NUVEEN INSURED PREMIUM INCOME
MUNICIPAL FUND 2
NUVEEN PREMIUM INCOME MUNICIPAL FUND
2, INC.
NUVEEN PREMIUM INCOME MUNICIPAL FUND
4, INC.
NUVEEN INSURED MUNICIPAL OPPORTUNITY
FUND, INC.
Sub-Item 77E-Legal Proceedings
and Sub-Item 85B-Errors and Omissions Policy Claims
A lawsuit brought in June, 1996 (Green et al v. Nuveen
Advisory Corp. et al) by certain individual common
shareholders of six leveraged closed-end funds (including
the above-referenced Funds) sponsored by Nuveen is
currently pending in federal district court in Chicago. The
plaintiffs allege that the leveraged closed-end funds
engaged in certain practices that violated various
provisions of the 1940 Act and common law. The
plaintiffs also alleged, among other things, breaches of
fiduciary duty by the funds' directors and Nuveen
Advisory and various misrepresentations and omission in
prospectuses and shareholder reports relating to the use of
leverage through the issuance and periodic auctioning of
preferred stock and the basis of the calculation and
payment of management and brokerage fees to Nuveen
Advisory and Nuveen. Plaintiffs also filed a motion to
certify defendant and plaintiff classes.
The defendants are vigorously defending the case and filed
motions to dismiss the entire lawsuit asserting that the
claims are without merit and to oppose certification of any
classes. By opinion dated March 30, 1999, the court
granted most of the defendants' motion to dismiss and
denied plaintiffs' motion to certify defendant and plaintiff
classes. The court dismissed all claims against the funds,
the funds' directors and Nuveen. The court dismissed
these claims without prejudice (which means that the
plaintiffs can re-file the claims if they can correct the
defect that led to the claim being dismissed) on the ground
that the claims should have been brought as derivative
claims on behalf of the funds. The only remaining claim
is brought under Section 36(b) of the 1940 Act against
Nuveen Advisory, and relates solely to advisory fees
Nuveen Advisory received from the six relevant funds.
The parties are currently engaged in discovery relating to
the one remaining claim.
NUVEEN MASSACHUSETTS PREMIUM INCOME
MUNICIPAL FUND (the "Fund")
Sub-Item 77E-Legal Proceedings and
Sub-Item 85B-Errors and Omissions Policy Claims
A lawsuit brought in June, 1996 (Green et al v. Nuveen
Advisory Corp. et al) by certain individual common
shareholders of six leveraged closed-end funds (including
the above-referenced Funds) sponsored by Nuveen is
currently pending in federal district court in Chicago. The
plaintiffs allege that the leveraged closed-end funds
engaged in certain practices that violated various
provisions of the 1940 Act and common law. The
plaintiffs also alleged, among other things, breaches of
fiduciary duty by the funds' directors and Nuveen
Advisory and various misrepresentations and omission in
prospectuses and shareholder reports relating to the use of
leverage through the issuance and periodic auctioning of
preferred stock and the basis of the calculation and
payment of management and brokerage fees to Nuveen
Advisory and Nuveen. Plaintiffs also filed a motion to
certify defendant and plaintiff classes.
The defendants are vigorously defending the case and filed
motions to dismiss the entire lawsuit asserting that the
claims are without merit and to oppose certification of any
classes. By opinion dated March 30, 1999, the court
granted most of the defendants' motion to dismiss and
denied plaintiffs' motion to certify defendant and plaintiff
classes. The court dismissed all claims against the funds,
the funds' directors and Nuveen. The court dismissed
these claims without prejudice (which means that the
plaintiffs can re-file the claims if they can correct the
defect that led to the claim being dismissed) on the ground
that the claims should have been brought as derivative
claims on behalf of the funds. The only remaining claim
is brought under Section 36(b) of the 1940 Act against
Nuveen Advisory, and relates solely to advisory fees
Nuveen Advisory received from the six relevant funds.
The parties are currently engaged in discovery relating to
the one remaining claim.
Legal Proceedings
Lawsuits originally filed in January, 1994 by
shareholders of Nuveen Premium Income Municipal
Fund, Inc. ("NPI") and Nuveen Municipal Value Fund
("NUV"), two Nuveen sponsored closed-end funds, are
currently pending in the United States District Court in
Chicago, against John Nuveen & Co. Incorporated,
Nuveen Advisory Corp., (adviser to the Nuveen Funds)
and those individuals who were directors of NUV and NPI
at the time of each Fund's January, 1994 rights offering.
The lawsuits (which have been consolidated) allege,
among other things, that the defendants violated federal
and state law and each fund's articles of incorporation in
the rights offerings and seek unspecified damages.
Subsequently, plaintiffs brought actions on behalf
of NPI and NUV against the funds' outside and Nuveen's
inside legal counsel alleging, among other things,
negligence and professional malpractice and seeking
unspecified damages. The Board of Directors of NPI and
NUV have created a committee comprised of directors
who are not defendants in the suits to investigate the
various claims made by the plaintiffs in each action; the
committee has completed its investigation. Based on the
committee's investigation, each Fund, in May, 1996, filed
a motion to be substituted as the actual plaintiff and to
terminate the litigation, except as to certain claims against
the Fund's adviser and outside counsel. The motion is
currently pending before the Court. While there can be
no assurance as to the outcome of these suits, based on
their current status, Fund management believes that they
will not have a material adverse effect on the Funds.
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