<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>5
<FILENAME>nkx77q1ab0216.txt
<TEXT>
<PAGE>

                                                                 Execution Copy

               NUVEEN CALIFORNIA AMT-FREE MUNICIPAL INCOME FUND

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

                       Effective as of December 19, 2014

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<C>     <S>                                                                         <C>
RECITALS...........................................................................   1

DEFINITIONS........................................................................   1

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

  1.2   Interpretation.............................................................  13

  1.3   Liability of Officers, Trustees and Shareholders...........................  13

TERMS APPLICABLE TO ALL SERIES OF INSTITUTIONAL MUNIFUND TERM PREFERRED SHARES.....  13

  2.1   Number of Shares; Ranking..................................................  14

  2.2   Dividends and Distributions................................................  14

  2.3   Liquidation Rights.........................................................  19

  2.4   Coverage & Leverage Tests..................................................  19

  2.5   Redemption.................................................................  21

  2.6   Voting Rights..............................................................  30

  2.7   Rating Agencies............................................................  35

  2.8   Issuance of Additional Preferred Shares....................................  36

  2.9   Status of Redeemed or Repurchased iMTP Shares..............................  36

  2.10  Distributions with respect to Taxable Allocations..........................  36

  2.11  Term Redemption Liquidity Account and Liquidity Requirement................  38

  2.12  Global Certificate.........................................................  40

  2.13  Notice.....................................................................  40

  2.14  Termination................................................................  40

  2.15  Appendices.................................................................  40

  2.16  Actions on Other than Business Days........................................  40

  2.17  Modification...............................................................  41

  2.18  Transfers..................................................................  41

  2.19  No Additional Rights.......................................................  41

  2.20  Agreed Tax Treatment.......................................................  41
</TABLE>

<PAGE>

               NUVEEN CALIFORNIA AMT-FREE MUNICIPAL INCOME FUND

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

   Nuveen California AMT-Free Municipal Income Fund (the "Fund"), a
Massachusetts business trust, certifies that:

                                   RECITALS

   FIRST: The Fund is authorized under Article IV of the Fund's Amended and
Restated Declaration of Trust (which, as hereafter restated or amended from
time to time, is herein called the "Declaration"), to issue an unlimited number
of Preferred Shares (as defined below), 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 Preferred Shares, $.01 par value per
share, of the Fund, such shares to be classified as Institutional MuniFund Term
Preferred Shares ("iMTP"), and such iMTP to be issued in one or more series.
The terms related to a series may be set forth in this Statement through an
Appendix (as defined below) attached hereto or in a separate statement.

   THIRD: The number of shares, preferences, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption, of each series of iMTP subject to this Statement, as now or
hereafter authorized by the Board of Trustees, are set forth in this Statement,
as modified, amended or supplemented in an appendix to this Statement (each an
"Appendix" and collectively the "Appendices") specifically relating to such
series (each such series being referred to herein as a "Series of iMTP Shares"
or "iMTP Shares of a Series"), and shares of all such Series of iMTP Shares
subject to this Statement being referred to herein individually as an "iMTP
Share" and collectively as the "iMTP Shares").

                                  DEFINITIONS

   1.1 Definitions. Unless the context or use indicates another or different
meaning or intent and except with respect to any Series of iMTP Shares as
specifically provided in the Appendix applicable to such Series of iMTP Shares,
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

                                       1

<PAGE>

the Fund which are shares of stock for purposes of the 1940 Act, including all
outstanding iMTP 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 the
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).

   "Additional California Amount Payment" means a payment to a Holder of iMTP
Shares of an amount which, when taken together with the aggregate amount of
Taxable Allocations made to such Holder to which such Additional California
Amount Payment relates, would cause such Holder's dividends in dollars (after
federal and California income tax consequences in respect of both the Taxable
Allocations and Additional California Amount Payment) from the aggregate of
such Taxable Allocations and the related Additional California 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 and California income tax
purposes) from the gross income of such Holder. Such Additional California
Amount Payment shall be calculated (i) without consideration being given to the
time value of money; (ii) assuming that no Holder of iMTP Shares is subject to
the federal alternative minimum tax with respect to dividends received from the
Fund; (iii) only taking into account the regular federal income tax (and the
tax imposed under Section 1411 of the Code or any successor provision) and
California individual income tax with respect to dividends received from the
Fund (that is, without giving effect to any other California tax or any other
federal tax based on income); and (iv) assuming that each Taxable Allocation
and each Additional California Amount Payment (except to the extent such
Additional California 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 iMTP Shares at the maximum marginal combined regular federal and
California individual income tax rate (taking account of the federal income tax
deductibility of state and local taxes paid or incurred and the tax imposed
under Section 1411 of the Code or any successor provision) applicable to
ordinary income or net capital gains, as applicable, or the maximum marginal
regular federal corporate income tax rate applicable to ordinary income or net
capital gains, as applicable, whichever is greater, in effect at the time such
Additional California Amount Payment is paid.

   "Adviser" means Nuveen Fund Advisors, LLC, a Delaware limited liability
company, 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" means, with respect to any Series of iMTP Shares, The Bank of New
York Mellon and its successors or any other calculation and paying agent
appointed by the Fund with respect to such Series of iMTP Shares.

   "Agent Agreement" means, with respect to any Series of iMTP Shares, the
Amended and Restated Calculation and Paying Agent Agreement to be dated
December 19,

                                       2

<PAGE>

2014, by and among the Agent, the Fund and certain other Persons, relating to
the Institutional MuniFund Term Preferred Shares to be issued by the Fund,
including the iMTP 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
calculation and paying agent appointed by the Fund.

   "Agent Member" means a Person with an account at the Securities Depository
that holds one or more iMTP 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 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
iMTP Shares, the percentage per annum set forth opposite the highest applicable
credit rating assigned to such Series of iMTP Shares by any Rating Agency (or
the lowest applicable credit rating assigned to such Series of iMTP Shares by
any Rating Agency, in the event any Rating Agency has assigned such Series of
iMTP Shares a credit rating of Below Investment Grade) in the table below on
the Rate Determination Date for such Rate Period (provided that, if such Series
of iMTP Shares is not assigned a credit rating by any Rating Agency on the Rate
Determination Date for any Rate Period for such Series of iMTP Shares as a
result of each Rating Agency ceasing to rate tax-exempt closed-end investment
companies generally, "Applicable Spread" means, with respect to such Rate
Period, (i) the percentage per annum in such table directly below the
percentage per annum set forth opposite the highest applicable credit rating
most recently assigned to such Series of iMTP Shares by any Rating Agency prior
to such Rate Determination Date or (ii) the Increased Rate, if the most
recently assigned credit rating from any such Rating Agency for such Series of
iMTP Shares is Below Investment Grade prior to such Rate Determination Date):

<TABLE>
<CAPTION>
                              Long-Term Ratings*
             ------------------------------------------------------
                Fitch        Moody's       Applicable Percentage
                -----        -------       ---------------------
             <S>           <C>          <C>
              AAA to AA-    Aaa to Aa3       Initial Spread**
               A+ to A-      A1 to A3   Initial Spread plus 0.25%**
             BBB+ to BBB-  Baa1 to Baa3 Initial Spread plus 1.00%**
              Below BBB-    Below Baa3   Initial Spread plus 5.00%
</TABLE>

*And/or the equivalent ratings of any Other Rating Agency then rating the iMTP
Shares.

**Unless an Increased Rate Period is in effect and is continuing or the
Increased Rate otherwise applies to any portion of a Rate Period, in which case
the Applicable Spread shall be the Initial Spread plus 5.00% for such period or
portion thereof, as the case may be.

                                       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 iMTP 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.

   "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 Fund.

                                       4

<PAGE>

   "Custodian Agreement" means any Custodian Agreement by and between the
Custodian and the Fund.

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

   "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 Security that has a credit rating from at least one NRSRO
that is the highest applicable rating generally ascribed by such NRSRO to
Municipal Securities (long-term or short-term as to the applicable type of
obligation) as of the date of this Statement (or such rating's future
equivalent), including (A) any such Municipal Security 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 Security 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 Securities or U.S. Government Obligations or any
combination thereof; or

   (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 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 iMTP Shares of a Series are
recorded as beneficial owner of such iMTP Shares by the Securities Depository,
an Agent

                                       5

<PAGE>

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 of iMTP Shares,
the first Business Day of each calendar month that any shares of such Series of
iMTP Shares are outstanding; provided, however, that with respect any Series of
iMTP Shares for which the first Dividend Period, as specified in the Appendix
relating to such Series of iMTP Shares, is longer than one month, the first
Dividend Payment Date for such Series of iMTP Shares 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 of iMTP Shares, the
Dividend Period for such Series of iMTP Shares set forth in the Appendix for
such Series of iMTP Shares.

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

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

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

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

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

                                       6

<PAGE>

   "Final Memorandum" means the final offering memorandum of the Fund relating
to the offering and sale of the iMTP Shares dated December 16, 2014, as the
same may be amended, revised or supplemented from time to time.

   "Fitch" means Fitch Ratings, a part of the Fitch Group, and any successor or
successors thereto.

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

   "Holder" means, with respect to the iMTP Shares of a 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 Agent or otherwise.

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

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

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

   "Increased Rate" means, with respect to any Rate Period for a Series of iMTP
Shares (or any portion of a Rate Period to which the Increased Rate otherwise
applies), the Index Rate for such Rate Period plus an Applicable Spread of the
Initial Spread plus 5.00% per annum.

   "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 iMTP
Shares, the SIFMA Municipal Swap Index made available by the close of business
on the Rate Determination Date for such Rate Period.

   "Initial Rate Period" means, with respect to the iMTP Shares of a Series of
iMTP Shares, 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).

   "Initial Spread" means, with respect to any Series of iMTP Shares, the rate
per annum specified as the Initial Spread for such Series of iMTP Shares in the
Appendix for such Series of iMTP Shares.

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

                                       7

<PAGE>

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

   "Liquidity Account Investments" means (i) Deposit Securities or (ii) any
other security or investment owned by the Fund that is rated not less than A3
by Moody's, A- by Standard & 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 Standard & Poor's Securities
Evaluations, Inc./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 Securities of
comparable quality, type of issue, coupon, maturity and rating; state of
issuance; indications as to value from dealers; and general market conditions.
The pricing service may employ electronic data processing techniques or a
matrix system, or both, to determine recommended valuations.

   "Maximum Rate" means 15% per annum.

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

   "Municipal Securities" means municipal securities as described under the
heading "Portfolio Composition" in the Preliminary Memorandum and Final
Memorandum or other offering document for a Series of iMTP Shares.

   "Non-Call Period" means, with respect to any Series of iMTP Shares, the
period (if any) during which such Series of iMTP Shares shall not be subject to
redemption at the option of the Fund, as set forth in the Appendix for such
Series of iMTP Shares.

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

                                       8

<PAGE>

   "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 of iMTP
Shares, the premium payable by the Fund upon the redemption of iMTP Shares of
such Series of iMTP Shares at the option of the Fund, as set forth in the
Appendix for such Series of iMTP Shares.

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

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

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

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

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

   (c) any shares of such Series of iMTP Shares as to which the Fund shall be
the Holder or the beneficial owner.

   "Person" means and includes an individual, a partnership, a trust (including
a business 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.

                                       9

<PAGE>

   "Preferred Shares" means the authorized preferred shares of beneficial
interest, par value $.01 per share, of the Fund, including iMTP Shares of each
Series, shares of any other series of preferred shares of beneficial interest
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.

   "Preliminary Memorandum" means the preliminary offering memorandum of the
Fund relating to the offering and sale of the iMTP Shares dated December 9,
2014, as the same may be amended, revised or supplemented from time to time.

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

   "Purchase Agreement" means (i) with respect to the initial Series of iMTP
Shares issued pursuant to this Statement, the Purchase Agreement dated as of
December 16, 2014 between the Fund and Morgan Stanley & Co. LLC, and (ii) with
respect to any subsequent Series of iMTP Shares issued pursuant to this
Statement, the purchase agreement or other similar agreement for the iMTP
Shares of such Series of iMTP Shares (if any) specified in the Appendix for
such Series of iMTP Shares.

   "Rate Determination Date" means, with respect to the Initial Rate Period for
any Series of iMTP Shares, the day immediately preceding the Date of Original
Issue of such Series of iMTP Shares and, with respect to any Subsequent Rate
Period for any Series of iMTP Shares, the last day of the immediately preceding
Rate Period for such Series of iMTP Shares 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 iMTP Shares, the Initial
Rate Period and any Subsequent Rate Period of the iMTP Shares of such Series of
iMTP Shares.

   "Rating Agencies" means, as of any date and in respect of a Series of iMTP
Shares, (i) each of Fitch and Moody's, to the extent each maintains a rating on
the iMTP Shares of such Series of iMTP Shares on such date and has not been
replaced as a Rating Agency in accordance with Section 2.7 and (ii) any other
NRSRO designated as an Other Rating Agency on such date in accordance with
Section 2.7. Fitch and Moody's have initially been designated as the Rating
Agencies for purposes of the iMTP Shares. In the event that at any time any
Rating Agency (i) ceases to be a Rating Agency for purposes of any Series of
iMTP Shares and such Rating Agency has been replaced by another Rating Agency
in accordance with Section 2.7, any references to any credit rating of the
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 Rating Agency that has replaced such
Rating

                                      10

<PAGE>

Agency as of the most recent date on which such replacement Rating Agency
published credit ratings for such Series of iMTP Shares or (ii) designates a
new rating definition for any credit rating of such Rating Agency to replace a
corresponding rating definition of such Rating Agency, any references to such
replaced rating definition of such Rating Agency contained in this Statement or
any Appendix shall instead be deemed to be references to such corresponding
replacement 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 iMTP 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 of iMTP
Shares, shall be disregarded, and only the ratings of the then-designated
Rating Agencies for such Series of iMTP Shares shall be taken into account for
purposes of this Statement and such Appendix provided that, for purposes of
determining the Dividend Rate applicable to a Rate Period, the credit rating
assigned by any Rating Agency designated after the Rate Determination Date for
such Rate Period will be applicable on or as of the next succeeding Rate
Determination Date.

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

   "Rating Downgrade Period" means, with respect to any Series of iMTP Shares,
any period during which the iMTP Shares of such Series of iMTP Shares are rated
A1 or lower by Moody's and A+ or lower by Fitch (or an equivalent of such
ratings, as permitted or contemplated by the definition of "Rating Agency").

   "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 iMTP Shares.

   "Series of iMTP Shares" shall have the meaning 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
Bloomberg L.P. or its

                                      11

<PAGE>

successor, or as otherwise designated by the Securities Industry and Financial
Markets Association; provided, however, that, if such index is no longer
produced by Bloomberg L.P. or its successor, then SIFMA Municipal Swap Index
shall mean (i) the S&P Municipal Bond 7 Day High Grade Rate Index produced by
Standard & Poor's Financial Services LLC or its successors or (ii) if the S&P
Municipal Bond 7 Day High Grade Rate Index is no longer produced, such other
reasonably comparable index selected in good faith by the Board of Trustees.

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

   "Statement" means this Statement Establishing and Fixing the Rights and
Preferences of Institutional 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 iMTP 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 of iMTP Shares to, and including, the next Rate
Determination Date for such Series of iMTP Shares and any period thereafter
from, and including, the first day following a Rate Determination Date for
shares of such Series of iMTP Shares to, and including, the next succeeding
Rate Determination Date for shares of such Series of iMTP Shares.

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

   "Taxable Allocation" means, with respect to any Series of iMTP Shares, the
allocation of any net capital gains or other income taxable for regular federal
income tax purposes, or regular California individual income tax purposes, to a
dividend paid in respect of such Series of iMTP Shares.

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

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

   "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

                                      12

<PAGE>

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.

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

   With respect to any Series of iMTP Shares, any additional definitions
specifically set forth in the Appendix relating to such Series of iMTP Shares
and any amendments to any definitions specifically set forth in the Appendix
relating to such Series of iMTP Shares, 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 of iMTP Shares.

   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 the Commonwealth of Massachusetts, and an 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
                 INSTITUTIONAL MUNIFUND TERM PREFERRED SHARES

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

                                      13

<PAGE>

   2.1 Number of Shares; Ranking.

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

       (b) The iMTP Shares of each Series shall rank on a parity with iMTP
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 iMTP
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 iMTP Shares shall have, solely by reason of being such
a Holder, any preemptive or other right to acquire, purchase or subscribe for
any iMTP 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 iMTP Shares of a 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 of iMTP Shares at the
Dividend Rate for such Series of iMTP Shares, calculated as set forth herein,
and no more. Dividends and other distributions on the iMTP Shares of a Series
shall accumulate from the Date of Original Issue with respect to such Series of
iMTP Shares. The amount of dividends per share payable on iMTP 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 of iMTP
Shares accumulated for each such Rate Period (or part thereof) shall be
computed by (i) multiplying the Dividend Rate in effect for iMTP Shares of such
Series of iMTP Shares 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 of iMTP Shares.

                                      14

<PAGE>

       (b) Dividends on iMTP 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 or other distributions shall be declared or
paid on shares of a Series of iMTP 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 other outstanding
Preferred Shares (including shares of other Series of iMTP 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 other outstanding Preferred Shares
of any series, any dividends and other distributions being declared and paid on
iMTP 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 the shares of each such series of
Preferred Shares on the relevant dividend payment date for such series. No
Holders of iMTP Shares shall be entitled to any dividends and other
distributions, whether payable in cash, property or shares, in excess of full
cumulative dividends and other distributions as provided in Article II of this
Statement on such iMTP Shares.

          (ii) No full dividends or other distributions shall be declared or
paid on other Preferred Shares of the Fund for any dividend period therefor or
part thereof unless full cumulative dividends and other distributions have been
or contemporaneously are declared and paid on the iMTP Shares through the most
recent Dividend Payment Date for each Series of iMTP Shares. If full cumulative
dividends and other distributions due have not been declared and paid on the
iMTP Shares through such most recent Dividend Payment Dates, any dividends
being declared and paid upon the iMTP Shares and any other Preferred Shares
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 the iMTP Shares and each other Preferred Shares on the relevant dividend
payment dates therefor.

          (iii) For so long as any iMTP Shares are Outstanding, the Fund shall
not: (x) declare or pay 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

                                      15

<PAGE>

amount of such dividend or distribution or redemption or purchase price or
liquidation proceeds, (B) all cumulative dividends and other distributions on
all iMTP Shares and all other series of Preferred Shares ranking on a parity
with the iMTP 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)(iii) hereof with
respect to Outstanding iMTP Shares of a 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.

          (iv) Any dividend payment made on iMTP 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 of iMTP Shares 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 iMTP Shares, the Fund shall deposit with the 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 of iMTP Shares. The Fund may direct the
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 deposited with the Agent for the payment of
dividends or other distributions payable on a Series of iMTP Shares shall be
held in trust for the payment of such dividends or other distributions by the
Agent for the benefit of the Holders of such Series of iMTP Shares entitled to
the payment of such dividends or other distributions pursuant to
Section 2.2(f). Any moneys paid to the Agent in accordance with the foregoing
but not applied by the Agent to the payment of dividends or other
distributions, 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.

                                      16

<PAGE>

       (f) Dividends on iMTP Shares of a Series shall be paid on each Dividend
Payment Date for such Series of iMTP Shares to the Holders of shares of such
Series of iMTP Shares 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 iMTP 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 of iMTP
Shares 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 iMTP Shares of a Series which may be in arrears.

       (g) (i) The Dividend Rate on a Series of iMTP 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 iMTP 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 Agent by 12:00 noon, New York City time, on a Dividend
Payment Date for such Series of iMTP Shares, Deposit Securities that will
provide funds available to the Agent on such Dividend Payment Date sufficient
to pay the full amount of any dividend on such Series of iMTP Shares payable on
such Dividend Payment Date (a "Dividend Default") and such Dividend Default has
not ended as contemplated by Section 2.2(g)(ii); (B) the Fund has failed to
deposit with the Agent by 12:00 noon, New York City time, on an applicable
Redemption Date for such Series of iMTP Shares, Deposit Securities that will
provide funds available to the Agent on such Redemption Date sufficient to pay
the full amount of the Redemption Price payable in respect of such Series of
iMTP Shares on such Redemption Date (a "Redemption Default") and such
Redemption Default has not ended as contemplated by Section 2.2(g)(ii); (C) (x)
any Rating Agency has withdrawn the credit rating required to be maintained
with respect to such Series of iMTP Shares pursuant to Section 2.7 other than
due to the Rating Agency ceasing to rate tax-exempt closed-end management
investment companies generally or (y) the Board of Trustees has terminated the
designation of a Rating Agency without complying with the requirements of
Section 2.7 and, in the case of clause (x) above, such withdrawal is continuing
and, in the case of clause (y) above, the iMTP Shares of such Series of iMTP
Shares are not then rated by at least two Rating Agencies in accordance with
Section 2.7; or (D) (i) a court or other applicable governmental authority has
made a final determination that for U.S. federal income tax purposes the iMTP
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"). For the
avoidance of doubt, no determination by any court or other applicable

                                      17

<PAGE>

governmental authority that requires the Fund to make an Additional California
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 iMTP 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 of iMTP Shares and any unpaid
Redemption Price on such Series of iMTP Shares shall have been deposited
irrevocably in trust in same-day funds with the Agent.

          (iii) No Increased Rate Period for a Series of iMTP Shares with
respect to any Dividend Default or Redemption Default on such Series of iMTP
Shares shall be deemed to have commenced if the amount of any dividend or any
Redemption Price due in respect of such Series of iMTP Shares is deposited
irrevocably in trust, in same-day funds, with the 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
of iMTP Shares with respect to which such Default occurred, together with an
amount equal to the Increased Rate on such Series of iMTP Shares applied to the
aggregate Liquidation Preference of and for the period of such non-payment on
the shares of such Series of iMTP Shares, determined as provided in Section
2.2(a).

       (h) Reporting of Dividend Rate. With respect to any Outstanding Series
of iMTP Shares, the Agent shall calculate, in accordance with the terms hereof,
the applicable Dividend Rate for such Series of iMTP Shares for each Rate
Period (or portion thereof) in a Dividend Period and shall provide notice
thereof by Electronic Means to the Fund by 5:00 p.m. (New York City time) on
each Rate Determination Date. Such notice shall set forth the Index Rate and
the Applicable Spread (which may be the Applicable Spread for the Increased
Rate, if applicable, subject to the Fund's compliance with the penultimate
sentence of this Section 2.2(h)) used in connection with the calculation of the
Dividend Rate for such Series of iMTP Shares for each such Rate Period. In the
event that an Increased Rate Period is in effect for any Rate Period for an
Outstanding Series of iMTP Shares (or the Increased Rate is otherwise in effect
for any portion of a Rate Period), the Fund will, as soon as practicable, (i)
make public disclosure via press release of the effectiveness of the Increased
Rate for such Increased Rate Period (or portion of a Rate Period) and (ii)
provide notice thereof by Electronic Means to the Agent. Such public disclosure
and notification to the Agent will constitute the Fund's sole obligation with
respect to notification to any Person concerning the effectiveness of the
Increased Rate for any Increased Rate Period (or portion of a Rate Period).

                                      18

<PAGE>

   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 iMTP
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
without 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 iMTP Shares and any other
outstanding Preferred Shares shall be insufficient to permit the payment in
full to such Holders of the Liquidation Preference of such iMTP 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 iMTP 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 iMTP 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.

   2.4 Coverage & Leverage Tests.

       (a) Asset Coverage Requirement. For so long as any iMTP Shares of a
Series are Outstanding, the Fund shall have Asset Coverage of at least 225% as
of the

                                      19

<PAGE>

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 iMTP Shares of a
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 of iMTP Shares or other Preferred
Shares) to pay the full redemption price for such Series of iMTP Shares or
other Preferred Shares (or the portion thereof to be redeemed) shall have been
deposited in trust with the paying agent for such Series of iMTP Shares or
other Preferred Shares and the requisite notice of redemption for such Series
of iMTP Shares or other Preferred Shares (or the portion thereof to be
redeemed) shall have been given, and (ii) the Deposit Securities or other 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 iMTP Shares of
a Series are Outstanding, the Effective Leverage Ratio shall not exceed 45% (or
46% solely by reason of fluctuations in the Market Value of the Fund's
portfolio securities) as of the close of business on any Business Day. If the
Effective Leverage Ratio shall exceed the applicable percentage provided in the
preceding sentence as of any time as of which such compliance is required to be
determined as aforesaid, the provisions of Section 2.5(b)(ii) shall be
applicable, which provisions to the extent complied with shall constitute the
sole remedy for the Fund's failure to comply with the provisions of this
Section 2.4(c).

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

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

                                      20

<PAGE>

net proceeds from the sale of the iMTP Shares, for which the Fund has delivered
Deposit Securities or sufficient funds (in accordance with the terms of such
senior securities) to the paying agent for such senior securities or otherwise
has adequate Deposit Securities or sufficient funds on hand for the purpose of
such redemption; (B) the aggregate principal amount of the Fund's "senior
securities representing indebtedness" (as that term is defined in the 1940
Act); and (C) the aggregate 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 iMTP Shares shall be subject to redemption by
the Fund as provided below:

       (a) Term Redemption. The Fund shall redeem all iMTP Shares of a Series
on the Term Redemption Date for such Series of iMTP Shares, at a price per
share equal to the Liquidation Preference per share of such Series of iMTP
Shares plus an amount equal to all unpaid dividends and other distributions on
such share of such Series of iMTP Shares accumulated from and including the
Date of Original Issue to (but excluding) the Term Redemption Date for such
Series of iMTP Shares (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 in

                                      21

<PAGE>

accordance with the terms of the Preferred Shares to be redeemed. In addition,
in accordance with the terms of the Preferred Shares to be redeemed, the Fund
shall cause to be deposited Deposit Securities or other sufficient funds in
trust with the Agent or other applicable paying agent, 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 iMTP Shares of a Series, to enable it to meet the requirements
of Section 2.5(b)(i)(B). In the event that any iMTP 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 of iMTP Shares plus an amount equal to all
unpaid dividends and other distributions on such share of such Series of iMTP
Shares accumulated from and including the Date of Original Issue to (but
excluding) the date fixed for such redemption by the Board of Trustees (whether
or not earned or declared by the Fund, but excluding interest thereon) (the
"Mandatory Redemption Price").

              (B)  On the Redemption Date for a redemption contemplated by
Section 2.5(b)(i)(A), the Fund shall redeem at the Mandatory Redemption Price,
out of funds legally available therefor, such number of Preferred Shares (which
may include at the sole option of the Fund any number or proportion of iMTP
Shares of a 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
iMTP Shares and other Preferred Shares the redemption or retirement of which
would have such result, all iMTP 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 iMTP Shares of a 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

                                      22

<PAGE>

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 iMTP 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 iMTP 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 iMTP Shares of a Series are to be redeemed pursuant to
this Section 2.5(b)(i), the number of iMTP Shares of such Series of iMTP Shares
to be redeemed from the respective Holders shall be determined (A) pro rata
among the Outstanding shares of such Series of iMTP Shares, (B) by lot or (C)
in such other manner as the Board of Trustees may determine to be fair and
equitable and that is in accordance with the 1940 Act; provided, in each such
case, that such method of redemption as set forth in this Section 2.5(b)(i)(B)
shall be subject to any applicable procedures established by the Securities
Depository.

          (ii)  Effective Leverage Ratio Mandatory Redemption. (A) If 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) and 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 or other
transactions required by this Section 2.5(b)(ii), the Fund shall 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 for any applicable Series of iMTP Shares in
respect of which the Effective Leverage Ratio is being determined) to not
exceed the Effective Leverage Ratio required under Section 2.4(c) (without
giving effect to the parenthetical provision in the first sentence of Section
2.4(c)) as so determined by (x) not later than the close of business on the
Business Day next following the Effective Leverage Ratio Cure Date, 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, not later than the close of business on
the Business Day next

                                      23

<PAGE>

following the Effective Leverage Ratio Cure Date, causing notices of redemption
to be issued, and causing to be deposited Deposit Securities or other
sufficient funds in trust with the 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 iMTP Shares of a Series, or (z)
engaging in any combination of the actions contemplated by clauses (x) and (y)
of this Section 2.5(b)(ii)(A). In the event that any iMTP Shares of a Series
are to be redeemed pursuant to clause (y) of this Section 2.5(b)(ii)(A), the
Fund shall redeem such iMTP Shares at a price per iMTP Share equal to the
Mandatory Redemption Price.

              (B) On the Redemption Date for a redemption contemplated by
clause (y) of Section 2.5(b)(ii)(A), the Fund shall not redeem more than the
maximum number of Preferred Shares that can be redeemed out of funds expected
to be legally available therefor in accordance with the Declaration and
applicable law. If the Fund is unable to redeem the required number of iMTP
Shares and other Preferred Shares which have been designated to be redeemed in
accordance with clause (y) of Section 2.5(b)(ii)(A) due to the unavailability
of legally available funds, the Fund shall redeem those iMTP 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 iMTP Shares of a Series are to be redeemed pursuant to clause (y)
of Section 2.5(b)(ii)(A), the number of iMTP Shares of such Series of iMTP
Shares to be redeemed shall be redeemed (A) pro rata among the Outstanding
shares of such Series of iMTP Shares, (B) by lot or (C) in such other manner as
the Board of Trustees may determine to be fair and equitable and that is in
accordance with the 1940 Act; provided, in each such case, that such method of
redemption as set forth in this Section 2.5(b)(ii)(B) shall be subject to any
applicable procedures established by the Securities Depository.

       (c) Optional Redemption.

          (i) Subject to the provisions of Section 2.5(c)(ii), the Fund may at
its option on any Business Day following the expiration of the Non-Call Period
for a Series of iMTP Shares (any such Business Day referred to above in this
sentence, an "Optional Redemption Date") redeem in whole or from time to time
in part the Outstanding iMTP Shares of a Series, at a redemption price per

                                      24

<PAGE>

iMTP Share (the "Optional Redemption Price") equal to (x) the Liquidation
Preference per iMTP Share of such Series of iMTP Shares plus (y) an amount
equal to all unpaid dividends and other distributions on such iMTP Share of
such Series of iMTP Shares 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 without interest thereon) plus (z) the Optional
Redemption Premium per share (if any) that is applicable to an optional
redemption of iMTP Shares of such Series of iMTP Shares that is effected on
such Optional Redemption Date as set forth in the Appendix relating to such
Series of iMTP Shares.

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

          (iv) Any iMTP Shares redeemed at the sole option of the Fund pursuant
to the second sentence of Section 2.5(b)(i)(B) in excess of 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% but not greater than 250%: (A) will not be subject to any
Optional Redemption Premium and (B) may be redeemed during the Non-Call Period.

       (d) Procedures for Redemption.

          (i) If the Fund shall determine to redeem, in whole or in part, iMTP
Shares of a Series pursuant to Section 2.5(c), the Fund shall deliver a

                                      25

<PAGE>

preliminary notice of redemption (the "Preliminary Notice of Redemption"), by
overnight delivery, by first class mail, postage prepaid or by Electronic Means
to Holders thereof, or request the Agent, on behalf of the Fund, to promptly do
so by overnight delivery, by first class mail, postage prepaid or by Electronic
Means. A Preliminary Notice of Redemption shall be provided not more than
forty-five (45) calendar days prior to the anticipated optional redemption date
specified in such Preliminary Notice of Redemption. Each such Preliminary
Notice of Redemption shall state: (A) the date on which the optional redemption
is anticipated to occur; (B) the Series and number of iMTP Shares expected to
be redeemed; (C) the CUSIP number for iMTP Shares of such Series of iMTP
Shares; and (D) the provisions of this Statement under which such redemption is
expected to be made. If fewer than all iMTP Shares held by any Holder are
expected to be redeemed, the Preliminary Notice of Redemption delivered to such
Holder shall also specify the number of iMTP Shares expected to be redeemed
from such Holder and/or the method of determining such number. The Fund may
provide in any Preliminary Notice of Redemption relating to an optional
redemption contemplated to be effected pursuant to Section 2.5(c) of 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 Preliminary Notice of Redemption. No defect in the
Preliminary Notice of Redemption or delivery thereof shall affect the validity
of redemption proceedings, except as required by applicable law.

          (ii) If the Fund shall determine or be required to redeem, in whole
or in part, iMTP 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") with
respect to any redemption pursuant to Section 2.5(a), (b) or (c), by overnight
delivery, by first class mail, postage prepaid or by Electronic Means to
Holders thereof, or request the Agent, on behalf of the Fund, to promptly do so
by overnight delivery, by first class mail, postage prepaid or by Electronic
Means. A Notice of Redemption shall be provided not more than forty-five (45)
calendar days and not less than ten (10) calendar days prior to the date fixed
for redemption pursuant to Section 2.5(a), (b) or (c) 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 iMTP Shares to be
redeemed; (C) the CUSIP number for iMTP Shares of such Series of iMTP Shares;
(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)

                                      26

<PAGE>

are to be surrendered for payment of the Redemption Price; (F) that dividends
on the iMTP 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 iMTP Shares held by any Holder are to be
redeemed, the Notice of Redemption delivered to such Holder shall also specify
the number of iMTP Shares to be redeemed from such Holder and/or the method of
determining such number. The Fund may provide in any Notice of Redemption
relating to an optional redemption contemplated to be effected pursuant to
Section 2.5(c) of 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.

          (iii) 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 Agent Deposit Securities having an aggregate Market Value on
the date thereof no less than the Redemption Price of the iMTP Shares to be
redeemed on the Redemption Date and (B) give the Agent irrevocable instructions
and authority to pay the applicable Redemption Price to the Holders of the iMTP
Shares called for redemption on the Redemption Date. The Fund may direct the
Agent with respect to the investment of any Deposit Securities consisting of
cash so deposited prior to the Redemption Date, provided that the proceeds of
any such investment shall be available at the opening of business on the
Redemption Date as same day funds. Notwithstanding the provisions of clause (A)
of the preceding sentence, if the Redemption Date is the Term Redemption Date,
then such deposit of 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.

          (iv) Upon the date of the deposit of such Deposit Securities, all
rights of the Holders of the iMTP Shares so called for redemption shall cease
and terminate except the right of the Holders thereof to receive the Redemption
Price thereof and such iMTP Shares shall no longer be deemed Outstanding for
any purpose whatsoever (other than (A) the transfer thereof prior to the
applicable date of redemption of the iMTP Shares and (B) the accumulation of
dividends and other distributions thereon in accordance with the terms hereof
up to (but excluding) such applicable date of redemption, which accumulated
dividends and

                                      27

<PAGE>

other distributions, unless previously declared and paid as contemplated by the
last sentence of Section 2.5(d)(vii) below, shall be payable only as part of
the applicable Redemption Price on the date of redemption of the iMTP
Shares). The Fund shall be entitled to receive, promptly after the date of
redemption of the iMTP Shares, any Deposit Securities in excess of the
aggregate Redemption Price of the iMTP Shares called for redemption on the
Redemption Date. Any Deposit Securities so deposited that are unclaimed at the
end of three hundred and sixty five (365) calendar days from the date of
redemption of the iMTP Shares shall, to the extent permitted by law, be repaid
to the Fund, after which the Holders of the iMTP 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.

          (v) On or after the Redemption Date, each Holder of iMTP Shares in
certificated form (if any) that are subject to redemption shall surrender the
certificate(s) evidencing such iMTP 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 iMTP Shares, without interest, and in the case of a
redemption of fewer than all the iMTP Shares represented by such
certificate(s), a new certificate representing the iMTP Shares that were not
redeemed.

          (vi) Notwithstanding the other provisions of this Section 2.5, except
as otherwise required by law, (A) the Fund shall not redeem any iMTP Shares or
other series of Preferred Shares unless all accumulated and unpaid dividends
and other distributions on all Outstanding iMTP Shares and shares of 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 Preferred Shares for the payment of such dividends and other
distributions) shall have been or are contemporaneously deposited with the
Agent or other applicable paying agent for such Preferred Shares in accordance
with the terms of such Preferred Shares and (B) if, as of the Redemption Date
for a Series of iMTP Shares, any redemption required with respect to any
outstanding Preferred Shares (including shares of other Series of iMTP Shares)
ranking on a parity with such Series of iMTP Shares (x) shall not have been
made on the redemption date therefor or is not contemporaneously made on the
Redemption Date or (y) shall not have been or is not contemporaneously noticed
and Deposit Securities or sufficient funds or securities (in accordance with
the terms of such iMTP Shares or other Preferred Shares) for the payment of such

                                      28

<PAGE>

redemption shall not have been or are not contemporaneously deposited with the
Agent or other applicable paying agent for such other iMTP Shares or other
Preferred Shares in accordance with the terms of such other iMTP Shares or
other Preferred Shares, then any redemption required hereunder shall be made as
nearly as possible on a pro rata basis with all other Preferred Shares then
required to be redeemed (or in respect of which securities or funds for
redemption are required to be deposited) in accordance with the terms of such
Preferred Shares, and the number of shares of such Series of iMTP Shares to be
redeemed from the respective Holders shall be determined pro rata among the
Outstanding shares of such Series of iMTP Shares or in such other manner as the
Board of Trustees may determine to be fair and equitable and that is in
accordance with the 1940 Act; provided, in each such case, that such method of
redemption as set forth in this Section 2.5(d)(vi)(B) shall be subject to any
applicable procedures established by the Securities Depository, and provided
further, however, that the foregoing shall not prevent the purchase or
acquisition of Outstanding iMTP Shares pursuant to an otherwise lawful purchase
or exchange offer made on the same terms to Holders of all Outstanding iMTP
Shares and any other series of Preferred Shares for which all accumulated and
unpaid dividends and other distributions have not been paid or for which
required redemptions have not been made.

          (vii) 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 and applicable law,
such redemption shall be made as soon as practicable and, if applicable, in
accordance with subparagraph (vi) above, 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 Agent Deposit Securities having an aggregate Market
Value on the date thereof of no less than 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 Preliminary Notice of Redemption or
Notice of Redemption has been provided with respect to any iMTP Shares,
dividends shall be declared and paid on such iMTP Shares in accordance with
their terms regardless of whether Deposit Securities for the payment of the
Redemption Price of such iMTP Shares shall have been deposited in trust with
the Agent for that purpose.

                                      29

<PAGE>

          (viii) Notwithstanding anything to the contrary herein or in any
Preliminary Notice of Redemption or Notice of Redemption, if the Fund shall not
have redeemed iMTP Shares on the applicable Redemption Date, the Holders of the
iMTP Shares subject to redemption shall continue to be entitled to (a) receive
dividends on such iMTP Shares accumulated at the Dividend Rate for the period
from, and including, such Redemption Date through, but excluding, the date on
which such iMTP Shares are actually redeemed and such dividends, to the extent
accumulated, but unpaid, during such period (whether or not earned or declared
but without interest thereon), together with any Additional California Amount
Payment applicable thereto, shall be included in the Redemption Price for such
iMTP Shares and (b) transfer the iMTP Shares prior to the date on which such
iMTP Shares are actually redeemed, provided that all other rights of Holders of
such iMTP Shares shall have terminated upon the date of deposit of Deposit
Securities in accordance with and as provided in Sections 2.5(d)(iii) and
2.5(d)(iv).

       (e) Agent as Trustee of Redemption Payments by Fund. All Deposit
Securities transferred to the Agent for payment of the Redemption Price of iMTP
Shares called for redemption shall be held in trust by the Agent for the
benefit of Holders of iMTP 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)(iv) 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 law, but shall effect no redemption except in accordance
with the 1940 Act and any applicable 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 iMTP Shares (other than the
ten-calendar-day minimum notice period set forth in Section 2.5(d)(ii)),
provided that such modification does not materially and adversely affect the
Holders of the iMTP 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 Agent without its prior consent.

   2.6 Voting Rights.

       (a) One Vote Per iMTP Share. Except as otherwise provided in the
Declaration or as otherwise required by law, (i) each Holder of iMTP Shares
shall be

                                      30

<PAGE>

entitled to one vote for each iMTP 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 iMTP Shares, and Common
Shares shall vote together as a single class; provided, however, that the
holders of outstanding Preferred Shares, including Outstanding iMTP Shares,
shall be entitled, as a class, to the exclusion of the Holders of all other
securities and Common Shares of the Fund, to elect two trustees of the Fund at
all times. Subject to Section 2.6(b), the Holders of outstanding Common Shares
and Preferred Shares, including iMTP 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 iMTP Shares, would constitute a
majority of the Board of Trustees as so increased by such smallest number; and
the Holders of Preferred Shares, including iMTP 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 iMTP 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 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.

   A Voting Period shall terminate upon all of the foregoing conditions ceasing
to exist. 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

                                      31

<PAGE>

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

          (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 iMTP 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 iMTP 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 Preferred Shares pursuant to Section 2.6(b)(i) shall terminate, the remaining

                                      32

<PAGE>

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 iMTP Shares to Vote on Certain Matters.

          (i) Certain Amendments Requiring Approval of iMTP Shares. Except as
otherwise permitted by the terms of this Statement, so long as any iMTP Shares
are Outstanding, the Fund shall not, without the affirmative vote or consent of
the Holders of at least a majority of the iMTP Shares subject to this Statement
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 adversely affect any preference, right or
power of such iMTP 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 adversely affect the rights and preferences of the
iMTP Shares and (ii) a division of an iMTP Share shall be deemed to affect such
preferences, rights or powers only if the terms of such division adversely
affect the Holders of the iMTP Shares. For purposes of the foregoing, no matter
shall be deemed to adversely affect any preference, right or power of an iMTP
Share of any Series of iMTP Shares or the Holder thereof unless such matter (i)
alters or abolishes any preferential right of such iMTP Share or (ii) creates,
alters or abolishes any right in respect of redemption of such iMTP Share
(other than as a result of a division of an iMTP Share). So long as any iMTP
Shares are Outstanding, the Fund shall not, without the affirmative vote or
consent of at least 66 2/3% of the Holders of the iMTP 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. For the
avoidance of doubt, no vote of the holders of Common Shares shall be required
to amend, alter or repeal the provisions of this Statement, including any
Appendix hereto.

          (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 iMTP Shares Outstanding at the
time, voting as a separate class, shall be required (A) to approve any
conversion of the Fund from a closed-end to an open-end investment company, (B)
to approve any plan of reorganization (as such term is used in the 1940 Act)
adversely affecting such shares, or (C) to approve any other action requiring a
vote of security holders of the Fund under Section 13(a) of the 1940 Act. For

                                      33

<PAGE>

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
iMTP Shares. Except as otherwise permitted by the terms of this Statement, so
long as any iMTP 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 iMTP Shares of such Series of iMTP Shares Outstanding at the time,
voting as a separate class, amend, alter or repeal the provisions of the
Appendix relating to such Series of iMTP Shares, whether by merger,
consolidation or otherwise, so as to adversely affect any preference, right or
power set forth in such Appendix of the iMTP Shares of such Series of iMTP
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 adversely affect the rights and preferences of the iMTP Shares of
such Series of iMTP Shares and (ii) a division of an iMTP Share shall be deemed
to affect such preferences, rights or powers only if the terms of such division
adversely affect the Holders of the iMTP Shares of such Series of iMTP Shares;
and provided, further, that no amendment, alteration or repeal of (1) the
obligation of the Fund to (x) pay the Term Redemption Price on the Term
Redemption Date for a Series of iMTP Shares, (y) accumulate dividends at the
Dividend Rate (as set forth in this Statement and the applicable Appendix
hereto) for such Series of iMTP Shares, or (z) pay the Optional Redemption
Premium (if any) provided for in the Appendix for such Series of iMTP Shares or
(2) the provisions of the Appendix for such Series of iMTP Shares setting forth
the Liquidation Preference for the iMTP Shares of such Series of iMTP Shares
shall be effected without, in each case, the prior unanimous vote or consent of
the Holders of such Series of iMTP Shares. For purposes of the foregoing, no
matter shall be deemed to adversely affect any preference, right or power of an
iMTP Share of a Series or the Holder thereof unless such matter (i) alters or
abolishes any preferential right of such iMTP Share or (ii) creates, alters or
abolishes any right in respect of redemption of such iMTP Share. For the
avoidance of doubt, no vote of the holders of Common Shares shall be required
to amend, alter or repeal the provisions of this Statement, including any
Appendix hereto.

       (d) Voting Rights Set Forth Herein Are Sole Voting Rights. Unless
otherwise required by law or the Declaration, the Holders of iMTP Shares shall
not have

                                      34

<PAGE>

any relative rights or preferences or other special rights with respect to
voting such iMTP Shares other than those specifically set forth in this Section
2.6.

       (e) No Cumulative Voting. The Holders of iMTP 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 any dividends or pay any
dividends on any Series of iMTP Shares on the Dividend Payment Date therefor,
the exclusive remedy of the Holders of the iMTP 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
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 iMTP Shares to vote on any matter, whether such right is created
by this Statement, by the Declaration, by statute or otherwise, no Holder of
iMTP Shares shall be entitled to vote any iMTP Share and no iMTP 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 iMTP Share shall have been given in accordance with this
Statement and Deposit Securities for the payment of the Redemption Price of
such iMTP Share shall have been deposited in trust with the Agent for that
purpose. No iMTP Share held (legally or beneficially) 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.

       (h) Grant of Irrevocable Proxy. To the fullest extent permitted by
applicable law, each Holder and Designated Owner may in its discretion grant a
proxy with respect to the iMTP Shares, which proxy may be made irrevocable
under Massachusetts law to the extent coupled with an interest, and may, if so
provided in such proxy, continue in effect so long as the iMTP Shares covered
by the proxy are Outstanding, or for such other period provided in such proxy.

   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 iMTP Shares for so long as such Series of iMTP Shares is
Outstanding. 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

                                      35

<PAGE>

as a Rating Agency hereunder with respect to a Series of iMTP Shares so long as
either (i) immediately following such termination, there would be at least two
Rating Agencies with respect to such Series of iMTP Shares or (ii) it replaces
the terminated Rating Agency with another NRSRO and provides notice thereof to
the Holders of such Series of iMTP Shares; provided that such replacement shall
not occur unless such replacement Rating Agency shall have at the time of such
replacement (i) published a rating for the iMTP Shares of such Series of iMTP
Shares 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 Rating
Agencies hereunder with respect to a Series of iMTP Shares by notice to the
Holders of the iMTP Shares.

   2.8 Issuance of Additional Preferred Shares. So long as any iMTP 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 Preferred Shares, ranking on a parity with iMTP 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 iMTP Shares, including additional Series of iMTP Shares
and additional shares of then Outstanding Series of iMTP Shares, in each case
in accordance with applicable law, provided that the Fund shall, immediately
after giving effect to the issuance and sale of such additional 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 iMTP Shares. iMTP 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. Holders of iMTP
Shares of a Series shall be entitled to receive, when, as and if declared by
the Board of Trustees, out of funds legally available therefor in accordance
with applicable law, the Declaration and this Statement, additional dividends
or other distributions payable in an amount or amounts equal to the aggregate
Additional California Amount Payments, as follows:

       (a) Whenever the Fund intends or expects to include a Taxable Allocation
in any dividend on iMTP Shares of a Series, the Fund shall, subject to Section
2.10(b), (i) in addition to and in conjunction with the payment of such
dividend, pay the Additional California Amount Payment, payable in respect of
the Taxable Allocation that was included as part of such dividend and (ii)
notify the Agent of the fact that a Taxable Allocation will be so included not
later than fourteen (14) calendar days preceding the earliest date on which a
dividend is declared with respect to which the Taxable Allocation will relate
(as provided in Section 2.10(d)). Whenever such advance notice (a "Notice of
Taxable Allocation") is received from the Fund, the Agent will, in

                                      36

<PAGE>

turn, provide notice thereof to each Holder and to each Designated Owner or its
Agent Member that has been identified in writing to the Agent.

       (b) If the Fund determines that a Taxable Allocation must be included in
a dividend on iMTP Shares of a Series but it is not practicable to pay any
required Additional California Amount Payment concurrently with such dividend
pursuant to Section 2.10(a), then the Fund shall pay such Additional California
Amount Payment as soon as reasonably practicable and without reference to any
regular Dividend Payment Date. Similarly, if the Fund determines that a Taxable
Allocation must be included in a dividend on iMTP Shares of a Series but it is
not practicable to comply with the requirements for prior notice in Section
2.10(a), then the Fund shall provide notice thereof to the Agent as soon as
practicable, but in any event prior to the end of the calendar year in which
such dividend is paid. Whenever such notice is received from the Fund, the
Agent will, in turn, provide notice thereof to each Holder and each Designated
Owner or its Agent Member that has been identified in writing to the Agent. For
the avoidance of doubt, this Section 2.10(b) is not intended to excuse the
Fund's obligations under Section 2.10(a), but rather to provide a mechanism for
paying Additional California Amount Payments and providing notice thereof under
circumstances in which the Fund may not become aware of the need to report a
dividend as other than as wholly an exempt-interest dividend until it is not
practicable to comply fully with Section 2.10(a). Moreover, the Fund shall not
be considered to have failed to comply with the notice provisions of Section
2.10(a)(ii) to the extent that (i) the Fund's determination of whether a
Taxable Allocation will be required cannot be made prior to the date on which
notice would otherwise be required, (ii) such Taxable Allocation cannot be made
with respect to a later dividend because the current dividend is the last with
respect to the Fund's taxable year, and (iii) the Fund timely complies with its
obligations for notice under this Section 2.10(b) with respect to such events
and Taxable Allocation.

       (c) Notwithstanding anything to the contrary in this Statement, the Fund
shall not be required to make Additional California Amount Payments with
respect to any net capital gains or other taxable income determined by the
Internal Revenue Service to be allocable in a manner different from the manner
used by the Fund. The Fund will promptly give notice to the Agent of any such
determination, with instructions to forward such notice to each Holder of
affected iMTP Shares during the affected periods at such Holder's address as
the same appears or last appeared on the record books of the Fund.

       (d) If the Fund determines that a Taxable Allocation will be made with
respect to a dividend to be paid with respect to iMTP Shares of a Series on a
date specified in Section 2.2(f) and notice of such Taxable Allocation is
required pursuant to Section 2.10(a)(ii) or Section 2.10(b), to the extent
possible the Fund will cause such Taxable Allocation to relate to the last day
on which dividends are declared that will be paid on such specified date (and,
if the amount of the dividend declared on such last day is less than the
Taxable Allocation, the immediately preceding day, with such process continuing
to each preceding day in the applicable Dividend Period until the full amount
of the Taxable Allocation is exhausted) so that, to the extent possible, the
dividends

                                      37

<PAGE>

declared on the earlier dates will be reported entirely as exempt-interest
dividends and only the dividends declared with respect to such last day or
preceding days will include a Taxable Allocation.

   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 iMTP 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 of iMTP Shares. The "Term
Redemption Amount" for any Series of iMTP Shares shall be equal to the Term
Redemption Price to be paid on the Term Redemption Date for such Series of iMTP
Shares, based on the number of shares of such Series of iMTP Shares then
Outstanding, assuming for this purpose that the Dividend Rate for such Series
of iMTP Shares in effect at the time of the creation of the Term Redemption
Liquidity Account for such Series of iMTP Shares will be the Dividend Rate in
effect for such Series of iMTP Shares until the Term Redemption Date for such
Series of iMTP Shares. 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 iMTP Shares as of the
close of business on any Business Day is less than one hundred ten percent
(110%) of the Term Redemption Amount with respect to such Series of iMTP
Shares, 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 of iMTP Shares is equal to at least one hundred ten percent
(110%) of the Term Redemption Amount with respect to such Series of iMTP Shares
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 iMTP 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 of iMTP Shares and (ii) the
assets of the Fund constituting Deposit Securities segregated in the Term
Redemption Liquidity Account at the close of business on such date have a
Market Value equal to the Liquidity Requirement (if any) determined in
accordance with Section 2.11(b) below with respect to such Series of iMTP
Shares for such date. The Fund shall not, and shall cause the

                                      38

<PAGE>

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
iMTP 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.

       (b)  The Market Value of the Deposit Securities held in the Term
Redemption Liquidity Account for a Series of iMTP 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 of iMTP Shares occurs,
in each case specified in the table set forth below, shall not be less than the
percentage of the Term Redemption Amount for such Series of iMTP Shares 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:

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

       (c)  If the aggregate Market Value of the Deposit Securities included in
the Term Redemption Liquidity Account for a Series of iMTP Shares as of the
close of business on any Business Day is less than the Liquidity Requirement in
respect of such Series of iMTP Shares 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 of iMTP
Shares, so that the aggregate Market Value of the Deposit Securities included
in the Term Redemption Liquidity Account for such Series of iMTP Shares is at
least equal to the Liquidity Requirement for such Series of iMTP Shares 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 iMTP Shares may be applied by the Fund, in its
discretion, towards payment of the Term Redemption Price for such Series of
iMTP Shares as contemplated by Section 2.5(d). Upon the deposit by the Fund
with the Agent of Deposit Securities having an initial combined Market Value
sufficient to effect the redemption of

                                      39

<PAGE>

the iMTP Shares of a Series on the Term Redemption Date for such Series of iMTP
Shares in accordance with Section 2.5(d)(iii), the requirement of the Fund to
maintain the Term Redemption Liquidity Account in respect of such Series of
iMTP Shares as contemplated by this Section 2.11 shall lapse and be of no
further force and effect.

   2.12 Global Certificate. All iMTP Shares of a Series Outstanding from time
to time shall be represented by one global certificate for such Series of iMTP
Shares registered in the name of the Securities Depository or its nominee, and
no registration of transfer of shares of such Series of iMTP 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 restriction on
registration of transfer shall be conspicuously noted on the face or back of
the global certificates for such Series of iMTP Shares. Such global
certificates will be deposited with, or on behalf of, The Depository Trust
Company and registered in the name of Cede & Co., its nominee. Beneficial
interests in the global certificates will be held only through The Depository
Trust Company and any of its participants.

   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 other 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 all iMTP Shares of a Series subject to
this Statement have been redeemed in accordance with Section 2.5 of this
Statement, all rights and preferences of the shares of such Series of iMTP
Shares established and designated hereunder shall cease and terminate, and all
obligations of the Fund under this Statement with respect to such Series of
iMTP Shares shall terminate.

   2.15 Appendices. The designation of each Series of iMTP Shares subject to
this Statement may 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 of iMTP Shares so as
to reflect any amendments to the terms applicable to such Series of iMTP Shares
including an increase in the number of authorized shares of such Series of iMTP
Shares and (2) add additional Series of iMTP Shares by including a new Appendix
to this Statement relating to such Series of iMTP Shares.

   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,

                                      40

<PAGE>

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 law and Section 2.6(c), the
Board of Trustees, without the vote of the Holders of iMTP 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 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 so long as any such interpretation,
supplementation or amendment does not adversely affect the rights and
preferences of the iMTP Shares affected thereby.

   2.18 Transfers.

       (a) Unless otherwise permitted by the Fund, a Designated Owner or Holder
of any iMTP Shares of a Series may sell, transfer or otherwise dispose of iMTP
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, or (ii)
tender option bond trusts in which it reasonably believes all investors are
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act or any successor provision).

       (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 iMTP Shares and prospective purchasers of iMTP 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 iMTP Shares shall not have any relative rights or
preferences or other special rights with respect to such iMTP Shares other than
those specifically set forth in this Statement.

   2.20 Agreed Tax Treatment. The Fund shall, and each Holder and Designated
Owner of any iMTP Shares, by virtue of acquiring iMTP Shares, shall be deemed
to have agreed to, treat the iMTP Shares as equity in the Fund for U.S.
federal, state and local income and other tax purposes, applicable state law
and the 1940 Act, provided that the Fund shall not be in violation of this
Section 2.20 if a federal, state or local income tax authority requires the
Fund to treat the iMTP Shares as debt for such purposes due to a violation of
this Section 2.20 by any Holder or Designated Owner of iMTP Shares.

                                      41

<PAGE>

                 [Signature Page Begins on the Following Page]

                                      42

<PAGE>

   IN WITNESS WHEREOF, Nuveen California AMT-Free Municipal Income Fund has
caused this Statement to be signed on December 18, 2014 in its name and on its
behalf by a duly authorized officer. The Declaration is on file with the
Secretary 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 CALIFORNIA AMT-FREE MUNICIPAL
                                          INCOME FUND

                                          By:     /s/ Kevin J. McCarthy
                                                  ------------------------------
                                          Name:   Kevin J. McCarthy
                                          Title:  Vice President & Secretary

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

<PAGE>

                                                                     APPENDIX A

               NUVEEN CALIFORNIA AMT-FREE MUNICIPAL INCOME FUND

           INSTITUTIONAL MUNIFUND TERM PREFERRED SHARES, SERIES 2018

             Preliminary Statement and Incorporation By Reference

   This Appendix establishes a Series of Institutional MuniFund Term Preferred
Shares of Nuveen California AMT-Free Municipal Income Fund. Except as set forth
below, this Appendix incorporates by reference the terms set forth with respect
to all Series of such Institutional MuniFund Term Preferred Shares in that
"Statement Establishing and Fixing the Rights and Preferences of Institutional
MuniFund Term Preferred Shares" effective as of December 19, 2014 (the "iMTP
Statement"). This Appendix has been adopted by resolution of the Board of
Trustees of Nuveen California AMT-Free Municipal Income Fund. Capitalized terms
used herein but not defined herein have the respective meanings therefor set
forth in the iMTP Statement.

Section 1. Designation as to Series.

   Institutional MuniFund Term Preferred Shares, Series 2018: A series of Seven
Thousand Two Hundred (7,200) Preferred Shares classified as Institutional
MuniFund Term Preferred Shares is hereby designated as the "Institutional
MuniFund Term Preferred Shares, Series 2018" (the "Series 2018 iMTP Shares").
Each share of such Series of iMTP Shares 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 iMTP Statement (except as the iMTP Statement may be
expressly modified by this Appendix), as are set forth in this Appendix A. The
Series 2018 iMTP Shares shall constitute a separate series of Preferred Shares
and of the Institutional MuniFund Term Preferred Shares and each Series 2018
iMTP Share shall be identical. The following terms and conditions shall apply
solely to the Series 2018 iMTP Shares:

Section 2. Number of Authorized Shares of Series.

   The number of authorized shares is Seven Thousand Two Hundred (7,200).

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

   The Date of Original Issue is December 19, 2014.

Section 4. Initial Spread Applicable to Series.

   The Initial Spread is 0.47%.

Section 5. Liquidation Preference Applicable to Series.

                                      A-1

<PAGE>

   The Liquidation Preference is $5,000.00 per share.

Section 6. Term Redemption Date Applicable to Series.

   The Term Redemption Date is July 1, 2018.

Section 7. Dividend Payment Dates Applicable to Series.

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

Section 8. Non-Call Period Applicable to Series.

   The Non-Call Period is the period beginning on the Date of Original Issue
and ending at the close of business on December 31, 2015.

Section 9. Liquidity Account Initial Date Applicable to Series.

   The Liquidity Account Initial Date is January 1, 2018.

Section 10. Exceptions to Certain Definitions Applicable to the Series.

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

   Not applicable.

Section 11. 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 2018 iMTP Shares, in the
case of the first Dividend Period, the period beginning on the Date of Original
Issue for such Series of iMTP Shares and ending on and including January 31,
2015 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 2018 iMTP
Share to be redeemed an amount equal to:

   (A) if the Optional Redemption Date for the Series 2018 iMTP Share does not
occur during a Rating Downgrade Period or Increased Rate Period but occurs on
or after January 1,

                                      A-2

<PAGE>

2016 and prior to July 1, 2016, 1.00% of the Liquidation Preference for such
Series 2018 iMTP Share;

   (B) if the Optional Redemption Date for the Series 2018 iMTP Share does not
occur during a Rating Downgrade Period or Increased Rate Period but occurs on a
date that is on or after July 1, 2016, and prior to January 1, 2017, 0.50% of
the Liquidation Preference for such Series 2018 iMTP Share; or

   (C) if the Optional Redemption Date for the Series 2018 iMTP Share either
occurs during a Rating Downgrade Period or Increased Rate Period or occurs on a
date that is on or after January 1, 2017, 0.00% of the Liquidation Preference
for such Series 2018 iMTP Share.

Section 12. Amendments to Terms of iMTP Shares Applicable to the Series. The
following provisions contained under the heading "Terms of the iMTP Shares" in
the iMTP Statement are hereby amended as follows:

   Not applicable.

                                      A-3

<PAGE>

   IN WITNESS WHEREOF, Nuveen California AMT-Free Municipal Income Fund has
caused this Appendix to be signed on December 18, 2014 in its name and on its
behalf by a duly authorized officer. The Declaration is on file with the
Secretary 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 CALIFORNIA AMT-FREE MUNICIPAL
                                          INCOME FUND

                                          By:     /s/ Kevin J. McCarthy
                                                  ------------------------------
                                          Name:   Kevin J. McCarthy
                                          Title:  Vice President & Secretary

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