<SEC-DOCUMENT>0001083839-12-000019.txt : 20120117
<SEC-HEADER>0001083839-12-000019.hdr.sgml : 20120116
<ACCEPTANCE-DATETIME>20120117161411
ACCESSION NUMBER:		0001083839-12-000019
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 DIVIDEND ADVANTAGE MUNICIPAL INCOME FUND
		CENTRAL INDEX KEY:			0001090116
		IRS NUMBER:				752998730
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		NSAR-B/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-09475
		FILM NUMBER:		12529774

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

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

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND
		DATE OF NAME CHANGE:	19990709
</SEC-HEADER>
<DOCUMENT>
<TYPE>NSAR-B/A
<SEQUENCE>1
<FILENAME>answer.fil
<TEXT>
<PAGE>      PAGE  1
000 B000000 10/31/2011
000 C000000 0001090116
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 Y
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 NUVEEN INSURED DIVIDEND ADVANTAGE MUNI FUND
001 B000000 811-09475
001 C000000 3129178200
002 A000000 333 WEST WACKER DRIVE
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60606
002 D020000 1286
003  000000 N
004  000000 N
005  000000 N
006  000000 N
007 A000000 N
007 B000000  0
007 C010100  1
007 C010200  2
007 C010300  3
007 C010400  4
007 C010500  5
007 C010600  6
007 C010700  7
007 C010800  8
007 C010900  9
007 C011000 10
008 A000001 NUVEEN FUND ADVISORS, INC.
008 B000001 A
008 C000001 801-14147
008 D010001 CHICAGO
008 D020001 IL
008 D030001 60606
008 D040001 1286
008 A000002 NUVEEN ASSET MANAGEMENT, LLC
008 B000002 S
008 C000002 801-71957
008 D010002 CHICAGO
008 D020002 IL
008 D030002 60606
008 D040002 1286
012 A000001 EQUISERVE INC.
012 B000001 84-05925
012 C010001 PROVIDENCE
012 C020001 RI
<PAGE>      PAGE  2
012 C030001 02940
013 A000001 ERNST & YOUNG LLP
013 B010001 CHICAGO
013 B020001 IL
013 B030001 60606
014 A000001 NUVEEN INVESTMENTS, LLC
014 B000001 8-13464
015 A000001 STATE STREET BANK AND TRUST COMPANY
015 B000001 C
015 C010001 BOSTON
015 C020001 MA
015 C030001 02110
015 E010001 X
018  000000 Y
019 A000000 Y
019 B000000  241
019 C000000 NUVEENFUND
020 C000001      0
020 C000002      0
020 C000003      0
020 C000004      0
020 C000005      0
020 C000006      0
020 C000007      0
020 C000008      0
020 C000009      0
020 C000010      0
021  000000        0
022 A000001 JP MORGAN CHASE
022 B000001 13-3224016
022 C000001      3412
022 D000001      7336
022 A000002 RBC DOMINION
022 B000002 13-5033225
022 C000002      9662
022 D000002         0
022 A000003 MORGAN STANLEY
022 B000003 13-2655998
022 C000003      9637
022 D000003         0
022 A000004 CITIGROUP
022 B000004 13-3214963
022 C000004      7116
022 D000004         0
022 A000005 GEORGE K. BAUM & CO.
022 B000005 44-0522232
022 C000005      5677
022 D000005         0
022 A000006 STIFEL, NICOLAUS & CO
022 B000006 43-0538770
022 C000006         0
<PAGE>      PAGE  3
022 D000006      5362
022 A000007 D.A. DAVIDSON
022 B000007 81-0139474
022 C000007      5212
022 D000007         0
022 A000008 OPPENHEIMER
022 B000008 13-2798343
022 C000008         0
022 D000008      5057
022 A000009 MESIROW CAPITAL MKTS
022 B000009 36-3194849
022 C000009      3947
022 D000009         0
022 A000010 STERN BROTHERS & CO
022 B000010 43-1357568
022 C000010      2403
022 D000010         0
023 C000000      50565
023 D000000      19834
024  000000 N
025 D000001       0
025 D000002       0
025 D000003       0
025 D000004       0
025 D000005       0
025 D000006       0
025 D000007       0
025 D000008       0
026 A000000 N
026 B000000 N
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027  000000 N
028 A010000         0
028 A020000         0
028 A030000         0
028 A040000         0
028 B010000         0
028 B020000         0
028 B030000         0
028 B040000         0
028 C010000         0
028 C020000         0
028 C030000         0
028 C040000         0
028 D010000         0
<PAGE>      PAGE  4
028 D020000         0
028 D030000         0
028 D040000         0
028 E010000         0
028 E020000         0
028 E030000         0
028 E040000         0
028 F010000         0
028 F020000         0
028 F030000         0
028 F040000         0
028 G010000         0
028 G020000         0
028 G030000         0
028 G040000         0
028 H000000         0
030 A000000      0
030 B000000  0.00
030 C000000  0.00
031 A000000      0
031 B000000      0
032  000000      0
033  000000      0
035  000000      0
036 B000000      0
038  000000      0
042 A000000   0
042 B000000   0
042 C000000   0
042 D000000   0
042 E000000   0
042 F000000   0
042 G000000   0
042 H000000   0
043  000000      0
044  000000      0
045  000000 Y
046  000000 N
047  000000 N
048  000000  0.000
048 A010000        0
048 A020000 0.000
048 B010000        0
048 B020000 0.000
048 C010000        0
048 C020000 0.000
048 D010000        0
048 D020000 0.000
048 E010000        0
048 E020000 0.000
048 F010000        0
<PAGE>      PAGE  5
048 F020000 0.000
048 G010000        0
048 G020000 0.000
048 H010000        0
048 H020000 0.000
048 I010000        0
048 I020000 0.000
048 J010000        0
048 J020000 0.000
048 K010000        0
048 K020000 0.000
049  000000 N
050  000000 N
051  000000 N
052  000000 Y
053 A000000 Y
053 B000000 Y
053 C000000 N
054 A000000 Y
054 B000000 N
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 Y
055 A000000 Y
055 B000000 N
056  000000 Y
057  000000 N
058 A000000 N
059  000000 Y
060 A000000 Y
060 B000000 Y
061  000000        0
062 A000000 Y
062 B000000   0.0
062 C000000   0.0
062 D000000   0.0
062 E000000   0.0
062 F000000   0.0
062 G000000   0.0
062 H000000   0.0
062 I000000   0.0
<PAGE>      PAGE  6
062 J000000   0.0
062 K000000   0.0
062 L000000   0.0
062 M000000   0.0
062 N000000   0.0
062 O000000 149.4
062 P000000   0.0
062 Q000000   0.0
062 R000000   0.3
063 A000000   0
063 B000000  9.3
064 A000000 Y
064 B000000 N
066 A000000 N
067  000000 N
068 A000000 N
068 B000000 N
069  000000 N
070 A010000 Y
070 A020000 N
070 B010000 N
070 B020000 N
070 C010000 Y
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 Y
070 E020000 N
070 F010000 N
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 Y
070 K020000 Y
070 L010000 N
070 L020000 N
070 M010000 N
070 M020000 N
070 N010000 N
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 N
<PAGE>      PAGE  7
070 Q020000 N
070 R010000 N
070 R020000 N
071 A000000     50565
071 B000000     47786
071 C000000    654542
071 D000000    7
072 A000000 12
072 B000000    35021
072 C000000        0
072 D000000        0
072 E000000        0
072 F000000     4069
072 G000000        0
072 H000000        0
072 I000000       36
072 J000000      103
072 K000000       26
072 L000000       52
072 M000000       20
072 N000000        0
072 O000000        0
072 P000000     3923
072 Q000000        0
072 R000000       19
072 S000000        6
072 T000000        0
072 U000000        0
072 V000000        0
072 W000000      219
072 X000000     8473
072 Y000000      471
072 Z000000    27019
072AA000000     1369
072BB000000        0
072CC010000        0
072CC020000     7522
072DD010000    25332
072DD020000        0
072EE000000       86
073 A010000   0.8500
073 A020000   0.0000
073 B000000   0.0029
073 C000000   0.0000
074 A000000      478
074 B000000        0
074 C000000        0
074 D000000   669269
074 E000000        0
074 F000000        0
074 G000000        0
<PAGE>      PAGE  8
074 H000000        0
074 I000000     1333
074 J000000     1235
074 K000000        0
074 L000000     9774
074 M000000     1768
074 N000000   683857
074 O000000     3263
074 P000000      323
074 Q000000        0
074 R010000        0
074 R020000        0
074 R030000        0
074 R040000   232201
074 S000000        0
074 T000000   448070
074 U010000    29803
074 U020000        0
074 V010000    15.03
074 V020000     0.00
074 W000000   0.0000
074 X000000      185
074 Y000000   713890
075 A000000        0
075 B000000   433994
076  000000    14.32
077 A000000 Y
077 B000000 Y
077 C000000 Y
077 D000000 Y
077 E000000 Y
077 I000000 Y
077 Q010000 Y
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
084 A000000 N
084 B000000        0
085 A000000 Y
085 B000000 N
086 A010000      0
086 A020000      0
086 B010000      0
086 B020000      0
<PAGE>      PAGE  9
086 C010000    925
086 C020000  92500
086 D010000   3678
086 D020000  91950
086 E010000      0
086 E020000      0
086 F010000      0
086 F020000      0
087 A010000 COMMON STOCK
087 A020000 67071L106
087 A030000 NVG
088 A000000 N
088 B000000 N
088 C000000 N
088 D000000 Y
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>nvg77c.txt
<TEXT>
Form N-SAR, Sub-Item 77C
Submission of matters to a vote of security holders


Nuveen Insured Dividend Advantage Municipal Fund
811-09475

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 and November 16, 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
          20,007,305
            4,618,817
   Against
            1,274,675
               515,481
   Abstain
               763,730
               185,875
   Broker Non-Votes
            4,654,043
            1,409,263
      Total
          26,699,753
            6,729,436



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


   For
          19,963,407
            4,607,807
   Against
            1,289,720
               524,514
   Abstain
               792,583
               187,852
   Broker Non-Votes
            4,654,043
            1,409,263
      Total
          26,699,753
            6,729,436
</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>nvg77d.txt
<TEXT>
Form N-SAR, Sub-Item 77D

Policies with respect to security investments



Nuveen Insured Dividend Advantage Municipal Fund
811-09475




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 and November
16, 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>nvg77e.txt
<TEXT>
Form N-SAR, Sub-Item 77E
Legal Proceedings



Nuveen Insured Dividend Advantage Municipal Fund

333-59770, 811-09475

    Thirty-three Nuveen leveraged closed-end funds (including
the Nuveen Insured Dividend Advantage Municipal Fund
(symbol  NVG ) (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>nvg77i.txt
<TEXT>
Form N-SAR,
Sub-Item 77I
Terms of new or amended securities



Nuveen Insured Dividend Advantage Municipal Fund
811-09475


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>nvg77q1a.txt
<TEXT>
Form N-SAR,
Sub-Item 77Q1(a)
Copies of any material amendments
to the registrants charter


Nuveen Insured Dividend Advantage Municipal Fund
811-09475



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>nvg77q1a2.txt
<TEXT>
<PAGE>


                                                                  Execution Copy

                NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND

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

<PAGE>


<TABLE>
<CAPTION>
                                    Table of Contents

                                                                                 Page
<S>  <C>    <C>                                                                  <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>    <C>                                                                  <C>
     2.18   Transfers..............................................................33

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

                                       ii
<PAGE>


                NUVEEN INSURED DIVIDEND ADVANTAGE MUNICIPAL FUND

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

         Nuveen Insured Dividend 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 Commonwealth 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 most recently assigned to such Series by any Rating
Agency in the table set forth directly below on the Rate Determination Date for
such Rate Period:

                                       2

<PAGE>


                  Long-Term Ratings*
                  ------------------

                     Moody's         Fitch        Applicable Percentage
                     -------         -----        ---------------------

                  Aaa to Aa2      AAA to AA                1.00%
                  Aa3             AA-                      1.20%
                  A1              A+                       1.40%
                  A2              A                        1.60%
                  A3              A-                       1.80%
                  Baa1            BBB+                     2.70%
                  Baa2            BBB                      2.85%
                  Baa3            BBB-                     3.00%**

                *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 and is
                continuing, in which case the Applicable Spread shall be 6.00%
                for such period.

                                       3

<PAGE>


         "Asset Coverage" means "asset coverage" of a class of senior security
which is a stock, as defined for purposes of Section 18(h) of the 1940 Act as in
effect on the date hereof, 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 thirty (30)
calendar 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 (a) other than a day on which commercial
banks in The City of New York, New York are required or authorized by law or
executive order to close and (b) on which the New York Stock Exchange is not
closed.

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

                                       4

<PAGE>


         "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 to 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, the Dividend
Rate shall mean the Increased Rate for such Increased Rate Period; and provided
further that the Dividend Rate for any Rate Period 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 U.S. 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, the Index Rate for such Rate Period plus an Applicable
Spread of 6.00%.

         "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 Deposit Securities or any other
security or investment owned by the Fund that is rated not less than A3 by
Moody's, A- by Standard and Poor's, A- by Fitch or an equivalent rating by any
other NRSRO (or any such rating's future equivalent).

         "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
comparable quality, type of issue, coupon, maturity and rating; state of
issuance; indications as to

                                       7

<PAGE>


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 September 8, 2011 among the Fund, Wells Fargo Bank, National
Association and Wells Fargo & Company 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 (i)
or (ii) 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

                                       9

<PAGE>


or any Appendix shall instead be deemed to be references to such corresponding
replacement 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 U.S. 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

                                       10

<PAGE>


Data, Inc. or its successor, then SIFMA Municipal Swap Index shall mean (i) the
S&P Weekly 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 regular federal individual
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.

                                       11

<PAGE>


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

         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 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, and Section 2.4 of the Purchase Agreement, no
Holders of VMTP Shares shall be entitled to any

                                       13

<PAGE>


dividends and other distributions, whether 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% as of the close of business on any Business Day; provided,
however, in the event that the Fund's Effective Leverage Ratio exceeds 45% on
any Business Day solely by reason of fluctuations in the market value of the
Fund's portfolio securities, the Effective Leverage Ratio shall not exceed 46%
on such 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

                                       17

<PAGE>


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 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

                                       18

<PAGE>


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 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), (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 Fund fails to
comply with any additional requirements relating to the determination of the
Effective Leverage Ratio requirement determined pursuant to the Purchase
Agreement or Appendix applicable to such Series 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

                                       19

<PAGE>


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 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
sentence of 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 the penultimate sentence 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 the penultimate sentence 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 the penultimate sentence 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
the penultimate sentence 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

                                       20

<PAGE>


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.

                           (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 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, if applicable, the method of determining such number. The Fund
may provide in any Notice of Redemption relating to a 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

                                       21

<PAGE>


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 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
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.

                                       22

<PAGE>


                           (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 accordance with the Declaration, the
Statement, 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, the Statement, 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

                                       23

<PAGE>


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.

                  (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

                                       24

<PAGE>


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.

                           (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 the terms of this Statement, 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 the Holders of at least 66 2/3% 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,

                                       25

<PAGE>


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, 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 the terms of
this Statement, 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 the obligation of the Fund to (x) pay the
Term Redemption Price on the Term Redemption Date for a Series, or (y)
accumulate dividends at the Dividend Rate (as set forth in this Statement and
the applicable Appendix hereto) for a 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, the Declaration or this Statement, 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 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 such Series of Preferred Stock then outstanding or
so established and created, including

                                       27

<PAGE>


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 either the
Increased Rate or 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 the Taxable Allocation will state the amount of the
dividends payable in respect of each VMTP Share of the applicable Series for
such Dividend Period that will be treated as a Taxable Allocation 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 paid on 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 paid on such VMTP Share for such
Dividend Period. The Fund will use commercially reasonable efforts to effect the
distribution of 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
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 a Taxable Allocation as contemplated by 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 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.

                                       28

<PAGE>


                  (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.

                                       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 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
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 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:

                  Number of Months        Value of Deposit
                 Preceding Month of   Securities as Percentage
               Term Redemption Date:     of Term Redemption
                                               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 and Section 2.6(c), the Board
of Trustees, without the vote of the Holders of VMTP Shares, may interpret,
supplement, or amend the provisions of this Statement or any Appendix hereto to
supply any omission, resolve any inconsistency or ambiguity or to cure, correct
or supplement any defective or inconsistent provision, including any provision
that becomes defective after the date hereof because of impossibility of
performance or any provision that is inconsistent with any provision of any
other Preferred Shares of the Fund.

                                       32

<PAGE>


         2.18     Transfers.

                  (a)      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 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 (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 Dividend Advantage Municipal Fund
has caused this Statement to be signed on September __, 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 DIVIDEND 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 DIVIDEND 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 Dividend 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 September 8, 2011 (the "VMTP
Statement"). This Appendix has been adopted by resolution of the Board of
Trustees of Nuveen Insured Dividend 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
Nine Hundred Twenty-Five (925) 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 Nine Hundred Twenty-Five (925).

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

         The Date of Original Issue is September 8, 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 October 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 April 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 September 30, 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 October 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 September 30, 2012 and the denominator of which is the actual number
of days from and including October 1, 2011 to and including September 30, 2012;
or

         (B)      if the Optional Redemption Date for such Series 2014 VMTP
Share either occurs on or after October 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 Dividend Advantage Municipal Fund
has caused this Appendix to be signed on September __, 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 DIVIDEND 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>
