<DOCUMENT>
<TYPE>EX-7.A
<SEQUENCE>7
<FILENAME>file006.txt
<DESCRIPTION>PURCHASE AGREEMENT
<TEXT>

                                                                    Exhibit 7(a)
                                6,700,000 Shares

                              MuniAssets Fund, Inc.
                            (a Maryland corporation)

                                  Common Stock
                           (Par Value $0.10 Per Share)

                               PURCHASE AGREEMENT


                                                                  June ___, 1993

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, NY 10281-1305

Dear Sirs:

      MuniAssets Fund, Inc., a Maryland corporation (the "Fund"), and Fund Asset
Management,  Inc., a Delaware  corporation  (the  "Adviser"),  each confirms its
agreement  with  Merrill  Lynch & Co.,  Merrill  Lynch,  Pierce,  Fenner & Smith
Incorporated (the  "Underwriter"),  with respect to the sale by the Fund and the
purchase by the Underwriter of 6,700,000  shares of common stock, par value $.10
per share,  of the Fund (the "Common  Stock") and,  with respect to the grant by
the Fund to the  Underwriter  of the  option  described  in  Section 2 hereof to
purchase all or any part of 1,005,000 additional shares of Common Stock to cover
over-allotments. The aforesaid 6,700,000 shares (the "Initial Shares"), together
with all or any part of the 1,005,000  additional shares of Common Stock subject
to the  option  described  in  Section  2  hereof  (the  "Option  Shares"),  are
collectively hereinafter called the "Shares."

      Prior  to  the  purchase  and  public   offering  of  the  Shares  by  the
Underwriter,  the  Fund  and the  Underwriter  shall  enter  into  an  agreement
substantially  in the form of Exhibit A hereto (the  "Pricing  Agreement").  The
Pricing  Agreement  may take the form of an  exchange  of any  standard  form of
written telecommunication between the Fund and the Underwriter and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering of
the Shares will be governed by this  Agreement,  as  supplemented by the Pricing
Agreement.  From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.

<PAGE>

      The Fund has  filed  with the  Securities  and  Exchange  Commission  (the
"Commission") a registration  statement on Form N-2 (No. 33-61150) and a related
preliminary  prospectus for the  registration of the Shares under the Securities
Act of 1933,  as amended (the "1933 Act"),  and a  notification  on Form N-8A of
registration of the Fund 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 1940 Act (together with the rules and regulations under the
1933 Act, the "Rules and  Regulations")  and has filed such  amendments  to such
registration  statement  on Form  N-2,  if any,  and  such  amended  preliminary
prospectuses as may have been required to the date hereof. The Fund will prepare
and file such additional amendments thereto and such amended prospectuses as may
hereafter be required.  Such registration  statement (as amended, if applicable)
and the  prospectus  constituting  a part  thereof  (including  in each case the
information,  if any, deemed to be part thereof  pursuant to Rule 430A(b) of the
Rules and Regulations), as from time to time amended or supplemented pursuant to
the 1933 Act, are hereinafter  referred to as the  "Registration  Statement" and
the "Prospectus,"  respectively,  except that if any revised prospectus shall be
provided to the  Underwriter by the Fund for use in connection with the offering
of the Shares which differs from the Prospectus on file at the Commission at the
time  the  Registration   Statement  becomes  effective  (whether  such  revised
prospectus  is required to be filed by the Fund  pursuant to Rule 497(b) or Rule
497(h) of the Rules and Regulations),  the term "Prospectus" shall refer to each
such  revised  prospectus  from and after the time it is first  provided  to the
Underwriter for such use.

      The  Fund  understands  that  the  Underwriter  proposes  to make a public
offering  of the Shares as soon as the  Underwriter  deems  advisable  after the
Registration  Statement  becomes  effective  and the Pricing  Agreement has been
executed and delivered.

      SECTION 1.  Representations  and Warranties.  (a) The Fund and the Adviser
each severally  represents and warrants to the Underwriter as of the date hereof
and as of the date of the Pricing  Agreement (such later date being  hereinafter
referred to as the "Representation Date") as follows:

            (i) At the time the Registration  Statement becomes effective and at
      the  Representation  Date, the  Registration  Statement will comply in all
      material  respects with the requirements of the 1933 Act, the 1940 Act and
      the Rules and  Regulations  and will not contain an untrue  statement of a
      material  fact or omit to state a  material  fact  required  to be  stated
      therein or necessary to make the statements therein not misleading. At the
      time the Registration  Statement becomes effective,  at the Representation
      Date and at Closing Time referred to in Section 2, the Prospectus  (unless
      the term  "Prospectus"  refers to a prospectus  which has been provided to
      the Underwriter by the Fund for use in connection with the offering of the
      Shares which differs from the


                                       2
<PAGE>

      Prospectus  on file  with the  Commission  at the  time  the  Registration
      Statement becomes effective,  in which case at the time such prospectus is
      first provided to the Underwriter for such use) will not contain an untrue
      statement of a material fact or 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;  provided,  however,  that the
      representations  and  warranties  in this  subsection  shall  not apply to
      statements in or omissions from the  Registration  Statement or Prospectus
      made in reliance upon and in conformity with information  furnished to the
      Fund in writing by the Underwriter  expressly for use in the  Registration
      Statement or Prospectus.

            (ii) 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)  The  statement  of assets  and  liabilities  included  in the
      Registration  Statement presents fairly the financial position of the Fund
      as at  the  date  indicated  and  said  statement  has  been  prepared  in
      conformity with generally accepted accounting principles.

            (iv) 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, of the Fund, or in the earnings,  business affairs
      or business  prospects of the Fund, whether or not arising in the ordinary
      course of business,  (B) there have been no  transactions  entered into by
      the Fund which are  material to the Fund other than those in the  ordinary
      course of business,  and (C) there has been no dividend or distribution of
      any kind  declared,  paid or made by the Fund on any class of its  capital
      stock.

            (v) The Fund has been duly incorporated and is validly existing as a
      corporation  in good standing under the laws of the State of Maryland with
      corporate power and authority to own, lease and operate its properties and
      conduct its business as described in the Registration Statement;  the Fund
      is duly qualified as a foreign  corporation to transact business and is in
      good  standing  in  each  jurisdiction  in  which  such  qualification  is
      required; and the Fund has no subsidiaries.

            (vi) The Fund is registered  with the Commission  under the 1940 Act
      as a closed-end,  non-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.


                                       3
<PAGE>

            (vii) The authorized,  issued and  outstanding  capital stock of the
      Fund is as set forth in the Prospectus  under the caption  "Description of
      Capital Stock"; the Shares have been duly authorized for issuance and sale
      to the  Underwriter  pursuant  to this  Agreement  and,  when  issued  and
      delivered by the Fund pursuant to this  Agreement  against  payment of the
      consideration set forth in the Pricing  Agreement,  will be validly issued
      and fully  paid and  nonassessable;  the Shares  conform  in all  material
      respects to all statements  relating thereto contained in the Registration
      Statement;  and the  issuance of the Shares is not  subject to  preemptive
      rights.

            (viii)  The  Fund  is  not  in   violation   of  its   articles   of
      incorporation, as amended (the "Charter") or in default in the performance
      or observance of any material obligation, agreement, covenant or condition
      contained in any material contract,  indenture,  mortgage, loan agreement,
      note,  lease or other  instrument to which it is a party or by which it or
      its  properties  may be bound;  and the  execution  and  delivery  of this
      Agreement, the Pricing Agreement and the Investment Advisory Agreement and
      the Custodial Agreement referred to in the Registration Statement (as used
      herein,   the   "Advisory   Agreement"   and  the   "Custody   Agreement,"
      respectively) and the consummation of the transactions contemplated herein
      and therein have been duly  authorized by all necessary  corporate  action
      and will not conflict with or constitute a breach of, or default under, or
      result in the creation or  imposition of any lien,  charge or  encumbrance
      upon any property or assets of the Fund pursuant to any material contract,
      indenture,  mortgage,  loan agreement,  note, lease or other instrument to
      which  the Fund is a party or by which it may be bound or to which  any of
      the property or assets of the Fund is subject, nor will such action result
      in any violation of the provisions of the Charter or by-laws,  as amended,
      of the Fund (the  "By-Laws") or, to the best knowledge of the Fund and the
      Adviser,  any law,  administrative  regulation or  administrative or court
      decree; and no consent,  approval,  authorization or order of any court or
      governmental  authority or agency is required for the  consummation by the
      Fund of the  transactions  contemplated  by this  Agreement,  the  Pricing
      Agreement,  the Advisory Agreement and the Custody Agreement,  except such
      as has been  obtained  under the 1940 Act or as may be required  under the
      1933 Act, state securities or Blue Sky laws or foreign  securities laws in
      connection  with  the  purchase  and  distribution  of the  Shares  by the
      Underwriter.

            (ix)  The  Fund  owns or  possesses  or has  obtained  all  material
      governmental  licenses,  permits,  consents,  orders,  approvals and other
      authorizations  necessary  to  lease or own,  as the  case may be,  and to
      operate its properties and to carry on its businesses as  contemplated  in
      the Prospectus.


                                       4
<PAGE>

            (x) There is no action, suit or proceeding before or by any court or
      governmental agency or body, domestic or foreign,  now pending, or, to the
      knowledge of the Fund,  threatened  against or affecting,  the Fund, which
      might result in any material adverse change in the condition, financial or
      otherwise,  business  affairs or business  prospects of the Fund, or might
      materially and adversely  affect the properties or assets of the Fund; and
      there  are no  material  contracts  or  documents  of the Fund  which  are
      required to be filed as exhibits to the Registration Statement by the 1933
      Act, the 1940 Act or by the Rules and  Regulations  which have not been so
      filed.

            (xi) The Fund owns or possesses, or can acquire on reasonable terms,
      adequate  trademarks,  service marks and trade names  necessary to conduct
      its business as described in the Registration Statement,  and the Fund has
      not  received  any notice of  infringement  of or conflict  with  asserted
      rights of others with respect to any  trademarks,  service  marks or trade
      names which, singly or in the aggregate,  if the subject of an unfavorable
      decision, ruling or finding, would materially adversely affect the conduct
      of the business, operations, financial condition or income of the Fund.

            (xii) The  Shares  have been  approved  for  listing on the New York
      Stock Exchange upon notice of issuance.

      (b) The Adviser  represents and warrants to the Underwriter as of the date
hereof and as of the Representation Date as follows:

            (i) The Adviser has been duly  incorporated  as a corporation  under
      the laws of the State of Delaware  with  corporate  power and authority to
      conduct its business as described in the Prospectus.

            (ii) The Adviser is duly  registered as an investment  adviser under
      the Investment  Advisers Act of 1940, as amended (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 Advisory  Agreement for
      the Fund as contemplated by the Prospectus.

            (iii)  This  Agreement  has  been  duly  authorized,   executed  and
      delivered by the Adviser; the Advisory Agreement has been duly authorized,
      executed and delivered by the Adviser and  constitutes a valid and binding
      obligation  of the  Adviser,  enforceable  in  accordance  with its terms,
      subject, as to enforcement, to bankruptcy,  insolvency,  reorganization or
      other  laws  relating  to or  affecting  creditors'  rights and to general
      equity  principles;  and  neither  the  execution  and  delivery  of  this
      Agreement, or the Advisory Agreement nor the performance by the Adviser of
      its obligations hereunder or thereunder will conflict with, or result in a
      breach of any of


                                       5
<PAGE>

      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 the Adviser is a party or by which it is bound, or any
      law,  order,  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 Adviser or its respective properties or operations.

            (iv)  The  Adviser  has  the  financial  resources  available  to it
      necessary  for  the   performance  of  its  services  and  obligations  as
      contemplated in the Prospectus.

            (v) Any advertisement  approved by the Adviser for use in the public
      offering  of  the  Shares  pursuant  to  Rule  482  under  the  Rules  and
      Regulations (an "Omitting  Prospectus")  complies with the requirements of
      such Rule 482.

      (c) Any  certificate  signed by any officer of the Fund or the Adviser and
delivered to the Underwriter  shall be deemed a  representation  and warranty by
the  Fund or the  Adviser,  as the case may be,  to the  Underwriter,  as to the
matters covered thereby.

      SECTION 2. Sale and Delivery to the Underwriter;  Closing. On the basis of
the representations and warranties herein contained and subject to the terms and
conditions  herein set forth,  the Fund agrees to sell the Initial Shares to the
Underwriter,  and the Underwriter agrees to purchase the Initial Shares from the
Fund, at the price per share set forth in the Pricing Agreement.

      (a) If the Fund has elected not to rely upon Rule 430A under the Rules and
Regulations, the initial public offering prices and the purchase price per share
to be paid by the  Underwriter  for the Shares has been determined and set forth
in the  Pricing  Agreement,  dated  the date  hereof,  and an  amendment  to the
Registration  Statement and the Prospectus will be filed before the Registration
Statement becomes effective.

      (b) If the Fund has  elected  to rely upon  Rule 430A  under the Rules and
Regulations,  the purchase price per share to be paid by the Underwriter for the
Shares shall be an amount equal to the applicable initial public offering price,
less an amount per share to be determined by agreement  between the  Underwriter
and the Fund. The applicable  initial public offering price per share shall be a
fixed price based upon the number of Shares purchased in a single transaction to
be determined by agreement  between the  Underwriter  and the Fund.  The initial
public offering prices and the purchase price, when so determined,  shall be set
forth in the  Pricing  Agreement.  In the event that such  prices  have not been
agreed upon and the Pricing Agreement has not been executed and delivered by all
parties  thereto by the close of business on the fourth  business day  following
the date of this Agreement,  this Agreement shall terminate  forthwith,  without
liability of any party to any other


                                       6
<PAGE>

party,  except as provided in Section 4, unless otherwise agreed to by the Fund,
the Adviser and the Underwriter.

      In addition,  on the basis of the  representations  and warranties  herein
contained  and subject to the terms and  conditions  herein set forth,  the Fund
hereby  grants an option to the  Underwriter  to purchase all or any part of the
Option Shares at the price per share set forth above.  The option hereby granted
will  expire 45 days after the date  hereof (or, if the Fund has elected to rely
upon Rule 430A under the Rules and  Regulations,  45 days after the execution of
the Pricing  Agreement)  and may be  exercised  only for the purpose of covering
over-allotments   which  may  be  made  in  connection  with  the  offering  and
distribution  of the Initial  Shares upon notice by the  Underwriter to the Fund
setting  forth the number of Option Shares as to which the  Underwriter  is then
exercising  the option and the time,  date and place of payment and delivery for
such Option  Shares.  Any such time and date of delivery (a "Date of  Delivery")
shall be  determined by the  Underwriter  but shall not be later than seven full
business  days after the  exercise  of said  option,  nor in any event  prior to
Closing  Time,  as  hereinafter  defined,  unless  otherwise  agreed upon by the
Underwriter and the Fund.

      Payment of the purchase price for, and delivery of  certificates  for, the
Initial  Shares shall be made at the office of Rogers & Wells,  200 Park Avenue,
New York, New York 10166,  or at such other place as shall be agreed upon by the
Underwriter  and the Fund, at 10:00 A.M. on the fifth business day following the
date the Registration  Statement  becomes effective (or, if the Fund has elected
to rely upon Rule 430A under the Rules and  Regulations,  the fifth business day
after execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Underwriter and the
Fund (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  Shares are
purchased by the Underwriter, payment of the purchase price for, and delivery of
certificates for, such Option Shares shall be made at the above-mentioned office
of Rogers & Wells,  or at such other place as shall be  mutually  agreed upon by
the Fund and the  Underwriter,  on each Date of  Delivery  as  specified  in the
notice from the  Underwriter  to the Fund.  Payment shall be made to the Fund by
check or checks drawn in New York  Clearing  House or similar next day funds and
payable  to the  order of the  Fund,  against  delivery  to the  Underwriter  of
certificates for the Shares to be purchased by it.  Certificates for the Initial
Shares and Option Shares shall be in such  denominations  and registered in such
names as the  Underwriter  may  request in writing  at least two  business  days
before  Closing  Time  or  the  Date  of  Delivery,  as the  case  may  be.  The
certificates for the Initial Shares and the Option Shares will be made available
by the Fund for  examination  and  packaging by the  Underwriter  not later than
10:00  A.M.  on the  last  business  day  prior to  Closing  Time or the Date of
Delivery, as the case may be.


                                       7
<PAGE>

      SECTION 3. Covenants of the Fund. The Fund covenants with the  Underwriter
as follows:

      (a) The Fund will use its best efforts to cause the Registration Statement
to become effective under the 1933 Act, and will advise the Underwriter promptly
as to the time at which the  Registration  Statement and any amendments  thereto
(including any post-effective  amendment) becomes so effective and, if required,
to cause the issuance of any orders  exempting  the Fund from any  provisions of
the 1940 Act and will  advise the  Underwriter  promptly as to the time at which
any such orders are granted.

      (b) The Fund will  notify the  Underwriter  immediately,  and  confirm the
notice in writing,  (i) of the  effectiveness of the Registration  Statement and
any amendment  thereto  (including any  post-effective  amendment),  (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, (iv) of the issuance
by  the  Commission  of any  stop  order  suspending  the  effectiveness  of the
Registration  Statement or the initiation of any  proceedings  for that purpose,
and  (v)  of the  issuance  by the  Commission  of an  order  of  suspension  or
revocation of the  notification  on Form N-8A of  registration of the Fund as an
Investment  Company under the 1940 Act or the  initiation of any  proceeding for
that purpose. The Fund will make every reasonable effort to prevent the issuance
of any stop  order  described  in  subsection  (iv)  hereunder  or any  order of
suspension or revocation  described in subsection (v) hereunder and, if any such
stop order or order of suspension or revocation is issued, to obtain the lifting
thereof at the earliest possible moment.

      (c) The Fund will give the Underwriter notice of its intention to file any
amendment to the Registration Statement (including any post-effective amendment)
or  any  amendment  or  supplement  to the  Prospectus  (including  any  revised
prospectus which the Fund proposes for use by the Underwriter in connection with
the offering of the Shares,  which  differs from the  prospectus  on file at the
Commission at the time the Registration  Statement  becomes  effective,  whether
such revised  prospectus is required to be filed pursuant to Rule 497(b) or Rule
497(h) of the Rules and Regulations), whether pursuant to the 1940 Act, the 1933
Act, or  otherwise,  and will  furnish the  Underwriter  with copies of any such
amendment  or  supplement  a  reasonable  amount of time prior to such  proposed
filing  or use,  as the case may be,  and  will not file any such  amendment  or
supplement to which the Underwriter shall reasonably object.

      (d) The Fund will deliver to the Underwriter, as soon as practicable,  two
signed copies of the notification of registration and registration  statement as
originally  filed and of each amendment  thereto,  in each case with two sets of
the  exhibits  filed  therewith,  and will also  deliver  to the  Underwriter  a
conformed copy of the registration statement as originally filed and of each


                                       8
<PAGE>

amendment  thereto (but without  exhibits to the  registration  statement or any
such amendment).

      (e) The Fund will furnish to the Underwriter, from time to time during the
period when the Prospectus is required to be delivered  under the 1933 Act, such
number  of  copies  of  the  Prospectus  (as  amended  or  supplemented)  as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the Rules and Regulations.

      (f) If any event shall occur as a result of which it is necessary,  in the
opinion of counsel for the Underwriter, to amend or supplement the Prospectus in
order to make the Prospectus  not  misleading in the light of the  circumstances
existing at the time it is  delivered to a  purchaser,  the Fund will  forthwith
amend  or  supplement   the  Prospectus  by  preparing  and  furnishing  to  the
Underwriter a reasonable  number of copies of an amendment or amendments of or a
supplement or supplements to, the Prospectus (in form and substance satisfactory
to counsel for the  Underwriter),  so that, as so amended or  supplemented,  the
Prospectus  will not contain an untrue  statement of a material  fact or omit to
state a material fact necessary in order to make the statements  therein, in the
light of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading.

      (g) The Fund  will  endeavor,  in  cooperation  with the  Underwriter,  to
qualify the Shares for offering and sale under the applicable securities laws of
such states and other  jurisdictions of the United States as the Underwriter may
designate,  and will maintain such  qualifications in effect for a period of not
less than one year after the date hereof. The Fund will file such statements and
reports as may be required by the laws of each  jurisdiction in which the Shares
have been qualified as above provided.

      (h) The Fund will make generally  available to its securityholders as soon
as practicable,  but no later than 60 days after the close of the period covered
thereby,  an earnings  statement (in form  complying with the provisions of Rule
158 of the Rules and Regulations)  covering a twelve-month  period beginning not
later  than the first day of the  Funds's  fiscal  quarter  next  following  the
"effective" date (as defined in said Rule 158) of the Registration Statement.

      (i) Between the date of this Agreement and the  termination of any trading
restrictions  or Closing Time,  whichever is later,  the Fund will not,  without
your prior  consent,  offer or sell,  or enter into any  agreement to sell,  any
equity or equity related securities of the Fund other than the Shares and shares
of Common stock issued in reinvestment of dividends or distributions.

      (j) If, at the time that the Registration Statement becomes effective, any
information  shall have been omitted therefrom in reliance upon Rule 430A of the
Rules and Regulations,


                                       9
<PAGE>

then immediately following the execution of the Pricing Agreement, the Fund will
prepare,  and file or transmit for filing with the Commission in accordance with
such Rule 430A and Rule  497(h)  of the  Rules  and  Regulations,  copies of the
amended  Prospectus,  or,  if  required  by such  Rule  430A,  a  post-effective
amendment  to the  Registration  Statement  (including  an amended  Prospectus),
containing all information so omitted.

      (k)  Trading of the Shares on the New York  Stock  Exchange  will begin no
later than four weeks from the date of the Prospectus.

      SECTION 4. Payment of Expenses.  The Fund will pay all expenses incidental
to the performance of its obligations under this Agreement,  including,  but not
limited to, expenses relating to (i) the printing and filing of the Registration
Statement as originally filed and of each amendment  thereto,  (ii) the printing
of this Agreement and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the certificates  for the Shares to the  Underwriter,  (iv) the fees
and  disbursements of the Fund's counsel and accountants,  (v) the qualification
of the Shares under securities laws in accordance with the provisions of Section
3(g) of this  Agreement,  including  filing  fees  and  any  reasonable  fees or
disbursements  of counsel for the  Underwriter  in  connection  therewith and in
connection  with the  preparation of the blue sky survey,  (vi) the printing and
delivery  to  the  Underwriter  of  copies  of  the  registration  statement  as
originally filed and of each amendment thereto,  of the preliminary  prospectus,
and of the  Prospectus  and any  amendments or  supplements  thereto,  (vii) the
printing  and  delivery  to the  Underwriter  of copies of the blue sky  survey,
(viii) the fees and  expenses  incurred  with  respect  to the  filing  with the
National Association of Securities Dealers,  Inc. and (ix) the fees and expenses
incurred  with  respect  to the  listing  of the  Shares  on the New York  Stock
Exchange.

      If this Agreement is terminated by the  Underwriter in accordance with the
provisions  of Section 5 or  Section 9 (a) (i),  the Fund or the  Adviser  shall
reimburse the  Underwriter  for all of its  reasonable  out-of-pocket  expenses,
including the reasonable fees and  disbursements of counsel for the Underwriter.
In the event the transactions  contemplated  hereunder are not consummated,  the
Adviser  agrees  to pay all of the  costs  and  expenses  set forth in the first
paragraph of this Section 4 which the Fund would have paid if such  transactions
were consummated.

      SECTION 5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter  hereunder  are subject to the accuracy of the  representations  and
warranties of the Fund and the Adviser herein  contained,  to the performance by
the Fund and the Adviser of their respective obligations  hereunder,  and to the
following further conditions:

      (a) The Registration  Statement shall have become effective not later than
5:30 P.M., New York City time, on the date


                                       10
<PAGE>

of this  Agreement,  or at a later time and date not later,  however,  than 5:30
P.M. on the first business day following the date hereof,  or at such later time
and date as may be  approved  by the  Underwriter,  and at Closing  Time no stop
order suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission.  If the Fund has  elected  to rely  upon  Rule 430A of the Rules and
Regulations,  the  prices  of  the  Shares  and  any  price-related  information
previously  omitted from the effective  Registration  Statement pursuant to such
Rule 430A shall have been  transmitted to the Commission for filing  pursuant to
Rule 497(h) of the Rules and Regulations  within the prescribed time period, and
prior to Closing Time the Fund shall have provided evidence  satisfactory to the
Underwriter of such timely filing, or a post-effective  amendment providing such
information shall have been promptly filed and declared  effective in accordance
with the requirements of Rule 430A of the Rules and Regulations.

      (b) At Closing Time, the Underwriter shall have received:

      (1) The  favorable  opinion,  dated as of Closing Time, of Rogers & Wells,
counsel for the Fund and the Underwriter, to the effect that:

            (i) The Fund has been duly incorporated and is validly existing as a
      corporation in good standing under the laws of the State of Maryland.

            (ii) The Fund has corporate  power and  authority to own,  lease and
      operate  its  properties  and conduct its  business  as  described  in the
      Registration Statement and the Prospectus.

            (iii)  The  Fund is  duly  qualified  as a  foreign  corporation  to
      transact  business and is in good standing in each  jurisdiction  in which
      such qualification is required.

            (iv) The Shares have been duly  authorized  for issuance and sale to
      the Underwriter  pursuant to this Agreement and, when issued and delivered
      by  the  Fund  pursuant  to  this   Agreement   against   payment  of  the
      consideration set forth in the Pricing  Agreement,  will be validly issued
      and  fully  paid and  nonassessable;  the  issuance  of the  Shares is not
      subject to preemptive rights; and the authorized capital stock conforms as
      to legal matters in all material  respects to the  description  thereof in
      the  Registration  Statement  under the  caption  "Description  of Capital
      Stock."

            (v) This  Agreement  and the Pricing  Agreement  each have been duly
      authorized,  executed and delivered by the Fund and each complies with all
      applicable provisions of the 1940 Act.


                                       11
<PAGE>

            (vi) The Registration Statement is effective under the 1933 Act and,
      to the best of their knowledge and  information,  no stop order suspending
      the effectiveness of the Registration  Statement has been issued under the
      1933  Act  or  proceedings   therefor   initiated  or  threatened  by  the
      Commission.

            (vii) At the time the Registration Statement became effective and at
      the  Representation  Date,  the  Registration  Statement  (other  than the
      financial  statements  included  therein,  as to which no opinion  need be
      rendered)   complied  as  to  form  in  all  material  respects  with  the
      requirements  of the  1933  Act  and  the  1940  Act  and  the  Rules  and
      Regulations.

            (viii) To the best of their knowledge and information,  there are no
      legal or governmental  proceedings  pending or threatened against the Fund
      which are required to be disclosed in the  Registration  Statement,  other
      than those disclosed therein.

            (ix) To the best of their  knowledge and  information,  there are no
      contracts, indentures,  mortgages, loan agreements, notes, leases or other
      instruments  of the Fund  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 as  exhibits  thereto,  the
      descriptions thereof are correct in all material respects,  and no default
      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 instrument so described,
      referred to or filed.

            (x) No  consent,  approval,  authorization  or order of any court or
      governmental  authority or agency is required in connection  with the sale
      of the Shares to the  Underwriter,  except such as has been obtained under
      the 1933 Act, the 1940 Act or the Rules and  Regulations or such as may be
      required under state or foreign  securities laws; and to the best of their
      knowledge and  information,  the execution and delivery of this Agreement,
      the Pricing  Agreement,  the Advisory  Agreement and the Custody Agreement
      and the consummation of the transactions  contemplated  herein and therein
      will not conflict  with or  constitute a breach of, or default  under,  or
      result in the creation or  imposition of any lien,  charge or  encumbrance
      upon any  property  or  assets  of the Fund  pursuant  to,  any  contract,
      indenture,  mortgage,  loan agreement,  note, lease or other instrument to
      which  the Fund is a party or by which it may be bound or to which  any of
      the property or assets of the Fund is subject, nor will such action result
      in any violation of the  provisions of the Charter or By-Laws of the Fund,
      or any law or administrative


                                       12
<PAGE>

      regulation,   or,  to  the  best  of  their  knowledge  and   information,
      administrative or court decree.

            (xi) The Advisory Agreement and the Custody Agreement have each been
      duly  authorized  and  approved  by the Fund and  comply as to form in all
      material respects with all applicable provisions of the 1940 Act, and both
      have been duly executed by the Fund.

            (xii) The Fund is registered with the Commission  under the 1940 Act
      as a closed-end  nondiversified  management  investment  company,  and all
      required  action has been  taken by the Fund under the 1933 Act,  the 1940
      Act and  the  Rules  and  Regulations  to make  the  public  offering  and
      consummate  the  sale  of the  Shares  pursuant  to  this  Agreement;  the
      provisions of the Charter and By-Laws of the Fund comply as to form in all
      material  respects with the requirements of the 1940 Act; and, to the best
      of their knowledge and  information,  no order of suspension or revocation
      of such  registration  under the 1940 Act, pursuant to Section 8(e) of the
      1940 Act, has been issued or proceedings  therefor initiated or threatened
      by the Commission.

            (xiii) The information in the Prospectus  under the caption "Taxes,"
      to the extent that it constitutes matters of law or legal conclusions, has
      been reviewed by them and is correct in all material respects.

      (2) The  favorable  opinion,  dated  as of  Closing  Time,  of  Philip  L.
Kirstein,   Esq.,  General  Counsel  to  the  Adviser,  in  form  and  substance
satisfactory to counsel for the Underwriter, to the effect that:

            (i) The Adviser has been duly  organized as a corporation  under the
      laws of the  State of  Delaware  with  corporate  power and  authority  to
      conduct its business as described in the  Registration  Statement  and the
      Prospectus.

            (ii) The Adviser is duly  registered 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
      Advisory Agreement for the Fund as contemplated by the Prospectus.

            (iii)  This  Agreement  and the  Advisory  Agreement  have been duly
      authorized,  executed  and  delivered  by the  Adviser,  and the  Advisory
      Agreement  constitutes  a valid and  binding  obligation  of the  Adviser,
      enforceable in accordance with its terms,  subject, as to enforcement,  to
      bankruptcy,  insolvency,  reorganization  or  other  laws  relating  to or
      affecting creditors' rights and to general equity principles;  and, to the
      best of his knowledge and information,  neither the execution and delivery
      of this Agreement or the Advisory


                                       13
<PAGE>

      Agreement nor the performance by the Adviser 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 giving notice or
      lapse of time or both, a default  under,  any  agreement or  instrument to
      which the Adviser is a party or by which the Adviser is bound, or any law,
      order,  rule or regulation  applicable to the Adviser of any jurisdiction,
      court,  federal or state regulatory body,  administrative  agency or other
      governmental  body,  stock  exchange  or  securities   association  having
      jurisdiction over the Adviser or its properties or operations.

            (iv) To the best of his knowledge and information,  the description
      of the Adviser in the  Registration  Statement and the Prospectus does not
      contain  any  untrue  statement  of a  material  fact or omit to state any
      material  fact  required  to be stated  therein or  necessary  to make the
      statements therein not misleading.

      (3) In addition to providing the opinion required by subsection (b) (1) of
this  Section,  Rogers & Wells  shall also state that  nothing has come to their
attention that would lead them to believe that the Registration Statement on the
date it became  effective or at the  Representation  Date,  contained any untrue
statement of a material  fact or omitted to state any material  fact required to
be stated therein or necessary to make the statements  therein not misleading or
that the Prospectus, as of the date the Registration Statement became effective,
at the Representation  Date (unless the term "Prospectus" refers to a prospectus
which has been  provided to the  Underwriter  by the Fund for use in  connection
with the offering of the Shares which differs from the Prospectus on file at the
Commission at the time the Registration  Statement becomes  effective,  in which
case at the time they are first provided to the  Underwriter for such use) or at
Closing  Time,  contained or contain any untrue  statement of a material fact or
omitted or omit to state any  material  fact  necessary  to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading.  In  making  such  statement,  Rogers  & Wells  may  state  that the
limitations inherent in the independent  verification of factual matters and the
character  of  determinations  involved  in the  registration  process are such,
however,   that  it  does  not  assume  any  responsibility  for  the  accuracy,
completeness  or  fairness  of the  statements  contained  in  the  Registration
Statement and Prospectus,  except to the limited extent stated in paragraph b(l)
(xiii) above.  In addition,  it does not express any opinion or belief as to the
financial statements  contained in the Registration  Statement or the Prospectus
and  understands  that the  Underwriters  are  relying  upon  Deloitte & Touche,
certified public accountants, as to the form and content of financial statements
contained in the Registration Statement and Prospectus. In giving their opinion,
Rogers  & Wells  may  rely as to  matters  involving  the  laws of the  State of
Maryland upon the opinion of Ginsburg,  Feldman and Bress, Chartered.  Ginsburg,
Feldman and Bress, Chartered and Rogers & Wells may rely, as to matters of fact,
upon certificates


                                       14
<PAGE>

and written statements of officers and employees of and accountants for the Fund
and the Adviser and of public officials.

      (c) At Closing Time,  (i) the  Registration  Statement and the  Prospectus
shall  contain  all  statements  which  are  required  to be stated  therein  in
accordance  with the 1933 Act, the 1940 Act and the Rules and Regulations and in
all material  respects  shall conform to the  requirements  of the 1933 Act, the
1940 Act and the Rules and Regulations and the Prospectus  shall not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements  therein,  in the light of the circumstances  under which
they were made, not misleading,  and no action,  suit or proceeding at law or in
equity  shall be  pending  or,  to the  knowledge  of the  Fund or the  Adviser,
threatened  against  the Fund or the  Adviser  which would be required to be set
forth in the Prospectus  other than as set forth  therein,  (ii) there shall not
have been,  since the respective  dates as of which  information is given in the
Registration  Statement and the Prospectus,  any material  adverse change in the
condition,  financial or  otherwise,  of the Fund or in its  earnings,  business
affairs or business prospects,  whether or not arising in the ordinary course of
business,  from that set forth in the  Registration  Statement  and  Prospectus,
(iii) the Adviser shall have the financial  resources  available to it necessary
for the  performance  of its services and  obligations  as  contemplated  in the
Registration  Statement  and the  Prospectus  and (iv) no  proceedings  shall be
pending or, to the knowledge of the Fund or the Adviser,  threatened against the
Fund or the Adviser before or by any federal,  state or other commission,  board
or  administrative  agency  wherein an unfavorable  decision,  ruling or finding
would  materially  and  adversely  affect  the  business,   property,  financial
condition or income of either the Fund or the Adviser other than as set forth in
the Registration  Statement and the Prospectus;  and the Underwriter  shall have
received,  at Closing Time, a  certificate  of the President or Treasurer of the
Fund and of the President or a Vice President of the Adviser dated as of Closing
Time, evidencing  compliance with the appropriate  provisions of this subsection
(c).

      (d) At Closing Time,  the  Underwriter  shall have received  certificates,
dated as of Closing  Time,  (i) of the President or Treasurer of the Fund to the
effect that the  representations and warranties of the Fund contained in Section
1(a) and (b) are true and  correct  with the same  force  and  effect  as though
expressly  made at and as of Closing  Time,  and (ii) of the President or a Vice
President of the Adviser to the effect that the  representations  and warranties
of the Adviser  contained in Sections 1(a) and (b) are true and correct with the
same force and effect as though expressly made at and as of Closing Time.

      (e) At the time of execution of this Agreement, the Underwriter shall have
received from Deloitte & Touche a letter,  dated such date in form and substance
satisfactory to the Underwriter, to the effect that:


                                       15
<PAGE>

            (i) they are independent accountants with respect to the Fund within
      the meaning of the 1933 Act and the Rules and Regulations;

            (ii) in their  opinion,  the  statement  of assets  and  liabilities
      examined by them and included in the Registration Statement complies as to
      form in all material respects with the applicable accounting  requirements
      of the 1933 Act and the 1940 Act and the Rules and Regulations; and

            (iii) they have performed specified procedures,  not constituting an
      audit,  including  a reading of the  latest  available  interim  financial
      statements  of the  Fund,  a  reading  of the  minute  books of the  Fund,
      inquiries of officials of the Fund  responsible  for financial  accounting
      matters and such other  inquiries  and  procedures  as may be specified in
      such letter,  and on the basis of such  inquiries and  procedures  nothing
      came to their  attention  that caused them to believe  that at the date of
      the latest  available  statement  of assets and  liabilities  read by such
      accountants,  or at a  subsequent  specified  date not more than five days
      prior to the date of this  Agreement,  there was any change in the capital
      stock or net  assets of the Fund as  compared  with  amounts  shown on the
      statement of net assets included in the Prospectus.

      (f) At Closing Time, the  Underwriter  shall have received from Deloitte &
Touche 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 five days prior to Closing Time.

      (g) At Closing Time, all proceedings  taken by the Fund and the Adviser in
connection with the organization and registration of the Fund under the 1940 Act
and the issuance and sale of the Shares as herein and therein contemplated shall
be satisfactory in form and substance to the Underwriter.

      (h) In the event the Underwriter  exercises its option provided in section
2  hereof  to  purchase   all  or  any  portion  of  the  Option   Shares,   the
representations  and warranties of the Fund and the Adviser contained herein and
the  statements  in any  certificate  furnished  by the  Fund  and  the  Adviser
hereunder  shall  be true  and  correct  as of each  Date of  Delivery,  and the
Underwriter shall have received:

            (1)  certificates,  dated the Date of Delivery,  of the President or
      Treasurer  of the Fund and of the  President  or a Vice  President  of the
      Adviser  confirming  that the  information  contained  in the  certificate
      delivered  by each of them at Closing Time  pursuant to Sections  5(c) and
      (d), as the case may be, remains true as of such Date of Delivery;


                                       16
<PAGE>

            (2) the  favorable  opinion of Rogers & Wells,  counsel for the Fund
      and Philip L. Kirstein, Esq., General Counsel to the Adviser, each in form
      and  substance  satisfactory  to  the  Underwriter,  dated  such  Date  of
      Delivery,  relating to the Option  Shares and otherwise to the same effect
      as the opinions required by Sections 5(b)(1) and (2), respectively; and

            (3)  a  letter  from  Deloitte  &  Touche,  in  form  and  substance
      satisfactory   to  the  Underwriter  and  dated  such  Date  of  Delivery,
      substantially  the same in scope and substance as the letter  furnished to
      the Underwriter pursuant to Section 5(e), except that the "specified date"
      in the letter  furnished  pursuant to this Section 5(h)(3) shall be a date
      not more than five days prior to such Date of Delivery.

      If any condition  specified in this Section shall not have been  fulfilled
when and as required to be  fulfilled,  this  Agreement may be terminated by the
Underwriter  by notice to the Fund at any time at or prior to Closing Time,  and
such  termination  shall be without  liability  of any party to any other  party
except as provided in Section 4.

      SECTION 6.  Indemnification.  (a) The Fund and the  Adviser,  jointly  and
severally, agree to indemnify and hold harmless the Underwriter and each person,
if any,  who controls  the  Underwriter  within the meaning of Section 15 of the
1933 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 information deemed to
      be part of the Registration  Statement  pursuant to Rule 430A of the Rules
      and  Regulations,  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 contained 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  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, if such settlement is


                                       17
<PAGE>

          effected with the written consent of the indemnifying party; and

            (iii) against any and all expense whatsoever (including the fees and
      disbursements of counsel chosen by the Underwriter) reasonably incurred in
      investigating,   preparing  or  defending   against  any  litigation,   or
      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 does 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 Fund by the
Underwriter  expressly for use in the  Registration  Statement (or any amendment
thereto) or any  preliminary  prospectus or the  Prospectus (or any amendment or
supplement thereto).

      (b) The Underwriter  agrees,  severally and not jointly,  to indemnify and
hold harmless the Fund and the Adviser, their respective directors,  each of the
Fund's officers who signed the Registration Statement,  and each person, if any,
who  controls  the Fund or the  Adviser  within the meaning of Section 15 of the
1933 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) 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 Fund by the  Underwriter  expressly for use in the
Registration  Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).

      (c) In addition to the foregoing indemnification,  the Adviser also agrees
to indemnify  and hold  harmless the  Underwriter  and each Person,  if any, who
controls  the  Underwriter  within  the  meaning  of Section 15 of the 1933 Act,
against any and all loss, liability,  claim, damage and expense described in the
indemnity  contained  in  subsection  (a) of this  Section,  with respect to any
Omitting Prospectus or any advertising materials approved by the Adviser for use
in connection with the public offering of the Shares.

      (d) 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 it from any  liability  which it may have
otherwise than on


                                       18
<PAGE>

account of this indemnity  agreement.  An indemnifying  party may participate at
its own  expense  in the  defense  of any such  action.  In no event  shall  the
indemnifying  parties  be  liable  for the 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.

      SECTION  7.  Contribution.  In order  to  provide  for just and  equitable
contribution in circumstances in which the indemnity  agreement  provided for in
Section 6 is for any reason held to be unenforceable by the indemnified  parties
although  applicable in accordance with its terms, the Fund, the Adviser and the
Underwriter  shall  contribute to the  aggregate  losses,  liabilities,  claims,
damages and expenses of the nature  contemplated by said indemnity  agreement as
incurred by the Fund,  the Adviser and the  Underwriter,  as  incurred,  in such
proportion that the  Underwriter is responsible for that portion  represented by
the percentage that the aggregate underwriting  compensation payable pursuant to
Section 2 hereof bears to the aggregate  initial  public  offering  price of the
Shares sold under this  Agreement  and the Fund and the Adviser are  responsible
for  the  balance;  provided,  however,  that 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,  each  person,  if any,  who
controls the Underwriter  within the meaning of Section 15 of the 1933 Act shall
have the same rights to  contribution as the  Underwriter,  and each director of
the Fund and the Adviser, respectively,  each officer of the Fund who signed the
Registration  Statement,  and each person,  if any, who controls the Fund or the
Adviser  within  the  meaning  of Section 15 of the 1933 Act shall have the same
rights to contribution as the Fund and the Adviser, respectively.

      SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All  representations,  warranties and agreements  contained in this Agreement or
the Pricing  Agreement,  or contained in certificates of officers of the Fund or
the Adviser submitted pursuant hereto,  shall remain operative and in full force
and  effect,  regardless  of  any  investigation  made  by or on  behalf  of the
Underwriter or controlling person, or by or on behalf of the Fund or the Adviser
and shall survive delivery of the Shares to the Underwriter.

      SECTION 9. Termination of Agreement. (a) The Underwriter, by notice to the
Fund,  may terminate  this Agreement at any time at or prior to Closing Time (i)
if there has  been,  since the date of this  Agreement  or since the  respective
dates  as of which  information  is given  in the  Registration  Statement,  any
material  adverse  change in the  condition,  financial or otherwise,  or in the
earnings,  business  affairs or business  prospects  of the Fund or the Adviser,
whether or not arising in the ordinary course


                                       19
<PAGE>

of business,  or (ii) if there has occurred any material  adverse  change in the
financial  markets  in  the  United  States  or  elsewhere  or any  outbreak  of
hostilities   or  other  calamity  or  crisis  or  any  escalation  of  existing
hostilities  the  effect  of which is such as to make it,  in the  Underwriter's
judgment,  impracticable to market the Shares or enforce  contracts for the sale
of the Shares, or (iii) if trading in the Common Stock has been suspended by the
Commission or if trading  generally on either the American Stock Exchange or the
New York Stock  Exchange has been  suspended,  or minimum or maximum  prices for
trading have been fixed,  or maximum ranges for prices for securities  have been
required, by either of said exchanges or by order of the Commission or any other
governmental  authority, or if a banking moratorium has been declared by Federal
or New York authorities.

      (b) 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.

      SECTION 10. 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 written  telecommunication.  Notices to the
Underwriter shall be directed to Merrill Lynch World Headquarters,  North Tower,
World  Financial  Center,  New  York,  New  York  10281,  Attention:  _________,
Director;  notices to the Fund or the Adviser  shall be directed to each of them
at 800 Scudders  Mill Road,  Plainsboro,  New Jersey  08536,  Attention:  Arthur
Zeikel, President.

      SECTION 11. Parties.  This Agreement and the Pricing Agreement shall inure
to the benefit of and be binding upon the Underwriter, the Fund, the Adviser and
their respective successors. Nothing expressed or mentioned in this Agreement or
the Pricing Agreement is intended or shall be construed to give any person, firm
or corporation,  other than the parties hereto and their  respective  successors
and the controlling persons and officers 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 the Pricing  Agreement and all  conditions  and
provisions  hereof are intended to be for the sole and exclusive  benefit of the
parties hereto and thereto and their respective successors, and said controlling
persons and officers and  directors  and their heirs and legal  representatives,
and for the benefit of no other  person,  firm or  corporation.  No purchaser of
Shares from the  Underwriter  shall be deemed to be a successor by reason merely
of such purchase.

      SECTION  12.  Governing  Law and  Time.  This  Agreement  and the  Pricing
Agreement  shall be governed by the laws of the State of New York  applicable to
agreements made and to be performed in said State.  Specified times of day refer
to New York City time.


                                       20
<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 single binding agreement
among the Underwriter, the Fund and the Adviser in accordance with its terms.

                                       Very truly yours,

                                       MUNIASSETS FUND, INC.


                                       By:__________________________________
                                                 (Authorized Officer)


                                       FUND ASSET MANAGEMENT, INC.


                                       By:__________________________________
                                                 (Authorized Officer)


Confirmed and Accepted,
  as of the date first above
  written:

MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED




By:_______________________________________
   Vice President
   Investment Banking Group


                                       21
<PAGE>

                                                                       Exhibit A

                                6,700,000 Shares
                              MuniAssets Fund, Inc
                            (a Maryland corporation)

                                  Common Stock
                           (Par Value $.l0 Per Share)

                                PRICING AGREEMENT


                                                                   June __, 1993

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281

Dear Sirs:

      Reference is made to the  Purchase  Agreement,  dated June ___,  1993 (the
"Purchase Agreement"),  relating to the purchase by Merrill Lynch & Co., Merrill
Lynch,  Pierce,  Fenner & Smith Incorporated (the  "Underwriter"),  of the above
shares of Common  Stock par value  $.10 per share  (the  "Initial  Shares"),  of
MuniAssets  Fund,  Inc.  (the "Fund") and relating to the option  granted to the
Underwriter  to purchase up to an additional  1,005,000  shares of Common Stock,
par value $.10 per share,  of the Fund to cover  over-allotments  in  connection
with the sale of the Initial  Shares (the "Option  Shares").  The Initial Shares
and all or any part of the Option Shares are collectively  herein referred to as
the "Shares."

      Pursuant to Section 2 of the Purchase Agreement,  the Fund agrees with the
Underwriter as follows:

      1. The applicable  initial public offering price per share for the Shares,
determined as provided in said Section 2 shall be as follows:

            (a) $15.00 for purchases in single  transactions  of less than 3,500
      Shares;

            (b)  $14.85 for  purchase  in single  transactions  of 3,500 or more
      Shares but less than 7,000 Shares; and

            (c) $14.70 for  purchases  in single  transactions  of 7,000 or more
      Shares.

<PAGE>

      2.  The  purchase  price  per  share  for  the  Shares  to be  paid by the
Underwriter shall be $_________ being an amount equal to the applicable  initial
public offering price set forth above less (i) $_____ per share for purchases in
single  transactions  of less  than  3,500  Shares;  (ii)  $_____  per share for
purchases  in single  transactions  of 3,500 or more  Shares but less than 7,000
Shares and (iii) $_____ per share for purchases in single  transactions of 7,000
or more Shares.

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

                                               Very truly yours,

                                               MUNIASSETS FUND, INC.


                                                By:_____________________________
                                                     (Authorized Officer)


Confirmed and Accepted, as
  of the date first above
  written:

MERRILL LYNCH, PIERCE, FENNER & SMITH
            INCORPORATED


By:_______________________________________
   Vice President
   Investment Banking Group


</TEXT>
</DOCUMENT>
