<SEC-DOCUMENT>0001083839-12-000020.txt : 20120117
<SEC-HEADER>0001083839-12-000020.hdr.sgml : 20120116
<ACCEPTANCE-DATETIME>20120117161845
ACCESSION NUMBER:		0001083839-12-000020
CONFORMED SUBMISSION TYPE:	NSAR-B/A
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20111031
FILED AS OF DATE:		20120117
DATE AS OF CHANGE:		20120117
EFFECTIVENESS DATE:		20120117

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NUVEEN AMT-FREE MUNICIPAL INCOME FUND
		CENTRAL INDEX KEY:			0001195737
		IRS NUMBER:				030487030
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		NSAR-B/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21213
		FILM NUMBER:		12529829

	BUSINESS ADDRESS:	
		STREET 1:		NUVEEN INVESTMENTS, INC.
		STREET 2:		333 WEST WACKER DRIVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606
		BUSINESS PHONE:		3129178146

	MAIL ADDRESS:	
		STREET 1:		NUVEEN INVESTMENTS, INC.
		STREET 2:		333 WEST WACKER DRIVE
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60606

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NUVEEN INSURED TAX FREE ADVANTAGE MUNICIPAL FUND
		DATE OF NAME CHANGE:	20021003
</SEC-HEADER>
<DOCUMENT>
<TYPE>NSAR-B/A
<SEQUENCE>1
<FILENAME>answer.fil
<TEXT>
<PAGE>      PAGE  1
000 B000000 10/31/2011
000 C000000 0001195737
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000 E000000 NF
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000 I000000 6.1
000 J000000 A
001 A000000 NUVEEN INSURED TAX-FREE ADVANTAGE MUNI FUND
001 B000000 811-21213
001 C000000 3129178200
002 A000000 333 WEST WACKER DRIVE
002 B000000 CHICAGO
002 C000000 IL
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008 B000001 A
008 C000001 801-14147
008 D010001 CHICAGO
008 D020001 IL
008 D030001 60606
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008 A000002 NUVEEN ASSET MANAGEMENT, LLC
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012 A000001 EQUISERVE INC.
012 B000001 84-05925
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<PAGE>      PAGE  2
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014 A000001 NUVEEN INVESTMENTS, LLC
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078  000000 N
080 A000000 CHUBB GROUP OF INSURANCE COMPANIES
080 B000000 BERKLEY, GREAT AMERICAN, ST.PAUL,CNA & ZURICH
080 C000000   114000
081 A000000 Y
081 B000000 240
082 A000000 N
082 B000000        0
083 A000000 N
083 B000000        0
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SIGNATURE   STEPHEN D. FOY
TITLE       V.P. & CONTROLLER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>ey77b1011.txt
<TEXT>
Report of Independent Registered Public Accounting Firm

To the Shareholders and
Board of Directors/Trustees of
Nuveen Funds

In planning and performing our audits of the financial statements of
each of the Nuveen Funds listed in Exhibit A attached hereto (the
Funds) as of and for the year ended October 31, 2011, in accordance
with the standards of the Public Company Accounting Oversight Board
(United States), we considered the Funds internal control over financial
reporting, including controls over safeguarding securities, as a basis for
designing our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements
of Form N-SAR, but not for the purpose of expressing an opinion on the
effectiveness of the Funds internal control over financial reporting.
Accordingly, we express no such opinion.

The management of the Funds is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of controls.
A funds internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
A funds internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the fund; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the fund are being made
only in accordance with authorizations of management and
directors/trustees of the fund; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition,
use or disposition of a funds assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.

A deficiency in internal control over financial reporting exists when the
design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions,
to prevent or detect misstatements on a timely basis. A material
weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable
possibility that a material misstatement of the funds annual or interim
financial statements will not be prevented or detected on a timely basis.

Our consideration of the Funds internal control over financial reporting
was for the limited purpose described in the first paragraph and would
not necessarily disclose all deficiencies in internal control that might be
material weaknesses under standards established by the Public
Company Accounting Oversight Board (United States). However, we
noted no deficiencies in the Funds internal control over financial
reporting and its operation, including controls over safeguarding
securities that we consider to be a material weakness as defined above
as of October 31, 2011.

This report is intended solely for the information and use of
management and the Board of Directors/Trustees of the Funds and the
Securities and Exchange Commission and is not intended to be and
should not be used by anyone other than these specified parties.




          /s/ ERNST & YOUNG LLP

Chicago, Illinois
December 28, 2011
Exhibit A

Fund
Nuveen Performance Plus Municipal Fund, Inc. (NPP)
Nuveen Municipal Advantage Fund, Inc. (NMA)
Nuveen Municipal Market Opportunity Fund, Inc. (NMO)
Nuveen Dividend Advantage Municipal Fund (NAD)
Nuveen Dividend Advantage Municipal Fund 2 (NXZ)
Nuveen Dividend Advantage Municipal Fund 3 (NZF)
Nuveen Investment Quality Municipal Fund, Inc. (NQM)
Nuveen Select Quality Municipal Fund, Inc. (NQS)
Nuveen Quality Income Municipal Fund, Inc. (NQU)
Nuveen Premier Municipal Income Fund, Inc. (NPF)
Nuveen Municipal High Income Opportunity Fund (NMZ)
Nuveen Municipal High Income Opportunity Fund 2 (NMD)
Nuveen Insured Quality Municipal Fund, Inc. (NQI)
Nuveen Insured Municipal Opportunity Fund, Inc. (NIO)
Nuveen Premier Insured Municipal Income Fund, Inc. (NIF)
Nuveen Insured Premium Income Municipal Fund 2 (NPX)
Nuveen Insured Dividend Advantage Municipal Fund (NVG)
Nuveen Insured Tax-Free Advantage Municipal Fund (NEA)
Nuveen Premium Income Municipal Fund, Inc. (NPI)
Nuveen Premium Income Municipal Fund 2, Inc. (NPM)
Nuveen Premium Income Municipal Fund 4, Inc. (NPT)
Nuveen Municipal Value Fund, Inc. (NUV)
Nuveen Municipal Value Fund 2 (NUW)
Nuveen Municipal Income Fund, Inc. (NMI)
Nuveen Enhanced Municipal Value Fund (NEV)
Nuveen Equity Index Fund (FEIX)
Nuveen Mid Cap Index Fund (FMCI)
Nuveen Small Cap Index Fund (FSCI)
Nuveen Equity Income Fund (FEI)
Nuveen Large Cap Value Fund (FLCV)
Nuveen Mid Cap Value Fund (FMCV)
Nuveen Small Cap Value Fund (FSCV)
Nuveen Global Infrastructure Fund (FGI)
Nuveen Real Estate Securities Fund (FRES)
Nuveen International Fund (FI)
Nuveen International Select Fund (FIS)
Nuveen Quantitative Large Cap Core Fund (FQLCC)
Nuveen Tactical Market Opportunities Fund (FTMO)
Nuveen Large Cap Growth Opportunities Fund (FLCGO)
Nuveen Mid Cap Growth Opportunities Fund (FMCGO)
Nuveen Small Cap Growth Opportunities Fund (FSCGO)
Nuveen Large Cap Select Fund (FLCS)
Nuveen Mid Cap Select Fund (FMCS)
Nuveen Small Cap Select Fund (FSCS)





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77C VOTES
<SEQUENCE>3
<FILENAME>nea77c.txt
<TEXT>
Form N-SAR, Sub-Item 77C
Submission of matters to a vote of security holders


Nuveen Insured Tax-Free Advantage Municipal Fund
 811-21213

The annual meeting of shareholders was held on July 25, 2011, at the
offices of Nuveen Investments; at this meeting the shareholders were asked
to vote on the election of Board Members, the elimination of Fundamental
Investment Policies and the approval of new Fundamental Investment
Policies. The meeting was subsequently adjourned to August 31, 2011 and
additionally adjourned to October 19, 2011.

Voting results are as follows:
<table>
<c>
<c> Common and Preferred
shares voting together as a class
<c>  Preferred shares voting
together as a class
To approve the elimination of the Funds
fundamental investment policy relating to
the Funds ability to make loans


   For
          15,754,452
            3,806,471
   Against
            1,117,326
               390,597
   Abstain
               639,878
                 52,508
   Broker Non-Votes
            3,531,370
            1,048,925
      Total
          21,043,026
            5,298,501



To approve the new fundamental
investment policy relating to the Funds
 ability to make loans


   For
          15,704,797
            3,795,132
   Against
            1,147,561
               394,486
   Abstain
               659,298
                 59,958
   Broker Non-Votes
            3,531,370
            1,048,925
      Total
          21,043,026
            5,298,501
</table>
Proxy materials are herein incorporated by reference
to the SEC filing on June 22, 2011, under
Conformed Submission Type DEF 14A, accession
number 0000950123-11- 060814.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77D POLICIES
<SEQUENCE>4
<FILENAME>nea77d.txt
<TEXT>
Form N-SAR, Sub-Item 77D

Policies with respect to security investments



Nuveen Insured Tax-Free Advantage Municipal Fund
 811-21213



The annual meeting of shareholders was held on July 25, 2011, at the
offices of Nuveen Investments; at this meeting the shareholders were asked
to vote on the election of Board Members, the elimination of certain
Fundamental Investment Policies and the approval of new Fundamental
Investment Policies. The meeting was subsequently adjourned to August
31, 2011 and additionally adjourned to October 19, 2011 at which the
policy changes were approved by an affirmative vote of the shareholders.


A description of the policy changes can be found in
the proxy statement.  Proxy materials are herein
incorporated by reference
to the SEC filing on June 22, 2011, under
Conformed Submission Type DEF 14A, accession
number 0000950123-11- 060814.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77E LEGAL
<SEQUENCE>5
<FILENAME>nea77e.txt
<TEXT>
Form N-SAR, Sub-Item 77E
Legal Proceedings



Nuveen Insured Tax-Free Advantage Municipal Fund

811-21213

    Thirty-three Nuveen leveraged closed-end funds (including
the Nuveen Insured Tax-Free Advantage Municipal Fund (symbol
 NEA ) (hereafter, the  Fund )) have each received a demand
letter from a law firm on behalf of purported holders of the funds
common shares. Each letter alleged that Nuveen Fund Advisors
(the funds investment adviser) and the funds officers and Board
of Directors or Trustees, as applicable (the  Board of Trustees )
breached their fiduciary duties by favoring the interests of holders
of the funds auction rate preferred shares ( ARPS ) over those of
its common shareholders in connection with each funds ARPS
refinancing and/or redemption activities, and demanded that the
Board take action to remedy those alleged breaches. In response to
the demand letters, each funds Board of Trustees established a
Demand Committee of certain of its disinterested and independent
members to investigate the claims. The Demand Committee, for
each fund, retained independent counsel to assist it in conducting
its investigation. Based upon its investigation, the Demand
Committee, for each fund, found that it was not in the best interests
of each fund or its shareholders to take the actions suggested in the
demand letters, and recommended that the full Board reject the
demands made in the demand letters. After reviewing the findings
and recommendation of each Demand Committee, the full Board
of each fund unanimously adopted the Demand Committees
recommendation and each of the thirty-three funds has since
rejected the demands made in the demand letters.

    Subsequently, all thirty-three funds that received demand
letters (including the Fund) and one fund that did not receive a
demand letter were named as nominal defendants in four putative
shareholder derivative action complaints filed in the Circuit Court
of Cook County, Illinois, Chancery Division (the  Cook County
Chancery Court ). The four putative shareholder actions have
since been consolidated into one shareholder derivative action
complaint captioned Martin Safier, et al., v. Nuveen Asset
Management, et al., filed with the Cook County Chancery Court on
February 18, 2011 (the  Complaint ). The Complaint was filed on
behalf of purported holders of each funds common shares and also
names Nuveen Fund Advisors as a defendant, together with current
and former officers and a trustee of each of the funds (together
with the nominal defendants, collectively, the  Defendants ). The
Complaint contains the same basic allegations contained in the
demand letters. The suit seeks a declaration that the Defendants
have breached their fiduciary duties, an order directing the
Defendants not to redeem any ARPS at their liquidation value
using fund assets, indeterminate monetary damages in favor of the
funds and an award of plaintiffs costs and disbursements in
pursuing the action. The plaintiffs filed a motion for preliminary
injunction to stop the funds subject to the lawsuits from redeeming
additional ARPS during the pendency of the lawsuits. The court
rejected that motion on November 23, 2010.

    On April 29, 2011, each of the Defendants filed a motion to
dismiss the Complaint, which remains pending before the court.

    By decision dated December 16, 2011, the Court granted the
Defendants Motion to Dismiss with prejudice. It is not known
whether the plaintiffs intend to file an appeal of the Courts
decision.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77I NEW SECUR
<SEQUENCE>6
<FILENAME>nea77i.txt
<TEXT>
Form N-SAR,
Sub-Item 77I
Terms of new or amended securities


Nuveen Insured Tax-Free Advantage Municipal Fund
 811-21213


The preferred class of the registrants securities has been
materially modified, as stated in the
Statement Establishing and Fixing the Rights and Preferences of
Variable Rate Municipal Term Preferred Shares, containing a description
of the Funds preferred securities.  A copy of such Statement is attached
in this Funds N-SAR-A filing under Sub-Item 77Q1(a).

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>7
<FILENAME>nea77q1a.txt
<TEXT>
Form N-SAR,
Sub-Item 77Q1(a)
Copies of any material amendments
to the registrants charter


Nuveen Insured Tax-Free Advantage Municipal Fund
 811-21213


Attached please find as an exhibit under
Sub-Item 77Q1(a) of Form N-SAR a copy of the
Statement Establishing and Fixing the Rights and Preferences of
Variable Rate Municipal Term Preferred Shares, considered an amendment
to the Articles of Incorporation, containing a description of the Funds
preferred securities.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>8
<FILENAME>nea77q1a2.txt
<TEXT>
<PAGE>

                                                                  Execution Copy

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

          STATEMENT ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
                 OF VARIABLE RATE MUNIFUND TERM PREFERRED SHARES

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                  PAGE

<S>                                                                                <C>
DEFINITIONS...................................................................      1

   1.1    Definitions.........................................................      1
          -----------

   1.2    Interpretation......................................................     12
          --------------

   1.3    Liability of Officers, Trustees and Shareholders....................     12
          ------------------------------------------------

TERMS APPLICABLE TO ALL SERIES OF VARIABLE RATE MUNIFUND
   TERM PREFERRED SHARES......................................................     12

   2.1    Number of Shares; Ranking...........................................     12
          -------------------------

   2.2    Dividends and Distributions.........................................     13
          ---------------------------

   2.3    Liquidation Rights..................................................     16
          ------------------

   2.4    Coverage & Leverage Tests...........................................     17
          ------------------------

   2.5    Redemption..........................................................     18
          ----------

   2.6    Voting Rights.......................................................     23
          -------------

   2.7    Rating Agencies.....................................................     27
          ---------------

   2.8    Issuance of Additional Preferred Shares.............................     27
          ---------------------------------------

   2.9    Status of Redeemed or Repurchased VMTP Shares.......................     28
          ---------------------------------------------

   2.10   Distributions with respect to Taxable Allocations...................     28
          -------------------------------------------------

   2.11   Term Redemption Liquidity Account and Liquidity Requirement.........     30
          -----------------------------------------------------------

   2.12   Global Certificate..................................................     31
          ------------------

   2.13   Notice..............................................................     32
          ------

   2.14   Termination.........................................................     32
          -----------

   2.15   Appendices..........................................................     32
          ----------

   2.16   Actions on Other than Business Days.................................     32
          -----------------------------------

   2.17   Modification........................................................     32
          ------------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                <C>
   2.18   Transfers...........................................................     33
          ---------

   2.19   No Additional Rights................................................     33
          --------------------
</TABLE>


                                       ii

<PAGE>

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

          STATEMENT ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
                 OF VARIABLE RATE MUNIFUND TERM PREFERRED SHARES

     Nuveen Insured Tax-Free Advantage Municipal Fund (the "Fund"), a
                                                            ----
Massachusetts business trust, certifies that:

                                    RECITALS

     FIRST: The Fund is authorized under Article IV of the Fund's Declaration of
Trust, as amended (which, as hereafter restated or amended from time to time, is
herein called the "Declaration"), to issue an unlimited number of
                   -----------
preferred shares, par value $.01 per share.

     SECOND: Pursuant to the authority expressly vested in the Board of Trustees
of the Fund by Article IV of the Declaration, the Board of Trustees has, by
resolution, authorized the issuance of a class of preferred shares, $.01 par
value per share, of the Fund, such shares to be classified as Variable Rate
MuniFund Term Preferred Shares ("VMTP"), and such VMTP to be issued in one or
                                 ----
more series (each such series, a "Series").
                                  ------

     THIRD: The preferences, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption, of each
Series of VMTP are set forth in this Statement, as modified, amended or
supplemented in the appendix hereto (each an "Appendix" and collectively the
                                              --------
"Appendices") to this Statement specifically relating to such Series as now or
 ----------
hereafter filed by the Fund with the Secretary of State of the State of
Massachusetts (each such Series being referred to herein as a "Series of VMTP
                                                               --------------
Shares," "VMTP Shares of a Series" or a "Series"), and shares of all such Series
------    -----------------------        ------
being referred to herein individually as a "VMTP Share" and collectively as the
                                            ----------
"VMTP Shares").
 -----------

                                   DEFINITIONS

     1.1 Definitions. Unless the context or use indicates another or different
         -----------
meaning or intent and except with respect to any Series as specifically provided
in the Appendix applicable to such Series, each of the following terms when used
in this Statement shall have the meaning ascribed to it below, whether such term
is used in the singular or plural and regardless of tense:

     "1940 Act" means the Investment Company Act of 1940, as amended, or
      --------
any successor statute.

     "1940 Act Asset Coverage" means "asset coverage," as defined for purposes
      -----------------------
of Section 18(h) of the 1940 Act, of at least 200% with respect to all
outstanding senior securities of the Fund which are shares of stock for purposes
of the 1940 Act, including all outstanding VMTP Shares (or such other asset
coverage as may in the future be specified in or under the 1940 Act or by rule,
regulation or order of United States Securities and Exchange Commission as the
minimum asset coverage for senior securities which are shares of stock of a
closed-end investment company).

<PAGE>

     "Additional Amount Payment" means a payment to a Holder of VMTP Shares of
      -------------------------
an amount which, when taken together with the aggregate amount of Taxable
Allocations made to such Holder to which such Additional Amount Payment relates,
would cause such Holder's dividends in dollars (after federal income tax
consequences) from the aggregate of such Taxable Allocations and the related
Additional Amount Payment to be equal to the dollar amount of the dividends that
would have been received by such Holder if the amount of such aggregate Taxable
Allocations would have been excludable (for federal income tax purposes) from
the gross income of such Holder. Such Additional Amount Payment shall be
calculated (i) without consideration being given to the time value of money;
(ii) assuming that no Holder of VMTP Shares is subject to the federal
alternative minimum tax with respect to dividends received from the Fund; and
(iii) assuming that each Taxable Allocation and each Additional Amount Payment
(except to the extent such Additional Amount Payment is reported as an
exempt-interest dividend for purposes of Section 852(b)(5) of the Code) would be
taxable in the hands of each Holder of VMTP Shares at the maximum marginal
regular federal individual income tax rate (taking account of the tax imposed
under Section 1411 of the Code or any successor provision) applicable to
ordinary income or net capital gain, as applicable, or the maximum marginal
regular federal corporate income tax rate applicable to ordinary income or net
capital gain, as applicable, whichever is greater, in effect at the time such
Additional Amount Payment is paid.

     "Adviser" means Nuveen Fund Advisors, Inc., a Delaware corporation, or such
      -------
other entity as shall be then serving as the investment adviser of the Fund, and
shall include, as appropriate, any sub-adviser duly appointed by the Adviser.

     "Agent Member" means a Person with an account at the Securities Depository
      ------------
that holds one or more VMTP Shares through the Securities Depository, directly
or indirectly, for a Designated Owner and that will be authorized and
instructed, directly or indirectly, by a Designated Owner to disclose
information to the Redemption and Paying Agent with respect to such Designated
Owner.

     "Appendices" and "Appendix" shall have the respective meanings as set forth
      ----------       --------
in the Recitals of this Statement.

     "Applicable Spread" means, with respect to any Rate Period for any Series
      -----------------
of VMTP Shares, the percentage per annum set forth opposite the highest
applicable credit rating assigned to such Series by any Rating Agency in the
table set forth directly below on the Rate Determination Date for such Rate
Period, provided, however, that, if such Series of VMTP Shares is not assigned a
        --------  -------
credit rating by any Rating Agency on the Rate Determination Date for any Rate
Period for such Series of VMTP Shares as a result of each Rating Agency ceasing
to rate tax-exempt closed-end investment companies generally, "Applicable
                                                               ----------
Spread" means, with respect to such Rate Period, (i) the percentage per annum in
------
such table directly below the percentage per annum set forth opposite the
highest applicable credit rating most recently assigned to such Series by any
Rating Agency in such table prior to such Rate Determination Date, or (ii) 6.05%
per annum if such percentage per annum set forth opposite such highest
applicable credit rating is 3.05% per annum.


                                       2

<PAGE>

<TABLE>
<CAPTION>
          --------------------------------------------------------------------------
                              Long-Term Ratings*
                              ------------------

          Standard & Poor's          Moody's         Fitch     Applicable Percentage
          -----------------          -------         -----     ---------------------
          <S>                 <C>                    <C>                   <C>
          AAA to AA           Aaa to Aa2             AAA to AA             1.05%
          --------------------------------------------------------------------------
          AA-                 Aa3                    AA-                   1.25%
          --------------------------------------------------------------------------
          A+                  A1                     A+                    1.45%
          --------------------------------------------------------------------------
          A                   A2                     A                     1.65%
          --------------------------------------------------------------------------
          A-                  A3                     A-                    1.85%
          --------------------------------------------------------------------------
          BBB+                Baa1                   BBB+                  2.75%
          --------------------------------------------------------------------------
</TABLE>


                                              3

<PAGE>

<TABLE>
          --------------------------------------------------------------------------
          <S>                 <C>                    <C>                   <C>
          BBB                 Baa2                   BBB                   2.90%
          --------------------------------------------------------------------------
          BBB-                Baa3                   BBB-                  3.05%**
          --------------------------------------------------------------------------

          * And/or the equivalent ratings of an Other Rating Agency then rating
          the VMTP Shares utilizing the highest of the ratings of the Rating
          Agencies then rating the VMTP Shares.

          ** Unless an Increased Rate Period is in effect or the Increased Rate
          otherwise applies to any portion of a Rate Period, in which case the
          Applicable Spread shall be 6.05% for such period or portion thereof,
          as the case may be.
          --------------------------------------------------------------------------
</TABLE>

     "Asset Coverage" means "asset coverage," as defined for purposes of Section
      --------------
18(h) of the 1940 Act as in effect on the date hereof, with respect to all
outstanding senior securities of the Fund which are shares of stock for purposes
of the 1940 Act, including all Outstanding VMTP Shares, determined on the basis
of values calculated as of a time within 48 hours (only including Business Days)
next preceding the time of such determination.

     "Asset Coverage Cure Date" means, with respect to the failure by the Fund
      ------------------------
to maintain Asset Coverage of at least 225% as of the close of business on a
Business Day (as required by Section 2.4(a)), the date that is ten (10) Business
                             ---------------
Days following such Business Day.

     "Below Investment Grade" means, with respect any Series of VMTP Shares and
      ----------------------
as of any date, the following ratings with respect to each Rating Agency (to the
extent it is a Rating Agency on such date):

          (i) lower than BBB-, in the case of Fitch;

          (ii) lower than Baa3, in the case of Moody's; and

          (iii) lower than an equivalent long-term credit rating to those set
     forth in clauses (i) and (ii), in the case of any Other Rating Agency.

     "Board of Trustees" means the Board of Trustees of the Fund or any duly
      -----------------
authorized committee thereof as permitted by applicable law.

     "Business Day" means any day other than a day (i) on which commercial banks
      ------------
in The City of New York, New York are required or authorized by law or executive
order to close or (ii) on which the New York Stock Exchange is closed.


                                       4

<PAGE>

     "By-Laws" means the By-Laws of the Fund as amended from time to time.
      -------

     "Closed-End Funds" shall have the meaning as set forth in Section 2.18(a).
      ----------------                                         ---------------

     "Code" means the Internal Revenue Code of 1986, as amended.
      ----

     "Common Shares" means the common shares of beneficial interest, par value
      -------------
$.01 per share, of the Fund.

     "Custodian" means a bank, as defined in Section 2(a)(5) of the 1940 Act,
      ---------
that has the qualifications prescribed in paragraph 1 of Section 26(a) of the
1940 Act, or such other entity as shall be providing custodian services to the
Fund as permitted by the 1940 Act or any rule, regulation, or order thereunder,
and shall include, as appropriate, any similarly qualified sub-custodian duly
appointed by the Custodian.

     "Custodian Agreement" means, with respect to any Series, the Custodian
      -------------------
Agreement by and between the Custodian and the Fund with respect to such Series.

     "Date of Original Issue" means, with respect to any Series, the date
      ----------------------
specified as the Date of Original Issue for such Series in the Appendix for such
Series.

     "Declaration" shall have the meaning as set forth in the Recitals of this
      -----------
Statement.

     "Default" shall mean a Dividend Default or a Redemption Default.
      -------

     "Deposit Securities" means, as of any date, any United States
      ------------------
dollar-denominated security or other investment of a type described below that
either (i) is a demand obligation payable to the holder thereof on any Business
Day or (ii) has a maturity date, mandatory redemption date or mandatory payment
date, on its face or at the option of the holder, preceding the relevant
Redemption Date, Dividend Payment Date or other payment date in respect of which
such security or other investment has been deposited or set aside as a Deposit
Security:

     (1) cash or any cash equivalent;

     (2) any U.S. Government Obligation;

     (3) any Municipal Obligation that has a credit rating from at least one
NRSRO that is the highest applicable rating generally ascribed by such NRSRO to
Municipal Obligations with substantially similar terms as of the date of this
Statement (or such rating's future equivalent), including (A) any such Municipal
Obligation that has been pre-refunded by the issuer thereof with the proceeds of
such refunding having been irrevocably deposited in trust or escrow for the
repayment thereof and (B) any such fixed or variable rate Municipal Obligation
that qualifies as an eligible security under Rule 2a-7 under the 1940 Act;

     (4) any investment in any money market fund registered under the 1940 Act
that qualifies under Rule 2a-7 under the 1940 Act, or similar investment vehicle
described in Rule 12d1-1(b)(2) under the 1940 Act, that invests principally in
Municipal Obligations or U.S. Government Obligations or any combination thereof;
or


                                       5

<PAGE>

     (5) any letter of credit from a bank or other financial institution that
has a credit rating from at least one NRSRO that is the highest applicable
rating generally ascribed by such NRSRO to bank deposits or short-term debt of
similar banks or other financial institutions as of the date of this Statement
(or such rating's future equivalent).

     "Designated Owner" means a Person in whose name VMTP Shares of any Series
      ----------------
are recorded as beneficial owner of such VMTP Shares by the Securities
Depository, an Agent Member or other securities intermediary on the records of
such Securities Depository, Agent Member or securities intermediary, as the case
may be.

     "Dividend Default" shall have the meaning as set forth in Section
      ----------------                                         -------
2.2(g)(i).
---------

     "Dividend Payment Date" means, with respect to any Series, the first
      ---------------------
Business Day of each calendar month that any shares of such Series are
outstanding; provided, however, that with respect any Series for which the first
             --------  -------
Dividend Period, as specified in the Appendix relating to such Series, is longer
than one month, the first Dividend Payment Date for such Series shall be the
first Business Day of the calendar month immediately following the end of such
Dividend Period.

     "Dividend Period" means, with respect to any Series, the Dividend Period
      ---------------
for such Series set forth in the Appendix for such Series.

     "Dividend Rate" means, with respect to any Rate Period for a Series of VMTP
      -------------
Shares and subject to the adjustment described in Section 2.10(a), the Index
                                                  ---------------
Rate for such Rate Period plus the Applicable Spread for such Rate Period;
provided, however, that with respect to any Increased Rate Period (or any
--------  -------
portion of a Rate Period to which the Increased Rate otherwise applies), the
Dividend Rate shall mean the Increased Rate for such Increased Rate Period (or
such portion of a Rate Period); and provided further that the Dividend Rate for
                                    -------- -------
any Rate Period (or portion thereof) shall in no event exceed the Maximum Rate.

     "Effective Leverage Ratio" shall have the meaning as set forth in Section
      ------------------------                                         -------
2.4(d).
------

     "Effective Leverage Ratio Cure Date" shall have the meaning as set forth in
      ----------------------------------
Section 2.5(b)(ii)(A).
---------------------

     "Electronic Means" means email transmission, facsimile transmission or
      ----------------
other similar electronic means of communication providing evidence of
transmission (but excluding online communications systems covered by a separate
agreement) acceptable to the sending party and the receiving party, in any case
if operative as between any two parties, or, if not operative, by telephone
(promptly confirmed by any other method set forth in this definition), which, in
the case of notices to the Redemption and Paying Agent and the Custodian, shall
be sent by such means to each of its representatives set forth in the Redemption
and Paying Agent Agreement and the Custodian Agreement, respectively.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.
      ------------

     "Fitch" means Fitch Ratings, a part of the Fitch Group, which is a majority
      -----
owned subsidiary of Fimalac, S.A., and any successor or successors thereto.


                                       6

<PAGE>

     "Fund" shall have the meaning as set forth in the Preamble to this
      ----
Statement.

     "Holder" means, with respect to the VMTP Shares of any Series or any other
      ------
security issued by the Fund, a Person in whose name such security is registered
in the registration books of the Fund maintained by the Redemption and Paying
Agent or otherwise.

     "Increased Rate" means, with respect to any Increased Rate Period for a
      --------------
Series of VMTP Shares or any portion of a Rate Period to which the Increased
Rate otherwise applies, the Index Rate for such Rate Period plus an Applicable
                                                            ----
Spread of 6.05%.

     "Increased Rate Period" shall have the meaning as set forth in Section
      ---------------------                                         -------
2.2(g)(i).
---------

     "Index Rate" means, with respect to any Rate Period for a Series of VMTP
      ----------
Shares, the SIFMA Municipal Swap Index made available by 3:00 p.m., New York
City time, on the Rate Determination Date for such Rate Period.

     "Initial Rate Period" means, with respect to the VMTP Shares of any Series,
      -------------------
the period commencing on and including the Date of Original Issue thereof and
ending on, and including, the next succeeding calendar day that is a Wednesday
(or if such Wednesday is not a Business Day, the next succeeding Business Day).

     "Liquidation Preference" means, with respect to any Series, the amount
      ----------------------
specified as the liquidation preference per share for that Series in the
Appendix for such Series.

     "Liquidity Account Initial Date" means, with respect to any Series, the
      ------------------------------
date designated as the Liquidity Account Initial Date in the Appendix for such
Series.

     "Liquidity Account Investments" means (i) Deposit Securities or (ii) any
      -----------------------------
other security or investment owned by the Fund that is assigned a rating by
Moody's, Fitch or Standard and Poor's equal to or higher than A3, in the case of
Moody's, and A-, in the case of Standard and Poor's and Fitch, and is not
assigned a rating lower than any such rating by any of Moody's, Fitch or
Standard and Poor's.

     "Liquidity Requirement" shall have the meaning as set forth in Section
      ---------------------                                         -------
2.11(b).
-------

     "Mandatory Redemption Price" shall have the meaning as set forth in Section
      --------------------------                                         -------
2.5(b)(i)(A).
------------

     "Market Value" of any asset of the Fund means, for securities for which
      ------------
market quotations are readily available, the market value thereof determined by
an independent third-party pricing service designated from time to time by the
Board of Trustees, which pricing service shall be J. J. Kenny Co., Inc. (or any
successor thereto), International Data Corporation (or any successor thereto) or
such other independent third-party pricing service broadly recognized in the
tax-exempt fund market. Market Value of any asset shall include any interest
accrued thereon. The pricing service values portfolio securities at the mean
between the quoted bid and asked price or the yield equivalent when quotations
are readily available. Securities for which quotations are not readily available
are valued at fair value as determined by the pricing service using methods that
include consideration of: yields or prices of Municipal Obligations of


                                       7

<PAGE>

comparable quality, type of issue, coupon, maturity and rating; indications as
to value from dealers; and general market conditions. The pricing service may
employ electronic data processing techniques or a matrix system, or both, to
determine recommended valuations.

     "Maximum Rate" means 15% per annum.
      ------------

     "Moody's" means Moody's Investors Service, Inc. and any successor or
      -------
successors thereto.

     "Municipal Obligation" means municipal securities as described under the
      --------------------
heading "Portfolio Composition" in the prospectus or other offering document for
a Series of VMTP Shares.

     "Notice of Redemption" shall have the meaning as set forth in Section
      --------------------                                         -------
2.5(d).
------

     "Notice of Taxable Allocation" shall have the meaning as set forth in
      ----------------------------
Section 2.10(a).
---------------

     "NRSRO" means (a) each of Fitch, Moody's and Standard & Poor's so long as
      -----
such Person is a nationally recognized statistical rating organization within
the meaning of Section 3(a)(62) of the Exchange Act and (b) any other nationally
recognized statistical rating organization within the meaning of Section
3(a)(62) of the Exchange Act that is not an "affiliated person" (as defined in
Section 2(a)(3) of the 1940 Act) of the Fund.

     "Optional Redemption Date" shall have the meaning as set forth in Section
      ------------------------                                         -------
2.5(c)(i).
---------

     "Optional Redemption Premium" means, with respect to any Series, the
      ---------------------------
premium payable by the Fund upon the redemption of VMTP Shares of such Series at
the option of the Fund, as set forth in the Appendix for such Series.

     "Optional Redemption Price" shall have the meaning as set forth in Section
      -------------------------                                         -------
2.5(c)(i).
---------

     "Other Rating Agency" means each Rating Agency, if any, other than Moody's
      -------------------
or Fitch then providing a rating for the VMTP Shares pursuant to the request of
the Fund.

     "Outstanding" means, as of any date with respect to VMTP Shares of any
      -----------
Series, the number of VMTP Shares of such Series theretofore issued by the Fund
except (without duplication):

     (a) any VMTP Shares of such Series theretofore cancelled or redeemed or
delivered to the Redemption and Paying Agent for cancellation or redemption in
accordance with the terms hereof;

     (b) any VMTP Shares of such Series as to which the Fund shall have given a
Notice of Redemption and irrevocably deposited with the Redemption and Paying
Agent sufficient Deposit Securities to redeem such shares in accordance with
Section 2.5 hereof;
-----------

     (c) any VMTP Shares of such Series as to which the Fund shall be the Holder
or the Designated Owner; and


                                       8

<PAGE>

     (d) any VMTP Shares of such Series represented by any certificate in lieu
of which any new certificate has been executed and delivered by the Fund.

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

     "Preferred Shares" means the authorized preferred shares of beneficial
      ----------------
interest, par value $.01 per share, of the Fund, including VMTP Shares of each
Series, shares of any other series of such preferred shares now or hereafter
issued by the Fund, and any other shares of beneficial interest hereafter
authorized and issued by the Fund of a class having priority over any other
class as to distribution of assets or payments of dividends.

     "Purchase Agreement" means (i) with respect to the initial Series of VMTP
      ------------------
Shares issued pursuant to this Statement, the VMTP Purchase Agreement to be
dated as of July 28, 2011 between the Fund and Citibank, N.A. and (ii) with
respect to any subsequent Series of VMTP Shares, the purchase agreement or other
similar agreement for the VMTP Shares of such Series (if any) specified in the
Appendix for such Series.

     "Rate Determination Date" means, with respect to the Initial Rate Period
      -----------------------
for any Series of VMTP Shares, the day immediately preceding the Date of
Original Issue of such Series and, with respect to any Subsequent Rate Period
for any Series of VMTP Shares, the last day of the immediately preceding Rate
Period for such Series or, if such day is not a Business Day, the next
succeeding Business Day; provided, however, that the next succeeding Rate
                         --------  -------
Determination Date will be determined without regard to any prior extension of a
Rate Determination Date to a Business Day.

     "Rate Period" means, with respect to any Series of VMTP Shares, the Initial
      -----------
Rate Period and any Subsequent Rate Period of the VMTP Shares of such Series.

     "Rating Agencies" means, as of any date and in respect of a Series of VMTP
      ---------------
Shares, (i) each of Moody's and Fitch and (ii) any other NRSRO designated as a
Rating Agency on such date in accordance with Section 2.7, in each case above,
                                              -----------
to the extent it maintains a rating on the VMTP Shares of such Series on such
date and the Board of Trustees has not terminated its designation as a Rating
Agency in accordance with Section 2.7. Moody's and Fitch have initially been
                          -----------
designated as the Rating Agencies for purposes of the VMTP Shares. In the event
that at any time any Rating Agency (i) ceases to be a Rating Agency for purposes
of any Series of VMTP Shares and such Rating Agency has been replaced by an
Other Rating Agency in accordance with Section 2.7, any references to any credit
                                       -----------
rating of such replaced Rating Agency in this Statement or any Appendix shall be
deleted for purposes hereof as provided below and shall be deemed instead to be
references to the equivalent credit rating of the Other Rating Agency that has
replaced such Rating Agency as of the most recent date on which such replacement
Other Rating Agency published credit ratings for such Series of VMTP Shares or
(ii) designates a new rating definition for any credit rating of such Rating
Agency with a corresponding replacement rating definition for such credit rating
of such Rating Agency, any references to such replaced rating definition of such
Rating Agency contained in this Statement or any Appendix shall instead be
deemed to be references to such corresponding replacement


                                       9

<PAGE>

rating definition. In the event that at any time the designation of any Rating
Agency as a Rating Agency for purposes of any Series of VMTP Shares is
terminated in accordance with Section 2.7, any rating of such terminated Rating
                              -----------
Agency, to the extent it would have been taken into account in any of the
provisions of this Statement or the Appendix for such Series, shall be
disregarded, and only the ratings of the then-designated Rating Agencies for
such Series shall be taken into account for purposes of this Statement and such
Appendix.

     "Rating Agency Guidelines" means the guidelines of any Rating Agency, as
      ------------------------
they may be amended or modified from time to time, compliance with which is
required to cause such Rating Agency to continue to issue a rating with respect
to a Series of VMTP Shares for so long as such Series is Outstanding.

     "Ratings Event" shall have the meaning set forth in Section 2.2(g)(i).
      -------------                                      -----------------

     "Redemption and Paying Agent" means, with respect to any Series, State
      ---------------------------
Street Bank and Trust Company and its successors or any other redemption and
paying agent appointed by the Fund with respect to such Series.

     "Redemption and Paying Agent Agreement" means, with respect to any Series,
      -------------------------------------
the Transfer Agency and Service Agreement dated October 7, 2002, as amended, by
and among the Redemption and Paying Agent, the Fund and certain other Persons,
as further amended by an Amendment thereto dated February 24, 2011 relating to
the VMTP Shares, and as the same may be amended, restated or modified from time
to time, or any similar agreement between the Fund and any other redemption and
paying agent appointed by the Fund.

     "Redemption Date" shall have the meaning as set forth in Section 2.5(d).
      ---------------                                         --------------

     "Redemption Default" shall have the meaning as set forth in Section
      ------------------                                         -------
2.2(g)(i).
---------

     "Redemption Price" shall mean the Term Redemption Price, the Mandatory
      ----------------
Redemption Price or the Optional Redemption Price, as applicable.

     "Securities Act" means the Securities Act of 1933, as amended.
      --------------

     "Securities Depository" shall mean The Depository Trust Company and its
      ---------------------
successors and assigns or any other securities depository selected by the Fund
that agrees to follow the procedures required to be followed by such securities
depository as set forth in this Statement with respect to the VMTP Shares.

     "Series" and "Series of VMTP Shares" shall have the meanings as set forth
      ------       ---------------------
in the Recitals of this Statement.

     "SIFMA Municipal Swap Index" means the Securities Industry and Financial
      --------------------------
Markets Association Municipal Swap Index, or such other weekly, high-grade index
comprised of seven-day, tax-exempt variable rate demand notes produced by
Municipal Market Data, Inc. or its successor, or as otherwise designated by the
Securities Industry and Financial Markets Association; provided, however, that
                                                       --------  -------
if such index is no longer produced by Municipal Market Data, Inc. or its
successor, then SIFMA Municipal Swap Index shall mean (i) the S&P Weekly


                                       10

<PAGE>

High Grade Municipal Index produced by Standard & Poor's Financial Services LLC
or its successors or (ii) if the S&P Weekly High Grade Municipal Index is no
longer produced, such other reasonably comparable index selected in good faith
by the Board of Trustees of the Fund.

     "Standard and Poor's" means Standard and Poor's Ratings Services, a
      -------------------
Standard and Poor's Financial Services LLC business, and any successor or
successors thereto.

     "Statement" means this Statement Establishing and Fixing the Rights and
      ---------
Preferences of Variable Rate MuniFund Term Preferred Shares, as it may be
amended from time to time in accordance with its terms.

     "Subsequent Rate Period" means, with respect to any Series of VMTP Shares,
      ----------------------
the period consisting of seven days, but adjusted in each case to reflect any
changes when the regular day that is a Rate Determination Date is not a Business
Day, from, and including, the first day following the Initial Rate Period of
such Series to, and including, the next Rate Determination Date for such Series
and any period thereafter from, and including, the first day following a Rate
Determination Date for shares of such Series to, and including, the next
succeeding Rate Determination Date for shares of such Series.

     "Tax Event" shall have the meaning as set forth in Section 2.2(g)(i).
      ---------                                         -----------------

     "Taxable Allocation" means, with respect to any Series, the allocation of
      ------------------
any net capital gain or other income taxable for federal income tax purposes to
a dividend paid in respect of such Series.

     "Term Redemption Amount" shall have the meaning as set forth in Section
      ----------------------                                         -------
2.11(a).
-------

     "Term Redemption Date" means, with respect to any Series, the date
      --------------------
specified as the Term Redemption Date in the Appendix for such Series.

     "Term Redemption Liquidity Account" shall have the meaning as set forth in
      ---------------------------------
Section 2.11(a).
---------------

     "Term Redemption Price" shall have the meaning as set forth in Section
      ---------------------                                         -------
2.5(a).
------

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

     "VMTP" shall have the meaning as set forth in the Recitals of this
      ----
Statement.

     "VMTP Shares" shall have the meaning as set forth in the Recitals of this
      -----------
Statement.

     "VMTP Shares of a Series" shall have the meaning as set forth in the
      -----------------------
Recitals of this Statement.

     "Voting Period" shall have the meaning as set forth in Section 2.6(b)(i).
      -------------                                         -----------------


                                       11

<PAGE>

     With respect to any Series, any additional definitions specifically set
forth in the Appendix relating to such Series and any amendments to any
definitions specifically set forth in the Appendix relating to such Series, as
such Appendix may be amended from time to time, shall be incorporated herein and
made part hereof by reference thereto, but only with respect to such Series.

     1.2 Interpretation. The headings preceding the text of Sections included in
         --------------
this Statement are for convenience only and shall not be deemed part of this
Statement or be given any effect in interpreting this Statement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Statement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Statement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Except as otherwise
expressly set forth herein, reference to any law means such law as amended,
modified, codified, replaced or re-enacted, in whole or in part, including
rules, regulations, enforcement procedures and any interpretations promulgated
thereunder. Underscored references to Sections shall refer to those portions of
this Statement. The use of the terms "hereunder," "hereof," "hereto" and words
of similar import shall refer to this Statement as a whole and not to any
particular Article, Section or clause of this Statement.

     1.3 Liability of Officers, Trustees and Shareholders.
         ------------------------------------------------

     The Declaration is on file with the Secretary of State of the Commonwealth
of Massachusetts, and the said officer of the Fund has executed this Statement
as an officer and not individually, and the obligations and rights set forth in
this Statement are not binding upon any such officer, or the trustees of the
Fund or shareholders of the Fund, individually, but are binding upon the assets
and property of the Fund.

                        TERMS APPLICABLE TO ALL SERIES OF
                  VARIABLE RATE MUNIFUND TERM PREFERRED SHARES

     Except for such changes and amendments hereto with respect to a Series of
VMTP Shares that are specifically contemplated by the Appendix relating to such
Series, each Series of VMTP Shares shall have the following terms:

     2.1 Number of Shares; Ranking.
         -------------------------

          (a) The number of authorized shares constituting any Series of VMTP
Shares shall be as set forth with respect to such Series in the Appendix hereto
relating to such Series. No fractional VMTP Shares shall be issued.


                                       12

<PAGE>

          (b) The VMTP Shares of each Series shall rank on a parity with VMTP
Shares of each other Series and with shares of any other series of Preferred
Shares as to the payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up of the affairs of the Fund. The VMTP
Shares of each Series shall have preference with respect to the payment of
dividends and as to distribution of assets upon dissolution, liquidation or
winding up of the affairs of the Fund over the Common Shares as set forth
herein.

          (c) No Holder of VMTP Shares shall have, solely by reason of being
such a Holder, any preemptive or other right to acquire, purchase or subscribe
for any VMTP Shares or Common Shares or other securities of the Fund which it
may hereafter issue or sell.

     2.2 Dividends and Distributions.
         ---------------------------

          (a) The Holders of VMTP Shares of any Series shall be entitled to
receive, when, as and if declared by, or under authority granted by, the Board
of Trustees, out of funds legally available therefor and in preference to
dividends and other distributions on Common Shares, cumulative cash dividends
and other distributions on each share of such Series at the Dividend Rate for
such Series, calculated as set forth herein, and no more. Dividends and other
distributions on the VMTP Shares of any Series shall accumulate from the Date of
Original Issue with respect to such Series. The amount of dividends per share
payable on VMTP Shares of a Series on any Dividend Payment Date shall equal the
sum of the dividends accumulated but not yet paid for each Rate Period (or part
thereof) in the related Dividend Period. The amount of dividends per share of a
Series accumulated for each such Rate Period (or part thereof) shall be computed
by (i) multiplying the Dividend Rate in effect for VMTP Shares of such Series
for such Rate Period (or part thereof) by a fraction, the numerator of which
shall be the actual number of days in such Rate Period (or part thereof) and the
denominator of which shall be the actual number of days in the year in which
such Rate Period (or such part thereof) occurs (365 or 366) and (ii) multiplying
the product determined pursuant to clause (i) by the Liquidation Preference for
a share of such Series.

          (b) Dividends on VMTP Shares of each Series with respect to any
Dividend Period shall be declared to the Holders of record of such shares as
their names shall appear on the registration books of the Fund at the close of
business on each day in such Dividend Period and shall be paid as provided in
Section 2.2(f) hereof.
--------------

          (c) (i) No full dividends and other distributions shall be declared or
paid on shares of a Series of VMTP Shares for any Dividend Period or part
thereof unless full cumulative dividends and other distributions due through the
most recent dividend payment dates therefor for all outstanding Preferred Shares
(including shares of other Series of VMTP Shares) ranking on a parity with such
Series of VMTP Shares have been or contemporaneously are declared and paid
through the most recent dividend payment dates therefor. If full cumulative
dividends and other distributions due have not been declared and paid on all
such outstanding Preferred Shares of any series, any dividends and other
distributions being declared and paid on VMTP Shares of a Series will be
declared and paid as nearly pro rata as possible in proportion to the respective
amounts of dividends and other distributions accumulated but unpaid on each such
series of Preferred Shares on the relevant dividend payment date for such
series. Subject to Section 2.10, no Holders of VMTP Shares shall be entitled to
                   ------------
any dividends and other distributions, whether


                                       13

<PAGE>

payable in cash, property or shares, in excess of full cumulative dividends and
other distributions as provided in this Section 2.2(c)(i) on such VMTP Shares.
                                        -----------------

               (ii) For so long as any VMTP Shares are Outstanding, the Fund
shall not: (x) declare any dividend or other distribution (other than a dividend
or distribution paid in Common Shares) in respect of the Common Shares, (y) call
for redemption, redeem, purchase or otherwise acquire for consideration any
Common Shares, or (z) pay any proceeds of the liquidation of the Fund in respect
of the Common Shares, unless, in each case, (A) immediately thereafter, the Fund
shall have 1940 Act Asset Coverage after deducting the amount of such dividend
or distribution or redemption or purchase price or liquidation proceeds, (B) all
cumulative dividends and other distributions on all VMTP Shares and all other
series of Preferred Shares ranking on a parity with the VMTP Shares due on or
prior to the date of the applicable dividend, distribution, redemption, purchase
or acquisition shall have been declared and paid (or shall have been declared
and Deposit Securities or sufficient funds (in accordance with the terms of such
Preferred Shares) for the payment thereof shall have been deposited irrevocably
with the paying agent for such Preferred Shares) and (C) the Fund shall have
deposited Deposit Securities pursuant to and in accordance with the requirements
of Section 2.5(d)(ii) hereof with respect to Outstanding VMTP Shares of any
   ------------------
Series to be redeemed pursuant to Section 2.5(a) or Section 2.5(b) hereof for
                                  --------------    --------------
which a Notice of Redemption shall have been given or shall have been required
to be given in accordance with the terms hereof on or prior to the date of the
applicable dividend, distribution, redemption, purchase or acquisition.

               (iii) Any dividend payment made on VMTP Shares of a Series shall
first be credited against the dividends and other distributions accumulated with
respect to the earliest Dividend Period for such Series for which dividends and
other distributions have not been paid.

          (d) Not later than 12:00 noon, New York City time, on the Dividend
Payment Date for a Series of VMTP Shares, the Fund shall deposit with the
Redemption and Paying Agent Deposit Securities having an aggregate Market Value
on such date sufficient to pay the dividends and other distributions that are
payable on such Dividend Payment Date in respect of such Series. The Fund may
direct the Redemption and Paying Agent with respect to the investment or
reinvestment of any such Deposit Securities so deposited prior to the Dividend
Payment Date, provided that such investment consists exclusively of Deposit
Securities and provided further that the proceeds of any such investment will be
available as same day funds at the opening of business on such Dividend Payment
Date.

          (e) All Deposit Securities paid to the Redemption and Paying Agent for
the payment of dividends payable on a Series of VMTP Shares shall be held in
trust for the payment of such dividends by the Redemption and Paying Agent for
the benefit of the Holders of such Series entitled to the payment of such
dividends pursuant to Section 2.2(f). Any moneys paid to the Redemption and
                      --------------
Paying Agent in accordance with the foregoing but not applied by the Redemption
and Paying Agent to the payment of dividends, including interest earned on such
moneys while so held, will, to the extent permitted by law, be repaid to the
Fund as soon as possible after the date on which such moneys were to have been
so applied, upon request of the Fund.


                                       14

<PAGE>

          (f) Dividends on VMTP Shares of a Series shall be paid on each
Dividend Payment Date for such Series to the Holders of shares of such Series as
their names appear on the registration books of the Fund at the close of
business on the day immediately preceding such Dividend Payment Date (or if such
day is not a Business Day, the next preceding Business Day). Dividends in
arrears on VMTP Shares of a Series for any past Dividend Period may be declared
and paid at any time, without reference to any regular Dividend Payment Date, to
the Holders of shares of such Series as their names appear on the registration
books of the Fund on such date, not exceeding fifteen (15) calendar days
preceding the payment date thereof, as may be fixed by the Board of Trustees. No
interest or sum of money in lieu of interest will be payable in respect of any
dividend payment or payments on VMTP Shares of any Series which may be in
arrears.

          (g) (i) The Dividend Rate on a Series of VMTP Shares shall be adjusted
to the Increased Rate for each Increased Rate Period (as hereinafter defined).
Subject to the cure provisions of Section 2.2(g)(iii), a Rate Period with
                                  -------------------
respect to a Series of VMTP Shares shall be deemed to be an "Increased Rate
                                                             --------------
Period" if on the first day of such Rate Period, (A) the Fund has failed to
------
deposit with the Redemption and Paying Agent by 12:00 noon, New York City time,
on a Dividend Payment Date for such Series, Deposit Securities (as a result of
complying with Section 2.2(c) or otherwise) that will provide funds available to
               --------------
the Redemption and Paying Agent on such Dividend Payment Date sufficient to pay
the full amount of any dividend on such Series payable on such Dividend Payment
Date (a "Dividend Default") and such Dividend Default has not ended as
         ----------------
contemplated by Section 2.2(g)(ii) on or prior to such first day; (B) the Fund
                ------------------
has failed to deposit with the Redemption and Paying Agent by 12:00 noon, New
York City time, on an applicable Redemption Date for such Series, Deposit
Securities that will provide funds available to the Redemption and Paying Agent
on such Redemption Date sufficient to pay the full amount of the Redemption
Price payable in respect of such Series on such Redemption Date (a "Redemption
                                                                    ----------
Default") and such Redemption Default has not ended as contemplated by Section
-------                                                                -------
2.2(g)(ii) on or prior to such first day; (C) any Rating Agency has withdrawn
----------
the credit rating required to be maintained with respect to such Series pursuant
to Section 2.7 other than due to the Rating Agency ceasing to rate tax-exempt
   -----------
closed-end management investment companies generally and such withdrawal is
continuing; (D) a Ratings Event (as defined below) has occurred and is
continuing with respect to such Series; or (E) (i) a court or other applicable
governmental authority has made a final determination that for federal tax
purposes the VMTP Shares do not qualify as equity in the Fund and (ii) such
determination results from an act or failure to act on the part of the Fund (a
"Tax Event"). A "Ratings Event" shall be deemed to exist with respect to any
 ---------       -------------
Series of VMTP Shares at any time such VMTP Shares have a long-term credit
rating from at least one-half of the Rating Agencies designated at such time
that is Below Investment Grade. For the avoidance of doubt, no determination by
any court or other applicable governmental authority that requires the Fund to
make an Additional Amount Payment in respect of a Taxable Allocation shall be
deemed to be a Tax Event hereunder.

               (ii) Subject to the cure provisions of Section 2.2(g)(iii), a
                                                      -------------------
Dividend Default or a Redemption Default on a Series of VMTP Shares shall end on
the Business Day on which, by 12:00 noon, New York City time, an amount equal to
all unpaid dividends on such Series and any unpaid Redemption Price on such
Series shall have been deposited irrevocably in trust in same-day funds with the
Redemption and Paying Agent.


                                       15

<PAGE>

               (iii) No Increased Rate Period for a Series of VMTP Shares with
respect to any Dividend Default or Redemption Default on such Series shall be
deemed to have commenced if the amount of any dividend or any Redemption Price
due in respect of such Series (if such Default is not solely due to the willful
failure of the Fund) is deposited irrevocably in trust, in same-day funds, with
the Redemption and Paying Agent by 12:00 noon, New York City time, on a Business
Day that is not later than three (3) Business Days after the applicable Dividend
Payment Date or Redemption Date for such Series with respect to which such
Default occurred, together with an amount equal to the Increased Rate on such
Series applied to the amount and period of such non-payment on such Series,
determined as provided in Section 2.2(a).
                          --------------

     2.3 Liquidation Rights.
         ------------------

          (a) In the event of any liquidation, dissolution or winding up of the
affairs of the Fund, whether voluntary or involuntary, the Holders of VMTP
Shares shall be entitled to receive out of the assets of the Fund available for
distribution to shareholders, after satisfying claims of creditors but before
any distribution or payment shall be made in respect of the Common Shares, a
liquidation distribution equal to the Liquidation Preference for such shares,
plus an amount equal to all unpaid dividends and other distributions on such
shares accumulated to (but excluding) the date fixed for such distribution or
payment on such shares (whether or not earned or declared by the Fund, but
excluding interest thereon), and such Holders shall be entitled to no further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up.

          (b) If, upon any liquidation, dissolution or winding up of the affairs
of the Fund, whether voluntary or involuntary, the assets of the Fund available
for distribution among the Holders of all Outstanding VMTP Shares and any other
outstanding Preferred Shares ranking on a parity with the VMTP Shares shall be
insufficient to permit the payment in full to such Holders of the Liquidation
Preference of such VMTP Shares plus accumulated and unpaid dividends and other
distributions on such shares as provided in Section 2.3(a) above and the amounts
                                            --------------
due upon liquidation with respect to such other Preferred Shares, then such
available assets shall be distributed among the Holders of such VMTP Shares and
such other Preferred Shares ratably in proportion to the respective preferential
liquidation amounts to which they are entitled. In connection with any
liquidation, dissolution or winding up of the affairs of the Fund, whether
voluntary or involuntary, unless and until the Liquidation Preference on each
Outstanding VMTP Share plus accumulated and unpaid dividends and other
distributions on such shares as provided in Section 2.3(a) above have been paid
                                            --------------
in full to the Holders of such shares, no dividends, distributions or other
payments will be made on, and no redemption, purchase or other acquisition by
the Fund will be made by the Fund in respect of, the Common Shares.

          (c) Neither the sale of all or substantially all of the property or
business of the Fund, nor the merger, consolidation or reorganization of the
Fund into or with any other business or statutory trust, corporation or other
entity, nor the merger, consolidation or reorganization of any other business or
statutory trust, corporation or other entity into or with the Fund shall be a
dissolution, liquidation or winding up, whether voluntary or involuntary, for
the purpose of this Section 2.3.
                    -----------


                                       16

<PAGE>

     2.4 Coverage & Leverage Tests.
         -------------------------

          (a) Asset Coverage Requirement. For so long as any VMTP Shares of any
              --------------------------
Series are Outstanding, the Fund shall have Asset Coverage of at least 225% as
of the close of business on each Business Day. If the Fund shall fail to
maintain such Asset Coverage as of any time as of which such compliance is
required to be determined as aforesaid, the provisions of Section 2.5(b)(i)
                                                          -----------------
shall be applicable, which provisions to the extent complied with shall
constitute the sole remedy for the Fund's failure to comply with the provisions
of this Section 2.4(a).
        --------------

          (b) Calculation of Asset Coverage. For purposes of determining whether
              -----------------------------
the requirements of Section 2.4(a) are satisfied, (i) no VMTP Shares of any
                    --------------
Series or other Preferred Shares shall be deemed to be Outstanding for purposes
of any computation required by Section 2.4(a) if, prior to or concurrently with
                               --------------
such determination, sufficient Deposit Securities or other sufficient funds (in
accordance with the terms of such Series or other Preferred Shares) to pay the
full redemption price for such Series or other Preferred Shares (or the portion
thereof to be redeemed) shall have been deposited in trust with the paying agent
for such Series or other Preferred Shares and the requisite notice of redemption
for such Series or other Preferred Shares (or the portion thereof to be
redeemed) shall have been given, and (ii) the Deposit Securities or other
sufficient funds that shall have been so deposited with the applicable paying
agent shall not be included as assets of the Fund for purposes of such
computation.

          (c) Effective Leverage Ratio Requirement. For so long as VMTP Shares
              ------------------------------------
of any Series are Outstanding, the Effective Leverage Ratio shall not exceed 45%
(or 46% solely by reason of fluctuations in the market value of the Fund's
portfolio securities) as of the close of business on any Business Day. If the
Effective Leverage Ratio shall exceed the applicable percentage provided in the
preceding sentence as of any time as of which such compliance is required to be
determined as aforesaid, the provisions of Section 2.5(b)(ii) shall be
                                           ------------------
applicable, which provisions to the extent complied with shall constitute the
sole remedy for the Fund's failure to comply with the provisions of this Section
                                                                         -------
2.4(c).
------

          (d) Calculation of Effective Leverage Ratio. For purposes of
              ---------------------------------------
determining whether the requirements of Section 2.4(c) are satisfied, the
                                        --------------
"Effective Leverage Ratio" on any date shall mean the quotient of:
 ------------------------

               (i) The sum of (A) the aggregate liquidation preference of the
Fund's "senior securities" (as that term is defined in the 1940 Act) that are
stock for purposes of the 1940 Act, excluding, without duplication, (1) any such
senior securities for which the Fund has issued a notice of redemption and
either has delivered Deposit Securities or sufficient funds (in accordance with
the terms of such senior securities) to the paying agent for such senior
securities or otherwise has adequate Deposit Securities or sufficient funds on
hand for the purpose of such redemption and (2) any such senior securities that
are to be redeemed with net proceeds from the sale of the VMTP Shares, for which
the Fund has delivered Deposit Securities or sufficient funds (in accordance
with the terms of such senior securities) to the paying agent for such senior
securities or otherwise has adequate Deposit Securities or sufficient funds on
hand for the purpose of such redemption; (B) the aggregate principal amount of
the Fund's "senior securities representing indebtedness" (as that term is
defined in the 1940 Act); and (C) the aggregate


                                       17

<PAGE>

principal amount of floating rate securities not owned by the Fund that
correspond to the associated inverse floating rate securities owned by the Fund;
divided by
------- --
               (ii) The sum of (A) the Market Value of the Fund's total assets
(including amounts attributable to senior securities but excluding any assets
consisting of Deposit Securities or funds referred to in clauses (A)(1) and A(2)
of Section 2.4(d)(i) above), less the amount of the Fund's accrued liabilities
   -----------------
(other than liabilities for the aggregate principal amount of senior securities
representing indebtedness, including floating rate securities), and (B) the
aggregate principal amount of floating rate securities not owned by the Fund
that correspond to the associated inverse floating rate securities owned by the
Fund.

     2.5 Redemption. Each Series of VMTP Shares shall be subject to redemption
         ----------
by the Fund as provided below:

          (a) Term Redemption. The Fund shall redeem all VMTP Shares of a Series
              ---------------
on the Term Redemption Date for such Series, at a price per share equal to the
Liquidation Preference per share of such Series plus an amount equal to all
unpaid dividends and other distributions on such share of such Series
accumulated from and including the Date of Original Issue to (but excluding) the
Term Redemption Date for such Series (whether or not earned or declared by the
Fund, but excluding interest thereon) (the "Term Redemption Price").
                                            ---------------------

          (b) Asset Coverage and Effective Leverage Ratio Mandatory Redemption.
              ----------------------------------------------------------------

               (i) Asset Coverage Mandatory Redemption. (A) If the Fund fails to
                   -----------------------------------
comply with the Asset Coverage requirement as provided in Section 2.4(a) as of
                                                          --------------
any time as of which such compliance is required to be determined in accordance
with Section 2.4(a) and such failure is not cured as of the Asset Coverage Cure
     --------------
Date other than as a result of the redemption required by this Section
                                                               -------
2.5(b)(i), the Fund shall, to the extent permitted by the 1940 Act and
---------
Massachusetts law, by the close of business on the Business Day next following
such Asset Coverage Cure Date, cause a notice of redemption to be issued, and
cause to be deposited Deposit Securities or other sufficient funds in trust with
the Redemption and Paying Agent or other applicable paying agent, in each case
in accordance with the terms of the Preferred Shares to be redeemed, for the
redemption of a sufficient number of Preferred Shares, which at the Fund's sole
option (to the extent permitted by the 1940 Act and Massachusetts law) may
include any number or proportion of VMTP Shares of any Series, to enable it to
meet the requirements of Section 2.5(b)(i)(B). In the event that any VMTP Shares
                         --------------------
of a Series then Outstanding are to be redeemed pursuant to this Section
                                                                 -------
2.5(b)(i), the Fund shall redeem such shares at a price per share equal to the
---------
Liquidation Preference per share of such Series plus an amount equal to all
unpaid dividends and other distributions on such share of such Series
accumulated from and including the Date of Original Issue to (but excluding) the
date fixed for such redemption by the Board of Trustees (whether or not earned
or declared by the Fund, but excluding interest thereon) (the "Mandatory
                                                               ---------
Redemption Price").
----------------

                    (B) On the Redemption Date for a redemption contemplated by
Section 2.5(b)(i)(A), the Fund shall redeem at the Mandatory Redemption Price,
--------------------
out of funds legally available therefor, such number of Preferred Shares (which
may include at the sole option of the Fund any number or proportion of VMTP
Shares of any Series) as shall be equal to the


                                       18

<PAGE>

lesser of (x) the minimum number of Preferred Shares, the redemption of which,
if deemed to have occurred immediately prior to the opening of business on the
Asset Coverage Cure Date, would result in the Fund having Asset Coverage on such
Asset Coverage Cure Date of at least 225% (provided, however, that if there is
no such minimum number of VMTP Shares and other Preferred Shares the redemption
or retirement of which would have such result, all VMTP Shares and other
Preferred Shares then outstanding shall be redeemed), and (y) the maximum number
of Preferred Shares that can be redeemed out of funds expected to be legally
available therefor in accordance with the Declaration and applicable law.
Notwithstanding the foregoing, in the event that Preferred Shares are redeemed
pursuant to this Section 2.5(b)(i), the Fund may at its sole option, but is not
                 -----------------
required to, redeem a sufficient number of VMTP Shares of any Series pursuant to
this Section 2.5(b)(i) that, when aggregated with other Preferred Shares
     -----------------
redeemed by the Fund, would result, if deemed to have occurred immediately prior
to the opening of business on the Asset Coverage Cure Date, in the Fund having
Asset Coverage on such Asset Coverage Cure Date of up to and including 250%. The
Fund shall effect such redemption on the date fixed by the Fund therefor, which
date shall not be later than thirty (30) calendar days after such Asset Coverage
Cure Date, except that if the Fund does not have funds legally available for the
redemption of all of the required number of VMTP Shares and other Preferred
Shares which have been designated to be redeemed or the Fund otherwise is unable
to effect such redemption on or prior to thirty (30) calendar days after such
Asset Coverage Cure Date, the Fund shall redeem those VMTP Shares and other
Preferred Shares which it was unable to redeem on the earliest practicable date
on which it is able to effect such redemption. If fewer than all of the
Outstanding VMTP Shares of a Series are to be redeemed pursuant to this Section
                                                                        -------
2.5(b)(i), the number of VMTP Shares of such Series to be redeemed shall be
---------
redeemed (A) pro rata among the Outstanding shares of such Series, (B) by lot or
(C) in such other manner as the Board of Trustees may determine to be fair and
equitable.

               (ii) Effective Leverage Ratio Mandatory Redemption. (A) If (x)
                    ---------------------------------------------
the Fund fails to comply with the Effective Leverage Ratio requirement as
provided in Section 2.4(c) as of any time as of which such compliance is
            --------------
required to be determined in accordance with Section 2.4(c) or (y) with respect
to the initial Series of VMTP Shares issued pursuant to this Statement, the Fund
fails to comply with the Effective Leverage Ratio requirement determined as set
forth in Section 6.13 of the Purchase Agreement applicable to such Series if
such requirement shall still be in effect in accordance with the terms of such
Purchase Agreement, or (z) with respect to any other Series of VMTP Shares
issued pursuant to the Statement, the Appendix or Purchase Agreement for which
includes additional requirements relating to the determination of the Effective
Leverage Ratio, the Fund fails to comply with the Effective Leverage Ratio
requirement determined pursuant to such Appendix or Purchase Agreement, and, in
any such case, such failure is not cured as of the close of business on the date
that is seven Business Days following the Business Day on which such
non-compliance is first determined (the "Effective Leverage Ratio Cure Date")
                                         ----------------------------------
other than as a result of the redemption required by this Section 2.5(b)(ii),
                                                          ------------------
the Fund shall not later than the close of business on the Business Day next
following the Effective Leverage Ratio Cure Date cause the Effective Leverage
Ratio (determined in accordance with the requirements applicable to the
determination of the Effective Leverage Ratio under this Statement, and under
the Appendix and Purchase Agreement for any applicable Series of VMTP Shares in
respect of which the Effective Leverage Ratio is being determined) to not exceed
the Effective Leverage Ratio required under Section 2.4(c) (without giving
                                            --------------
effect to the parenthetical provision in the first sentence of Section 2.4(c))
                                                               ---------------
as so determined, by (x) engaging


                                       19

<PAGE>

in transactions involving or relating to the floating rate securities not owned
by the Fund and/or the inverse floating rate securities owned by the Fund,
including the purchase, sale or retirement thereof, (y) to the extent permitted
by the 1940 Act and Massachusetts law, cause a notice of redemption to be
issued, and cause to be deposited Deposit Securities or other sufficient funds
in trust with the Redemption and Paying Agent or other applicable paying agent,
in each case in accordance with the terms of the Preferred Shares to be
redeemed, for the redemption of a sufficient number of Preferred Shares, which
at the Fund's sole option (to the extent permitted by the 1940 Act and
Massachusetts law) may include any number or proportion of VMTP Shares of any
Series, or (z) engaging in any combination of the actions contemplated by
clauses (x) and (y) of this Section 2.5(b)(ii)(A). In the event that any VMTP
                            ---------------------
Shares of a Series are to be redeemed pursuant to clause (y) of this Section
                                                                     -------
2.5(b)(ii)(A), the Fund shall redeem such VMTP Shares at a price per VMTP Share
-------------
equal to the Mandatory Redemption Price.

                    (B) On the Redemption Date for a redemption contemplated by
clause (y) of Section 2.5(b)(ii)(A), the Fund shall not redeem more than the
              ---------------------
maximum number of Preferred Shares that can be redeemed out of funds expected to
be legally available therefor in accordance with the Declaration and applicable
law. If the Fund is unable to redeem the required number of VMTP Shares and
other Preferred Shares which have been designated to be redeemed in accordance
with clause (y) of Section 2.5(b)(ii)(A) due to the unavailability of legally
                   ---------------------
available funds, the Fund shall redeem those VMTP Shares and other Preferred
Shares which it was unable to redeem on the earliest practicable date on which
it is able to effect such redemption. If fewer than all of the Outstanding VMTP
Shares of a Series are to be redeemed pursuant to clause (y) of Section
                                                                -------
2.5(b)(ii)(A), the number of VMTP Shares of such Series to be redeemed shall be
-------------
redeemed (A) pro rata among the Outstanding shares of such Series, (B) by lot or
(C) in such other manner as the Board of Trustees may determine to be fair and
equitable.

          (c) Optional Redemption.
              -------------------

               (i) Subject to the provisions of Section 2.5(c)(ii), the Fund may
                                                ------------------
at its option on any Business Day (an "Optional Redemption Date") redeem in
                                       ------------------------
whole or from time to time in part the Outstanding VMTP Shares of any Series, at
a redemption price per VMTP Share (the "Optional Redemption Price") equal to (x)
                                        -------------------------
the Liquidation Preference per VMTP Share of such Series plus (y) an amount
                                                         ----
equal to all unpaid dividends and other distributions on such VMTP Share of such
Series accumulated from and including the Date of Original Issue to (but
excluding) the Optional Redemption Date (whether or not earned or declared by
the Fund, but excluding interest thereon) plus (z) the Optional Redemption
                                          ----
Premium per share (if any) that is applicable to an optional redemption of VMTP
Shares of such Series that is effected on such Optional Redemption Date as set
forth in the Appendix relating to such Series.

               (ii) If fewer than all of the outstanding VMTP Shares of a Series
are to be redeemed pursuant to Section 2.5(c)(i), the shares of such Series to
                               -----------------
be redeemed shall be selected either (A) pro rata among the Holders of such
Series, (B) by lot or (C) in such other manner as the Board of Trustees may
determine to be fair and equitable. Subject to the provisions of this Statement
and applicable law, the Board of Trustees will have the full power and authority
to prescribe the terms and conditions upon which VMTP Shares will be redeemed
pursuant to this Section 2.5(c) from time to time.
                 --------------


                                       20

<PAGE>

               (iii) The Fund may not on any date deliver a Notice of Redemption
pursuant to Section 2.5(d) in respect of a redemption contemplated to be
            --------------
effected pursuant to this Section 2.5(c) unless on such date the Fund has
                          --------------
available Deposit Securities for the Optional Redemption Date contemplated by
such Notice of Redemption having a Market Value not less than the amount
(including any applicable premium) due to Holders of VMTP Shares by reason of
the redemption of such VMTP Shares on such Optional Redemption Date.

          (d) Procedures for Redemption.
              -------------------------

               (i) If the Fund shall determine or be required to redeem, in
whole or in part, VMTP Shares of a Series pursuant to Section 2.5(a), (b) or
                                                      -------------------
(c), the Fund shall deliver a notice of redemption (the "Notice of Redemption"),
---                                                      --------------------
by overnight delivery, by first class mail, postage prepaid or by Electronic
Means to Holders thereof, or request the Redemption and Paying Agent, on behalf
of the Fund, to promptly do so by overnight delivery, by first class mail,
postage prepaid or by Electronic Means. A Notice of Redemption shall be provided
not more than forty-five (45) calendar days and not less than twenty-five (25)
calendar days prior to the date fixed for redemption in such Notice of
Redemption (the "Redemption Date"). Each such Notice of Redemption shall state:
                 ---------------
(A) the Redemption Date; (B) the Series and number of VMTP Shares to be
redeemed; (C) the CUSIP number for VMTP Shares of such Series; (D) the
applicable Redemption Price on a per share basis; (E) if applicable, the place
or places where the certificate(s) for such shares (properly endorsed or
assigned for transfer, if the Board of Trustees requires and the Notice of
Redemption states) are to be surrendered for payment of the Redemption Price;
(F) that dividends on the VMTP Shares to be redeemed will cease to accumulate
from and after such Redemption Date; and (G) the provisions of this Statement
under which such redemption is made. If fewer than all VMTP Shares held by any
Holder are to be redeemed, the Notice of Redemption delivered to such Holder
shall also specify the number of VMTP Shares to be redeemed from such Holder
and/or the method of determining such number. The Fund may provide in any Notice
of Redemption relating to an optional redemption contemplated to be effected
pursuant to this Statement that such redemption is subject to one or more
conditions precedent and that the Fund shall not be required to effect such
redemption unless each such condition has been satisfied at the time or times
and in the manner specified in such Notice of Redemption. No defect in the
Notice of Redemption or delivery thereof shall affect the validity of redemption
proceedings, except as required by applicable law.

               (ii) If the Fund shall give a Notice of Redemption, then at any
time from and after the giving of such Notice of Redemption and prior to 12:00
noon, New York City time, on the Redemption Date (so long as any conditions
precedent to such redemption have been met or waived by the Fund), the Fund
shall (A) deposit with the Redemption and Paying Agent Deposit Securities having
an aggregate Market Value on the date thereof no less than the Redemption Price
of the VMTP Shares to be redeemed on the Redemption Date and (B) give the
Redemption and Paying Agent irrevocable instructions and authority to pay the
applicable Redemption Price to the Holders of the VMTP Shares called for
redemption on the Redemption Date. The Fund may direct the Redemption and Paying
Agent with respect to the investment of any Deposit Securities consisting of
cash so deposited prior to the Redemption Date, provided that the proceeds of
any such investment shall be available at the opening of business on the
Redemption Date as same day funds. Notwithstanding the provisions of clause (A)
of the preceding sentence, if the Redemption Date is the Term Redemption Date,
then such deposit of


                                       21

<PAGE>

Deposit Securities (which may come in whole or in part from the Term Redemption
Liquidity Account) shall be made no later than fifteen (15) calendar days prior
to the Term Redemption Date.

               (iii) Upon the date of the deposit of such Deposit Securities,
all rights of the Holders of the VMTP Shares so called for redemption shall
cease and terminate except the right of the Holders thereof to receive the
Redemption Price thereof and such VMTP Shares shall no longer be deemed
Outstanding for any purpose whatsoever (other than (A) the transfer thereof
prior to the applicable Redemption Date and (B) the accumulation of dividends
thereon in accordance with the terms hereof up to (but excluding) the applicable
Redemption Date, which accumulated dividends, unless previously declared and
paid as contemplated by the last sentence of Section 2.5(d)(vi) below, shall be
                                             ------------------
payable only as part of the applicable Redemption Price on the Redemption Date).
The Fund shall be entitled to receive, promptly after the Redemption Date, any
Deposit Securities in excess of the aggregate Redemption Price of the VMTP
Shares called for redemption on the Redemption Date. Any Deposit Securities so
deposited that are unclaimed at the end of three hundred and sixty five (365)
calendar days from the Redemption Date shall, to the extent permitted by law, be
repaid to the Fund, after which the Holders of the VMTP Shares so called for
redemption shall look only to the Fund for payment of the Redemption Price
thereof. The Fund shall be entitled to receive, from time to time after the
Redemption Date, any interest on the Deposit Securities so deposited.

               (iv) On or after the Redemption Date, each Holder of VMTP Shares
in certificated form (if any) that are subject to redemption shall surrender the
certificate(s) evidencing such VMTP Shares to the Fund at the place designated
in the Notice of Redemption and shall then be entitled to receive the Redemption
Price for such VMTP Shares, without interest, and, in the case of a redemption
of fewer than all the VMTP Shares represented by such certificate(s), a new
certificate representing the VMTP Shares that were not redeemed.

               (v) Notwithstanding the other provisions of this Section 2.5,
                                                                -----------
except as otherwise required by law, the Fund shall not redeem any VMTP Shares
or other series of Preferred Shares ranking on a parity with the VMTP Shares
with respect to dividends and other distributions unless all accumulated and
unpaid dividends and other distributions on all Outstanding VMTP Shares and such
other series of Preferred Shares for all applicable past dividend periods
(whether or not earned or declared by the Fund) (x) shall have been or are
contemporaneously paid or (y) shall have been or are contemporaneously declared
and Deposit Securities or sufficient funds (in accordance with the terms of such
VMTP Shares or other Preferred Shares) for the payment of such dividends and
other distributions shall have been or are contemporaneously deposited with the
Redemption and Paying Agent or other applicable paying agent for such VMTP
Shares or other Preferred Shares in accordance with the terms of such VMTP
Shares or other Preferred Shares, provided, however, that the foregoing shall
                                  --------  -------
not prevent the purchase or acquisition of Outstanding VMTP Shares pursuant to
an otherwise lawful purchase or exchange offer made on the same terms to Holders
of all Outstanding VMTP Shares and any such other series of Preferred Shares for
which all accumulated and unpaid dividends and other distributions have not been
paid.

               (vi) To the extent that any redemption for which Notice of
Redemption has been provided is not made by reason of the absence of legally
available funds therefor in


                                       22

<PAGE>

accordance with the Declaration and applicable law, such redemption shall be
made as soon as practicable to the extent such funds become available. In the
case of any redemption pursuant to Section 2.5(c), no Redemption Default shall
                                   --------------
be deemed to have occurred if the Fund shall fail to deposit in trust with the
Redemption and Paying Agent the Redemption Price with respect to any shares
where (1) the Notice of Redemption relating to such redemption provided that
such redemption was subject to one or more conditions precedent and (2) any such
condition precedent shall not have been satisfied at the time or times and in
the manner specified in such Notice of Redemption. Notwithstanding the fact that
a Notice of Redemption has been provided with respect to any VMTP Shares,
dividends may be declared and paid on such VMTP Shares in accordance with their
terms if Deposit Securities for the payment of the Redemption Price of such VMTP
Shares shall not have been deposited in trust with the Redemption and Paying
Agent for that purpose.

          (e) Redemption and Paying Agent as Trustee of Redemption Payments by
              ----------------------------------------------------------------
Fund. All Deposit Securities transferred to the Redemption and Paying Agent for
----
payment of the Redemption Price of VMTP Shares called for redemption shall be
held in trust by the Redemption and Paying Agent for the benefit of Holders of
VMTP Shares so to be redeemed until paid to such Holders in accordance with the
terms hereof or returned to the Fund in accordance with the provisions of
Section 2.5(d)(iii) above.
-------------------

          (f) Compliance With Applicable Law. In effecting any redemption
              ------------------------------
pursuant to this Section 2.5, the Fund shall use its best efforts to comply with
                 -----------
all applicable conditions precedent to effecting such redemption under the 1940
Act and any applicable Massachusetts law, but shall effect no redemption except
in accordance with the 1940 Act and any applicable Massachusetts law.

          (g) Modification of Redemption Procedures. Notwithstanding the
              -------------------------------------
foregoing provisions of this Section 2.5, the Fund may, in its sole discretion
                             -----------
and without a shareholder vote, modify the procedures set forth above with
respect to notification of redemption for the VMTP Shares, provided that such
modification does not materially and adversely affect the Holders of the VMTP
Shares or cause the Fund to violate any applicable law, rule or regulation; and
provided further that no such modification shall in any way alter the rights or
obligations of the Redemption and Paying Agent without its prior consent.

     2.6 Voting Rights.
         -------------

          (a) One Vote Per VMTP Share. Except as otherwise provided in the
              -----------------------
Declaration or as otherwise required by law, (i) each Holder of VMTP Shares
shall be entitled to one vote for each VMTP Share held by such Holder on each
matter submitted to a vote of shareholders of the Fund, and (ii) the holders of
outstanding Preferred Shares, including Outstanding VMTP Shares, and Common
Shares shall vote together as a single class; provided, however, that the
                                              --------  -------
holders of outstanding Preferred Shares, including Outstanding VMTP Shares,
shall be entitled, as a class, to the exclusion of the Holders of all other
securities and Common Shares of the Fund, to elect two trustees of the Fund at
all times. Subject to Section 2.6(b), the Holders of outstanding Common Shares
                      --------------
and Preferred Shares, including VMTP Shares, voting together as a single class,
shall elect the balance of the trustees.


                                       23

<PAGE>

          (b) Voting For Additional Trustees.
              ------------------------------

               (i) Voting Period. During any period in which any one or more of
                   -------------
the conditions described in clauses (A) or (B) of this Section 2.6(b)(i) shall
                                                       -----------------
exist (such period being referred to herein as a "Voting Period"), the number of
                                                  -------------
trustees constituting the Board of Trustees shall be automatically increased by
the smallest number that, when added to the two trustees elected exclusively by
the Holders of Preferred Shares, including VMTP Shares, would constitute a
majority of the Board of Trustees as so increased by such smallest number; and
the Holders of Preferred Shares, including VMTP Shares, shall be entitled,
voting as a class on a one-vote-per-share basis (to the exclusion of the Holders
of all other securities and classes of capital stock of the Fund), to elect such
smallest number of additional trustees, together with the two trustees that such
Holders are in any event entitled to elect. A Voting Period shall commence:

                    (A) if, at the close of business on any dividend payment
date for any outstanding Preferred Shares including any Outstanding VMTP Shares,
accumulated dividends (whether or not earned or declared) on such outstanding
Preferred Shares equal to at least two (2) full years' dividends shall be due
and unpaid and sufficient cash or specified securities shall not have been
deposited with the Redemption and Paying Agent or other applicable paying agent
for the payment of such accumulated dividends; or

                    (B) if at any time Holders of Preferred Shares are otherwise
entitled under the 1940 Act to elect a majority of the Board of Trustees.

     Upon the termination of a Voting Period, the voting rights described in
this Section 2.6(b)(i) shall cease, subject always, however, to the revesting of
     -----------------
such voting rights in the Holders of Preferred Shares upon the further
occurrence of any of the events described in this Section 2.6(b)(i).
                                                  -----------------

               (ii) Notice of Special Meeting. As soon as practicable after the
                    -------------------------
accrual of any right of the Holders of Preferred Shares to elect additional
trustees as described in Section 2.6(b)(i), the Fund shall call a special
                         -----------------
meeting of such Holders and notify the Redemption and Paying Agent and/or such
other Person as is specified in the terms of such Preferred Shares to receive
notice (i) by mailing or delivery by Electronic Means or (ii) in such other
manner and by such other means as are specified in the terms of such Preferred
Shares, a notice of such special meeting to such Holders, such meeting to be
held not less than ten (10) nor more than thirty (30) calendar days after the
date of the delivery by Electronic Means or mailing of such notice or the
delivery of such notice by such other means as are described in clause (ii)
above. If the Fund fails to call such a special meeting, it may be called at the
expense of the Fund by any such Holder on like notice. The record date for
determining the Holders of Preferred Shares entitled to notice of and to vote at
such special meeting shall be the close of business on the fifth (5th) Business
Day preceding the calendar day on which such notice is mailed or otherwise
delivered. At any such special meeting and at each meeting of Holders of
Preferred Shares held during a Voting Period at which trustees are to be
elected, such Holders, voting together as a class (to the exclusion of the
Holders of all other securities and classes of capital stock of the Fund), shall
be entitled to elect the number of trustees prescribed in Section 2.6(b)(i) on a
                                                          -----------------
one-vote-per-share basis.


                                       24

<PAGE>

               (iii) Terms of Office of Existing Trustees. The terms of office
                     ------------------------------------
of the incumbent trustees of the Fund at the time of a special meeting of
Holders of Preferred Shares to elect additional trustees in accordance with
Section 2.6(b)(i) shall not be affected by the election at such meeting by the
-----------------
Holders of VMTP Shares and such other Holders of Preferred Shares of the number
of trustees that they are entitled to elect, and the trustees so elected by the
Holders of VMTP Shares and such other Holders of Preferred Shares, together with
the two (2) trustees elected by the Holders of Preferred Shares in accordance
with Section 2.6(a) hereof and the remaining trustees elected by the holders of
     --------------
the Common Shares and Preferred Shares, shall constitute the duly elected
trustees of the Fund.

               (iv) Terms of Office of Certain Trustees to Terminate Upon
                    -----------------------------------------------------
Termination of Voting Period. Simultaneously with the termination of a Voting
----------------------------
Period, the terms of office of the additional trustees elected by the Holders of
the Preferred Shares pursuant to Section 2.6(b)(i) shall terminate, the
                                 -----------------

remaining trustees shall constitute the trustees of the Fund and the voting
rights of the Holders of Preferred Shares to elect additional trustees pursuant
to Section 2.6(b)(i) shall cease, subject to the provisions of the last sentence
   -----------------
of Section 2.6(b)(i).
   -----------------

          (c) Holders of VMTP Shares to Vote on Certain Matters.
              -------------------------------------------------

               (i) Certain Amendments Requiring Approval of VMTP Shares. Except
                   ----------------------------------------------------
as otherwise permitted by Sections 2.5(g) or 2.17, so long as any VMTP Shares
                          ---------------    ----
are Outstanding, the Fund shall not, without the affirmative vote or consent of
the Holders of at least a majority of the VMTP Shares of all Series Outstanding
at the time, voting together as a separate class, amend, alter or repeal the
provisions of the Declaration, or this Statement, whether by merger,
consolidation or otherwise, so as to materially and adversely affect any
preference, right or power of such VMTP Shares or the Holders thereof; provided,
                                                                       --------
however, that (i) a change in the capitalization of the Fund in accordance with
-------
Section 2.8 hereof shall not be considered to materially and adversely affect
-----------
the rights and preferences of the VMTP Shares, and (ii) a division of a VMTP
Share shall be deemed to materially and adversely affect such preferences,
rights or powers only if the terms of such division materially and adversely
affect the Holders of the VMTP Shares. For purposes of the foregoing, no matter
shall be deemed to materially and adversely affect any preference, right or
power of a VMTP Share of any Series or the Holder thereof unless such matter (i)
alters or abolishes any preferential right of such VMTP Share, or (ii) creates,
alters or abolishes any right in respect of redemption of such VMTP Share (other
than solely as a result of a division of a VMTP Share). So long as any VMTP
Shares are Outstanding, the Fund shall not, without the affirmative vote or
consent of at least 66 2/3% of the Holders of the VMTP Shares Outstanding at the
time, voting as a separate class, file a voluntary application for relief under
Federal bankruptcy law or any similar application under state law for so long as
the Fund is solvent and does not foresee becoming insolvent.

               (ii) 1940 Act Matters. Unless a higher percentage is provided for
                    ----------------
in the Declaration, the affirmative vote of the Holders of at least "a majority
of the outstanding Preferred Shares," including VMTP Shares Outstanding at the
time, voting as a separate class, shall be required (A) to approve any
conversion of the Fund from a closed-end to an open-end investment company, (B)
to approve any plan of reorganization (as such term is used in the 1940 Act)
adversely affecting such shares, or (C) to approve any other action requiring a
vote of security holders of the Fund under Section 13(a) of the 1940 Act. For
purposes of the foregoing,


                                       25

<PAGE>

the vote of a "majority of the outstanding Preferred Shares" means the vote at
an annual or special meeting duly called of (i) sixty-seven percent (67%) or
more of such shares present at a meeting, if the Holders of more than fifty
percent (50%) of such shares are present or represented by proxy at such
meeting, or (ii) more than fifty percent (50%) of such shares, whichever is
less.

               (iii) Certain Amendments Requiring Approval of Specific Series of
                     -----------------------------------------------------------
VMTP Shares. Except as otherwise permitted by Sections 2.5(g) or 2.17, so long
-----------                                   ---------------    ----
as any VMTP Shares of a Series are Outstanding, the Fund shall not, without the
affirmative vote or consent of the Holders of at least a majority of the VMTP
Shares of such Series, Outstanding at the time, voting as a separate class,
amend, alter or repeal the provisions of the Appendix relating to such Series,
whether by merger, consolidation or otherwise, so as to materially and adversely
affect any preference, right or power set forth in such Appendix of the VMTP
Shares of such Series or the Holders thereof; provided, however, that (i) a
                                              --------  -------
change in the capitalization of the Fund in accordance with Section 2.8 hereof
                                                            -----------
shall not be considered to materially and adversely affect the rights and
preferences of the VMTP Shares of such Series, and (ii) a division of a VMTP
Share shall be deemed to affect such preferences, rights or powers only if the
terms of such division materially and adversely affect the Holders of the VMTP
Shares of such Series; and provided, further, that no amendment, alteration or
                           --------  -------
repeal of (1) the obligation of the Fund to (x) pay the Term Redemption Price on
the Term Redemption Date for a Series, (y) accumulate dividends at the Dividend
Rate (as set forth in this Statement and the applicable Appendix hereto) for a
Series, or (z) pay the Optional Redemption Premium (if any) provided for in the
Appendix for such Series, or (2) the provisions of the Appendix for such Series
setting forth the Liquidation Preference for the VMTP Shares of such Series,
shall be effected without, in each case, the prior unanimous vote or consent of
the Holders of such Series of VMTP Shares. For purposes of the foregoing, no
matter shall be deemed to adversely affect any preference, right or power of a
VMTP Share of a Series or the Holder thereof unless such matter (i) alters or
abolishes any preferential right of such VMTP Share, or (ii) creates, alters or
abolishes any right in respect of redemption of such VMTP Share.

          (d) Voting Rights Set Forth Herein Are Sole Voting Rights. Unless
              -----------------------------------------------------
otherwise required by law or the Declaration, the Holders of VMTP Shares shall
not have any relative rights or preferences or other special rights with respect
to voting such VMTP Shares other than those specifically set forth in this
Section 2.6; provided, however, that nothing in this Statement shall be deemed
-----------  --------  -------
to preclude or limit the right of the Fund (to the extent permitted by
applicable law) to contractually agree with any Holder or Designated Owner of
VMTP Shares of any Series that any action or inaction by the Fund shall require
the consent or approval of such Holder or Designated Owner.

          (e) No Cumulative Voting. The Holders of VMTP Shares shall have no
              --------------------
rights to cumulative voting.

          (f) Voting for Trustees Sole Remedy for Fund's Failure to Declare or
              ----------------------------------------------------------------
Pay Dividends. In the event that the Fund fails to declare or pay any dividends
-------------
on any Series of VMTP Shares on the Dividend Payment Date therefor, the
exclusive remedy of the Holders of the VMTP Shares shall be the right to vote
for trustees pursuant to the provisions of this Section 2.6. Nothing in this
                                                -----------
Section 2.6(f) shall be deemed to affect the obligation of the Fund to
--------------


                                       26

<PAGE>

accumulate and, if permitted by applicable law, the Declaration and this
Statement, pay dividends at the Increased Rate in the circumstances contemplated
by Section 2.2(g) hereof.
   --------------

          (g) Holders Entitled to Vote. For purposes of determining any rights
              ------------------------
of the Holders of VMTP Shares to vote on any matter, whether such right is
created by this Statement, by the Declaration, by statute or otherwise, no
Holder of VMTP Shares shall be entitled to vote any VMTP Share and no VMTP Share
shall be deemed to be "Outstanding" for the purpose of voting or determining the
number of shares required to constitute a quorum if, prior to or concurrently
with the time of determination of shares entitled to vote or the time of the
actual vote on the matter, as the case may be, the requisite Notice of
Redemption with respect to such VMTP Share shall have been given in accordance
with this Statement and Deposit Securities for the payment of the Redemption
Price of such VMTP Share shall have been deposited in trust with the Redemption
and Paying Agent for that purpose. No VMTP Share held (legally or beneficially)
or controlled by the Fund shall have any voting rights or be deemed to be
outstanding for voting or for calculating the voting percentage required on any
other matter or other purposes.

     2.7 Rating Agencies.
         ---------------

     The Fund shall use commercially reasonable efforts to cause the Rating
Agencies to issue long-term credit ratings with respect to each Series of VMTP
Shares for so long as such Series is Outstanding. The Fund shall use
commercially reasonable efforts to comply with any applicable Rating Agency
Guidelines. If a Rating Agency shall cease to rate the securities of tax-exempt
closed-end management investment companies generally, the Board of Trustees
shall terminate the designation of such Rating Agency as a Rating Agency
hereunder. The Board of Trustees may elect to terminate the designation of any
Rating Agency as a Rating Agency hereunder with respect to a Series of VMTP
Shares so long as either (i) immediately following such termination, there would
be at least two Rating Agencies with respect to such Series or (ii) it replaces
the terminated Rating Agency with another NRSRO and provides notice thereof to
the Holders of such Series; provided that such replacement shall not occur
                            --------
unless such replacement Other Rating Agency shall have at the time of such
replacement (i) published a rating for the VMTP Shares of such Series and (ii)
entered into an agreement with the Fund to continue to publish such rating
subject to the Rating Agency's customary conditions. The Board of Trustees may
also elect to designate one or more other NRSROs as Other Rating Agencies
hereunder with respect to a Series of VMTP Shares by notice to the Holders of
the VMTP Shares. The Rating Agency Guidelines of any Rating Agency may be
amended by such Rating Agency without the vote, consent or approval of the Fund,
the Board of Trustees or any Holder of Preferred Shares, including any VMTP
Shares, or Common Shares.

     2.8 Issuance of Additional Preferred Shares.
         ---------------------------------------

     So long as any VMTP Shares are Outstanding, the Fund may, without the vote
or consent of the Holders thereof, authorize, establish and create and issue and
sell shares of one or more series of a class of senior securities of the Fund
representing stock under Section 18 of the 1940 Act ranking on a parity with
VMTP Shares as to the payment of dividends and the distribution of assets upon
dissolution, liquidation or the winding up of the affairs of the Fund, in
addition to then Outstanding Series of VMTP Shares, and authorize, issue and
sell additional shares of any


                                       27

<PAGE>

such Series of Preferred Stock then outstanding or so established and created,
including additional Series of VMTP Shares, in each case in accordance with
applicable law, provided that the Fund shall, immediately after giving effect to
the issuance of such Preferred Shares and to its receipt and application of the
proceeds thereof, including to the redemption of Preferred Shares with such
proceeds, have Asset Coverage (calculated in the same manner as is contemplated
by Section 2.4(b) hereof) of at least 225%.
   --------------

     2.9 Status of Redeemed or Repurchased VMTP Shares.
         ---------------------------------------------

     VMTP Shares that at any time have been redeemed or purchased by the Fund
shall, after such redemption or purchase, have the status of authorized but
unissued Preferred Shares.

     2.10 Distributions with respect to Taxable Allocations.
          -------------------------------------------------

     Whenever a Taxable Allocation is to be paid by the Fund with respect to the
VMTP Shares of a Series with respect to any Dividend Period and the Maximum Rate
is not in effect during such Dividend Period, the Fund shall comply with one of
clause (a), clause (b) or clause (c) of this Section 2.10:
                                             ------------

          (a) The Fund may provide notice to the Redemption and Paying Agent
prior to the commencement of any Dividend Period for a Series of VMTP Shares of
the amount of the Taxable Allocation that will be made in respect of shares of
such Series for such Dividend Period (a "Notice of Taxable Allocation"). Such
                                         ----------------------------
Notice of Taxable Allocation will state the amount of the Taxable Allocation
allocable to dividends payable in respect of each VMTP Share of the applicable
Series for such Dividend Period, the extent to which such amount will be treated
as a capital gain dividend (as defined in Section 852(b)(3)(C) of the Code) or
an income dividend for federal income tax purposes for such period, and the
adjustment to the Dividend Rate for each Rate Period (or portion thereof)
included in such Dividend Period that will be required to pay the Additional
Amount Payment in respect of the Taxable Allocation allocated to such VMTP Share
for such Dividend Period. In lieu of adjusting the Dividend Rate, the Fund may
make, in addition to and in conjunction with the payment of regular dividends
for such Dividend Period, a supplemental distribution in respect of each VMTP
Share of such Series for such Dividend Period equal to the Additional Amount
Payment payable in respect of the Taxable Allocation allocated to such VMTP
Share for such Dividend Period. The Fund will use commercially reasonable
efforts to effect the distribution of amounts equal to Taxable Allocations in
respect of VMTP Shares of each Series as provided in this Section 2.10(a), and
                                                          ---------------
shall only effect the distribution of an amount equal to a Taxable Allocation
pursuant to Section 2.10(b) and/or Section 2.10(c) if such commercially
            ---------------        ---------------
reasonable efforts do not reasonably permit the Fund to effect the distribution
of that amount pursuant to this Section 2.10(a). No adjustment shall be made to
                                ---------------
the Dividend Rate by reason of a Taxable Allocation unless prior notice has been
given in accordance with this Section 2.10(a).
                              ---------------

          (b) If the Fund does not provide a Notice of Taxable Allocation as
provided in Section 2.10(a) with respect to a Taxable Allocation that is made in
            ---------------
respect of VMTP Shares of a Series, the Fund may make one or more supplemental
distributions on shares of such Series equal to the amount of such Taxable
Allocation. Any such supplemental distribution in respect of VMTP Shares of a
Series may be declared and paid on any date, without reference to any


                                       28

<PAGE>

regular Dividend Payment Date, to the Holders of VMTP Shares of such Series as
their names appear on the registration books of the Fund on such date, not
exceeding fifteen (15) calendar days preceding the payment date of such
supplemental distribution, as may be fixed by the Board of Trustees. To the
extent practicable, as determined in good faith by the Fund, the Fund will give
notice to the Redemption and Paying Agent of the intention to make such
supplemental distribution prior to the date for (and, if practicable as
determined in good faith by the Fund, prior to the record date for) such
supplemental distribution.

          (c) If in connection with a redemption of VMTP Shares of a Series, the
Fund makes a Taxable Allocation without having either given advance notice
thereof pursuant to Section 2.10(a) or made one or more supplemental
                    ---------------
distributions pursuant to Section 2.10(b), the Fund shall direct the Redemption
                          ---------------
and Paying Agent to send an Additional Amount Payment in respect of such Taxable
Allocation to each Holder of VMTP Shares of such Series at such Holder's address
as the same appears or last appeared on the record books of the Fund.

          (d) Except as required by any Purchase Agreement applicable to a
particular Series of VMTP Shares, for so long as the applicable provisions of
such Purchase Agreement shall be in effect, the Fund shall not be required to
pay Additional Amount Payments with respect to VMTP Shares of any Series with
respect to any net capital gain or other taxable income determined by the
Internal Revenue Service to be allocable in a manner different from the manner
used by the Fund. The Fund will promptly give notice to the Redemption and
Paying Agent of any such determination, with instructions to forward such notice
to each Holder of affected VMTP Shares of such Series during the affected
periods at such Holder's address as the same appears or last appeared on the
record books of the Fund.


                                       29

<PAGE>

     2.11 Term Redemption Liquidity Account and Liquidity Requirement.
          -----------------------------------------------------------

          (a) On or prior to the Liquidity Account Initial Date with respect to
any Series of VMTP Shares, the Fund shall cause the Custodian to segregate, by
means of appropriate identification on its books and records or otherwise in
accordance with the Custodian's normal procedures, from the other assets of the
Fund (the "Term Redemption Liquidity Account") Liquidity Account Investments
           ---------------------------------
with a Market Value equal to at least One Hundred and Ten Percent (110%) of the
Term Redemption Amount with respect to such Series. The "Term Redemption Amount"
                                                         ----------------------
for any Series of VMTP Shares shall be equal to the Term Redemption Price to be
paid on the Term Redemption Date for such Series, based on the number of shares
of such Series then Outstanding, assuming for this purpose that the Dividend
Rate for such Series in effect at the time of the creation of the Term
Redemption Liquidity Account for such Series will be the Dividend Rate in effect
for such Series until the Term Redemption Date for such Series. If, on any date
after the Liquidity Account Initial Date, the aggregate Market Value of the
Liquidity Account Investments included in the Term Redemption Liquidity Account
for a Series of VMTP Shares as of the close of business on any Business Day is
less than one hundred and ten percent (110%) of the Term Redemption Amount with
respect to such Series, then the Fund shall cause the Custodian and the Adviser
to take all such necessary actions, including segregating additional assets of
the Fund as Liquidity Account Investments, so that the aggregate Market Value of
the Liquidity Account Investments included in the Term Redemption Liquidity
Account for such Series is at least equal to one hundred and ten percent (110%)
of the Term Redemption Amount with respect to such Series not later than the
close of business on the next succeeding Business Day. With respect to assets of
the Fund segregated as Liquidity Account Investments with respect to a Series of
VMTP Shares, the Adviser, on behalf of the Fund, shall be entitled to instruct
the Custodian on any date to release any Liquidity Account Investments from such
segregation and to substitute therefor other Liquidity Account Investments, so
long as (i) the assets of the Fund segregated as Liquidity Account Investments
at the close of business on such date have a Market Value equal to at least one
hundred and ten percent (110%) of the Term Redemption Amount with respect to
such Series and (ii) the assets of the Fund designated and segregated as Deposit
Securities at the close of business on such date have a Market Value equal to at
least the Liquidity Requirement (if any) determined in accordance with Section
                                                                       -------
2.11(b) below with respect to such Series for such date. The Fund shall cause
-------
the Custodian not to permit any lien, security interest or encumbrance to be
created or permitted to exist on or in respect of any Liquidity Account
Investments included in the Term Redemption Liquidity Account for any Series of
VMTP Shares, other than liens, security interests or encumbrances arising by
operation of law and any lien of the Custodian with respect to the payment of
its fees or repayment for its advances.


                                       30

<PAGE>

          (b) The Market Value of the Deposit Securities held in the Term
Redemption Liquidity Account for a Series of VMTP Shares, from and after the
15th day of the calendar month (or if such day is not a Business Day, the next
succeeding Business Day) that is the number of months preceding the calendar
month in which the Term Redemption Date for such Series occurs, in each case as
specified in the table set forth below, shall not be less than the percentage of
the Term Redemption Amount for such Series set forth below opposite such number
of months (the "Liquidity Requirement"), but in all cases subject to the
                ---------------------
provisions of Section 2.11(c) below:
              ---------------

           ---------------------   ------------------------
                                       Value of Deposit
                                       ----------------
             Number of Months      Securities as Percentage
             ----------------      ------------------------
            Preceding Month of        of Term Redemption
            ------------------        ------------------
           Term Redemption Date:            Amount
           ---------------------            ------
           ---------------------   ------------------------
                     5                        20%
           ---------------------   ------------------------
                     4                        40%
           ---------------------   ------------------------
                     3                        60%
           ---------------------   ------------------------
                     2                        80%
           ---------------------   ------------------------
                     1                       100%
           ---------------------   ------------------------

          (c) If the aggregate Market Value of the Deposit Securities included
in the Term Redemption Liquidity Account for a Series of VMTP Shares as of the
close of business on any Business Day is less than the Liquidity Requirement in
respect of such Series for such Business Day, then the Fund shall cause the
segregation of additional or substitute Deposit Securities in respect of the
Term Redemption Liquidity Account for such Series, so that the aggregate Market
Value of the Deposit Securities included in the Term Redemption Liquidity
Account for such Series is at least equal to the Liquidity Requirement for such
Series not later than the close of business on the next succeeding Business Day.

          (d) The Deposit Securities included in the Term Redemption Liquidity
Account for a Series of VMTP Shares may be applied by the Fund, in its
discretion, towards payment of the Term Redemption Price for such Series as
contemplated by Section 2.5(d). Upon the deposit by the Fund with the Redemption
                --------------
and Paying Agent of Deposit Securities having an initial combined Market Value
sufficient to effect the redemption of the VMTP Shares of a Series on the Term
Redemption Date for such Series in accordance with Section 2.5(d)(ii), the
                                                   ------------------
requirement of the Fund to maintain the Term Redemption Liquidity Account as
contemplated by this Section 2.11 shall lapse and be of no further force and
                     ------------
effect.

     2.12 Global Certificate.
          ------------------

     Prior to the commencement of a Voting Period, (i) all VMTP Shares of any
Series Outstanding from time to time shall be represented by one global
certificate for such Series registered in the name of the Securities Depository
or its nominee and (ii) no registration of transfer of shares of such Series of
VMTP Shares shall be made on the books of the Fund to any Person other than the
Securities Depository or its nominee or transferee. The foregoing


                                       31

<PAGE>

restriction on registration of transfer shall be conspicuously noted on the face
or back of the global certificates.

     2.13 Notice.
          ------

     All notices or communications hereunder, unless otherwise specified in this
Statement, shall be sufficiently given if in writing and delivered in person, by
telecopier, by Electronic Means or by overnight delivery. Notices delivered
pursuant to this Section 2.13 shall be deemed given on the date
                 ------------
received.

     2.14 Termination.
          -----------

     In the event that no VMTP Shares of a Series are Outstanding, all rights
and preferences of the VMTP Shares of such Series established and designated
hereunder shall cease and terminate, and all obligations of the Fund under this
Statement with respect to such Series shall terminate.

     2.15 Appendices.
          ----------

     The designation of each Series of VMTP Shares shall be set forth in an
Appendix to this Statement. The Board of Trustees may, by resolution duly
adopted, without shareholder approval (except as otherwise provided by this
Statement or required by applicable law) (1) amend the Appendix to this
Statement relating to a Series so as to reflect any amendments to the terms
applicable to such Series including an increase in the number of authorized
shares of such Series and (2) add additional Series of VMTP Shares by including
a new Appendix to this Statement relating to such Series.

     2.16 Actions on Other than Business Days.
          -----------------------------------

     Unless otherwise provided herein, if the date for making any payment,
performing any act or exercising any right, in each case as provided for in this
Statement, is not a Business Day, such payment shall be made, act performed or
right exercised on the next succeeding Business Day, with the same force and
effect as if made or done on the nominal date provided therefor, and, with
respect to any payment so made, no dividends, interest or other amount shall
accrue for the period between such nominal date and the date of payment.

     2.17 Modification.
          ------------

     To the extent permitted by applicable law, the Board of Trustees, without
the vote of the Holders of VMTP Shares, may interpret or adjust the provisions
of this Statement or any Appendix hereto to resolve any inconsistency or
ambiguity or to remedy any formal defect, and, in addition to amendments
permitted by Sections 2.5(g) and 2.6(c) hereof, may amend this Statement with
             ---------------     ------
respect to any Series of VMTP Shares prior to the issuance of VMTP Shares of
such Series.


                                       32

<PAGE>

     2.18 Transfers.
          ---------

          (a) Unless otherwise permitted by the Fund, a Designated Owner or
Holder of any VMTP Shares of any Series may sell, transfer or otherwise dispose
of VMTP Shares only in whole shares and only to (i) Persons that such Designated
Owner or Holder reasonably believes are "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act or any successor provision) in
accordance with Rule 144A under the Securities Act or any successor provision
that are registered closed-end management investment companies, the shares of
which are traded on a national securities exchange ("Closed-End Funds"), banks,
                                                     ----------------
insurance companies or registered open-end management investment companies, (ii)
tender option bond trusts (whether tax-exempt or taxable) in which all investors
are Persons that such Designated Owner or Holder reasonably believes are
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act or any successor provision) that are Closed-End Funds, banks, insurance
companies, or registered open-end management investment companies (or, in the
case of a tender option bond trust in which such Holder or Designated Owner
retains a residual interest, an affiliate of any of the foregoing expressly
provided for in any applicable Purchase Agreement), or (iii) other investors
with the prior written consent of the Fund. The restrictions on transfer
contained in this Section 2.18(a) shall not apply to any VMTP Shares that are
                  ---------------
being registered and sold pursuant to an effective registration statement under
the Securities Act or to any subsequent transfer of such VMTP Shares.

          (b) If at any time the Fund is not furnishing information pursuant to
Section 13 or 15(d) of the Exchange Act, in order to preserve the exemption for
resales and transfers under Rule 144A, the Fund shall furnish, or cause to be
furnished, to holders of VMTP Shares and prospective purchasers of VMTP Shares,
upon request, information with respect to the Fund satisfying the requirements
of subsection (d)(4) of Rule 144A.

     2.19 No Additional Rights.
          --------------------

     Unless otherwise required by law or the Declaration, the Holders of VMTP
Shares shall not have any relative rights or preferences or other special rights
with respect to such VMTP Shares other than those specifically set forth in this
Statement; provided, however, that nothing in this Statement shall be
           --------  -------
deemed to preclude or limit the right of the Fund (to the extent permitted by
applicable law) to contractually agree with any Holder or Designated Owner of
VMTP Shares of any Series with regard to any special rights of such Holder or
Designated Owner with respect to its investment in the Fund.

                  [Signature Page Begins on the Following Page]


                                       33

<PAGE>

     IN WITNESS WHEREOF, Nuveen Insured Tax-Free Advantage Municipal Fund has
caused this Statement to be signed on ___________ __, 2011 in its name and on
its behalf by a duly authorized officer. The Declaration is on file with the
Secretary of State of the Commonwealth of Massachusetts, and the said officer of
the Fund has executed this Statement as an officer and not individually, and the
obligations and rights set forth in this Statement are not binding upon any such
officer, or the trustees of the Fund or shareholders of the Fund, individually,
but are binding only upon the assets and property of the Fund.

                                     NUVEEN INSURED TAX-FREE
                                     ADVANTAGE MUNICIPAL FUND


                                     By:
                                         ---------------------------------------
                                         Name:  Kevin J. McCarthy
                                         Title: Vice President and Secretary



























     [Signature Page to the Statement Establishing and Fixing the Rights and
          Preferences of Variable Rate MuniFund Term Preferred Shares]

<PAGE>

                                                                      APPENDIX A

                NUVEEN INSURED TAX-FREE ADVANTAGE MUNICIPAL FUND

            VARIABLE RATE MUNIFUND TERM PREFERRED SHARES, SERIES 2014

              Preliminary Statement and Incorporation By Reference
              ----------------------------------------------------

     This Appendix establishes a Series of Variable Rate MuniFund Term Preferred
Shares of Nuveen Insured Tax-Free Advantage Municipal Fund Except as set forth
below, this Appendix incorporates by reference the terms set forth with respect
to all Series of such Variable Rate Municipal Term Preferred Shares in that
"Statement Establishing and Fixing the Rights and Preferences of Variable Rate
MuniFund Term Preferred Shares" dated July 27, 2011 (the "VMTP Statement"). This
                                                          --------------
Appendix has been adopted by resolution of the Board of Trustees of Nuveen
Insured Tax-Free Advantage Municipal Fund Capitalized terms used herein but not
defined herein have the respective meanings therefor set forth in the VMTP
Statement.

Section 1. Designation as to Series.
           ------------------------

     Variable Rate MuniFund Term Preferred Shares, Series 2014: A series of Six
Hundred Seventy-Six (676) Preferred Shares classified as Variable Rate MuniFund
Term Preferred Shares is hereby designated as the "Variable Rate MuniFund Term
Preferred Shares, Series 2014" (the "Series 2014 VMTP Shares"). Each share of
                                     -----------------------
such Series shall have such preferences, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption, in addition to those required by applicable law
and those that are expressly set forth in the Declaration and the VMTP Statement
(except as the VMTP Statement may be expressly modified by this Appendix), as
are set forth in this Appendix A. The Series 2014 VMTP Shares shall constitute a
                      ----------
separate series of Preferred Shares and of the Variable Rate MuniFund Term
Preferred Shares and each Series 2014 VMTP Share shall be identical. The
following terms and conditions shall apply solely to the Series 2014 VMTP
Shares:

Section 2. Number of Authorized Shares of Series.
           -------------------------------------

     The number of authorized shares is Six Hundred Seventy-Six (676).

Section 3. Date of Original Issue with respect to Series.
           ---------------------------------------------

     The Date of Original Issue is July 28, 2011.

Section 4. Liquidation Preference Applicable to Series.
           -------------------------------------------

     The Liquidation Preference is $100,000.00 per share.

Section 5. Term Redemption Date Applicable to Series.
           -----------------------------------------

     The Term Redemption Date is August 1, 2014.


                                       A-1

<PAGE>

Section 6. Dividend Payment Dates Applicable to Series.
           -------------------------------------------

     The Dividend Payment Dates are the first Business Day of the month next
following each Dividend Period.

Section 7. Liquidity Account Initial Date Applicable to Series.
           ---------------------------------------------------

     The Liquidity Account Initial Date is February 1, 2014.

Section 8. Exceptions to Certain Definitions Applicable to the Series.
           ----------------------------------------------------------

     The following definitions contained under the heading "Definitions" in the
VMTP Statement are hereby amended as follows:

     Not applicable.

Section 9. Additional Definitions Applicable to the Series.
           -----------------------------------------------

     The following terms shall have the following meanings (with terms defined
in the singular having comparable meanings when used in the plural and vice
versa), unless the context otherwise requires:

     "Dividend Period" means, with respect to the Series 2014 VMTP Shares, in
      ---------------
the case of the first Dividend Period, the period beginning on the Date of
Original Issue for such Series and ending on and including August 31, 2011 and
for each subsequent Dividend Period, the period beginning on and including the
first calendar day of the month following the month in which the previous
Dividend Period ended and ending on and including the last calendar day of such
month.

     "Optional Redemption Premium" means with respect to each Series 2014 VMTP
      ---------------------------
Share to be redeemed an amount equal to

     (A) if the Optional Redemption Date for such Series 2014 VMTP Share occurs
prior to August 1, 2012, the product of (i) 1.25%, (ii) the Liquidation
Preference of such VMTP Share and (iii) a fraction, the numerator of which is
the number of days from and including the date of redemption to and including
July 31, 2012 and the denominator of which is the actual number of days from and
including August 1, 2011 to and including July 31, 2012; or

     (B) if the Optional Redemption Date for such Series 2014 VMTP Share either
occurs on or after August 1, 2012, none.


                                       A-2

<PAGE>

Section 10. Amendments to Terms of VMTP Shares Applicable to the Series.
            -----------------------------------------------------------

     The following provisions contained under the heading "Terms of the VMTP
Shares" in the VMTP Statement are hereby amended as follows:

     Not applicable.

                            [Signature page follows.]


                                       A-3

<PAGE>

     IN WITNESS WHEREOF, Nuveen Insured Tax-Free Advantage Municipal Fund has
caused this Appendix to be signed on July __, 2011 in its name and on its behalf
by a duly authorized officer. The Declaration is on file with the Secretary of
State of the Commonwealth of Massachusetts, and the said officer of the Fund has
executed this Statement as an officer and not individually, and the obligations
and rights set forth in this Statement are not binding upon any such officer, or
the trustees of the Fund or shareholders of the Fund, individually, but are
binding only upon the assets and property of the Fund.

                                     NUVEEN INSURED TAX-FREE
                                     ADVANTAGE MUNICIPAL FUND


                                     By:
                                         ---------------------------------------
                                         Name:  Kevin J. McCarthy
                                         Title: Vice President and Secretary



























     [Signature Page to the Appendix Establishing and Fixing the Rights and
          Preferences of Variable Rate MuniFund Term Preferred Shares]
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
