<DOCUMENT>
<TYPE>EX-99.H2
<SEQUENCE>5
<FILENAME>dex99h2.txt
<DESCRIPTION>FORM OF UNDERWRITING AGGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit h.2






                Municipal Auction Rate Cumulative Preferred Stock

                        MANAGED MUNICIPALS PORTFOLIO INC.

                        2,000 Preferred Shares, Series M
                        2,000 Preferred Shares, Series T
                        2,000 Preferred Shares, Series W
                        2,000 Preferred Shares, Series Th
                        2,000 Preferred Shares, Series F

                    Liquidation Preference $25,000 Per Share

                             UNDERWRITING AGREEMENT
                             ----------------------

                                                                  May [__], 2002

SALOMON SMITH BARNEY INC.
  388 Greenwich Street
  New York, New York 10013

Ladies and Gentlemen:

     Managed Municipals Portfolio Inc., a Maryland corporation (the "Fund"),
proposes, upon the terms and conditions set forth herein, to issue and sell an
aggregate of 10,000 Preferred Shares of its Municipal Auction Rate Cumulative
Preferred Stock Series M, Series T, Series W, Series Th and Series F, par value
$.001 per share, with a liquidation preference of $25,000 per share (the
"Preferred Shares"). The Preferred Shares will be authorized by, and subject to
the terms and conditions of, the Fund's Articles of Incorporation (as hereafter
amended and restated, the "Charter"), including the Articles Supplementary
Creating and Fixing the Rights of Municipal Auction Rate Cumulative Preferred
Stock of the Fund (the "Articles Supplementary"), in the form filed as an
exhibit to the Registration Statement referred to in Section 1 of this
agreement. The Fund and its investment manager, Smith Barney Fund Management LLC
(the "Manager"), wish to confirm as follows their agreement with Salomon Smith
Barney Inc. (the "Underwriter") in connection with the purchase of the Preferred
Shares by the Underwriter.

     Collectively, (i) the Investment Management Agreement, dated July 30, 1993,
between the Fund and the Manager (the "Management Agreement"), (ii) the Master
Custodian Agreement, dated June 29, 2001, between the Fund and State Street Bank
and Trust Company, (iii) the Auction Agency Agreement, to be dated as of May 22,
2002, between the Fund and Deutsche Bank Trust Company Americas, (iv) the
Broker-Dealer Agreement, to be dated May 22, 2002, between the Fund, Deutsche
Bank Trust Company Americas and Salomon Smith Barney Inc. and (v) the Transfer
Agency and Registrar Agreement, dated June 18, 1992, between the Fund and PFPC
Global Fund Services (as successor to The Shareholder Services Group, Inc.) are
hereinafter referred to as the "Fund Agreements". This Underwriting Agreement is
hereinafter referred to as the "Agreement".

<PAGE>

     1. Registration Statement and Prospectus. The Fund has prepared in
        -------------------------------------
conformity with the provisions of the Securities Act of 1933, as amended (the
"1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2, as amended (File Nos. 333-76788 and
811-6629), under the 1933 Act and the 1940 Act (the "Registration Statement"),
including a Prospectus relating to the Preferred Shares, and has filed the
Registration Statement and Prospectus in accordance with the 1933 Act and 1940
Act. The Fund also has filed a notification of registration of the Fund as an
investment company under the 1940 Act on Form N-8A (the "1940 Act
Notification"). The term "Registration Statement" as used in this Agreement
means the Registration Statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933 Act or, if
the Registration Statement became effective under the 1933 Act prior to the
execution of this Agreement, as amended or supplemented at the time it became
effective, prior to the execution of this Agreement. If it is contemplated, at
the time this Agreement is executed, that a post-effective amendment to the
Registration Statement will be filed under the 1933 Act and must be declared
effective before the offering of the Preferred Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If the Fund has filed an
abbreviated registration statement to register an additional amount of Preferred
Shares pursuant to Rule 462(b) under the 1933 Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall include such Rule 462 Registration Statement. The term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement or, if the
prospectus and statement of additional information included in the Registration
Statement omit information in reliance on Rule 430A under the 1933 Act Rules and
Regulations and such information is included in a prospectus and statement of
additional information filed with the Commission pursuant to Rule 497 under the
1933 Act, the term "Prospectus" as used in this Agreement means the prospectus
and statement of additional information in the forms included in the
Registration Statement as supplemented by the addition of the information
contained in the prospectus filed with the Commission pursuant to Rule 497. The
term "Prepricing Prospectus" as used in this Agreement means the prospectus and
statement of additional information subject to completion in the forms included
in the Registration Statement at the time of the initial filing of the
Registration Statement with the Commission on January 16, 2002, and as such
prospectus and statement of additional information shall have been amended from
time to time prior to the date of the Prospectus, together with any other
prospectus and statement of additional information relating to the Fund other
than the Prospectus approved in writing by or directly or indirectly prepared by
the Fund or the Manager; it being understood that the definition of Prepricing
Prospectus above shall not include any Prepricing Prospectus prepared by the
Underwriter unless approved in writing by the Fund or the Manager. The terms
"Registration Statement", "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.

     The Fund has furnished the Underwriter with copies of such Registration
Statement, each amendment to such Registration Statement filed with the
Commission and each Prepricing Prospectus.

     2. Agreements to Sell and Purchase. The Fund hereby agrees, subject to all
        -------------------------------
the terms and conditions set forth herein, to issue and sell to the Underwriter
and, upon the basis of the representations, warranties and agreements of the
Fund and the Manager herein contained

<PAGE>
                                                                               3


and subject to all the terms and conditions set forth herein, the Underwriter
agrees to purchase from the Fund, at a purchase price of $24,750 per Share,
the number of Preferred Shares set forth opposite the name of the Underwriter in
Schedule I hereto.

     3. Terms of Public Offering. The Fund and the Manager have been advised by
        ------------------------
the Underwriter that the Underwriter proposes to make a public offering of the
Preferred Shares as soon after the Registration Statement and this Agreement
have become effective as in the Underwriter's judgment is advisable and
initially to offer the Preferred Shares upon the terms set forth in the
Prospectus.

     4. Delivery of the Preferred Shares and Payment Therefor. Delivery to the
        -----------------------------------------------------
Underwriter of and payment for the Preferred Shares shall be made at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, or
through the facilities of The Depository Trust Company or another mutually
agreeable facility, at 9:30 A.M., New York City time, on May [__], 2002 (the
"Closing Date"). The Closing Date may be varied by agreement between the
Underwriter and the Fund. The certificates evidencing the Preferred Shares shall
be delivered to and registered at The Depository Trust Company, against payment
of the purchase price therefor in immediately available funds.

     5. Agreements of the Fund and the Manager. The Fund and the Manager,
        --------------------------------------
jointly and severally, agree with the Underwriter as follows:

     (a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective under the 1933 Act before the offering of the Preferred
Shares may commence, the Fund will endeavor to cause the Registration Statement
or such post-effective amendment to become effective under the 1933 Act as soon
as possible and will advise the Underwriter promptly and, if requested by the
Underwriter, will confirm such advice in writing when the Registration Statement
or such post-effective amendment has become effective.

     (b) The Fund will advise the Underwriter promptly and, if requested by the
Underwriter, will confirm such advice in writing: (i) of any request made by the
Commission for amendment of or a supplement to the Registration Statement, any
Prepricing Prospectus or the Prospectus (or any amendment or supplement to any
of the foregoing) or for additional information, (ii) of the issuance by the
Commission, the National Association of Securities Dealers, Inc. (the "NASD"),
any state securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory, self-regulatory or
administrative agency or any official of any order suspending the effectiveness
of the Registration Statement, prohibiting or suspending the use of the
Prospectus or any Prepricing Prospectus, or any sales material (as hereinafter
defined), of any notice pursuant to Section 8(e) of the 1940 Act, of the
suspension of qualification of the Preferred Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for any such purposes, (iii)
of receipt by the Fund, the Manager, any affiliate of the Fund or the Manager or
any representative or attorney of the Fund or the Manager of any other material
communication from the Commission, the NASD, any state securities commission,
any national securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency or any
official relating to the Fund (if such communication relating to the Fund is
received by such person within three years

<PAGE>

                                                                               4


after the date of this Agreement), the Registration Statement, the 1940 Act
Notification, the Prospectus, any Prepricing Prospectus, any sales material (as
hereinafter defined) (or any amendment or supplement to any of the foregoing) or
this Agreement or any of the Fund Agreements and (iv) within the period of time
referred to in paragraph (f) below, of any material adverse change in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Fund or the Manager or of the happening of any
other event which makes any statement of a material fact made in the
Registration Statement or the Prospectus, or any Prepricing Prospectus or any
sales material (as hereinafter defined) (or any amendment or supplement to any
of the foregoing) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus, or any Prepricing
Prospectus or any sales materials (as herein defined) (or any amendment or
supplement to any of the foregoing) in order to state a material fact required
by the 1933 Act, the 1940 Act or the Rules and Regulations 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 or of the necessity to
amend or supplement the Registration Statement, the Prospectus, or any
Prepricing Prospectus or any sales material (as herein defined) (or any
amendment or supplement to any of the foregoing) to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other law or order of any court
or regulatory body. If at any time the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or any other governmental, regulatory, self-regulatory or administrative
agency or any official shall issue any order suspending the effectiveness of the
Registration Statement, prohibiting or suspending the use of the Prospectus or
any sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) or suspending the qualification of the Preferred Shares for
offering or sale in any jurisdiction, the Fund will make every reasonable effort
to obtain the withdrawal of such order at the earliest possible time.

     (c) The Fund will furnish to the Underwriter, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to the Underwriter, without charge, such number
of conformed copies of the Registration Statement as originally filed and of
each amendment thereto, but without exhibits, as the Underwriter may reasonably
request.

     (d) The Fund will not (i) file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus, or any sales material (as
herein defined), of which the Underwriter shall not previously have been advised
or to which the Underwriter shall reasonably object after being so advised or
(ii) so long as, in the opinion of counsel for the Underwriter, a Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriter or any dealer, file any information, documents or reports pursuant
to the Securities Exchange Act of 1934, as amended (the "1934 Act"), without
delivering a copy of such information, documents or reports to the Underwriter
prior to or concurrently with such filing.

     (e) Prior to the execution and delivery of this Agreement, the Fund has
delivered to the Underwriter, without charge, in such quantities as the
Underwriter has requested, copies of each form of the Prepricing Prospectus. The
Fund consents to the use, in accordance with the provisions of the 1933 Act and
with the state securities or blue sky laws of the jurisdictions in

<PAGE>

                                                                               5

which the Preferred Shares are offered by the Underwriter and by dealers, prior
to the date of the Prospectus, of each Prepricing Prospectus so furnished by the
Fund.

     (f) As soon after the execution and delivery of this Agreement as possible
and thereafter from time to time for such period as in the opinion of counsel
for the Underwriter a prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriter or any dealer, the Fund will
expeditiously deliver to the Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriter may reasonably request. The Fund consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Preferred Shares are offered by the Underwriter and
by all dealers to whom Preferred Shares may be sold, both in connection with the
offering and sale of the Preferred Shares and for such period of time thereafter
as the Prospectus is required by the 1933 Act to be delivered in connection with
sales by the Underwriter or any dealer. If during such period of time any event
shall occur that in the judgment of the Fund or in the opinion of counsel for
the Underwriter is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Fund will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriter and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Fund and the Underwriter agree that the Registration Statement or the
Prospectus should be amended or supplemented, the Fund, if requested by the
Underwriter, will promptly issue a press release announcing or disclosing the
matters to be covered by the proposed amendment or supplement.

     (g) The Fund will make generally available to its security holders an
earnings statement, which need not be audited, covering a twelve-month period
ending not later than 15 months after the effective date of the Registration
Statement as soon as practicable after the end of such period, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 of the 1933 Act Rules and Regulations.

     (h) During the period of five years hereafter, the Fund will furnish to the
Underwriter (i) as soon as available, a copy of each report of the Fund mailed
to shareholders or filed with the Commission or furnished to the New York Stock
Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from time to
time such other information concerning the Fund as the Underwriter may
reasonably request.

     (i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
the Underwriter terminating this Agreement pursuant to Section 12 hereof or
pursuant to the second paragraph of Section 11 hereof) or if this Agreement
shall be terminated by the Underwriter because of any failure or refusal on the
part of the Fund or the Manager to comply with the terms or fulfill any of the
conditions of this Agreement, the Fund agrees to reimburse the Underwriter for
all out-of-pocket

<PAGE>

                                                                               6

expenses (including reasonable fees and expenses of counsel for the Underwriter)
incurred by the Underwriter in connection herewith.

     (j) The Fund will apply the net proceeds from the sale of the Preferred
Shares substantially in accordance with the description set forth in the
Prospectus and in such a manner as to comply with the investment objectives,
policies and restrictions of the Fund as described in the Prospectus.

     (k) The Fund will timely file the requisite copies of the Prospectus with
the Commission pursuant to Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
Regulations, whichever is applicable or, if applicable, will timely file the
certification permitted by Rule 497(j) of the 1933 Act Rules and Regulations and
will advise the Underwriter of the time and manner of such filing.

     (l) Except as provided in this Agreement, so long as the Preferred Shares
remain outstanding, the Fund will not sell, contract to sell, or otherwise
dispose of any senior securities (as defined in the 1940 Act) of the Fund, or
grant any options or warrants to purchase senior securities of the Fund, for a
period of 120 days after the date of the Prospectus, without the prior written
consent of the Underwriter.

     (m) The Fund will use its best efforts to cause the Preferred Shares, prior
to the Closing Date, to be assigned a rating of "AAA" by Fitch, Inc. ("Fitch")
and `Aaa' by Moody's Investors Service, Inc. ("Moody's" and, together with
Fitch, the "Rating Agencies").

     (n) The Fund and the Manager will each use its best efforts to perform all
of the agreements required of them and discharge all conditions to closing as
set forth in this Agreement.

     6. Representations and Warranties of the Fund and the Manager. The Fund and
        ----------------------------------------------------------
the Manager, jointly and severally, represent and warrant to the Underwriter
that:

     (a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.

     (b) The Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 497 of the 1933 Act
Rules and Regulations and the 1940 Act Notification when originally filed with
the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the applicable
requirements of the 1933 Act, the 1940 Act and the Rules and Regulations and did
not or will not at any such times 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 light of the circumstances under which they were
made, not misleading, except that this representation

<PAGE>


                                                                               7

and warranty does not apply to (i) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information relating to the Underwriter furnished to the Fund in writing by
or on behalf of the Underwriter expressly for use therein or (ii) with respect
to the representations of the Fund, the description of the Manager contained in
the Prospectus heading "Management of the Fund" and in the statement of
additional information heading "Investment Manager."

     (c) All the outstanding Common Stock (as defined in the Prospectus) of the
Fund has been duly authorized and validly issued, is fully paid and
nonassessable and is free of any preemptive or similar rights; the Preferred
Shares have been duly authorized and, when issued and delivered to the
Underwriter against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof in the Registration
Statement and the Prospectus (and any amendment or supplement to either of
them); and the capitalization of the Fund conforms to the description thereof in
the Registration Statement and the Prospectus (and any amendment or supplement
to either of them).

     (d) The Fund is a corporation duly organized and validly existing in good
standing under the laws of the State of Maryland with full corporate power to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a Material Adverse Effect (as hereinafter defined); and
the Fund has no subsidiaries.

     (e) There are no legal or governmental proceedings pending or, to the
knowledge of the Fund, threatened, against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) that are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.

     (f) The Fund is not in violation of its Charter, including the Articles
Supplementary and is in compliance in material respects with its other
organizational documents applicable to the Fund (together with the Charter and
Articles Supplementary, the "Organizational Documents"), and any law, ordinance,
administrative or governmental rule or regulation applicable to the Fund or of
any decree of the Commission, the NASD, any state securities commission, any
national securities exchange, any arbitrator, any court or governmental agency,
body or official having jurisdiction over the Fund, or in default in any respect
in the performance of any material obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the Fund is a
party or by which it or any of its properties may be bound, except where such
violation does not have a Material Adverse Effect (as hereinafter defined).

<PAGE>


                                                                               8

     (g) Neither the issuance and sale of the Preferred Shares, the execution,
delivery or performance of this Agreement or any of the Fund Agreements by the
Fund, nor the consummation by the Fund of the transactions contemplated hereby
or thereby (i) requires any consent, approval, authorization or other order of
or registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained prior to the date hereof and
such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Organizational Documents or (ii)
conflicts or will conflict with or constitutes or will constitute a material
breach of, or a default under, any material agreement, indenture, lease or other
instrument to which the Fund is a party or by which it or any of its properties
may be bound, or violates or will violate any statute, law, regulation or
judgment, injunction, order or decree applicable to the Fund or any of its
properties, or will result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the Fund pursuant to the
terms of any agreement or instrument to which it is a party or by which it may
be bound or to which any of its property or assets is subject. The Fund is not
subject to any order of any court or of any arbitrator, governmental authority
or administrative agency.

     (h) The accountants, KPMG LLP, who have certified or shall certify the
audited financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement to
either of them) are independent public accountants as required by the 1933 Act,
the 1940 Act and the Rules and Regulations.

     (i) The financial statements, together with related schedules and notes,
included or incorporated by reference in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), present fairly
the financial position, results of operations and changes in financial position
of the Fund on the basis stated or incorporated by reference in the Registration
Statement and the Prospectus at the respective dates or for the respective
periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the Fund.

     (j) The execution and delivery of, and the performance by the Fund of its
obligations under, this Agreement and the Fund Agreements have been duly and
validly authorized by the Fund, and this Agreement and the Fund Agreements have
been duly executed and delivered by the Fund and assuming due authorization,
execution and delivery by the other parties thereto, constitute the valid and
legally binding agreements of the Fund, enforceable against the Fund in
accordance with their terms (subject to the qualification that the
enforceability of the Fund's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity regardless of whether enforceability is

<PAGE>

                                                                               9

considered in a proceeding in equity or at law), except as rights to indemnity
and contribution hereunder and thereunder may be limited by federal or state
securities laws.

     (k) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), the Fund has
not incurred any liability or obligation, direct or contingent, or entered into
any transaction, not in the ordinary course of business, that is material to the
Fund, and there has not been any change in the capitalization, or material
increase in the short-term debt or long-term debt, of the Fund, or any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of the Fund, whether or not arising in the ordinary course of business (a
"Material Adverse Effect").

     (l) The Fund has not distributed and, prior to the later to occur of (i)
the Closing Date and (ii) completion of the distribution of the Preferred
Shares, will not distribute any offering material in connection with the
offering and sale of the Preferred Shares other than the Registration Statement,
the Prepricing Prospectus, the Prospectus or other materials, if any, permitted
by the 1933 Act, the 1940 Act or the Rules and Regulations.

     (m) (i) The Fund has such permits, licenses, franchises and authorizations
of governmental or regulatory authorities ("permits") as are necessary to own
its properties and to conduct its business in the manner described in the
Prospectus (and any amendment or supplement thereto), except for any such
permits the absence of which would not have a Material Adverse Effect, subject
to such qualifications as may be set forth in the Prospectus; (ii) the Fund has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Fund under any such permit, subject in each case
to such qualification as may be set forth in the Prospectus (and any amendment
or supplement thereto); and (iii) except as described in the Prospectus (and any
amendment or supplement thereto), none of such permits contains any restriction
that is materially burdensome to the Fund, except where the failure of (i), (ii)
or (iii) to be accurate would not, individually or in the aggregate, have a
Material Adverse Effect on the Fund.

     (n) The Fund maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Internal Revenue Code of 1986, as amended (the "Code"); (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books and records
requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

<PAGE>

                                                                              10

     (o) The Fund has filed all tax returns required to be filed, which returns
are complete and correct in all material respects, and the Fund is not in
material default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto.

     (p) No holder of any security of the Fund has any right to require
registration of any Common Stock, Preferred Shares or any other security of the
Fund because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement.

     (q) The Fund, subject to the Registration Statement having been declared
effective and the filing of the Prospectus under Rule 497 under the 1933 Act
Rules and Regulations, has taken all required action under the 1933 Act, the
1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Preferred Shares as contemplated by this Agreement.

     (r) The conduct by the Fund of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it does
not own, possess or license.

     (s) The Fund is registered under the 1940 Act as a diversified, closed-end
management investment company and the 1940 Act Notification has been duly filed
with the Commission and, at the time of filing thereof and any amendment or
supplement thereto, conformed in all material respects with all applicable
provisions of the 1940 Act and the 1940 Act Rules and Regulations. The Fund has
not received any notice from the Commission pursuant to Section 8(e) of the 1940
Act with respect to the 1940 Act Notification. The Fund is, and at all times
through the completion of the transactions contemplated hereby, will be, in
compliance in all material respects with the terms and conditions of the 1933
Act and the 1940 Act. No person is serving or acting as an officer, director or
investment adviser of the Fund except in accordance with the provisions of the
1940 Act and the 1940 Act Rules and Regulations and the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), and the rules and regulations of the
Commission promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations").

     (t) Except as stated in this Agreement and in the Prospectus (and any
amendment or supplement thereto), the Fund has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Fund to facilitate the sale or resale of the Preferred
Shares, and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.

     (u) The Fund has filed in a timely manner each document or report required
to be filed by it pursuant to the 1934 Act and the rules and regulations of the
Commission promulgated thereunder (the "1934 Act Rules and Regulations"); each
such document or report at the time it was filed conformed to the requirements
of the 1934 Act and the 1934 Act Rules and Regulations; and none of such
documents or reports contained an untrue statement of any material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.

<PAGE>

                                                                              11

     (v) All 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 Fund or the Manager
for use in connection with the offering and sale of the Preferred Shares
(collectively "sales material") complied and comply in all material respects
with the applicable requirements of the 1933 Act, the 1940 Act, the Rules and
Regulations and the rules and interpretations of the NASD and no such sales
material contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

     (w) Each of the Fund Agreements and the Fund's obligations under this
Agreement and each of the Fund Agreements comply in all material respects with
all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations,
the Advisers Act and the Advisers Act Rules and Regulations.

     (x) The Fund currently complies with all requirements under the Code to
qualify as a regulated investment company under Subchapter M of the Code.

     (y) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), no director of the Fund is
an "interested person" (as defined in the 1940 Act) of the Fund or an
"affiliated person" (as defined in the 1940 Act) of the Underwriter.

     (z) The Fund's Common Stock is duly listed on the NYSE.

     7. Representations and Warranties of the Manager. The Manager represents
        ---------------------------------------------
and warrants to the Underwriter as follows:

     (a) The Manager is a limited liability company validly existing in good
standing 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 Registration Statement and the Prospectus (and any amendment
or supplement to either of them), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or to
qualify does not have a Material Adverse Effect on the Manager or on the ability
of the Manager to perform its obligations under this Agreement and the
Management Agreement.

     (b) The Manager 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 1940 Act or the 1940 Act Rules and
Regulations from acting under the Management Agreement for the Fund as
contemplated by the Prospectus (or any amendment or supplement thereto). There
does not exist any proceeding or any facts or circumstances the existence of
which could lead to any proceeding which might adversely affect the registration
of the Manager with the Commission.

<PAGE>

                                                                              12

     (c) There are no legal or governmental proceedings pending or, to the
knowledge of the Manager, threatened against the Manager, or to which the
Manager or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus (or any amendment or supplement
to either of them) but are not described as required or that may reasonably be
expected to involve a prospective material adverse change in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Manager or on the ability of the Manager to perform its
obligations under this Agreement and the Management Agreement.

     (d) Neither the execution, delivery or performance of this Agreement or the
performance of the Management Agreement by the Manager, nor the consummation by
the Manager of the transactions contemplated hereby or thereby (A) requires the
Manager to obtain any consent, approval, authorization or other order of or
registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official or conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the certificate of formation, or other
organizational documents, of the Manager or (B) conflicts or will conflict with
or constitutes or will constitute a material breach of or a default under, any
material agreement, indenture, lease or other instrument to which the Manager is
a party or by which it or any of its properties may be bound, or violates or
will violate any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to the Manager or any of its properties or will
result in the creation or imposition of any material lien, charge or encumbrance
upon any property or assets of the Manager pursuant to the terms of any
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 Manager is subject. The Manager is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.

     (e) The execution and delivery of, and the performance by the Manager of
its obligations under, this Agreement and the Management Agreement have been
duly and validly authorized by the Manager, and this Agreement and the
Management Agreement have been duly executed and delivered by the Manager and,
assuming due authorization, execution and delivery by the other parties thereto,
each constitutes the valid and legally binding agreement of the Manager,
enforceable against the Manager in accordance with its terms (subject to the
qualification that the enforceability of the Manager's obligations thereunder
may be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights, and to
general principles of equity regardless of whether enforceability is considered
in a proceeding in equity or at law), except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.

     (f) The description of the Manager in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) complies in all material
respects with the provisions of the 1933 Act, the 1940 Act, the Advisers Act,
the Rules and Regulations and the Advisers Act Rules and Regulations and 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 light of the circumstances under which they were made, not misleading.

<PAGE>

                                                                              13

     (g) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement to either of them), subsequent to the respective
dates as of which such information is given in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), the Manager
has not incurred any liability or obligation, direct or contingent, or entered
into any transaction, not in the ordinary course of business, that is material
to the Manager or the Fund and that is required to be disclosed in the
Registration Statement or the Prospectus and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of the Manager, whether or not arising in the ordinary course of business, or
which, in each case, could have a Material Adverse Effect on the ability of the
Manager to perform its obligations under this Agreement and the Management
Agreement.

     (h) (i) The Manager has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment thereto); (ii) the Manager has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Manager under any such permit; and (iii) except
as described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to the
Manager, except where the failure of (i), (ii), or (iii) to be accurate would
not, individually or in the aggregate, have a Material Adverse Effect on the
Manager.

     8. Indemnification and Contribution.
        --------------------------------

     (a)(i) The Fund agrees to indemnify and hold harmless each of the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and reasonable expenses
(including reasonable costs of investigation), joint or several, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prepricing Prospectus or in the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Underwriter furnished in writing to the Fund by or on behalf of the
Underwriter expressly for use in connection therewith; provided, however, that
the indemnification contained in this paragraph (a)(i) with respect to any
Prepricing Prospectus, Prospectus or Registration Statement shall not inure to
the benefit of the Underwriter (or to the benefit of any person controlling the
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Preferred Shares by the Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such person
within the time required by the 1933 Act and the 1933 Act Rules and Regulations,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such

<PAGE>

                                                                              14

Prepricing Prospectus was corrected in the Prospectus, provided that the Fund
has delivered the Prospectus to the Underwriter in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Fund may otherwise
have.

     (a)(ii) The Manager agrees to indemnify and hold harmless each of the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and reasonable expenses
(including reasonable costs of investigation), joint or several, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Prepricing Prospectus or in the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
the Underwriter furnished in writing to the Fund by or on behalf of the
Underwriter expressly for use in connection therewith; provided, however, that
the indemnification contained in this paragraph (a)(ii) with respect to any
Prepricing Prospectus, Prospectus or Registration Statement shall not inure to
the benefit of the Underwriter (or to the benefit of any person controlling the
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Preferred Shares by the Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such person
within the time required by the 1933 Act and the 1933 Act Rules and Regulations,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Fund has delivered the Prospectus
to the Underwriter in requisite quantity on a timely basis to permit such
delivery or sending; and provided further, that (i) the Manager will not be
liable to any such indemnified party in any such case except to the extent that
the Fund has failed to indemnify and hold harmless such indemnified party
pursuant to paragraph (a)(i) in respect of any such loss, claim, damage,
liability or expense after such indemnified party has made a claim of the Fund
as required below; and (ii) the amount of the Manager's liability hereunder
shall be limited to the amount of the net proceeds from the sale of the
Preferred Shares and provided, further, that to the extent the Manager has
indemnified the Underwriter or each person, if any, who controls the
Underwriter, the Fund shall contribute to the Manager a portion of the amount
paid by the Manager to any such indemnified party as shall be appropriate to
reflect the relative benefits received by the Fund and the Manager in the
offering of the Preferred Shares and the relative fault of the Fund and the
Manager in causing the omission or misstatement which resulted in such payment.
This indemnity agreement shall be in addition to any liability which the Manager
may otherwise have.

     (b) Any party that proposes to assert the right to be indemnified under
this Section 8 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party (i)

<PAGE>

                                                                              15

will not relieve it from any liability that it may have to any indemnified party
under the foregoing provision of this Section 8 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party and (ii) will not, in any event, relieve such
indemnifying party from any other obligation (other than pursuant to the
foregoing provision of this Section 8) it may have under this Agreement. If any
action, suit or proceeding shall be brought against the Underwriter or any
person controlling the Underwriter in respect of which indemnity may be sought
against the Fund or the Manager, the Underwriter or such controlling person
shall promptly notify the Fund or the Manager, and the Fund or the Manager shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. The Underwriter or any such controlling person shall have
the right to employ separate counsel in any such action, suit or proceeding and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Underwriter or such controlling person unless (i)
the Fund or the Manager has agreed in writing to pay such fees and expenses,
(ii) the Fund or the Manager has failed to assume the defense and employ
counsel, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both the Underwriter or such
controlling person and the Fund or the Manager and the Underwriter or such
controlling person shall have been advised by its counsel that representation of
such indemnified party and the Fund or the Manager by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the Fund and the
Manager shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Underwriter or such controlling person). It is
understood, however, that the Fund and the Manager shall, in connection with any
one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for the Underwriter and controlling persons not having
actual or potential differing interests with the Underwriter or among
themselves, which firm shall be designated in writing by the Underwriter, and
that all such fees and expenses shall be reimbursed as they are incurred. The
Fund and the Manager shall not be liable for any settlement of any such action,
suit or proceeding effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with such written consent, or if there
be a final judgment for the plaintiff in any such action, suit or proceeding,
the Fund and the Manager agree to indemnify and hold harmless the Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.

     (c) The Underwriter agrees to indemnify and hold harmless the Fund and the
Manager, their directors, trustees and officers who sign the Registration
Statement, and any person who controls the Fund or the Manager within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Fund and the Manager to the
Underwriter, but only with respect to information relating to the Underwriter
furnished in writing by or on behalf of the Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Fund or the Manager, any of their directors or trustees, any
such officer, or any such controlling person based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or

<PAGE>

                                                                              16

supplement thereto, and in respect of which indemnity may be sought against the
Underwriter pursuant to this paragraph (c), the Underwriter shall have the
rights and duties given to the Fund and the Manager by paragraph (b) above
(except that if the Fund or the Manager shall have assumed the defense thereof
the Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the Underwriter's expense), and the Fund and the
Manager, their directors, trustees and any such officer, and any such
controlling person shall have the rights and duties given to the Underwriter by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which the Underwriter may otherwise have.

     (d) If the indemnification provided for in this Section 8 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
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, claims, damages, liabilities or reasonable expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Fund and the Manager on the one hand (treated jointly for this purpose as one
person) and the Underwriter on the other hand from the offering of the Preferred
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 Fund and the Manager on the one hand (treated jointly for this purpose as
one person) and the Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations with respect to
the offering of the Preferred Shares. The relative benefits received by the Fund
and the Manager on the one hand (treated jointly for this purpose as one person)
and the Underwriter on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Fund bear to the total underwriting discounts and commissions received by
the Underwriter, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Fund and the Manager on the one hand
(treated jointly for this purpose as one person) and the Underwriter on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Fund
and the Manager on the one hand (treated jointly for this purpose as one person)
or by the Underwriter on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 8(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify (i) will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 8(d),
unless such omission results in the forfeiture of substantive rights or defenses
by the party or parties from whom contribution is being sought and (ii) will
not, in any event, relieve the party or parties from whom contribution may be
sought from any other obligation (other than pursuant to this Section 8(d)) it
or they may have under this Agreement. Except for a settlement entered into
pursuant to the last sentence of Section 8(b) hereof, no party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent shall not be unreasonably withheld).

<PAGE>

                                                                              17

     (e) The Fund, the Manager and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
a pro rata allocation (even if the Underwriter 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 paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

     (f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or 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 action, suit or proceeding.

     (g) Notwithstanding any other provisions in this Section 8, no party shall
be entitled to the benefit of any provision under this Agreement which protects
or purports to protect such person against any liability to the Fund or its
security holders to which such person would otherwise be subject by reason of
such person's willful misfeasance, bad faith, or gross negligence, in the
performance of such person's duties hereunder, or by reason of such person's
reckless disregard of such person's obligations and duties hereunder.

     (h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Fund and the Manager set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter, the Fund, the Manager, their directors, trustees or
officers, or any person controlling the Fund or the Manager, (ii) acceptance of
any Preferred Shares and payment therefor hereunder, and (iii) any termination
of this Agreement. A successor to the Underwriter or any person controlling the
Underwriter, or to the Fund, the Manager, their directors, trustees or officers,
or any person controlling the Fund or the Manager, shall be entitled to the
benefits of the indemnity, contribution, and reimbursement agreements contained
in this Section 8.

     9. Conditions of Underwriter's Obligations. The obligation of the
        ---------------------------------------
Underwriter to purchase the Preferred Shares hereunder are subject to the
following conditions:

     (a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Preferred Shares may
commence, the Registration Statement or such

<PAGE>

                                                                              18

post-effective amendment shall have become effective not later than 5:30 P.M.,
New York City time, on the date hereof, or at such later date and time as shall
be consented to in writing by the Underwriter, and all filings, if any, required
by Rules 497 and 430A under the 1933 Act and the 1933 Act Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of the
Registration Statement or order pursuant to Section 8(e) of the 1940 Act shall
have been issued and no proceeding for those purposes shall have been instituted
or, to the knowledge of the Fund, the Manager or the Underwriter, threatened by
the Commission, and any request of the Commission for additional information (to
be included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the Underwriter's reasonable satisfaction.

     (b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change or any development involving a prospective change
in or affecting the condition (financial or other), business, prospects,
properties, net assets, or results of operations of the Fund or the Manager not
contemplated by the Prospectus, which in the Underwriter's reasonable opinion
would materially adversely affect the market for the Preferred Shares, or (ii)
any event or development relating to or involving the Fund or the Manager or any
officer or director of the Fund or the Manager which makes any statement made in
the Prospectus untrue or which, in the reasonable opinion of the Fund and its
counsel or the Underwriter and its counsel, requires the making of any addition
to or change in the Prospectus in order to state a material fact required by the
1933 Act, the 1940 Act or the Rules and Regulations or any other law to be
stated therein or necessary in order to make the statements therein not
misleading, if amending or supplementing the Prospectus to reflect such event or
development would, in the Underwriter's opinion, materially adversely affect the
market for the Preferred Shares.

     (c) The Fund shall have furnished to the Underwriter a report showing
compliance with the asset coverage requirements of the 1940 Act and a Basic
Maintenance Report (as defined in the Articles Supplementary), each dated the
Closing Date and in form and substance satisfactory to the Underwriter. Each
such report may use portfolio holdings and valuations as of the close of
business of any day not more than six business days preceding the Closing Date,
provided, however, that the Fund represents in such report that its total net
assets as of the Closing Date have not declined by 5% or more from such
valuation date.

     (d) The Underwriter shall have received on the Closing Date, an opinion of
Willkie Farr & Gallagher, counsel for the Fund, dated the Closing Date and
addressed to the Underwriter, in form and substance satisfactory to the
Underwriter and to the effect that:

     (d)(i) The Fund has been duly organized and is validly existing and in good
standing under the laws of the State of Maryland and has full corporate power to
own, lease and operate its properties, to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or supplement
to either of them);

     (d)(ii) The Preferred Shares have been duly authorized and, when issued and
delivered to the Underwriter against payment therefor in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable
and free of any preemptive or similar rights under the Charter or By-laws of the
Fund or, to such counsel's knowledge, under Maryland law and will conform in all
material respects to the description thereof in the

<PAGE>

                                                                              19

Registration Statement and the Prospectus under the heading "Description of
Preferred Shares" (and any amendment or supplement); the form of Certificate
evidencing the Preferred Shares complies in all material respects with all
requirements of Maryland law; and the relative rights, interests, powers and
preferences of the Preferred Shares, and the obligation of the Fund to redeem
such Preferred Shares upon the terms and conditions set forth in the Charter,
are legal, valid, binding and enforceable under Maryland law, subject to
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditor rights, to
general equitable principles and to the provisions of Section 2-311 of the
Maryland General Corporation Law;

     (d)(iii) The authorized Preferred Shares of the Fund are as set forth in
the Prospectus under the heading "Capitalization";

     (d)(iv) The Registration Statement is effective under the 1933 Act and the
1940 Act; any required filing of the Prospectus pursuant to Rule 497 of the 1933
Act Rules and Regulations has been made within the time periods required by Rule
497(b) or (h), as the case may be; to the knowledge of such counsel, no stop
order suspending its effectiveness or order pursuant to Section 8(e) of the 1940
Act relating to the Fund has been issued and no proceeding for any such purpose
is pending or threatened by the Commission;

     (d)(v) The Registration Statement, the Prospectus (and each amendment
thereof or supplement thereto) comply as to form in all material respects with
the applicable requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations (except that no opinion need be expressed as to the financial
statements or other financial data contained therein);

     (d)(vi) The statements made in the Prospectus (including the statement of
additional information) under the captions "The Auction" and "Description of
Preferred Shares", insofar as they purport to summarize the provisions of the
Articles Supplementary or other documents or agreements specifically referred to
therein, constitute accurate summaries of the terms of any such documents in all
material respects;

     (d)(vii) The statements made in the Prospectus (including the statement of
additional information) under the caption "Tax Matters," insofar as they
constitute matters of law or legal conclusions, have been reviewed by such
counsel and constitute accurate statements of any such matters of law or legal
conclusions in all material respects, and fairly present the information called
for with respect thereto by Form N-2 under the 1940 Act;

     (d)(viii) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required;

     (d)(ix) To such counsel's knowledge, after reasonable inquiry, there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration

<PAGE>

                                                                              20

Statement by the 1933 Act that have not been so described or filed as an
exhibit, or incorporated by reference as permitted by the 1933 Act, the 1940 Act
or the Rules and Regulations;

     (d)(x) Neither the issuance, sale or delivery of the Preferred Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the transactions
contemplated thereby (A) requires any consent, approval, authorization or other
order of or registration or filing by the Fund with the Commission, the NASD,
any national securities exchange, or to such counsel's knowledge, any
arbitrator, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may have been obtained
prior to the date hereof and such as may be required for compliance with state
securities and blue sky laws) or conflicts or will conflict in any material
respect with or constitutes or will constitute a material breach of, or a
material default under, the Charter, including the Articles Supplementary or the
Bylaws of the Fund or (B) (i) conflicts or will conflict with or constitutes or
will constitute a breach of, or a default under, any agreement, indenture, lease
or other instrument known to such counsel to which the Fund is a party or by
which it or any of its properties may be bound and that is identified, in an
officer's certificate of the Fund, as material to the business, financial
condition, operations, properties or prospects of the Fund (the "Agreements and
Instruments"), (ii) to such counsel's knowledge violates or will violate in any
material respect any statute, law or regulation (assuming compliance with state
securities and blue sky laws), except where such violation does not have a
Material Adverse Effect and except that such counsel may state that it expresses
no opinion as to the reasonableness or fairness of compensation payable under
the Management Agreement or as to rights to indemnity and contribution in this
Agreement or the Fund Agreements, (iii) violates or will violate any judgment,
injunction, order or decree that is applicable to the Fund or any of its
properties and that is known to such counsel, or (iv), to counsel's knowledge,
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Fund pursuant to the terms of the Agreements
and Instruments;

     (d)(xi) The Fund has corporate power to issue, sell and deliver the
Preferred Shares to the Underwriter as provided herein, and this Agreement and
the Fund Agreements have been duly authorized, executed and delivered by the
Fund and each complies with all applicable provisions of the 1940 Act and the
Advisers Act (except that such counsel may state that it expresses no opinion as
to the reasonableness or fairness of compensation payable under the Management
Agreement); assuming due authorization, execution and delivery by the other
parties thereto, this Agreement and each Fund Agreement constitutes the valid
and binding obligation of the Fund enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder and thereunder may be
limited by federal or state securities laws or principles of public policy and
except that such counsel may state that it expresses no opinion as to the
reasonableness or fairness of compensation payable under the Management
Agreement, subject to enforcement of bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equitable principles;

     (d)(xii) The Fund is duly registered under the 1940 Act as a diversified,
closed-end management investment company; and

<PAGE>

                                                                              21

          (d)(xiii) The provisions of the Charter, including the Articles
Supplementary and the investment policies and restrictions described in the
Prospectus (including the statement of additional information) under the caption
"Investment Objective and Policies" comply with the requirements of the 1940 Act
and the 1940 Act Rules and Regulations.

          Such counsel shall also have furnished to the Underwriter a statement,
addressed to the Underwriter, dated the Closing Date, to the effect that:

               They have not independently verified the accuracy, completeness
     or fairness of the statements made or the information contained in the
     Registration Statement or the Prospectus, and, except for the statements
     referred to in paragraphs (vi) and (vii) above and the information referred
     to in paragraph (xiii) above, they are not passing upon and do not assume
     any responsibility therefor. In the course of the preparation by the Fund
     of the Registration Statement and the Prospectus, they have participated in
     discussions with the representatives and employees and officers of the Fund
     and the Manager and in discussions with the Fund's independent accountants,
     in which the business and the affairs of the Fund and the Manager and the
     contents of the Registration Statement and the Prospectus were discussed.
     On the basis of information that they have gained in the course of their
     representation of the Fund in connection with its preparation of the
     Registration Statement and the Prospectus and their participation in the
     discussions referred to above, no facts have come to their attention that
     would lead them to believe that as of its effective date, the Registration
     Statement contained any untrue statement of a material fact or omitted to
     state any material fact required to be stated therein or necessary in order
     to make the statements therein not misleading, or that as of the Closing
     Date the Prospectus contained an untrue statement of material fact or
     omitted to state a material fact required to be stated therein or necessary
     to make the statements therein, in light of the circumstances under which
     they were made, not misleading (in each case other than the financial
     statements and schedules, the notes thereto and any schedules and other
     financial data contained or incorporated by reference therein or omitted
     therefrom, as to which they need express no opinion).

          Insofar as the opinions expressed above are dependent upon matters
governed by Maryland law, Willkie Farr & Gallagher will be permitted to rely on
the opinion of Venable, Baetjer and Howard, LLP, Baltimore, Maryland.

          (e) The Underwriter shall have received on the Closing Date an opinion
of the General Counsel for the Manager, dated the Closing Date and addressed to
the Underwriter, in form and substance satisfactory to the Underwriter and to
the effect that:

          (e)(i) The Manager is a limited liability company duly organized and
validly existing and in good standing 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 Registration Statement and the
Prospectus (and any amendment or supplement to either of them);

          (e)(ii) The Manager 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

<PAGE>

                                                                              22

and Regulations, the 1940 Act or the 1940 Act Rules and Regulations from acting
as the investment manager to the Fund pursuant to the Advisory Agreement as
described in the Prospectus;

          (e)(iii) To the best of such counsel's knowledge after reasonable
inquiry, there are no legal or governmental proceedings pending or threatened
against the Manager, or to which the Manager or any of its properties is
subject, that are required to be described in the Registration Statement or the
Prospectus but are not described as required;

          (e)(iv) To the best of such counsel's knowledge after reasonable
inquiry, the Manager is not in violation of its certificate of formation, nor is
the Manager in default under any material agreement, indenture or instrument or
in breach or violation of any judgment, decree, order, rule or regulation of any
court or governmental or self-regulatory agency or body;

          (e)(v) Neither the execution, delivery or performance of this
Agreement nor the consummation by the Manager of the transactions contemplated
hereby (A) requires the Manager to obtain any consent, approval, authorization
or other order of or registration or filing with, the Commission, the NASD, any
national securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such as may have been obtained prior to the date hereof and such as may be
required for compliance with state securities or blue sky laws) or conflicts or
will conflict with or constitutes or will constitute a breach of, or a default
under, the certificate of formation, or other organizational documents, of the
Manager or (B) (i) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any material agreement, indenture,
lease or other instrument to which the Manager is a party or by which it or any
of its properties may be bound (the "Agreements and Instruments"), (ii) to such
counsel's knowledge, violates or will violate any statute, law or regulation
(assuming compliance with state securities and blue sky laws), (iii) violates or
will violate any judgment, injunction, order or decree that is applicable to the
Manager or any of its properties and that is known to such counsel, or (iv) will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Manager pursuant to the terms of the Agreements and
Instruments;

          (e)(vi) The Manager has the corporate power and authority to enter
into this Agreement and the Management Agreement, and this Agreement and the
Management Agreement have been duly authorized, executed and delivered by the
Manager; assuming due authorization, execution and delivery by the other parties
thereto, this Agreement and the Management Agreement each constitutes the valid
and binding obligation of the Manager enforceable in accordance with its terms
(except as rights to indemnity and contribution in this Agreement and the
Management Agreement may be limited by federal or state securities laws),
subject as to enforcement to bankruptcy, fraudulent conveyance, insolvency,
moratorium, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles (regardless of
whether enforceability is considered in a proceeding in equity or at law); and

          (e)(vii) The description of the Manager (other than statements as to
the Manager's investment decisions, beliefs and strategies regarding the Fund's
portfolio as to which such counsel need express no opinion) in the Registration
Statement and the Prospectus does not

<PAGE>

                                                                              23

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
light of the circumstances under which they were made, not misleading.

          (f) The Underwriter shall have received on the Closing Date an opinion
of Simpson Thacher & Bartlett, counsel for the Underwriter, dated the Closing
Date and addressed to the Underwriter, with respect to such matters as the
Underwriter may reasonably request.

          (g) The Underwriter shall have received letters addressed to the
Underwriter and dated the date hereof and the Closing Date from KPMG LLP,
independent certified public accountants, substantially in the forms heretofore
approved by the Underwriter.

          (h) (i) No order suspending the effectiveness of the Registration
Statement or prohibiting or suspending the use of the Prospectus (or any
amendment or supplement thereto) or any Prepricing Prospectus or any sales
material shall have been issued and no proceedings for such purpose or for the
purpose of commencing an enforcement action against the Fund, the Manager or,
with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, the Underwriter, may be
pending before or, to the knowledge of the Fund, the Manager or the Underwriter
or in the reasonable view of counsel to the Underwriter, shall be threatened or
contemplated by the Commission at or prior to the Closing Date and that any
request for additional information on the part of the Commission (to be included
in the Registration Statement, the Prospectus or otherwise) be complied with to
the satisfaction of the Underwriter; (ii) there shall not have been any change
in the capitalization of the Fund nor any material increase in the short-term or
long-term debt of the Fund (other than in the ordinary course of business) from
that set forth or contemplated in the Registration Statement or the Prospectus
(or any amendment or supplement thereto); (iii) there shall not have been,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or other), business, prospects, properties, net
assets or results of operations of the Fund or the Manager; (iv) the Fund shall
not have any liabilities or obligations, direct or contingent (whether or not in
the ordinary course of business), that are material to the Fund, other than
those reflected in the Registration Statement or the Prospectus (or any
amendment or supplement to either of them); and (v) all the representations and
warranties of the Fund and the Manager contained in this Agreement shall be true
and correct on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and the Underwriter shall have received a
certificate of the Fund and the Manager, dated the Closing Date and signed by
the chief executive officer and the chief financial officer of each of the Fund
and the Manager (or such other officers as are acceptable to the Underwriter),
to the effect set forth in this Section 9(h) and in Section 9(i) hereof.

          (i) Neither the Fund nor the Manager shall have failed at or prior to
the Closing Date to have performed or complied in all material respects with any
of its agreements herein contained and required to be performed or complied with
by it hereunder at or prior to the Closing Date.

<PAGE>

                                                                              24

     (j) The Fund shall have delivered and the Underwriter shall have received
evidence satisfactory to the Underwriter that the Preferred Shares are rated
`Aaa' by Moody's and AAA by Fitch as of the Closing Date, and there shall not
have been given any notice of any intended or potential downgrading, or of any
review for a potential downgrading, in the rating accorded to the Preferred
Shares by any Rating Agency.

     (k) The Fund and the Manager shall have furnished or caused to be furnished
to the Underwriter such further certificates and documents as the Underwriter
shall have reasonably requested.

     All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriter and the Underwriter's counsel.

     Any certificate or document signed by any officer of the Fund or the
Manager and delivered to the Underwriter, or to counsel for the Underwriter,
shall be deemed a representation and warranty by the Fund or the Manager to the
Underwriter as to the statements made therein.

     10. Expenses. The Fund agrees to pay the following costs and expenses and
         --------
all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the 1940 Act
Notification, the Prospectus and each amendment or supplement to any of them
(including, without limitation, the filing fees prescribed by the 1933 Act, the
1940 Act and the Rules and Regulations); (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each Prepricing
Prospectus, the Prospectus, any sales material and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Preferred Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Preferred Shares,
including any stamp taxes in connection with the original issuance and sale of
the Preferred Shares; (iv) the reproduction and delivery of this Agreement, any
dealer agreements, the preliminary blue sky memorandum, if any, and all other
agreements or documents reproduced and delivered in connection with the offering
of the Preferred Shares; (v) the registration of the Preferred Shares under the
1934 Act; (vi) the reasonable fees, expenses and disbursements of counsel for
the Underwriter relating to the preparation, reproduction, and delivery of any
preliminary blue sky memorandum; (vii) fees paid to the Rating Agencies; (viii)
the transportation and other expenses incurred by or on behalf of Fund
representatives in connection with presentations to prospective purchasers of
the Preferred Shares; and (ix) the fees and expenses of the Fund's accountants
and the fees and expenses of counsel (including local and special counsel) for
the Fund.

     11. Effective Date of Agreement. This Agreement shall become effective: (i)
         ---------------------------
upon the execution and delivery hereof by the parties hereto; or (ii) if, at the
time this Agreement is executed and delivered, it is necessary for the
Registration Statement or a post-effective amendment thereto to be declared
effective before the offering of the Preferred Shares may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time as
this

<PAGE>

                                                                              25

Agreement shall have become effective, it may be terminated by the Fund, by
notifying the Underwriter, or by the Underwriter, by notifying the Fund.

     Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

     12. Termination of Agreement. This Agreement shall be subject to
         ------------------------
termination in the Underwriter's absolute discretion, without liability on the
part of the Underwriter to the Fund or the Manager, by notice to the Fund, if
prior to the Closing Date (i) trading in securities generally on the NYSE shall
have been suspended or materially limited, (ii) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, the effect of which on
the financial markets of the United States is to make it, in the Underwriter's
judgment, impracticable or inadvisable to commence or continue the offering of
the Preferred Shares at the offering price to the public set forth on the cover
page of the Prospectus or to enforce contracts for the resale of the Preferred
Shares by the Underwriter. Notice of such termination may be given to the Fund
by telegram, telecopy or telephone and shall be subsequently confirmed by
letter.

     13. Information Furnished by the Underwriter. The statements set forth in
         ----------------------------------------
the last paragraph on the cover page and the statements in the first and third
sentences of the third paragraph and in the fifth paragraph under the caption
"Underwriting" in any Prepricing Prospectus and in the Prospectus, constitute
the only information furnished by or on behalf of the Underwriter as such
information is referred to in Sections 6(b) and 8 hereof.

     14. Miscellaneous. Except as otherwise provided in Sections 5, 11 and 12
         -------------
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Fund or the Manager, at the offices
of the Fund at 125 Broad Street, New York, New York 10004, Attention: Secretary;
or (ii) if to the Underwriter, to Salomon Smith Barney Inc., 388 Greenwich
Street, New York, New York 10013, Attention: Manager, Investment Banking
Division.

     15. Disclaimer. A copy of the document establishing the Fund is filed with
         ----------
the Secretary of the State of Maryland. This Agreement is executed by officers
not as individuals and is not binding upon any of the directors, officers, or
shareholders of the Fund individually but only upon the assets of the Fund.

     This Agreement has been and is made solely for the benefit of the
Underwriter, the Fund, the Manager, their directors and officers, and the other
controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriter of any of the Preferred Shares in
his status as such purchaser.

     16. Applicable Law; Counterparts. This Agreement shall be governed by and
         ----------------------------
construed in accordance with the laws of the State of New York.

<PAGE>

                                                                              26

     This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

                                  [End of Text]

<PAGE>




     Please confirm that the foregoing correctly sets forth the agreement among
the Fund, the Manager and the Underwriter.

                                      Very truly yours,


                                      MANAGED MUNICIPALS PORTFOLIO
                                      INC.



                                      By:
                                          ------------------------



Confirmed as of the date first
above mentioned.

SALOMON SMITH BARNEY INC.           SMITH BARNEY FUND MANAGEMENT LLC



By:                                        By:
    ------------------------                  ------------------------


<PAGE>





                                   SCHEDULE I


                        MANAGED MUNICIPALS PORTFOLIO INC.



                                                                Number of
                  Underwriter                               Preferred Shares
                  -----------                               ----------------

Salomon Smith Barney Inc. ..............................    2,000, Series M
                                                            2,000, Series T
                                                            2,000, Series W
                                                            2,000, Series Th
                                                            2,000, Series F



Total ..................................................    10,000



</TEXT>
</DOCUMENT>
