of public policy and subject to the
               qualification that the enforceability of the Manager's
               obligations hereunder may

                                       21

<PAGE>

               be limited by bankruptcy, insolvency, reorganization, moratorium
               and other laws relating to or affecting creditors' rights
               generally and by general equitable principles, whether
               enforcement is considered in a proceeding in equity or at law;

                    (viii)  The Fund Agreements comply in all material respects
               with all applicable provisions of the 1933 Act, the 1940 Act, the
               Advisers Act, the Rules and Regulations and the Advisers Act
               Rules and Regulations;

                    (ix)    The Fund is not in violation of its Declaration of
               Trust or By-Laws or to the best knowledge of such counsel after
               reasonable inquiry, is not in material default in the performance
               of any material obligation, agreement or condition contained in
               any bond, debenture, note or other evidence of indebtedness,
               except as may be disclosed in the Prospectus (and any amendment
               or supplement thereto);

                    (x)     No consent, approval, authorization or order of or
               registration or filing with the Commission, the NASD, any state
               securities commission, any national securities exchange, any
               arbitrator, any court or any other governmental body, agency or
               regulatory, self-regulatory or administrative agency or any
               official is required on the part of the Fund (except as have been
               obtained under the 1933 Act and the 1934 Act or such as may be
               required under state securities or Blue Sky laws governing the
               purchase and distribution of the Shares) for the valid issuance
               and sale of the Shares to the Underwriters as contemplated by
               this Agreement, performance of the Fund Agreements or this
               Agreement by the Fund, the consummation by the Fund of the
               transactions contemplated thereby or hereby or the adoption of
               the Fund's Dividend Reinvestment Plan;

                    (xi)    Neither the offer, sale or delivery of the Shares,
               the execution, delivery or performance of this Agreement or the
               Fund Agreements, compliance by the Fund with the provisions
               hereof or thereof, consummation by the Fund of the transactions
               contemplated hereby or thereby nor the adoption of the Fund's
               Dividend Reinvestment Plan violates the Declaration of Trust or
               By-Laws of the Fund or any material agreement, indenture, lease
               or other instrument to which the Fund is a party or by which it
               or any of its properties is bound that is an exhibit to the
               Registration Statement or that is known to such counsel after
               reasonable inquiry or, to the best of such counsel's knowledge
               after reasonable inquiry, will result in the creation or
               imposition of any material lien, charge or encumbrance upon any
               property or assets of the Fund, nor, to the best of such
               counsel's knowledge after reasonable inquiry, will any such
               action result in any violation of any existing material law,
               regulation, ruling (assuming compliance with all applicable state
               securities and Blue Sky laws), judgment, injunction, order or
               decree known to such counsel after reasonable inquiry, applicable
               to the Fund or any of its properties, except that, in the
               published opinion of the Commission, the indemnification
               provisions in this Agreement and the Fund Agreements, insofar

                                       22

<PAGE>

               as they relate to indemnification for liabilities arising under
               the 1933 Act, are against public policy as expressed in the 1933
               Act and therefore unenforceable;

                    (xii)   The Registration Statement and all post-effective
               amendments, if any, have become effective under the 1933 Act and,
               to the best knowledge of such counsel after reasonable inquiry,
               no order suspending the effectiveness of the Registration
               Statement has been issued and no proceedings for that purpose are
               pending before or contemplated by the Commission; and any filing
               of the Prospectus and any amendments or supplements thereto
               required pursuant to Rule 497 of the 1933 Act Rules and
               Regulations prior to the date of such opinion has been made in
               accordance with Rule 497;

                    (xiii)  The Fund is duly registered with the Commission
               under the 1940 Act as a closed-end, diversified management
               investment company and all action has been taken by the Fund as
               required by the 1933 Act and the 1940 Act and the Rules and
               Regulations in connection with the issuance and sale of the
               Shares to make the public offering and consummate the sale of the
               Shares as contemplated by this Agreement;

                    (xiv)   The statements made in the Registration Statement
               and the Prospectus (and any amendment or supplement to either of
               them through the date of the opinion) under the caption "Tax
               Matters" have been reviewed by such counsel and to the extent
               they describe or summarize tax laws, doctrines or practices of
               the United States, present a fair and accurate description or
               summary thereof as of the date of the opinion;

                    (xv)    The statements in the Registration Statement and
               Prospectus (and any amendment or supplement to either of them
               through the date of the opinion), insofar as they are
               descriptions of contracts, agreements or other legal documents or
               refer to statements of law or legal conclusions, are accurate and
               present fairly the information required to be shown;

                    (xvi)   The Registration Statement and the Prospectus (and
               any amendment or supplement to either of them through the date of
               the opinion) comply as to form in all material respects with the
               requirements of the 1933 Act, the 1940 Act and the Rules and
               Regulations (except that no opinion need be expressed as to the
               financial statements and the notes thereto and the schedules and
               other financial and statistical data included therein as to which
               such counsel need not express any opinion);

                    (xvii)  To the best knowledge of such counsel after
               reasonable inquiry, (A) other than as described or contemplated
               in the Prospectus (or any amendment or supplement thereto through
               the date of the opinion), there are no actions, suits or other
               legal or governmental proceedings pending or expressly threatened
               against the Fund (through the date of the opinion) and (B) there
               are no material agreements, contracts, indentures, leases or
               other instruments that are required to

                                       23

<PAGE>

               be described in the Registration Statement or the Prospectus (or
               any amendment or supplement to either of them through the date of
               the opinion) or to be filed as an exhibit to the Registration
               Statement that are not described or filed as required, as the
               case may be;

                    (xviii) To the best knowledge of such counsel after
               reasonable inquiry, the Fund is not in violation of any law,
               ordinance, administrative or governmental rule or regulation
               applicable to the Fund or of any decree of the Commission, the
               NASD, any state securities commission, any national securities
               exchange, any arbitrator, any court or any other governmental,
               regulatory, self-regulatory or administrative agency or any
               official having jurisdiction over the Fund; and

                    (xix)   The Shares are duly authorized for listing, subject
               to official notice of issuance, on the American Stock Exchange
               and the Fund's registration statement on Form 8-A under the 1934
               Act is effective.

               Such counsel shall also state that although counsel has not
     undertaken, except as otherwise indicated in their opinion, to determine
     independently and does not assume any responsibility for, the accuracy or
     completeness of the statements in the Registration Statement, such counsel
     has participated in the preparation of the Registration Statement and the
     Prospectus, including review and discussion of the contents thereof, and
     nothing has come to the attention of such counsel that has caused it to
     believe that the Registration Statement, at the time the Registration
     Statement became effective or the Prospectus, as of its date and as of the
     Closing Date or the Option Closing Date, as the case may be, contained an
     untrue statement of a material fact or omitted to state a material fact
     required to be stated therein or necessary to make the statements therein
     (in the case of a prospectus, in light of the circumstances under which
     they were made) not misleading or that any amendment or supplement to the
     Prospectus, as of the Closing Date or the Option Closing Date, contained an
     untrue statement of a material fact or omitted to state a material fact
     necessary in order to make the statements therein, in light of the
     circumstances under which they were made, not misleading (it being
     understood that such counsel need express no view with respect to the
     financial statements and the notes thereto and the schedules and other
     financial and statistical data included in the Registration Statement or
     the Prospectus).

               In rendering such opinion, such counsel may limit such opinion to
     matters involving the application of the laws of the State of Illinois, The
     Commonwealth of Massachusetts and the United States. To the extent they
     deem proper and to the extent specified in such opinion, such counsel may
     rely, as to matters involving the application of laws of The Commonwealth
     of Massachusetts, upon the opinion of Bingham McCutchen LLP or, as to other
     matters, other counsel of good standing whom they believe to be reliable
     and who are satisfactory to the Representatives; provided that (X) such
     reliance is expressly authorized by the opinion so relied upon and a copy
     of each such opinion is delivered to the Representatives and is, in form
     and substance, satisfactory to them and their counsel and (Y) Bell, Boyd &
     Lloyd LLC states in their opinion that they believe that they and the
     Underwriters are justified in relying thereon. As to matters involving the
     application of the

                                       24

<PAGE>

     federal laws of the United States to the Taxable Equivalent Yield Tables
     contained in Appendix B to the statement of additional information, such
     counsel may rely on the comfort letter provided by Chapman and Cutler. In
     addition, in giving the opinion contained in Section 9(b)(vii) above, such
     counsel may rely on the paragraphs in the opinion of Gifford R. Zimmerman
     corresponding to Sections 9(c)(i), (iii) and (v) below; provided that (x)
     such reliance is expressly authorized by the opinion so relied upon and (y)
     Bell, Boyd & Lloyd LLC states in its opinion that it believes that it and
     the Underwriters are justified in relying thereon.

               (c)  You shall have received on the Closing Date an opinion of
     Gifford R. Zimmerman, Managing Director, Assistant Secretary and General
     Counsel for the Manager, dated the Closing Date and addressed to you, as
     Representatives of the several Underwriters, to the effect that:

                    (i)     The Manager is a corporation duly incorporated and
               validly existing in good standing under the laws of the State of
               Delaware with full corporate power and authority to own, lease
               and operate its properties and to conduct its business as
               described in the Registration Statement and the Prospectus (and
               any amendment or supplement to either of them) and is duly
               registered and qualified to conduct its business and is in good
               standing in each jurisdiction or place where the nature of its
               properties or the conduct of its business requires such
               registration or qualification, except where the failure to so
               register or to qualify does not have a material, adverse effect
               on the condition (financial or other), business, properties, net
               assets or results of operations of the Manager;

                    (ii)    The Manager is duly registered with the Commission
               under the Advisers Act as an investment adviser and is not
               prohibited by the Advisers Act, the 1940 Act or the Rules and
               Regulations under such acts from acting for the Fund under the
               Management Agreement as contemplated by the Prospectus (and any
               amendment or supplement thereto);

                    (iii)   The Manager has corporate power and authority to
               enter into this Agreement and the Management Agreement and this
               Agreement and the Management Agreement have been duly authorized,
               executed and delivered by the Manager and the Management
               Agreement is a valid, legal and binding agreement of the Manager,
               enforceable against the Manager in accordance with its terms,
               except as enforcement of rights to indemnity and contribution
               hereunder may be limited by federal or state securities laws or
               principles of public policy and subject to the qualification that
               the enforceability of the Manager's obligations hereunder and
               thereunder may be limited by bankruptcy, insolvency,
               reorganization, moratorium and other laws relating to or
               affecting creditors' rights generally and by general equitable
               principles;

                    (iv)    The Management Agreement complies in all material
               respects with all applicable provisions of the Advisers Act, the
               1940 Act and the Advisers Act Rules and Regulations and the 1940
               Act Rules and Regulations;

                                       25

<PAGE>

                    (v)     Neither the execution and delivery by the Manager of
               this Agreement or the Management Agreement nor the consummation
               by the Manager of the transactions contemplated hereunder or
               thereunder constitutes or will constitute a breach of or a
               default under the Certificate of Incorporation or By-Laws of the
               Manager or any material agreement, indenture, lease or other
               instrument to which the Manager is a party or by which it or any
               of its properties is bound that is known to such counsel after
               reasonable inquiry, or will result in the creation or imposition
               of any material lien, charge or encumbrance upon any property or
               assets of the Manager, nor will any such action result in any
               violation of any existing material law, regulation, ruling
               (assuming compliance with all applicable state securities and
               Blue Sky laws), judgment, injunction, order or decree known to
               such counsel after reasonable inquiry, applicable to the Fund or
               any of its properties;

                    (vi)    The description of the Manager and its business in
               the Prospectus (and any amendment or supplement thereto) complies
               in all material respects with all requirements of the 1933 Act,
               the 1940 Act and the Rules and Regulations;

                    (vii)   To the best knowledge of such counsel after
               reasonable inquiry, other than as described or contemplated in
               the Prospectus (and any amendment or supplement thereto), there
               are no actions, suits or other legal or governmental proceedings
               pending or threatened against the Manager or to which the Manager
               or any of its property is subject which are required to be
               described in the Registration Statement or Prospectus (or any
               amendment or supplement to either of them);

                    (viii)  The Manager owns, possesses or has obtained and
               currently maintains all governmental licenses, permits, consents,
               orders, approvals and other authorizations as are necessary for
               the Manager to carry on its business as contemplated in the
               Prospectus (and any amendment or supplement thereto); and

                    (ix)    No material consent, approval, authorization or
               order of or registration or filing with any court, regulatory
               body, administrative or other governmental body, agency or
               official is required on the part of the Manager for the
               performance of this Agreement or the Management Agreement by the
               Manager or for the consummation by the Manager of the
               transactions contemplated hereby or thereby.

                    Such counsel shall also state that although counsel has not
               undertaken, except as otherwise indicated in its opinion, to
               determine independently and does not assume any responsibility
               for, the accuracy or completeness of the statements in the
               Registration Statement, such counsel has participated in the
               preparation of the Registration Statement and the Prospectus,
               including review and discussion of the contents thereof and
               nothing has come to its attention that has caused it to believe
               that the Registration Statement at the time it became effective
               or the Prospectus, as of its date and as of the Closing Date or
               the Option Closing Date,

                                       26

<PAGE>

               as the case may be, contained an untrue statement of a material
               fact or omitted to state a material fact required to be stated
               therein or necessary to make the statements therein (in the case
               of a prospectus, in light of the circumstances under which they
               were made) not misleading or that any amendment or supplement to
               the Prospectus, as of the Closing Date or the Option Closing
               Date, contained an untrue statement of a material fact or omitted
               to state a material fact necessary in order to make the
               statements therein, in light of the circumstances under which
               they were made, not misleading (it being understood that such
               counsel need express no opinion with respect to the financial
               statements and the notes thereto and the schedules and other
               financial and statistical data included in the Registration
               Statement or the Prospectus).

                    In rendering such opinion, counsel may limit such opinion to
               matters involving the application of the laws of the State of
               Illinois, the Delaware General Corporation Law statute and the
               laws of the United States and may rely upon an opinion or
               opinions, each dated the Closing Date, of other counsel retained
               by the Manager as to laws of any jurisdiction other than the
               United States, the State of Illinois and the Delaware General
               Corporation Law statute, provided that (X) each such local
               counsel is acceptable to the Representatives, (Y) such reliance
               is expressly authorized by each opinion so relied upon and a copy
               of each such opinion is delivered to the Representatives and is
               in form and substance satisfactory to them and their counsel and
               (Z) counsel shall state in his view that he believes that he and
               the Underwriters are justified in relying thereon.

               (d)  You shall have received on the Closing Date a comfort
     letter, substantially in the form heretofore approved by you, from Chapman
     and Cutler, special counsel to the Fund, dated the Closing Date and
     addressed to you, as Representatives of the several Underwriters, with
     respect to the information presented in Appendix B to the statement of
     additional information under the heading "Taxable Equivalent Yield Tables".

               (e)  That you shall have received on the Closing Date, an
     opinion, dated the Closing Date, of Simpson Thacher & Bartlett, counsel for
     the Underwriters, dated the Closing Date and addressed to you, as
     Representatives of the several Underwriters, with respect to such matters
     as the Underwriters may require and the Fund, the Manager and their
     respective counsels shall have furnished to such counsel such documents as
     they may request for the purpose of enabling them to pass upon such
     matters.

               (f)  That you shall have received letters addressed to you, as
     Representatives of the several Underwriters, and dated the date hereof and
     the Closing Date from Ernst & Young LLP, independent certified public
     accountants, substantially in the forms heretofore approved by you.

               (g)  (i) No order suspending the effectiveness of the
     Registration Statement or prohibiting or suspending the use of the
     Prospectus (or any amendment or supplement thereto) or any Prepricing
     Prospectus or any sales material shall have been issued and no proceedings
     for such purpose or for the purpose of commencing an enforcement action

                                       27

<PAGE>

     against the Fund, the Manager or, with respect to the transactions
     contemplated by the Prospectus (or any amendment or supplement thereto) and
     this Agreement, any Underwriter, may be pending before or, to the knowledge
     of the Fund, the Manager or any Underwriter or in the reasonable view of
     counsel to the Underwriters, shall be threatened or contemplated by the
     Commission at or prior to the Closing Date and that any request for
     additional information on the part of the Commission (to be included in the
     Registration Statement, the Prospectus or otherwise) be complied with to
     the satisfaction of the Representatives, (ii) there shall not have been any
     change in the capital stock of the Fund nor any material increase in debt
     of the Fund from that set forth in the Prospectus (and any amendment or
     supplement thereto) and the Fund shall not have sustained any material
     liabilities or obligations, direct or contingent, other than those
     reflected in the Prospectus (and any amendment or supplement thereto);
     (iii) since the date of the Prospectus there shall not have been any
     material, adverse change in the condition (financial or other), business,
     prospects, properties, net assets or results of operations of the Fund or
     the Manager; (iv) the Fund and the Manager must not have sustained any
     material loss or interference with its business from any court or from
     legislative or other governmental action, order or decree or from any other
     occurrence not described in the Registration Statement and the Prospectus
     (and any amendment or supplement to either of them); and (v) all of the
     representations and warranties of the Fund and the Manager contained in
     this Agreement shall be true and correct on and as of the date hereof and
     as of the Closing Date as if made on and as of the Closing Date.

               (h)  Subsequent to the effective date of this Agreement, there
     shall not have occurred (i) any change or any development involving a
     prospective change in or affecting the condition (financial or other),
     business, prospects, properties, net assets or results of operations of the
     Fund or the Manager not contemplated by the Prospectus (and any amendment
     or supplement thereto), which in your opinion, as Representatives of the
     several Underwriters, would materially, adversely affect the market for the
     Shares or (ii)any event or development relating to or involving the Fund,
     the Manager or any officer or trustee or director of the Fund or the
     Manager which makes any statement of a material fact made in the Prospectus
     (or any amendment or supplement thereto) untrue or which, in the opinion of
     the Fund and its counsel or the Underwriters and their counsel, requires
     the making of any addition to or change in the Prospectus (or any amendment
     or supplement thereto) in order to state a material fact required by the
     1933 Act, the 1940 Act, the Rules and Regulations or any other law to be
     stated therein or necessary in order to make the statements therein (in the
     case of a prospectus, in light of the circumstances under which they were
     made) not misleading, if amending or supplementing the Prospectus (or any
     amendment or supplement thereto) to reflect such event or development
     would, in your opinion, as Representatives of the several Underwriters,
     materially, adversely affect the market for the Shares.

               (i)  That neither the Fund nor the Manager shall have failed at
     or prior to the Closing Date to have performed or complied with any of the
     agreements herein contained and required to be performed or complied with
     by them at or prior to the Closing Date.

                                       28

<PAGE>

               (j)  That you shall have received on the Closing Date a
     certificate, dated such date, of the chief administrative officer,
     president, any managing director or any vice president and of the
     controller or treasurer of each of the Fund and the Manager certifying that
     (i) the signers have carefully examined the Registration Statement, the
     Prospectus (and any amendments or supplements to either of them) and this
     Agreement, (ii) the representations and warranties of the Fund (with
     respect to the certificates from such Fund officers) and the
     representations of the Manager (with respect to the certificates from such
     officers of the Manager) in this Agreement are true and correct on and as
     of the date of the certificate as if made on such date, (iii) since the
     date of the Prospectus (and any amendment or supplement thereto) there has
     not been any material, adverse change in the condition (financial or
     other), business, prospects (other than as a result of a change in the
     financial markets generally), properties, net assets or results of
     operations of the Fund (with respect to the certificates from such Fund
     officers) or the Manager (with respect to the certificates from such
     officers of the Manager), (iv) to the knowledge of such officers after
     reasonable investigation, no order suspending the effectiveness of the
     Registration Statement or prohibiting the sale of any of the Shares or
     having a material, adverse effect on the Fund (with respect to the
     certificates from such Fund officers) or the Manager (with respect to the
     certificates from such officers of the Manager) has been issued and no
     proceedings for any such purpose are pending before or threatened by the
     Commission or any court or other regulatory body, the NASD, any state
     securities commission, any national securities exchange, any arbitrator,
     any court or any other governmental, regulatory, self-regulatory or
     administrative agency or any official, (v) each of the Fund (with respect
     to certificates from such Fund officers) and the Manager (with respect to
     certificates from such officers of the Manager) has performed and complied
     with all agreements that this Agreement requires it to perform by such
     Closing Date, (vi) neither the Fund (with respect to the certificate from
     such officers of the Fund) nor the Manager (with respect to the certificate
     from such officers of the Manager) has sustained any material loss or
     interference with its business from any court or from legislative or other
     governmental action, order or decree or from any other occurrence not
     described in the Registration Statement and the Prospectus and any
     amendment or supplement to either of them and (vii) with respect to the
     certificate from such officers of the Fund, there has not been any change
     in the capital stock of the Fund nor any material increase in the debt of
     the Fund from that set forth in the Prospectus (and any amendment or
     supplement thereto) and the Fund has not sustained any material liabilities
     or obligations, direct or contingent, other than those reflected in the
     Prospectus (and any amendment or supplement thereto).

               (k)  That the Fund and the Manager shall have furnished to you
     such further certificates, documents and opinions of counsel as you shall
     reasonably request (including certificates of officers of the Fund and the
     Manager).

               All such opinions, certificates, letters and other documents will
     be in compliance with the provisions hereof only if they are satisfactory
     in form and substance to you and your counsel acting in good faith.

                                       29

<PAGE>

               Any certificate or document signed by any officer of the Fund or
     the Manager and delivered to you, as Representatives of the Underwriters or
     to Underwriters' counsel, shall be deemed a representation and warranty by
     the Fund or the Manager to each Underwriter as to the statements made
     therein.

               The several obligations of the Underwriters to purchase
     Additional Shares hereunder are subject to (i) the accuracy of and
     compliance with the representations and warranties of the Fund and the
     Manager contained herein on and as of the Option Closing Date as though
     made on any Option Closing Date, (ii) satisfaction on and as of any Option
     Closing Date of the conditions set forth in this Section 9 except that, if
     any Option Closing Date is other than the Closing Date, the certificates,
     opinions and letters referred to in paragraphs (b), (c), (d), (e), (f),
     (j), (k) and this paragraph shall be dated the Option Closing Date in
     question and the opinions and letters called for by paragraphs (b), (c),
     (d) and (e) shall be revised to reflect the sale of Additional Shares and
     (iii) the absence of circumstances on or prior to the Option Closing Date
     which would permit termination of this Agreement pursuant to Section 11
     hereof if they existed on or prior to the Closing Date.

     10.  Effective Date of Agreement.This Agreement shall become effective: (i)
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Fund by notifying you or by
you, as Representatives of the several Underwriters, by notifying the Fund.

          If any one or more of the Underwriters shall fail or refuse to
purchase Firm Shares which it or they have agreed to purchase hereunder and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Firm Shares, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the aggregate number of
Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
accordance with of the Salomon Smith Barney Master Agreement Among Underwriters,
to purchase Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase. If any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to you and the Fund for the
purchase of such Firm Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Fund are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Fund. In any such case which does not result
in termination of this Agreement, either you or the Fund shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the

                                       30

<PAGE>

Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Fund,
purchases Firm Shares which a defaulting Underwriter agreed, but failed or
refused, to purchase.

          Any notice under this Section 10 may be made by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

     11.  Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of the
Underwriters to the Fund or the Manager, by notice given to the Fund or the
Manager prior to delivery of and payment for the Firm Shares and any Additional
Shares, as the case may be, if at any time prior to such time (i) trading in the
Fund's Common Shares shall have been suspended by the Commission or the AMEX or
trading in securities generally on the NYSE or the AMEX 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 your sole judgment, impracticable or
inadvisable to proceed with the offering or delivery of the Shares as
contemplated by the Prospectus (exclusive of any supplement thereto). Notice of
such termination may be given to the Fund or the Manager by telegram, telecopy
or telephone and shall be subsequently confirmed by letter.

     12.  Expenses. The Fund agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Fund of its
obligations hereunder: (a) the preparation, printing or reproduction, filing
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations) and distribution of the Registration
Statement (including exhibits thereto), the Prospectus, each Prepricing
Prospectus and the 1940 Act Notification and all amendments or supplements to
any of them, (b) the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, each Prepricing Prospectus, any
sales material and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Shares, (c) the preparation, printing, authentication, issuance and delivery of
certificates for the Shares, including any stamp taxes and transfer agent and
registrar fees payable in connection with the original issuance and sale of such
Shares, (d) the registrations or qualifications of the Shares for offer and sale
under the securities or Blue Sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction and delivery of the preliminary and supplemental Blue Sky Memoranda
and such registration and qualification), (e) the fees and expenses of the
Fund's independent accountants, counsel for the Fund and of the transfer agent,
(f) the expenses of delivery to the Underwriters and dealers (including postage,
air freight and the

                                       31

<PAGE>

cost of counting and packaging) of copies of the Prospectus, the Prepricing
Prospectus, any sales material and all amendments or supplements to the
Prospectus as may be requested for use in connection with the offering and sale
of the Shares, (g) the printing (or reproduction) and delivery of this
Agreement, any dealer agreements, the preliminary and supplemental Blue Sky
Memoranda and all other company-authorized agreements or other documents printed
(or reproduced) and delivered in connection with the offering of the Shares, (h)
the filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the NASD and incurred with
respect to the review of the offering of the Shares by the NASD and (i) the
registration of the Shares under the 1934 Act and the listing of the Shares on
the AMEX.

     Notwithstanding the foregoing, in the event that the sale of the Firm
Shares is not consummated pursuant to Section 2 hereof, the Manager will pay the
costs and expenses of the Fund set forth above in this Section 12 (a) through
(i), and reimbursements of Underwriter expenses in connection with the offering
shall be made in accordance with Section 5(k) hereof.

     13.  Information Furnished by the Underwriters. The names of the
underwriters and numbers of Shares listed opposite such names in the first
paragraph under the caption "Underwriting" in the Prospectus, as well as, under
the same caption, the last sentence of the second paragraph, the first sentence
of the eleventh paragraph, the first sentence of the thirteenth paragraph and
the eighteenth paragraph constitute the only information relating to any
Underwriter furnished to the Fund in writing by or on behalf of the Underwriters
through you as such information is referred to herein, expressly for use in the
Prospectus.

     14.  Miscellaneous. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (a) if to the Fund or the Manager, c/o Nuveen
Investments at 333 West Wacker Drive, Chicago, Illinois 60606, Attention: Alan
G. Berkshire or (b) if to you, as Representatives of the Underwriters, at the
office of Salomon Smith Barney Inc. at 388 Greenwich Street, New York, New York
10013, Attention: Manager, Investment Banking Division.

     This Agreement has been and is made solely for the benefit of the several
Underwriters, the Fund, the Manager, their trustees, directors and officers and
the other controlling persons referred to in Section 8 hereof and their
respective successors and assigns to the extent provided herein and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" or the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Shares in his status as such purchaser.

     A copy of the Declaration of Trust of the Fund is on file with the
Secretary of State of The Commonwealth of Massachusetts. Consistent with the
Fund's Declaration of Trust, notice is hereby given and the parties hereto agree
that this Agreement has been executed on behalf of the Fund by the Trustee(s) or
officer(s) of the Fund in such capacity and not individually by them and that
the obligations of the Fund under this Agreement are not binding upon any of
them or the shareholders of the Fund individually but are binding only upon the
assets and property of the Fund.

                                       32

<PAGE>

     15.  Applicable Law; Counterparts.This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

     This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

                                       33

<PAGE>

     Please confirm that the foregoing correctly sets forth the agreement among
the Fund and the Manager and the several Underwriters.


                                        Very truly yours,

                                        NUVEEN INSURED TAX-FREE ADVANTAGE
                                        MUNICIPAL FUND


                                        By:
                                            ------------------------------------
                                            Title:  Chief Administrative Officer


                                        NUVEEN ADVISORY CORP.


                                        By:
                                            ------------------------------------
                                            Title:  Managing Director

                                       34

<PAGE>

                                        Confirmed as of the date
                                        first above written on
                                        behalf of themselves and
                                        the other several
                                        Underwriters named in
                                        Schedule I hereto.
By:                         Salomon Smith Barney Inc.
                            Nuveen Investments
                            A.G. Edwards & Sons, Inc.
                            Prudential Securities Incorporated
                            H&R Block Financial Advisors, Inc.
                            Fahnestock & Co. Inc.
                            Janney Montgomery Scott LLC
                            Legg Mason Wood Walker, Incorporated
                            Quick & Reilly, Inc. A FleetBoston Financial Company
                            Raymond James & Associates, Inc.
                            RBC Dain Rauscher, Inc.
                            Ryan Beck & Co.
                            SunTrust Capital Markets, Inc.
                            Wachovia Securities, Inc.
                            Wedbush Morgan Securities Inc.

AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS

By:      SALOMON SMITH BARNEY INC.


         By:
            ---------------------------------
            Title:

                                       35

<PAGE>

                                   SCHEDULE I

NAME OF UNDERWRITERS                            NUMBER OF COMMON SHARES
- -------------------------                       -----------------------

Salomon Smith Barney Inc.
Nuveen Investments

        Total

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H.2
<SEQUENCE>6
<FILENAME>dex99h2.txt
<DESCRIPTION>FORM OF S.S.B. MASTER SELECTED DEALER AGREEMENT
<TEXT>
<PAGE>




                        MASTER SELECTED DEALER AGREEMENT

                                                                    July 1, 1999

Ladies and Gentlemen:

          In connection with registered public offerings of securities for which
we are acting as manager or co-manager of an underwriting syndicate or
unregistered offerings of securities for which we are acting as manager or
co-manager of the initial purchasers, you may be offered the right as a selected
dealer to purchase as principal a portion of such securities. This will confirm
our mutual agreement as to the general terms and conditions applicable to your
participation in any such selected dealer group.

        1. APPLICABILITY OF THIS AGREEMENT. The terms and conditions of this
Agreement shall be applicable to any offering of securities ("Securities"),
whether pursuant to a registration statement filed under the Securities Act of
1933, as amended (the "Securities Act"), or exempt from registration thereunder,
in respect of which Salomon Smith Barney Inc. (acting for its own account or for
the account of any underwriting or similar group or syndicate) is responsible
for managing or otherwise implementing the sale of the Securities to selected
dealers ("Selected Dealers") and has expressly informed you that such terms and
conditions shall be applicable. Any such offering of Securities to you as a
Selected Dealer is hereinafter called an "Offering". In the case of any Offering
where we are acting for the account of any underwriting or similar group or
syndicate ("Underwriters"), the terms and conditions of this Agreement shall be
for the benefit of, and binding upon, such Underwriters, including, in the case
of any Offering where we are acting with others as representatives of
Underwriters, such other representatives.

        2. CONDITIONS OF OFFERING; ACCEPTANCE AND PURCHASES. Any Offering will
be subject to delivery of the Securities and their acceptance by us and any
other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the basis
of reservation of Securities or an allotment against subscription. We will
advise you by telecopy, telex or other form of written communication ("Written
Communication", which term, in the case of any Offering described in Section
3(a) or 3(b) hereof, may include a prospectus or offering circular) of the
particular method and supplementary terms and conditions (including, without
limitation, the information as to prices and the offering date referred to in
Section 3(c) hereof) of any Offering in which you are invited to participate. To
the extent such supplementary terms and conditions are inconsistent with any
provision herein, such terms and conditions shall supersede any such provision.
Unless otherwise indicated in any such Written Communication, acceptances and
other communications

<PAGE>

by you with respect to an Offering should be sent to the appropriate Syndicate
Department of Salomon Smith Barney Inc. We may close the subscription books at
any time in our sole discretion without notice, and we reserve the right to
reject any acceptance in whole or in part.

        Unless notified otherwise by us, Securities purchased by you shall be
paid for on such date as we shall determine, on one day's prior notice to you,
by wire transfer payable in immediately available funds to the order of Salomon
Smith Barney Inc., in an amount equal to the Public Offering Price (as
hereinafter defined) or, if we shall so advise you, at such Public Offering
Price less the Concession (as hereinafter defined). If Securities are purchased
and paid for at such Public Offering Price, such Concession will be paid after
the termination of the provisions of Section 3(c) hereof with respect to such
Securities. Unless notified otherwise by us, payment for and delivery of
Securities purchased by you shall be made through the facilities of The
Depository Trust Company, if you are a member, unless you have otherwise
notified us prior to the date specified in a Written Communication to you from
us or, if you are not a member, settlement may be made through a correspondent
who is a member pursuant to instructions which you will send to us prior to such
specified date.

        3. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          (a) REGISTERED OFFERINGS. In the case of any Offering of Securities
which are registered under the Securities Act ("Registered Offering"), we will
make available to you as soon as practicable after sufficient copies are made
available to us by the issuer of the Securities such number of copies of each
preliminary prospectus and of the final prospectus relating thereto as you may
reasonably request for the purposes contemplated by the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
applicable rules and regulations of the Securities and Exchange Commission
thereunder.

          You represent and warrant that you are familiar with Rule 15c2-8 under
the Exchange Act relating to the distribution of preliminary and final
prospectuses and agree that you will comply therewith. You agree to make a
record of your distribution of each preliminary prospectus and when furnished
with copies of any revised preliminary prospectus, you will promptly forward
copies thereof to each person to whom you have theretofore distributed a
preliminary prospectus.

          You agree that in purchasing Securities in a Registered Offering you
will rely upon no statement whatsoever, written or oral, other than the
statements in the final prospectus delivered to you by us. You will not be
authorized by the issuer or other seller of Securities offered pursuant to a
prospectus or by any Underwriters to give any information or to make any
representation not contained in the prospectus in connection with the sale of
such Securities.

          (b) OFFERINGS PURSUANT TO OFFERING CIRCULAR. In the case of any
Offering of Securities, other than a Registered Offering, which is made pursuant
to an offering circular or other document comparable to a prospectus in a
Registered Offering, we will make available to you as soon as practicable after
sufficient copies are made available to us by the issuer of the Securities such
number of copies of each preliminary offering circular and of the final offering
circular relating thereto as you may reasonably request. You agree that you will
comply with applicable Federal, state and other laws, and the

                                        2

<PAGE>

applicable rules and regulations of any regulatory body promulgated thereunder,
governing the use and distribution of offering circulars by brokers or dealers.

          You agree that in purchasing Securities pursuant to an offering
circular you will rely upon no statements whatsoever, written or oral, other
than the statements in the final offering circular delivered to you by us. You
will not be authorized by the issuer or other seller of Securities offered
pursuant to an offering circular or by any Underwriters to give any information
or to make any representation not contained in the offering circular in
connection with the sale of such Securities.

          (c) OFFER AND SALE TO THE PUBLIC. The Offering of Securities is made
subject to the conditions referred to the prospectus or offering circular
relating to the Offering and to the terms and conditions set forth in this
Agreement. With respect to any Offering of Securities, we will inform you by a
Written Communication of the public offering price, the selling concession, the
reallowance (if any) to dealers and the time when you may commence selling
Securities to the public. After such public offering has commenced, we may
change the public offering price, the selling concession and the reallowance to
dealers. The offering price, selling concession and reallowance (if any) to
dealers at any time in effect with respect to an Offering are hereinafter
referred to, respectively, as the "Public Offering Price", the "Concession" and
the "Reallowance". With respect to each Offering of Securities, until the
provisions of this Section 3(c) shall be terminated pursuant to Section 4
hereof, you agree to offer Securities to the public only at the Public Offering
Price, except that if a Reallowance is in effect, a Reallowance from the Public
Offering Price not in excess of such Reallowance may be allowed as consideration
for services rendered in distribution to dealers who are actually engaged in the
investment banking or securities business who are either members in good
standing of the NASD who agree to abide by the applicable rules of the NASD (see
Section 3(e) below) or foreign banks, dealers or institutions not eligible for
membership in the NASD who represent to you that they will promptly reoffer such
Securities at the Public Offering Price and will abide by the conditions with
respect to foreign banks, dealers and institutions set forth in Section 3(e)
hereof.

          (d) OVER-ALLOTMENT; STABILIZATION; UNSOLD ALLOTMENTS. We may, with
respect to any Offering, be authorized to over-allot in arranging sales to
Selected Dealers, to purchase and sell Securities for long or short account and
to stabilize or maintain the market price of the Securities. You agree that upon
our request at any time and from time to time prior to the termination of the
provisions of Section 3(c) hereof with respect to any Offering, you will report
to us the amount of Securities purchased by you pursuant to such Offering which
then remain unsold by you and will, upon our request at any such time, sell to
us for our account or the account of one or more Underwriters such amount of
such unsold Securities as we may designate at the Public Offering Price less an
amount to be determined by us not in excess of the Concession. If, prior to the
later of (a) the termination of the provisions of Section 3(c) hereof with
respect to any Offering, or (b) the covering by us of any short position created
by us in connection with such Offering for our account or the account of one or
more Underwriters, we purchase or contract to purchase for our account or the
account of one or more Underwriters in the open market or otherwise any
Securities purchased by you under this Agreement as part of such Offering, you
agree to pay us on demand for the account of the Underwriters an amount equal to
the Concession with respect to such Securities (unless you shall have purchased
such Securities pursuant to Section 2 hereof at the Public Offering Price and
you have not received or been credited with any Concession, in which case we
shall not

                                        3

<PAGE>

be obligated to pay such Concession to you pursuant to Section 2) plus transfer
taxes and broker's commissions or dealer's mark-up, if any, paid in connection
with such purchase or contract to purchase.

          (e) NASD. You represent and warrant that you are actually engaged in
the investment banking or securities business and either are a member in good
standing of the NASD or, if you are not such a member, you are a foreign bank,
dealer or institution not eligible for membership in the NASD which agrees to
make no sales within the United State, its territories or its possessions or to
persons who are citizens thereof or residents therein, and in making other sales
to comply with the NASD's interpretation with respect to free-riding and
withholding. You further represent, by your participation in an Offering, that
you have provided to us all documents and other information required to be filed
with respect to you, any related person or any person associated with you or any
such related person pursuant to the supplementary requirements of the NASD's
interpretation with respect to review of corporate financing as such
requirements relate to such Offering.

          You agree that, in connection with any purchase or sale of the
Securities wherein a selling concession, discount or other allowance is received
or granted, you will (a) if you are a member of the NASD, comply with all
applicable interpretive material ("IM") and Conduct Rules of the NASD,
including, without limitation, IM 2110-1 (relating to Free-Riding and
Withholding) and Conduct Rule 2740 (relating to Selling Concessions, Discounts
and Other Allowances) or (b) if you are a foreign bank or dealer or institution
not eligible for such membership, comply with IM 2110-1 and with Conduct Rules
2730 (relating to Securities Taken in Trade), 2740 (relating to Selling
Concessions) and 2750 (relating to Transactions With Related Persons) as though
you were such a member and Conduct Rule 2420 (relating to Dealing with
Non-Members) as it applies to a non-member broker or dealer in a foreign
country.

          You further agree that, in connection with any purchase of securities
from us that is not otherwise covered by the terms of this Agreement (whether we
are acting as manager, as member of an underwriting syndicate or a selling group
or otherwise), if a selling concession, discount or other allowance is granted
to you, clauses (a) and (b) of the preceding paragraph will be applicable.

          (f) RELATIONSHIP AMONG UNDERWRITERS AND SELECTED DEALERS. We may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with our consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the Public
Offering Price less all or any part of the Concession. We shall have full
authority to take such action as we deem advisable in all matters pertaining to
any Offering under this Agreement. You are not authorized to act as agent for
us, any Underwriter or the issuer or other seller of any Securities in offering
Securities to the public or otherwise. Neither we nor any Underwriter shall be
under any obligation to you except for obligations assumed hereby or in any
Written Communication from us in connection with any Offering. Nothing contained
herein or in any Written Communication from us shall constitute the Selected
Dealers an association or partners with us or any Underwriter or with one
another. If the Selected Dealers, among themselves or with the Underwriters,
should be deemed to constitute a partnership for Federal income tax purposes,
then you elect to be excluded from the application of Subchapter K, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986 and agree not to take any
position inconsistent with that election. You authorize us, in

                                        4

<PAGE>

our discretion, to execute and file on your behalf such evidence of that
election as may be required by the Internal Revenue Service. In connection with
any Offering you shall be liable for your proportionate amount of any tax,
claim, demand or liability that may be asserted against you alone or against one
or more Selected Dealers participating in such Offering, or against us or the
Underwriters, based upon the claim that the Selected Dealers, or any of them
constitute an association, an unincorporated business or other entity,
including, in each case, your proportionate amount of any expense incurred in
defending against any such tax, claim, demand or liability.

          (g) BLUE SKY LAWS. Upon application to us, we shall inform you as to
any advice we have received from counsel concerning the jurisdictions in which
Securities have been qualified for sale or are exempt under the securities or
blue sky laws of such jurisdictions, but we do not assume any obligation or
responsibility as to your right to sell Securities in any such jurisdiction.

          (h) COMPLIANCE WITH LAW. You agree that in selling Securities pursuant
to any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities), you will comply with all applicable laws,
rules and regulations, including the applicable provisions of the Securities Act
and the Exchange Act, the applicable rules and regulations of the Securities and
Exchange Commission thereunder, the applicable rules and regulations of the
NASD, the applicable rules and regulations of any securities exchange or other
regulatory authority having jurisdiction over the Offering and the applicable
laws, rules and regulations specified in Section 3(b) hereof. Without limiting
the foregoing, (a) you agree that, at all times since you were invited to
participate in an Offering of Securities, you have complied with the provisions
of Regulation M applicable to such Offering, in each case after giving effect to
any applicable exemptions and (b) you represent that your incurrence of
obligations hereunder in connection with any Offering of Securities will not
result in the violation by you of Rule 15c3-1 under the Exchange Act, if such
requirements are applicable to you.

        4. TERMINATION; SUPPLEMENTS AND AMENDMENTS. This Agreement shall
continue in full force and effect until terminated by a written instrument
executed by each of the parties hereto. This Agreement may be supplemented or
amended by us by written notice thereof to you, and any such supplement or
amendment to this Agreement shall be effective with respect to any Offering to
which this Agreement applies after the date of such supplement or amendment.
Each reference to "this Agreement" herein shall, as appropriate, be to this
Agreement as so amended and supplemented. The terms and conditions set forth in
Section 3(c) hereof with regard to any Offering will terminate at the close of
business on the 30th day after the commencement of the public offering of the
Securities to which such Offering relates, but in our discretion may be extended
by us for a further period not exceeding 30 days and in our discretion, whether
or not extended, may be terminated at any earlier time.

        5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified in Section 1
hereof, and the respective successors and assigns of each of them.

        6. GOVERNING LAW. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any Written
Communication from us to you in connection therewith shall be governed by, and
construed in accordance with, the

                                        5

<PAGE>

laws of the State of New York applicable to contracts made and to be performed
within the State of New York.

          Please confirm by signing and returning to us the enclosed copy of
this Agreement that your subscription to or your acceptance of any reservation
of any Securities pursuant to an Offering shall constitute (i) acceptance of and
agreement to the terms and conditions of this Agreement (as supplemented and
amended pursuant to Section 4 hereof; together with and subject to any
supplementary terms and conditions contained in any Written Communication from
us in connection with such Offering, all of which shall constitute a binding
agreement between you and us, individually or as representative of any
Underwriters, (ii) confirmation that your representations and warranties set
forth in Section 3 hereof are true and correct at that time, (iii) confirmation
that your agreements set forth in Sections 2 and 3 hereof have been and will be
fully performed by you to the extent and at the times required thereby and (iv)
in the case of any Offering described in Section 3(a) or 3(b) hereof,
acknowledgment that you have requested and received from us sufficient copies of
the final prospectus or offering circular, as the case may be, with respect to
such Offering in order to comply with your undertakings in Section 3(a) or 3(b)
hereof.

                                         Very truly yours,


                                         Salomon Smith Barney Inc.


                                         By:
                                            ---------------------------------
                                            Name:
                                            Title:


CONFIRMED:__________________________________1999

________________________________________________
                   (Name of Dealer)

by:
   ---------------------------------------------
   Name:
   Title:

Address:________________________________________

        ________________________________________

        ________________________________________


Telephone:

                                        6

<PAGE>

Fax:    _________________________________________

                                        7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H.3
<SEQUENCE>7
<FILENAME>dex99h3.txt
<DESCRIPTION>FORM OF NUVEEN MASTER SELECTED DEALER AGREEMENT
<TEXT>
<PAGE>


                          NUVEEN EXCHANGE-TRADED FUNDS

                                   ----------

                        MASTER SELECTED DEALER AGREEMENT

                                                                February 9, 2001

Dear Ladies and Gentlemen:

          In connection with public offerings of securities ("Securities") of
registered investment companies sponsored by Nuveen Investments ("Nuveen") which
are underwritten by a group of underwriters ("Underwriters") which are
represented by Nuveen alone or in conjunction with other firms (the
"Representatives"), you (a "Dealer") may be offered from time to time the
opportunity to purchase a portion of such securities, as a principal, at a
discount from the public offering price representing a selling concession or
reallowance granted as consideration for services rendered in the distribution
of such securities, subject to the terms and conditions of this Agreement.

          1.   General. (a) This Agreement sets forth the general terms,
conditions and representations applicable to any such purchase. These general
terms, conditions and representations may be modified, amended or supplemented
in connection with an offering of Securities by telegram, telex, facsimile
transmission or other written form (electronic or otherwise) of communication of
Nuveen or other Representative of the Underwriters of such offering (any
communication in any such form being herein referred to as a "written
communication") to you in connection with such offering. This Agreement shall
become effective with respect to your participation in an offering of Securities
upon your acceptance of any reservation of any such Securities, as a Dealer.
Such acceptance shall constitute your acceptance of this Agreement as modified,
amended or supplemented by any such written communication.

               (b)  As used herein, the term "Agreement" shall mean this
Agreement and, after receipt by you of written notice thereof, any amendment or
supplement hereto, plus any additional or supplementary terms, conditions and
representations contained in the prospectus relating to the offering of
Securities or any other written communication to you from Nuveen or any other
Representative of the Underwriters of any offering of securities. This Agreement
shall constitute a binding agreement between you and Nuveen, individually, and,
in respect of a public offering of

                                        1

<PAGE>

Securities, Nuveen and the other Representatives of the Underwriters of such
offering on whose behalf Nuveen is acting.

               (c)  This Agreement supersedes any prior understanding you have
with Nuveen with respect to the subject matter hereof.

          2.   Sales to Selected Dealers. For any specific offering, we will
advise you by telegram of the method and terms of offering, the time of the
release of the Securities for sale to the public, the initial offering price,
the selling concession, the portion of the selling concession allowable to
certain dealers (the "reallowance"), the time at which subscription books will
be opened, the amount, if any, of Securities reserved for purchase by Dealers
and the period of reservation. Subscription books may be closed by us at any
time in our discretion without notice, and the right is reserved to reject any
subscription in whole or in part. Notification of allotments against the
rejections of subscriptions will be made as promptly as practicable. In
purchasing Securities, you must rely only on the prospectus, and on no other
statements whatsoever, written or oral.

          3.   Offering Provisions. Upon receipt of the telegram or letter
referred to in Section 2 hereof, promptly on the date set forth in such telegram
for release of the Securities for sale to the public, you will reoffer the
Securities purchased by you hereunder, subject to receipt and acceptance of the
Securities by the Underwriters, and upon the other terms, conditions and
representations set forth herein and in the prospectus relating to such
Securities. Securities purchased hereunder are to be offered to the public at
the initial public offering price set forth in the prospectus, except that if a
reallowance is in effect, a reallowance from the public offering price not in
excess of such reallowance may be allowed by you but only to dealers who are
actually engaged in the investment banking or securities business, who execute
the written agreement prescribed by Rule 2740(c) of the Rules of Conduct of the
National Association of Securities Dealers, Inc. ("NASD") and who are members in
good standing of the NASD or are foreign dealers, not eligible for membership in
the NASD, who, in each case, represent to you that they will promptly reoffer
such Securities to the public at the initial public offering price set forth in
the prospectus and will abide by the conditions with respect to foreign brokers
and dealers set forth in the first paragraph of Section 6 hereof.

          If prior to the completion of a distribution of the Securities in an
offering, directly or indirectly in connection with their activities under this
agreement, Nuveen or an Underwriter of the offering purchases on the open market
any Securities purchased by you under this Agreement as part of the offering,
you agree to pay Nuveen or the lead Representative of the Underwriters of the
offering on demand an amount equal to the concession with respect to the
Securities, plus, as applicable, transfer taxes, broker's commission, or
dealer's markups, if any, paid in connection with such transactions.
Alternatively, Nuveen or the Representatives of the Underwriters of the offering
may withhold payment for a period of time of, or determine not to pay, all or
any part of the concession with respect to the Securities so received. You will
advise Nuveen or any other

                                        2

<PAGE>

Representative from time to time at our request, of the number of Securities
purchased by you hereunder remaining unsold and you agree to sell to us, at our
request, for the account of one or more of the Underwriters, such number of such
unsold Securities as we may designate, at the initial offering price less an
amount to be determined by us, not in excess of the full concession.

          4.   Delivery and Payment. Payment for and delivery of Securities
purchased by you hereunder will be made through the facilities of the Depository
Trust Company, if you are a member, or, if you are not a member, settlement may
be made through a correspondent who is a member pursuant to instructions which
you will send to us prior to such specified date. At the discretion of Nuveen or
a Representative of the Underwriters of the offering, we may require you to pay
the full public offering price for any offering of Securities. If you are called
upon to pay the full public offering price for the Securities purchased by you
the concession will be paid to you, less any amounts charged to your account
pursuant to Section 3 above, after termination of this Agreement.

          5.   Termination. This Agreement shall continue in full force and
effect until terminated by either party by five days' written notice to the
other; provided, that if this Agreement has become effective with respect to any
offering of Securities, this Agreement may not be terminated by you with respect
to such offering. It shall remain in full force and effect as to such offering.
Notwithstanding any distribution and settlement of accounts, you shall be liable
for the proper proportion of any transfer tax or other liability which may be
asserted against the Representatives or any of the Underwriters or Dealers based
upon the claim that the Dealers, or any of them, constitute a partnership, an
association, an unincorporated business or other separate entity.

          6.   Position of Selected Dealers and Underwriters. You represent that
you are actually engaged in the investment banking or securities business and
are a member in good standing of the NASD or that you are a foreign dealer, not
eligible for membership in the NASD, which agrees not to offer or sell any
Securities in, or to persons who are nationals or residents of, the United
States of America. In making sales of Securities, if you are such a member, you
agree to comply with all applicable rules of the NASD, including, without
limitation, IM 2110-1 (the NASD's Interpretation with Respect to Free-Riding and
Withholding) and Rules 2740 and 2750 of the NASD's Rules of Conduct, or, if you
are a foreign dealer, you agree to comply with such Interpretation and Rules
2730, 2740 and 2750 of such Rules of Conduct as though you were such a member,
and with Rule 2420 as that Rule applies to a non-member broker or dealer in a
foreign country. You also confirm that you have complied and will comply with
the prospectus delivery requirements of Rule 15c2-8 under the Securities
Exchange Act of 1934, as amended including Rule 15c2-8(b) which requires all
participating dealers to distribute a copy of the preliminary prospectus
relating to the offering of Securities to each person to whom they expect to
confirm a sale of the Securities not less than 48 hours prior to the time they
expect to mail such confirmation. You are not authorized to give any information
or make any representations with respect to an offering of Securities other than
those contained in the prospectus for the offering,

                                        3

<PAGE>

or to act as agent for the issuer, any Underwriter, Representative or Nuveen.

          Neither Nuveen, individually or as Representative of the Underwriters,
nor any of the Representatives or Underwriters shall be under any liability to
you, except for obligations expressly assumed in this Agreement and any
liabilities under the Securities Act of 1933, as amended. No obligations on the
part of Nuveen will be implied or inferred herefrom. All communications to
Nuveen relating to the subject matter of this Agreement should be addressed to
John Nuveen & Co. Incorporated, 333 W. Wacker Drive, Chicago, Illinois 60606
(Attention: Tom Muntz), and any notices to you shall be deemed to have been duly
given if mailed or telegraphed to you at such address as you shall indicate on
the last page of this Agreement.

          7.   Blue Sky Matters. Neither Nuveen, individually or as a
Representative of the Underwriters, nor any of the Representatives or
Underwriters will have any responsibility with respect to the right of any
Dealer to sell Securities in any jurisdiction, notwithstanding any information
we may furnish in that connection.

          8.   Indemnification. You agree to indemnify and hold harmless Nuveen
and each Representative and Underwriter of an offering of Securities and each
person, if any, who controls Nuveen or any such Representative or Underwriter
within the meaning of Section 15 of the Securities Act of 1933, as amended or
Section 20 of the Securities Exchange Act of 1934, as amended, from and against
any and all losses, claims, damages, liabilities and expenses, joint or several
(including reasonable costs of investigation) (any of the foregoing being
hereinafter referred to individually as a "Loss" and collectively, as "Losses")
suffered or incurred by any such indemnified person arising out of or in
connection with such offering for or on account of or arising from or in
connection with (i) any violation of any law, rule or regulation (including any
rule of any self-regulatory organization) or (ii) any breach of any
representation, warranty, covenant or agreement contained in this Agreement. The
foregoing indemnity agreement shall be in addition to any liability which you
may otherwise have.

          9.   Procedures Relating to Indemnification. (a) An indemnified person
under Section 8 of this Agreement (the "Indemnified Party") shall give written
notice to you of any Loss in respect of which you have a duty to indemnify such
Indemnified Party under Section 8 of this Agreement (a "Claim"), specifying in
reasonable detail the nature of the Loss for which indemnification is sought,
except that any delay or failure so to notify you shall only relieve you of your
obligations hereunder to the extent, if at all, that you are actually prejudiced
by reason of such delay or failure.

               (b)  If a Claim results from any action, suit or proceeding
brought or asserted against an Indemnified Party, you shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses. The Indemnified
Party shall have the right to employ separate counsel in such action, suit or
proceeding and participate in such defense thereof, but the fees and expenses of
such counsel shall

                                        4

<PAGE>

be at the expense of the Indemnified Party unless (i) you have agreed in writing
to pay such fees and expenses, (ii) you have failed within a reasonable time to
assume the defense and employ counsel or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Indemnified Party and you and such Indemnified Party shall have been advised by
its counsel that representation of such Indemnified Party and you by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between you and the
Indemnified Party (in which case you shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Indemnified Party).
It is understood, however, that you shall, in connection with any one action,
suit or proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Parties not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by the Representatives of the offering and that all such fees and
expenses shall be reimbursed promptly as they are incurred. You shall not be
liable for any settlement of any such action, suit or proceeding effected
without your written consent, but if settled with such written consent or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, you agree to indemnify and hold harmless any Indemnified Party from
and against any loss, liability, damage or expense by reason by such settlement
or judgment.

               (c)  With respect to any Claim not within Paragraph (b) of
Section 9 hereof, you shall have 20 days from receipt of notice from the
Indemnified Party of such Claim within which to respond thereto. If you do not
respond within such twenty-day period, you shall be deemed to have accepted
responsibility to make payment and shall have no further right to contest the
validity of such Claim. If you notify the Indemnified Party within such
twenty-day period that you reject such Claim in whole or in part, the
Indemnified Party shall be free to pursue such remedies as may be available to
the Indemnified Party under applicable law.

          10.  Survival. The representations, warranties, covenants and
agreements of the undersigned contained in this Agreement, including, without
limitation, the indemnity agreements contained in Sections 8 and 9 hereof, shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Representative or Underwriter or any
person controlling any Representative or Underwriter, or their directors or
officers, (ii) acceptance of any Shares and payment therefor and (iii) any
termination of this Agreement.

          11.  This Agreement shall be governed by the laws of the State of New
York or the laws of such other state as indicated in a written communication to
you by Nuveen with respect to any particular securities offering.

          Please confirm your agreement to the foregoing by signing in the space
provided

                                        5

<PAGE>

below and returning to us the enclosed counterpart of this Agreement.


                                         NUVEEN INVESTMENTS


                                         By:
                                            ------------------------------------
                                                 Managing Director

Confirmed as of _____________.
                [Date]

_______________________________

By:
   ----------------------------

Title:

Address:

________________________________


________________________________


________________________________

                                        6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H.4
<SEQUENCE>8
<FILENAME>dex99h4.txt
<DESCRIPTION>FORM OF MASTER AGREEMENT AMONG UNDERWRITERS
<TEXT>
<PAGE>



                       MASTER AGREEMENT AMONG UNDERWRITERS

                            Registered SEC Offerings
                    (including Multiple Syndicate Offerings),
                   Standby Underwritings and Exempt Offerings
                 (other than Offerings of Municipal Securities)

                                                                    July 1, 1999

Ladies and Gentlemen:

          From time to time Salomon Smith Barney Inc. ("Salomon Smith Barney")
may invite you (and others) to participate on the terms set forth herein as an
underwriter or an initial purchaser, or in a similar capacity, in connection
with certain offerings of securities that are managed solely by us or with one
or more other co-managers. If we invite you to participate in a specific
offering and sale (an "Offering") to which this Master Agreement Among
Underwriters (the "Salomon Smith Barney Master AAU") shall apply, we will send
the information set forth below in Section 1.1 to you by one or more wires,
telexes, facsimile or electronic data transmissions or other written
communications (each a "Wire" and collectively, an "AAU"). Each Wire will
indicate that it is a Wire pursuant to the Salomon Smith Barney Master AAU. The
Wire inviting you to participate in an Offering is referred to herein as the
"Invitation Wire". You and we hereby agree that by the terms hereof the
provisions of this Salomon Smith Barney Master AAU automatically shall be
incorporated by reference in each AAU, except that any such AAU may also exclude
or revise any provision of this Salomon Smith Barney Master AAU or may contain
such additional provisions as may be specified in such AAU.

                                   I. GENERAL

          1.1. TERMS OF AAU; CERTAIN DEFINITIONS; CONSTRUCTION. Each AAU shall
relate to an Offering and shall identify (i) the securities to be offered in the
Offering (the "Securities"), their principal terms, the issuer or issuers (each
an "Issuer") and any guarantor (each a "Guarantor") thereof and, if different
from the Issuer, the seller or sellers (each a "Seller") of the Securities, (ii)
the underwriting agreement, purchase agreement, standby underwriting agreement,
distribution agreement or similar agreement (as identified in such AAU and as
amended or supplemented, including a terms agreement or pricing agreement
pursuant to any of the foregoing, collectively, the "Underwriting Agreement")
providing for the purchase, on a several and not joint basis, of the Securities
by the several underwriters, initial purchasers or others acting in a similar
capacity on whose behalf the Manager (as defined below) executes the
Underwriting Agreement (including the Manager and the

<PAGE>

Co-Managers (as defined below), the "Underwriters"), (iii) if applicable, that
the Underwriting Agreement includes an option (an "Over-allotment Option") to
purchase Additional Securities (as defined below) to cover over-allotments, if
any, (iv) if applicable, that the Offering is part of an offering that includes
concurrent offerings by two or more syndicates (an "International Offering"),
each of which will offer and sell Securities subject to such restrictions as
shall be specified in any Intersyndicate Agreement (as defined below) referred
to in such AAU, (v) the price at which the Securities are to be purchased by the
several Underwriters from any Issuer or Seller thereof (the "Purchase Price"),
(vi) the offering terms, including, if applicable, the price or prices at which
the Securities initially will be offered by the Underwriters (the "Offering
Price"), any selling concession to dealers (the "Selling Concession"),
reallowance (the "Reallowance"), management fee, global coordinators' fee,
praecipium or other similar fees, discounts or commissions (collectively, the
"Fees and Commissions") with respect to the Securities, (vii) the proposed
pricing date ("Pricing Date") and settlement date (the "Settlement Date"),
(viii) any contractual restrictions on the offer and sale of the Securities
pursuant to the Underwriting Agreement, Intersyndicate Agreement or otherwise,
(ix) any co-managers for such Offering (the "Co-Managers"), (x) your proposed
participation in the Offering, (xi) if applicable, the trustee, fiscal agent or
similar agent (the "Trustee") for the indenture, trust agreement, fiscal agency
agreement or similar agreement (the "Indenture") under which such Securities
will be issued and (xii) any other principal terms of the Offering.

          The term "Manager" means Salomon Smith Barney. The term "Underwriters"
includes the Manager and the Co-Managers. The term "Firm Securities" means the
number or amount of Securities that the several Underwriters are initially
committed to purchase under the Underwriting Agreement (which may be expressed
as a percentage of an aggregate number or amount of Securities to be purchased
by the Underwriters as in the case of a standby Underwriting Agreement). The
term "Additional Securities" means the Securities, if any, that the several
Underwriters have an option to purchase under the Underwriting Agreement to
cover over-allotments, if any. The number, amount or percentage of Firm
Securities set forth opposite each Underwriter's name in the Underwriting
Agreement plus any additional Firm Securities that such Underwriter has become
obligated to purchase under the Underwriting Agreement or Article XI hereof is
hereinafter referred to as the "Original Purchase Obligation" of such
Underwriter and the ratio which such Original Purchase Obligation bears to the
total of all Firm Securities set forth in the Underwriting Agreement (or, in the
case of a standby Underwriting Agreement, to 100%) is hereinafter referred to as
the "Underwriting Percentage" of such Underwriter.

          References herein to statutory sections, rules, regulations, forms and
interpretive materials shall be deemed to include any successor provisions.

          1.2. ACCEPTANCE OF AAU. You shall have accepted an AAU for an Offering
if we receive your acceptance, prior to the time specified in the Invitation
Wire for such Offering, by wire, telex, facsimile or electronic data
transmission or other written communication (any such manner of communication
being deemed "In

                                        2

<PAGE>

Writing") (or orally, if promptly confirmed In Writing) in the manner specified
in the Invitation Wire, of our invitation to participate in the Offering. If we
receive your timely acceptance of the invitation to participate, such AAU shall
constitute a valid and binding contract between us. Your acceptance of the
Invitation Wire shall also constitute acceptance by you of the terms of
subsequent Wires to you relating to the Offering unless we receive In Writing,
within the time and in the manner specified in such subsequent Wire, a notice
from you to the effect that you do not accept the terms of such subsequent Wire,
in which case you shall be deemed to have elected not to participate in the
Offering.

          1.3. UNDERWRITERS' QUESTIONNAIRE. Your acceptance of the Invitation
Wire shall confirm that you have no exceptions to the Underwriters'
Questionnaire attached as Exhibit A hereto (or to any other questions addressed
to you in any Wires relating to the Offering previously sent to you), other than
exceptions noted by you In Writing in connection with the Offering and received
from you by us before the time specified in the Invitation Wire or any
subsequent Wire.

                             II. OFFERING MATERIALS

          2.1. REGISTERED OFFERINGS. In the case of an Offering that will be
registered in whole or in part (a "Registered Offering") under the United States
Securities Act of 1933, as amended (the "1933 Act"), you understand that the
Issuer has filed with the Securities and Exchange Commission (the "Commission")
a registration statement including a prospectus relating to the Securities. The
term "Registration Statement" means such registration statement as amended or
deemed to be amended to the effective date of the Underwriting Agreement and, in
the event that the Issuer files an abbreviated registration statement to
register additional Securities pursuant to Rule 462(b) under the 1933 Act, such
abbreviated registration statement. The term "Prospectus" means the prospectus,
together with the final prospectus supplement, if any, relating to the Offering
first used to confirm sales of Securities and, in the case of a Registered
Offering that is an International Offering, the term "Prospectus" shall mean,
collectively, each prospectus or offering circular, together with each final
prospectus supplement or final offering circular supplement, if any, relating to
the Offering, in the respective forms first used or made available for use to
confirm sales of Securities. The term "Preliminary Prospectus" means any
preliminary prospectus relating to the Offering or any preliminary prospectus
supplement together with a prospectus relating to the Offering and, in the case
of a Registered Offering that is an International Offering, the term
"Preliminary Prospectus" shall mean, collectively, each preliminary prospectus
or preliminary offering circular relating to the Offering or each preliminary
prospectus supplement or preliminary offering circular supplement, together with
a prospectus or offering circular, respectively, relating to the Offering. As
used herein the terms "Registration Statement", "Prospectus" and "Preliminary
Prospectus" shall include in each case the material, if any, incorporated by
reference therein. The Manager will furnish to you, or make arrangements for you
to obtain, copies of each Prospectus and Preliminary

                                        3

<PAGE>

Prospectus (but excluding for this purpose, unless otherwise required pursuant
to regulations under the 1933 Act, documents incorporated therein by reference)
as soon as practicable after sufficient quantities thereof have been made
available by the Issuer.

          2.2. UNREGISTERED OFFERINGS. In the case of an Offering other than a
Registered Offering, you understand that no registration statement has been
filed with the Commission. The term "Offering Circular" means an offering
circular or memorandum, if any, or any other written materials authorized by the
Issuer to be used in connection with an Offering that is not a Registered
Offering. The term "Preliminary Offering Circular" means any preliminary
offering circular or memorandum, if any, or any other written preliminary
materials authorized by the Issuer to be used in connection with such an
Offering. As used herein, the terms "Offering Circular" and "Preliminary
Offering Circular" shall include the material, if any, incorporated by reference
therein. We will either, as soon as practicable after the later of the date of
the Invitation Wire or the date made available to us by the Issuer, furnish to
you (or make available for your review in our office) a copy of any Preliminary
Offering Circular or any proof or draft of the Offering Circular. In any event,
in any Offering involving an Offering Circular, the Manager will furnish to you,
or make arrangements for you to obtain, as soon as practicable after sufficient
quantities thereof are made available by the Issuer, copies of the final
Offering Circular, as amended or supplemented, if applicable (but excluding for
this purpose documents incorporated therein by reference).

                            III. MANAGER'S AUTHORITY

          3.1. AUTHORITY OF MANAGER TO DETERMINE FORM OF DOCUMENTS, TERMS OF
OFFERING, ETC. You authorize the Manager to act as lead manager of the Offering
of the Securities by the Underwriters (the "Underwriters' Securities") or by the
Issuer or Seller pursuant to delayed delivery contracts (the "Contract
Securities"), if any, contemplated by the Underwriting Agreement. You authorize
the Manager, on your behalf, (a) to determine the form of the Underwriting
Agreement, (b) to execute and deliver the Underwriting Agreement to the Issuer,
Guarantor or Seller, (c) to determine the form of any agreement or agreements
between or among the syndicates participating in the International Offering of
which the Offering is a part (each an "Intersyndicate Agreement"), and (d) to
execute and deliver any such Intersyndicate Agreement. You authorize the Manager
(i) to exercise any Over-allotment Option for the purchase any of or all the
Additional Securities for the accounts of the several Underwriters pursuant to
the Underwriting Agreement, (ii) to agree, on your behalf and on behalf of the
Co-Managers, to any addition to, change in or waiver of any provision of, or the
termination of, the Underwriting Agreement or any Intersyndicate Agreement
(other than an increase in the Purchase Price or in your Original Purchase
Obligation to purchase Securities, in either case from that contemplated by the
applicable AAU), (iii) to add or remove prospective Underwriters to or from the
syndicate, (iv) to exercise, in the Manager's discretion, all the authority
vested in the Manager in the Underwriting

                                        4

<PAGE>

Agreement and (v) except as described below in this Section 3.1, to take any
other action as may seem advisable to the Manager in respect of the Offering
(including, without limitation, actions and communications with the Commission,
the National Association of Securities Dealers, Inc. (the "NASD"), state blue
sky or securities commissions, stock exchanges and other regulatory bodies or
organizations). If, in accordance with the terms of the applicable AAU, the
Offering of the Securities is at varying prices based on prevailing market
prices or prices related to prevailing market prices or at negotiated prices,
you authorize the Manager to determine, on your behalf in the Manager's
discretion, any Offering Price and the Fees and Commissions applicable to the
Offering from time to time. You authorize the Manager on your behalf to arrange
for any currency transactions (including forward and hedging currency
transactions) as the Manager deems necessary to facilitate settlement of the
purchase of the Securities, but you do not authorize the Manager on your behalf
to engage in any other forward or hedging transactions in connection with the
Offering unless such transactions are specified in an applicable AAU or are
otherwise consented to by you. You further authorize the Manager, subject to the
provisions of Section 1.2 hereof, (i) to vary the offering terms of the
Securities in effect at any time, including, if applicable, the Offering Price
and Fees and Commissions set forth in the applicable AAU, (ii) to determine, on
your behalf, the Purchase Price and (iii) to increase or decrease the number,
amount or percentage of Securities being offered. Notwithstanding the foregoing
provisions of this Section 3.1, the Manager shall notify the Underwriters, prior
to the signing of the Underwriting Agreement, of any provision in the
Underwriting Agreement that could result in an increase in the amount or
percentage of Firm Securities set forth opposite each Underwriter's name in the
Underwriting Agreement by more than 25% (or such other percentage as shall have
been specified in the applicable Invitation Wire or otherwise consented to by
you) as a result of the failure or refusal of another Underwriter or
Underwriters to perform its or their obligations thereunder.

          3.2. OFFERING DATE. The Offering is to be made as soon after the
Underwriting Agreement is entered into by the Issuer, Guarantor or Seller and
the Manager as in the Manager's judgment is advisable, on the terms and
conditions set forth in the Prospectus or the Offering Circular, as the case may
be, and the applicable AAU. You agree not to sell any Securities prior to the
time the Manager releases such Securities for sale to purchasers. The date on
which such Securities are released for sale is referred to herein as the
"Offering Date".

          3.3. ADVERTISING; SUPPLEMENTAL OFFERING MATERIAL. Any public
advertisement of the Offering shall be made by the Manager on behalf of the
Underwriters on such date as the Manager shall determine. You agree not to
advertise the Offering prior to the date of the Manager's advertisement thereof
without the Manager's consent. If the offering is made in whole or in part in
reliance on Rule 144A (or upon another exemption from registration), you agree
not to engage in any general solicitation and to abide by any other restrictions
in the AAU or the Underwriting Agreement in connection therewith relating to any
advertising or publicity. Any advertisement you may make of the Offering after
such date will be your own

                                        5

<PAGE>

responsibility and at your own expense and risk. In addition to your agreement
to comply with restrictions on the Offering pursuant to Sections 10.10 and 10.11
hereof, you also agree that you will not, in connection with the offer and sale
of the Securities in the Offering, without the consent of the Manager, give to
any prospective purchaser of the Securities or other person not in your employ
any written information concerning the Offering, the Issuer, the Guarantor or
the Seller, other than information contained in any Preliminary Prospectus,
Prospectus, Preliminary Offering Circular or Offering Circular or in any
computational materials ("Computational Materials") or other offering materials
prepared by or with the consent of the Manager for use by the Underwriters in
connection with the Offering and, in the case of a Registered Offering, filed
with the Commission or the NASD, as applicable (the "Supplemental Offering
Materials"). You further agree to cease distribution of any Computational
Materials on the Offering Date.

          3.4. INSTITUTIONAL AND RETAIL SALES. You authorize the Manager to sell
to institutions or retail purchasers such Securities purchased by you pursuant
to the Underwriting Agreement as the Manager shall determine. The Selling
Concession on any such sales shall be credited to the accounts of the
Underwriters as the Manager shall determine.

          3.5. SALES TO DEALERS. You authorize the Manager to sell to Dealers
(as defined below) such Securities purchased by you pursuant to the Underwriting
Agreement as the Manager shall determine. A "Dealer" shall be a person who is
(a) a broker or dealer (as defined in the By-Laws of the NASD) actually engaged
in the investment banking or securities business and (i) a member in good
standing of the NASD or (ii) a foreign bank, broker, dealer or other institution
not eligible for membership in the NASD that, in the case of either clause
(a)(i) or (a)(ii), makes the representations and agreements applicable to such
institutions contained in Section 10.6 hereof or (b) in the case of Offerings of
Securities that are exempt securities under Section 3(a)(12) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and such other Securities as
from time to time may be sold by a "bank" (as defined in Section 3(a)(6) of the
1934 Act (a "Bank")), a Bank that is not a member of the NASD and that makes the
representations and agreements applicable to such institutions contained in
Section 10.6 hereof. If the price for any such sales by the Manager to Dealers
exceeds an amount equal to the Offering Price less the Selling Concession set
forth in the applicable AAU, the amount of such excess, if any, shall be
credited to the accounts of the Underwriters as the Manager shall determine.

          3.6. DIRECT SALES. The Manager will advise you promptly, on the date
of the Offering, as to the Securities purchased by you pursuant to the
Underwriting Agreement that you shall retain for direct sale. At any time prior
to the termination of the applicable AAU, any such Securities that are held by
the Manager for sale but not sold, may, on your request and at the Manager's
discretion, be released to you for direct sale, and Securities so released to
you shall no longer be deemed held for sale by the Manager. You may allow, and
Dealers may reallow, a discount on sales to Dealers in an amount not in excess
of the Reallowance set forth in the applicable AAU.

                                        6

<PAGE>

You may not purchase Securities from, or sell Securities to, any other
Underwriter or Dealer at any discount or concession other than the Reallowance,
except with the consent of the Manager.

          3.7. RELEASE OF UNSOLD SECURITIES. From time to time prior to the
termination of the applicable AAU, on the request of the Manager, you shall
advise the Manager of the amount of Securities remaining unsold which were
retained by or released to you for direct sale and of the amount of Securities
and Other Securities (as defined below) purchased for your account remaining
unsold which were delivered to you pursuant to Article V hereof or pursuant to
any Intersyndicate Agreement, and, on the request of the Manager, you shall
release to the Manager any such Securities and Other Securities remaining unsold
(i) for sale by the Manager to institutions, Dealers or retail purchasers, (ii)
for sale by the Issuer or Seller pursuant to delayed delivery contracts or (iii)
if, in the Manager's opinion, such Securities or Other Securities are needed to
make delivery against sales made pursuant to Article V hereof or any
Intersyndicate Agreement.

          3.8. INTERNATIONAL OFFERINGS. In the case of an International
Offering, you authorize the Manager (i) to make representations on your behalf
as set forth in any Intersyndicate Agreement or Underwriting Agreement and (ii)
to purchase or sell for your account pursuant to the Intersyndicate Agreement
(a) Securities, (b) any other securities of the same class and series, or any
securities into which the Securities may be converted or for which the
Securities may be exchanged or exercised and (c) any other securities designated
in the applicable AAU or applicable Intersyndicate Agreement (the securities
referred to in clauses (b) and (c) above being referred to collectively as the
"Other Securities").

                         IV. DELAYED DELIVERY CONTRACTS

          4.1. ARRANGEMENTS FOR SALES. You agree that arrangements for sales of
Contract Securities will be made only through the Manager acting either directly
or through Dealers (including Underwriters acting as Dealers), and you authorize
the Manager to act on your behalf in making such arrangements. The aggregate
amount of Securities to be purchased by the several Underwriters shall be
reduced by the respective amounts of Contract Securities attributed to such
Underwriters as hereinafter provided. Subject to the provisions of Section 4.2,
the aggregate amount of Contract Securities shall be attributed to the
Underwriters as nearly as practicable in their respective Underwriting
Percentages, except that, as determined by the Manager in its discretion, (i)
Contract Securities directed and allocated by a purchaser to specific
Underwriters shall be attributed to such Underwriters and (ii) Contract
Securities for which arrangements have been made for sale through Dealers shall
be attributed to each Underwriter approximately in the proportion that
Securities of such Underwriter held by the Manager for sales to Dealers bear to
all Securities so held. The fee with respect to Contract Securities payable to
the Manager for the accounts of the Underwriters pursuant to the Underwriting
Agreement shall be credited to the accounts of the respective Underwriters in
proportion to the Contract Securities attributed to such Underwriters pursuant
to the provisions of this Section 4.1, less, in the case of each

                                        7

<PAGE>

Underwriter, the concession to Dealers on Contract Securities sold through
Dealers and attributed to such Underwriter.

          4.2. EXCESS SALES. If the amount of Contract Securities attributable
to an Underwriter pursuant to Section 4.1 would exceed such Underwriter's
Original Purchase Obligation reduced by the amount of Underwriters' Securities
sold by or on behalf of such Underwriter, such excess shall not be attributed to
such Underwriter, and such Underwriter shall be regarded as having acted only as
a Dealer with respect to, and shall receive only the concession to Dealers on,
such excess.

        V. PURCHASE AND SALE OF SECURITIES; FACILITATION OF DISTRIBUTION

          5.1. PURCHASE AND SALE OF SECURITIES; FACILITATION OF DISTRIBUTION. In
order to facilitate the distribution and sale of the Securities, you authorize
the Manager to buy and sell Securities and any Other Securities, in addition to
Securities sold pursuant to Article III hereof, in the open market or otherwise
(including, without limitation, pursuant to any Intersyndicate Agreement), for
long or short account, on such terms as it shall deem advisable, and to
over-allot in arranging sales. Such purchases and sales and over-allotments
shall be made for the accounts of the several Underwriters as nearly as
practicable in their respective Underwriting Percentages or, in the case of an
International Offering, such purchases and sales shall be for such accounts as
set forth in the applicable Intersyndicate Agreement. Any securities which may
have been purchased by the Manager for stabilizing purposes in connection with
the Offering prior to the execution of the applicable AAU shall be treated as
having been purchased pursuant to this Section 5.1 for the accounts of the
several Underwriters or, in the case of an International Offering, for such
accounts as are set forth in the applicable Intersyndicate Agreement. Your net
commitment pursuant to the foregoing authorization shall not exceed at the close
of business on any day an amount equal to 20% of your Underwriting Percentage of
the aggregate initial Offering Price of the Firm Securities, it being understood
that, in calculating such net commitment, the initial Offering Price shall be
used with respect to the Securities so purchased or sold and, in the case of all
Other Securities, shall be the purchase price thereof. Your net commitment for
short account (i.e., "naked short") shall be calculated by assuming that all
Securities that may be purchased upon exercise of any over-allotment option then
exercisable are acquired (whether or not actually acquired) and, in the case of
an International Offering, after giving effect to the purchase of any Securities
or Other Securities that the Manager has agreed to purchase for your account
pursuant to any applicable Intersyndicate Agreement. On demand you shall take up
and pay for any Securities or Other Securities so purchased for your account and
any Securities released to you pursuant to Section 3.7 hereof and you shall
deliver to the Manager against payment any Securities or Other Securities so
sold or over-allotted for your account or released to you. The Manager agrees to
notify you if it engages in any stabilization transaction requiring reports to
be filed pursuant to Rule 17a-2 under the 1934 Act and to notify you of the date
of termination of stabilization. You agree not to stabilize or engage in any
syndicate covering transaction (as defined in Rule 100 of

                                        8

<PAGE>

Regulation M under the 1934 Act ("Regulation M")) in connection with the
Offering without the prior consent of the Manager. You further agree to provide
to Salomon Smith Barney any reports required of you pursuant to Rule 17a-2 not
later than the date specified therein and you authorize Salomon Smith Barney to
file on your behalf with the Commission any reports required by such Rule.

          If the limitations of Rule 101 of Regulation M ("Rule 101") do not
apply to you with respect to the Securities, Other Securities or other reference
securities (as defined in Rule 100 of Regulation M) because they satisfy the
exception for actively-traded securities in subsection (c)(1) of Rule 101 or the
exception for Rule 144A securities in subsection (b)(10) of Rule 101, you agree
that promptly upon notice from the Manager (or, if later, at the time stated in
the notice) you will comply with Rule 101 as though such exception were not
available but the other provisions of Rule 101 (as interpreted by the Commission
and after giving effect to any applicable exemptions) did apply. If the
securities in question are NASDAQ securities (as defined in Rule 100 of
Regulation M) you may engage in passive market making in accordance with Rule
103 of Regulation M (except that the daily net purchase volume limitation will
not apply and the maximum displayed bid size shall be 5,000 shares excluding
transactions effected in the SOES system) unless the notice from the Manager
also states that passive market making is not permitted.

          5.2. PENALTY WITH RESPECT TO SECURITIES REPURCHASED BY THE MANAGER. If
pursuant to the provisions of Section 5.1 and prior to the termination of the
Manager's authority to cover any short position incurred under the applicable
AAU or such other date as the Manager shall specify in a Wire, either (A) the
Manager purchases or contracts to purchase for the account of any Underwriter in
the open market or otherwise any Securities which were retained by, or released
to, you for direct sale or any Securities sold pursuant to Section 3.4 for which
you received a portion of the Selling Concession set forth in the applicable
AAU, or any Securities which may have been issued on transfer or in exchange for
such Securities, and which Securities were therefore not effectively placed for
investment or (B) if the Manager has advised you by Wire that trading in the
Securities will be reported to the Manager pursuant to the "Initial Public
Offering Tracking System" of The Depository Trust Company ("DTC") and the
Manager determines, based on notices from DTC, that your customers sold an
amount of Securities during any day that exceeds the amount previously notified
to you by Wire, then you authorize the Manager either to charge your account
with an amount equal to such portion of the Selling Concession set forth in the
applicable AAU received by you with respect to such Securities or, in the case
of clause (B), such Securities as exceed the amount specified in such Wire or to
require you to repurchase such Securities or, in the case of clause (B), such
Securities as exceed the amount specified in such Wire, at a price equal to the
total cost of such purchase, including transfer taxes, accrued interest,
dividends and commissions, if any.

          5.3. COMPLIANCE WITH REGULATION M. You represent that, at all times
since you were invited to participate in the Offering, you have complied with
the provisions of Regulation M applicable to such Offering, in each case as
interpreted by the Commission and after giving effect to any applicable
exemptions. If you have been

                                        9

<PAGE>

notified in a Wire that the Underwriters may conduct passive market making in
compliance with Rule 103 of Regulation M in connection with the Offering, you
represent that, at all times since your receipt of such Wire, you have complied
with the provisions of such Rule applicable to such Offering, as interpreted by
the Commission and after giving effect to any applicable exemptions.

          5.4. STANDBY UNDERWRITINGS. You authorize the Manager in its
discretion, at any time on, or from time to time prior to, the expiration of the
conversion right of convertible securities identified in the applicable AAU in
the case of securities called for redemption, or the expiration of rights to
acquire securities in the case of rights offerings, for which, in either case,
standby underwriting arrangements have been made: (i) to purchase convertible
securities or rights to acquire Securities for your account, in the open market
or otherwise, on such terms as the Manager determines and to convert convertible
securities or exercise rights so purchased; and (ii) to offer and sell the
underlying common stock or depositary shares for your account, in the open
market or otherwise, for long or short account (for purposes of such commitment,
such common stock or depositary shares being considered the equivalent of
convertible securities or rights), on such terms consistent with the terms of
the Offering set forth in the Prospectus or Offering Circular as the Manager
determines. On demand you shall take up and pay for any securities so purchased
for your account or you shall deliver to the Manager against payment any
securities so sold, as the case may be. During such period you may offer and
sell the underlying common stock or depositary shares, but only at prices set by
the Manager from time to time, and any such sales shall be subject to the
Manager's right to sell to you the underlying common stock or depositary shares
as above provided and to the Manager's right to reserve your Securities
purchased, received or to be received upon conversion. You agree not to bid for,
purchase, attempt to induce others to purchase, or sell, directly or indirectly,
any convertible securities or rights or underlying common stock or depositary
shares, provided, however, that no Underwriter shall be prohibited from (a)
selling underlying common stock owned beneficially by such Underwriter on the
day the convertible securities were first called for redemption, (b) converting
convertible securities owned beneficially by such Underwriter on such date or
selling underlying common stock issued upon conversion of convertible securities
so owned, (c) exercising rights owned beneficially by such Underwriter on the
record date for a rights offering or selling the underlying common stock or
depositary shares issued upon exercise of rights so owned or (d) purchasing or
selling convertible securities or rights or underlying common stock or
depositary shares as a broker pursuant to unsolicited orders.

                           VI. PAYMENT AND SETTLEMENT

          6.1. PAYMENT AND SETTLEMENT. You shall deliver to the Manager on the
date and at the place and time specified in the applicable AAU (or on such later
date and at such place and time as may be specified by the Manager in a
subsequent Wire) the funds specified in the applicable AAU, payable to the order
of Salomon Smith Barney Inc., for (i) an amount equal to the Offering Price plus
(if not included in the Offering Price) accrued interest, amortization of
original issue discount or dividends, if

                                       10

<PAGE>

any, specified in the Prospectus or Offering Circular, less the applicable
Selling Concession in respect of the Firm Securities to be purchased by you,
(ii) an amount equal to the Offering Price plus (if not included in the Offering
Price) accrued interest, amortization of original issue discount or dividends,
if any, specified in the Prospectus or Offering Circular, less the applicable
Selling Concession in respect of such of the Firm Securities to be purchased by
you as shall have been retained by or released to you for direct sale as
contemplated by Section 3.6 hereof or (iii) the amount set forth or indicated in
the applicable AAU, as the Manager shall advise. You shall make similar payment
as the Manager may direct for Additional Securities, if any, to be purchased by
you on the date specified by the Manager for such payment. The Manager will make
payment to the Issuer or Seller against delivery to the Manager for your account
of the Securities to be purchased by you, and the Manager will deliver to you
the Securities paid for by you which shall have been retained by or released to
you for direct sale. If the Manager determines that transactions in the
Securities are to be settled through the facilities of DTC or other
clearinghouse facility, payment for and delivery of Securities purchased by you
shall be made through such facilities, if you are a member, or, if you are not a
member, settlement shall be made through your ordinary correspondent who is a
member.

                                  VII. EXPENSES

          7.1. MANAGEMENT FEE. You authorize the Manager to charge your account
as compensation for the Manager's and Co-Managers' services in connection with
the Offering, including the purchase from the Issuer or Seller of the
Securities, as the case may be, and the management of the Offering, the amount,
if any, set forth as the management fee, global coordinators fee, praecipium or
other similar fee in the applicable AAU. Such amount shall be divided among the
Manager and any Co-Managers named in the applicable AAU as they may determine.

          7.2. GENERAL EXPENSES. You authorize the Manager to charge your
account with your Underwriting Percentage of all expenses of a general nature
incurred by the Manager and Co-Managers under the applicable AAU in connection
with the Offering, including the negotiation and preparation thereof, or in
connection with the purchase, carrying, marketing and sale of any securities
under the applicable AAU and any Intersyndicate Agreement, including, without
limitation, legal fees and expenses, transfer taxes, costs associated with
approval of the Offering by the NASD and the costs of currency transactions
(including forward and hedging currency transactions) entered into to facilitate
settlement of the purchase of Securities permitted under Section 3.1 hereof.

                    VIII. MANAGEMENT OF SECURITIES AND FUNDS

          8.1. ADVANCES; LOANS; PLEDGES. You authorize the Manager to advance
the Manager's own funds for your account, charging current interest rates, or

                                       11

<PAGE>

to arrange loans for your account for the purpose of carrying out the provisions
of the applicable AAU and any Intersyndicate Agreement and in connection
therewith, to hold or pledge as security therefor all or any securities which
the Manager may be holding for your account under the applicable AAU and any
Intersyndicate Agreement, to execute and deliver any notes or other instruments
evidencing such advances or loans and to give all instructions to the lenders
with respect to any such loans and the proceeds thereof. The obligations of the
Underwriters under loans arranged on their behalf shall be several in proportion
to their respective Original Purchase Obligations and not joint. Any lender is
authorized to accept the Manager's instructions as to the disposition of the
proceeds of any such loans. In the event of any such advance or loan, repayment
thereof shall, in the discretion of the Manager, be effected prior to making any
remittance or delivery pursuant to Section 8.2, 8.3 or 9.2 hereof.

          8.2. RETURN OF AMOUNT PAID FOR SECURITIES. Out of payment received by
the Manager for Securities sold for your account which have been paid for by
you, the Manager will remit to you promptly an amount equal to the price paid by
you for such Securities.

          8.3. DELIVERY AND REDELIVERY OF SECURITIES FOR CARRYING PURPOSES. The
Manager may deliver to you from time to time prior to the termination of the
applicable AAU pursuant to Section 9.1 hereof against payment, for carrying
purposes only, any Securities or Other Securities purchased by you under the
applicable AAU or any Intersyndicate Agreement which the Manager is holding for
sale for your account but which are not sold and paid for. You shall redeliver
to the Manager against payment any Securities or Other Securities delivered to
you for carrying purposes at such times as the Manager may demand.

                        IX. TERMINATION; INDEMNIFICATION

          9.1. TERMINATION. Each AAU shall terminate at the close of business on
the later of the date on which the Underwriters pay the Issuer or Seller for the
Securities and 45 full days after the applicable Offering Date, unless sooner
terminated by the Manager. The Manager may in its discretion by notice to you
prior to the termination of such AAU alter any of the terms or conditions of the
Offering to the extent permitted by Articles III or IV hereof, or terminate or
suspend the effectiveness of Article V hereof, or any part thereof. No
termination or suspension pursuant to this paragraph shall affect the Manager's
authority under Section 3.1 hereof to take actions in respect of the Offering or
under Article V hereof to cover any short position incurred under such AAU or in
connection with covering any such short position to require you to repurchase
Securities as specified in Section 5.2 hereof.

          9.2. DELIVERY OR SALE OF SECURITIES; SETTLEMENT OF ACCOUNTS. Upon
termination of each AAU or prior thereto at the Manager's discretion, the
Manager shall deliver to you any Securities paid for by you pursuant to Section
6.1 hereof and held by the Manager for sale pursuant to Section 3.4 or 3.5
hereof but not sold and paid for and any Securities or Other Securities that are
held by the Manager for your account

                                       12

<PAGE>

pursuant to the provisions of Article V hereof or any Intersyndicate Agreement.
Notwithstanding the foregoing, at the termination of such AAU, if the aggregate
initial Offering Price of any such Securities and the aggregate purchase price
of any Other Securities so held and not sold and paid for does not exceed an
amount equal to 20% of the aggregate initial Offering Price of the Securities,
the Manager may, in its discretion, sell such Securities and Other Securities
for the accounts of the several Underwriters, at such prices, on such terms, at
such times and in such manner as it may determine. Within the period specified
by applicable NASD Rules or, if no period is so specified, as soon as
practicable after termination of such AAU, your account shall be settled and
paid. The Manager may reserve from distribution such amount as the Manager deems
advisable to cover possible additional expenses. The determination by the
Manager of the amount so to be paid to or by you shall be final and conclusive.
Any of your funds in the Manager's hands may be held with the Manager's general
funds without accountability for interest

          Notwithstanding any provision of this Master AAU other than Section
10.12, upon termination of each AAU or prior thereto at the Manager's
discretion, the Manager (i) may allocate to the accounts of the Underwriters the
expenses described in Section 7.2 hereof and any losses incurred upon the sale
of Securities or Other Securities pursuant to the applicable AAU or any
Intersyndicate Agreement (including any losses incurred upon the sale of
securities referred to in Section 5.4(ii) hereof), (ii) may deliver to the
Underwriters any unsold Securities or Other Securities purchased pursuant to
Section 5.1 hereof or any Intersyndicate Agreement and (iii) may deliver to the
Underwriters any unsold Securities purchased pursuant to the applicable
Underwriting Agreement, in each case in the Manager's discretion. The Manager
shall have full discretion to allocate expenses and Securities to the accounts
of any Underwriter as the Manager decides, except that (a) no Underwriter (other
than the Manager or a Co-Manager) shall bear more than its share of such
expenses, losses or Securities (such share shall not exceed such Underwriter's
Underwriting Percentage and shall be determined pro rata among all such
Underwriters based on their Underwriting Percentages), (b) no such Underwriter
shall receive Securities that, together with any Securities purchased by such
Underwriter pursuant to Section 6.1 (but excluding any Securities that such
Underwriter is required to repurchase pursuant to Section 5.2) exceed such
Underwriter's Original Purchase Obligation and (c) no Co-Manager shall bear more
than its share, as among the Manager and the other Co-Managers, of such
expenses, losses or Securities (such share to be determined pro rata among the
Manager and all Co-Managers based on (1) their relative Underwriting Percentages
as a percentage of the total combined Underwriting Percentages of the Manager
and all Co-Managers, or (2) if the Manager so determines, their relative
Offering Economics (as hereinafter defined) as a percentage of the combined
Offering Economics of the Manager and all Co-Managers together. The Manager's or
a Co-Manager's "Offering Economics" equals the sum of its Management Fee Share,
its Underwriting Fee Share and its Selling Concession Share (each as hereinafter
defined). The Manager's or a Co-Manager's "Management Fee Share" is the dollar
amount of its share, as agreed among the Manager and any Co-Managers, of the
amount payable by all Underwriters to some or all of the Manager and any
Co-Manager as a global coordinators' fee, praecipium, management fee or other
fee. The

                                       13

<PAGE>

Manager's or a Co-Manager's "Underwriting Fee Share" is the dollar amount of its
Underwriting Percentage of the aggregate initial Offering Price of the Firm
Securities less the Purchase Price thereof, less the Selling Concession thereon.
The Manager's or a Co-Manager's "Selling Concession Share" is the dollar amount
of any Selling Concession credited to it on sales from the institutional pot or
on sales made for the account of any other Underwriter. If any Securities or
Other Securities returned to you pursuant to clause (ii) or (iii) above were not
paid for by you pursuant to Section 6.1 hereof, you shall pay to the Manager an
amount per security equal to the amount set forth in Section 6.1(i), in the case
of Securities returned to you pursuant to clause (iii) above, or the purchase
price of such securities, in the case of Securities or Other Securities returned
to you pursuant to clause (ii) above.

          9.3. POST-SETTLEMENT EXPENSES. Notwithstanding any settlement on the
termination of the applicable AAU, you agree to pay any transfer taxes which may
be assessed and paid after such settlement on account of any sales or transfers
under such AAU or any Intersyndicate Agreement for your account and your
Underwriting Percentage of (i) all expenses incurred by the Manager in
investigating, preparing to defend or defending against any action, claim or
proceeding which is asserted or instituted by any party (including any
governmental or regulatory body) relating to (a) the Registration Statement, any
Preliminary Prospectus or Prospectus (or any amendment or supplement thereto),
any Preliminary Offering Circular or Offering Circular (or any amendment or
supplement thereto) or Supplemental Offering Materials, (b) the violation of any
applicable restrictions on the offer, sale, resale or purchase of Securities or
Other Securities imposed by United States Federal or state laws or foreign laws
and the rules and regulations of any regulatory body promulgated thereunder or
pursuant to the terms of such AAU, the Underwriting Agreement or any
Intersyndicate Agreement or (c) any claim that the Underwriters constitute a
partnership, an association or an unincorporated business or other separate
entity and (ii) any liability, including attorneys' fees, incurred by the
Manager in respect of any such action, claim or proceeding, whether such
liability shall be the result of a judgment or arbitrator's determination or as
a result of any settlement agreed to by the Manager, other than any such expense
or liability as to which the Manager actually receives indemnity pursuant to
Section 9.4, contribution pursuant to Section 9.5, indemnity or contribution
pursuant to the Underwriting Agreement or damages from an Underwriter for breach
of its representations, warranties, agreements, or covenants contained in the
applicable AAU. None of the foregoing provisions of this Section 9.3 shall
relieve any defaulting or breaching Underwriter from liability for its defaults
or breach.

          9.4. INDEMNIFICATION. You agree to indemnify and hold harmless each
other Underwriter and each person, if any, who controls any such Underwriter
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act, to the extent and upon the terms which you agree to indemnify and hold
harmless any of the Issuer, the Guarantor, the Seller, any person controlling
the Issuer, the Guarantor, the Seller, its directors and, in the case of a
Registered Offering, its officers who signed the Registration Statement and, in
the case of an Offering other than a Registered Offering, its officers, in each
case as set forth in the Underwriting Agreement. You further agree to indemnify
and hold harmless any investment banking firm identified in

                                       14

<PAGE>

a Wire as the qualified independent underwriter as defined in Rule 2720 of the
NASD's Conduct Rules ("QIU") for an Offering and each person, if any, who
controls such QIU within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, from and against any and all losses, claims, damages
and liabilities related to, arising out of or in connection with such investment
banking firm's activities as QIU for the Offering. You agree with the other
Underwriters to reimburse such QIU for all expenses, including fees and expenses
of counsel as they are incurred, in connection with investigating, preparing
for, or defending any action, claim or proceeding related to, arising out of, or
in connection with such QIU's activities as a QIU for the Offering. Each
Underwriter shall be responsible for its Underwriting Percentage of any amount
due to such QIU on account of the foregoing indemnity. You agree that such QIU
shall have no additional liability to any Underwriter or otherwise as a result
of its serving as QIU in connection with the Offering. You further agree that to
the extent the indemnification provided to a QIU under this Section 9.4 is
unavailable to such QIU or insufficient in respect of any losses, claims,
damages or liabilities (and expenses relating thereto), whether as a matter of
law or public policy or as a result of the default of any Underwriter in
performing its obligations under this Section 9.4, you and each other
Underwriter shall contribute to the amount paid or payable by such QIU as a
result of such losses, claims, damages or liabilities (and expenses relating
thereto) in proportion to your Underwriting Percentage.

          9.5. CONTRIBUTION. Notwithstanding any settlement on the termination
of the applicable AAU, you agree to pay upon request of the Manager, as
contribution, your Underwriting Percentage of any losses, claims, damages or
liabilities, joint or several, paid or incurred by any Underwriter to any person
other than an Underwriter, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus or Prospectus (or any amendment or
supplement thereto), any Preliminary Offering Circular or Offering Circular (or
any amendment or supplement thereto) or Supplemental Offering Materials or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (other
than an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information furnished to
the Company in writing by the Underwriter on whose behalf the request for
contribution is being made expressly for use therein) and your Underwriting
Percentage of any legal or other expenses reasonably incurred by the Underwriter
(with the approval of the Manager) on whose behalf the request for contribution
is being made in connection with investigating or defending any such loss,
claim, damage or liability or any action in respect thereof; provided that no
request shall be made on behalf of any Underwriter guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) from any
Underwriter who was not guilty of such fraudulent misrepresentation. None of the
foregoing provisions of this Section 9.5 shall relieve any defaulting or
breaching Underwriter from liability for its defaults or breach.

          9.6. SEPARATE COUNSEL. If any claim is asserted or action or
proceeding commenced pursuant to which the indemnity provided in Section 9.4 may
apply, the Manager may take such action in connection therewith as it deems

                                       15

<PAGE>

necessary or desirable, including retention of counsel for the Underwriters, and
in its discretion separate counsel for any particular Underwriter or group of
Underwriters, and the fees and disbursements of any counsel so retained shall be
allocated among the several Underwriters as determined by the Manager. Any
Underwriter may elect to retain at its own expense its own counsel and, on
advice of such counsel but only with the consent of the Manager, may settle or
consent to the settlement of any such claim, action or proceeding. The Manager
may settle or consent to the settlement of any such claim, action or proceeding.
Whenever the Manager receives notice of the assertion of any claim, action or
proceeding to which the provisions of Section 9.4 would apply, it will give
prompt notice thereof to each Underwriter, and whenever you receive notice of
the assertion of any claim or commencement of any action or proceeding to which
the provisions of Section 9.4 would apply, you will give prompt notice thereof
to the Manager. The Manager also will furnish each Underwriter with periodic
reports, at such times as it deems appropriate, as to the status of such claim,
action or proceeding, and the action taken by it in connection therewith.

          9.7. SURVIVAL OF AGREEMENTS. Regardless of any termination of an AAU,
your agreements contained in Article V and Sections 3.1, 9.3, 9.4, 9.5, 9.6 and
11.2 shall remain operative and in full force and effect regardless of (i) any
termination of the Underwriting Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Issuer, the Guarantor, the Seller, its directors or officers or
any person controlling the Issuer, the Guarantor or the Seller and (iii)
acceptance of any payment for any Securities.

                X. REPRESENTATIONS AND COVENANTS OF UNDERWRITERS

          10.1. KNOWLEDGE OF OFFERING. You understand that it is your
responsibility to examine the Registration Statement, the Prospectus or the
Offering Circular, as the case may be, relating to the Offering, any amendment
or supplement thereto, any Preliminary Prospectus or Preliminary Offering
Circular and the material, if any, incorporated by reference therein and any
Supplemental Offering Materials and you will familiarize yourself with the terms
of the Securities, any applicable Indenture and the other terms of the Offering
thereof which are to be reflected in the Prospectus or the Offering Circular, as
the case may be, and the applicable AAU and Underwriting Agreement. The Manager
is authorized, with the advice of counsel for the Underwriters, to approve on
your behalf any amendments or supplements to the Registration Statement and the
Prospectus or the Offering Circular, as the case may be.

          10.2. DISTRIBUTION OF MATERIALS. You will keep an accurate record of
the names and addresses of all persons to whom you give copies of the
Registration Statement, the Prospectus, any Preliminary Prospectus (or any
amendment or supplement thereto) or any Offering Circular or any Preliminary
Offering Circular and, when furnished with any subsequent amendment to the
Registration Statement, any subsequent Prospectus, any subsequent Offering
Circular or any memorandum outlining changes in the Registration Statement or
any Prospectus or Offering Circular,

                                       16

<PAGE>

you will, upon request of the Manager, promptly forward copies thereof to such
persons.

          10.3. ACCURACY OF UNDERWRITERS' INFORMATION. You confirm that the
information that you have given or are deemed to have given in response to the
Underwriters' Questionnaire attached as Exhibit A hereto (and to any other
questions addressed to you in the Invitation Wire or other Wires), which
information has been furnished to the Issuer for use in the Registration
Statement and the Prospectus or the Offering Circular, as the case may be, or
has otherwise been relied upon in connection with the Offering, is complete and
accurate. You shall notify the Manager immediately of any development before the
termination of the applicable AAU which makes untrue or incomplete any
information that you have given or are deemed to have given in response to the
Underwriters' Questionnaire (or such other questions).

          10.4. NAME; ADDRESS. Unless you have promptly notified the Manager in
writing otherwise, your name as it should appear in the Prospectus or the
Offering Circular and any advertisement, if different, and your address are as
set forth on the signature pages hereof.

          10.5. CAPITAL REQUIREMENTS. You represent that your commitment to
purchase the Securities will not result in a violation of the financial
responsibility requirements of Rule 15c3-1 under the 1934 Act or of any similar
provision of any applicable rules of any securities exchange to which you are
subject or, if you are a financial institution subject to regulation by the
Board of Governors of the United States Federal Reserve System, the United
States Comptroller of the Currency or the United States Federal Deposit
Insurance Corporation, will not place you in violation of any applicable capital
requirements or restrictions of such regulator or any other regulator to which
you are subject.

          10.6. COMPLIANCE WITH NASD REQUIREMENTS. You represent that you are a
member in good standing of the NASD, a Bank that is not a member of the NASD or
a foreign bank or dealer not eligible for membership in the NASD. In making
sales of Securities, if you are such a member, you agree to comply with all
applicable interpretive material ("IM") and rules of the NASD, including,
without limitation, IM-2110-1 (the NASD's interpretation with respect to
free-riding and withholding) and Rule 2740 of the NASD's Conduct Rules, or, if
you are such a foreign bank or dealer, you agree to comply, as applicable, with
IM-2110-1 and Rules 2730, 2740 and 2750 of the NASD's Conduct Rules as though
you were such a member and Rule 2420 of the NASD's Conduct Rules as it applies
to a nonmember broker or dealer in a foreign country. If you are a Bank, you
agree, to the extent required by applicable law or the Conduct Rules of the
NASD, that you will not, in connection with the public offering of any
Securities that do not constitute "exempted securities" within the meaning of
Section 3(a)(12) of the 1934 Act or such other Securities as from time to time
may be sold by a Bank, purchase any Securities at a discount from the Offering
Price from any Underwriter or dealer or otherwise accept any Fees and
Commissions from any Underwriter or Dealer, and you agree to comply, as
applicable, with Rule 2420 of the NASD's Conduct Rules as though you were a
member.

                                       17

<PAGE>

          10.7. FURTHER STATE NOTICE. The Manager will file a Further State
Notice with the Department of State of New York, if required.

          10.8. COMPLIANCE WITH RULE 15C2-8. In the case of a Registered
Offering and any other Offering to which the provisions of Rule 15c2-8 under the
1934 Act are made applicable pursuant to the AAU or otherwise, you agree to
comply with such Rule in connection with the Offering. In the case of an
Offering other than a Registered Offering, you agree to comply with applicable
Federal and state laws and the applicable rules and regulations of any
regulatory body promulgated thereunder governing the use and distribution of
offering circulars by underwriters.

          10.9. DISCRETIONARY ACCOUNTS. In the case of a Registered Offering of
Securities issued by an Issuer that was not, immediately prior to the filing of
the Registration Statement, subject to the requirements of Section 13(d) or
15(d) of the 1934 Act, you agree that you will not make sales to any account
over which you exercise discretionary authority in connection with such sale
except as otherwise permitted by the applicable AAU for such Offering.

          10.10. OFFERING RESTRICTIONS. If you are a foreign bank or dealer and
you are not registered as a broker-dealer under Section 15 of the 1934 Act, you
agree that while you are acting as an Underwriter in respect of the Securities
and in any event during the term of the applicable AAU, you will not directly or
indirectly effect in, or with persons who are nationals or residents of, the
United States, its territories or possessions any transactions (except for the
purchases provided for in the Underwriting Agreement and transactions
contemplated by Articles III and V hereof) in Securities or any Other
Securities.

          It is understood that, except as specified in the applicable AAU, no
action has been taken by the Manager, the Issuer, the Guarantor or the Seller to
permit you to offer Securities in any jurisdiction other than the United States,
in the case of a Registered Offering, where action would be required for such
purpose.

          10.11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. You agree to make
to each other Underwriter participating in an Offering the same representations,
warranties and agreements, if any, made by the Underwriters to the Issuer, the
Guarantor or the Seller in the applicable Underwriting Agreement or any
Intersyndicate Agreement and you authorize the Manager to make such
representations, warranties and agreements to the Issuer, the Guarantor or the
Seller on your behalf.

          10.12. LIMITATION ON THE AUTHORITY OF THE MANAGER TO PURCHASE AND SELL
SECURITIES FOR THE ACCOUNT OF CERTAIN UNDERWRITERS. Notwithstanding any
provision of this AAU authorizing the Manager to purchase or sell any Securities
or Other Securities (including arranging for the sale of Contract Securities) or
over-allot in arranging sales of Securities for the accounts of the several
Underwriters, the Manager may not, in connection with the Offering of any
Securities, make any such purchases, sales and/or over-allotments for the
account of any Underwriter that, not later than its

                                       18

<PAGE>

acceptance of the Invitation Wire relating to such Offering, has advised the
Manager that, due to its status as, or relationship to, a bank or bank holding
company such purchases, sales and/or over-allotments are prohibited by
applicable law. If any Underwriter so advises the Manager, the Manager may
allocate any such purchases, sales and over-allotments (and the related
expenses) which otherwise would have been allocated to your account based on
your respective Underwriting Percentage to your account based on the ratio of
your Original Purchase Obligation to the Original Purchase Obligations of all
Underwriters other than the advising Underwriter or Underwriters or in such
other manner as the Manager shall determine.

                           XI. DEFAULTING UNDERWRITERS

          11.1. EFFECT OF TERMINATION. If the Underwriting Agreement is
terminated as permitted by the terms thereof, your obligations hereunder with
respect to the Offering of the Securities shall immediately terminate except (i)
as set forth in Section 9.7, (ii) that you shall remain liable for your
Underwriting Percentage (or such other percentage as may be specified pursuant
to Section 9.2) of all expenses and for any purchases or sales which may have
been made for your account pursuant to the provisions of Article V hereof or any
Intersyndicate Agreement and (iii) that such termination shall not affect any
obligations of any defaulting or breaching Underwriter.

          11.2. SHARING OF LIABILITY. If any Underwriter shall default in its
obligations (i) pursuant to Section 5.1, 5.2 or 5.4, (ii) to pay amounts charged
to its account pursuant to Section 7.1, 7.2 or 8.1 or (iii) pursuant to Section
9.2, 9.3, 9.4, 9.5, 9.6 or 11.1, you will assume your proportionate share
(determined on the basis of the respective Underwriting Percentages of the
non-defaulting Underwriters) of such obligations, but no such assumption shall
relieve any defaulting Underwriter from liability to the non-defaulting
Underwriters, the Issuer, the Guarantor or the Seller for its default.

          11.3. ARRANGEMENTS FOR PURCHASES. The Manager is authorized to arrange
for the purchase by others (including the Manager or any other Underwriter) of
any Securities not purchased by any defaulting Underwriter in accordance with
the terms of the applicable Underwriting Agreement or, if the applicable
Underwriting Agreement does not provide arrangements for defaulting
Underwriters, in the discretion of the Manager. If such arrangements are made,
the respective amounts of Securities to be purchased by the remaining
Underwriters and such other person or persons, if any, shall be taken as the
basis for all rights and obligations hereunder, but this shall not relieve any
defaulting Underwriter from liability for its default.

                                       19

<PAGE>

                               XII. MISCELLANEOUS

          12.1. OBLIGATIONS SEVERAL. Nothing contained in this Salomon Smith
Barney Master AAU or any AAU constitutes you partners with the Manager or with
the other Underwriters and the obligations of you and each of the other
Underwriters are several and not joint. Each Underwriter elects to be excluded
from the application of Subchapter K, Chapter 1, Subtitle A, of the United
States Internal Revenue Code of 1986, as amended. Each Underwriter authorizes
the Manager, on behalf of such Underwriter, to execute such evidence of such
election as may be required by the United States Internal Revenue Service.

          12.2. LIABILITY OF MANAGER. The Manager shall be under no liability to
you for any act or omission except for obligations expressly assumed by the
Manager in the applicable AAU.

          12.3. TERMINATION OF MASTER AGREEMENT AMONG UNDERWRITERS. This Salomon
Smith Barney Master AAU may be terminated by either party hereto upon five
business days' written notice to the other party; provided that with respect to
any Offering for which an AAU was sent prior to such notice, this Salomon Smith
Barney Master AAU as it applies to such Offering shall remain in full force and
effect and shall terminate with respect to such Offering in accordance with
Section 9.1 hereof.

          12.4. GOVERNING LAW. This Salomon Smith Barney Master AAU and each AAU
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed in the State of New
York.

          12.5. AMENDMENTS. This Salomon Smith Barney Master AAU may be amended
from time to time by consent of the parties hereto. Your consent shall be deemed
to have been given to an amendment to this Salomon Smith Barney Master AAU, and
such amendment shall be effective, five business days following written notice
to you of such amendment if you do not notify Salomon Smith Barney in writing
prior to the close of business on such fifth business day that you do not
consent to such amendment. Upon effectiveness, the provisions of this Salomon
Smith Barney Master AAU as so amended shall apply to each AAU thereafter entered
into except as otherwise specifically provided in any such AAU.

          12.6. NOTICES. Any notice to any Underwriter shall be deemed to have
been duly given if mailed, sent by wire, telex, facsimile or electronic
transmission or other written communication or delivered in person to such
Underwriter at the address which shall have been provided to Salomon Smith
Barney as provided in Section 10.4 hereof. Any such notice shall take effect
upon receipt thereof.

          Please confirm your acceptance of this Salomon Smith Barney Master AAU
by signing and returning to us the enclosed duplicate copy hereof.

                                       20

<PAGE>

                                                   Very truly yours,

                                                   Salomon Smith Barney Inc.


                                                   By:
                                                      --------------------------
                                                      Name:
                                                      Title:


CONFIRMED:_________________________________1999

_______________________________________________
             (Name of Underwriter)

By:
   --------------------------------------------
Name:
Title:
     (If person signing is not an officer or a partner,
      please attach instrument of authorization)

Address: _______________________________

         _______________________________

         _______________________________


Telephone: _____________________________

Fax: ___________________________________

                                       21

<PAGE>

                                                                       EXHIBIT A
                                                                    June 1, 1999

                            SALOMON SMITH BARNEY INC.
                           UNDERWRITERS' QUESTIONNAIRE

          In connection with each Offering covered by the Salomon Smith Barney
Inc. Master Agreement Among Underwriters dated June 1, 1999, we confirm that
except as set forth in a timely reply by us to the Invitation Wire:

          (1)  Neither we nor any of our directors, officers or partners have a
     material relationship (as "material" is defined in Regulation C under the
     1933 Act) with the Issuer, the Guarantor or any Seller.

          (2)  (If the offer and sale of the Securities are to be registered
     under the 1933 Act pursuant to a Registration Statement on Form S-1 of Form
     F-1:) Neither we nor any "group" (as that term is used in Section 13(d)(3)
     of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
     which we are a member is the beneficial owner (determined in accordance
     with Rule 13d-3 under the Exchange Act) of more than 5% of any class of
     voting securities of the Issuer or the Guarantor, nor do we have any
     knowledge that more than 5% of any class of voting securities of the Issuer
     or the Guarantor is held or to be held subject to any voting trust or other
     similar agreement.

          (3)  Other than as may be stated in the Salomon Smith Barney Master
     Agreement Among Underwriters dated June 1, 1999, the applicable AAU, the
     Intersyndicate Agreement or dealer agreement, if any, the Prospectus, the
     Registration Statement or the Offering Circular, we do not know and have no
     reason to believe that there is an intention to over-allot or that the
     price of any security may be stabilized to facilitate the offering of the
     Securities.

          (4)  Except as described in the Prospectus or Offering Circular, as
     the case may, be and the Invitation Wire, we do not know of any discounts
     or commissions to be allowed or paid to dealers, including all cash,
     securities, contracts or other consideration to be received by any dealer
     in connection with the sale of the securities.

                                       22

<PAGE>

          (5)  We have not prepared any report or memorandum for external use in
     connection with the Offering. (If there are any exceptions, (i) furnish
     four (4) copies of each report and memorandum to Salomon Smith Barney Inc.,
     388 Greenwich Street, New York, N.Y. 10013, Attention: Investment Banking
     Department/Transaction Structuring Group, (ii) identify each class of
     person who received such material and the number of copies distributed to
     each such class, and (iii) indicate when such distribution commenced and
     ceased.)

          (6)  (If the offer and sale of the Securities are to be registered
     under the 1933 Act pursuant to a Registration Statement on Form S-1 or Form
     F-1:) We have not within the past twelve months prepared or had prepared
     for us any engineering, management or similar report or memorandum relating
     to broad aspects of the business, operations or products of the Issuer or
     the Guarantor. (The immediately preceding sentence does not apply to
     reports solely comprised of recommendations to buy, sell or hold the
     Issuer's or the Guarantor's securities, unless such recommendations have
     changed within the past six months or to information already contained in
     documents filed with the Commission. If there are any exceptions, (i)
     furnish four (4) copies of each report and memorandum to Salomon Smith
     Barney Inc. 388 Greenwich Street, New York, N.Y. 10013, Attention:
     Investment Banking Department/Transaction Structuring Group, (ii) identify
     each class of persons who received such material and the number of copies
     distributed to each such class, and (iii) indicate when such distribution
     commenced and ceased.)

          (7)  We are not an "affiliate" of the Issuer or the Guarantor for
     purposes of Rule 2720 of the National Association of Securities Dealers,
     Inc.'s ("NASD") Conduct Rules. We understand that under Rule 2720 (except
     as provided in Rule 2720(b)(1)(C) thereof) two entities are "affiliates" of
     each other if one entity controls, is controlled by, or is under common
     control with, the second entity and that "control" is presumed to exist if
     one entity (or, in the case of an NASD member, the entity and all "persons
     associated with" it (as defined in the NASD By-Laws)) beneficially owns 10%
     or more of the second entity's outstanding voting securities or, if the
     second entity is a partnership, if the first entity has a partnership
     interest in 10% or more of the second entity's distributable profits or
     losses.

          (8)  (If the Securities are not investment grade debt securities or
     preferred stock, or equity securities for which there exists a "bona fide
     independent market" (as defined in Rule 2720(b)(3) of the NASD's Conduct
     Rules) or otherwise exempted under Rule 2720(b)(7)(D) of the NASD's Conduct
     Rules:) We do not have a "conflict of interest" with the Issuer or the
     Guarantor under Rule 2720 of the NASD's Conduct Rules. In that regard, we
     specifically confirm that we, our "parent" (as defined in Rule 2720),
     affiliates and "persons associated with" us (as defined in the NASD
     By-Laws), in the aggregate do not (i) beneficially own 10% or more of the
     Issuer's or the Guarantor's "common equity", "preferred equity", or
     "subordinated debt" (as each such term is defined in Rule 2720), or (ii) in
     the case of an Issuer or Guarantor which is a partnership,

                                       23

<PAGE>

     beneficially own a general, limited or special partnership interest in 10%
     or more of the Issuer's or Guarantor's distributable profits or losses.

          (9)  (If filing with the NASD is required:) Neither we nor any of our
     directors, officers, partners or "persons associated with" us (as defined
     in the NASD By-Laws) nor, to our knowledge, any "related person" (defined
     by the NASD to include counsel, financial consultants and advisors,
     finders, members of the selling or distribution group, any NASD member
     participating in the offering and any other persons associated with or
     related to and members of the immediate family of any of the foregoing) or
     any other broker-dealer, (a) within the last 12 months have purchased in
     private transactions, or intend before, at or within six months after the
     commencement of the public offering of the Securities to purchase in
     private transactions, any securities of the Issuer, the Guarantor or any
     Issuer Related Party (as hereinafter defined), (b) within the last 12
     months had any dealings with the Issuer, the Guarantor, any Seller or any
     subsidiary or controlling person thereof (other than relating to the
     proposed Underwriting Agreement) as to which documents or information are
     required to be filed with the NASD pursuant to its Corporate Financing
     Rule, or (c) during the 12 months immediately preceding the filing of the
     Registration Statement (or, if there is none, the Offering Circular), have
     entered into any arrangement which provided or provides for the receipt of
     any item of value (including, but not limited to, cash payments and expense
     reimbursements) and/or the transfer of any warrants, options or other
     securities from the Issuer, the Guarantor or any Issuer Related Party to us
     or any related person.

          (10) (If filing with the NASD is required:) There is no association or
     affiliation between us and (i) any officer or director of the Issuer, the
     Guarantor or any Issuer Related Party, or (ii) any securityholder of five
     percent or more (or, in the case of an initial public offering of equity
     securities, any securityholder) of any class of securities of the Issuer,
     the Guarantor or an Issuer Related Party; it being understood that for
     purposes of paragraph (9) above and this paragraph (10), the term "Issuer
     Related Party" includes any Seller, any affiliate of the Issuer the
     Guarantor or a Seller and the officers or general partners, directors,
     employees and securityholders thereof. (If there are any exceptions, state
     the identity of the person with whom the association or affiliation exists
     and, if relevant, the number of equity securities or the face value of debt
     securities owned by such person, the date such securities were acquired and
     the price paid for such securities).

          (11) (If the Securities are not issued by a real estate investment
     trust:) No portion of the net offering proceeds from the sale of the
     Securities will be paid to us or any of our affiliates or "persons
     associated with" us (as defined in the NASD By-Laws) or members of the
     immediate family of any such person.

          (12) (If the Securities are debt securities and their offer and sale
     is to be registered under the 1933 Act:) We are not an affiliate (as
     defined in Rule 0-2 under the Trust Indenture Act of 1939) of the Trustee
     for the Securities or of

                                       24

<PAGE>

     its parent, if any. Neither the Trustee nor its parent, if any, nor any of
     their directors or executive officers is a "director, officer, partner,
     employee, appointee or representative" of ours (as those terms are defined
     in the Trust Indenture Act of 1939 or in the relevant instructions to Form
     T-1). We and our directors, partners, and executive officers, taken as a
     group, did not on the date specified in the Invitation Wire, and do not,
     own beneficially 1% or more of the shares of any class of voting securities
     of the Trustee or of its parent, if any. If we are a corporation, we do not
     have outstanding and have not assumed or guaranteed any securities issued
     otherwise than in our present corporate name.

          (13) (If the Issuer is a public utility:) We are not a "holding
     company" or a "subsidiary company" or an "affiliate" of a "holding company"
     or of a "public-utility company", each as defined in the Public Utility
     Holding Company Act of 1935.

          (14) If we are, or we are affiliated with, a U.S. or non-U.S. bank, we
     hereby represent that our participation in the offering of the Securities
     on the terms contemplated in the applicable AAU and the proposed
     Underwriting Agreement does not contravene any U.S. or state banking law
     restricting the exercise of securities powers in the United States.

          Capitalized terms used but not defined herein shall have the
respective meanings given to them in the applicable AAU.

                                       25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.H.5
<SEQUENCE>9
<FILENAME>dex99h5.txt
<DESCRIPTION>FORM OF DEALER LETTER AGREEMENT
<TEXT>
<PAGE>


                               Nuveen Investments
                              333 West Wacker Drive
                                Chicago, IL 60606

                                November __, 2002

[           ]
Managing Director, Equity Capital Markets
Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013

Dear [       ]:

               Reference is made to Nuveen Insured Tax-Free Advantage Municipal
Fund. The fund currently is making an initial public offering of its common
shares of beneficial interest (the "Shares") through several underwriters. Such
offering is referred to herein as the "Offering". You are acting as lead manager
and representative (the "Representative") of the underwriters of the Offering
and we are participating as a manager and underwriter of the Offering.

               We are requesting that we be able to offer certain broker-dealers
the opportunity to participate as selling dealers in the Offering. This letter
is to confirm our agreement with you as to the terms and conditions on which we
may transact business (collectively, the "Nuveen Selected Dealers" and,
individually, a "Nuveen Selected Dealer"):

          a.   each Nuveen Selected Dealer to whom we offer to sell, or sell,
Shares shall have entered into a master selected dealer agreement ("Selected
Dealer Agreement") with Nuveen, the form of which is attached hereto as Exhibit
A;

          b.   before offering to sell, or selling, Shares to a Nuveen Selected
Dealer, Nuveen will carry out such independent investigations as it deems
necessary to determine that such dealer satisfies the criteria set forth in
Section 6 of the Selected Dealer Agreement;

          c.   we will act under and enforce each Selected Dealer Agreement only
with your consent (which shall not be unreasonably withheld) or upon your
instruction;

          d.   we shall not allow to any Nuveen Selected Dealer purchasing
Shares in an Offering a selling concession that is in an amount in excess of the
maximum selling concession set by you for selected dealers for the Offering; and

          e.   we agree upon instruction from you, subject to the other terms of
the Offering, to pay for and purchase all Shares that we reserve in the
Offering, whether such Shares are reserved by us for our own account or for the
account of one or more Nuveen Selected Dealers, and we agree to make all
purchases of Shares in accordance with Master Agreement among Underwriters dated
July 1, 1999 between the Representatives and Nuveen and the underwriting
agreement for the Offering of such Shares.

<PAGE>

                                                                               2

               If the foregoing correctly sets forth our understanding regarding
the matters described herein, please so indicate by signing a copy of this
letter where indicated below and returning the signed copy of this letter to us.
For your convenience, a duplicate copy of this letter has been included.

                                             NUVEEN INVESTMENTS

                                             By
                                                ---------------------------
                                                Name:
                                                Title:

<PAGE>

                                                                               3

Acknowledged and agreed to as of this
__ day of November, 2002 on behalf of themselves
and, in respect of the Offering, the other
underwriters of the Offering.

by: SALOMON SMITH BARNEY INC.

SALOMON SMITH BARNEY INC.,
as Representative of the Underwriters

By
     ----------------------------------
     Name:
     Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.I
<SEQUENCE>10
<FILENAME>dex99i.txt
<DESCRIPTION>DEFERRED COMPENSATION PLAN
<TEXT>
<PAGE>


                     NUVEEN OPEN-END AND CLOSED-END FUNDS

                        DEFERRED COMPENSATION PLAN FOR
                      INDEPENDENT DIRECTORS AND TRUSTEES

                                   PREAMBLE
                                   --------

     The Board of each Participating Fund hereby establishes this Deferred
Compensation Plan for Independent Directors and Trustees.  The purpose of the
Plan is to allow the independent directors and trustees of the Participating
Funds to defer receipt of all, or a portion, of the compensation they earn for
their service to the Participating Funds in lieu of receiving current payments
of such compensation, and to treat any deferred amount as though an equivalent
dollar amount had been invested in shares of one or more Eligible Funds.  Each
Board intends that the Plan shall be maintained at all times on an unfunded
basis for federal income tax purposes under the Internal Revenue Code of 1986,
as amended.  The Plan is not covered by the Employee Retirement Income Security
Act of 1974, as amended.

SECTION 1 DEFINITIONS OF TERMS AND CONSTRUCTION
          -------------------------------------

     1.1  Definitions.  The following terms as used in this Plan shall have the
          -----------
following meanings:

          (a) "Administrator" shall mean Nuveen or such other person or persons
as the Boards may from time to time designate, provided that no Eligible
Participant may serve as Administrator.

          (b) "Beneficiary" shall mean such person or persons designated
pursuant to Section 4.4 hereof to receive benefits after the death of an
Eligible Participant.

          (c) "Board" shall mean the Board of Directors or the Board of Trustees
of the respective Participating Funds.

          (d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.

          (e) "Compensation" shall mean the retainer and fees paid by
Participating Funds to an Eligible Participant for a Deferral Period prior to
reduction for Deferrals made under this Plan.

          (f) "Deferral" shall mean the amount or amounts of an Eligible
Participant's Compensation deferred under the provisions of Section 3 of this
Plan.

          (g) "Deferral Account" shall mean the account maintained to reflect an
Eligible Participant's Deferrals made pursuant to Section 3 herein and any other
credits or debits thereto.

<PAGE>


          (h) "Deferral Election" shall mean the Eligible Participant's election
to defer his or her compensation under Plan Section 3.1(a).

          (i) "Deferral Period" shall mean each calendar quarter during which an
Eligible Participant makes, or is entitled to make, Deferrals under Section 3
hereof.

          (j) "Eligible Fund" means an open-end fund managed by Nuveen and
designated by the Boards as a fund that may be chosen by an Eligible Participant
as a fund in which the Eligible Participant's Deferral Account may be deemed to
be invested.

          (k) "Eligible Participant" shall mean a member of a Board who is not
an "interested person" of a Participating Fund or of Nuveen, as such term is
defined under Section 2(a)(19) of the Investment Company Act of 1940, as amended
("1940 Act").

          (l) "Hardship and Unforeseeable Emergency" shall mean a severe
financial hardship to an Eligible Participant resulting from a sudden and
unexpected illness or accident of the Eligible Participant or a dependent
(within the meaning of Section 152(a) of the Code), of the Eligible Participant,
loss of the Eligible Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances, arising from events beyond the
Eligible Participant's control.  Whether circumstances constitute a Hardship and
Unforeseeable Emergency depends on the facts of each case, as determined by the
Administrator, but in any case does not include a hardship that may be relieved:

              (i)   through reimbursement or compensation by insurance or
              otherwise;

              (ii)  by liquidation of the Eligible Participant's assets to the
              extent that liquidation itself would not cause such a severe
              financial hardship; or

              (iii) by ceasing to defer receipt of any Compensation not yet
              earned.

The term "Hardship and Unforeseeable Emergency" shall have the same meaning as
the term "unforeseeable emergency" as used in regulations issued under Section
457 of the Code, and shall be applied accordingly.  The need to send an Eligible
Participant's child to college and the desire to purchase a home shall not
constitute a Hardship and Unforeseeable Emergency.

          (n) "Net Asset Value" shall mean the per share value of an open-end
fund, as determined as set forth in such fund's registration statement under the
1940 Act, governing instruments and otherwise in accordance with law.

          (o) "Nuveen" shall mean The John Nuveen Company and its affiliates.

          (p) "Participating Fund" shall mean an open-end or closed-end fund
managed by Nuveen, whether existing at the time of adoption of the Plan or
established at a later date, designated by its Board as a fund compensation from
which may be deferred by an Eligible Participant.  Participating Funds shall be
listed on Exhibit A to the Plan, which shall be revised

<PAGE>


from time to time by the Administrator, provided that failure to list a
Participating Fund on Exhibit A shall not affect its status as a Participating
Fund.

          (q) "Plan" shall mean this Deferred Compensation Plan for Independent
Directors and Trustees, as amended from time to time.

          (r) "Separation from Service" shall mean the date on which an Eligible
Participant ceases to be a member of a Board.

          (s) "Valuation Date" shall mean the last business day of each calendar
quarter and any other day upon which Nuveen makes a valuation of the Deferral
Account.

     1.2  Plurals and Gender.  Where appearing in this Plan the singular shall
          ------------------
include the plural and the masculine shall include the feminine, and vice versa,
unless the context clearly indicates a different meaning.

     1.3  Headings.  The headings and subheadings in this Plan are inserted for
          --------
convenience of reference only and are to be ignored in any construction of the
provisions hereof.

     1.4  Separate Agreement.  This Plan shall be construed as a separate
          ------------------
agreement between each Eligible Participant and each of the Participating Funds.

SECTION 2 PERIOD DURING WHICH DEFERRALS ARE PERMITTED
          -------------------------------------------

     2.1  Commencement of Deferrals.  An Eligible Participant may elect, on a
          -------------------------
form provided by, and submitted to, the Administrator, to commence Deferrals
under Section 3 hereof for the period beginning on the first day of the first
quarter beginning on or after the date such form is submitted to the
Administrator.

     2.2  Termination of Deferrals.  An Eligible Participant shall not be
          ------------------------
eligible for Deferral of additional Compensation after the earlier of the
following dates:

          (a) The date he cancels his election pursuant to Section 3.3(b);

          (b)  his Separation from Service; or

          (c) the effective date of the termination of this Plan.

SECTION 3 DEFERRALS
          ---------

     3.1  Deferral Elections.

          (a) Subject to Section 3.1(d), an Eligible Participant participating
in the Plan may elect to defer receipt of all, or a specified dollar amount or
percentage of the Compensation (including fees for attending meetings) earned
per quarter by such Eligible Participant for serving as a member of the Board of
each Participating Fund or as a member of any committee (or subcommittee of such
committee) of the Board of a Participating Fund of which such Eligible

<PAGE>

Participant from time to time may be a member.  Reimbursement of expenses of
attending meetings of the Board, committees of the Board or subcommittees of
such committees may not be deferred.

          (b) Deferrals described in Section 3.1(a) above shall be withheld,
based upon the percentage or dollar amount elected, from each payment of
Compensation which the Eligible Participant would otherwise have been entitled
but for his election in Section 3.1(a) below.  If a dollar amount per quarter is
elected, 100% of each payment of Compensation in each quarter will be deferred
until such amount is reached.

          (c) Each Participating Fund shall establish a book entry account
("Deferral Account") to which will be credited an amount equal to the Eligible
Participant's Deferrals under this Plan.  Any Compensation earned by an Eligible
Participant which he has elected to defer pursuant to the Plan will be credited
to such Eligible Participant's Deferral Account on the date such Compensation
otherwise would have been payable to such Eligible Participant.  The Deferral
Account shall be debited to reflect any distributions from such Account.  Such
debits shall be allocated to the Deferral Account as of the date such
distributions are made.

          (d) Each amount that an Eligible Participant elects to defer shall be
allocated among all Participating Funds for which the Eligible Participant
serves as a director or trustee in the same proportion that the Eligible
Participant's Compensation would have been allocated if it had not been
deferred, and all subsequent earnings credited, and all distributions, losses
and expenses charged, to the Eligible Participant's Deferral Account, shall be
allocated among the Participating Funds in the same manner.  The obligations of
the Participating Funds to pay their respective allocated shares of an Eligible
Participant's Deferral Account shall be several and not joint.

     3.2  Valuation of Deferral Account.
          -----------------------------

          (a)  Each Board shall from time to time designate one or more open-end
funds managed by Nuveen as Eligible Funds.  An Eligible Participant, on his
deferral election form, shall have the right to select from the then-current
list of Eligible Funds one or more, but not more than three, funds in which his
Deferral Account shall be deemed invested as set forth in this Section 3
("Designated Funds").  An Eligible Participant may designate an Eligible Fund
even if he is not a member of the Board of that Eligible Fund.  Except as
provided below, amounts credited to an Eligible Participant's Deferral Account
shall be treated as though such amounts had been invested and reinvested in
shares of the Eligible Participant's Designated Funds, initially calculated as
follows:

          (i)  the product of

               (x)  the amount of such Deferrals and

               (y)  the percentage of such Deferrals to be deemed invested in
                    that Designated Fund, divided by

<PAGE>

          (ii) the Designated Fund's Net Asset Value per share as of the date
               such amount is so credited.

          (b)  As of the last day of each calendar year, by written election
delivered to the Administrator not less than 10 business days prior to the end
of such year, each Eligible Participant may direct that the Designated Funds in
which his or her Deferral Account is deemed invested be changed.  Any election
to change such investment direction shall indicate the dollar amount or
percentage of the balance in such Deferral Account (determined based on the then
current Net Asset Value of each Designated Fund in which the Deferral Account is
deemed invested immediately prior to giving effect to such investment change) to
be invested in each such Designated Fund.  The number of shares of each
Designated Fund to be deemed held in the Eligible Participant's Deferral Account
following such investment change shall be calculated as follows:

          (i)  the product of

               (x)  the balance in such Deferral Account and

               (y)  the percentage of such balance to be deemed invested in that
                    Designated Fund divided by

          (ii) the Designated Fund's Net Asset Value per share as of the last
               day of such calendar year.

          (c)  If a Designated Fund shall pay a stock dividend on, or split,
combine, reclassify or substitute other securities by merger, consolidation or
otherwise for its outstanding shares, the Eligible Participant's Deferral
Account shall be adjusted as though shares of such Designated Fund were actually
held by the Deferral Account in order to preserve rights substantially
proportionate to the rights deemed held immediately prior to such event.

          (d)  On each payment date of dividends or capital gains distributions
declared on shares of any Designated Fund in which an Eligible Participant's
Deferral Account is deemed invested, the Deferral Account will be credited with
book adjustments representing all dividends or capital gains distributions which
would have been realized had such account been invested in shares of such
Designated Fund and such dividend or capital gains distribution had been
received and reinvested.

          (e)  The value of a Deferral Account on any Valuation Date shall be
the sum of (i) the number of shares of each Designated Fund deemed to be held in
the Deferral Account by the preceding paragraphs, multiplied by (ii) the Net
Asset Value per share of such Designated Fund on the Valuation Date.

          (f)  On each date upon which a distribution of less than the entire
balance is to be charged to an Eligible Participant's Deferral Account, the
amount of such distribution shall, unless the Eligible Participant otherwise
specifies in accordance with rules established by the Administrator, be
allocated among all of the Designated Funds in which the Deferral Account is

<PAGE>

deemed to be invested in proportion to the aggregate value of the number of
deemed shares of each such Designated Fund, and the number of deemed shares of
each such Designated Fund shall then be reduced by the portion of the
distribution allocated to such Designated Fund divided by the Net Asset Value
per share of such Designated Fund on the date on which the distribution is
charged.

          (g)   Unless and until each Board otherwise determines, the Eligible
Funds shall include only one or more open-end funds managed by Nuveen.  Open-end
funds that cease to be managed by Nuveen shall automatically cease to be
Eligible Funds, unless one of the Boards otherwise determines with respect to
Eligible Participants that are members of such Board.  Either Board may at any
time remove any open-end fund from the list of Eligible Funds, or may add any
open-end fund (whether or not managed by Nuveen), for Eligible Participants who
are members of that Board.  If an Eligible Fund is removed from the list of
Eligible Funds for any reason then no further deferrals shall be deemed invested
in such Fund and, unless the Board otherwise determines, the Administrator shall
give each Eligible Participant whose Deferral Account is deemed to be invested
in such Eligible Fund a reasonable period to submit a new designation, and any
Eligible Participant who fails to submit a new designation shall be subject to
the provisions of Section 3.2(h)(iii) below.

          (h)   As of each Valuation Date, income, gain and loss equivalents
(determined as if the Deferral Account is invested in the manner set forth under
Section 3.2(a), above) attributable to the period following the next preceding
Valuation Date shall be credited to and/or deducted from the Eligible
Participant's Deferral Account.  Except as provided below, the Eligible
Participant's Deferral Account shall receive a return in accordance with his
investment designations, provided such designations conform to the provisions of
this Section.  If:

          (i)   the Eligible Participant does not furnish the Administrator with
                a written designation,

          (ii)  the written designation from the Eligible Participant is
                unclear, or

          (iii) less than all of the Eligible Participant's Deferral Account is
                covered by such written designation,

then the Eligible Participant's Deferral Account shall receive no return until
such time as the Eligible Participant shall provide the Administrator with
instructions.

          3.3   Manner of Electing Deferral.
                ---------------------------

          (a)   An Eligible Participant shall elect to participate in this Plan
and defer his Compensation by completing, signing and filing with the
Administrator a Notice of Election to Defer Compensation (the "Notice") in the
form attached to this Plan.  The Notice shall include:

          (i)   the amount of Compensation to be deferred;

<PAGE>

          (ii)  the time at which the distribution of such amount will commence,
                which may be:

                (A)  a specified date selected by the Participant not prior to
                     the third anniversary of such election,

                (B)  the first day of the month, quarter or year following the
                     Eligible Participant's Separation from Service, or

                (C)  the earlier of (A) or (B);

                provided that the distribution of an Eligible Participant's
                Deferral Account shall in any event commence no later than the
                fifth anniversary of that Eligible Participant's Separation from
                Service.

          (iii) the manner of distribution of such deferred compensation (i.e.,
                in a lump sum or the number of annual or quarterly
                installments);

          (iv)  the Designated Fund or Designated Funds in which such deferrals
                are to be deemed invested and in what amounts or percentages;
                and

          (v)   any beneficiary designated pursuant to Section 4.4 of this Plan.

          (b)   All Deferral Elections shall remain in effect until the earliest
of:  (i) the date on which the Deferral Election is canceled or modified, (ii)
the date of the Eligible Participant's Separation from Service, or (iii) the
date on which the Eligible Participant begins to receive distributions from his
or her Deferral Account.  An Eligible Participant may modify the amount of his
Deferral Election and/or the Designated Fund(s) specified in the Deferral
Election, on a prospective basis by submitting an amended Notice to the
Administrator.  Such change will be effective as of the first day of the year
following the date such revision is submitted to the Administrator.  An Eligible
Participant may cancel his Deferral Election on a prospective basis by
submitting an amended Notice to the Administrator, which cancellation of the
Deferral Election shall be effective for all Compensation for calendar quarters
beginning or for meetings held after such notice is received, subject to any
delay necessary for administrative processing.  An Eligible Participant who
cancels his Deferral Election may thereafter make a new Deferral Election as of
the first day of any subsequent year pursuant to Section 3.3(a), but all new
deferrals shall be credited to the same Deferral Account, and the time and
manner of distribution of the Deferral Account, the manner in which the Deferral
Election is deemed invested, and the identity of the Eligible Participant's
Beneficiary, shall remain the same unless changed for the entire Deferral
Account as otherwise provided herein.

     3.4  Time of Electing Deferral.  An Eligible Participant's initial Notice
          -------------------------
under Section 3.3(a) shall be filed with the Administrator no later than 10
business days prior to the last business day of the calendar quarter preceding
the quarter for which the Deferral Election is made.  An Eligible Participant's
Notice under Section 3.3(b) modifying the amount of his Deferral Election, or a
Notice under Section 3.3(a) making a Deferral Election after a prior

<PAGE>

Deferral Election has been cancelled, shall be filed with the Administrator no
later than 10 business days prior to the last business day of the year preceding
the year for which the modified or new Deferral Election is effective.

SECTION 4 DISTRIBUTIONS FROM DEFERRAL ACCOUNT
          -----------------------------------

     4.1  Eligible Participant's Election.  An Eligible Participant shall elect
          -------------------------------
at the time of his Deferral Election the time at which his distribution is to
commence, and the form of distribution, which may be either:

          (a) lump sum; or

          (b) annual or quarterly installments over a period of five (5) years,
with each installment being equal to the balance in the Deferral Account
immediately prior to payment of the installment divided by the number of
installments remaining to be paid (including the installment the amount of which
is being determined).

          (c) If an Eligible Participant fails to designate the manner of
distribution to apply to his Deferral Account, such Deferral Account shall be
distributed in a lump sum on the first day of the month following the Eligible
Participant's Separation from Service.

          (d) An Eligible Participant may elect to change his distribution
election with respect to his Deferral Account by filing an amended Notice with
the Administrator not less than six months prior to the earlier of the date on
which distribution was scheduled to begin under the original Notice or the date
on which it is scheduled to begin under the amended Notice. The Eligible
Participant's new distribution election shall be void and the Eligible
Participant's original election shall be reinstated if the date on which
distribution was originally scheduled to begin occurs (by reason of Separation
from Service or otherwise) within six months after the date on which the changed
distribution election was filed with the Administrator.

     4.2  Death Prior to Complete Distribution of Deferral Account.  If an
          --------------------------------------------------------
Eligible Participant dies prior to the commencement of the distribution of the
amounts credited to his Deferral Account, the balance of such Account shall be
distributed to his Beneficiary in a lump sum as soon as practicable after the
Eligible Participant's death.  If an Eligible Participant dies after the
commencement of such distributions, but prior to the complete distribution of
his Deferral Account, the balance of the amounts credited to his Deferral
Account shall be distributed to his Beneficiary over the remaining period during
which such amounts were otherwise distributable to the Eligible Participant
under Section 4.1 hereof.  Notwithstanding the above, the Administrator, in its
sole discretion, may accelerate the distribution of the Deferral Account.

     4.3  Hardship and Unforeseeable Emergency.  An Eligible Participant may
          ------------------------------------
request at any time a withdrawal of part or all of the amount then credited to
his Deferral Account on account of Hardship and Unforeseeable Emergency by
submitting a written request to the Administrator accompanied by evidence that
his financial condition constitutes a Hardship and Unforeseeable Emergency.  The
Administrator shall review the Eligible Participant's request and

<PAGE>

determine the extent, if any, to which such request is justified. Any such
withdrawal shall be limited to an amount reasonably necessary to meet the
Hardship and Unforeseeable Emergency, but not more than the amount of the
Eligible Participant's Deferral Account.

     4.4  Designation of Beneficiary.  For the purposes of Section 4.2 hereof,
          --------------------------
the Eligible Participant's Beneficiary shall be the person or persons so
designated by the Eligible Participant in a written instrument submitted to the
Administrator. Subject to rules established by the Administrator, an Eligible
Participant may designate multiple or alternative Beneficiaries, and may change
his Beneficiary at any time without the consent of any prior Beneficiary;
provided that no change of a Beneficiary shall be effective unless and until
actually received, in proper form, by the Administrator during the Eligible
Participant's life.  The Administrator's determination of the person eligible to
receive the Deferral Account of a deceased Eligible Participant, if made in good
faith, shall be final and binding on all parties.  If an Eligible Participant
fails to properly designate a Beneficiary or if his Beneficiary predeceases him,
his beneficiary shall be his estate.

     4.5  Domestic Relations Orders.  If any judgment, decree or order
          -------------------------
(including approval of a property settlement agreement) which (i) relates to the
provision of child support, alimony payments, or marital property rights to a
spouse, former spouse, child, or other dependent of an Eligible Participant, and
(ii) is made pursuant to a state or foreign domestic relations law (including a
community property law) directs assignment of a portion of an Eligible
Participant's Deferral Account to a spouse, former spouse, child, or other
dependent of an Eligible Participant, such amount may be paid in a lump-sum cash
payment at the request of the person to whom assignment is directed to be made
as soon as administratively possible after the Administrator's receipt of the
signed order, as long as the order (or a written direction to the Administrator
of how to interpret the order, signed by the Eligible Participant and the person
to whom the order directs assignment) clearly specifies the amount of the
Deferral Account assigned and the timing of payment to the person to whom the
assignment is made.

SECTION 5 AMENDMENTS AND TERMINATION
          --------------------------

     5.1  Amendments.  The Boards reserve the right to amend, in whole or in
          ----------
part, and in any manner, any or all of the provisions of this Plan by action of
both Boards, except that no amendment shall reduce the balance in any Eligible
Participant's Deferral Account, or (unless necessary to comply with the 1940 Act
or other applicable law) significantly delay the time at which such balance is
payable without the consent of the Eligible Participant affected.

     5.2  Termination.  Each Board may terminate this Plan at any time by
          -----------
action of the Board and the Eligible Participants' Deferral Accounts shall
become payable as of the Valuation Date next following the effective date of the
termination of this Plan.  If one Board elects to terminate the Plan with
respect to the Eligible Participants who are members of such Board, the Plan
shall remain in effect with respect to Eligible Participants who are members of
the other Board.

<PAGE>

SECTION 6 MISCELLANEOUS
          -------------

     6.1  Rights of Creditors.
          -------------------

          (a) This Plan is unfunded.  Neither an Eligible Participant nor any
other person shall have any interest in any specific asset or assets of a
Participating Fund by reason of any Deferral Account hereunder, nor any rights
to receive distribution of his Deferral Account except and to the extent
expressly provided hereunder.  Except for money market funds complying with rule
2a-7 under the 1940 Act, a Participating Fund shall not be required to purchase,
hold or dispose of any investments pursuant to this Plan.  If in order to cover
its obligations hereunder a Participating Fund purchases any investments, the
same shall continue for all purposes to be a part of the general assets and
property of that Participating Fund subject to the claims of its general
creditors and no person other than the Participating Fund shall by virtue of the
provisions of this Plan have any interest in such assets other than an interest
as a general creditor of the Participating Fund.

          (b) The rights of an Eligible Participant and the Beneficiaries to the
amounts held in the Deferral Account are unsecured and such amounts shall be
subject to the claims of the creditors of a Participating Fund.  With respect to
the payment of amounts held under the Deferral Account, the Eligible Participant
and his Beneficiaries have the status of unsecured creditors of that
Participating Fund.  This Plan is executed on behalf of each Participating Fund
by an officer of that Participating Fund as such and not individually.  Any
obligation of a Participating Fund hereunder shall be an unsecured obligation of
that Participating Fund and not of any other person.

     6.2  Agents.  Each Participating Fund may employ agents and provide for
          ------
such clerical, legal, actuarial, accounting, advisory or other services as it
deems necessary to perform its duties under this Plan.  Each Participating Fund
shall bear the cost of such services and all other expenses it incurs in
connection with the administration of this Plan.

     6.3  Incapacity.  If the Administrator shall receive evidence satisfactory
          ----------
to it that an Eligible Participant or any Beneficiary entitled to receive any
benefit under the Plan is, at the time when such benefit becomes payable, a
minor, or is physically or mentally incompetent to receive such benefit and to
give a valid release therefor, and that another person or an institution is then
maintaining or has custody of the Eligible Participant or Beneficiary and that
no guardian, committee or other representative of the estate of the Eligible
Participant or Beneficiary shall have been duly appointed, a Participating Fund
may make payment of such benefit otherwise payable to the Eligible Participant
or Beneficiary to such other person or institution, including a custodian under
a Uniform Transfers to Minors Act or corresponding legislation (who shall be an
adult, a guardian of the minor or a trust company), and the release of such
other person or institution shall be a valid and complete discharge for the
payment of such benefit.

     6.4  Statement of Deferral Account.  The Administrator will furnish each
          -----------------------------
Eligible Participant with a statement setting forth the value of such Eligible
Participant's Deferral Account as of the end of each calendar year and all
credits to and payments from such Deferral

<PAGE>

Account during such year. Such statements will be furnished no later than 60
days after the end of each calendar year.

     6.5   Governing Law.  This Plan shall be governed by the laws of the State
           -------------
of Illinois.

     6.6   Non-guarantee of Status.  Nothing contained in this Plan shall be
           -----------------------
construed as a contract or guarantee of the right of an Eligible Participant to
be, or remain as, a director or a trustee of a fund, or to receive any, or any
particular rate of, Compensation.

     6.7   Counsel.  Each Board may consult with legal counsel with respect to
           -------
the meaning or construction of this Plan, its obligations or duties hereunder or
with respect to any action or proceeding or any question of law, and it shall be
fully protected with respect to any action taken or omitted by it in good faith
pursuant to the advice of legal counsel.

     6.8   Interests Not Transferable.  An Eligible Participant's and
           --------------------------
Beneficiaries' interests in the Deferral Account may not be anticipated, sold,
encumbered, pledged, mortgaged, charged, transferred, alienated, assigned nor
become subject to execution, garnishment or attachment and any attempt to do so
by any person shall be deemed null and void; no Participating Fund shall
recognize the rights of any party under this Plan except those of the Eligible
Participant or his Beneficiary; provided that this Section 6.8 shall not
preclude a Participating Fund from offsetting any amount payable to an Eligible
Participant hereunder by any amount owed by such Eligible Participant to that
Participating Fund or to Nuveen.

     6.9   Entire Agreement.  This Plan contains the entire understanding
           ----------------
between each Participating Fund and the Eligible Participants with respect to
the payment of non-qualified deferred compensation by a Participating Fund to
the Eligible Participants.

     6.10  Powers of Administrator.  In addition to other powers specifically
           -----------------------
set forth herein, the Administrator shall have all power and authority necessary
or convenient for the administration of this Plan, including without limitation
the authority to:

     (i)   construe and interpret the Plan, and resolve any inconsistency or
           ambiguity with respect to any of its terms;

     (ii)  decide all questions of eligibility and determine the amount, manner
           and time of payment of any benefits hereunder;

     (iii) prescribe rules and procedures to be followed by Eligible
           Participants or Beneficiaries in making any election or taking any
           action provided for herein, which rules and procedures may alter any
           provision of the Plan that is administrative or ministerial in nature
           without the necessity for an amendment;

     (iv)  allocate Deferral Accounts among the Eligible Funds;

     (v)   maintain all the necessary records for the administration of the
           Plan;

<PAGE>

     (vi)  delegate any of it duties or powers under the Plan to any other
           person acting under its supervision; and

     (vii) do all other acts which the Administrator deems necessary or proper
           to accomplish and implement its responsibilities under the Plan.

Any rule or procedure adopted by the Administrator, or any decision, ruling or
determination made by the Administrator, in good faith shall be final, binding
and conclusive on all Participating Funds, Eligible Participants, Beneficiaries
and all persons claiming through them.  The authority of the Administrator may
be exercised by such person as the Chief Executive Officer of the Administrator
may designate or, in the absence of a specific designation, by those officers
and employees of the Administrator whose normal duties include payment of
compensation to independent directors and trustees.

     6.11  Participant Litigation.  In any action or proceeding regarding the
           ----------------------
Plan Eligible Participants or their Beneficiaries or any other persons having or
claiming to have an interest in this Plan shall not be necessary parties and
shall not be entitled to any notice or process.  Any final judgment which is not
appealed or appealable and may be entered in any such action or proceeding shall
be binding and conclusive on the parties hereto and all persons having or
claiming to have any interest in this Plan.  To the extent permitted by law, if
a legal action is begun against either Board, any Participating Fund, the
Administrator, or any of their respective officers, directors, trustees,
employees or agents (an "indemnified party"), by or on behalf of any person and
such action results adversely to such person or if a legal action arises because
of conflicting claims to an Eligible Participant's or other person's benefits,
the costs to the indemnified party of defending the action will be charged to
the amounts, if any, which were involved in the action or were payable to the
Eligible Participant or other person concerned.  To the extent permitted by
applicable law, acceptance of participation in this Plan shall constitute a
release of each of the indemnified parties from any and all liability and
obligation not involving willful misconduct or gross neglect.

     6.12  Successors and Assigns.  This Plan shall be binding upon, and shall
           ----------------------
inure to the benefit of, the Participating Funds and their successors and
assigns and to the Eligible Participants and their heirs, executors,
administrators and personal representatives.

     6.13  Severability.  In the event any one or more provisions of this Plan
           ------------
are held to be invalid or unenforceable, such illegality or unenforceability
shall not affect the validity or enforceability of the other provisions hereof
and such other provisions shall remain in full force and effect unaffected by
such invalidity or unenforceability.

<PAGE>

     IN WITNESS WHEREOF, each Participating Fund has caused this Plan to be
executed by one of its duly authorized officers, this 30th day of October, 1998.


                                By:    /s/ Alan G. Berkshire
                                       ---------------------
                                Name:  Alan G. Berkshire
                                Title: Vice President



         /s/ Karen L. Healy
- -----------------------------------------
                Witness


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.J
<SEQUENCE>11
<FILENAME>dex99j.txt
<DESCRIPTION>MASTER CUSTODIAN AGREEMENT
<TEXT>
<PAGE>

                           Master Custodian Agreement

This Agreement between those Investment Companies (each such investment company
and each investment company made subject to this Agreement in accordance with
Section 18 herein, be referred to as a "Fund" and collectively as the "Funds")
listed on Appendix A hereto (hereinafter "Appendix A", as it may be amended from
time to time) which may be Massachusetts business trusts or have such other form
of organization as may be indicated and State Street Bank and Trust Company, a
Massachusetts trust company (the "Custodian").

                                   Witnesseth:

Whereas, the Custodian and the Funds desire to enter into this Custodian
Agreement;

Whereas, the Funds are registered under the Investment Company Act of 1940 and
each Fund has appointed the Bank to act as its Custodian;

Whereas, the Funds may be authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and

Whereas, each Fund so authorized intends that this Agreement be applicable to
each of its series set forth on Appendix A (each such series together with all
other series subsequently established by the Fund and made subject to this
Agreement in accordance with Section 19 herein, be referred to as a "Portfolio"
and collectively as the "Portfolios").

Now Therefore, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:

Section 1.   Employment of Custodian and Property to be Held by It

Each Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities"). Each Fund, on behalf of its Portfolio(s), agrees
to deliver to the Custodian all securities and cash of such Portfolios, and all
payments of income, payments of principal or capital distributions received by
it with respect to all securities owned by it from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest of each Fund representing interests in its Portfolios ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of a Portfolio held or received by the Fund and not delivered to
the Custodian.

Upon receipt of "Proper Instructions" (as such term is defined in Section 6
hereof), the Custodian shall on behalf of the applicable Portfolio from time to
time employ one or more sub-custodians located in the United States, but only in
accordance with an applicable vote by the Board of Directors or the Board of
Trustees of the applicable Fund on behalf of the applicable Portfolio (as
appropriate, and in each case, the "Board"). The Custodian may employ as
sub-custodian for each Fund's foreign securities on behalf of the applicable
Portfolio, the

<PAGE>

foreign banking institutions and foreign securities depositories designated in
Schedules A and B hereto, but only in accordance with the applicable provisions
of Sections 3 and 4. The Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.

Section 2.   Duties of the Custodian with Respect to Property of the Fund Held
             By the Custodian in the United States

     Section 2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States, including all domestic securities owned by such
Portfolio other than securities which are maintained pursuant to Section 2.8 in
a clearing agency which acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the Treasury (each, a "U.S.
Securities System").

     Section 2.2 Delivery of Securities. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian only upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:

     1)   Upon sale of such securities for the account of the Portfolio and
          receipt of payment therefor;

     2)   Upon the receipt of payment in connection with any repurchase
          agreement related to such securities entered into by a Portfolio;

     3)   In the case of a sale effected through a U.S. Securities System, in
          accordance with the provisions of Section 2.8 hereof;

     4)   To the depository agent in connection with tender or other similar
          offers for securities of a Portfolio;

     5)   To the issuer thereof or its agent when such securities are called,
          redeemed, retired or otherwise become payable; provided that, in any
          such case, the cash or other consideration is to be delivered to the
          Custodian;

     6)   To the issuer thereof, or its agent, for transfer into the name of the
          Portfolio or into the name of any nominee or nominees of the Custodian
          or into the name or nominee name of any agent appointed pursuant to
          Section 2.7 or into the name or nominee name of any sub-custodian
          appointed pursuant to Section 1; or for exchange for a different
          number of bonds, certificates or other evidence

                                       2

<PAGE>

          representing the same aggregate face amount or number of units;
          provided that, in any such case, the new securities are to be
          delivered to the Custodian;

     7)   Upon the sale of such securities for the account of the Portfolio, to
          the broker or its clearing agent, against a receipt, for examination
          in accordance with "street delivery" custom; provided that in any such
          case, the Custodian shall have no responsibility or liability for any
          loss arising from the delivery of such securities prior to receiving
          payment for such securities except as may arise from the Custodian's
          own negligence or willful misconduct;

     8)   For exchange or conversion pursuant to any plan of merger,
          consolidation, recapitalization, reorganization or readjustment of the
          securities of the issuer of such securities, or pursuant to provisions
          for conversion contained in such securities, or pursuant to any
          deposit agreement; provided that, in any such case, the new securities
          and cash, if any, are to be delivered to the Custodian;

     9)   In the case of warrants, rights or similar securities, the surrender
          thereof in the exercise of such warrants, rights or similar securities
          or the surrender of interim receipts or temporary securities for
          definitive securities; provided that, in any such case, the new
          securities and cash, if any, are to be delivered to the Custodian;

     10)  For delivery in connection with any loans of securities made by the
          Portfolio, but only against receipt of adequate collateral as agreed
          upon from time to time by the Custodian and the Fund on behalf of the
          Portfolio, which may be in the form of cash or obligations issued by
          the United States government, its agencies or instrumentalities,
          except that in connection with any loans for which collateral is to be
          credited to the Custodian's account in the book-entry system
          authorized by the U.S. Department of the Treasury, the Custodian will
          not be held liable or responsible for the delivery of securities owned
          by the Portfolio prior to the receipt of such collateral;

     11)  For delivery as security in connection with any borrowing by a Fund on
          behalf of a Portfolio requiring a pledge of assets by the Fund on
          behalf of the Portfolio, but only against receipt of amounts borrowed;

     12)  For delivery in accordance with the provisions of any agreement among
          a Fund on behalf of a Portfolio, the Custodian and a broker-dealer
          registered under the Securities Exchange Act of 1934 (the "Exchange
          Act") and a member of The National Association of Securities Dealers,
          Inc. ("NASD"), relating to compliance with the rules of The Options
          Clearing Corporation and of any registered national securities
          exchange, or of any similar organization or organizations, regarding
          escrow or other arrangements in connection with transactions by the
          Portfolio of the Fund;

                                       3

<PAGE>

     13)  For delivery in accordance with the provisions of any agreement among
          a Fund on behalf of a Portfolio, the Custodian, and a futures
          commission merchant registered under the Commodity Exchange Act,
          relating to compliance with the rules of the Commodity Futures Trading
          Commission ("CFTC") and/or any contract market, or any similar
          organization or organizations, regarding account deposits in
          connection with transactions by the Portfolio of the Fund;

     14)  Upon receipt of instructions from the transfer agent for the Fund (the
          "Transfer Agent") for delivery to such Transfer Agent or to the
          holders of Shares in connection with distributions in kind, as may be
          described from time to time in the currently effective prospectus and
          statement of additional information of the Fund related to the
          Portfolio (the "Prospectus"), in satisfaction of requests by holders
          of Shares for repurchase or redemption; and

     15)  For any other purpose, but only upon receipt of Proper Instructions
          from the Fund on behalf of the applicable Portfolio specifying the
          securities of the Portfolio to be delivered and naming the person or
          persons to whom delivery of such securities shall be made.

     Section 2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the applicable
Portfolio or of any nominee of the Custodian which nominee shall be assigned
exclusively to a Portfolio, unless a Fund has authorized in writing the
appointment of a nominee to be used in common with other registered investment
companies having the same investment advisor as the Portfolio, or in the name or
nominee name of any agent appointed pursuant to Section 2.7 or in the name or
nominee name of any sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of the Portfolio under the terms
of this Agreement shall be in "street name" or other good delivery form. If,
however, the Fund directs the Custodian to maintain securities in "street name",
the Custodian shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis only
of relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.

     Section 2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of each Portfolio of
each Fund, subject only to draft or order by the Custodian acting pursuant to
the terms of this Agreement, and shall hold in such account or accounts, subject
to the provisions hereof, all cash received by it from or for the account of the
Portfolio, other than cash maintained by the Portfolio in a bank account
established and used in accordance with Rule 17f-3 under the Investment Company
Act of 1940, as amended (the "1940 Act"). Monies held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the banking
department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the monies to be deposited
with each such bank or trust

                                       4

<PAGE>

company shall on behalf of each applicable Portfolio be approved by vote of a
majority of the Board. Such monies shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in that
capacity.

     Section 2.5 Collection of Income. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other payments with
respect to registered domestic securities held hereunder to which each Portfolio
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments with
respect to bearer domestic securities if, on the date of payment by the issuer,
such securities are held by the Custodian or its agent thereof and shall credit
such income, as collected, to such Portfolio's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach and present
for payment all coupons and other income items requiring presentation as and
when they become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection therewith, other
than to provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of the
income to which the Portfolio is properly entitled.

     Section 2.6 Payment of Fund Monies. Upon receipt of Proper Instructions on
behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:

     1)   Upon the purchase of domestic securities, options, futures contracts
          or options on futures contracts for the account of the Portfolio but
          only (a) against the delivery of such securities or evidence of title
          to such options, futures contracts or options on futures contracts to
          the Custodian (or any bank, banking firm or trust company doing
          business in the United States or abroad which is qualified under the
          1940 Act to act as a custodian and has been designated by the
          Custodian as its agent for this purpose) registered in the name of the
          Portfolio or in the name of a nominee of the Custodian referred to in
          Section 2.3 hereof or in proper form for transfer; (b) in the case of
          a purchase effected through a U.S. Securities System, in accordance
          with the conditions set forth in Section 2.8 hereof; (c) in the case
          of repurchase agreements entered into between the Fund on behalf of a
          Portfolio and the Custodian, or another bank, or a broker-dealer which
          is a member of NASD, (i) against delivery of the securities either in
          certificate form or through an entry crediting the Custodian's account
          at the Federal Reserve Bank with such securities or (ii) against
          delivery of the receipt evidencing purchase by the Portfolio of
          securities owned by the Custodian along with written evidence of the
          agreement by the Custodian to repurchase such securities from the
          Portfolio; or (d) for transfer to a time deposit account of the Fund
          in any bank, whether domestic or foreign; such transfer may be
          effected prior to receipt of a confirmation from a broker and/or the
          applicable bank pursuant to Proper Instructions from the Fund as
          defined herein;

                                       5

<PAGE>

     2)   In connection with conversion, exchange or surrender of securities
          owned by the Portfolio as set forth in Section 2.2 hereof;

     3)   For the redemption or repurchase of Shares issued as set forth in
          Section 5 hereof;

     4)   For the payment of any expense or liability incurred by the Portfolio,
          including but not limited to the following payments for the account of
          the Portfolio: interest, taxes, management, accounting, transfer agent
          and legal fees, and operating expenses of the Fund whether or not such
          expenses are to be in whole or part capitalized or treated as deferred
          expenses;

     5)   For the payment of any dividends on Shares declared pursuant to the
          governing documents of the Fund;

     6)   For payment of the amount of dividends received in respect of
          securities sold short; and

     7)   For any other purpose, but only upon receipt of Proper Instructions
          specifying the amount of such payment and naming the person or persons
          to whom such payment is to be made.

     Section 2.7 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as the Custodian
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder.

     Section 2.8 Deposit of Fund Assets In U.S. Securities Systems. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System subject to the following provisions:

     1)   The Custodian may keep securities of the Portfolio in a U.S.
          Securities System provided that such securities are represented in an
          account of the Custodian in the U.S. Securities System (the "U.S.
          Securities System Account") which account shall not include any assets
          of the Custodian other than assets held as a fiduciary, custodian or
          otherwise for customers;

     2)   The records of the Custodian with respect to securities of the
          Portfolio which are maintained in a U.S. Securities System shall
          identify by book-entry those securities belonging to the Portfolio;

     3)   The Custodian shall pay for securities purchased for the account of
          the Portfolio upon (i) receipt of advice from the U.S. Securities
          System that such securities

                                       6

<PAGE>

          have been transferred to the U.S. Securities System Account, and (ii)
          the making of an entry on the records of the Custodian to reflect such
          payment and transfer for the account of the Portfolio. The Custodian
          shall transfer securities sold for the account of the Portfolio upon
          (i) receipt of advice from the U.S. Securities System that payment for
          such securities has been transferred to the U.S. Securities System
          Account, and (ii) the making of an entry on the records of the
          Custodian to reflect such transfer and payment for the account of the
          Portfolio. Copies of all advices from the U.S. Securities System of
          transfers of securities for the account of the Portfolio shall
          identify the Portfolio, be maintained for the Portfolio by the
          Custodian and be provided to the Fund at its request. Upon request,
          the Custodian shall furnish the Fund on behalf of the Portfolio
          confirmation of each transfer to or from the account of the Portfolio
          in the form of a written advice or notice and shall furnish to the
          Fund copies of daily transaction sheets reflecting each day's
          transactions in the U.S. Securities System for the account of the
          Portfolio;

     4)   The Custodian shall provide the Fund with any report obtained by the
          Custodian on the U.S. Securities System's accounting system, internal
          accounting control and procedures for safeguarding securities
          deposited in the U.S. Securities System;

     5)   Anything to the contrary in this Agreement notwithstanding, the
          Custodian shall be liable to the Fund for the benefit of the Portfolio
          for any loss or damage to the Portfolio resulting from use of the U.S.
          Securities System by reason of any negligence, misfeasance or
          misconduct of the Custodian or any of its agents or of any of its or
          their employees or from failure of the Custodian or any such agent to
          enforce effectively such rights as it may have against the U.S.
          Securities System; at the election of the Fund, it shall be entitled
          to be subrogated to the rights of the Custodian with respect to any
          claim against the U.S. Securities System or any other person which the
          Custodian may have as a consequence of any such loss or damage if and
          to the extent that the Portfolio has not been made whole for any such
          loss or damage.

     Section 2.9 Segregated Account. The Custodian shall upon receipt of Proper
Instructions on behalf of each applicable Portfolio establish and maintain a
segregated account or accounts for and on behalf of each such Portfolio, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.8
hereof, (i) in accordance with the provisions of any agreement among the Fund on
behalf of a Portfolio, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the CFTC or any registered contract market), or of any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Portfolio, (ii) for purposes of segregating
cash or government securities in connection with options purchased, sold or
written by the

                                       7

<PAGE>

Portfolio or commodity futures contracts or options thereon purchased or sold by
the Portfolio, (iii) for the purposes of compliance by the Portfolio with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release of the U.S. Securities and Exchange Commission (the "SEC"),
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies, and (iv) for any
other purpose upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio.

     Section 2.10 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in connection
with transfers of securities.

     Section 2.11 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.

     Section 2.12 Communications Relating to Fund Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
applicable Fund all written information (including, without limitation, pendency
of calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
the Fund on behalf of the Portfolio and the maturity of futures contracts
purchased or sold by the Portfolio) received by the Custodian from issuers of
the securities being held for the Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Portfolio all written
information received by the Custodian from issuers of the securities whose
tender or exchange is sought and from the party (or its agents) making the
tender or exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.

Section 3.   Provisions Relating to Rules 17F-5 and 17F-7

     Section 3.1. Definitions. As used throughout this Agreement, the following
capitalized terms shall have the indicated meanings:

"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.

                                       8

<PAGE>

"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act; the term does not include any Eligible Securities Depository.

"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.

"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.

"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.

"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.

"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.

     Section 3.2. The Custodian as Foreign Custody Manager.

          3.2.1   Delegation to the Custodian as Foreign Custody Manager. The
Fund, by resolution adopted by its Board, hereby delegates to the Custodian,
subject to Section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets of the Portfolios held outside the
United States, and the Custodian hereby accepts such delegation as Foreign
Custody Manager with respect to the Portfolios.

          3.2.2   Countries Covered. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody Manager.
The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets of the
Portfolios, which list of Eligible Foreign Custodians may be amended from time
to time in the sole discretion of the Foreign Custody Manager. The Foreign
Custody Manager will provide amended versions of Schedule A in accordance with
Section 3.2.5 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the
applicable account opening requirements for such country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board, on behalf of the
Portfolios, responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Agreement by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each

                                       9

<PAGE>

country listed on Schedule A in which the Custodian has previously placed or
currently maintains Foreign Assets pursuant to the terms of the Contract.
Following the receipt of Proper Instructions directing the Foreign Custody
Manager to close the account of a Portfolio with the Eligible Foreign Custodian
selected by the Foreign Custody Manager in a designated country, the delegation
by the Board on behalf of the Portfolios to the Custodian as Foreign Custody
Manager for that country shall be deemed to have been withdrawn and the
Custodian shall immediately cease to be the Foreign Custody Manager of the
Portfolios with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period to which the parties agree in writing)
after receipt of any such notice by the Fund, the Custodian shall have no
further responsibility in its capacity as Foreign Custody Manager to the Fund
with respect to the country as to which the Custodian's acceptance of delegation
is withdrawn.

          3.2.3   Scope of Delegated Responsibilities:

     (a)  Selection of Eligible Foreign Custodians. Subject to the provisions of
this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign
Assets in the care of the Eligible Foreign Custodian selected by the Foreign
Custody Manager in each country listed on Schedule A, as amended from time to
time. In performing its delegated responsibilities as Foreign Custody Manager to
place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation the factors specified in Rule 17f-5(c)(1).

     (b)  Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

     (c)  Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the Foreign Custody Manager shall establish a system to
monitor (i) the appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) the contract governing the custody
arrangements established by the Foreign Custody Manager with the Eligible
Foreign Custodian. In the event the Foreign Custody Manager determines that the
custody arrangements with an Eligible Foreign Custodian it has selected are no
longer appropriate, the Foreign Custody Manager shall notify the Board in
accordance with Section 3.2.5 hereunder.

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<PAGE>

          3.2.4   Guidelines for the Exercise of Delegated Authority. For
purposes of this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Portfolios.

          3.2.5   Reporting Requirements. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another Eligible Foreign Custodian
by providing to the Board an amended Schedule A at the end of the calendar
quarter in which an amendment to such Schedule has occurred. The Foreign Custody
Manager shall make written reports notifying the Board of any other material
change in the foreign custody arrangements of the Fund described in this Section
3.2 after the occurrence of the material change.

          3.2.6   Standard of Care as Foreign Custody Manager of a Portfolio. In
performing the responsibilities delegated to it, the Foreign Custody Manager
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of assets of management investment
companies registered under the 1940 Act would exercise.

          3.2.7   Representations with Respect to Rule 17F-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Contract to
the Custodian as the Foreign Custody Manager of the Portfolios.

          3.2.8   Effective Date and Termination of the Custodian as Foreign
Custody Manager. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and shall
remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party. Termination will
become effective thirty (30) days after receipt by the non-terminating party of
such notice. The provisions of Section 3.2.2 hereof shall govern the delegation
to and termination of the Custodian as Foreign Custody Manager of the Portfolios
with respect to designated countries.

     Section 3.3  Eligible Securities Depositories.

          3.3.1   Analysis and Monitoring. The Custodian shall (a) provide the
Fund (or its duly-authorized investment manager or investment advisor) with an
analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or investment advisor) of any material change in such risks,
in accordance with section (a)(1)(i)(B) of Rule 17f-7.

                                       11

<PAGE>

           3.3.2  Standard of Care. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.3.1.

Section 4. Duties of the Custodian with Respect to Property of the Portfolios
           Held Outside the United States

     Section 4.1  Definitions. As used throughout this Agreement, the following
capitalized terms shall have the indicated meanings:

"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.

"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.

     Section 4.2. Holding Securities. The Custodian shall identify on its books
as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities so
held by the Foreign Sub-Custodian be held separately from any assets of such
Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

     Section 4.3. Foreign Securities Systems. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as
applicable, in such country.

     Section 4.4. Transactions in Foreign Custody Account.

          4.4.1.  Delivery of Foreign Assets. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Portfolios
held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities
System account, only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:

     (i)  upon the sale of such foreign securities for the Portfolio in
          accordance with commercially reasonable market practice in the country
          where such foreign securities are held or traded, including, without
          limitation: (A) delivery against expectation of receiving later
          payment; or (B) in the case of a sale effected

                                       12

<PAGE>

               through a Foreign Securities System, in accordance with the rules
               governing the operation of the Foreign Securities System;

     (ii)      in connection with any repurchase agreement related to foreign
               securities;

     (iii)     to the depository agent in connection with tender or other
               similar offers for foreign securities of the Portfolios;

     (iv)      to the issuer thereof or its agent when such foreign securities
               are called, redeemed, retired or otherwise become payable;

     (v)       to the issuer thereof, or its agent, for transfer into the name
               of the Custodian (or the name of the respective Foreign
               Sub-Custodian or of any nominee of the Custodian or such Foreign
               Sub-Custodian) or for exchange for a different number of bonds,
               certificates or other evidence representing the same aggregate
               face amount or number of units;

     (vi)      to brokers, clearing banks or other clearing agents for
               examination or trade execution in accordance with market custom;
               provided that in any such case the Foreign Sub-Custodian shall
               have no responsibility or liability for any loss arising from the
               delivery of such securities prior to receiving payment for such
               securities except as may arise from the Foreign Sub-Custodian's
               own negligence or willful misconduct;

     (vii)     for exchange or conversion pursuant to any plan of merger,
               consolidation, recapitalization, reorganization or readjustment
               of the securities of the issuer of such securities, or pursuant
               to provisions for conversion contained in such securities, or
               pursuant to any deposit agreement;

     (viii)    in the case of warrants, rights or similar foreign securities,
               the surrender thereof in the exercise of such warrants, rights or
               similar securities or the surrender of interim receipts or
               temporary securities for definitive securities;

     (ix)      for delivery as security in connection with any borrowing by the
               Portfolios requiring a pledge of assets by the Portfolios;

     (x)       in connection with trading in options and futures contracts,
               including delivery as original margin and variation margin;

     (xi)      in connection with the lending of foreign securities; and

     (xii)     for any other purpose, but only upon receipt of Proper
               Instructions specifying the foreign securities to be delivered
               and naming the person or persons to whom delivery of such
               securities shall be made.

                                       13

<PAGE>

            4.4.2.  Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign
Sub-Custodian or the respective Foreign Securities System to pay out, monies of
the applicable Portfolio in the following cases only:

     (i)    upon the purchase of foreign securities for the Portfolio, unless
            otherwise directed by Proper Instructions, by (A) delivering money
            to the seller thereof or to a dealer therefor (or an agent for such
            seller or dealer) against expectation of receiving later delivery of
            such foreign securities; or (B) in the case of a purchase effected
            through a Foreign Securities System, in accordance with the rules
            governing the operation of such Foreign Securities System;

     (ii)   in connection with the conversion, exchange or surrender of foreign
            securities of the Portfolio;

     (iii)  for the payment of any expense or liability of the Portfolio,
            including but not limited to the following payments: interest,
            taxes, investment advisory fees, transfer agency fees, fees under
            this Contract, legal fees, accounting fees, and other operating
            expenses;

     (iv)   for the purchase or sale of foreign exchange or foreign exchange
            contracts for the Portfolio, including transactions executed with or
            through the Custodian or its Foreign Sub-Custodians;

     (v)    in connection with trading in options and futures contracts,
            including delivery as original margin and variation margin;

     (vi)   for payment of part or all of the dividends received in respect of
            securities sold short;

     (vii)  in connection with the borrowing or lending of foreign securities;
            and

     (viii) for any other purpose, but only upon receipt of Proper Instructions
            specifying the amount of such payment and naming the person or
            persons to whom such payment is to be made.

            4.4.3.  Market Conditions. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received for
the account of the Portfolio and delivery of Foreign Assets maintained for the
account of the Portfolio may be effected in accordance with the customary
established securities trading or processing practices and procedures in the
country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) with the expectation of
receiving later payment for such Foreign Assets from such purchaser or dealer.

                                       14

<PAGE>

The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian described on Schedule C hereto at the time or times set forth on
such Schedule. The Custodian may revise Schedule C from time to time, provided
that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder.

     Section 4.5. Registration of Foreign Securities. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of the Custodian or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and the Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. The Custodian or a Foreign Sub-Custodian
shall not be obligated to accept securities on behalf of a Portfolio under the
terms of this Contract unless the form of such securities and the manner in
which they are delivered are in accordance with reasonable market practice.

     Section 4.6  Bank Accounts. The Custodian shall identify on its books as
belonging to the Portfolio cash (including cash denominated in foreign
currencies) deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of, cash on the
books of the Custodian, a bank account or bank accounts shall be opened and
maintained outside the United States on behalf of a Portfolio with a Foreign
Sub-Custodian. All accounts referred to in this Section shall be subject only to
draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian)
acting pursuant to the terms of this Agreement to hold cash received by or from
or for the account of the Portfolio. Cash maintained on the books of the
Custodian (including its branches, subsidiaries and affiliates), regardless of
currency denomination, is maintained in bank accounts established under, and
subject to the laws of, The Commonwealth of Massachusetts.

     Section 4.7. Collection of Income. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolio shall be entitled and shall
credit such income, as collected, to the Portfolio. In the event that
extraordinary measures are required to collect such income, the Fund and the
Custodian shall consult as to such measures and as to the compensation and
expenses of the Custodian relating to such measures.

     Section 4.8  Shareholder Rights. With respect to the foreign securities
held pursuant to this Section 4, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. The Fund acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
lack of notice and other factors may have the effect of severely limiting the
ability of the Fund to exercise shareholder rights.

                                       15

<PAGE>

     Section 4.9.  Communications Relating to Foreign Securities. The Custodian
shall transmit promptly to the Fund written information with respect to
materials received by the Custodian via the Foreign Sub-Custodians from issuers
of the foreign securities being held for the account of the Portfolios
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith). With respect to
tender or exchange offers, the Custodian shall transmit promptly to the Fund
written information with respect to materials so received by the Custodian from
issuers of the foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer. The Custodian shall
not be liable for any untimely exercise of any tender, exchange or other right
or power in connection with foreign securities or other property of the
Portfolios at any time held by it unless (i) the Custodian or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) the Custodian receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at least three
business days prior to the date on which the Custodian is to take action to
exercise such right or power.

     Section 4.10. Liability of Foreign Sub-Custodians. Each agreement pursuant
to which the Custodian employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, the Custodian
from and against any loss, damage, cost, expense, liability or claim arising out
of or in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Fund's election, the Portfolios shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims against a
Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made whole
for any such loss, damage, cost, expense, liability or claim.

     Section 4.11  Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on a Fund, the Portfolios
or the Custodian as custodian of the Portfolios by the tax law of the United
States or of any state or political subdivision thereof. It shall be the
responsibility of the applicable Fund to notify the Custodian of the obligations
imposed on the Fund with respect to the Portfolios or the Custodian as custodian
of the Portfolios by the tax law of countries other than those mentioned in the
above sentence, including responsibility for withholding and other taxes,
assessments or other governmental charges, certifications and governmental
reporting. The sole responsibility of the Custodian with regard to such tax law
shall be to use reasonable efforts to assist the Fund with respect to any claim
for exemption or refund under the tax law of countries for which the Fund has
provided such information.

     Section 4.12. Liability of Custodian. The Custodian shall be liable for the
acts or omissions of a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally in the Contract and, regardless of
whether assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, the Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,

                                       16

<PAGE>

expropriation, currency restrictions, or acts of war or terrorism, or any other
loss where the Sub-Custodian has otherwise acted with reasonable care.

Section 5.   Payments for Sales or Repurchases or Redemptions of Shares

The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit into the account of the appropriate Portfolio such
payments as are received for Shares thereof issued or sold from time to time by
the applicable Fund. The Custodian will provide timely notification to such Fund
on behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.

From such funds as may be available for the purpose, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Fund to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Fund and the Custodian.

Section 6.   Proper Instructions

Proper Instructions as used throughout this Agreement means a writing signed or
initialed by one or more person or persons as the Board shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type of transaction involved. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. Each applicable Fund shall cause all oral instructions to be confirmed
in writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that each Fund and the
Custodian agree to security procedures, including but not limited to, the
security procedures selected by the Fund in the form of Funds Transfer Addendum
attached hereto. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.9.

Section 7.   Actions Permitted Without Express Authority

The Custodian may in its discretion, without express authority from the
applicable Fund on behalf of each applicable Portfolio:

                                       17

<PAGE>

       1)    make payments to itself or others for minor expenses of handling
             securities or other similar items relating to its duties under this
             Agreement, provided that all such payments shall be accounted for
             to the Fund on behalf of the Portfolio;

       2)    surrender securities in temporary form for securities in definitive
             form;

       3)    endorse for collection, in the name of the Portfolio, checks,
             drafts and other negotiable instruments; and

       4)    in general, attend to all non-discretionary details in connection
             with the sale, exchange, substitution, purchase, transfer and other
             dealings with the securities and property of the Portfolio except
             as otherwise directed by the Board.

Section 8.   Evidence of Authority

The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the applicable
Fund. The Custodian may receive and accept a copy of a resolution of the Board,
certified by the Secretary or an Assistant Secretary of the Fund ("Certified
Resolution"), as conclusive evidence (a) of the authority of any person to act
in accordance with such resolution or (b) of any determination or of any action
by the Board as described in such resolution, and such resolution may be
considered as in full force and effect until receipt by the Custodian of written
notice to the contrary.

Section 9.   Duties of Custodian with Respect to the Books of Account and
             Calculation of Net Asset Value and Net Income

The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of each
Portfolio and/or compute the net asset value per Share of the outstanding Shares
or, if directed in writing to do so by the Fund on behalf of the Portfolio,
shall itself keep such books of account and/or compute such net asset value per
Share. If so directed, the Custodian shall also calculate daily the net income
of the Portfolio as described in the Prospectus and shall advise the Fund and
the Transfer Agent daily of the total amounts of such net income and, if
instructed in writing by an officer of the Fund to do so, shall advise the
Transfer Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per Share and the daily
income of each Portfolio shall be made at the time or times described from time
to time in the Prospectus.

Section 10.  Records

The Custodian shall create and maintain all records relating to its activities
and obligations under

                                       18

<PAGE>

this Agreement in such manner as will meet the obligations of the Fund under the
1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the Fund and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the SEC. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by each Portfolio and held
by the Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.

Section 11.  Opinion of Fund's Independent Accountant

The Custodian shall take all reasonable action, as the applicable Fund, on
behalf of each applicable Portfolio, may from time to time request, to obtain
from year to year favorable opinions from the Fund's independent accountants
with respect to its activities hereunder in connection with the preparation of
the Fund's Form N-1A, and Form N-SAR or other annual reports to the SEC and with
respect to any other requirements thereof.

Section 12.  Reports to Fund by Independent Public Accountants

The Custodian shall provide the applicable Fund, on behalf of each of the
Portfolios, at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities System or a Foreign Securities System, relating to the
services provided by the Custodian under this Agreement; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.

Section 13.  Compensation of Custodian

The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between each Fund on
behalf of each applicable Portfolio and the Custodian.

Section 14.  Responsibility of Custodian

So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement and shall be held harmless in acting

                                       19

<PAGE>

upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Agreement,
but shall be kept indemnified by and shall be without liability to any Fund for
any action taken or omitted by it in good faith without negligence, including,
without limitation, acting in accordance with any Proper Instruction. It shall
be entitled to rely on and may act upon advice of counsel (who may be counsel
for a Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. The Custodian shall be
without liability to any Fund or Portfolio for any loss, liability, claim or
expense resulting from or caused by anything which is part of Country Risk (as
defined in Section 3 hereof), including without limitation nationalization,
expropriation, currency restrictions, or acts of war, revolution, riots or
terrorism.

Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, the Custodian
shall be without liability to any Fund for any loss, liability, claim or expense
resulting from or caused by; (i) events or circumstances beyond the reasonable
control of the Custodian or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by the Fund or
its duly-authorized investment manager or investment advisor in their
instructions to the Custodian provided such instructions have been in accordance
with this Agreement; (iii) the insolvency of or acts or omissions by a
securities system (including both U.S. Securities Systems and Foreign Securities
Systems); (iv) any delay or failure of any broker, agent or intermediary,
central bank or other commercially prevalent payment or clearing system to
deliver to the Custodian's sub-custodian or agent securities purchased or in the
remittance or payment made in connection with securities sold; (v) any delay or
failure of any company, corporation, or other body in charge of registering or
transferring securities in the name of the Custodian, the Fund, the Custodian's
sub-custodians, nominees or agents or any consequential losses arising out of
such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vi) delays or
inability to perform its duties due to any disorder in market infrastructure
with respect to any particular security or Securities System; and (vii) any
provision of any present or future law or regulation or order of the United
States of America, or any state thereof, or any other country, or political
subdivision thereof or of any court of competent jurisdiction.

The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.

If a Fund on behalf of a Portfolio requires the Custodian to take any action
with respect to securities, which action involves the payment of money or which
action may, in the opinion of

                                       20

<PAGE>

the Custodian, result in the Custodian or its nominee assigned to the Fund or
the Portfolio being liable for the payment of money or incurring liability of
some other form, such Fund on behalf of the Portfolio, as a prerequisite to
requiring the Custodian to take such action, shall provide indemnity to the
Custodian in an amount and form satisfactory to it.

If a Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.

In no event shall the Custodian be liable for indirect, special or consequential
damages.

Section 15.  Effective Period, Termination and Amendment

This Agreement shall become effective for any particular Fund on the date
indicated on Appendix A, shall continue in full force and effect until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than sixty (60) days after the date
of such delivery or mailing; provided, however, that no Fund shall not amend or
terminate this Agreement in contravention of any applicable federal or state
regulations, or any provision of such Fund's Declaration of Trust, Articles of
Incorporation or other governing documents, as applicable, and further provided,
that each Fund may at any time by action of its Board (i) substitute another
bank or trust company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.

Upon termination of the Agreement with respect to any particular Portfolio, the
Fund on behalf of each applicable Portfolio shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.

Section 16.  Successor Custodian

If a successor custodian for one or more Funds or Portfolios shall be appointed
by the applicable Board, the Custodian shall, upon termination, deliver to such
successor custodian at the office of

                                       21

<PAGE>

the Custodian, duly endorsed and in the form for transfer, all securities of
each applicable Portfolio then held by it hereunder and shall transfer to an
account of the successor custodian all of the securities of each such Portfolio
held in a Securities System.

If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a Certified Resolution, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such resolution.

In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian hereunder and all
instruments held by the Custodian relative thereto and all other property held
by it under this Agreement on behalf of each applicable Portfolio, and to
transfer to an account of such successor custodian all of the securities of each
such Portfolio held in any Securities System. Thereafter, such bank or trust
company shall be the successor of the Custodian under this Agreement.

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof with respect to
any Portfolio owing to the failure of the applicable Fund to procure the
Certified Resolution to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.

Section 17.  Interpretive and Additional Provisions

In connection with the operation of this Agreement, the Custodian and each Fund
on behalf of the Portfolios may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. Any
such interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the Fund's Declaration of Trust, Articles of
Incorporation or other governing documents, as applicable. No interpretive or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.

                                       22

<PAGE>

Section 18.  Additional Funds

In the event that any entity in addition to those Funds listed on Appendix A
attached hereto desires to have the Custodian render services as custodian under
the terms hereof and if the Custodian wishes to provide such services, then the
parties will execute a revised Exhibit A. Upon execution thereof, such entity
shall become a Fund hereunder and be bound by all terms, conditions and
provisions hereof.

Section 19.  Additional Portfolios

In the event that any Fund establishes one or more series of Shares in addition
to the Portfolios listed on Appendix A attached hereto with respect to which it
desires to have the Custodian render services as custodian under the terms
hereof and if the Custodian wishes to provide such services, then the parties
will execute a revised Exhibit A. Upon execution thereof, such entity shall
become a Portfolio hereunder.

Section 20.  Massachusetts Law to Apply

This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.

Section 21.  Prior Agreements

This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between each Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of each Portfolio's assets.

Section 22.  Notices.

Any notice, instruction or other instrument required to be given hereunder may
be delivered in person to the offices of the parties as set forth herein during
normal business hours or delivered prepaid registered mail or by telex, cable or
telecopy to the parties at the following addresses or such other addresses as
may be notified by any party from time to time.

To any Fund:      Nuveen
                  333 West Wacker Drive
                  Chicago, Illinois 60606
                  Attention: Stephen Foy, Vice President
                  Telephone: (312) 917-7956
                  Facsimile: (312) 917-7725

                                       23

<PAGE>

To the Custodian:       State Street Bank and Trust Company
                        One Federal Street BO2/2
                        Boston, Massachusetts 02101
                        Attention: Louis D. Abruzzi, Jr.
                        Telephone: 617-662-0300
                        Facsimile: 617- 662-0291

Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.

Section 23.  Reproduction of Documents

This Agreement and all schedules, addenda, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

Section 24.  Remote Access Services Addendum

The Custodian and each Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.

Section 25.  Shareholder Communications Election

SEC Rule 14b-2 requires banks which hold securities for the account of customers
to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all

                                       24

<PAGE>

securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.

YES [_]      The Custodian is authorized to release the Fund's name, address,
             and share positions.

NO  [X]      The Custodian is not authorized to release the Fund's name,
             address, and share positions.

Section 26.  Limitation of Liability

To the extent that a Fund's Declaration of Trust is on file with the Secretary
of The Commonwealth of Massachusetts, this Agreement is executed on behalf of
such Fund by the Fund's officers as officers and not individually. The
obligations imposed upon the applicable Fund by this Agreement are not binding
upon any of such Fund's Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Fund.

                  [Remainder of page intentionally left blank.]

                                       25

<PAGE>

         IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed effective as of August 19, 2002.

Each of the Funds Listed On Appendix A:    Fund Signature Attested to By:




By:    /s/ Stephen D. Foy                  By:    /s/ Tina M. Lazar
       ------------------------------             ----------------------------

Name:  Stephen D. Foy                      Name:  Tina M. Lazar
       -----------------------------              ----------------------------

Title: Vice President                      Title: Vice President
       ------------------------------             ----------------------------




State Street Bank and Trust Company        Signature Attested to By:




By:    /s/ Joseph L. Hooley                By:    /s/ Raelene S. LaPlante
       ------------------------------             ----------------------------

Name:  Joseph L. Hooley                    Name:  Raelene S. LaPlante
       ------------------------------             ----------------------------

Title: Executive Vice President            Title: Vice President and Counsel
       ------------------------------             ----------------------------

                                       26

<PAGE>

                                   Appendix A
                               Custodian Agreement

Fund Name                                                         Effective Date
       Series Name



Nuveen Floating Rate Fund                                                8/19/02

Nuveen Senior Income Fund                                                8/19/02

Nuveen Arizona Dividend Advantage Municipal Fund 3                       9/15/02

Nuveen Connecticut Dividend Advantage Municipal Fund 3                   9/15/02

Nuveen Georgia Dividend Advantage Municipal Fund 2                       9/15/02

Nuveen Maryland Dividend Advantage Municipal Fund 3                      9/15/02

Nuveen North Carolina Dividend Advantage Municipal Fund 3                9/15/02

Nuveen Quality Preferred Income Fund 2                                   9/15/02

Nuveen Insured New York Tax Free Advantage Municipal Fund               11/04/02

Nuveen Insured California Tax Free Advantage Municipal Fund             11/04/02

Nuveen Insured Tax Free Advantage Municipal Fund                        11/04/02

Nuveen Insured Florida Tax Free Advantage Municipal Fund                11/04/02

Nuveen Insured Massachusetts Tax Free Advantage Municipal Fund          11/04/02




For The Above Fund Parties                   State Street Bank and Trust Company




By:    /s/ Stephen Foy                    By:       /s/ Marianne Nickerson
       -------------------------                    ----------------------------

Name:  Stephen Foy                        Name:     Marianne Nickerson
       -------------------------                    ----------------------------

Title: Vice President                        Title: Vice President
       -------------------------                    ----------------------------


Date:  November 19, 2002
       -------------------------

                                       27

<PAGE>

                             FUNDS TRANSFER ADDENDUM                      [LOGO]


OPERATING GUIDELINES

1.   OBLIGATION OF THE SENDER: State Street is authorized to promptly debit
Client's account(s) upon the receipt of a payment order in compliance with the
selected Security Procedure chosen for funds transfer and in the amount of money
that State Street has been instructed to transfer. State Street shall execute
payment orders in compliance with the Security Procedure and with the Client's
instructions on the execution date provided that such payment order is received
by the customary deadline for processing such a request, unless the payment
order specifies a later time. All payment orders and communications received
after this time will be deemed to have been received on the next business day.

2.   SECURITY PROCEDURE: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client agrees that the Security
Procedures are reasonable and adequate for its wire transfer transactions and
agrees to be bound by any payment orders, amendments and cancellations, whether
or not authorized, issued in its name and accepted by State Street after being
confirmed by any of the selected Security Procedures. The Client also agrees to
be bound by any other valid and authorized payment order accepted by State
Street. The Client shall restrict access to confidential information relating to
the Security Procedure to authorized persons as communicated in writing to State
Street. The Client must notify State Street immediately if it has reason to
believe unauthorized persons may have obtained access to such information or of
any change in the Client's authorized personnel. State Street shall verify the
authenticity of all instructions according to the Security Procedure.

3.   ACCOUNT NUMBERS: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern. Financial
institutions that receive payment orders initiated by State Street at the
instruction of the Client may also process payment orders on the basis of
account numbers, regardless of any name included in the payment order. State
Street will also rely on any financial institution identification numbers
included in any payment order, regardless of any financial institution name
included in the payment order.

4.   REJECTION: State Street reserves the right to decline to process or delay
the processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of State Street's receipt of
such payment order; (b) if initiating such payment order would cause State
Street, in State Street's sole judgment, to exceed any volume, aggregate dollar,
network, time, credit or similar limits upon wire transfers which are applicable
to State Street; or (c) if State Street, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.

5.   CANCELLATION OR AMENDMENT: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.

6.   ERRORS: State Street shall assume no responsibility for failure to detect
any erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.

7.   INTEREST AND LIABILITY LIMITS: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.

8.   AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
a Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry, and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.

9.   CONFIRMATION STATEMENTS: Confirmation of State Street's execution of
payment orders shall ordinarily be provided within 24 hours. Notice may be
delivered through State Street's proprietary information systems, such as, but
not limited to Horizon and GlobalQuest(R), account statements, advices, or by
facsimile or callback. The Client must report any objections to the execution of
a payment order within 30 days.

10.  LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to repay
any deposit made at a non-U.S. branch of State Street, or any deposit made with
State Street and denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or(c) the closure of a non-U.S. branch of State Street in order
to prevent, in the reasonable judgment of State Street, harm to the employees or
property of State Street. The obligation to repay any such deposit shall not be
transferred to and may not be enforced against any other branch of State Street.

The foregoing provisions constitute the disclosure required by Massachusetts
General Laws, Chapter 167D, Section 36.

While State Street is not obligated to repay any deposit made at a non-U.S.
branch or any deposit denominated in a non-U.S. currency during the period in
which its repayment has been prevented, prohibited or otherwise blocked, State
Street will repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist.

11.  MISCELLANEOUS: State Street and the Client agree to cooperate to attempt to
recover any funds erroneously paid to the wrong party or parties, regardless of
any fault of State Street or the Client, but the party responsible for the
erroneous payment shall bear all costs and expenses incurred in trying to effect
such recovery. These Guidelines may not be amended except by a written agreement
signed by the parties.

                                       28

<PAGE>

                             FUNDS TRANSFER ADDENDUM                      [LOGO]


Security Procedure(s) Selection Form

Please select one or more of the funds transfer security procedures indicated
below.

[_] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.

Selection of this security procedure would be most appropriate for existing
SWIFT members.

[_] Standing Instructions
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.

[_] Remote Batch Transmission
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers. Clients selecting this option should have an existing
facility for completing CPU-CPU transmissions. This delivery mechanism is
typically used for high-volume business.

[_] Global Horizon Interchangesm Funds Transfer Service
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street. This delivery mechanism is most appropriate for
Clients with a low-to-medium number of transactions (5-75 per day), allowing
Clients to enter, batch, and review wire transfer instructions on their PC prior
to release to State Street.

[_] Telephone Confirmation (Callback)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.

Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.

[_] Repetitive Wires
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.

This alternative is recommended whenever funds are frequently transferred
between the same two accounts.

[_] Transfers Initiated by Facsimile
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.

We provide this option for Clients who wish to batch wire instructions and
transmit these as a group to State Street Mutual Fund Services once or several
times a day.

                                       29

<PAGE>

                             FUNDS TRANSFER ADDENDUM                      [LOGO]


[_] Automated Clearing House (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. Clients using ACH must select one or more
of the following delivery options:

[_] Global Horizon Interchange Automated Clearing House Service
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.

[_] Transmission from Client PC to State Street Mainframe with Telephone
Callback

[_] Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback

[_] Transmission from DST Systems to State Street Mainframe with Encryption

[_] Magnetic Tape Delivered to State Street with Telephone Callback

State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective ____________________________
for payment orders initiated by our organization.

Key Contact Information

Whom shall we contact to implement your selection(s)?

CLIENT OPERATIONS CONTACT                            ALTERNATE CONTACT

___________________________________          ___________________________________
          Name                                           Name

___________________________________          ___________________________________
          Address                                        Address

___________________________________          ___________________________________
          City/State/Zip Code                            City/State/Zip Code

___________________________________          ___________________________________
          Telephone Number                               Telephone Number

___________________________________          ___________________________________
          Facsimile Number                               Facsimile Number

___________________________________
          SWIFT Number

___________________________________
          Telex Number

                                       30

<PAGE>
                             FUNDS TRANSFER ADDENDUM                      [LOGO]

INSTRUCTION(S)

TELEPHONE CONFIRMATION

Fund ______________________________________________________

Investment Adviser ________________________________________

Authorized Initiators
    Please Type or Print

Please provide a listing of Fund officers or other individuals who are currently
authorized to initiate wire transfer instructions to State Street:

NAME                 TITLE (Specify whether position  SPECIMEN SIGNATURE
                     is with Fund or Investment
                     Adviser)

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

Authorized Verifiers
    Please Type or Print

Please provide a listing of Fund officers or other individuals who will be
CALLED BACK to verify the initiation of repetitive wires of $10 million or more
and all non-repetitive wire instructions:

NAME                 CALLBACK PHONE NUMBER            DOLLAR LIMITATION (IF ANY)

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

___________________  _______________________________  __________________________

                                       31

<PAGE>

             REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT

         ADDENDUM to that certain Custodian Agreement effective as of August 19,
2002 (the "Custodian Agreement") between the funds listed on Appendix A attached
thereto and as may be revised from time to time (the "Customer") and State
Street Bank and Trust Company, including its subsidiaries and affiliates ("State
Street").

         State Street has developed and utilizes proprietary accounting and
other systems in conjunction with the custodian services which State Street
provides to the Customer. In this regard, State Street maintains certain
information in databases under its control and ownership which it makes
available to its customers (the "Remote Access Services").

The Services

State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~Sight(SM) as described in Exhibit A
or such other systems as may be offered from time to time (the "System") on a
remote basis.

Security Procedures

The Customer agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other security
procedures as may be issued from time to time by State Street for use of the
System and access to the Remote Access Services. The Customer agrees to advise
State Street immediately in the event that it learns or has reason to believe
that any person to whom it has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this Addendum and the
Customer will cooperate with State Street in seeking injunctive or other
equitable relief. The Customer agrees to discontinue use of the System and
Remote Access Services, if requested, for any security reasons cited by State
Street.

Fees

Fees and charges for the use of the System and the Remote Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). The Customer
shall be responsible for any tariffs, duties or taxes imposed or levied by any
government or governmental agency by reason of the transactions contemplated by
this Addendum, including, without limitation, federal, state and local taxes,
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street). Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.

Proprietary Information/Injunctive Relief

The System and Remote Access Services described herein and the databases,
computer programs, screen formats, report formats, interactive design
techniques, formulae, processes, systems, software, knowhow, algorithms,
programs, training aids, printed materials, methods, books, records, files,
documentation and other information made available to the Customer by State
Street as part of the Remote Access Services and through the use of the System
and all copyrights, patents, trade secrets and other proprietary rights of
State Street related thereto are the exclusive, valuable and confidential
property of State Street and its

                                       32

<PAGE>

relevant licensors (the "Proprietary Information"). The Customer agrees on
behalf of itself and its Authorized Designees to keep the Proprietary
Information confidential and to limit access to its employees and Authorized
Designees (under a similar duty of confidentiality) who require access to the
System for the purposes intended. The foregoing shall not apply to Proprietary
Information in the public domain or required by law to be made public.

The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Remote Access Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State Street's customer.

The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System; nor will the Customer or Customer's Authorized Designees reverse
engineer, decompile or otherwise attempt to secure the source code for all or
any part of the System.

The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.

Limited Warranties

State Street represents and warrants that it is the owner of and has the right
to grant access to the System and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology,
including but not limited to the use of the Internet, and the necessity of
relying upon third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided "AS IS", and
the Customer and its Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and statements
produced using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized Designees for any
direct or indirect, special, incidental, punitive or consequential damages
arising out of or in any way connected with the System or the Remote Access
Services, nor shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such party's
control.

State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the date issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its products at no
cost to you and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do likewise for its
systems.

                                       33

<PAGE>

EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

Infringement

State Street will defend or, at our option, settle any claim or action brought
against the Customer to the extent that it is based upon an assertion that
access to the System or use of the Remote Access Services by the Customer under
this Addendum constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer notifies State
Street promptly in writing of any such claim or proceeding and cooperates with
State Street in the defense of such claim or proceeding. Should the System or
the Remote Access Services or any part thereof become, or in State Street's
opinion be likely to become, the subject of a claim of infringement or the like
under any applicable patent or copyright or trade secret laws, State Street
shall have the right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote Access Services,
(ii) replace or modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or (iii) terminate
this Addendum without further obligation.

Termination

Either party to the Custodian Agreement may terminate this Addendum (i) for any
reason by giving the other party at least one-hundred and eighty (180) days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty (30) days' notice in the case of notice from the Customer to
State Street of termination, or (ii) immediately for failure of the other party
to comply with any material term and condition of the Addendum by giving the
other party written notice of termination. This Addendum shall in any event
terminate within ninety (90) days after the termination of the Custodian
Agreement. In the event of termination, the Customer will return to State Street
all copies of documentation and other confidential information in its possession
or in the possession of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.

Miscellaneous

This Addendum and the exhibits hereto constitute the entire understanding of the
parties to the Custodian Agreement with respect to access to the System and the
Remote Access Services. This Addendum cannot be modified or altered except in a
writing duly executed by each of State Street and the Customer and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

By its execution of the Custodian Agreement, the Customer accepts responsibility
for its and its Authorized Designees' compliance with the terms of this
Addendum.

                                       34

<PAGE>

                                   EXHIBIT A
                                       to
             REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT


                                  IN~SIGHT(SM)
                           System Product Description

In~Sight(SM) provides bilateral information delivery, interoperability, and
on-line access to State Street. In~Sight(SM) allows users a single point of
entry into State Street's diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor(SM), Multicurrency Horizon(SM),
Securities Lending, Performance & Analytics, and Electronic Trade Delivery can
be accessed through In~Sight(SM). This Internet-enabled application is designed
to run from a Web browser and perform across low-speed data lines or corporate
high-speed backbones. In~Sight(SM) also offers users a flexible toolset,
including an ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered through
In~Sight(SM) will continue to increase in direct proportion with the customer
roll out, as it is viewed as the information delivery system will grow with
State Street's customers.

                                       35

<PAGE>

                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


Argentina            Citibank, N.A.


Australia            Westpac Banking Corporation


Austria              Erste Bank der Osterreichischen Sparkassen AG


Bahrain              HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Bangladesh           Standard Chartered Bank


Belgium              Fortis Bank nv-sa


Benin                via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Bermuda              The Bank of Bermuda Limited


Bolivia              Citibank, N. A.


Botswana             Barclays Bank of Botswana Limited


Brazil               Citibank, N.A.


Bulgaria             ING Bank N.V.


Burkina Faso         via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Canada               State Street Trust Company Canada


Cayman Islands       Bank of Nova Scotia Trust Company (Cayman) Ltd.


Chile                BankBoston, N.A.

                                       36

<PAGE>

                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


People's Republic    Hongkong and Shanghai Banking Corporation Limited,
of China             Shanghai and Shenzhen branches


Colombia             Cititrust Colombia S.A. Sociedad Fiduciaria


Costa Rica           Banco BCT S.A.


Croatia              Privredna Banka Zagreb d.d

Cyprus               Cyprus Popular Bank Ltd.


Czech Republic       Ceskoslovenska Obchodni Banka, A.S.


Denmark              Danske Bank A/S


Ecuador              Citibank, N.A.


Egypt                HSBC Bank Egypt S.A.E.
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Estonia              Hansabank

Finland              Nordea Bank Finland Plc.


France               BNP Paribas Securities Services, S.A.


Germany              Dresdner Bank AG


Ghana                Barclays Bank of Ghana Limited


Greece               National Bank of Greece S.A.

                                       37

<PAGE>
                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


Guinea-Bissau        via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Hong Kong            Standard Chartered Bank

Hungary              HVB Bank Hungary Rt.


Iceland              Icebank Ltd.


India                Deutsche Bank AG

                     Hongkong and Shanghai Banking Corporation Limited


Indonesia            Standard Chartered Bank


Ireland              Bank of Ireland


Israel               Bank Hapoalim B.M.


Italy                BNP Paribas Securities Services, S.A.


Ivory Coast          Societe Generale de Banques en Cote d'Ivoire


Jamaica              Scotiabank Jamaica Trust and Merchant Bank Ltd.


Japan                Mizuho Corporate Bank Ltd.

                     Sumitomo Mitsui Banking Corporation


Jordan               HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Kazakhstan           HSBC Bank Kazakhstan
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)

                                       38

<PAGE>
                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


Kenya                Barclays Bank of Kenya Limited


Republic of Korea    Hongkong and Shanghai Banking Corporation Limited


Latvia               A/s Hansabanka

Lebanon              HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Lithuania            Vilniaus Bankas AB


Malaysia             Standard Chartered Bank Malaysia Berhad


Mali                 via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Mauritius            Hongkong and Shanghai Banking Corporation Limited


Mexico               Banco Nacional de Mexico S.A.


Morocco              Banque Commerciale du Maroc


Namibia              Standard Bank Namibia Limited               -


Netherlands          KAS BANK N.V.


New Zealand          Westpac Banking Corporation


Niger                via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Nigeria              Stanbic Bank Nigeria Limited


Norway               Nordea Bank Norge ASA

                                       39

<PAGE>
                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


Oman                 HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Pakistan             Deutsche Bank AG


Palestine            HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Panama               BankBoston, N.A.


Peru                 Citibank, N.A.


Philippines          Standard Chartered Bank


Poland               Bank Handlowy w Warszawie S.A.


Portugal             Banco Comercial Portugues


Qatar                HSBC Bank Middle East
                     (as delegate of the Hongkong and Shanghai Banking
                     Corporation Limited)


Romania              ING Bank N.V.


Russia               ING Bank (Eurasia) ZAO, Moscow


Senegal              via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                     Ivory Coast


Singapore            The Development Bank of Singapore Limited

Slovak Republic      Ceskoslovenska Obchodni Banka, A.S., pobocka zahranicnej
                     banky v SR


Slovenia             Bank Austria Creditanstalt d.d. - Ljubljana

                                       40

<PAGE>
                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country               Subcustodian


South Africa          Nedcor Bank Limited

                      Standard Bank of South Africa Limited


Spain                 Banco Santander Central Hispano S.A.


Sri Lanka             Hongkong and Shanghai Banking Corporation Limited


Swaziland             Standard Bank Swaziland Limited


Sweden                Skandinaviska Enskilda Banken


Switzerland           UBS AG


Taiwan - R.O.C.       Central Trust of China


Thailand              Standard Chartered Bank


Togo                  via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
                      Ivory Coast


Trinidad & Tobago     Republic Bank Limited


Tunisia               Banque Internationale Arabe de Tunisie


Turkey                Citibank, N.A.


Uganda                Barclays Bank of Uganda Limited


Ukraine               ING Bank Ukraine


United Arab Emirates  HSBC Bank Middle East
                      (as delegate of the Hongkong and Shanghai Banking
                      Corporation Limited)

                                       41

<PAGE>
                                  STATE STREET                        SCHEDULE A
                             GLOBAL CUSTODY NETWORK
                                  SUBCUSTODIANS


Country              Subcustodian


United Kingdom       State Street Bank and Trust Company,  London Branch


Uruguay              BankBoston, N.A.


Venezuela            Citibank, N.A.


Vietnam              The Hongkong and Shanghai Banking Corporation Limited


Zambia               Barclays Bank of Zambia Limited


Zimbabwe             Barclays Bank of Zimbabwe Limited

                                       42

<PAGE>

                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

         Country                   Depositories

         Argentina                 Caja de Valores S.A.

         Australia                 Austraclear Limited

         Austria                   Oesterreichische Kontrollbank AG
                                   (Wertpapiersammelbank Division)

         Bahrain                   Clearing, Settlement, and Depository System
                                   of the Bahrain Stock Exchange

         Belgium                   Caisse Interprofessionnelle de Depots et de
                                   Virements de Titres, S.A.

                                   Banque Nationale de Belgique

         Benin                     Depositaire Central - Banque de Reglement

         Bermuda                   Bermuda Securities Depository

         Brazil                    Central de Custodia e de Liquidacao
                                   Financeira de Titulos Privado (CETIP)

                                   Companhia Brasileira de Liquidacao e Custodia

                                   Sistema Especial de Liquidacao e de Custodia
                                   (SELIC)

         Bulgaria                  Bulgarian National Bank

                                   Central Depository AD

         Burkina Faso              Depositaire Central - Banque de Reglement

         Canada                    Canadian Depository for Securities Limited

         Chile                     Deposito Central de Valores S.A.

         People's Republic         China Securities Depository and Clearing
                                   Corporation Limited

                                       43

<PAGE>

                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

         Country                      Depositories

         of China                     Shanghai Branch

                                      China Securities Depository and Clearing
                                      Corporation Limited Shenzhen Branch

         Colombia                     Deposito Central de Valores

                                      Deposito Centralizado de Valores de
                                      Colombia S.A. (DECEVAL)

         Costa Rica                   Central de Valores S.A.

         Croatia                      Ministry of Finance

                                      National Bank of Croatia

                                      Sredisnja Depozitarna Agencija d.d.

         Cyprus                       Central Depository and Central Registry

         Czech Republic               Czech National Bank

                                      Stredisko cennych papiru - Ceska republika

         Denmark                      Vaerdipapircentralen (Danish Securities
                                      Center)

         Egypt                        Misr for Clearing, Settlement, and
                                      Depository S.A.E.

         Estonia                      Eesti Vaartpaberikeskus

         Finland                      Suomen Arvopaperikeskus (Finnish Central
                                      Securities Depository)

         France                       Euroclear France

         Germany                      Clearstream Banking AG, Frankfurt

         Greece                       Apothetirion Titlon AE - Central
                                      Securities Depository

                                       44

<PAGE>
                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

          Country                      Depositories

                                       Bank of Greece,
                                       System for Monitoring Transactions in
                                       Securities in Book-Entry Form

         Guinea-Bissau                 Depositaire Central - Banque de Reglement

         Hong Kong                     Central Moneymarkets Unit

                                       Hong Kong Securities Clearing Company
                                       Limited

         Hungary                       Kozponti Elszamolohaz es Ertektar
                                       (Budapest) Rt. (KELER)

         Iceland                       Iceland Securities Depository Limited

         India                         Central Depository Services India Limited

                                       National Securities Depository Limited

                                       Reserve Bank of India

         Indonesia                     Bank Indonesia

                                       PT Kustodian Sentral Efek Indonesia

         Israel                        Tel Aviv Stock Exchange Clearing House
                                       Ltd. (TASE Clearinghouse)

         Italy                         Monte Titoli S.p.A.

         Ivory Coast                   Depositaire Central - Banque de Reglement

         Jamaica                       Jamaica Central Securities Depository

         Japan                         Bank of Japan  - Net System
                                       Japan Securities Depository Center
                                       (JASDEC) Incorporated

                                       45

<PAGE>
                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

          Country                    Depositories

         Kazakhstan                  Central Depository of Securities

         Kenya                       Central Bank of Kenya

         Republic of Korea           Korea Securities Depository

         Latvia                      Latvian Central Depository

         Lebanon                     Custodian and Clearing Center of Financial
                                     Instruments for Lebanon and the Middle East
                                     (Midclear) S.A.L.

                                     Banque du Liban

         Lithuania                   Central Securities Depository of Lithuania

         Malaysia                    Malaysian Central Depository Sdn. Bhd.

                                     Bank Negara Malaysia

         Mali                        Depositaire Central - Banque de Reglement

         Mauritius                   Central Depository and Settlement Co. Ltd.

                                     Bank of Mauritius

         Mexico                      S.D. Indeval, S.A. de C.V.

         Morocco                     Maroclear

         Netherlands                 Nederlands Centraal Instituut voor Giraal
                                     Effectenverkeer B.V.(NECIGEF)

         New Zealand                 New Zealand Central Securities Depository
                                     Limited

                                       46

<PAGE>
                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

        Country                     Depositories

         Niger                      Depositaire Central - Banque de Reglement

         Nigeria                    Central Securities Clearing System Limited

         Norway                     Verdipapirsentralen (Norwegian Central
                                    Securities Depository)

         Oman                       Muscat Depository & Securities Registration
                                    Company, SAOC

         Pakistan                   Central Depository Company of Pakistan
                                    Limited

                                    State Bank of Pakistan

         Palestine                  Clearing Depository and Settlement, a
                                    department of the Palestine Stock Exchange

         Panama                     Central Latinoamericana de Valores, S.A.
                                    (LatinClear)

         Peru                       Caja de Valores y Liquidaciones, Institucion
                                    de Compensacion y Liquidacion de Valores S.A

         Philippines                Philippine Central Depository, Inc.

                                    Registry of Scripless Securities (ROSS) of
                                    the Bureau of Treasury

         Poland                     Krajowy Depozyt Papierow Wartosciowych S.A.
                                    (National Depository of Securities)

                                    Central Treasury Bills Registrar

         Portugal                   INTERBOLSA - Sociedade Gestora de Sistemas
                                    de Liquidacao e de Sistemas Centralizados de
                                    Valores Mobiliarios, S.A.

                                       47

<PAGE>

                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

        Country                      Depositories

         Qatar                       Central Clearing and Registration (CCR), a
                                     department of the Doha Securities Market

         Romania                     Bucharest Stock Exchange Registry Division

                                     National Bank of Romania

                                     National Securities Clearing, Settlement
                                     and Depository Company

         Russia                      Vneshtorgbank, Bank for Foreign Trade of
                                     the Russian Federation

         Senegal                     Depositaire Central - Banque de Reglement

         Singapore                   Central Depository (Pte) Limited

                                     Monetary Authority of Singapore

         Slovak Republic             National Bank of Slovakia

                                     Stredisko cennych papierov SR, a.s.

         Slovenia                    KDD - Centralna klirinsko depotna
                                     druzba d.d.

         South Africa                Central Depository Limited

                                     Share Transactions Totally Electronic
                                     (STRATE) Ltd.

         Spain                       Banco de Espana

                                     Servicio de Compensacion y
                                     Liquidacion de Valores, S.A.

         Sri Lanka                   Central Depository System (Pvt) Limited

         Sweden                      Vardepapperscentralen  VPC AB

                                       48

<PAGE>

                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

          Country                     Depositories

                                      (Swedish Central Securities Depository)

         Switzerland                  SegaIntersettle AG (SIS)

         Taiwan - R.O.C.              Taiwan Securities Central Depository
                                      Company Limited

         Thailand                     Bank of Thailand

                                      Thailand Securities Depository Company
                                      Limited

         Togo                         Depositaire Central - Banque de Reglement

         Trinidad and Tobago          Trinidad and Tobago Central Bank

         Tunisia                      Societe Tunisienne Interprofessionelle
                                      pour la Compensation et de Depots des
                                      Valeurs Mobilieres (STICODEVAM)

         Turkey                       Central Bank of Turkey

                                      Takas ve Saklama Bankasi A.S. (TAKASBANK)

         Uganda                       Bank of Uganda

         Ukraine                      Mizhregionalny Fondovy Souz

                                      National Bank of Ukraine

         United Arab Emirates         Clearing and Depository System,
                                      a department of the Dubai Financial Market

         Venezuela                    Banco Central de Venezuela

         Vietnam                      Securities Registration, Clearing and
                                      Settlement, Depository Department of the
                                      Securities Trading Center

                                       49

<PAGE>

                                  STATE STREET                        SCHEDULE B
                             GLOBAL CUSTODY NETWORK
                   DEPOSITORIES OPERATING IN NETWORK MARKETS

         Country                          Depositories

         Zambia                           Bank of Zambia

                                          LuSE Central Shares Depository Limited

         TRANSNATIONAL

         Euroclear

         Clearstream Banking AG

                                       50

<PAGE>

                                   SCHEDULE C

                             MARKETING INFORMATION

<TABLE>
<CAPTION>
Publication/Type of Information                                          Brief Description
- -------------------------------                                          -----------------
(scheduled frequency)
<S>                                                     <C>
The Guide to Custody in World Markets                   An overview of settlement and safekeeping procedures,
- -------------------------------------                   custody practices and foreign investor considerations
(hardcopy annually and regular                          for the markets in which State Street offers custodial
website updates)                                        services.

Global Custody Network Review                           Information relating to Foreign Sub-Custodians in State
- -----------------------------                           Street's Global Custody Network. The Review stands as an
(annually)                                              integral part of the materials that State Street provides
                                                        to its U.S. mutual fund clients to assist them in
                                                        complying with SEC Rule 17f-5. The Review also gives
                                                        insight into State Street's market expansion and Foreign
                                                        Sub-Custodian selection processes, as well as the procedures
                                                        and controls used to monitor the financial condition and
                                                        performance of our Foreign Sub-Custodian banks.

Securities Depository Review                            Custody risk analyses of the Foreign Securities Depositories
- ----------------------------                            presently operating in Network markets. This publication is an
(annually)                                              integral part of the materials that State Street provides to its
                                                        U.S. mutual fund clients to meet informational obligations created
                                                        by SEC Rule 17f-7.

Global Legal Survey                                     With respect to each market in which State Street offers custodial
- -------------------                                     services, opinions relating to whether local law restricts (i)
(annually)                                              access of a fund's independent public accountants to books and
                                                        records of a Foreign Sub-Custodian or Foreign Securities System,
                                                        (ii) a fund's ability to recover in the event of bankruptcy or
                                                        insolvency of a Foreign Sub-Custodian or Foreign Securities System,
                                                        (iii) a fund's ability to recover in the event of a loss by a Foreign
                                                        Sub-Custodian or Foreign Securities System, and (iv) the ability of a
                                                        foreign investor to convert cash and cash equivalents to U.S. dollars.

Subcustodian Agreements                                 Copies of the contracts that State Street has entered into with each
- -----------------------                                 Foreign Sub-Custodian that maintains U.S. mutual fund assets in the
(annually)                                              markets in which State Street offers custodial services.

Global Market Bulletin                                  Information on changing settlement and custody conditions in
- ----------------------                                  markets where State Street offers custodial services. Includes
(daily or as necessary)                                 changes in market and tax regulations, depository developments,
                                                        dematerialization information, as well as other market changes that
                                                        may impact State Street's clients.

Foreign Custody Advisories                              For those markets where State Street offers custodial services
(as necessary)                                          that exhibit special risks or infrastructures impacting custody,
                                                        State Street issues market advisories to highlight those unique
                                                        market factors which might impact our ability to offer recognized
                                                        custody service levels.

Material Change Notices                                 Informational letters and accompanying materials confirming
(presently on a quarterly                               State Street's foreign custody arrangements, including a
basis or as otherwise necessary)                        summary of material changes with Foreign Sub-Custodians that have
                                                        occurred during the previous quarter. The notices also identify
                                                        any material changes in the custodial risks associated with
                                                        maintaining assets with Foreign Securities Depositories.
</TABLE>

                                       51

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K.1
<SEQUENCE>12
<FILENAME>dex99k1.txt
<DESCRIPTION>TRANSFER AGENCY AND SERVICE AGREEMENT
<TEXT>
<PAGE>

                      Transfer Agency and Service Agreement

                                      Among

               Each of the Nuveen Closed End Investment Companies

                           Listed on Exhibit A Hereto

                                       and

                       State Street Bank and Trust Company

<PAGE>

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
 1.  Appointment of Agent ...............................................    1

 2.  Standard Services ..................................................    2

 3.  Dividend Disbursing Services .......................................    3

 4.  Shareholder Internet Services ......................................    4

 5.  Fees and Expenses ..................................................    5

 6.  Representations and Warranties of the Transfer Agent ...............    6

 7.  Representations and Warranties of Fund .............................    7

 8.  Data Access and Proprietary Information ............................    7

 9.  Indemnification ....................................................    9

10.  Consequential Damages ..............................................   11

11.  Responsibilities of the Transfer Agent .............................   11

12.  Confidentiality ....................................................   12

13.  Covenants of the Fund and the Transfer Agent .......................   12

14.  Termination of Agreement ...........................................   13

15.  Assignment and Third Party Beneficiaries ...........................   14

16.  Subcontractors .....................................................   15

17.  Miscellaneous ......................................................   15

18.  Limitation of Liability ............................................   17

<PAGE>

AGREEMENT made as of the 7th day of October, 2002, by and among each of the
Nuveen closed-end investment companies listed on Exhibit A hereto, which may be
amended from time to time, each being either a Minnesota corporation or a
Massachusetts business trust as indicated on Exhibit A (each a "Fund" or the
"Fund"), and State Street Bank and Trust Company, a Massachusetts trust company,
having a principal office and place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Transfer Agent").

WHEREAS, the Fund desires to appoint the Transfer Agent as sole transfer agent,
registrar, administrator of dividend reinvestment plans, option plans, and
direct stock purchase plans, and as dividend disbursing agent and processor of
all payments received or made by Fund under this Agreement.

WHEREAS, the Transfer Agent desires to accept such appointments and perform the
services related to such appointments;

WHEREAS, the Board of Directors or Board of Trustees, as the case may be, of
each Fund has approved appointment of the Transfer Agent.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:

1. Appointment of Agent.

     1.1  Appointments. The Fund hereby appoints the Transfer Agent to act as
          sole transfer agent and registrar for all Shares in accordance with
          the terms and conditions hereof and as administrator of plans and
          appoints the Transfer Agent as dividend disbursing agent and processor
          of all payments received or made by or on behalf of the Fund under
          this Agreement, and the Transfer Agent accepts the appointments. Fund
          shall provide Transfer Agent with certified copies of resolutions
          appointing the Transfer Agent as transfer agent.

     1.2  Documents. In connection with the appointing of Transfer Agent as the
          transfer agent and registrar for each Fund, the Fund will provide or
          has previously provided each of the following documents to the
          Transfer Agent:

          (a)  Copies (in paper, electronic or other agreed upon format) of
               Registration Statements and amendments thereto, filed with the
               Securities and Exchange Commission for initial public offerings;

          (b)  Specimens of all forms of outstanding stock certificates, in
               forms approved by the Board of Directors of the Fund, with a
               certificate of the Secretary of the Fund as to such approval; and

          (c)  Specimens of the Signatures of the officers of the Fund
               authorized to sign stock certificates and individuals authorized
               to sign written instructions and requests.

<PAGE>

     1.3  Records. Transfer Agent may adopt as part of its records all lists of
          holders, records of Fund's shares, books, documents and records which
          have been employed by any former agent of Fund for the maintenance of
          the ledgers for the Fund's shares, provided such ledger is certified
          by an officer of Fund or the prior transfer agent to be true,
          authentic and complete.

     1.4  Shares. Fund shall, if applicable, inform Transfer Agent as to (i) the
          existence or termination of any restrictions on the transfer of Shares
          and in the application to or removal from any certificate of stock of
          any legend restricting the transfer of such Shares or the substitution
          for such certificate of a certificate without such legend, (ii) any
          authorized but unissued Shares reserved for specific purposes, (iii)
          any outstanding Shares which are exchangeable for Shares and the basis
          for exchange, (iv) reserved Shares subject to option and the details
          of such reservation and (v) special instructions regarding dividends
          and information of foreign holders.

     1.5  Fund's Agent. Transfer Agent represents that it is engaged in an
          independent business and will perform its obligations under this
          Agreement as an agent of Fund.

2.  Standard Services.

     2.1  Transfer Agent Services. The Transfer Agent will perform the following
          services:

          In accordance with the procedures established from time to time by
          agreement between the Fund and the Transfer Agent, the Transfer Agent
          shall:

          (a)  issue and record the appropriate number of Shares as authorized
               and hold such Shares in the appropriate Shareholder account;

          (b)  effect transfers of Shares by the registered owners thereof upon
               receipt of appropriate documentation;

          (c)  act as agent for Shareholders pursuant to dividend reinvestment
               plans, and other investment programs as amended from time to time
               in accordance with the terms of the agreements relating thereto
               to which the Transfer Agent is or will be a party;

          (d)  issue replacement certificates for those certificates alleged to
               have been lost, stolen or destroyed upon receipt by the Transfer
               Agent of an open penalty surety bond satisfactory to it and
               holding it and the Fund harmless, absent notice to the Fund and
               the Transfer Agent that such certificates have been acquired by a
               bona fide purchaser. The Transfer Agent, at its option, may issue
               replacement certificates in place of mutilated stock certificates
               upon presentation thereof without such indemnity. Further, the
               Transfer Agent may at its sole option accept indemnification from
               the Fund to issue replacement certificates for those certificates
               alleged to have been lost, stolen or destroyed in lieu of an open
               penalty bond;

                                       2

<PAGE>

          (e)  prepare and transmit payments for dividends and distributions
               declared by the Fund, provided good funds for said dividends or
               distributions are received by the Transfer Agent prior to the
               scheduled payable date for said dividends or distributions;

          (f)  issue replacement checks and place stop orders on original checks
               based on shareholder's representation that a check was not
               received or was lost. Such stop orders and replacements will be
               deemed to have been made at the request of the Fund, and the Fund
               shall be responsible for all losses or claims resulting from such
               replacement; and

          (g)  Receive all payments made to the Fund or the Transfer Agent under
               any dividend reinvestment plan, direct stock purchase plan, and
               plans and make all payments required to be made under such plans,
               including all payments required to be made to the Fund.

     2.3  Customary Services. The Transfer Agent shall perform all the customary
          services of a transfer agent, agent of dividend reinvestment plan,
          cash purchase plan and other investment programs and of a dividend
          disbursing agent and a processor of payments as described above
          consistent with those requirements in effect as of the date of this
          Agreement.

     2.4  Unclaimed Property and Lost Shareholders. The Transfer Agent shall
          report unclaimed property to each state in compliance with state law
          and shall comply with Section 17Ad-17 of the Securities Exchange Act
          of 1934, as amended (the "Exchange Act"), for lost Shareholders. If
          the Fund is not in compliance with applicable state laws, there will
          be no charge for the first two years for this service for such Fund,
          other than a charge for due diligence notices (reflected on Schedule
          5.1) provided that after the first two years, the Transfer Agent will
          charge such Fund its then standard fee plus any out-of-pocket
          expenses.

     2.5  Certificates. The Fund shall deliver to Transfer Agent an appropriate
          supply of stock certificates, which certificates shall provide a
          signature panel for use by an officer of or authorized signor for
          Transfer Agent to sign as transfer agent and registrar, and which
          shall state that such certificates are only valid after being
          countersigned and registered.

3.  Dividend Disbursing Services.

     3.1  Declaration of Dividends. Upon receipt of a written notice from an
          officer of the Fund declaring the payment of a dividend, the Transfer
          Agent shall disburse such dividend payments provided that in advance
          of such payment, the Fund furnishes the Transfer Agent with sufficient
          funds. The payment of such funds to the Transfer Agent for the purpose
          of being available for the payment of dividend checks from time to
          time is not intended by the Fund to confer any rights in such funds on
          the Fund's Shareholders whether in trust or in contract or otherwise.

                                       3

<PAGE>

     3.2  Stop Payments. The Fund hereby authorizes the Transfer Agent to stop
          payment of checks issued in payment of dividends, but not presented
          for payment, when the payees thereof allege either that they have not
          received the checks or that such checks have been mislaid, lost,
          stolen, destroyed or, through no fault of theirs, are otherwise beyond
          their control and cannot be produced by them for presentation and
          collection, and the Transfer Agent shall issue and deliver duplicate
          checks in replacement thereof, and the Fund shall indemnify Transfer
          Agent against any loss or damage resulting from reissuance of the
          checks.

     3.3  Tax Withholding. The Transfer Agent is hereby authorized to deduct
          from all dividends declared by the Fund and disbursed by the Transfer
          Agent, as dividend disbursing agent, the tax required to be withheld
          pursuant to Sections 1441, 1442 and 3406 of the Internal Revenue Code
          of 1986, as amended, or by any Federal or State statutes subsequently
          enacted, and to make the necessary return and payment of such tax in
          connection therewith.

     3.4  Optional Services. To the extent that the Fund elects to engage the
          Transfer Agent to provide the services listed below the Fund shall
          engage the Transfer Agent to provide such services upon terms and fees
          to be agreed upon by the parties:

          (a)  Corporate actions (including inter alia, odd lot buy backs,
               exchanges, mergers, redemptions, subscriptions, capital
               reorganization, coordination of post-merger services and special
               meetings).

4. Shareholder Internet Services.

     4.1  Shareholder Internet Services. The Transfer Agent shall provide
          internet access to the Fund's shareholders through a designated web
          site ("Shareholder Internet Services"), which will be accessed by the
          Fund's shareholders via a link on the Fund's web site. The Shareholder
          Internet Services will be provided pursuant to established procedures
          and will allow shareholders to view their account information and
          perform certain on-line transaction request capabilities. The
          Shareholder Internet Services shall be provided at no additional
          charge, other than the transaction fees currently being charged for
          the different transactions as described on the Fee Schedule. The
          Transfer Agent reserves the right to charge a fee for this service in
          the future.

     4.2  Scope of Obligations. Transfer Agent shall at all times use reasonable
          care in performing Shareholder Internet Services under this Agreement.
          With respect to any claims for losses, damages, costs or expenses
          which may arise directly or indirectly from security procedures which
          Transfer Agent has implemented or omitted, Transfer Agent shall be
          presumed to have used reasonable care if it has followed, in all
          material respects, its security procedures then in effect. Transfer
          Agent's security procedures for shareholder Internet access reflect
          current industry standards and Transfer Agent shall modify such
          security procedures from time to time to reflect changes in industry
          standards. Transfer Agent also may, but shall not be required to,
          modify such security procedures to the extent it believes, in good
          faith, that such modifications will enhance the security of

                                       4

<PAGE>

          Shareholder Internet Services. All data and information transmissions
          accessed via Shareholder Internet Services are for informational
          purposes only, and are not intended to satisfy regulatory requirements
          or comply with any laws, rules, requirements or standards of any
          federal, state or local governmental authority, agency or industry
          regulatory body, including the securities industry, which compliance
          is the sole responsibility of the Fund.

     4.3  No Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN SECTION
          4.2 OF THIS AGREEMENT, THE SHAREHOLDER INTERNET SERVICES ARE PROVIDED
          "AS-IS," ON AN "AS AVAILABLE" BASIS, AND TRANSFER AGENT HEREBY
          SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES,
          EXPRESS OR IMPLIED, REGARDING SUCH SERVICES PROVIDED BY TRANSFER AGENT
          HEREUNDER, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
          FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM
          COURSE OF DEALING OR COURSE OF PERFORMANCE.

5. Fees and Expenses

     5.1  Fee Schedule. For the performance by the Transfer Agent pursuant to
          this Agreement, the Fund agrees to pay the Transfer Agent an annual
          maintenance fee for each Shareholder account as set forth in the
          attached fee schedule ("Schedule 5.1"). Such fees and out-of-pocket
          expenses and advances identified under Section 5.2 below may be
          changed from time to time subject to mutual written agreement between
          the Fund and the Transfer Agent.

     5.2  Out-of-Pocket Expenses. In addition to the fee paid under Section 5.1
          above, the Fund agrees to reimburse the Transfer Agent for
          out-of-pocket expenses, including but not limited to postage,
          confirmation statements, investor statements, audio response,
          telephone calls, records retention/storage, customized
          programming/enhancements, federal wire fees, transcripts, microfilm,
          microfiche, disaster recovery, hardware at the Fund's facility,
          telecommunications/network configuration, forms, sales taxes,
          exchange and broker fees, or advances incurred by the Transfer Agent
          for the items set out in Schedule 5.1 attached hereto. Out-of-pocket
          expenses may include the costs to Transfer Agent of certain
          administrative expenses so long as such expenses are described in
          reasonable detail on the applicable invoice. In addition, any other
          expenses incurred by the Transfer Agent at the request or with the
          consent of the Fund, will be reimbursed by the Fund.

     5.3  Postage. Postage for mailing of dividends, proxies, Fund reports and
          other mailings to all shareholder accounts shall be advanced to the
          Transfer Agent by the Fund at least seven (7) days prior to the
          mailing date of such materials.

     5.4  Invoices. The Fund agrees to pay all fees and reimbursable expenses
          within thirty (30) days following the receipt of the respective
          invoice, except for any fees or expenses that are subject to good
          faith dispute. In the event of such a

                                       5

<PAGE>

          dispute, the Fund may only withhold that portion of the fee or expense
          subject to the good faith dispute. The Fund shall notify the Transfer
          Agent in writing within twenty-one (21) calendar days following the
          receipt of each invoice if the Fund is disputing any amounts in good
          faith. If the Fund does not provide such notice of dispute within the
          required time, the invoice will be deemed accepted by the Fund. The
          Fund shall settle such disputed amounts within five (5) days of the
          day on which the parties agree on the amount to be paid by payment of
          the agreed amount. If no agreement is reached, then such disputed
          amounts shall be settled as may be required by law or legal process.

     5.5  Cost of Living Adjustment. For each year following the Initial Term,
          unless the parties shall otherwise agree and provided that the service
          mix and volumes remain consistent as previously provided in the
          Initial Term, the total fee for all services shall equal the fee that
          would be charged for the same services based on a fee rate (as
          reflected in a fee rate schedule) increased by the percentage increase
          for the twelve-month period of such previous calendar year of the
          CPI-W (defined below) or, in the event that publication of such index
          is terminated, any successor or substitute index, appropriately
          adjusted, acceptable to both parties. As used herein, "CPI-W" shall
          mean the Consumer Price Index for Urban Wage Earners and Clerical
          Workers (Area: Boston-Brockton-Nashua, MA-NH-ME-CT; Base Period:
          1982-84=100), as published by the United States Department of Labor,
          Bureau of Labor Statistics.

     5.6  Late Payments. If any undisputed amount in an invoice of the Transfer
          Agent (for fees or reimbursable expenses) is not paid when due, the
          Fund shall pay the Transfer Agent interest thereon (from the due date
          to the date of payment) at a per annum rate equal to one percent
          (1.0%) plus the Prime Rate (that is, the base rate on corporate loans
          posted by large domestic banks) published by The Wall Street Journal
          (or, in the event such rate is not so published, a reasonably
          equivalent published rate selected by the Fund) on the first day of
          publication during the month when such amount was due. Notwithstanding
          any other provision hereof, such interest rate shall be no greater
          than permitted under applicable provisions of Massachusetts law.

     5.7  Bank Accounts. The Fund acknowledges that the bank demand deposit
          accounts ("DDAs") maintained by the Transfer Agent in connection with
          the Services will be in its name and that the Transfer Agent may
          receive investment earnings in connection with the investment of
          funds, at the Transfer Agent's risk and for its benefit, held in those
          accounts from time to time.

6. Representations and Warranties of the Transfer Agent

     The Transfer Agent represents and warrants to the Fund that:

     6.1  It is a trust company duly organized and existing and in good standing
          under the laws of The Commonwealth of Massachusetts.

     6.2  It is duly qualified to carry on its business in The Commonwealth of
          Massachusetts.

                                       6

<PAGE>

     6.3  It is empowered under applicable laws and by its Charter and By-Laws
          to enter into and perform this Agreement.

     6.4  All requisite corporate proceedings have been taken to authorize it to
          enter into and perform this Agreement.

     6.5  It has and will continue to have access to the necessary facilities,
          equipment and personnel to perform its duties and obligations under
          this Agreement.

7. Representations and Warranties of Fund

     Each Fund represents and warrants to the Transfer Agent that:

     7.1  It is a business trust or corporation (as indicated on Exhibit A) duly
          organized and existing and in good standing under the laws of its
          state of organization.

     7.2  It is empowered under applicable laws and by its organizational
          documents to enter into and perform this Agreement.

     7.3  All corporate proceedings required by said organizational documents
          have been taken to authorize it to enter into and perform this
          Agreement.

     7.4  It is a closed-end management investment company registered under the
          Investment Company Act of 1940, as amended.

     7.5  A registration statement under the Securities Act of 1933, as amended
          is currently effective and will remain effective, and appropriate
          state securities law filings have been made and will continue to be
          made, with respect to all Shares of the Fund being offered for sale.

8. Data Access and Proprietary Information

     8.1  The Fund acknowledges that the databases, computer programs, screen
          formats, report formats, interactive design techniques, and
          documentation manuals furnished to the Fund by the Transfer Agent as
          part of the Fund's ability to access certain Fund-related data ("Fund
          Data") maintained by the Transfer Agent on databases under the control
          and ownership of the Transfer Agent or other third party ("Data Access
          Services") constitute copyrighted, trade secret, or other proprietary
          information (collectively, "Proprietary Information") of substantial
          value to the Transfer Agent or other third party. In no event shall
          Proprietary Information be deemed Fund Data. The Fund agrees to treat
          all Proprietary Information as proprietary to the Transfer Agent and
          further agrees that it shall not divulge any Proprietary Information
          to any person or organization except as may be provided hereunder.
          Without limiting the foregoing, the Fund agrees for itself and its
          employees and agents to:

          (a)  Use such programs and databases (i) solely on computers of the
               Fund or its management company, or (ii) solely from equipment at
               the location agreed to

                                       7

<PAGE>

               between the Fund and the Transfer Agent and (iii) solely in
               accordance with the Transfer Agent's applicable user
               documentation;

          (b)  Refrain from copying or duplicating in any way (other than in the
               normal course of performing processing on computers of the Fund
               or its management company), the Proprietary Information;

          (c)  Refrain from obtaining unauthorized access to any portion of the
               Proprietary Information, and if such access is inadvertently
               obtained, to inform in a timely manner of such fact and dispose
               of such information in accordance with the Transfer Agent's
               instructions;

          (d)  Refrain from causing or allowing information transmitted from the
               Transfer Agent's computer to computers of the Fund or its
               management company to be retransmitted to any other computer
               terminal or other device except as expressly permitted by the
               Transfer Agent (such permission not to be unreasonably withheld);

          (e)  Allow the Fund to have access only to those authorized
               transactions as agreed to between the Fund and the Transfer
               Agent; and

          (f)  Honor all reasonable written requests made by the Transfer Agent
               to protect at the Transfer Agent's expense the rights of the
               Transfer Agent in Proprietary Information at common law, under
               federal copyright law and under other federal or state law.

     8.2  Proprietary Information shall not include all or any portion of any of
          the foregoing items that: (i) are or become publicly available without
          breach of this Agreement; (ii) are released for general disclosure by
          a written release by the Transfer Agent; or (iii) are already in the
          possession of the receiving party at the time of receipt without
          obligation of confidentiality or breach of this Agreement.

     8.3  The Fund acknowledges that its obligation to protect the Transfer
          Agent's Proprietary Information is essential to the business interest
          of the Transfer Agent and that the disclosure of such Proprietary
          Information in breach of this Agreement would cause the Transfer Agent
          immediate, substantial and irreparable harm, the value of which would
          be extremely difficult to determine. Accordingly, the parties agree
          that, in addition to any other remedies that may be available in law,
          equity, or otherwise for the disclosure or use of the Proprietary
          Information in breach of this Agreement, the Transfer Agent shall be
          entitled to seek and obtain a temporary restraining order, injunctive
          relief, or other equitable relief against the continuance of such
          breach.

     8.4  If the Fund notifies the Transfer Agent that any of the Data Access
          Services do not operate in material compliance with the most recently
          issued user documentation for such services, the Transfer Agent shall
          use its best efforts to correct such failure in a timely manner.
          Organizations from which the Transfer Agent may obtain certain data
          included in the Data Access Services are solely responsible for the
          contents of such data and the Fund agrees to make no claim

                                       8

<PAGE>

          against the Transfer Agent arising out of the contents of such
          third-party data, including, but not limited to, the accuracy thereof.
          DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
          SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS,
          AS AVAILABLE BASIS. THE TRANSFER AGENT EXPRESSLY DISCLAIMS ALL
          WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT
          LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
          A PARTICULAR PURPOSE.

     8.5  If the transactions available to the Fund include the ability to
          originate electronic instructions to the Transfer Agent in order to
          (i) effect the transfer or movement of cash or Shares or (ii) transmit
          Shareholder information or other information, then in such event the
          Transfer Agent shall be entitled to rely on the validity and
          authenticity of such instruction without undertaking any further
          inquiry as long as such instruction is undertaken in conformity with
          security procedures established by the Transfer Agent from time to
          time.

     8.6  Each party shall take reasonable efforts to advise its employees of
          their obligations pursuant to this Section 8. The obligations of this
          Section shall survive any termination of this Agreement.

9.   Indemnification.

     9.1  The Transfer Agent shall not be responsible for, and the Fund shall
          indemnify and hold the Transfer Agent harmless from and against, any
          and all losses, claims, damages, costs, charges, counsel fees and
          expenses, payments, expenses and liability arising out of or
          attributable to:

          (a)  All actions of the Transfer Agent or its agents or subcontractors
               required to be taken pursuant to this Agreement, provided such
               actions are taken in good faith and without negligence or willful
               misconduct;

          (b)  The Fund's lack of good faith, negligence or willful misconduct
               or the breach of any representation or warranty of the Fund
               hereunder;

          (c)  The reasonable reliance or use by the Transfer Agent or its
               agents or subcontractors of information, records and documents
               data, stock certificates or services, which are received by the
               Transfer Agent or its agents or subcontractors by machine
               readable input, facsimile, CRT data entry, electronic
               instructions or other similar means authorized by the Fund, and
               which have been prepared, maintained or performed by the Fund or
               any other person or firm on behalf of the Fund including but not
               limited to any broker-dealer, TPA or previous transfer agent;

          (d)  The reasonable reliance or use by the Transfer Agent or its
               agents or subcontractors of any paper or document reasonably
               believed to be genuine and to have been signed by the proper
               person or persons including Shareholders or electronic
               instruction from Shareholders submitted through electronic means
               pursuant to the security procedures for such electronic
               communication established by the Transfer Agent;



                                       9

<PAGE>

          (e)  The reasonable reliance on, or the carrying out by the Transfer
               Agent or its agents or subcontractors of any instructions or
               requests of the Fund's representatives;

          (f)  The offer or sale of Shares in violation of any federal or state
               securities laws requiring that such Shares be registered or in
               violation of any stop order or other determination or ruling by
               any federal or state agency with respect to the offer or sale of
               such Shares;

          (g)  The negotiation and processing of any checks including without
               limitation for deposit into the Fund's DDA maintained by the
               Transfer Agent in accordance with the procedures mutually agreed
               upon by the parties;

          (h)  Any actions taken or omitted to be taken by any former agent of
               the Fund and arising from Transfer Agent's reliance on the
               certified list of holders; and

          (i)  The negotiation, presentment, delivery or transfer of Shares
               through the Direct Registration System Profile System.

     9.2  Instructions. At any time the Transfer Agent may apply to any officer
          of the Fund for instruction, and may consult with legal counsel for
          the Transfer Agent or the Fund with respect to any matter arising in
          connection with the services to be performed by the Transfer Agent
          under this Agreement, and Transfer Agent and its agents and
          subcontractors shall not be liable and shall be indemnified by the
          Fund for any action taken or omitted by it in reliance upon such
          instructions or upon the advice or opinion of such counsel. The
          Transfer Agent, its agents and subcontractors shall be protected and
          indemnified in acting upon any paper or document reasonably believed
          to be genuine and to have been signed by the proper person or persons,
          or upon any instruction, information, data, records or documents
          provided the Transfer Agent or its agents or subcontractors by
          telephone, in person, machine readable input, telex, CRT data entry or
          similar means authorized by the Fund, and shall not be held to have
          notice of any change of authority of any person, until receipt of
          written notice thereof from the Fund. The Transfer Agent, its agents
          and subcontractors shall also be protected and indemnified in
          recognizing stock certificates which are reasonably believed to bear
          the proper manual or facsimile signatures of officers of the Fund, and
          the proper countersignature of any former transfer agent or former
          registrar, or of a co-transfer agent or co-registrar.

     9.3. Standard of Care. The Transfer Agent shall at all times act in good
          faith and agrees to use its best efforts within reasonable limits to
          ensure the accuracy of all services performed under this Agreement,
          but assumes no responsibility and shall not be liable for loss or
          damage due to errors, including encoding and payment processing
          errors, unless said errors are caused by its negligence, bad faith, or
          willful misconduct or that of its employees or agents.

     9.4. Notice. In order that the indemnification provisions contained in this
          Section shall apply, upon the assertion of a claim for which the Fund
          may be required to

                                       10

<PAGE>
          indemnify the Transfer Agent, the Transfer Agent shall promptly notify
          the Fund of such assertion, and shall keep the Fund advised with
          respect to all developments concerning such claim. The Fund shall have
          the option to participate with the Transfer Agent in the defense of
          such claim or to defend against said claim in its own name or the name
          of the Transfer Agent. The Transfer Agent shall in no case confess any
          claim or make any compromise in any case in which the Fund may be
          required to indemnify it except with the Fund's prior written consent.

10.  Consequential Damages.

     NO PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR
     CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING, BUT NOT LIMITED
     TO, LOSS OF ANTICIPATED PROFITS, OCCASIONED BY A BREACH OF ANY PROVISION OF
     THIS AGREEMENT EVEN IF APPRISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.  Responsibilities of the Transfer Agent.

     The Transfer Agent undertakes the duties and obligations imposed by this
     Agreement upon the following terms and conditions, by all of which the
     Fund, by its acceptance hereof, shall be bound:

     11.1 Whenever in the performance of its duties hereunder the Transfer Agent
          shall deem it necessary or desirable that any fact or matter be proved
          or established prior to taking or suffering any action hereunder, such
          fact or matter may be deemed to be conclusively proved and established
          by a certificate signed by an officer of the Fund and delivered to the
          Transfer Agent. Such certificate shall be full authorization to the
          recipient for any action taken or suffered in good faith by it under
          the provisions of this Agreement in reliance upon such certificate.

     11.2 The Fund agrees that it will perform, execute, acknowledge and deliver
          or cause to be performed, executed, acknowledged and delivered all
          such further and other acts, instruments and assurances as may
          reasonably be required by the Transfer Agent for the carrying out, or
          performing by the Transfer Agent of the provisions of this Agreement.

     11.3 Transfer Agent, any of its affiliates or subsidiaries, and any
          stockholder, director, officer or employee of the Transfer Agent may
          buy, sell or deal in the securities of the Fund or become pecuniarily
          interested in any transaction in which the Fund may be interested, or
          contract with or lend money to the Fund or otherwise act as fully and
          freely as though it were not appointed as agent under this Agreement.
          Nothing herein shall preclude the Transfer Agent from acting in any
          other capacity for the Fund or for any other legal entity.

     11.4 No provision of this Agreement shall require the Transfer Agent to
          expend or risk its own funds or otherwise incur any financial
          liability in the performance of any of its duties hereunder or in the
          exercise of its rights if it shall believe in

                                       11

<PAGE>

          good faith that repayment of such funds or adequate indemnification
          against such risk or liability is not reasonably assured to it.

12.  Confidentiality

     12.1 The Transfer Agent and the Fund agree that they will not, at any time
          during the term of this Agreement or after its termination, reveal,
          divulge, or make known to any person, firm, corporation or other
          business organization, any Fund customer lists, trade secrets, cost
          figures and projections, profit figures and projections, or any other
          secret or confidential information whatsoever, whether of the Transfer
          Agent or of the Fund, used or gained by the Transfer Agent or the Fund
          during performance under this Agreement. The Fund and the Transfer
          Agent further covenant and agree to retain all such knowledge and
          information acquired during and after the term of this Agreement
          respecting such lists, trade secrets, or any secret or confidential
          information whatsoever in trust for the sole benefit of the Transfer
          Agent or the Fund and their successors and assigns. In the event of
          breach of the foregoing by either party, the remedies provided by
          Section 8.3 shall be available to the party whose confidential
          information is disclosed. The above prohibition of disclosure shall
          not apply to the extent that the Transfer Agent must disclose such
          data to its sub-contractor or the Fund's agent for purposes of
          providing services under this Agreement.

     12.2 In the event that any requests or demands are made for the inspection
          of the Shareholder records of the Fund, other than request for records
          of Shareholders pursuant to standard subpoenas from state or federal
          government authorities (i.e., divorce and criminal actions), the
          Transfer Agent will endeavor to notify the Fund and to secure
          instructions from an authorized officer of the Fund as to such
          inspection. The Transfer Agent expressly reserves the right, however,
          to exhibit the Shareholder records to any person whenever it is
          advised by counsel that it may be held liable for the failure to
          exhibit the Shareholder records to such person or if required by law
          or court order.

13.  Covenants of the Fund and the Transfer Agent

     13.1 Documentation. The Fund shall promptly furnish to the Transfer Agent
          the following:

          (a)  A certified copy of the resolution of the Board of Trustees or
               the Board of Directors of the Fund authorizing the appointment of
               the Transfer Agent and the execution and delivery of this
               Agreement; and

          (b)  A copy (in paper, electronic or other agreed upon format) of the
               organizational documents of the Fund and all amendments thereto.

     13.2 Facilities. The Transfer Agent hereby agrees to establish and maintain
          facilities and procedures reasonably acceptable to the Fund for
          safekeeping of stock certificates, check forms and facsimile signature
          imprinting devices, if any; and for the preparation or use, and for
          keeping account of, such certificates, forms and devices.



                                       12

<PAGE>

     13.3 Records. The Transfer Agent shall keep records relating to the
          services to be performed hereunder, in the form and manner as it may
          deem advisable. The Transfer Agent agrees that all such records
          prepared or maintained by it relating to the services performed
          hereunder are the property of the Fund and will be preserved,
          maintained and made available in accordance with the requirements of
          law, and will be surrendered promptly to the Fund on and in accordance
          with its request.

     13.4 Non-Solicitation of Transfer Agent Employees. The Fund shall not
          attempt to hire or assist with the hiring of an employee of the
          Transfer Agent or of its affiliated companies or encourage any
          employee to terminate their relationship with the Transfer Agent or
          its affiliated companies.

14.  Termination of Agreement

     14.1 Term. The initial term of this Agreement (the "Initial Term") shall be
          three (3) years from the date first stated above unless terminated
          pursuant to the provisions of this Section 14. Unless a terminating
          party gives written notice to the other party one hundred and twenty
          (120) days before the expiration of the Initial Term or any Renewal
          Term, this Agreement will renew automatically from year to year (each
          such year-to-year renewal term a "Renewal Term"). One hundred and
          twenty (120) days before the expiration of the Initial Term or a
          Renewal Term the parties to this Agreement will agree upon a Fee
          Schedule for the upcoming Renewal Term. Otherwise, the fees shall be
          increased pursuant to Section 5.5 of this Agreement.

     14.2 Early Termination. Notwithstanding anything contained in this
          Agreement to the contrary, should the Fund desire to move any of its
          services provided by the Transfer Agent hereunder to a successor
          service provider prior to the expiration of the then current Initial
          or Renewal Term, or without the required notice, the Transfer Agent
          shall make a good faith effort to facilitate the conversion on such
          prior date; however, there can be no guarantee or assurance that the
          Transfer Agent will be able to facilitate a conversion of services on
          such prior date. In connection with the foregoing, should this
          Agreement be terminated by the Fund for any reason other than a
          material breach of the Agreement by the Transfer Agent and the
          services be converted to a successor service provider, or if the Fund
          is liquidated or its assets merged or purchased or the like with or by
          another entity which does not utilize the services of the Transfer
          Agent, the fees payable to the Transfer Agent shall be calculated as
          if the services had been performed by the Transfer Agent until the
          expiration of the then current Initial or Renewal Term and calculated
          at the asset and/or Shareholder account levels, as the case may be, on
          the date notice of termination was given to the Transfer Agent. In
          addition to the forgoing, in the event that the Fund terminates this
          Agreement during the Initial Term, other than due to a material breach
          of the Agreement by the Transfer Agent, then the Fund will reimburse
          the Transfer Agent in an amount equal to the cost of conversion and
          implementation, which will be subject to a pro rata reduction over the
          Initial Term. The payment of all fees to the Transfer Agent as set
          forth herein shall be accelerated to the business

                                       13

<PAGE>

          day immediately prior to the conversion or termination of services or
          such later date or dates as may be mutually agreed by the parties.

     14.3 Expiration of Term. During the Initial Term or Renewal Term, whichever
          currently is in effect, should either party exercise its right to
          terminate, all out-of-pocket expenses or costs associated with the
          movement of records and material will be borne by the Fund.
          Additionally, the Transfer Agent reserves the right to charge for any
          other reasonable expenses associated with such termination.

     14.4 Confidential Information. Upon termination of this Agreement, each
          party shall return to the other party all copies of confidential or
          proprietary materials or information received from such other party
          hereunder, other than materials or information required to be retained
          by such party under applicable laws or regulations.

     14.5 Unpaid Invoices. The Transfer Agent may terminate this Agreement
          immediately upon an unpaid invoice payable by the Fund to the Transfer
          Agent being outstanding for more than ninety (90) days, except with
          respect to any amount subject to a good faith dispute within the
          meaning of Section 5.4 of this Agreement.

     14.6 Bankruptcy. Either party hereto may terminate this Agreement by notice
          to the other party, effective at any time specified therein, in the
          event that (a) the other party ceases to carry on its business or (b)
          an action is commenced by or against the other party under Title 11 of
          the United States Code or a receiver, conservator or similar officer
          is appointed for the other party and such suit, conservatorship or
          receivership is not discharged within sixty (60) days.

15.  Assignment and Third Party Beneficiaries

     15.1 Except as provided in Section 16.1 below, neither this Agreement nor
          any rights or obligations hereunder may be assigned by either party
          without the written consent of the other party. Any attempt to do so
          in violation of this Section shall be void. Unless specifically stated
          to the contrary in any written consent to an assignment, no assignment
          will release or discharge the assignor from any duty or responsibility
          under this Agreement.

     15.2 Except as explicitly stated elsewhere in this Agreement, nothing under
          this Agreement shall be construed to give any rights or benefits in
          this Agreement to anyone other than the Transfer Agent and the Fund,
          and the duties and responsibilities undertaken pursuant to this
          Agreement shall be for the sole and exclusive benefit of the Transfer
          Agent and the Fund. This Agreement shall inure to the benefit of and
          be binding upon the parties and their respective permitted successors
          and assigns.

     15.3 This Agreement does not constitute an agreement for a partnership or
          joint venture between the Transfer Agent and the Fund. Other than as
          provided in

                                       14

<PAGE>

          Section 16.1, neither party shall make any commitments with third
          parties that are binding on the other party without the other party's
          prior written consent.

16.  Subcontractors

     16.1 The Transfer Agent may, without further consent on the part of the
          Fund, subcontract for the performance hereof with (i) Boston Financial
          Data Services, Inc., a Massachusetts corporation ("Boston Financial")
          which is duly registered as a transfer agent pursuant to Section
          17A(c)(2) of the Securities Exchange Act of 1934, as amended, (ii) a
          Boston Financial subsidiary duly registered as a transfer agent or
          (iii) a Boston Financial affiliate duly registered as a transfer
          agent; provided however, that the Transfer Agent shall be as fully
          responsible to the Fund for the acts and omissions of such
          subcontractor as it is for its own acts and omissions.

     16.2 Nothing herein shall impose any duty upon the Transfer Agent in
          connection with or make the Transfer Agent liable for the actions or
          omissions to act of unaffiliated third parties such as by way of
          example and not limitation, Airborne Services, Federal Express, United
          Parcel Service, the U.S. Mails, the NSCC and telecommunication
          companies, provided, if the Transfer Agent selected such company, the
          Transfer Agent shall have exercised due care in selecting the same.

17.  Miscellaneous

     17.1 Amendment. This Agreement may be amended or modified by a written
          amendment executed by the parties hereto and, to the extent required,
          authorized or approved by a resolution of the Board of Directors of
          the Fund.

     17.2 Massachusetts Law to Apply. This Agreement shall be construed and the
          provisions thereof interpreted under and in accordance with the laws
          of The Commonwealth of Massachusetts.

     17.3 Force Majeure. Notwithstanding anything to the contrary contained
          herein, neither party shall be liable for any delays or failures in
          performance resulting from acts beyond its reasonable control
          including, without limitation, acts of God, acts of war or terrorism,
          shortage of supply, breakdowns or malfunctions, interruptions or
          malfunction of computer facilities, or loss of data due to power
          failures or mechanical difficulties with information storage or
          retrieval systems, labor difficulties or civil unrest. Notwithstanding
          the foregoing, in the event of such an occurrence, each party agrees
          to make a good faith effort to perform its obligations hereunder.

     17.4 Survival. All provisions regarding indemnification, warranty,
          liability, and limits thereon, and confidentiality and/or protections
          of proprietary rights and trade secrets shall survive the termination
          of this Agreement.

     17.5 Severability. If any term, provision, covenant or restriction of this
          Agreement is held by a court of competent jurisdiction or other
          authority to be invalid, void or unenforceable, the remainder of the
          terms, provision, covenants and restrictions

                                       15

<PAGE>

            of this Agreement shall remain in full force and effect and shall in
            no way be affected, impaired or invalidated.

     17.6   Successors. All the covenants and provisions of this agreement by or
            for the benefit of the Fund or the Transfer Agent shall bind and
            inure to the benefit of their respective successors and assigns
            hereunder.

     17.7   Priorities Clause. In the event of any conflict, discrepancy or
            ambiguity between the terms and conditions contained in this
            Agreement and any Schedules or attachments hereto, the terms and
            conditions contained in this Agreement shall take precedence.

     17.8   Waiver. No waiver by either party or any breach or default of any of
            the covenants or conditions herein contained and performed by the
            other party shall be construed as a waiver of any succeeding breach
            of the same or of any other covenant or condition.

     17.9   Merger of Agreement. This Agreement constitutes the entire agreement
            between the parties hereto and supersedes any prior agreement with
            respect to the subject matter hereof whether oral or written.

     17.10  Counterparts. This Agreement may be executed by the parties hereto
            on any number of counterparts, and all of said counterparts taken
            together shall be deemed to constitute one and the same instrument.

     17.11  Reproduction of Documents. This Agreement and all schedules,
            exhibits, attachments and amendments hereto may be reproduced by any
            photographic, photostatic, microfilm, micro-card, miniature
            photographic or other similar process. The parties hereto each agree
            that any such reproduction shall be admissible in evidence as the
            original itself in any judicial or administrative proceeding,
            whether or not the original is in existence and whether or not such
            reproduction was made by a party in the regular course of business,
            and that any enlargement, facsimile or further reproduction shall
            likewise be admissible in evidence.

     17.12  Notices. Any notice or communication by the Transfer Agent or the
            Fund to the other is duly given if in writing and delivered in
            person or mailed by first class mail, postage prepaid, telex,
            telecopier or overnight air courier guaranteeing next day delivery,
            to the other's address:

            (a)   If to the Transfer Agent, to:

                  State Street Bank and Trust Company
                  c/o Boston Financial Data Services, Inc.
                  2 Heritage Drive, 4th Floor
                  North Quincy, Massachusetts 02171
                  Attention: Legal Department
                  Facsimile: (617) 483-2490

                                       16

<PAGE>

            (b)   If to the Fund, to:

                  Nuveen Funds
                  c/o Nuveen Investments
                  333 W. Wacker Drive
                  Suite 3300
                  Chicago, IL  60606

                  Attn:  General Counsel
                  Facsimile:  (312) 917-7952

The Transfer Agent and the Fund may, by notice to the other, designate
additional or different addresses for subsequent notices or communications.

Section 18.  Limitation of Liability

     For each Fund that is a business trust, the Fund's Declaration of Trust is
     on file with the Secretary of The Commonwealth of Massachusetts. This
     Agreement is executed on behalf of each such Fund by the Fund's officers as
     officers and not individually. The obligations imposed upon each such Fund
     by this Agreement are not binding upon any of the Fund's Trustees, officers
     or shareholders individually but are binding only upon the assets and
     property of the Fund.

                                       17

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.

                                     FUND


                                     BY: /s/ Tina M. Lazar
                                        ----------------------------------------
                                     as an Authorized Officer on behalf of each
                                     of the Funds indicated on Exhibit A


ATTEST:

/s/ Sheri Snowden
- -----------------------------------


                                     STATE STREET BANK AND TRUST
                                       COMPANY



                                     BY: /s/ Joseph L. Hooley
                                         ---------------------------------------
                                             Executive Vice President


ATTEST:

/s/ Joanne M. Henthorn
- ------------------------------------


                                       18

<PAGE>

                                   SCHEDULE A

                             NUVEEN CLOSED-END FUNDS

Nuveen Municipal Value Fund, Inc. +
Nuveen California Municipal Value Fund, Inc. +
Nuveen New York Municipal Value Fund, Inc. +
Nuveen Municipal Income Fund, Inc. +
Nuveen Select Maturities Municipal Fund *
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 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 *
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 Premium Income Municipal Fund 2, Inc. +
Nuveen Arizona Premium Income Municipal Fund, Inc. +
Nuveen Insured California Premium Income Municipal Fund, Inc. +
Nuveen Insured Florida Premium Income Municipal Fund *
Nuveen Michigan Premium Income Municipal Fund, Inc. +
Nuveen New Jersey Premium Income Municipal Fund, Inc. +
Nuveen Insured New York Premium Income Municipal Fund, Inc. +
Nuveen Premium Income Municipal Fund 4, Inc. +
Nuveen Insured California Premium Income Municipal Fund 2, Inc. +
Nuveen Maryland Premium Income Municipal Fund *
Nuveen Massachusetts Premium Income Municipal Fund *
Nuveen Pennsylvania Premium Income Municipal Fund 2 *
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  *

                                       19

<PAGE>

                               SCHEDULE A (cont'd)

                             NUVEEN CLOSED-END FUNDS

Nuveen Insured Premium Income Municipal Fund 2 *
Nuveen California Dividend Advantage Municipal Fund *
Nuveen New York 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 Jersey Dividend Advantage Municipal Fund *
Nuveen New York Dividend Advantage Municipal Fund 2 *
Nuveen Ohio Dividend Advantage Municipal Fund *
Nuveen Pennsylvania Dividend Advantage Municipal Fund *
Nuveen Dividend Advantage Municipal Fund 3 *
Nuveen California Dividend Advantage Municipal 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 *
Nuveen Ohio Dividend Advantage Municipal Fund 3 *
Nuveen Select Tax-Free Income Portfolio *
Nuveen Select Tax-Free Income Portfolio 2 *
Nuveen California Select Tax-Free Income Portfolio *
Nuveen New York Select Tax-Free Income Portfolio *
Nuveen Select Tax-Free Income Portfolio 3 *
Nuveen Senior Income Fund *
Nuveen Real Estate Income Fund *
Nuveen Quality Preferred Income Fund *
Nuveen Arizona Dividend Advantage Municipal Fund 3*
Nuveen Connecticut Dividend Advantage Municipal Fund 3*

                                       20

<PAGE>

                               SCHEDULE A (cont'd)

                             NUVEEN CLOSED-END FUNDS

Nuveen Georgia Dividend Advantage Municipal Fund 2*
Nuveen Maryland Dividend Advantage Municipal Fund 3*
Nuveen North Carolina Dividend Advantage Municipal Fund 3*
Nuveen Quality Preferred Income Fund 2*
Nuveen Floating Rate Fund*
Nuveen Insured Tax-Free Advantage Municipal Fund*
Nuveen Insured New York Tax-Free Advantage Municipal Fund*
Nuveen Insured California Tax-Free Advantage Municipal Fund*
Nuveen Insured Florida Tax-Free Advantage Municipal Fund*
Nuveen Insured Massachusetts Tax-Free Advantage Municipal Fund*
- -----------------------------------------------
+ Minnesota Corporation
* Massachusetts Business Trust

FUND                                                 STATE STREET BANK AND TRUST
                                                                COMPANY

BY: /s/ Tina M. Lazar                          BY: /s/ Joseph L. Hooley
   ---------------------------------------        ------------------------------
as an Authorized Officer on behalf of each
of the Funds indicated above


                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.K.2
<SEQUENCE>13
<FILENAME>dex99k2.txt
<DESCRIPTION>EXPENSE REIMBURSEMENT AGREEMENT
<TEXT>
<PAGE>


                         EXPENSE REIMBURSEMENT AGREEMENT

AGREEMENT made this 14th day of November, 2002, by and between NUVEEN INSURED
TAX-FREE ADVANTAGE MUNICIPAL FUND, a Massachusetts business trust (the "Fund"),
and NUVEEN ADVISORY CORP., a Delaware corporation (the "Adviser").

                               W I T N E S S E T H

WHEREAS, the Fund and the Adviser have separately entered into an Investment
Management Agreement of even date herewith ( the "Management Agreement");

In consideration of the mutual covenants hereinafter contained, and in
connection with the establishment and commencement of operations of the Fund, it
is hereby agreed by and between the parties hereto as follows:

1.   For the period from the commencement of the Fund's operations through
November 30, 2002 and for the 12 month periods ending November 30 in each
indicated year during the term of the Management Agreement (including any
continuation done in accordance with Section 15(c) of the Investment Company Act
of 1940), the Adviser agrees to reimburse expenses (including the management fee
and other expenses) in the amounts determined by applying the following annual
rates to the average daily net assets of the Fund:

<PAGE>

<TABLE>
<CAPTION>
                Percentage Reimbursed (as                   Percentage Reimbursed (as
 Period Ending   a percentage of average    Period Ending    a percentage of average
  November 30     daily net assets)/(1)/     November 30      daily net assets)/(1)/

     <S>                 <C>                    <C>                 <C>
     2002/(2)/           .32%
     2003                .32%                   2007                .32%
     2004                .32%                   2008                .24%
     2005                .32%                   2009                .16%
     2006                .32%                   2010                .08%
</TABLE>

/(1)/ Including net assets attributable to MuniPreferred Shares.
/(2)/ From the commencement of operations.

2.   To effect the expense reimbursement provided for in this Agreement, the
Fund may offset the appropriate amount of the reimbursement contemplated
hereunder against the management fee payable under the Management Agreement.

3.   This Agreement, and the Adviser's obligation to so reimburse expenses
hereunder, shall terminate on the earlier of (a) November 30, 2010 or (b)
termination of the Management Agreement.

4.   Except as provided in paragraph 3, above, this Agreement may be terminated
only by the vote of (a) the Board of Trustees of the Fund, including the vote of
the members of the Board who are not "interested persons" within the meaning of
the Investment Company Act of 1940, and (b) a majority of the outstanding voting
securities of the Fund.

5.   If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.

                                        2

<PAGE>

6.   The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.

     IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed on the day and year above written.

                                         NUVEEN INSURED TAX-FREE
                                         ADVANTAGE MUNICIPAL FUND


by:                                      /s/ Jessica R. Droeger
                                         ----------------------
                                               Vice President


Attest:  /s/ Virginia L. O'Neal
       ------------------------
         Assistant Secretary


                                         NUVEEN ADVISORY CORP.


                                         by:    /s/ William M. Fitzgerald
                                             -------------------------------
                                                    Managing Director


Attest: /s/ Larry Martin
        ----------------
        Assistant Secretary

                                        3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.L.1
<SEQUENCE>14
<FILENAME>dex99l1.txt
<DESCRIPTION>OPINION AND CONSENT OF BELL, BOYD & LLOYD
<TEXT>
<PAGE>

                                                                     Exhibit l.1

BELL, BOYD & LLOYD LLC                 THREE FIRST NATIONAL PLAZA
                                       70 WEST MADISON STREET, SUITE 3300
                                       CHICAGO, ILLINOIS 60602-4207
                                       312.372.1121   FAX 312.372.2098

                                       OFFICES IN CHICAGO
                                       AND WASHINGTON, D.C.

                                November 20, 2002

Nuveen Insured Tax-Free Advantage Municipal Fund
333 West Wacker Drive
Chicago, Illinois  60606

Ladies and Gentlemen:

               Nuveen Insured Tax-Free Advantage Municipal Fund

     We have acted as counsel for Nuveen Insured Tax-Free Advantage Municipal
Fund (the "Fund") in connection with the registration under the Securities Act
of 1933 (the "Act") of certain of its common shares of beneficial interest (the
"Shares") covered by registration statement no. 333-100320 on form N-2, as it is
proposed to be amended by pre-effective amendment no. 2 (as proposed to be
amended, the "Registration Statement").

     In this connection we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate and other
records, certificates and other papers as we deemed it necessary to examine for
the purpose of this opinion, including the agreement and declaration of trust
and by-laws of the Fund, actions of the board of trustees of the Fund
authorizing the issuance of shares of the Fund and the Registration Statement.

     We assume that, upon sale of the Shares, the Fund will receive the
authorized consideration therefor, which will at least equal the net asset value
of the Shares.

     Based upon the foregoing, we are of the opinion that when the Shares are
issued and sold after the Registration Statement has been declared effective and
the authorized consideration therefor is received by the Fund, they will be
legally issued, fully paid and nonassessable by the Fund, except that, as set
forth in the Registration Statement, shareholders of the Fund may under certain
circumstances be held personally liable for obligations of the Fund.

     In rendering the foregoing opinion, we have relied upon the opinion of
Bingham McCutchen LLP expressed in their letter to us dated November 20, 2002.

<PAGE>

Nuveen Insured Tax-Free Advantage Municipal Fund
November 20, 2002
Page 2


     We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under section 7 of the Act.

                                Very truly yours,



                                /s/ Bell, Boyd & Lloyd LLC



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.L.2
<SEQUENCE>15
<FILENAME>dex99l2.txt
<DESCRIPTION>OPINION AND CONSENT OF BINGHAM MCCUTCHEN, LLP
<TEXT>
<PAGE>





                                                     November 20, 2002


Bell Boyd & Lloyd LLC
Three First National Plaza
Suite 3300
Chicago, Illinois 60602


RE:      Nuveen Insured Tax-Free Advantage Municipal Fund
         ------------------------------------------------

Ladies and Gentlemen:

We have acted as special Massachusetts counsel to Nuveen Insured Tax-Free
Dividend Advantage Municipal Fund, a Massachusetts business trust (the "Fund"),
in connection with the Fund's Registration Statement on Form N-2 as such
Registration Statement is proposed to be amended by Pre-Effective Amendment
No. 2 to be filed with the Securities and Exchange Commission on or about
November 20, 2002 (as proposed to be amended, the "Registration Statement"),
with respect to certain of its Common Shares of Beneficial Interest, par value
of $.01 per share (the "Shares"). You have requested that we deliver this
opinion to you, as special counsel to the Fund, for use by you in connection
with your opinion to the Fund with respect to the Shares.

In connection with the furnishing of this opinion, we have examined the
following documents:

          (a) a certificate of the Secretary of the Commonwealth of
     Massachusetts as to the existence of the Fund;

          (b) copies, certified by the Secretary of the Commonwealth of
     Massachusetts, of the Fund's Declaration of Trust and of all amendments
     thereto on file in the office of the Secretary of the Commonwealth of
     Massachusetts;

          (c) a Certificate of Secretary of the Fund, certifying as to, and
     attaching copies of, the Fund's Declaration of Trust and By-Laws, and
     certain resolutions adopted by the Trustees of the Fund; and

          (d) a printer's proof dated November 20, 2002 of Pre Effective
     Amendment No. 2.

<PAGE>

Bell Boyd & Lloyd LLC
November 20, 2002
Page 2





In such examination, we have assumed the genuineness of all signatures, the
conformity to the originals of all of the documents reviewed by us as copies,
the authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing any
document. We have assumed that the Registration Statement, as filed with the
Securities and Exchange Commission, will be in substantially the form of the
printer's proof referred to in paragraph (d) above.

This opinion is based entirely on our review of the documents listed above and
such investigation of law as we have deemed necessary or appropriate. We have
made no other review or investigation of any kind whatsoever, and we have
assumed, without independent inquiry, the accuracy of the information set forth
in such documents. As to our opinion below relating to the due organization and
existence of the Fund, our opinion relies entirely upon and is limited by the
certificate referenced in paragraph (a) above.

This opinion is limited solely to the laws of the Commonwealth of Massachusetts
as applied by courts located in such Commonwealth.

We understand that all of the foregoing assumptions and limitations are
acceptable to you.

Based upon and subject to the foregoing, please be advised that it is our
opinion that:

     1. The Fund is duly organized and existing under the Fund's Declaration of
Trust and the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly referred to
as a "Massachusetts business trust."

     2. The Shares, when issued and sold in accordance with the Fund's
Declaration of Trust and By-Laws, will be legally issued, fully paid and
non-assessable, except that, as indicated in the Registration Statement,
shareholders of the Fund may under certain circumstances be held personally
liable for its obligations.


<PAGE>

Bell Boyd & Lloyd LLC
November 20, 2002
Page 3




We hereby consent to your reliance on this opinion in connection with your
opinion to the Fund with respect to the Shares, to the reference to our name in
the Registration Statement under the heading "Legal Opinions" and to the filing
of this opinion as an exhibit to the Registration Statement.


                                            Very truly yours,


                                            /s/ BINGHAM McCUTCHEN LLP



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.N
<SEQUENCE>16
<FILENAME>dex99n.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG
<TEXT>
<PAGE>

                        CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated November 5, 2002 in the Registration Statement
(Form N-2) and related prospectus and statement of additional information of the
Nuveen Insured Tax-Free Advantage Municipal Fund filed with the Securities and
Exchange Commission in the Pre-effective Amendment No. 2 to the Registration
Statement under the Securities Act of 1933 (File No. 333-100320) and in this
Amendment No. 3 to the Registration Statement under the Investment Company Act
of 1940 (File No. 811-21213).


                                                           /s/ ERNST & YOUNG LLP


Chicago, Illinios
November 20, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.P
<SEQUENCE>17
<FILENAME>dex99p.txt
<DESCRIPTION>SUBSCRIPTION AGREEMENT OF NUVEEN ADVISORY CORP.
<TEXT>
<PAGE>


                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

                             Subscription Agreement

     This Agreement made this November 4, 2002 by and between Nuveen Insured
Tax-Free Advantage Municipal Fund, a Massachusetts business trust (the "Fund"),
and Nuveen Advisory Corp., a Delaware corporation (the "Subscriber");

                                   WITNESSETH:

     WHEREAS, the Fund has been formed for the purposes of carrying on business
as a closed-end management investment company; and

     WHEREAS, the Subscriber has been selected by the Fund's Board of Trustees
to serve as investment adviser to the Fund; and

     WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Fund
wishes to sell to the Subscriber, 7,000 common shares for a purchase price of
$14.325 per share;

     NOW THEREFORE, IT IS AGREED:

     l.   The Subscriber subscribes for and agrees to purchase from the Fund
7,000 common shares for a purchase price of $14.325 per share. Subscriber agrees
to make payment for these shares at such time as demand for payment may be made
by an officer of the Fund.

     2.   The Fund agrees to issue and sell said shares to Subscriber promptly
upon its receipt of the purchase price.

     3.   To induce the Fund to accept its subscription and issue the shares
subscribed for, the Subscriber represents that it is informed as follows:

          (a)  That the shares being subscribed for have not been and will not
     be registered under the Securities Act of l933 ("Securities Act");

          (b)  That the shares will be sold by the Fund in reliance on an
     exemption from the registration requirements of the Securities Act;

          (c)  That the Fund's reliance upon an exemption from the registration
     requirements of the Securities Act is predicated in part on the
     representations and agreements contained in this Subscription Agreement;

<PAGE>

                                        2

          (d)  That when issued, the shares will be "restricted securities" as
     defined in paragraph (a)(3) of Rule l44 of the General Rules and
     Regulations under the Securities Act ("Rule l44") and cannot be sold or
     transferred by Subscriber unless they are subsequently registered under the
     Securities Act or unless an exemption from such registration is available;

          (e)  That there do not appear to be any exemptions from the
     registration provisions of the Securities Act available to the Subscriber
     for resale of the shares. In the future, certain exemptions may possibly
     become available, including an exemption for limited sales including an
     exemption for limited sales in accordance with the conditions of Rule l44.

The Subscriber understands that a primary purpose of the information
acknowledged in subparagraphs (a) through (e) above is to put it on notice as to
restrictions on the transferability of the shares.

     4.   To further induce the Fund to accept its subscription and issue the
shares subscribed for, the Subscriber:

          (a)  Represents and warrants that the shares subscribed for are being
     and will be acquired for investment for its own account and not on behalf
     of any other person or persons and not with a view to, or for sale in
     connection with, any public distribution thereof; and

          (b)  Agrees that any certificates representing the shares subscribed
     for may bear a legend substantially in the following form:

         The shares represented by this certificate have been acquired for
         investment and have not been registered under the Securities Act of
         l933 or any other federal or state securities law. These shares may not
         be offered for sale, sold or otherwise transferred unless registered
         under said securities laws or unless some exemption from registration
         is available.

     5.   This Subscription Agreement and all of its provisions shall be binding
upon the legal representatives, heirs, successors and assigns of the parties
hereto.





<PAGE>



     6.   The Fund's Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts. This Agreement is executed on behalf of the Fund
by the Fund's officers as officers and not individually and the obligations
imposed upon the Fund by this Agreement are not binding upon any of the Fund's
Trustees, officers or shareholders individually but are binding only upon the
assets and property of the Fund.

     IN WITNESS WHEREOF, this Subscription Agreement has been executed by the
parties hereto as of the day and date first above written.


NUVEEN INSURED TAX-FREE
ADVANTAGE MUNICIPAL FUND


By:        /s/ Jessica R. Droeger
     ----------------------------


NUVEEN ADVISORY CORP.


By:        /s/ William M. Fitzgerald
     ------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.S
<SEQUENCE>18
<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-----
