<DOCUMENT>
<TYPE>EX-99.2H
<SEQUENCE>4
<FILENAME>c22094_ex99-2h.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>

                                                                     Exhibit (h)





                            BlackRock Core Bond Trust


                              [            Shares]


                                  Common Shares
                                ($.001 Par Value)


                             UNDERWRITING AGREEMENT


                                November 27, 2001

<PAGE>


                             UNDERWRITING AGREEMENT


                                                               November 27, 2001


UBS Warburg LLC,
as Managing Underwriter
299 Park Avenue
New York, New York  10171-0026

Ladies and Gentlemen:

        BlackRock  Core Bond Trust,  a Delaware  business  trust (the  "Trust"),
proposes  to issue  and sell to the  underwriters  named in  Schedule  A annexed
hereto (the "Underwriters") an aggregate of [ ]common shares (the "Firm Shares")
of beneficial interest $0.001 par value (the "Common Shares"),  of the Trust. In
addition, solely for the purpose of covering over-allotments, the Trust proposes
to grant to the  Underwriters  the  option to  purchase  from the Trust up to an
additional [ ] Common Shares (the "Additional Shares").  The Firm Shares and the
Additional  Shares are  hereinafter  collectively  sometimes  referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.

        The Trust has filed with the  Securities  and Exchange  Commission  (the
"Commission"),  in accordance with the provisions of the Securities Act of 1933,
as amended,  and the rules and regulations  thereunder  (collectively called the
"Act"),  and with the  provisions  of the  Investment  Company  Act of 1940,  as
amended,  and the rules and  regulations  thereunder  (collectively  called  the
"Investment  Company  Act"),  a  registration  statement  on Form N-2 (File Nos.
333-71836 and  811-10543,  including a prospectus  and a statement of additional
information,  relating to the Shares. The Trust has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary  prospectuses
(including a preliminary  statement of additional  information)  (each  thereof,
including such  preliminary  statement of additional  information,  being herein
called a  "Preliminary  Prospectus")  relating to the Shares.  Except  where the
context  otherwise  requires,  the  registration  statement,  as amended when it
becomes  effective (the  "Effective  Date"),  including all documents filed as a
part  thereof,   and  including  any  information   contained  in  a  prospectus
subsequently  filed with the  Commission  pursuant to Rule 497 under the Act and
deemed to be part of the  registration  statement  at the time of  effectiveness
pursuant  to  Rule  430A  under  the  Act is  herein  called  the  "Registration
Statement,"   and  the   prospectus   (including  the  statement  of  additional
information),  in the form filed by the Trust with the  Commission  pursuant  to
Rule 497  under the Act or, if no such  filing  is  required,  the form of final
prospectus  (including  the form of final  statement of additional  information)
included  in the  Registration  Statement  at the time it became  effective,  is
herein called the  "Prospectus".  Any  registration  statement filed pursuant to
Rule 462(b) of the Act is herein  referred to as the "Rule  462(b)  Registration
Statement,"  and after  such  filing  the term  "Registration  Statement"  shall
include the Rule 462(b) Registration Statement. In addition, the Trust has filed
a Notification  of Registration  on Form N-8A (the  "Notification")  pursuant to
Section 8 of the Investment Company Act.

        BlackRock Advisors,  Inc. ("BAI") acts as the Trust's investment adviser
pursuant to an Investment Management Agreement by and between the Trust and BAI,
dated as of November 19, 2001 (the "Management Agreement").  BlackRock Financial
Management,  Inc. ("BFM") acts as the Trust's investment sub-adviser pursuant to
a Sub-Investment  Advisory Agreement by and between BFM and BAI, as accepted and
agreed  to by the  Trust,  dated as of  November  19,  2001  (the  "Sub-Advisory
Agreement").  BAI and BFM are each an "Adviser",  and together,  the "Advisers".
State Street Bank and Trust Company acts as the custodian (the  "Custodian")  of
the Trust's cash and portfolio assets pursuant to a Custodian  Agreement,  dated
as of November 19, 2001 (the "Custodian Agreement"). EquiServe Trust

<PAGE>


Company acts as the Trust's  transfer agent,  registrar,  shareholder  servicing
agent and dividend  disbursing  agent with  respect to the common  shares of the
Trust (the "Transfer Agent") pursuant to a Transfer Agent and Service Agreement,
dated as of November 26, 2001 (the "Transfer Agency Agreement").

        The Trust, the Advisers and the Underwriters agree as follows:

        1.      SALE  AND  PURCHASE.  Upon  the  basis  of  the  warranties  and
representations  and subject to the terms and conditions  herein set forth,  the
Trust  agrees  to  sell  to  the  respective   Underwriters   and  each  of  the
Underwriters,  severally and not jointly,  agrees to purchase from the Trust the
aggregate  number of Firm Shares set forth opposite the name of such Underwriter
in  Schedule  A attached  hereto in each case at a  purchase  price of $ [ ] per
Share.  The Trust is advised by you that the  Underwriters  intend (i) to make a
public  offering of their  respective  portions of the Firm Shares as soon after
the  effective  date  of the  Registration  Statement  as in  your  judgment  is
advisable  and (ii)  initially to offer the Firm Shares upon the terms set forth
in the  Prospectus.  You may from time to time  increase or decrease  the public
offering  price  after the  initial  public  offering  to such extent as you may
determine.

                In addition, the Trust hereby grants to the several Underwriters
the option to purchase, and upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase,  severally and not jointly,  from the Trust, ratably
in  accordance  with the number of Firm Shares to be  purchased by each of them,
all or a  portion  of  the  Additional  Shares  as may  be  necessary  to  cover
over-allotments  made in connection with the offering of the Firm Shares, at the
same purchase  price per share to be paid by the  Underwriters  to the Trust for
the Firm  Shares.  This option may be  exercised by you on behalf of the several
Underwriters  at any time,  and from time to time, on or before the  forty-fifth
day following the date hereof, by written notice to the Trust. Such notice shall
set forth the aggregate  number of  Additional  Shares as to which the option is
being  exercised,  and the date and time when the  Additional  Shares  are to be
delivered (such date and time being herein referred to as the Additional Time of
Purchase);  PROVIDED, HOWEVER, that the Additional Time of Purchase shall not be
earlier than the Time of Purchase (as defined below) nor earlier than the second
business day(1) after the date on which the option shall have been exercised nor
later than the tenth  business day after the date on which the option shall have
been exercised.  The number of Additional  Shares to be sold to each Underwriter
shall be the number which bears the same  proportion to the aggregate  number of
Additional  Shares  being  purchased  as the  number  of Firm  Shares  set forth
opposite  the name of such  Underwriter  on Schedule A hereto bears to the total
number of Firm Shares  (subject,  in each case,  to such  adjustment  as you may
determine to eliminate fractional shares).

        2.      PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares  shall be made to the  Trust by  Federal  Funds  wire  transfer,  against
delivery of the  certificates  for the Firm Shares to you through the facilities
of the  Depository  Trust  Company  ("DTC") for the  respective  accounts of the
Underwriters.  Such payment and delivery  shall be made at 10:00 A.M.,  New York
City time,  on November 30, 2001 (unless  another time shall be agreed to by you
and the Trust or unless postponed in accordance with the provisions of Section 8
hereof).  The time at which such  payment  and  delivery  are  actually  made is
hereinafter  sometimes  called the "Time of  Purchase"  or the  "Closing  Date".
Certificates for the Firm Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify on the second business
day preceding the Time of Purchase.  For the purpose of expediting  the checking
of the  certificates  for the Firm Shares by you,  the Trust agrees to make such
certificates  available to you for such  purpose at least one full  business day
preceding the Time of Purchase.

                Payment of the purchase price for the Additional Shares shall be
made at the  Additional  Time of  Purchase  in the same  manner  and at the same
office as the payment for the Firm Shares.

--------

(1)     As used  herein  "business  day"  shall mean a day on which the New York
        Stock Exchange is open for trading.

                                     - 2 -
<PAGE>


Certificates  for the Additional  Shares shall be delivered to you in definitive
form in such names and in such  denominations as you shall specify no later than
the second  business day  preceding  the  Additional  Time of Purchase.  For the
purpose of expediting the checking of the certificates for the Additional Shares
by you,  the Trust  agrees to make such  certificates  available to you for such
purpose  at  least  one full  business  day  preceding  the  Additional  Time of
Purchase.

        3.      REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE ADVISERS.

                (a)     The  Trust  and  the  Advisers   jointly  and  severally
        represent and warrant to each of the  Underwriters as of the date hereof
        and as of the Closing Date and each Additional Time of Purchase, if any,
        referred  to in Section 2 hereof,  and agree with each  Underwriter,  as
        follows:

                        (i)     Each of the Registration  Statement and any Rule
                462(b) Registration Statement has become effective under the Act
                and  no  stop  order   suspending  the   effectiveness   of  the
                Registration Statement or any Rule 462(b) Registration Statement
                has been  issued  under  the Act,  or  order  of  suspension  or
                revocation  of  registration  pursuant  to  Section  8(e) of the
                Investment  Company Act, and no proceedings for any such purpose
                have been  instituted or are pending or, to the knowledge of the
                Trust or the Advisers,  are contemplated by the Commission,  and
                any  request  on the  part  of  the  Commission  for  additional
                information has been complied with.

                        At the respective times the Registration Statement,  any
                Rule  462(b)  Registration   Statement  and  any  post-effective
                amendments thereto became effective and at any Closing Date, the
                Registration Statement,  the Rule 462(b) Registration Statement,
                the  Notification  and any  amendments and  supplements  thereto
                complied  and will  comply  in all  material  respects  with the
                requirements  of the Act and the Investment  Company Act and did
                not and will not contain an untrue  statement of a material fact
                or omit to state a material fact  required to be stated  therein
                or  necessary  to make the  statements  therein not  misleading.
                Neither  the   Prospectus  nor  any  amendments  or  supplements
                thereto,  at the time the  Prospectus  or any such  amendment or
                supplement was issued and at any Closing Date,  included or will
                include an untrue  statement  of a  material  fact or omitted or
                will omit to state a material  fact  necessary  in order to make
                the statements  therein, in the light of the circumstances under
                which they were made, not misleading.  If Rule 434 of the Act is
                used,  the Trust will comply with the  requirements  of Rule 434
                and the Prospectus shall not be "materially different",  as such
                term is used in Rule 434,  from the  prospectus  included in the
                Registration Statement at the time it became effective.

                        Each preliminary  prospectus and the prospectus filed as
                part of the  Registration  Statement as  originally  filed or as
                part of any  amendment  thereto,  or filed  pursuant to Rule 497
                under the Act,  complied when so filed in all material  respects
                with the Rules and Regulations and each  preliminary  prospectus
                and the  Prospectus  delivered  to the  Underwriters  for use in
                connection   with   this   offering   was   identical   to   the
                electronically   transmitted   copies  thereof  filed  with  the
                Commission  pursuant to its Electronic  Data Gathering  Analysis
                and Retrieval System  ("EDGAR"),  except to the extent permitted
                by Regulation S-T.

                        If a Rule 462(b)  Registration  Statement is required in
                connection  with the offering and sale of the Shares,  the Trust
                has  complied or will comply with the  requirements  of Rule 111
                under the Act relating to the payment of filing fees thereof.

                                     - 3 -
<PAGE>


                        (ii)    The  accountants  who certified the statement of
                assets and liabilities  included in the  Registration  Statement
                are independent public accountants as required by the Act.

                        (iii)   The statement of assets and liabilities included
                in the Registration Statement and the Prospectus,  together with
                the related notes, presents fairly the financial position of the
                Trust at the date indicated; said statement has been prepared in
                conformity  with  generally   accepted   accounting   principles
                ("GAAP").

                        (iv)    To  the  extent  estimated  or  projected,  such
                estimates or projections  set forth in the Prospectus in the Fee
                Table are  reasonably  believed to be attainable  and reasonably
                based.

                        (v)     Since   the   respective   dates   as  of  which
                information  is  given  in the  Registration  Statement  and the
                Prospectus,  except as otherwise  stated therein,  (A) there has
                been no material  adverse change in the condition,  financial or
                otherwise,  or in the  earnings,  business  affairs or  business
                prospects  of the Trust,  whether or not arising in the ordinary
                course of business (a "Material Adverse Effect"), (B) there have
                been no transactions entered into by the Trust, other than those
                in the  ordinary  course of business,  which are  material  with
                respect  to the  Trust,  and (C) there has been no  dividend  or
                distribution of any kind declared,  paid or made by the Trust on
                any class of its capital stock other than  dividends made in the
                ordinary  course of  business  prior to the  Additional  Time of
                Purchase.

                        (vi)    The Trust has been duly organized and is validly
                existing as a business  trust in good standing under the laws of
                the State of Delaware and has business trust power and authority
                to own,  lease and  operate  its  properties  and to conduct its
                business as  described in the  Prospectus  and to enter into and
                perform its obligations  under this Agreement;  and the Trust is
                duly qualified as a foreign business trust to transact  business
                and is in good standing in each other jurisdiction in which such
                qualification is required, whether by reason of the ownership or
                leasing of property or the conduct of business, except where the
                failure so to qualify or to be in good standing would not result
                in a Material Adverse Effect.

                        (vii)   The Trust has no subsidiaries.

                        (viii)  The Trust is duly registered with the Commission
                under the  Investment  Company Act as a  closed-end  diversified
                management  investment  company,  and no order of  suspension or
                revocation of such  registration  has been issued or proceedings
                therefor initiated or threatened by the Commission.

                        (ix)    No person is  serving  or acting as an  officer,
                trustee or investment  adviser of the Trust except in accordance
                with  the  provisions  of the  Investment  Company  Act  and the
                Investment  Advisers Act of 1940, as amended,  and the rules and
                regulations   thereunder,   (the  "Advisers  Act").   Except  as
                disclosed in the  Registration  Statement and the Prospectus (or
                any amendment or  supplement  to either of them),  no trustee of
                the  Trust  is  an  "interested   person"  (as  defined  in  the
                Investment  Company Act) of the Trust or an "affiliated  person"
                (as defined in the Investment Company Act) of any Underwriter.

                        (x)     The authorized,  issued and  outstanding  common
                shares of  beneficial  interest  of the Trust is as set forth in
                the Prospectus as of the date thereof under the

                                     - 4 -
<PAGE>


                caption  "Description  of  Shares."  All issued and  outstanding
                common shares of beneficial interest of the Trust have been duly
                authorized   and   validly   issued   and  are  fully  paid  and
                non-assessable,   except  as   provided   for  in  the   Trust's
                declaration  of  trust,  and  have  been  offered  and  sold  or
                exchanged by the Trust in compliance  with all  applicable  laws
                (including,  without  limitation,  federal and state  securities
                laws);  none of the  outstanding  common  shares  of  beneficial
                interest of the Trust was issued in violation of the  preemptive
                or other similar rights of any securityholder of the Trust.

                        (xi)    The Shares to be purchased  by the  Underwriters
                from the Trust have been duly  authorized  for issuance and sale
                to the Underwriters  pursuant to this Agreement and, when issued
                and delivered by the Trust  pursuant to this  Agreement  against
                payment of the consideration  set forth herein,  will be validly
                issued and fully paid and non-assessable, except as provided for
                in the Trust's  declaration of trust.  The Shares conform in all
                material  respects to all statements  relating thereto contained
                in the Prospectus and such description  conforms in all material
                respects to the rights set forth in the instruments defining the
                same;  no holder  of the  Shares  will be  subject  to  personal
                liability by reason of being such a holder;  and the issuance of
                the Shares is not  subject to the  preemptive  or other  similar
                rights of any securityholder of the Trust.

                        (xii)   The Trust is not in violation of its declaration
                of  trust  or  by-laws,  or in  default  in the  performance  or
                observance of any obligation,  agreement,  covenant or condition
                contained in any contract,  indenture,  mortgage, deed of trust,
                loan or credit  agreement,  note,  lease or other  agreement  or
                instrument  to which it is a party or by which it may be  bound,
                or to  which  any of the  property  or  assets  of the  Trust is
                subject (collectively,  "Agreements and Instruments") except for
                such  violations or defaults that would not result in a Material
                Adverse Effect;  and the execution,  delivery and performance of
                this  Agreement,  the  Management  Agreement,  the  Sub-Advisory
                Agreement,  the  Custodian  Agreement  and the  Transfer  Agency
                Agreement and the consummation of the transactions  contemplated
                herein and in the Registration Statement (including the issuance
                and sale of the Shares and the use of the proceeds from the sale
                of the Shares as described in the  Prospectus  under the caption
                "Use  of  Proceeds")  and  compliance  by  the  Trust  with  its
                obligations hereunder have been duly authorized by all necessary
                corporate  action  and do not  and  will  not,  whether  with or
                without  the  giving  of  notice  or  passage  of time or  both,
                conflict with or constitute a breach of, or default or Repayment
                Event (as defined  below)  under,  or result in the  creation or
                imposition of any lien,  charge or encumbrance upon any property
                or  assets  of  the  Trust   pursuant  to,  the  Agreements  and
                Instruments (except for such conflicts,  breaches or defaults or
                liens,  charges  or  encumbrances  that  would  not  result in a
                Material  Adverse  Effect),  nor will such action  result in any
                violation  of the  provisions  of the  declaration  of  trust or
                by-laws  of the  Trust or any  applicable  law,  statute,  rule,
                regulation,  judgment,  order, writ or decree of any government,
                government instrumentality or court, domestic or foreign, having
                jurisdiction over the Trust or any of its assets,  properties or
                operations.  As used herein, a "Repayment Event" means any event
                or  condition  which gives the holder of any note,  debenture or
                other  evidence of  indebtedness  (or any person  acting on such
                holder's behalf) the right to require the repurchase, redemption
                or  repayment  of all or a portion of such  indebtedness  by the
                Trust.

                        (xiii)  There is no action, suit, proceeding, inquiry or
                investigation  before or  brought  by any court or  governmental
                agency or body,  domestic or foreign,  now  pending,  or, to the
                knowledge of the Trust or the Advisers,  threatened,  against or
                affecting  the Trust,  which is required to be  disclosed in the
                Registration Statement (other than as

                                     - 5 -
<PAGE>

                disclosed  therein),  or which might  reasonably  be expected to
                result in a Material  Adverse Effect,  or which might reasonably
                be expected to materially and adversely affect the properties or
                assets  of the  Trust or the  consummation  of the  transactions
                contemplated  in this Agreement or the  performance by the Trust
                of its obligations hereunder. The aggregate of all pending legal
                or governmental  proceedings to which the Trust is a party or of
                which any of its property or assets is the subject which are not
                described  in the  Registration  Statement,  including  ordinary
                routine  litigation  incidental  to  the  business,   could  not
                reasonably be expected to result in a Material Adverse Effect.

                        (xiv)   There are no contracts  or  documents  which are
                required to be  described in the  Registration  Statement or the
                Prospectus or to be filed as exhibits  thereto by the Act or the
                Investment  Company  Act which  have not been so  described  and
                filed as required.

                        (xv)    The Trust owns or  possesses,  or can acquire on
                reasonable  terms,  adequate patents,  patent rights,  licenses,
                inventions,  copyrights,  know-how  (including trade secrets and
                other unpatented and/or unpatentable proprietary or confidential
                information, systems or procedures),  trademarks, service marks,
                trade  names  or  other  intellectual  property   (collectively,
                "Intellectual  Property") necessary to carry on the business now
                operated by the Trust, and the Trust has not received any notice
                or is not  otherwise  aware of any  infringement  of or conflict
                with asserted rights of others with respect to any  Intellectual
                Property or of any facts or circumstances which would render any
                Intellectual  Property  invalid or  inadequate  to  protect  the
                interest  of  the  Trust  therein,  and  which  infringement  or
                conflict (if the subject of any unfavorable decision,  ruling or
                finding)  or  invalidity  or   inadequacy,   singly  or  in  the
                aggregate,  would result in a Material Adverse Effect;  provided
                that the Trust's right to use the name "BlackRock" is limited as
                set forth in Section 16 of the Management Agreement.

                        (xvi)   No  filing  with,  or  authorization,  approval,
                consent, license, order,  registration,  qualification or decree
                of, any court or  governmental  authority or agency is necessary
                or required for the  performance by the Trust of its obligations
                hereunder, in connection with the offering,  issuance or sale of
                the Shares  hereunder or the  consummation  of the  transactions
                contemplated by this Agreement, except such as have been already
                obtained or as may be  required  under the Act,  the  Investment
                Company Act,  the  Securities  Exchange Act of 1934,  as amended
                (the "1934 Act"), or state securities laws.

                        (xvii)  The  Trust  possesses  such  permits,  licenses,
                approvals,  consents  and  other  authorizations  (collectively,
                "Governmental  Licenses")  issued  by the  appropriate  federal,
                state, local or foreign regulatory  agencies or bodies necessary
                to  operate  its  properties  and to  conduct  the  business  as
                contemplated in the Prospectus;  the Trust is in compliance with
                the  terms and  conditions  of all such  Governmental  Licenses,
                except  where the failure so to comply  would not,  singly or in
                the  aggregate,  have  a  Material  Adverse  Effect;  all of the
                Governmental  Licenses  are valid and in full force and  effect,
                except when the invalidity of such Governmental  Licenses or the
                failure of such  Governmental  Licenses  to be in full force and
                effect would not have a Material  Adverse Effect;  and the Trust
                has not  received  any  notice of  proceedings  relating  to the
                revocation or  modification  of any such  Governmental  Licenses
                which,  singly  or  in  the  aggregate,  if  the  subject  of an
                unfavorable  decision,  ruling  or  finding,  would  result in a
                Material Adverse Effect.

                                     - 6 -
<PAGE>


                        (xviii) Any  advertising,   sales  literature  or  other
                promotional material (including "prospectus  wrappers",  "broker
                kits," "road show slides" and "road show scripts") authorized in
                writing  by or  prepared  by the Trust or the  Advisers  used in
                connection with the public offering of the Shares (collectively,
                "sales  material")  does not  contain an untrue  statement  of a
                material  fact or omit to state a material  fact  required to be
                stated therein or necessary to make the statements  therein,  in
                the light of the  circumstances  under which they were made, not
                misleading.  Moreover,  all  sales  material  complied  and will
                comply in all material respects with the applicable requirements
                of the  Act,  the  Investment  Company  Act  and the  rules  and
                interpretations  of  the  National   Association  of  Securities
                Dealers, Inc. ("NASD").

                        (xix)   The Trust  intends to direct the  investment  of
                the  proceeds  of the  offering  described  in the  Registration
                Statement in such a manner as to comply with the requirements of
                Subchapter  M of the Internal  Revenue Code of 1986,  as amended
                ("Subchapter M of the Code" and the "Code,"  respectively),  and
                intends to  qualify  as a  regulated  investment  company  under
                Subchapter M of the Code.

                        (xx)    This Agreement,  the Management  Agreement,  the
                Sub-Advisory Agreement, the Custodian Agreement and the Transfer
                Agency Agreement have each been duly authorized by all requisite
                action on the part of the Trust,  executed and  delivered by the
                Trust, as of the dates noted therein, and each complies with all
                applicable  provisions of the Investment  Company Act.  Assuming
                due  authorization,  execution and delivery by the other parties
                thereto with respect to the Custodian Agreement and the Transfer
                Agency  Agreement,   each  of  the  Management  Agreement,   the
                Sub-Advisory Agreement, the Custodian Agreement and the Transfer
                Agency  Agreement  constitutes a valid and binding  agreement of
                the Trust,  enforceable in accordance with its terms,  except as
                affected  by  bankruptcy,   insolvency,  fraudulent  conveyance,
                reorganization, moratorium and other similar laws relating to or
                affecting   creditors'  rights   generally,   general  equitable
                principles  (whether  considered in a proceeding in equity or at
                law).

                        (xxi)   There are no persons with registration rights or
                other similar rights to have any securities  registered pursuant
                to the  Registration  Statement or otherwise  registered  by the
                Trust under the Act.

                        (xxii)  The  Shares  have  been  duly   authorized   for
                listing, upon notice of issuance, on the New York Stock Exchange
                ("NYSE")  and the  Trust's  registration  statement  on Form 8-A
                under the 1934 Act has become effective.

                (b)     The Advisers  represent and warrant to each  Underwriter
        as of the date hereof and as of the Closing Date  referred to in Section
        2 hereof as follows:

                        (i)     Each of the Advisers has been duly organized and
                is validly  existing and in good standing as corporations  under
                the laws of the State of Delaware with full corporate  power and
                authority  to own,  lease  and  operate  its  properties  and to
                conduct its business as described in the  Prospectus and each is
                duly qualified as a foreign corporation to transact business and
                is in good  standing  in each other  jurisdiction  in which such
                qualification is required.

                        (ii)    Each of Advisers is duly  registered and in good
                standing with the Commission as an investment  adviser under the
                Advisers  Act, and is not  prohibited by

                                     - 7 -
<PAGE>


                the Advisers Act or the Investment Company Act, or the rules and
                regulations  under such acts,  from acting under the  Management
                Agreement  and  the  Sub-Advisory  Agreement  for the  Trust  as
                contemplated by the Prospectus.

                        (iii)   The   description   of  each   Adviser   in  the
                Registration  Statement and the Prospectus (and any amendment or
                supplement  to  either  of  them)  complied  and  comply  in all
                material respects with the provisions of the Act, the Investment
                Company  Act and the  Advisers  Act and is true and  correct and
                does not contain any untrue statement of a material fact or omit
                to state any  material  fact  required  to be stated  therein or
                necessary in order to make the statements  therein,  in light of
                the circumstances under which they were made, not misleading.

                        (iv)    Each of the Advisers has the financial resources
                available to it necessary  for the  performance  of its services
                and  obligations  as   contemplated  in  the  Prospectus,   this
                Agreement and under the respective  Management Agreement and the
                Sub-Advisory Agreement to which it is a party.

                        (v)     This Agreement,  the Management  Agreement,  the
                Sub-Advisory  Agreement and the Shareholder Servicing Agreement,
                by and  between  UBS  Warburg  LLC  and  BAI  (the  "Shareholder
                Servicing Agreement"), have each been duly authorized,  executed
                and delivered by each  respective  Adviser,  and the  Management
                Agreement,   the  Sub-Advisory  Agreement  and  the  Shareholder
                Servicing   Agreement  each   constitute  a  valid  and  binding
                obligation of each respective Adviser, enforceable in accordance
                with its terms,  except as affected by  bankruptcy,  insolvency,
                fraudulent  conveyance,  reorganization,  moratorium  and  other
                similar  laws  relating  to  or  affecting   creditors'   rights
                generally and general equitable  principles  (whether considered
                in a proceeding in equity or at law);  and neither the execution
                and delivery of this Agreement,  the Management  Agreement,  the
                Sub-Advisory  Agreement or the Shareholder  Servicing  Agreement
                nor the performance by either of the Advisers of its obligations
                hereunder  or  thereunder  will  conflict  with,  or result in a
                breach  of any of the terms and  provisions  of, or  constitute,
                with or without the giving of notice or lapse of time or both, a
                default  under,  any  agreement  or  instrument  to which either
                Adviser is a party or by which it is bound,  the  certificate of
                incorporation,  the by-laws or other organizational documents of
                each of the Advisers,  or to each  Adviser's  knowledge,  by any
                law, order,  decree, rule or regulation  applicable to it of any
                jurisdiction,   court,   federal  or  state   regulatory   body,
                administrative agency or other governmental body, stock exchange
                or securities  association having jurisdiction over the Advisers
                or their  respective  properties or operations;  and no consent,
                approval,  authorization  or order of any court or  governmental
                authority  or agency is  required  for the  consummation  by the
                Advisers of the transactions contemplated by this Agreement, the
                Management   Agreement,   the  Sub-Advisory   Agreement  or  the
                Shareholder Servicing Agreement, except as have been obtained or
                may be required under the Act, the  Investment  Company Act, the
                1934 Act or  state  securities  laws.  The  representations  and
                warranties  made by the Advisers in this paragraph in regards to
                the  Shareholder  Servicing  Agreement  are made  only as of the
                Closing Date.

                        (vi)    Since   the   respective   dates   as  of  which
                information  is  given  in the  Registration  Statement  and the
                Prospectus,  except as otherwise  stated therein,  there has not
                occurred any event which should reasonably be expected to have a
                material  adverse  effect on the  ability  of either  Adviser to
                perform its respective  obligations under this Agreement and the
                respective  Management  Agreement and Sub-Advisory  Agreement to
                which it is a party.

                                     - 8 -
<PAGE>


                        (vii)   There is no action, suit, proceeding, inquiry or
                investigation  before or  brought  by any court or  governmental
                agency or body,  domestic or foreign,  now  pending,  or, to the
                knowledge  of the  Advisers,  threatened  against  or  affecting
                either of the Advisers or any  "affiliated  person" of either of
                the Advisers (as such term is defined in the Investment  Company
                Act) or any  partners,  directors,  officers or employees of the
                foregoing,  whether  or not  arising in the  ordinary  course of
                business,  which might  reasonably  be expected to result in any
                material   adverse  change  in  the   condition,   financial  or
                otherwise,  or earnings,  business affairs or business prospects
                of either of the Advisers,  materially and adversely  affect the
                properties  or assets of either of the  Advisers  or  materially
                impair or adversely affect the ability of either of the Advisers
                to function as an investment  adviser or perform its obligations
                under the Management Agreement or the Sub-Advisory Agreement, or
                which is required to be disclosed in the Registration  Statement
                and the Prospectus.

                        (viii)  Each   Adviser  is  not  in   violation  of  its
                certificate of  incorporation,  by-laws or other  organizational
                documents  or in  default  under  any  agreement,  indenture  or
                instrument except for such violations or defaults that would not
                result in a Material Adverse Effect on the respective Adviser or
                the Trust.

                (c)     Any  certificate  signed by any  officer of the Trust or
        the  Advisers  delivered  to the  Representative  or to counsel  for the
        Underwriters  shall be deemed a representation and warranty by the Trust
        or the  Advisers,  as the case  may be,  to each  Underwriter  as to the
        matters covered thereby.

        4.      CERTAIN COVENANTS OF THE TRUST AND THE ADVISERS

                (a)     The  Trust  and the  Advisers,  jointly  and  severally,
        covenant with each Underwriter as follows:

                        (i)     The Trust,  subject to  Section  4(a)(ii),  will
                comply  with  the  requirements  of Rule  430A or Rule  434,  as
                applicable,    and   will    notify   UBS   Warburg   LLC   (the
                "Representative") immediately, and confirm the notice in writing
                or by sending any relevant copies of the following  documents to
                the Representative, (i) when any post-effective amendment to the
                Registration Statement shall become effective, or any supplement
                to the  Prospectus  or any  amended  Prospectus  shall have been
                filed,  (ii) of the receipt of any comments from the Commission,
                (iii) of any request by the  Commission for any amendment to the
                Registration  Statement or any  amendment or  supplement  to the
                Prospectus  or  for  additional  information,  and  (iv)  of the
                issuance  by the  Commission  of any stop order  suspending  the
                effectiveness  of the  Registration  Statement  or of any  order
                preventing or suspending the use of any preliminary  prospectus,
                or of the  suspension  of the  qualification  of the  Shares for
                offering or sale in any  jurisdiction,  or of the  initiation or
                threatening of any  proceedings  for any of such  purposes.  The
                Trust will  promptly  effect the filings  necessary  pursuant to
                Rule  497 of the  Act and  will  take  such  steps  as it  deems
                necessary to ascertain  promptly  whether the form of prospectus
                transmitted for filing under Rule 497 was received for filing by
                the  Commission  and,  in the  event  that it was  not,  it will
                promptly  file  such  prospectus.  The  Trust  will  make  every
                reasonable  effort to prevent the issuance of any stop order, or
                order of suspension or  revocation of  registration  pursuant to
                Section 8(e) of the  Investment  Company  Act,  and, if any such
                stop order or order of suspension or revocation of  registration
                is  issued,  to  obtain  the  lifting  thereof  at the  earliest
                possible moment.

                                     - 9 -
<PAGE>


                        (ii)    The Trust will give the Representative notice of
                its   intention  to  file  or  prepare  any   amendment  to  the
                Registration  Statement (including any filing under Rule 462(b))
                or  any   amendment,   supplement  or  revision  to  either  the
                prospectus included in the Registration Statement at the time it
                became  effective  or  to  the  Prospectus,   will  furnish  the
                Representative  with copies of any such  documents a  reasonable
                amount of time prior to such proposed filing or use, as the case
                may be, and will not file or use any such  document to which the
                Representative or counsel for the Underwriters shall object.

                        (iii)   The Trust has  furnished  or will deliver to the
                Representative and counsel for the Underwriters, without charge,
                signed copies of the Registration  Statement as originally filed
                and  of  each  amendment  thereto   (including   exhibits  filed
                therewith  or  incorporated  by  reference  therein)  and signed
                copies of all consents  and  certificates  of experts,  and will
                also deliver to the Representative,  without charge, a conformed
                copy of the  Registration  Statement as originally  filed and of
                each  amendment  thereto  (without  exhibits)  for  each  of the
                Underwriters.  The copies of the Registration Statement and each
                amendment   thereto   furnished  to  the  Underwriters  will  be
                identical to the electronically transmitted copies thereof filed
                with the  Commission  pursuant  to EDGAR,  except to the  extent
                permitted by Regulation S-T.

                        (iv)    The Trust  has  delivered  to each  Underwriter,
                without charge, as many copies of each preliminary prospectus as
                such  Underwriter  reasonably  requested,  and the Trust  hereby
                consents to the use of such copies for purposes permitted by the
                Act. The Trust will furnish to each Underwriter, without charge,
                during  the  period  when  the  Prospectus  is  required  to  be
                delivered  under the Act or the 1934 Act,  such number of copies
                of  the  Prospectus  (as  amended  or   supplemented)   as  such
                Underwriter  may  reasonably  request.  The  Prospectus  and any
                amendments or supplements  thereto furnished to the Underwriters
                will  be  identical  to the  electronically  transmitted  copies
                thereof filed with the Commission  pursuant to EDGAR,  except to
                the extent permitted by Regulation S-T.

                        (v)     If at any time when a prospectus  is required by
                the Act to be delivered in connection  with sales of the Shares,
                any event  shall occur or  condition  shall exist as a result of
                which  it is  necessary,  in the  opinion  of  counsel  for  the
                Underwriters  or  for  the  Trust,  to  amend  the  Registration
                Statement or amend or  supplement  the  Prospectus in order that
                the  Prospectus  will not  include  any untrue  statements  of a
                material  fact or omit to state a  material  fact  necessary  in
                order to make the statements therein not misleading in the light
                of the  circumstances  existing at the time it is delivered to a
                purchaser,  or if it shall be necessary,  in the opinion of such
                counsel, at any such time to amend the Registration Statement or
                amend or supplement  the  Prospectus in order to comply with the
                requirements  of the Act,  the Trust will  promptly  prepare and
                file with the  Commission,  subject  to Section  3(a)(ii),  such
                amendment  or  supplement  as may be  necessary  to correct such
                statement or omission or to make the  Registration  Statement or
                the Prospectus comply with such requirements, and the Trust will
                furnish  to the  Underwriters  such  number  of  copies  of such
                amendment  or  supplement  as the  Underwriters  may  reasonably
                request.

                        (vi)    The  Trust  will  use  its  best   efforts,   in
                cooperation  with the  Underwriters,  to qualify  the Shares for
                offering and sale under the applicable  securities  laws of such
                states  and  other  jurisdictions  of the  United  States as the
                Representative may designate and to maintain such qualifications
                in effect  for a period of not less than one year from the later
                of the effective date of the Registration Statement and any Rule
                462(b)

                                     - 10 -
<PAGE>


                Registration Statement;  provided, however, that the Trust shall
                not be  obligated  to file any  general  consent  to  service of
                process or to qualify as a foreign business trust or as a dealer
                in  securities  in  any  jurisdiction  in  which  it is  not  so
                qualified  or to subject  itself to taxation in respect of doing
                business in any  jurisdiction  in which it is not  otherwise  so
                subject.  In each  jurisdiction in which the Shares have been so
                qualified,  the Trust will file such  statements  and reports as
                may be  required  by the laws of such  jurisdiction  to continue
                such  qualification  in effect for a period of not less than one
                year from the effective date of the  Registration  Statement and
                any Rule 462(b) Registration Statement.

                        (vii)   The Trust will timely file such reports pursuant
                to the 1934  Act as are  necessary  in  order to make  generally
                available  to its  security  holders as soon as  practicable  an
                earnings  statement  for the  purposes  of, and to  provide  the
                benefits contemplated by, the last paragraph of Section 11(a) of
                the Act.

                        (viii)  The Trust will use the net proceeds  received by
                it from the sale of the  Shares in the manner  specified  in the
                Prospectus under "Use of Proceeds".

                        (ix)    The Trust will use its  reasonable  best efforts
                to effect  the  listing  of the  Shares on the NYSE,  subject to
                notice of issuance,  concurrently  with the effectiveness of the
                Registration Statement.

                        (x)     During a period of 180 days from the date of the
                Prospectus,  the Trust  will  not,  without  the  prior  written
                consent  of the  Representative,  (A)  directly  or  indirectly,
                offer,  pledge,  sell,  contract  to sell,  sell any  option  or
                contract to  purchase,  purchase any option or contract to sell,
                grant any  option,  right or warrant to  purchase  or  otherwise
                transfer or dispose of Shares or any securities convertible into
                or   exercisable  or   exchangeable   for  Shares  or  file  any
                registration  statement under the Act with respect to any of the
                foregoing  or (B) enter into any swap or any other  agreement or
                any transaction that transfers, in whole or in part, directly or
                indirectly, the economic consequence of ownership of the Shares,
                whether any such swap or transaction  described in clause (A) or
                (B) above is to be settled by  delivery  of Shares or such other
                securities,  in cash or otherwise.  The foregoing sentence shall
                not apply to (1) the Shares to be sold  hereunder  or (2) Shares
                issued pursuant to any dividend reinvestment plan.

                        (xi)    The Trust, during the period when the Prospectus
                is required to be delivered  under the Act or the 1934 Act, will
                file all  documents  required  to be filed  with the  Commission
                pursuant to the  Investment  Company Act and the 1934 Act within
                the  time  periods  required  by  the  Investment  Company  Act,
                respectively.

                        (xii)   The Trust will comply with the  requirements  of
                Subchapter  M of the Code to qualify as a  regulated  investment
                company under the Code.

                        (xiii)  The  Trust  will  not  (a)  take,   directly  or
                indirectly,  any  action  designed  to cause or to result in, or
                that  might   reasonably   be   expected  to   constitute,   the
                stabilization  or  manipulation  of the price of any security of
                the Trust to  facilitate  the sale or resale of the Shares,  and
                (b) until the Closing  Date (i) sell,  bid for or  purchase  the
                Shares  or  pay  any  person  any  compensation  for  soliciting
                purchases  of the  Shares  or (ii)  pay or  agree  to pay to any
                person any compensation  for soliciting  another to purchase any
                other securities of the Trust.

                                     - 11 -
<PAGE>


                        (xiv)   If the Trust  elects  to rely upon Rule  462(b),
                the Trust shall file a Rule 462(b)  Registration  Statement with
                the  Commission in compliance  with Rule 462(b) by no later than
                10:00 P.M., Washington, D.C. time, on the day following the date
                of this  Agreement,  and the  Trust  shall at the time of filing
                either pay to the  Commission the filing fee for the Rule 462(b)
                Registration Statement or give irrevocable  instructions for the
                payment of such fee pursuant to Rule 111(b) under the Act.

                        (xv)    The Trust will pay all costs, expenses, fees and
                taxes (other than any transfer taxes and fees and  disbursements
                of  counsel  for the  Underwriters  except  as set  forth  under
                Section 5 hereof and (iii),  (iv) and (vi) below) in  connection
                with  (i)  the  preparation  and  filing  of  the   Registration
                Statement, each preliminary prospectus,  the Prospectus, and any
                amendments  or  supplements   thereto,   and  the  printing  and
                furnishing of copies of each thereof to the  Underwriters and to
                dealers  (including  costs of mailing  and  shipment),  (ii) the
                registration,  issue, sale and delivery of the Shares, (iii) the
                producing,  word  processing  and/or printing of this Agreement,
                any Agreement Among  Underwriters,  any dealer  agreements,  any
                Powers  of  Attorney  and  any  closing   documents   (including
                compilations  thereof) and the reproduction  and/or printing and
                furnishing  of copies of each  thereof to the  Underwriters  and
                (except  closing  documents)  to  dealers  (including  costs  of
                mailing and shipment),  (iv) the qualification of the Shares for
                offering  and sale  under  state laws and the  determination  of
                their  eligibility  for investment  under state law as aforesaid
                (including   the   legal   fees  and   filing   fees  and  other
                disbursements of counsel for the  Underwriters) and the printing
                and  furnishing  of  copies  of any  blue sky  surveys  or legal
                investment  surveys to the Underwriters and to dealers,  (v) any
                listing   of  the   Shares  on  any   securities   exchange   or
                qualification  of the  Shares  for  quotation  on NASDAQ and any
                registration thereof under the Exchange Act, (vi) any filing for
                review  of the  public  offering  of the  Shares by the NASD and
                (vii)  the   performance   of  the  Trust's  other   obligations
                hereunder.  BAI has agreed to pay  organizational  expenses  and
                offering  costs (other than sales load) of the Trust that exceed
                $.03 per Common Share.

        5.      REIMBURSEMENT OF UNDERWRITERS'  EXPENSES.  If the Shares are not
delivered for any reason other than the  termination of this Agreement  pursuant
to the first two paragraphs of Section 7 hereof or the default by one or more of
the Underwriters in its or their  respective  obligations  hereunder,  the Trust
shall, in addition to paying the amounts  described in Section  4(a)(xv) hereof,
reimburse the Underwriters for all of their  out-of-pocket  expenses,  including
the fees and disbursements of their counsel.

        6.      CONDITIONS OF UNDERWRITERS' OBLIGATIONS.  The obligations of the
several  Underwriters  hereunder  are subject to the  accuracy  in all  material
respects of the  representations  and  warranties  of the Trust and the Advisers
contained in Section 3 hereof or in  certificates of any officer of the Trust or
the Advisers  delivered pursuant to the provisions hereof, to the performance by
the Trust and the Advisers of their respective  covenants and other  obligations
hereunder, and to the following further conditions:

                (a)     The  Registration  Statement,  including any Rule 462(b)
        Registration Statement,  has become effective and at the Closing Date no
        stop order suspending the  effectiveness  of the Registration  Statement
        shall have been  issued  under the Act,  no notice or order  pursuant to
        Section 8(e) of the Investment  Company Act shall have been issued,  and
        no  proceedings  with  respect to either  shall have been  initiated  or
        threatened  by the  Commission,  and  any  request  on the  part  of the
        Commission for additional  information  shall have been complied with to
        the reasonable satisfaction of counsel to the Underwriters. A prospectus
        containing  the Rule 430A  information  shall  have been  filed with the
        Commission in accordance  with Rule 497 (or a  post-effective  amendment
        providing such information shall have been filed and declared  effective
        in accordance with the requirements of Rule 430A).

                                     - 12 -
<PAGE>


                (b)     No amendment or supplement to the Registration Statement
        or  Prospectus  shall  be  filed  prior  to the  time  the  Registration
        Statement becomes effective to which you object in writing.

                (c)     The Registration  Statement shall become effective at or
        before  5:00 P.M.,  New York City time,  on the date of this  Agreement,
        unless a later time (but not later  than 5:00 P.M.,  New York City time,
        on the second full business day after the date of this Agreement)  shall
        be agreed to by the Trust and you in writing or by telephone,  confirmed
        in writing;  PROVIDED,  HOWEVER, that the Trust and you and any group of
        Underwriters,  including  you, who have agreed  hereunder to purchase in
        the  aggregate  at least  50% of the Firm  Shares  may from time to time
        agree on a later date.

                (d)     Prior to the Time of Purchase, or the Additional Time of
        Purchase,  as the case may be,  (i) no stop  order  with  respect to the
        effectiveness of the Registration Statement shall have been issued under
        the Act or proceedings  initiated under Section 8(d) or 8(e) of the Act;
        (ii)  the  Registration   Statement  and  all  amendments   thereto,  or
        modifications  thereof, if any, shall not contain an untrue statement of
        a material  fact or omit to state a material  fact required to be stated
        therein or necessary to make the statements therein not misleading;  and
        (iii) the  Prospectus  and all  amendments or  supplements  thereto,  or
        modifications  thereof, if any, shall not contain an untrue statement of
        a material  fact or omit to state a material  fact required to be stated
        therein or necessary to make the statements therein, in the light of the
        circumstances under which they are made, not misleading.

                (e)     At the  Closing  Date,  the  Representative  shall  have
        received  the  favorable  opinions,  dated as of the  Closing  Date,  of
        Skadden,  Arps,  Slate,  Meagher & Flom LLP,  counsel for the Trust, and
        Daniel R.  Waltcher,  counsel for the  Advisers,  in form and  substance
        satisfactory  to counsel for the  Underwriters,  together with signed or
        reproduced  copies of such  letters  for each of the other  Underwriters
        substantially  to the  effect  set forth in EXHIBIT A hereto and to such
        further effect as counsel to the Underwriters may reasonably request.

                (f)     At the  Closing  Date,  the  Representative  shall  have
        received  the  favorable  opinion,  dated  as of the  Closing  Date,  of
        Clifford  Chance  Rogers  & Wells  LLP,  counsel  for the  Underwriters,
        together with signed or reproduced copies of such letter for each of the
        other  Underwriters with respect to the matters set forth in clauses (A)
        (i), (ii),  (vi), (vii) (solely as to preemptive or other similar rights
        arising  by  operation  of law or under the  charter  or  by-laws of the
        Trust),  (viii) through (x),  inclusive,  (xii), (xiv) (solely as to the
        information in the  Prospectus  under  "Description  of Shares") and the
        last paragraph of EXHIBIT A hereto.  In giving such opinion such counsel
        may rely, as to all matters governed by the laws of jurisdictions  other
        than the law of the State of New York and the  federal law of the United
        States, upon the opinions of counsel satisfactory to the Representative.
        Such  counsel  may also state  that,  insofar as such  opinion  involves
        factual matters,  they have relied, to the extent they deem proper, upon
        certificates  of  officers  of the  Trust  and  certificates  of  public
        officials.

                (g)     At the Closing  Date,  there shall not have been,  since
        the date hereof or since the respective dates as of which information is
        given in the Prospectus,  any material  adverse change in the condition,
        financial or  otherwise,  or in the earnings or business  affairs of the
        Trust,  whether or not arising in the ordinary  course of business,  and
        the  Representative   shall  have  received  a  certificate  of  a  duly
        authorized officer of the Trust and of the Treasurer of the Trust and of
        the  President or a Vice  President or Managing  Director of each of the
        Advisers, dated as of the Closing Date, to the effect that (i) there has
        been no such  material  adverse  change,  (ii) the  representations  and
        warranties  in Sections  3(a) and (b) hereof are true and correct in all
        material

                                     - 13 -
<PAGE>


        respects with the same force and effect as though  expressly made at and
        as of the  Closing  Date,  (iii)  each of the  Trust  and the  Advisers,
        respectively,  has complied in all material respects with all agreements
        and satisfied in all material  respects all conditions on its part to be
        performed or satisfied at or prior to the Closing Date, and (iv) no stop
        order suspending the  effectiveness of the  Registration  Statement,  or
        order of suspension or  revocation of  registration  pursuant to Section
        8(e) of the  Investment  Company Act, has been issued and no proceedings
        for  any  such  purpose  have  been  instituted  or are  pending  or are
        contemplated by the Commission.

                (h)     At the  time of the  execution  of this  Agreement,  the
        Representative  shall have  received from Deloitte & Touche LLP a letter
        dated   such  date,   in  form  and   substance   satisfactory   to  the
        Representative, together with signed or reproduced copies of such letter
        for each of the other Underwriters containing statements and information
        of the type  ordinarily  included in accountants'  "comfort  letters" to
        underwriters  with  respect  to the  financial  statements  and  certain
        financial  information  contained in the Registration  Statement and the
        Prospectus.

                (i)     At the  Closing  Date,  the  Representative  shall  have
        received  from  Deloitte & Touche LLP a letter,  dated as of the Closing
        Date, to the effect that they reaffirm the statements made in the letter
        furnished  pursuant to subsection  (e) of this Section,  except that the
        specified  date referred to shall be a date not more than three business
        days prior to The Closing Date.

                (j)     At the Closing Date, the Shares shall have been approved
        for listing on the NYSE, subject only to official notice of issuance.

                (k)     The  NASD  has  confirmed  that  it has not  raised  any
        objection  with  respect  to  the  fairness  and  reasonableness  of the
        underwriting terms and arrangements.

                (l)     In the event that the Underwriters exercise their option
        provided  in  Section 1 hereof to  purchase  all or any  portion  of the
        Additional  Shares,  the  representations  and  warranties  of the Trust
        contained herein and the statements in any certificates furnished by the
        Trust  hereunder shall be true and correct as of each Additional Time of
        Purchase  and,  at  the  relevant  Additional  Time  of  Purchase,   the
        Representative shall have received:

                        (i)     Certificates,  dated  such  Additional  Time  of
                Purchase,  of a duly authorized  officer of the Trust and of the
                Treasurer of the Trust and of the President or a Vice  President
                or Managing Director of each of the Advisers confirming that the
                information  contained in the  certificate  delivered by each of
                them at the Closing Date pursuant to Section 6(d) hereof remains
                true and correct in all material  respects as of such Additional
                Time of Purchase.

                        (ii)    The favorable  opinion of Skadden,  Arps, Slate,
                Meagher  & Flom  LLP,  counsel  for the  Trust,  and  Daniel  R.
                Waltcher,  counsel  for  the  Advisers,  in form  and  substance
                satisfactory  to  counsel  for  the  Underwriters,   dated  such
                Additional Time of Purchase,  relating to the Additional  Shares
                to  be  purchased  on  such  Additional  Time  of  Purchase  and
                otherwise to the same effect as the opinion  required by Section
                6(b) hereof.

                        (iii)   The favorable  opinion of Clifford Chance Rogers
                & Wells LLP, counsel for the Underwriters, dated such Additional
                Time  of  Purchase,  relating  to the  Additional  Shares  to be
                purchased on such  Additional  Time of Purchase and otherwise to
                the same effect as the opinion required by Section 6(c) hereof.

                                     - 14 -
<PAGE>


                        (iv)    A letter from Deloitte & Touche LLP, in form and
                substance  satisfactory  to the  Representative  and dated  such
                Additional Time of Purchase,  substantially in the same form and
                substance as the letter furnished to the Representative pursuant
                to Section 6(f) hereof,  except that the "specified date" in the
                letter furnished  pursuant to this paragraph shall be a date not
                more than five days prior to such Additional Time of Purchase.

                (m)     At the  Closing  Date  and at  each  Additional  Time of
        Purchase,  counsel for the  Underwriters  shall have been furnished with
        such  documents  and  opinions  as they may  reasonably  require for the
        purpose  of  enabling  them to pass  upon the  issuance  and sale of the
        Shares as herein  contemplated,  or in order to evidence the accuracy of
        any of the  representations or warranties,  or the fulfillment of any of
        the conditions, herein contained; and all proceedings taken by the Trust
        and the Advisers in connection with the organization and registration of
        the Trust under the Investment  Company Act and the issuance and sale of
        the  Shares as herein  contemplated  shall be  satisfactory  in form and
        substance to the Representative and counsel for the Underwriters.

        7.      EFFECTIVE DATE OF AGREEMENT;  TERMINATION.  This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received  notification of the  effectiveness of the Registration  Statement,  or
(ii) if Rule 430A under the Act is used,  when the parties  hereto have executed
and delivered this Agreement.

                The obligations of the several  Underwriters  hereunder shall be
subject  to  termination  in the  absolute  discretion  of you or any  group  of
Underwriters  (which  may  include  you)  which has  agreed to  purchase  in the
aggregate  at least 50% of the Firm  Shares,  if, since the time of execution of
this Agreement or the respective  dates as of which  information is given in the
Registration  Statement and Prospectus,  (y) there has been any material adverse
change,  financial or otherwise  (other than as referred to in the  Registration
Statement and Prospectus), in the operations, business or condition of the Trust
and its subsidiaries  taken as a whole,  which would, in your judgment or in the
judgment  of such group of  Underwriters,  make it  impracticable  to market the
Shares, or (z) if, at any time prior to the Time of Purchase or, with respect to
the purchase of any Additional Shares,  the Additional Time of Purchase,  as the
case may be, trading in securities on the New York Stock Exchange,  the American
Stock  Exchange  or the Nasdaq  National  Market  shall have been  suspended  or
limitations or minimum prices shall have been  established on the New York Stock
Exchange,  the American Stock Exchange or the Nasdaq  National  Market,  or if a
banking  moratorium  shall have been declared either by the United States or New
York State  authorities,  or if the United  States  shall have  declared  war in
accordance  with its  constitutional  processes or there shall have occurred any
material   outbreak  or  escalation  of   hostilities   or  other   national  or
international  calamity  or  crisis  of  such  magnitude  in its  effect  on the
financial  markets of the United  States as, in your judgment or in the judgment
of such group of Underwriters, to make it impracticable to market the Shares.

                If you or any group of  Underwriters  elects to  terminate  this
Agreement  as provided in this  Section 7, the Trust and each other  Underwriter
shall be notified promptly by letter or telegram.

                If the sale to the  Underwriters of the Shares,  as contemplated
by this  Agreement,  is not  carried  out by the  Underwriters  for  any  reason
permitted  under this  Agreement  or if such sale is not carried out because the
Trust  shall be unable to comply  with any of the terms of this  Agreement,  the
Trust  shall not be under any  obligation  or  liability  under  this  Agreement
(except to the extent provided in Sections  4(a)(xv),  5 and 9 hereof),  and the
Underwriters  shall be under no  obligation or liability to the Trust under this
Agreement  (except to the extent provided in Section 9 hereof) or to one another
hereunder.

                                     - 15 -
<PAGE>


        8.      INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 6 and
7, if any Underwriter shall default in its obligation to take up and pay for the
Firm  Shares  to be  purchased  by it  hereunder  (otherwise  than  for a reason
sufficient to justify the  termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm  Shares  which all  Underwriters  so
defaulting  shall have  agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares,  the  non-defaulting  Underwriters shall
take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated  to  purchase  pursuant to Section 1 hereof) the number of Firm Shares
agreed to be  purchased  by all such  defaulting  Underwriters,  as  hereinafter
provided.  Such  Shares  shall be  taken up and paid for by such  non-defaulting
Underwriter or  Underwriters in such amount or amounts as you may designate with
the  consent  of  each  Underwriter  so  designated  or,  in the  event  no such
designation  is  made,  such  Shares  shall  be  taken  up and  paid  for by all
non-defaulting  Underwriters  pro rata in proportion to the aggregate  number of
Firm  Shares  set  opposite  the names of such  non-defaulting  Underwriters  in
Schedule A.

                Without   relieving   any   defaulting   Underwriter   from  its
obligations  hereunder,  the Trust agrees with the  non-defaulting  Underwriters
that it will not sell any Firm  Shares  hereunder  unless all of the Firm Shares
are purchased by the  Underwriters (or by substituted  Underwriters  selected by
you with the approval of the Trust or selected by the Trust with your approval).

                If a new  Underwriter  or  Underwriters  are  substituted by the
Underwriters  or by the Trust for a defaulting  Underwriter or  Underwriters  in
accordance with the foregoing  provision,  the Trust or you shall have the right
to postpone the Time of Purchase for a period not  exceeding  five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.

                The term  Underwriter as used in this  Agreement  shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.

                If  the  aggregate   number  of  Shares  which  the   defaulting
Underwriter or Underwriters  agreed to purchase  exceeds 10% of the total number
of Shares which all Underwriters  agreed to purchase  hereunder,  and if neither
the non-defaulting Underwriters nor the Trust shall make arrangements within the
five  business day period  stated above for the purchase of all the Shares which
the defaulting  Underwriter or Underwriters agreed to purchase  hereunder,  this
Agreement  shall be  terminated  without  further  act or deed and  without  any
liability on the part of the Trust to any non-defaulting Underwriter and without
any  liability  on the  part of any  non-defaulting  Underwriter  to the  Trust.
Nothing in this  paragraph,  and no action taken  hereunder,  shall  relieve any
defaulting  Underwriter  from  liability  in  respect  of any  default  of  such
Underwriter under this Agreement.

        9.      INDEMNITY AND CONTRIBUTION.

                (a)     Each  of  the  Trust  and  the  Advisers,   jointly  and
        severally,   agrees  to   indemnify,   defend  and  hold  harmless  each
        Underwriter,  its trustees,  partners,  directors and officers,  and any
        person who controls any Underwriter  within the meaning of Section 15 of
        the Act or  Section  20 of the  Exchange  Act,  and the  successors  and
        assigns  of all of the  foregoing  persons  from and  against  any loss,
        damage,  expense,  liability or claim  (including the reasonable cost of
        investigation) which, jointly or severally,  any such Underwriter or any
        such person may incur under the Act, the Exchange Act, the common law or
        otherwise,  insofar as such loss,  damage,  expense,  liability or claim
        arises out of or is based upon any untrue  statement  or alleged  untrue
        statement of a material fact contained in the Registration Statement (or
        in the Registration Statement as amended by any post-effective amendment
        thereof by the Trust) or in a Prospectus

                                     - 16 -
<PAGE>


        (the term  Prospectus  for the purpose of this Section 9 being deemed to
        include any preliminary prospectus, the Prospectus and the Prospectus as
        amended or supplemented by the Trust), or arises out of or is based upon
        any omission or alleged omission to state a material fact required to be
        stated in either such Registration  Statement or Prospectus or necessary
        to make the statements  made therein not  misleading,  except insofar as
        any such loss, damage,  expense,  liability or claim arises out of or is
        based  upon any  untrue  statement  or  alleged  untrue  statement  of a
        material fact contained in and in conformity with information  furnished
        in writing by or on behalf of any  Underwriter  through you to the Trust
        or the Adviser,  expressly for use with reference to such Underwriter in
        such  Registration  Statement or such  Prospectus or arises out of or is
        based upon any omission or alleged  omission to state a material fact in
        connection  with  such  information   required  to  be  stated  in  such
        Registration  Statement  or such  Prospectus  or  necessary to make such
        information  not  misleading,  PROVIDED,  HOWEVER,  that  the  indemnity
        agreement   contained  in  this  subsection  (a)  with  respect  to  any
        preliminary prospectus or amended preliminary prospectus shall not inure
        to the  benefit  of any  Underwriter  (or to the  benefit  of any person
        controlling  such  Underwriter)  from whom the person asserting any such
        loss, damage, expense,  liability or claim purchased the Shares which is
        the subject thereof if the Prospectus  corrected any such alleged untrue
        statement or omission and if such  Underwriter  failed to send or give a
        copy of the  Prospectus  to  such  person  at or  prior  to the  written
        confirmation  of the sale of such  Shares  to such  person,  unless  the
        failure is the result of noncompliance by the Company with paragraph (h)
        of Section 4 hereof.

                If any action, suit or proceeding (together,  a "Proceeding") is
        brought  against an  Underwriter  or any such person in respect of which
        indemnity  may be sought  against the Trust or the Advisers  pursuant to
        the foregoing paragraph,  such Underwriter or such person shall promptly
        notify the Trust and the Advisers in writing of the  institution of such
        Proceeding  and the Trust or the  Advisers  shall  assume the defense of
        such  Proceeding,   including  the  employment  of  counsel   reasonably
        satisfactory  to such  indemnified  party  and  payment  of all fees and
        expenses; PROVIDED, HOWEVER, that the omission to so notify the Trust or
        the  Advisers  shall  not  relieve  the Trust or the  Advisers  from any
        liability which the Trust or the Advisers may have to any Underwriter or
        any such person or otherwise. Such Underwriter or such person shall have
        the right to employ its or their own  counsel in any such case,  but the
        fees  and  expenses  of such  counsel  shall be at the  expense  of such
        Underwriter  or of such person  unless the  employment  of such  counsel
        shall have been  authorized in writing by the Trust or the Advisers,  as
        the case may be, in  connection  with the defense of such  Proceeding or
        the Trust or the Advisers shall not have,  within a reasonable period of
        time in light of the  circumstances,  employed counsel to have charge of
        the  defense of such  Proceeding  or such  indemnified  party or parties
        shall have reasonably  concluded that there may be defenses available to
        it or them which are different  from,  additional to or in conflict with
        those  available to the Trust or the Advisers (in which case neither the
        Trust nor the  Advisers  shall have the right to direct  the  defense of
        such Proceeding on behalf of the indemnified  party or parties),  in any
        of which  events such fees and  expenses  shall be borne by the Trust or
        the Advisers and paid as incurred (it being  understood,  however,  that
        the Trust or the  Advisers  shall not be liable for the expenses of more
        than one separate  counsel (in addition to any local counsel) in any one
        Proceeding  or series of related  Proceedings  in the same  jurisdiction
        representing   the   indemnified   parties   who  are  parties  to  such
        Proceeding).  Neither the Trust nor the Adviser  shall be liable for any
        settlement of any Proceeding effected without its written consent but if
        settled with the written consent of the Trust or the Advisers, the Trust
        or the  Advisers,  as the  case  may be,  agree  to  indemnify  and hold
        harmless any  Underwriter  and any such person from and against any loss
        or liability by reason of such settlement. Notwithstanding the foregoing
        sentence,  if at any time an  indemnified  party shall have requested an
        indemnifying  party to  reimburse  the  indemnified  party  for fees and
        expenses  of counsel as  contemplated  by the  second  sentence  of this
        paragraph,  then the  indemnifying  party agrees that it shall be liable
        for any  settlement  of any

                                     - 17 -
<PAGE>


        Proceeding  effected  without its written consent if (i) such settlement
        is  entered  into more  than 60  business  days  after  receipt  by such
        indemnifying  party of the  aforesaid  request,  (ii) such  indemnifying
        party shall not have reimbursed the indemnified party in accordance with
        such  request  prior  to the  date of such  settlement  and  (iii)  such
        indemnified  party shall have given the  indemnifying  party at least 30
        days' prior notice of its  intention to settle.  No  indemnifying  party
        shall,  without  the prior  written  consent of the  indemnified  party,
        effect any settlement of any pending or threatened Proceeding in respect
        of  which  any  indemnified  party  is or could  have  been a party  and
        indemnity could have been sought  hereunder by such  indemnified  party,
        unless  such  settlement  includes  an  unconditional  release  of  such
        indemnified  party from all  liability  on claims  that are the  subject
        matter of such  Proceeding  and does not include an  admission of fault,
        culpability  or a failure  to act,  by or on behalf of such  indemnified
        party.

                (b)     Each Underwriter  severally agrees to indemnify,  defend
        and  hold  harmless  the  Trust  and the  Advisers,  and  each of  their
        respective trustees, directors and officers, and any person who controls
        the Trust or the Advisers within the meaning of Section 15 of the Act or
        Section 20 of the Exchange Act, and the successors and assigns of all of
        the  foregoing  persons  from and  against  any loss,  damage,  expense,
        liability or claim  (including  the  reasonable  cost of  investigation)
        which,  jointly  or  severally,  the Trust or the  Advisers  or any such
        person may incur  under the Act,  the  Exchange  Act,  the common law or
        otherwise,  insofar as such loss,  damage,  expense,  liability or claim
        arises out of or is based upon any untrue  statement  or alleged  untrue
        statement  of a  material  fact  contained  in  and in  conformity  with
        information  furnished  in writing  by or on behalf of such  Underwriter
        through  you to the  Trust  or  the  Advisers  expressly  for  use  with
        reference to such Underwriter in the  Registration  Statement (or in the
        Registration  Statement  as  amended  by  any  post-effective  amendment
        thereof by the Trust) or in a  Prospectus,  or arises out of or is based
        upon any  omission  or  alleged  omission  to state a  material  fact in
        connection  with  such  information   required  to  be  stated  in  such
        Registration  Statement  or such  Prospectus  or  necessary to make such
        information not misleading.

                If any Proceeding is brought against the Trust,  the Advisers or
        any such person in respect of which  indemnity may be sought against any
        Underwriter pursuant to the foregoing paragraph, the Trust, the Advisers
        or such person shall promptly notify such  Underwriter in writing of the
        institution  of such  Proceeding and such  Underwriter  shall assume the
        defense  of  such  Proceeding,   including  the  employment  of  counsel
        reasonably  satisfactory  to such  indemnified  party and payment of all
        fees and  expenses;  PROVIDED,  HOWEVER,  that the omission to so notify
        such  Underwriter  shall not relieve such Underwriter from any liability
        which such  Underwriter may have to the Trust,  the Advisers or any such
        person or otherwise.  The Trust,  the Advisers or such person shall have
        the right to employ its own  counsel in any such case,  but the fees and
        expenses  of such  counsel  shall be at the  expense of the  Trust,  the
        Advisers or such person unless the employment of such counsel shall have
        been  authorized in writing by such  Underwriter in connection  with the
        defense of such Proceeding or such Underwriter  shall not have, within a
        reasonable  period  of  time in  light  of the  circumstances,  employed
        counsel  to  have  charge  of the  defense  of such  Proceeding  or such
        indemnified party or parties shall have reasonably  concluded that there
        may be  defenses  available  to it or them which are  different  from or
        additional  to or in conflict with those  available to such  Underwriter
        (in which case such  Underwriter  shall not have the right to direct the
        defense  of such  Proceeding  on  behalf  of the  indemnified  party  or
        parties,  but such Underwriter may employ counsel and participate in the
        defense  thereof but the fees and expenses of such  counsel  shall be at
        the expense of such  Underwriter),  in any of which events such fees and
        expenses  shall be borne by such  Underwriter  and paid as incurred  (it
        being understood, however, that such Underwriter shall not be liable for
        the expenses of more than one separate counsel (in addition to any local
        counsel) in any one  Proceeding or series of related  Proceedings in the
        same jurisdiction  representing the indemnified  parties who are parties
        to such

                                     - 18 -
<PAGE>


        Proceeding).  No  Underwriter  shall be liable for any settlement of any
        such Proceeding effected without the written consent of such Underwriter
        but if  settled  with the  written  consent  of such  Underwriter,  such
        Underwriter  agrees  to  indemnify  and hold  harmless  the  Trust,  the
        Advisers  and any such person from and against any loss or  liability by
        reason of such settlement. Notwithstanding the foregoing sentence, if at
        any time an indemnified party shall have requested an indemnifying party
        to reimburse the  indemnified  party for fees and expenses of counsel as
        contemplated  by  the  second  sentence  of  this  paragraph,  then  the
        indemnifying  party agrees that it shall be liable for any settlement of
        any  Proceeding  effected  without  its  written  consent  if  (i)  such
        settlement  is entered into more than 60 business  days after receipt by
        such indemnifying party of the aforesaid request, (ii) such indemnifying
        party shall not have reimbursed the indemnified party in accordance with
        such  request  prior  to the  date of such  settlement  and  (iii)  such
        indemnified  party shall have given the  indemnifying  party at least 30
        days' prior notice of its  intention to settle.  No  indemnifying  party
        shall,  without  the prior  written  consent of the  indemnified  party,
        effect any settlement of any pending or threatened Proceeding in respect
        of  which  any  indemnified  party  is or could  have  been a party  and
        indemnity could have been sought  hereunder by such  indemnified  party,
        unless  such  settlement  includes  an  unconditional  release  of  such
        indemnified  party from all  liability  on claims  that are the  subject
        matter of such Proceeding.

                (c)     In addition to the foregoing indemnification,  the Trust
        and the Advisers  also,  jointly and  severally,  agree to indemnify and
        hold harmless each Underwriter and each person, if any, who controls any
        Underwriter  within the meaning of Section 15 of the 1933 Act or Section
        20 of the 1934 Act, against any and all loss,  liability,  claim, damage
        and expense  described in the  indemnity  contained in Section  9(a), as
        limited by the  proviso  set forth  therein,  with  respect to any sales
        material.

                (d)     If the indemnification provided for in this Section 9 is
        unavailable to an  indemnified  party under  subsections  (a) and (b) of
        this Section 9 in respect of any losses, damages, expenses,  liabilities
        or claims referred to therein, then each applicable  indemnifying party,
        in lieu of indemnifying such indemnified  party, shall contribute to the
        amount  paid or  payable by such  indemnified  party as a result of such
        losses, damages, expenses,  liabilities or claims (i) in such proportion
        as is appropriate to reflect the relative benefits received by the Trust
        and the Advisers on the one hand and the  Underwriters on the other hand
        from the  offering of the Shares or (ii) if the  allocation  provided by
        clause (i) above is not permitted by applicable  law, in such proportion
        as is appropriate to reflect not only the relative  benefits referred to
        in clause  (i) above  but also the  relative  fault of the Trust and the
        Advisers  on the  one  hand  and of the  Underwriters  on the  other  in
        connection  with the  statements  or  omissions  which  resulted in such
        losses, damages,  expenses,  liabilities or claims, as well as any other
        relevant equitable considerations. The relative benefits received by the
        Trust and the Advisers on the one hand and the Underwriters on the other
        shall be deemed to be in the same  respective  proportions  as the total
        proceeds   from  the  offering  (net  of   underwriting   discounts  and
        commissions but before deducting expenses) received by the Trust and the
        total   underwriting   discounts   and   commissions   received  by  the
        Underwriters, bear to the aggregate public offering price of the Shares.
        The relative  fault of the Trust and the Advisers on the one hand and of
        the Underwriters on the other shall be determined by reference to, among
        other things,  whether the untrue  statement or alleged untrue statement
        of  a  material  fact  or  omission  or  alleged   omission  relates  to
        information supplied by the Trust or the Advisors or by the Underwriters
        and the parties' relative intent,  knowledge,  access to information and
        opportunity to correct or prevent such statement or omission. The amount
        paid or payable by a party as a result of the losses, damages, expenses,
        liabilities and claims referred to in this subsection shall be deemed to
        include any legal or other fees or expenses  reasonably incurred by such
        party in connection with investigating, preparing to defend or defending
        any Proceeding.

                                     - 19 -
<PAGE>


                (e)     The Trust, the Advisers and the Underwriters  agree that
        it would not be just and  equitable  if  contribution  pursuant  to this
        Section  9  were  determined  by  pro  rata  allocation   (even  if  the
        Underwriters  were  treated as one entity  for such  purpose)  or by any
        other method of  allocation  that does not take account of the equitable
        considerations referred to in subsection (c) above.  Notwithstanding the
        provisions  of this  Section  9, no  Underwriter  shall be  required  to
        contribute  any amount in excess of the amount by which the total  price
        at which the Shares  underwritten by such Underwriter and distributed to
        the public were  offered to the public  exceeds the amount of any damage
        which such  Underwriter  has otherwise been required to pay by reason of
        such untrue statement or alleged untrue statement or omission or alleged
        omission. No person guilty of fraudulent  misrepresentation  (within the
        meaning of Section  11(f) of the Act) shall be entitled to  contribution
        from any person who was not guilty of such fraudulent misrepresentation.
        The Underwriters'  obligations to contribute  pursuant to this Section 9
        are several in proportion to their respective  underwriting  commitments
        and not joint.

                (f)     The indemnity and contribution  agreements  contained in
        this Section 9 and the covenants,  warranties and representations of the
        Trust  contained in this Agreement shall remain in full force and effect
        regardless of any investigation made by or on behalf of any Underwriter,
        its  partners,  directors  or  officers  or any person  (including  each
        partner,   officer  or  director  of  such   person)  who  controls  any
        Underwriter within the meaning of Section 15 of the Act or Section 20 of
        the Exchange Act, or by or on behalf of the Trust or the  Advisers,  its
        trustees,  directors or officers or any person who controls the Trust or
        the  Advisers  within the meaning of Section 15 of the Act or Section 20
        of the Exchange Act, and shall survive any termination of this Agreement
        or the issuance  and delivery of the Shares.  The Trust and the Advisers
        and  each  Underwriter  agree  promptly  to  notify  each  other  of the
        commencement of any Proceeding against it and, in the case of the Trust,
        against  any of the  Trust's  or the  Advisers'  trustees,  officers  or
        directors in connection with the issuance and sale of the Shares,  or in
        connection with the Registration Statement or Prospectus.

        10.     NOTICES.  Except as otherwise herein  provided,  all statements,
requests,  notices and agreements  shall be in writing or by telegram and, if to
the  Underwriters,  shall be  sufficient in all respects if delivered or sent to
UBS  Warburg  LLC,  299 Park  Avenue,  New  York,  N.Y.  10171-0026,  Attention:
Syndicate  Department  and, if to the Trust or Advisers,  shall be sufficient in
all  respects  if  delivered  or sent to the Trust at the  offices of  BlackRock
Financial  Management,  Inc.  at 345 Park  Avenue,  New  York,  New York  10154,
Attention: Ralph L. Schlosstein.

        11.     GOVERNING  LAW;  CONSTRUCTION.  This  Agreement  and any  claim,
counterclaim  or dispute of any kind or nature  whatsoever  arising out of or in
any way relating to this Agreement ("Claim"),  directly or indirectly,  shall be
governed by, and  construed  in  accordance  with,  the laws of the State of New
York.  The Section  headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.

        12.     SUBMISSION TO JURISDICTION.  Except as set forth below, no Claim
may be commenced,  prosecuted or continued in any court other than the courts of
the  State of New York  located  in the  City and  County  of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Trust and
Advisers  consent to the  jurisdiction of such courts and personal  service with
respect thereto. The Trust and Advisers hereby consent to personal jurisdiction,
service  and venue in any court in which any Claim  arising out of or in any way
relating to this Agreement is brought by any third party against UBS Warburg LLC
or any indemnified party. Each of UBS Warburg LLC and the Trust and Advisers (on
its behalf  and, to the extent  permitted  by  applicable  law, on behalf of its
stockholders  and  affiliates)  waives all right to trial by jury in any action,
proceeding or counterclaim  (whether based upon contract,  tort or otherwise) in

                                     - 20 -
<PAGE>


any way arising out of or relating  to this  Agreement.  The Trust and  Advisers
agree that a final  judgment  in any such  action,  proceeding  or  counterclaim
brought in any such court shall be conclusive  and binding upon the Trust or the
Advisers,  as the case may be, and may be  enforced  in any other  courts in the
jurisdiction  of which the Trust or the Advisers,  as the case may be, is or may
be subject, by suit upon such judgment.

        13.     PARTIES AT INTEREST. The Agreement herein set forth has been and
is made  solely  for the  benefit  of the  Underwriters  and the  Trust  and the
Advisers and to the extent provided in Section 9 hereof the controlling persons,
directors  and  officers  referred  to in such  section,  and  their  respective
successors,   assigns,   heirs,  personal   representatives  and  executors  and
administrators.  No  other  person,  partnership,   association  or  corporation
(including a purchaser,  as such purchaser,  from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.

        14.     COUNTERPARTS. This Agreement may be signed by the parties in one
or more counterparts  which together shall constitute one and the same agreement
among the parties.

        15.     SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Trust and the Advisers and their successors and assigns and
any  successor  or assign of any  substantial  portion  of the  Trust's  and the
Advisers' and any of the Underwriters' respective businesses and/or assets.

                                     - 21 -
<PAGE>


                If the foregoing  correctly sets forth the  understanding  among
the Trust,  the Advisers and the  Underwriters,  please so indicate in the space
provided below for the purpose,  whereupon this letter and your acceptance shall
constitute  a  binding   agreement  among  the  Trust,   the  Advisers  and  the
Underwriters, severally.

                                        Very truly yours,

                                        BlackRock Core Bond Trust

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

                                        BlackRock Advisors, Inc.

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

                                        BlackRock Financial Management, Inc.

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

Accepted and agreed to as of the
date first above written, on
behalf of itself and the
other several Underwriters
named in Schedule A

UBS WARBURG LLC

By:      UBS WARBURG LLC


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

                                     - 22 -
<PAGE>


                                   SCHEDULE A


                                                                      NUMBER OF
                          UNDERWRITER                                FIRM SHARES
                          -----------                                -----------
UBS Warburg LLC................................................
Deutsche Banc Alex. Brown Inc..................................
Prudential Securities Incorporated.............................
First Union Securities, Inc....................................
Gruntal & Co., L.L.C...........................................
J.J.B. Hilliard, W.L. Lyons, Inc...............................
Wells Fargo Van Kasper, LLC....................................
         Total.................................................

                                      A-1
<PAGE>


                                                                       Exhibit A

                    FORM OF OPINION OF TRUST'S AND ADVISERS'
                       COUNSEL TO BE DELIVERED PURSUANT TO
                                  SECTION 6(e)

        (A)     With respect to the Trust:

                        (i)     The Trust has been duly organized and is validly
                existing as a business  trust in good standing under the laws of
                the State of Delaware.

                        (ii)    The Trust has business trust power and authority
                to own,  lease and  operate  its  properties  and to conduct its
                business as  described in the  Prospectus  and to enter into and
                perform its obligations under the Purchase Agreement.

                        (iii)   The  Trust  is  duly   qualified  as  a  foreign
                business  trust to transact  business and is in good standing in
                each other jurisdiction in which such qualification is required,
                whether by reason of the ownership or leasing of property or the
                conduct of  business,  except where the failure so to qualify or
                to be in good  standing  would not result in a Material  Adverse
                Effect.

                        (iv)    To the best of our knowledge, the Trust does not
                have any subsidiaries.

                        (v)     The authorized, issued and outstanding shares of
                beneficial  interest  of  the  Trust  is as  set  forth  in  the
                Prospectus  under the caption  "Description  of shares -- Common
                Shares" (except for subsequent  issuances,  if any,  pursuant to
                the Purchase  Agreement);  all issued and outstanding  shares of
                beneficial  interest of the Trust have been duly  authorized and
                validly issued and are fully paid and non-assessable,  except as
                provided for in the Trust's  declaration of trust, and have been
                offered and sold or  exchanged by the Trust in  compliance  with
                all applicable laws (including,  without limitation, federal and
                state  securities  laws); the Shares conform as to legal matters
                to all statements  relating thereto  contained in the Prospectus
                and such  description  conforms  to the  rights set forth in the
                instruments  defining  the  same;  and  none of the  outstanding
                shares  of  beneficial  interest  of the  Trust  was  issued  in
                violation  of the  preemptive  or other  similar  rights  of any
                securityholder of the Trust.

                        (vi)    The Shares to be purchased  by the  Underwriters
                from the Trust have been duly  authorized  for issuance and sale
                to the Underwriters pursuant to the Purchase Agreement and, when
                issued  and  delivered  by the Trust  pursuant  to the  Purchase
                Agreement  against payment of the consideration set forth in the
                Purchase  Agreement,  will be validly  issued and fully paid and
                non-assessable,   except  as   provided   for  in  the   Trust's
                declaration of trust,  and no holder of the Shares is or will be
                subject to personal liability by reason of being such a holder.

                        (vii)   The  issuance  of the  Shares is not  subject to
                preemptive or other similar rights of any  securityholder of the
                Trust.

                        (viii)  The Purchase Agreement has been duly authorized,
                executed and delivered by the Trust.

                        (ix)    The Registration  Statement,  including any Rule
                462(b) Registration Statement, has been declared effective under
                the Act; any required filing of the

                                      A-1
<PAGE>


                Prospectus  pursuant to Rule 497(c) or Rule 497(h) has been made
                in the manner and within the time  period  required by Rule 497;
                and, to the best of our knowledge,  no stop order suspending the
                effectiveness of the  Registration  Statement or any Rule 462(b)
                Registration  Statement  has been issued under the Act,  and, to
                the best of our knowledge,  no order of suspension or revocation
                of  registration  pursuant  to  Section  8(e) of the  Investment
                Company Act has been  issued,  and no  proceedings  for any such
                purpose have been instituted or are pending or threatened by the
                Commission.

                        (x)     The Registration  Statement,  including any Rule
                462(b) Registration Statement, the Rule 430A Information and the
                Rule 434  Information,  as  applicable,  the Prospectus and each
                amendment  or  supplement  to  the  Registration  Statement  and
                Prospectus  as of their  respective  effective  or  issue  dates
                (other than the financial  statements and  supporting  schedules
                included  therein  or  omitted  therefrom,  as to  which we need
                express no opinion),  and the notification on Form N-8A complied
                as to form in all material respects with the requirements of the
                Act, the Investment Company Act and the Rules and Regulations.

                        (xi)    If Rule 434 has been relied upon, the Prospectus
                was not  "materially  different,"  as such  term is used in Rule
                434, from the prospectus included in the Registration  Statement
                at the time it became effective.

                        (xii)   The form of  certificate  used to  evidence  the
                Shares  complies in all material  respects  with all  applicable
                statutory requirements,  with any applicable requirements of the
                declaration   of  trust  and   by-laws  of  the  Trust  and  the
                requirements of the New York Stock Exchange.

                        (xiii)  To the  best  of  our  knowledge,  there  is not
                pending or threatened any action, suit,  proceeding,  inquiry or
                investigation,  to which the  Trust is a party,  or to which the
                property of the Trust is subject, before or brought by any court
                or governmental agency or body, domestic or foreign, which might
                reasonably be expected to result in a Material  Adverse  Effect,
                or  which  might   reasonably  be  expected  to  materially  and
                adversely  affect the  properties  or assets of the Trust or the
                consummation  of the  transactions  contemplated in the Purchase
                Agreement  or the  performance  by the Trust of its  obligations
                thereunder.

                        (xiv)   The   information   in  the   Prospectus   under
                "Description   of  shares"   and  "Tax   matters"   and  in  the
                Registration  Statement under Item 29 (Indemnification),  to the
                extent that it  constitutes  matters of law,  summaries of legal
                matters,  the Trust's  declaration of trust and by-laws or legal
                proceedings,  or legal conclusions,  has been reviewed by us and
                is correct in all material respects.

                        (xv)    Each   of   the   Management   Agreement,    the
                Sub-Advisory  Agreement,  the Custodian Agreement,  the Transfer
                Agency  Agreement  and  the  Purchase  Agreement  comply  in all
                material   respects  with  all  applicable   provisions  of  the
                Investment  Company Act, Advisers Act, the Rules and Regulations
                and the Advisers Act Rules and Regulations.

                        (xvi)   The Trust is duly registered with the Commission
                under the  Investment  Company Act as a closed-end,  diversified
                management   investment  company;   and,  to  the  best  of  our
                knowledge,   no  order  of  suspension  or  revocation  of  such
                registration has been issued or proceedings  therefor  initiated
                or threatened by the Commission.

                                      A-2
<PAGE>


                        (xvii)  To the  best  of our  knowledge,  no  person  is
                serving  as an  officer,  trustee or  investment  adviser of the
                Trust except in accordance  with the Investment  Company Act and
                the Rules and  Regulations  and the Investment  Advisers Act and
                the Advisers Act Rules and  Regulations.  Except as disclosed in
                the  Registration  Statement and Prospectus (or any amendment or
                supplement to either of them), to the best of our knowledge,  no
                trustee of the Trust is an  "interested  person"  (as defined in
                the  Investment  Company  Act) of the  Trust  or an  "affiliated
                person"  (as  defined  in  the  Investment  Company  Act)  of an
                Underwriter.

                        (xviii) There are no  statutes or  regulations  that are
                required  to  be  described  in  the  Prospectus  that  are  not
                described as required.

                        (xix)   All descriptions in the  Registration  Statement
                of contracts  and other  documents to which the Trust is a party
                are  accurate  in all  material  respects.  To the  best  of our
                knowledge,  there  are  no  franchises,  contracts,  indentures,
                mortgages,  loan agreements,  notes, leases or other instruments
                required to be  described  or  referred  to in the  Registration
                Statement  or to be filed as exhibits  thereto  other than those
                described  or  referred to therein or filed or  incorporated  by
                reference as exhibits thereto,  and the descriptions  thereof or
                references thereto are correct in all material respects.

                        (xx)    To the best of our  knowledge,  the Trust is not
                in  violation  of its  declaration  of trust or  by-laws  and no
                default by the Trust exists in the due performance or observance
                of any  material  obligation,  agreement,  covenant or condition
                contained in any contract, indenture,  mortgage, loan agreement,
                note,  lease or other  agreement or instrument that is described
                or referred to in the  Registration  Statement or the Prospectus
                or filed or  incorporated  by  reference  as an  exhibit  to the
                Registration Statement.

                        (xxi)   No  filing  with,  or  authorization,  approval,
                consent, license, order,  registration,  qualification or decree
                of, any court or  governmental  authority or agency  (other than
                under the Act, the 1934 Act, the Investment  Company Act and the
                Rules and  Regulations,  which have been obtained,  or as may be
                required  under the  securities  or blue sky laws of the various
                states,  as to which we need express no opinion) is necessary or
                required in connection with the due authorization, execution and
                delivery of the Purchase Agreement or for the offering, issuance
                or sale of the Shares or the  consummation  of the  transactions
                contemplated by this Agreement.

                        (xxii)  The execution,  delivery and  performance of the
                Purchase  Agreement  and the  consummation  of the  transactions
                contemplated in the Purchase  Agreement and in the  Registration
                Statement (including the issuance and sale of the Shares and the
                use of the proceeds  from the sale of the Shares as described in
                the  Prospectus   under  the  caption  "Use  of  Proceeds")  and
                compliance by the Trust with its obligations  under the Purchase
                Agreement  do not and will  not,  whether  with or  without  the
                giving  of  notice  or lapse of time or both,  conflict  with or
                constitute  a breach  of,  or  default  or  Repayment  Event (as
                defined in Section 1(a)(xii) of the Purchase Agreement) under or
                result in the  creation  or  imposition  of any lien,  charge or
                encumbrance upon any property or assets of the Trust pursuant to
                any contract, indenture, mortgage, deed of trust, loan or credit
                agreement,  note,  lease or any other  agreement or  instrument,
                known to us, to which the Trust is a party or by which it or any
                of them may be bound,  or to which any of the property or assets
                of the  Trust is  subject,  nor will such  action  result in any
                violation  of the  provisions  of the  charter or by-laws of the
                Trust,  or  any  applicable  law,  statute,   rule,  regulation,
                judgment, order, writ or decree, known to us, of any government,
                government

                                      A-3
<PAGE>


                instrumentality   or  court,   domestic   or   foreign,   having
                jurisdiction over the Trust or any of its properties,  assets or
                operations.

                        (xxiii) The   Purchase    Agreement,    the   Management
                Agreement,  the Sub-Advisory Agreement,  the Custodian Agreement
                and the Transfer Agency Agreement have each been duly authorized
                by all requisite  action on the part of the Trust,  executed and
                delivered by the Trust, as of the dates noted therein.  Assuming
                due  authorization,  execution and delivery by the other parties
                thereto with respect to the Custodian Agreement and the Transfer
                Agency  Agreement,   each  of  the  Management  Agreement,   the
                Sub-Advisory Agreement, the Custodian Agreement and the Transfer
                Agency  Agreement  constitutes a valid and binding  agreement of
                the Trust,  enforceable in accordance with its terms,  except as
                affected  by  bankruptcy,   insolvency,  fraudulent  conveyance,
                reorganization, moratorium and other similar laws relating to or
                affecting   creditors'  rights   generally,   general  equitable
                principles  (whether  considered in a proceeding in equity or at
                law) and an implied covenant of good faith and fair dealing.

        (B)     With respect to the Advisers:

                        (i)     Each  Adviser  has been  duly  organized  and is
                validly  existing as a corporation  in good  standing  under the
                laws of the State of Delaware.

                        (ii)    Each  Adviser  has  full  corporate   power  and
                authority  to own,  lease  and  operate  its  properties  and to
                conduct its business as described in the Prospectus and to enter
                into and perform its obligations under the Purchase Agreement.

                        (iii)   Each  Adviser  is duly  qualified  as a  foreign
                corporation to transact business and is in good standing in each
                other  jurisdiction  in which such  qualification  is  required,
                whether by reason of the ownership or leasing of property or the
                conduct  of  business,  except  where the  failure to so qualify
                would not result in a Material Adverse Effect.

                        (iv)    Each  Adviser  is  duly   registered   with  the
                Commission as an  investment  adviser under the Advisers Act and
                is not  prohibited  by the Advisers  Act, the Advisers Act Rules
                and  Regulations,  the  Investment  Company Act or the Rules and
                Regulations  from acting under the Management  Agreement for the
                Trust as contemplated by the Prospectus.

                        (v)     The Purchase Agreement, the Management Agreement
                and  the  Sub-Advisory  Agreement  have  been  duly  authorized,
                executed  and  delivered  by the  respective  Adviser,  and  the
                Management   Agreement  and  the  Sub-Advisory   Agreement  each
                constitutes  a valid and binding  obligation  of the  respective
                Adviser,  enforceable  in accordance  with its terms,  except as
                affected  by  bankruptcy,   insolvency,  fraudulent  conveyance,
                reorganization, moratorium and other similar laws relating to or
                affecting  creditors'  rights  generally  and general  equitable
                principles  (whether  considered in a proceeding in equity or at
                law).

                        (vi)    To the  best  of  our  knowledge,  there  is not
                pending or threatened any action, suit,  proceeding,  inquiry or
                investigation,  to which the Advisers  are a party,  or to which
                the  property of the  Advisers is subject,  before or brought by
                any court or governmental  agency or body,  domestic or foreign,
                which might  reasonably  be  expected to result in any  material
                adverse change in the condition, financial or otherwise, in the

                                      A-4
<PAGE>


                earnings,   business  affairs  or  business   prospects  of  the
                Advisers,  materially  and  adversely  affect the  properties or
                assets of the Advisers or materially  impair or adversely affect
                the ability of the Advisers to function as an investment adviser
                or perform its obligations under the Management Agreement or the
                Sub-Advisory  Agreement, or which is required to be disclosed in
                the Registration Statement or the Prospectus.

                        (vii)   To the  best  of  our  knowledge,  there  are no
                franchises,  contracts, indentures,  mortgages, loan agreements,
                notes,  leases or other instruments  required to be described or
                referred  to in the  Registration  Statement  or to be  filed as
                exhibits  thereto  other than those  described  or  referred  to
                therein  or filed  or  incorporated  by  reference  as  exhibits
                thereto,  and the descriptions thereof or references thereto are
                correct in all material respects.

                        (viii)  To the best of our  knowledge,  each  Adviser is
                not in violation of its certificate of incorporation, by-laws or
                other  organizational  documents  and no default by the Advisers
                exists in the due  performance  or  observance  of any  material
                obligation,  agreement,  covenant or condition  contained in any
                contract,  indenture,  mortgage, loan agreement,  note, lease or
                other  agreement or instrument  that is described or referred to
                in the  Registration  Statement  or the  Prospectus  or filed or
                incorporated  by  reference  as an exhibit  to the  Registration
                Statement.

                        (ix)    No  filing  with,  or  authorization,  approval,
                consent, license, order,  registration,  qualification or decree
                of, any court or governmental  authority or agency,  domestic or
                foreign  (other than under the Act, the  Investment  Company Act
                and the Rules and Regulations,  which have been obtained,  or as
                may be  required  under the  securities  or blue sky laws of the
                various  states,  as to which we need  express  no  opinion)  is
                necessary or required in connection with the due  authorization,
                execution and delivery of the Purchase Agreement.

                        (x)     The execution,  delivery and  performance of the
                Purchase  Agreement  and the  consummation  of the  transactions
                contemplated in the Purchase  Agreement and in the  Registration
                Statement and compliance by the Advisers with their  obligations
                under the Purchase  Agreement do not and will not,  whether with
                or  without  the  giving  of  notice  or  lapse of time or both,
                conflict with or constitute a breach of, or default or Repayment
                Event  (as  defined  in  Section   1(a)(xii)   of  the  Purchase
                Agreement)  under or result in the creation or imposition of any
                lien,  charge or encumbrance  upon any property or assets of the
                Advisers pursuant to any contract, indenture,  mortgage, deed of
                trust,  loan or  credit  agreement,  note,  lease  or any  other
                agreement or instrument, known to us, to which the Advisers is a
                party or by which  it or any of them may be  bound,  or to which
                any of the property or assets of the Advisers is subject (except
                for such  conflicts,  breaches or defaults or liens,  charges or
                encumbrances that would not have a Material Adverse Effect), nor
                will such action  result in any  violation of the  provisions of
                the charter or by-laws of the Advisers,  or any applicable  law,
                statute,  rule,  regulation,  judgment,  order,  writ or decree,
                known to us, of any government,  government  instrumentality  or
                court,  domestic  or  foreign,   having  jurisdiction  over  the
                Advisers or any of its properties, assets or operations.

        In addition, we have participated in the preparation of the Registration
Statement  and the  Prospectus  and  participated  in  discussions  with certain
officers,  trustees and  employees of the Trust,  representatives  of Deloitte &
Touche LLP, the independent accountants who examined the statement of assets and
liabilities  of  the  Trust  included  or   incorporated  by  reference  in  the
Registration Statement and

                                      A-5
<PAGE>


the Prospectus,  and you and your  representatives  and we have reviewed certain
Trust records and documents.  While we have not  independently  verified and are
not  passing  upon,  and do not assume any  responsibility  for,  the  accuracy,
completeness  or  fairness  of the  information  contained  in the  Registration
Statement  and the  Prospectus,  except to the extent  necessary to enable us to
give the opinions  with  respect to the Trust in  paragraphs  (A)(v),  (xiv) and
(xix), on the basis of such  participation  and review,  nothing has come to our
attention that would lead us to believe that the Registration  Statement (except
for financial statements, supporting schedules and other financial data included
therein or omitted therefrom and for statistical  information  derived from such
financial statements,  supporting schedules or other financial data, as to which
we do not express any belief),  at the time such  Registration  Statement became
effective,  contained an untrue statement of a material fact or omitted to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein not misleading or that the Prospectus  (except for financial
statements,  supporting  schedules and other financial data included  therein or
omitted  therefrom and for statistical  information  derived from such financial
statements,  supporting schedules or other financial data, as to which we do not
express any belief),  at the time the Prospectus  was issued,  or at the Closing
Date,  included or includes an untrue statement of a material fact or omitted or
omits to  state a  material  fact  necessary  in  order  to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.

                                      A-6

</TEXT>
</DOCUMENT>
