<DOCUMENT>
<TYPE>EX-99.(H)
<SEQUENCE>8
<FILENAME>file007.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>

                       BlackRock Municipal Income Trust II
                           (a Delaware business trust)


                     [ ]Common Shares of Beneficial Interest
                           (Par Value $.001 Per Share)


                               PURCHASE AGREEMENT


                                                                  July [ ], 2002

Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
UBS Warburg
c/o Merrill Lynch, Pierce, Fenner & Smith
     Incorporated
North Tower
World Financial Center
New York, New York 10080

Ladies and Gentlemen:

     BlackRock Municipal Income Trust II, a Delaware business trust (the
"Trust"), the Trust's investment adviser, BlackRock Advisors, Inc., a Delaware
corporation ("BAI"), and its investment sub-adviser, BlackRock Financial
Management, Inc., a Delaware corporation ("BFM") (each, an "Adviser" and
together, the "Advisers"), each confirms its agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and UBS
Warburg ("UBS") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch and UBS are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of the
respective number of common shares of beneficial interest, par value $.001 per
share, of the Trust ("Common Shares") set forth in said Schedule A, and with
respect to the grant by the Trust to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of [ ] additional Common Shares to cover over-allotments, if any. The
aforesaid [ ] Common Shares (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the [ ] Common Shares subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities."

     The Trust understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.

     The Trust has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-91080 and No.
811-21126) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Trust as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Trust will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule 497")
of the Rules and Regulations or (ii) if the

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Trust has elected to rely upon Rule 434 ("Rule 434") of the Rules and
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 497. The information included in any such
prospectus or in any such Term Sheet, as the case may be, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, including the
statement of additional information incorporated therein by reference, is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated [ ], 2002 together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").

     All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.

     SECTION 1. Representations and Warranties.

     (a) Representations and Warranties by the Trust and the Advisers. The Trust
and the Advisers jointly and severally represent and warrant to each Underwriter
as of the date hereof, as of the Closing Time referred to in Section 2(c)
hereof, and as of each Date of Delivery (if any) referred to in Section 2(b)
hereof, and agree with each Underwriter, as follows:

         (i) Compliance with Registration Requirements. Each of the Registration
     Statement and any Rule 462(b) Registration Statement has become effective
     under the 1933 Act and no stop order suspending the effectiveness of the
     Registration Statement or any Rule 462(b) Registration Statement has been
     issued under the 1933 Act, or order of suspension or revocation of
     registration pursuant to Section 8(e) of the 1940 Act, and no proceedings
     for any such purpose have been instituted or are pending or, to the
     knowledge of the Trust or the Advisers, are contemplated by the Commission,
     and any request on the part of the Commission for additional information
     has been complied with.

         At the respective times the Registration Statement, any Rule 462(b)
     Registration Statement and any post-effective amendments thereto became
     effective and at the Closing Time (and, if any Option Securities are
     purchased, at the Date of Delivery), the Registration Statement, the Rule
     462(b) Registration Statement, the notification of Form N-8A and any
     amendments and supplements thereto complied and will comply in all material
     respects with the requirements of the 1933 Act, the 1940 Act and the Rules
     and Regulations and did not and will not contain

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     an untrue statement of a material fact or omit to state a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading. Neither the Prospectus nor any amendments or supplements
     thereto, at the time the Prospectus or any such amendment or supplement was
     issued and at the Closing Time (and, if any Option Securities are
     purchased, at the Date of Delivery), included or will include an untrue
     statement of a material fact or omitted or will omit to state a material
     fact necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading. If Rule 434 is
     used, the Trust will comply with the requirements of Rule 434 and the
     Prospectus shall not be "materially different", as such term is used in
     Rule 434, from the prospectus included in the Registration Statement at the
     time it became effective.

         Each preliminary prospectus and the prospectus filed as part of the
     Registration Statement as originally filed or as part of any amendment
     thereto, or filed pursuant to Rule 497 under the 1933 Act, complied when so
     filed in all material respects with the Rules and Regulations and each
     preliminary prospectus and the Prospectus delivered to the Underwriters for
     use in connection with this offering was identical to the electronically
     transmitted copies thereof filed with the Commission pursuant to EDGAR,
     except to the extent permitted by Regulation S-T.

         If a Rule 462(b) Registration Statement is required in connection with
     the offering and sale of the Securities, the Trust has complied or will
     comply with the requirements of Rule 111 under the 1933 Act Regulations
     relating to the payment of filing fees thereof.

         (ii) Independent Accountants. The accountants who certified the
     statement of assets and liabilities included in the Registration Statement
     are independent public accountants as required by the 1933 Act and the
     Rules and Regulations.

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

         (iv) Expense Summary. The information set forth in the Prospectus in
     the Fee Table has been prepared in accordance with the requirements of Form
     N-2 and to the extent estimated or projected, such estimates or projections
     are reasonably believed to be attainable and reasonably based.

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

         (vi) Good Standing of the Trust. The Trust has been duly organized and
     is validly existing as a business trust in good standing under the laws of
     the State of Delaware and has business trust power and authority to own,
     lease and operate its properties and to conduct its business as described
     in the Prospectus and to enter into and perform its obligations under this
     Agreement; and the Trust is duly qualified as a foreign business trust to
     transact business and is in good standing in each other jurisdiction in
     which such qualification is required, whether by

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     reason of the ownership or leasing of property or the conduct of business,
     except where the failure so to qualify or to be in good standing would not
     result in a Material Adverse Effect.

         (vii) No Subsidiaries. The Trust has no subsidiaries.

         (viii) Investment Company Status. The Trust is duly registered with the
     Commission under the 1940 Act as a closed-end diversified management
     investment company, and no order of suspension or revocation of such
     registration has been issued or proceedings therefor initiated or
     threatened by the Commission.

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

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

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

         (xii) Absence of Defaults and Conflicts. The Trust is not in violation
     of its declaration of trust or by-laws, or in default in the performance or
     observance of any obligation, agreement, covenant or condition contained in
     any contract, indenture, mortgage, deed of trust, loan or credit agreement,
     note, lease or other agreement or instrument to which it is a party or by
     which it may be bound, or to which any of the property or assets of the
     Trust is subject (collectively, "Agreements and Instruments") except for
     such violations or defaults that would not result in a Material Adverse
     Effect; and the execution, delivery and performance of this Agreement, the
     Management Agreement, the Sub-Advisory Agreement, the Custodian Agreement
     and the Transfer Agent and Service Agreement referred to in the
     Registration Statement (as used herein, the "Management Agreement," the
     "Sub-Advisory Agreement", the "Custodian Agreement" and the "Transfer
     Agency Agreement," respectively) and the consummation of the transactions
     contemplated herein and in the Registration Statement (including the
     issuance and sale of the Securities and the use of the proceeds from the
     sale of the Securities as described in the Prospectus under the caption
     "Use of Proceeds") and compliance by the Trust with its obligations


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<PAGE>

     hereunder have been duly authorized by all necessary corporate action and
     do not and will not, whether with or without the giving of notice or
     passage of time or both, conflict with or constitute a breach of, or
     default or Repayment Event (as defined below) under, or result in the
     creation or imposition of any lien, charge or encumbrance upon any property
     or assets of the Trust pursuant to, the Agreements and Instruments (except
     for such conflicts, breaches or defaults or liens, charges or encumbrances
     that would not result in a Material Adverse Effect), nor will such action
     result in any violation of the provisions of the declaration of trust or
     by-laws of the Trust or any applicable law, statute, rule, regulation,
     judgment, order, writ or decree of any government, government
     instrumentality or court, domestic or foreign, having jurisdiction over the
     Trust or any of its assets, properties or operations. As used herein, a
     "Repayment Event" means any event or condition which gives the holder of
     any note, debenture or other evidence of indebtedness (or any person acting
     on such holder's behalf) the right to require the repurchase, redemption or
     repayment of all or a portion of such indebtedness by the Trust.

         (xiii) Absence of Proceedings. There is no action, suit, proceeding,
     inquiry or investigation before or brought by any court or governmental
     agency or body, domestic or foreign, now pending, or, to the knowledge of
     the Trust or the Advisers, threatened, against or affecting the Trust,
     which is required to be disclosed in the Registration Statement (other than
     as disclosed therein), or which might reasonably be expected to result in a
     Material Adverse Effect, or which might reasonably be expected to
     materially and adversely affect the properties or assets of the Trust or
     the consummation of the transactions contemplated in this Agreement or the
     performance by the Trust of its obligations hereunder. The aggregate of all
     pending legal or governmental proceedings to which the Trust is a party or
     of which any of its property or assets is the subject which are not
     described in the Registration Statement, including ordinary routine
     litigation incidental to the business, could not reasonably be expected to
     result in a Material Adverse Effect.

         (xiv) Accuracy of Exhibits. There are no contracts or documents which
     are required to be described in the Registration Statement or the
     Prospectus or to be filed as exhibits thereto by the 1933 Act, the 1940 Act
     or by the Rules and Regulations which have not been so described and filed
     as required.

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

         (xvi) Absence of Further Requirements. No filing with, or
     authorization, approval, consent, license, order, registration,
     qualification or decree of, any court or governmental authority or agency
     is necessary or required for the performance by the Trust of its
     obligations hereunder, in connection with the offering, issuance or sale of
     the Securities hereunder or the consummation of the transactions
     contemplated by this Agreement, except such as have been already obtained
     or as may be required under the 1933 Act, the 1940 Act, the Securities
     Exchange Act of 1934, as amended (the "1934 Act"), or state securities
     laws.

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<PAGE>

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

         (xviii) Advertisements. Any advertising, sales literature or other
     promotional material (including "prospectus wrappers", "broker kits," "road
     show slides," "road show scripts" and "electronic road show presentations")
     authorized in writing by or prepared by the Trust or the Advisers used in
     connection with the public offering of the Securities (collectively, "sales
     material") does not contain an untrue statement of a material fact or omit
     to state a material fact required to be stated therein or necessary to make
     the statements therein not misleading. Moreover, all sales material
     complied and will 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 National Association of Securities
     Dealers, Inc. ("NASD").

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

         (xx) Material Agreements. This Agreement, the Management Agreement, the
     Sub-Advisory Agreement, the Custodian Agreement and the Transfer Agency
     Agreement have each been duly authorized by all requisite action on the
     part of the Trust, executed and delivered by the Trust, as of the dates
     noted therein and each complies with all applicable provisions of the 1940
     Act. Assuming due authorization, execution and delivery by the other
     parties thereto with respect to the Custodian Agreement and the Transfer
     Agency Agreement, each of the Management Agreement, the Sub-Advisory
     Agreement, the Custodian Agreement and the Transfer Agency Agreement
     constitutes a valid and binding agreement of the Trust, enforceable in
     accordance with its terms, except as affected by bankruptcy, insolvency,
     fraudulent conveyance, reorganization, moratorium and other similar laws
     relating to or affecting creditors' rights generally, general equitable
     principles (whether considered in a proceeding in equity or at law).

         (xxi) Registration Rights. There are no persons with registration
     rights or other similar rights to have any securities registered pursuant
     to the Registration Statement or otherwise registered by the Trust under
     the 1933 Act.

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

     (b) Representations and Warranties by the Advisers. The Advisers represent
and warrant to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof as follows:

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

         (ii) Investment Adviser Status. Each of Advisers is duly registered and
     in good standing with the Commission as an investment adviser under the
     Advisers Act, and is not prohibited by the Advisers Act or the 1940 Act, or
     the rules and regulations under such acts, from acting under the Management
     Agreement and the Sub-Advisory Agreement for the Trust as contemplated by
     the Prospectus.

         (iii) Description of Advisers. The description of each Adviser in the
     Registration Statement and the Prospectus (and any amendment or supplement
     to either of them) complied and comply in all material respects with the
     provisions of the 1933 Act, the 1940 Act, the Advisers Act, the Rules and
     Regulations and the Advisers Act Rules and Regulations and is true and
     correct and does not contain any untrue statement of a material fact or
     omit to state any material fact required to be stated therein or necessary
     in order to make the statements therein, in light of the circumstances
     under which they were made, not misleading.

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

         (v) Authorization of Agreements; Absence of Defaults and Conflicts.
     This Agreement, the Management Agreement, the Additional Compensation
     Agreement between Merrill Lynch and BAI (the "Additional Compensation
     Agreement") and the Sub-Advisory Agreement have each been duly authorized,
     executed and delivered by each respective Adviser, and the Management
     Agreement, the Additional Compensation Agreement and the Sub-Advisory
     Agreement each constitute a valid and binding obligation of each respective
     Adviser, enforceable in accordance with its terms, except as affected by
     bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
     and other similar laws relating to or affecting creditors' rights generally
     and general equitable principles (whether considered in a proceeding in
     equity or at law); and neither the execution and delivery of this
     Agreement, the Management Agreement, the Additional Compensation Agreement
     or the Sub-Advisory Agreement nor the performance by either of the Advisers
     of its obligations hereunder or thereunder will conflict with, or result in
     a breach of any of the terms and provisions of, or constitute, with or
     without the giving of notice or lapse of time or both, a default under, any
     agreement or instrument to which either Adviser is a party or by which it
     is bound, the certificate of incorporation, the by-laws or other
     organizational documents of each of the Advisers, or to each Adviser's
     knowledge, by any law, order, decree, rule or regulation applicable to it
     of any jurisdiction, court, federal or state regulatory body,
     administrative agency or other governmental body, stock exchange or
     securities association having jurisdiction over the Advisers or their
     respective properties or operations; and no consent, approval,
     authorization or order of any court or governmental authority or agency is
     required for the consummation by the Advisers of the transactions
     contemplated by this Agreement, the Management Agreement, the Additional
     Compensation Agreement or the Sub-Advisory Agreement, except as have been
     obtained or may be required under the 1933 Act, the 1940 Act, the 1934 Act
     or state securities laws.

         (vi) No Material Adverse Change. Since the respective dates as of which
     information is given in the Registration Statement and the Prospectus,
     except as otherwise stated therein, there

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     has not occurred any event which should reasonably be expected to have a
     material adverse effect on the ability of either Adviser to perform its
     respective obligations under this Agreement and the respective Management
     Agreement and Sub-Advisory Agreement to which it is a party.

         (vii) Absence of Proceedings. There is no action, suit, proceeding,
     inquiry or investigation before or brought by any court or governmental
     agency or body, domestic or foreign, now pending, or, to the knowledge of
     the Advisers, threatened against or affecting either of the Advisers or any
     "affiliated person" of either of the Advisers (as such term is defined in
     the 1940 Act) or any partners, directors, officers or employees of the
     foregoing, whether or not arising in the ordinary course of business, which
     might reasonably be expected to result in any material adverse change in
     the condition, financial or otherwise, or earnings, business affairs or
     business prospects of either of the Advisers, materially and adversely
     affect the properties or assets of either of the Advisers or materially
     impair or adversely affect the ability of either of the Advisers to
     function as an investment adviser or perform its obligations under the
     Management Agreement or the Sub-Advisory Agreement, or which is required to
     be disclosed in the Registration Statement and the Prospectus.

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

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

     SECTION 2. Sale and Delivery to Underwriters; Closing.

     (a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.

     (b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Trust hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional [ ] Common Shares in the aggregate at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Trust and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 45 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representatives to the Trust setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of

                                       8
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Initial Securities, subject in each case to such adjustments as Merrill Lynch in
its discretion shall make to eliminate any sales or purchases of a fractional
number of Option Securities.

     (c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York
10036, or at such other place as shall be agreed upon by the Representatives and
the Trust, at 10:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Trust (such time and date of payment
and delivery being herein called "Closing Time").

     In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Trust, on each Date of Delivery as specified in the notice from the
Representatives to the Trust.

     Payment shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.

     (d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.

     SECTION 3. Covenants.

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

         (i) Compliance with Securities Regulations and Commission Requests. The
     Trust, subject to Section 3(a)(ii), will comply with the requirements of
     Rule 430A or Rule 434, as applicable, and will notify the Representatives
     immediately, and confirm the notice in writing, (i) when any post-effective
     amendment to the Registration Statement shall become effective, or any
     supplement to the Prospectus or any amended Prospectus shall have been
     filed, (ii) of the receipt of any comments from the Commission, (iii) of
     any request by the Commission for any amendment to the Registration
     Statement or any amendment or supplement to the Prospectus or for
     additional information, and (iv) of the issuance by the Commission of any
     stop order suspending the effectiveness of the Registration Statement or of
     any order preventing or suspending the use of any preliminary prospectus,
     or of the suspension of the qualification of the Securities for offering or
     sale in any jurisdiction, or of the initiation or threatening of any
     proceedings for any of such purposes. The Trust will promptly effect the
     filings necessary

                                       9
<PAGE>

     pursuant to Rule 497 and will take such steps as it deems necessary to
     ascertain promptly whether the form of prospectus transmitted for filing
     under Rule 497 was received for filing by the Commission and, in the event
     that it was not, it will promptly file such prospectus. The Trust will make
     every reasonable effort to prevent the issuance of any stop order, or order
     of suspension or revocation of registration pursuant to Section 8(e) of the
     1940 Act, and, if any such stop order or order of suspension or revocation
     of registration is issued, to obtain the lifting thereof at the earliest
     possible moment.

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

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

         (iv) Delivery of Prospectuses. The Trust has delivered to each
     Underwriter, without charge, as many copies of each preliminary prospectus
     as such Underwriter reasonably requested, and the Trust hereby consents to
     the use of such copies for purposes permitted by the 1933 Act. The Trust
     will furnish to each Underwriter, without charge, during the period when
     the Prospectus is required to be delivered under the 1933 Act or the 1934
     Act, such number of copies of the Prospectus (as amended or supplemented)
     as such Underwriter may reasonably request. The Prospectus and any
     amendments or supplements thereto furnished to the Underwriters will be
     identical to the electronically transmitted copies thereof filed with the
     Commission pursuant to EDGAR, except to the extent permitted by Regulation
     S-T.

         (v) Continued Compliance with Securities Laws. If at any time when a
     prospectus is required by the 1933 Act to be delivered in connection with
     sales of the Securities, any event shall occur or condition shall exist as
     a result of which it is necessary, in the opinion of counsel for the
     Underwriters or for the Trust, to amend the Registration Statement or amend
     or supplement the Prospectus in order that the Prospectus will not include
     any untrue statements of a material fact or omit to state a material fact
     necessary in order to make the statements therein not misleading in the
     light of the circumstances existing at the time it is delivered to a
     purchaser, or if it shall be necessary, in the opinion of such counsel, at
     any such time to amend the Registration Statement or amend or supplement
     the Prospectus in order to comply with the requirements of the 1933 Act or
     the Rules and Regulations, the Trust will promptly prepare and file with
     the Commission, subject to Section 3(a)(ii), such amendment or supplement
     as may be necessary to correct such statement or omission or to make the
     Registration Statement or the Prospectus comply with such requirements, and
     the Trust will furnish to the Underwriters such number of copies of such
     amendment or supplement as the Underwriters may reasonably request.

                                       10
<PAGE>

         (vi) Blue Sky Qualifications. The Trust will use its best efforts, in
     cooperation with the Underwriters, to qualify the Securities for offering
     and sale under the applicable securities laws of such states and other
     jurisdictions of the United States as the Representatives may designate and
     to maintain such qualifications in effect for a period of not less than one
     year from the later of the effective date of the Registration Statement and
     any Rule 462(b) Registration Statement; provided, however, that the Trust
     shall not be obligated to file any general consent to service of process or
     to qualify as a foreign corporation or as a dealer in securities in any
     jurisdiction in which it is not so qualified or to subject itself to
     taxation in respect of doing business in any jurisdiction in which it is
     not otherwise so subject. In each jurisdiction in which the Securities have
     been so qualified, the Trust will file such statements and reports as may
     be required by the laws of such jurisdiction to continue such qualification
     in effect for a period of not less than one year from the effective date of
     the Registration Statement and any Rule 462(b) Registration Statement.

         (vii) Rule 158. The Trust will timely file such reports pursuant to the
     1934 Act as are necessary in order to make generally available to its
     securityholders as soon as practicable an earnings statement for the
     purposes of, and to provide the benefits contemplated by, the last
     paragraph of Section 11(a) of the 1933 Act.

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

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

         (x) Restriction on Sale of Securities. During a period of 180 days from
     the date of the Prospectus, the Trust will not, without the prior written
     consent of Merrill Lynch, (A) directly or indirectly, offer, pledge, sell,
     contract to sell, sell any option or contract to purchase, purchase any
     option or contract to sell, grant any option, right or warrant to purchase
     or otherwise transfer or dispose of Common Shares or any securities
     convertible into or exercisable or exchangeable for Common Shares or file
     any registration statement under the 1933 Act with respect to any of the
     foregoing or (B) enter into any swap or any other agreement or any
     transaction that transfers, in whole or in part, directly or indirectly,
     the economic consequence of ownership of the Common Shares, whether any
     such swap or transaction described in clause (A) or (B) above is to be
     settled by delivery of Common Shares or such other securities, in cash or
     otherwise. The foregoing sentence shall not apply to (1) the Securities to
     be sold hereunder or (2) Common Shares issued pursuant to any dividend
     reinvestment plan.

         (xi) Reporting Requirements. The Trust, during the period when the
     Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
     will file all documents required to be filed with the Commission pursuant
     to the 1940 Act and the 1934 Act within the time periods required by the
     1940 Act and the Rules and Regulations and the 1934 Act and the rules and
     regulations of the Commission thereunder, respectively.

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

         (xiii) No Manipulation of Market for Securities. The Trust will not (a)
     take, directly or indirectly, any action designed to cause or to result in,
     or that might reasonably be expected to constitute, the stabilization or
     manipulation of the price of any security of the Trust to facilitate the
     sale or resale of the Securities, and (b) until the Closing Date, or the
     Date of Delivery, if any, (i) sell, bid for or purchase the Securities or
     pay any person any compensation for soliciting

                                       11
<PAGE>

     purchases of the Securities or (ii) pay or agree to pay to any person any
     compensation for soliciting another to purchase any other securities of the
     Trust .

         (xiv) Rule 462(b) Registration Statement. If the Trust elects to rely
     upon Rule 462(b), the Trust shall file a Rule 462(b) Registration Statement
     with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
     Washington, D.C. time, on the date of this Agreement, and the Trust shall
     at the time of filing either pay to the Commission the filing fee for the
     Rule 462(b) Registration Statement or give irrevocable instructions for the
     payment of such fee pursuant to Rule 111(b) under the 1933 Act.

     SECTION 4. Payment of Expenses.

     (a) Expenses. The Trust will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Trust's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(a)(vi)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus,
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (x) the
fees and expenses incurred in connection with the listing of the Securities on
the AMEX and (xi) the printing of any sales material. BAI has agreed to pay
organizational expenses and offering costs (other than sales load) of the Trust
that exceed $.03 per Common Share.

     (b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Trust and the Advisers, jointly and severally, agree that they shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.

     SECTION 5. Conditions of Underwriters' Obligations.

     The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Trust and the Advisers
contained in Section 1 hereof or in certificates of any officer of the Trust or
the Advisers delivered pursuant to the provisions hereof, to the performance by
the Trust and the Advisers of their respective covenants and other obligations
hereunder, and to the following further conditions:

     (a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed

                                       12
<PAGE>

with the Commission in accordance with Rule 497 (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A) or, if the Trust has elected to
rely upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 497.

     (b) Opinion of Counsel for Trust and the Advisers. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Trust, and
Dan Wachtler, counsel for the Advisers, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters substantially to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request.

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

     (d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Trust, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of a duly authorized officer
of the Trust and of the chief financial or chief accounting officer of the Trust
and of the President or a Vice President or Managing Director of each of the
Advisers, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Sections 1(a) and (b) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time, (iii) each of the Trust and
the Advisers, respectively, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement, or order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act, has been issued and no proceedings for any such
purpose have been instituted or are pending or are contemplated by the
Commission.

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

     (f) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.

                                       13
<PAGE>

     (g) Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the AMEX, subject only to official notice of issuance.

     (h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.

     (i) Execution of Additional Compensation Agreement. At Closing Time,
Merrill Lynch shall have received the Additional Compensation Agreement, dated
as of the Closing Date, as executed by BAI.

     (j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Trust contained herein and the statements in any certificates furnished
by the Trust hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, the Representatives shall have received:

         (i) Officers' Certificates. Certificates, dated such Date of Delivery,
     of a duly authorized officer of the Trust and of the chief financial or
     chief accounting officer of the Trust and of the President or a Vice
     President or Managing Director of each of the Advisers confirming that the
     information contained in the certificate delivered by each of them at the
     Closing Time pursuant to Section 5(d) hereof remains true and correct as of
     such Date of Delivery.

         (ii) Opinions of Counsel for the Trust and the Advisers. The favorable
     opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Trust,
     and Dan Wachtler, counsel for the Advisers, in form and substance
     satisfactory to counsel for the Underwriters, dated such Date of Delivery,
     relating to the Option Securities to be purchased on such Date of Delivery
     and otherwise to the same effect as the opinion required by Section 5(b)
     hereof.

         (iii) Opinion of Counsel for the Underwriters. The favorable opinion of
     Clifford Chance Rogers & Wells LLP, counsel for the Underwriters, dated
     such Date of Delivery, relating to the Option Securities to be purchased on
     such Date of Delivery and otherwise to the same effect as the opinion
     required by Section 5(c) hereof.

         (iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP, in
     form and substance satisfactory to the Representatives and dated such Date
     of Delivery, substantially in the same form and substance as the letter
     furnished to the Representatives pursuant to Section 5(f) hereof, except
     that the "specified date" in the letter furnished pursuant to this
     paragraph shall be a date not more than five days prior to such Date of
     Delivery.

     (k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Trust and the Advisers in connection with the organization and
registration of the Trust under the 1940 Act and the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and substance to
the Representatives and counsel for the Underwriters.

     (l) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Trust at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as

                                       14
<PAGE>

provided in Section 4 and except that Sections 1, 6, 7, 8 and 13 shall survive
any such termination and remain in full force and effect.

SECTION 6. Indemnification.

     (a) Indemnification of Underwriters. The Trust and the Advisers, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:

         (i) against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, arising out of any untrue statement or alleged
     untrue statement of a material fact contained in the Registration Statement
     (or any amendment thereto), including the Rule 430A Information and the
     Rule 434 Information, if applicable, or the omission or alleged omission
     therefrom of a material fact required to be stated therein or necessary to
     make the statements therein not misleading or arising out of any untrue
     statement or alleged untrue statement of a material fact included in any
     preliminary prospectus or the Prospectus (or any amendment or supplement
     thereto), or the omission or alleged omission therefrom of a material fact
     necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading;

         (ii) against any and all loss, liability, claim, damage and expense
     whatsoever, as incurred, to the extent of the aggregate amount paid in
     settlement of any litigation, or any investigation or proceeding by any
     governmental agency or body, commenced or threatened, or of any claim
     whatsoever based upon any such untrue statement or omission, or any such
     alleged untrue statement or omission; provided that (subject to Section
     6(e) below) any such settlement is effected with the written consent of the
     Trust; and

         (iii) against any and all expense whatsoever, as incurred (including
     the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
     incurred in investigating, preparing or defending against any litigation,
     or any investigation or proceeding by any governmental agency or body,
     commenced or threatened, or any claim whatsoever based upon any such untrue
     statement or omission, or any such alleged untrue statement or omission, to
     the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Trust or the
Advisers by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

     (b) Indemnification of Trust, Advisers, Trustees, Directors and Officers.
Each Underwriter severally agrees to indemnify and hold harmless the Trust and
the Advisers, their respective trustees and directors, each of the Trust's
officers who signed the Registration Statement, and each person, if any, who
controls the Trust or the Advisers within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Trust or the Advisers by
such Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).

                                       15
<PAGE>

     (c) Indemnification for Marketing Materials. In addition to the foregoing
indemnification, the Trust and the Advisers also, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a), as limited by
the proviso set forth therein, with respect to any sales material.

     (d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Trust and the Advisers. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

     (e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

     SECTION 7. Contribution.

     If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Advisers on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Trust and the Advisers on the one hand and of the Underwriters on

                                       16
<PAGE>

the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

     The relative benefits received by the Trust and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Trust and the total underwriting discount received by the Underwriters
(whether from the Trust or otherwise), in each case as set forth on the cover of
the Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.

     The relative fault of the Trust and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Trust or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

     The Trust, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

     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.

     For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Trust and each director of the Advisers, respectively, each
officer of the Trust who signed the Registration Statement, and each person, if
any, who controls the Trust or the Advisers, within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Trust and the Advisers, respectively. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.

     SECTION 8. Representations, Warranties and Agreements to Survive Delivery.

     All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Trust or the Advisers submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Trust or the Advisers, and shall survive delivery of the
Securities to the Underwriters.

                                       17
<PAGE>

     SECTION 9. Termination of Agreement.

     (a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Trust, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus (exclusive of any
supplement thereto), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Advisers, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in the Common Shares of the
Trust has been suspended or materially limited by the Commission or the AMEX, or
if trading generally on the New York Stock Exchange or the AMEX or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.

     (b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 13 shall survive such termination and remain in full force and effect.

     SECTION 10. Default by One or More of the Underwriters.

     If one or more of the Underwriters shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:

     (a) if the number of Defaulted Securities does not exceed 10% of the number
of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or

     (b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Trust to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.

     No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

     In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Trust to sell the relevant Option Securities,
as the case may be, either the Representatives or the Trust shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any

                                       18
<PAGE>

required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.

     SECTION 11. Notices.

     All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, c/o Merrill Lynch & Co., North Tower, World Financial Center,
New York, New York 10080, attention of Equity Capital Markets; and notices to
the Trust or the Advisers shall be directed, as appropriate, to the office of
BlackRock Financial Management, Inc. at 345 Park Avenue, New York, New York
10154, Attention: Ralph L. Schlosstein.

     SECTION 12. Parties.

     This Agreement shall each inure to the benefit of and be binding upon the
Underwriters, the Trust, the Advisers and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Trust, the Advisers and their respective successors and the
controlling persons and officers, trustees and directors referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Trust, the
Advisers and their respective partners and successors, and said controlling
persons and officers, trustees and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.

     SECTION 13. GOVERNING LAW AND TIME.

     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.

     SECTION 14. Effect of Headings.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.





                                       19
<PAGE>

     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument,
along with all counterparts, will become a binding agreement among the
Underwriters, the Trust and the Advisers in accordance with its terms.

                                          Very truly yours,


                                          BlackRock Municipal Income Trust II

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


                                          BlackRock Advisors, Inc.

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


                                          BlackRock Financial Management, Inc.

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

CONFIRMED AND ACCEPTED,
     as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
          INCORPORATED
UBS WARBURG

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
               INCORPORATED

By:
   ---------------------------------
   Authorized Signatory


For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.



                                       20
<PAGE>

                                   SCHEDULE A

                                                                 Number of
                  Name of Underwriter                        Initial Securities
                  -------------------                        ------------------

Merrill Lynch, Pierce, Fenner & Smith
          Incorporated.....................................       [ ]
UBS Warburg, LLC...........................................       [ ]
                                                                  ---
     Total.................................................       [ ]
                                                                  ===



                                     Sch A-1
<PAGE>

                                   SCHEDULE B

                       BLACKROCK MUNICIPAL INCOME TRUST II
                    [ ] Common Shares of Beneficial Interest
                           (Par Value $.001 Per Share)

     1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $15.00.

     2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $14.325, being an amount equal to the initial
public offering price set forth above less $0.675 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Trust
and payable on the Initial Securities but not payable on the Option Securities.









                                     Sch B-1


<PAGE>

                                                                       Exhibit A

                    FORM OF OPINION OF TRUST'S AND ADVISERS'
                       COUNSEL TO BE DELIVERED PURSUANT TO
                                  SECTION 5(b)

(A)  With respect to the Trust:

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

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

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

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

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

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

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

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

         (ix) The Registration Statement, including any Rule 462(b) Registration
     Statement, has been declared effective under the 1933 Act; any required
     filing of the Prospectus pursuant to Rule 497(c) or Rule 497(h) has been
     made in the manner and within the time period required by Rule 497; and, to
     the best of our knowledge, no stop order suspending the effectiveness of
     the Registration Statement or any Rule 462(b) Registration Statement has
     been issued under the 1933 Act, and, to the best of our knowledge, no order
     of suspension or revocation of registration

<PAGE>

     pursuant to Section 8(e) of the 1940 Act has been issued, and no
     proceedings for any such purpose have been instituted or are pending or
     threatened by the Commission.

         (x) The Registration Statement, including any Rule 462(b) Registration
     Statement, the Rule 430A Information and the Rule 434 Information, as
     applicable, the Prospectus and each amendment or supplement to the
     Registration Statement and Prospectus as of their respective effective or
     issue dates (other than the financial statements and supporting schedules
     included therein or omitted therefrom, as to which we need express no
     opinion), and the notification on Form N-8A complied as to form in all
     material respects with the requirements of the 1933 Act, the 1940 Act and
     the Rules and Regulations.

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

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

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

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

         (xv) Each of the Management Agreement, the Sub-Advisory Agreement, the
     Custodian Agreement, the Transfer Agency Agreement and the Purchase
     Agreement comply in all material respects with all applicable provisions of
     the 1940 Act, Advisers Act, the Rules and Regulations and the Advisers Act
     Rules and Regulations.

         (xvi) The Trust is duly registered with the Commission under the 1940
     Act as a closed-end diversified management investment company; and, to the
     best of our knowledge, no order of suspension or revocation of such
     registration has been issued or proceedings therefor initiated or
     threatened by the Commission.

         (xvii) To the best of our knowledge, no person is serving as an
     officer, trustee or investment adviser of the Trust except in accordance
     with the 1940 Act and the Rules and Regulations and the Investment Advisers
     Act and the Advisers Act Rules and Regulations. Except as disclosed in the
     Registration Statement and Prospectus (or any amendment or supplement to
     either of them), to the best of our knowledge, no trustee of the Trust is
     an "interested person" (as defined in the 1940 Act) of the Trust or an
     "affiliated person" (as defined in the 1940 Act) of an Underwriter.

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

                                      A-2
<PAGE>

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

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

         (xxi) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency (other than under the 1933 Act, the 1934 Act, the 1940
     Act and the Rules and Regulations, which have been obtained, or as may be
     required under the securities or blue sky laws of the various states, as to
     which we need express no opinion) is necessary or required in connection
     with the due authorization, execution and delivery of the Purchase
     Agreement or for the offering, issuance or sale of the Securities or the
     consummation of the transactions contemplated by this Agreement.

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

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

(B)  With respect to the Advisers:

                                      A-3
<PAGE>


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

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

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

         (iv) Each Adviser is duly registered with the Commission as an
     investment adviser under the Advisers Act and is not prohibited by the
     Advisers Act, the Advisers Act Rules and Regulations, the 1940 Act or the
     Rules and Regulations from acting under the Management Agreement for the
     Trust as contemplated by the Prospectus.

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

         (vi) To the best of our knowledge, there is not pending or threatened
     any action, suit, proceeding, inquiry or investigation, to which the
     Advisers are a party, or to which the property of the Advisers is subject,
     before or brought by any court or governmental agency or body, domestic or
     foreign, which might reasonably be expected to result in any material
     adverse change in the condition, financial or otherwise, in the earnings,
     business affairs or business prospects of the Advisers, materially and
     adversely affect the properties or assets of the Advisers or materially
     impair or adversely affect the ability of the Advisers to function as an
     investment adviser or perform its obligations under the Management
     Agreement or the Sub-Advisory Agreement, or which is required to be
     disclosed in the Registration Statement or the Prospectus.

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

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

         (ix) No filing with, or authorization, approval, consent, license,
     order, registration, qualification or decree of, any court or governmental
     authority or agency, domestic or foreign (other than under the 1933 Act,
     the 1940 Act and the Rules and Regulations, which have been obtained, or as
     may be required under the securities or blue sky laws of the various
     states, as to

                                      A-4
<PAGE>

     which we need express no opinion) is necessary or required in connection
     with the due authorization, execution and delivery of the Purchase
     Agreement.

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

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

                                       A-5

</TEXT>
</DOCUMENT>
