<DOCUMENT>
<TYPE>EX-99.2H DISTR CONTR
<SEQUENCE>7
<FILENAME>h1_00250209ao1.txt
<TEXT>



<PAGE>


                        __________ Shares


  ALLIANCE [CALIFORNIA] [NEW YORK] MUNICIPAL INCOME FUND, INC.

                          Common Stock

                     UNDERWRITING AGREEMENT

                                                 January __, 2002


Salomon Smith Barney Inc.
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
UBS Warburg LLC
Crowell, Weedon & Co.
Wedbush Morgan Securities, Inc.
Wells FargoVan Kasper, LLC

As Representatives of the Several Underwriters

c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

         The undersigned, Alliance [California] [New York]
Municipal Income Fund, Inc., a Maryland corporation (the "Fund"),
and Alliance Capital Management L.P., a Delaware limited
partnership (the "Manager"), address you as Underwriters and as
the representatives (the "Representatives") of each of the other
persons, firms and corporations, if any, listed in Schedule I
hereto (herein collectively called "Underwriters").  The Fund
proposes to issue and sell an aggregate of ___________ shares
(the "Firm Shares") of its common stock, $.001 par value per
share (the "Common Shares"), to the several Underwriters.  The
Fund also proposes to sell to the Underwriters, upon the terms
and conditions set forth in Section 2 hereof, up to an additional
___________ Common Shares (the "Additional Shares").  The Firm
Shares and Additional Shares are hereinafter collectively
referred to as the "Shares".

         The Fund and the Manager wish to confirm as follows
their agreements with you and the other several Underwriters on
whose behalf you are acting in connection with the several
purchases of the Shares by the Underwriters.




<PAGE>

         The Fund is entering into an investment management
agreement with the Manager dated January 24, 2002, a custody
agreement with State Street Bank & Trust Company dated January
24, 2002 and a shareholder transfer agency agreement with
Equiserve Trust Company, N.A. dated January 24, 2002, and such
agreements are herein referred to as the "Management Agreement",
the "Custodian Agreement" and the "Transfer Agency Agreement",
respectively.  Collectively, the Management Agreement, the
Custodian Agreement and the Transfer Agency Agreement are herein
referred to as the "Fund Agreements".  This Underwriting
Agreement is herein referred to as the "Agreement".

         1.   Registration Statement and Prospectus.  The Fund
has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions
of the Securities Act of 1933, as amended (the "1933 Act"), the
Investment Company Act of 1940, as amended (the "1940 Act"), and
the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Rules and Regulations") and the 1940 Act (the
"1940 Act Rules and Regulations" and together with the 1933 Act
Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2 (File No. 333-73134) under the
1933 Act and the 1940 Act and may pursuant to the Rules and
Regulations prepare and file an additional registration statement
relating to a portion of the Shares pursuant to Rule 462(b) of
the 1933 Act Rules and Regulations (collectively, the
"registration statement"), including a prospectus (including any
statement of additional information) relating to the Shares and a
notification of registration of the Fund as an investment company
under the 1940 Act on Form N-8A (the "1940 Act Notification").
The term "Registration Statement" as used in this Agreement means
the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the
1933 Act or, if the registration statement became effective under
the 1933 Act prior to the execution of this Agreement, as amended
or supplemented, prior to the execution of this Agreement and
includes any information deemed to be included by Rule 430A under
the 1933 Act Rules and Regulations.  If it is contemplated, at
the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed under the
1933 Act and must be declared effective before the offering of
the Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as
amended by said post-effective amendment.  The term "Prospectus"
as used in this Agreement means the prospectus (including the
statement of additional information) in the form included in the
Registration Statement or, if the prospectus (including the
statement of additional information) included in the Registration
Statement omits information in reliance on Rule 430A and such
information is included in a prospectus (including the statement
of additional information) filed with the Commission pursuant to


                                2



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Rule 497(h) under the 1933 Act Rules and Regulations, the term
"Prospectus" as used in this Agreement means the prospectus
(including the statement of additional information) in the form
included in the Registration Statement as supplemented by the
addition of the information contained in the prospectus
(including the statement of additional information) filed with
the Commission pursuant to Rule 497(h).  The term "Prepricing
Prospectus" as used in this Agreement means the prospectus
(including the statement of additional information) subject to
completion in the form included in the registration statement at
the time of the initial filing of the registration statement with
the Commission and as such prospectus (including the statement of
additional information) shall have been amended from time to time
prior to the date of the Prospectus, together with any other
prospectus (including any other statement of additional
information) relating to the Fund other than the Prospectus.

         The Fund has furnished the Representatives with copies
of such registration statement, each amendment to such
registration statement filed with the Commission and each
Prepricing Prospectus.

         2.   Agreements to Sell and Purchase.  The Fund hereby
agrees, subject to all the terms and conditions set forth herein,
to issue and to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the Fund and
the Manager herein contained and subject to all of the other
terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Fund at a
purchase price per share of $14.325 per Share (the "purchase
price per share"), the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto (or such number
of Firm Shares increased as set forth in Section 10 hereof).

         The Fund also agrees, subject to all the terms and
conditions set forth herein, to issue and to sell to the
Underwriters and, upon the basis of the representations,
warranties and agreements of the Fund and the Manager herein
contained and subject to all the terms and conditions set forth
herein, the Underwriters shall have the right to purchase from
the Fund, at the purchase price per share, pursuant to an option
(the "over-allotment option") which may be exercised at any time
and from time to time prior to 9:00 P.M., New York City time, on
the 45th day after the date of the Prospectus (or if such 45th
day shall be a Saturday or a Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange (the
"NYSE") is open for trading) up to an aggregate of ____________
Additional Shares. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with
the offering of the Firm Shares.  Upon any exercise of the
over-allotment option, upon the basis of the representations,


                                3



<PAGE>

warranties and agreements of the Fund and the Manager herein
contained and subject to all of the other terms and conditions
set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Fund the number of Additional
Shares (subject to such adjustments as you may determine to avoid
fractional shares) which bears the same proportion to the number
of Additional Shares to be purchased by the Underwriters as the
number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I (or such number of Firm Shares
increased as set forth in Section 10 hereof) bears to the
aggregate number of Firm Shares.

         3.   Terms of Public Offering.  The Fund and the Manager
have been advised by you that the Underwriters propose to make a
public offering of their respective portions of the Firm Shares
as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially
to offer the Firm Shares upon the terms set forth in the
Prospectus.

         4.   Delivery of Shares and Payments Therefor.

              (a)  Delivery to the Underwriters of and payment to
         the Fund for the Firm Shares and payment of all amounts
         due to the Underwriters under Section 12 hereof shall be
         made at the office of Salomon Smith Barney Inc., 388
         Greenwich Street, New York, New York 10013 or through
         the facilities of the Depository Trust Company or
         another mutually agreeable facility, at 9:00 A.M., New
         York City time, on _________ __, 2002 (the "Closing
         Date"). The place of closing for the Firm Shares and the
         Closing Date may be varied by agreement between you and
         the Fund.

              (b)  Delivery to the Underwriters of and payment to
         the Fund for any Additional Shares to be purchased by
         the Underwriters and payment of all amounts due to the
         Underwriters under Section 12 hereof shall be made at
         the aforementioned office of Salomon Smith Barney Inc.
         at such time and on such date (an "Option Closing
         Date"), which may be the same as the Closing Date, but
         shall in no event be earlier than the Closing Date nor
         earlier than two nor later than three business days
         after the giving of the notice hereinafter referred to,
         as shall be specified in a written notice from you on
         behalf of the Underwriters to the Fund of the
         Underwriters' determination to purchase a number,
         specified in said notice, of Additional Shares. The
         place of closing for any Additional Shares and the
         Option Closing Date for such Additional Shares may be
         varied by agreement between you and the Fund.


                                4



<PAGE>

              (c)  Certificates for the Firm Shares and for any
         Additional Shares shall be registered in such names and
         in such denominations as you shall request prior to 1:00
         P.M., New York City time, (i) in respect of the Firm
         Shares, on the second business day preceding the Closing
         Date and (ii) in respect of Additional Shares, on the
         day of the giving of the written notice in respect of
         such Additional Shares. Such certificates will be made
         available to you in New York City for inspection and
         packaging not later than 9:00 A.M., New York City time,
         on the business day next preceding the Closing Date or
         any Option Closing Date, as the case may be.  The
         certificates evidencing the Firm Shares and any
         Additional Shares to be purchased hereunder shall be
         delivered to you on the Closing Date or the Option
         Closing Date, as the case may be, against payment of the
         purchase price therefor in same-day funds to the order
         of the Fund.


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

              (a)  If, at the time this Agreement is executed and
         delivered, it is necessary for the Registration
         Statement or a post-effective amendment thereto to be
         declared effective under the 1933 Act before the
         offering of the Firm Shares may commence, the Fund will
         use its reasonable best efforts to cause the
         Registration Statement or such post-effective amendment
         to become effective under the 1933 Act as soon as
         possible. If the Registration Statement has become
         effective and the Prospectus contained therein omits
         certain information at the time of effectiveness
         pursuant to Rule 430A of the 1933 Act Rules and
         Regulations, the Fund will file a prospectus including
         such information pursuant to Rule 497(h) of the 1933 Act
         Rules and Regulations, as promptly as practicable, but
         no later than the second business day following the
         earlier of the date of the determination of the offering
         price of the Shares or the date the Prospectus is first
         used after the effective date of the Registration
         Statement. If the Registration Statement has become
         effective and the Prospectus contained therein does not
         so omit such information, the Fund will file a
         Prospectus or a certification pursuant to Rule 497 (c)
         or (j), as applicable, of the 1933 Act Rules and
         Regulations as promptly as practicable, but no later
         than the fifth business day following the date of the
         later of the effective date of the Registration


                                5



<PAGE>

         Statement or the commencement of the public offering of
         the Shares after the effective date of the Registration
         Statement. The Fund will advise you promptly and, if
         requested by you, will confirm such advice in writing
         (i) when the Registration Statement or such
         post-effective amendment has become effective and (ii)
         when the Prospectus has been timely filed pursuant to
         Rule 497(c) or Rule 497(h) of the 1933 Act Rules and
         Regulations or the certification permitted pursuant to
         Rule 497(j) of the 1933 Act Rules and Regulations has
         been timely filed, whichever is applicable.

              (b)  The Fund will advise you promptly and, if
         requested by you, will confirm such advice in writing:
         (i) of any request made by the Commission for amendment
         of or a supplement to the Registration Statement, any
         Prepricing Prospectus or the Prospectus (or any
         amendment or supplement to any of the foregoing) or for
         additional information, (ii) of the issuance by the
         Commission, the National Association of Securities
         Dealers, Inc. (the "NASD"), any state securities
         commission, any national securities exchange, any
         arbitrator, any court or any other governmental,
         regulatory, self-regulatory or administrative agency or
         any official suspending the effectiveness of the
         Registration Statement, prohibiting or suspending the
         use of the Prospectus, any Prepricing Prospectus or any
         sales material (as hereinafter defined), of any notice
         pursuant to Section 8(e) of the 1940 Act, of the
         suspension of qualification of the Shares for offering
         or sale in any jurisdiction, or the initiation or
         contemplated initiation of any proceeding for any such
         purposes, (iii) of receipt by the Fund, the Manager or
         any affiliate of the Fund or any representative or
         attorney of the Fund or the Manager of any other
         material communication from the Commission, the NASD,
         any state securities commission, any national securities
         exchange, any arbitrator, any court or any other
         governmental, regulatory, self-regulatory or
         administrative agency or any official relating to the
         Fund (if such communication relating to the Fund is
         received by such person within three years after the
         date of this Agreement), the Registration Statement, the
         1940 Act Notification, the Prospectus, any Prepricing
         Prospectus, any sales material (as hereinafter defined)
         (or any amendment or supplement to any of the
         foregoing), this Agreement or any of the Fund Agreements
         and (iv) within the period of time referred to in
         paragraph (f) below, of any material adverse change in
         the condition (financial or other), business, prospects,
         properties, net assets or results of operations of the


                                6



<PAGE>

         Fund or the Manager or of the happening of any event
         which makes any statement of a material fact made in the
         Registration Statement, the Prospectus, any Prepricing
         Prospectus or any sales material (as herein defined) (or
         any amendment or supplement to any of the foregoing)
         untrue or which requires the making of any additions to
         or changes in the Registration Statement, the
         Prospectus, any Prepricing Prospectus or any sales
         materials (as herein defined) (or any amendment or
         supplement to any of the foregoing) in order to state a
         material fact required by the 1933 Act, the 1940 Act or
         the Rules and Regulations to be stated therein or
         necessary in order to make the statements therein (in
         the case of a prospectus, in light of the circumstances
         under which they were made) not misleading or of the
         necessity to amend or supplement the Registration
         Statement, the Prospectus, any Prepricing Prospectus or
         any sales material (as herein defined) (or any amendment
         or supplement to any of the foregoing) to comply with
         the 1933 Act, the 1940 Act, the Rules and Regulations or
         any other law or order of any court or regulatory body.
         If at any time the Commission, the NASD, any state
         securities commission, any national securities exchange,
         any arbitrator, any court or any other governmental,
         regulatory, self-regulatory or administrative agency or
         any official shall issue any order suspending the
         effectiveness of the Registration Statement, prohibiting
         or suspending the use of the Prospectus, any Prepricing
         Prospectus or any sales material (as hereinafter
         defined) (or any amendment or supplement to any of the
         foregoing) or suspending the qualification of the Shares
         for offering or sale in any jurisdiction, the Fund will
         use its reasonable best efforts to obtain the withdrawal
         of such order at the earliest possible time.

              (c)  The Fund will furnish to you, without charge,
         three signed copies of the registration statement and
         the 1940 Act Notification as originally filed with the
         Commission and of each amendment thereto, including
         financial statements and all exhibits thereto (except
         any post-effective amendment required by Rule 8b-16 of
         the 1940 Act Rules and Regulations which is filed with
         the Commission after the later of (x) one year from the
         date of this Agreement and (y) the date on which the
         distribution of the Shares is completed) and will also
         furnish to you, without charge, such number of conformed
         copies of the registration statement as originally filed
         and of each amendment thereto (except any post-effective
         amendment required by Rule 8b-16 of the 1940 Act Rules
         and Regulations which is filed with the Commission after
         the later of (x) one year from the date of this


                                7



<PAGE>

         Agreement and (y) the date on which the distribution of
         the Shares is completed), with or without exhibits, as
         you may reasonably request.

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

              (e)  Prior to the execution and delivery of this
         Agreement, the Fund has delivered to you, without
         charge, in such quantities as you have reasonably
         requested, copies of each form of any Prepricing
         Prospectus. The Fund consents to the use, in accordance
         with the provisions of the 1933 Act and with the
         securities or Blue Sky laws of the jurisdictions in
         which the Shares are offered by the several Underwriters
         and by dealers, prior to the date of the Prospectus, of
         each Prepricing Prospectus so furnished by the Fund.

              (f)  As soon after the execution and delivery of
         this Agreement as possible and thereafter from time to
         time, for such period as in the opinion of counsel for
         the Underwriters a prospectus is required by the 1933
         Act to be delivered in connection with sales of Shares
         by any Underwriter or dealer, the Fund will
         expeditiously deliver to each Underwriter and each
         dealer, without charge, as many copies of the Prospectus
         (and of any amendment or supplement thereto) as you may
         reasonably request. The Fund consents to the use of the
         Prospectus (and of any amendments or supplements
         thereto) in accordance with the provisions of the 1933
         Act and with the securities or Blue Sky laws of the
         jurisdictions in which the Shares are offered by the
         several Underwriters and by all dealers to whom Shares
         may be sold, both in connection with the offering or
         sale of the Shares and for such period of time
         thereafter as the Prospectus is required by law to be
         delivered in connection with sales of Shares by any


                                8



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         Underwriter or dealer.  If during such period of time
         any event shall occur that in the judgment of the Fund
         or in the opinion of counsel for the Underwriters is
         required to be set forth in the Prospectus (as then
         amended or supplemented) or should be set forth therein
         in order to make the statements therein, in light of the
         circumstances under which they were made, not misleading
         or if it is necessary to supplement or amend the
         Prospectus to comply with the 1933 Act, the 1940 Act,
         the Rules and Regulations or any other law, rule or
         regulation, the Fund will forthwith prepare and, subject
         to the provisions of paragraph (d) above, file with the
         Commission an appropriate amendment or supplement
         thereto and will expeditiously furnish to the
         Underwriters and dealers, without charge, such number of
         copies thereof as they shall reasonably request.  In the
         event that the Prospectus is to be amended or
         supplemented, the Fund, if requested by you, will
         promptly issue a press release announcing or disclosing
         the matters to be covered by the proposed amendment or
         supplement.

              (g)  The Fund will cooperate with you and with
         counsel for the Underwriters in connection with the
         registration or qualification of the Shares for offering
         and sale by the several Underwriters and by dealers
         under the securities or Blue Sky laws of such
         jurisdictions as you may designate and will file such
         consents to service of process or other documents
         necessary or appropriate in order to effect such
         registration or qualification; provided that in no event
         shall the Fund be obligated to qualify to do business in
         any jurisdiction where it is not now so qualified or to
         take any action which would subject it to service of
         process in suits, other than those arising out of the
         offering or sale of the Shares, in any jurisdiction
         where it is not now so subject.

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

              (i)  The Fund will comply with the undertaking set
         forth in paragraph 6 of Item 33 of Part C of the
         Registration Statement.


                                9



<PAGE>

              (j)  During the period of five years hereafter, the
         Fund will furnish to you (i) as soon as available, a
         copy of each report of the Fund mailed to shareholders
         or filed with the Commission and (ii) from time to time
         such other information concerning the Fund as you may
         reasonably request.

              (k)  If this Agreement shall terminate or shall be
         terminated after execution pursuant to any provisions
         hereof (other than pursuant to the second paragraph of
         Section 10 hereof or by notice given by you terminating
         this Agreement pursuant to Section 10 or Section 11
         hereof) or if this Agreement shall be terminated by the
         Underwriters because of any failure or refusal on the
         part of the Fund or the Manager to comply with the terms
         or fulfill any of the conditions of this Agreement, the
         Fund and the Manager, jointly and severally, agree to
         reimburse the Representatives for all out-of-pocket
         expenses (including fees and expenses of counsel for the
         Underwriters) incurred by you in connection herewith,
         but the Fund and the Manager shall in no event be liable
         for any internal cost of the Underwriters or any loss of
         anticipated profits or speculative, consequential or
         similar damages for such termination.

              (l)  The Fund will direct the investment of the net
         proceeds of the offering of the Shares in such a manner
         as to comply with the investment objectives, policies
         and restrictions of the Fund as described in the
         Prospectus.

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

              (n)  Except as provided in this Agreement or
         pursuant to any dividend reinvestment plan of the Fund
         in effect on the date hereof, the Fund will not sell,
         contract to sell or otherwise dispose of, any Common
         Shares or any securities convertible into or exercisable
         or exchangeable for Common Shares or grant any options
         or warrants to purchase Common Shares, for a period of
         180 days after the date of the Prospectus, without the
         prior written consent of Salomon Smith Barney Inc.




                               10



<PAGE>

              (o)  Except as stated in this Agreement and in the
         Prospectus, neither the Fund nor the Manager has taken,
         nor will it take, directly or indirectly, any action
         designed to or that might reasonably be expected to
         cause or result in stabilization or manipulation of the
         price of the Common Shares.

              (p)  The Fund will use its reasonable best efforts
         to have the Common Shares listed, subject to notice of
         issuance, on the NYSE concurrently with the
         effectiveness of the Registration Statement and to
         comply with the rules and regulations of such exchange.


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

              (a)  Each Prepricing Prospectus included as part of
         the registration statement as originally filed or as
         part of any amendment or supplement thereto complied
         when so filed in all material respects with the
         provisions of the 1933 Act, the 1940 Act and the Rules
         and Regulations.

              (b)  The Registration Statement, in the form in
         which it became or becomes effective and also in such
         form as it may be when any post-effective amendment
         thereto shall become effective and the Prospectus and
         any amendment or supplement thereto when filed with the
         Commission under Rule 497 of the 1933 Act Rules and
         Regulations and the 1940 Act Notification when
         originally filed with the Commission and any amendment
         or supplement thereto when filed with the Commission
         complied or will comply in all material respects with
         the provisions of the 1933 Act, the 1940 Act and the
         Rules and Regulations and did not or will not at any
         such times contain an untrue statement of a material
         fact or omit to state a material fact required to be
         stated therein or necessary to make the statements
         therein (in the case of a prospectus, in light of the
         circumstances under which they were made) not
         misleading; except that this representation and warranty
         does not apply to statements in or omissions from the
         Registration Statement or the Prospectus (or any
         amendment or supplement thereto) made in reliance upon
         and in conformity with information relating to any
         Underwriter furnished to the Fund by or on behalf of any
         Underwriter through you expressly for use therein.




                               11



<PAGE>

              (c)  All the outstanding Common Shares of the Fund
         have been duly authorized and validly issued, are fully
         paid and, except as described in the Registration
         Statement, nonassessable and are free of any preemptive
         or similar rights; the Shares have been duly authorized
         and, when issued and delivered to the Underwriters
         against payment therefor in accordance with the terms
         hereof, will be validly issued, fully paid and, except
         as described in the Registration Statement,
         nonassessable and free of any preemptive or similar
         rights and the capital stock of the Fund conforms to the
         description thereof in the Registration Statement and
         the Prospectus (and any amendment or supplement to
         either of them).

              (d)  The Fund has been duly incorporated and is
         validly existing as a corporation in good standing under
         the laws of the State of Maryland, with full corporate
         power and authority to own, lease and operate its
         properties and to conduct its business as described in
         the Registration Statement and the Prospectus (and any
         amendment or supplement to either of them) and is duly
         registered and qualified to conduct business and is in
         good standing in each jurisdiction or place where the
         nature of its properties or the conduct of its business
         requires such registration or qualification, except
         where the failure so to register or to qualify does not
         have a material, adverse effect on the condition
         (financial or other), business, properties, net assets
         or results of operations of the Fund. The Fund has no
         subsidiaries.

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

              (f)  The Fund is not in violation of its Articles
         of Incorporation or By-Laws or in material violation of
         any law, ordinance, administrative or governmental rule
         or regulation applicable to the Fund or of any decree of


                               12



<PAGE>

         the Commission, the NASD, any state securities
         commission, any national securities exchange, any
         arbitrator, any court or any other governmental,
         regulatory, self-regulatory or administrative agency or
         any official having jurisdiction over the Fund or in
         breach or default in the performance of any obligation,
         agreement or condition contained in any material bond,
         debenture, note or any other evidence of indebtedness or
         in any agreement, indenture, lease or other instrument
         to which the Fund is a party or by which it or any of
         its properties may be bound.

              (g)  Neither the issuance and sale of the Shares,
         the execution, delivery or performance of this Agreement
         nor any of the Fund Agreements by the Fund, nor the
         consummation by the Fund of the transactions
         contemplated hereby or thereby (A) requires any consent,
         approval, authorization or other order of or
         registration or filing with the Commission, the NASD,
         any national securities exchange, any arbitrator, any
         court or any other governmental, regulatory,
         self-regulatory or administrative agency or any official
         (except compliance with the securities or Blue Sky laws
         of various jurisdictions which have been or will be
         effected in accordance with this Agreement and except
         for compliance with the filing requirements of the NASD
         Division of Corporate Finance) or conflicts or will
         conflict with or constitutes or will constitute a breach
         of the Articles of Incorporation or By-Laws of the Fund
         or (B) conflicts or will conflict with or constitutes or
         will constitute a breach of or a default under, any
         material agreement, indenture, lease or other instrument
         to which the Fund is a party or by which it or any of
         its properties may be bound or violates or will violate
         any material statute, law, regulation or filing or
         judgment, injunction, order or decree applicable to the
         Fund or any of its properties or will result in the
         creation or imposition of any material lien, charge or
         encumbrance upon any property or assets of the Fund
         pursuant to the terms of any agreement or instrument to
         which it is a party or by which it may be bound or to
         which any of the property or assets of the Fund is
         subject.

              (h)  Since the date as of which information is
         given in the Registration Statement and the Prospectus
         (and any amendment or supplement to either of them),
         except as otherwise stated therein, (A) there has been
         no material, adverse change in the condition (financial
         or other), business, properties, net assets or results
         of operations of the Fund or business prospects (other


                               13



<PAGE>

         than as a result of a change in the financial markets
         generally) 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
         its business as described in the Prospectus (and any
         amendment or supplement thereto) and (C) there has been
         no dividend or distribution of any kind declared, paid
         or made by the Fund on any class of its common stock.

              (i)  The accountants, Ernst & Young LLP, who have
         audited or shall audit the Statement of Assets and
         Liabilities included in the Registration Statement and
         the Prospectus (and any amendment or supplement to
         either of them), are an independent public accounting
         firm as required by the 1933 Act, the 1940 Act and the
         Rules and Regulations.

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

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

              (l)  The execution and delivery of and the
         performance by the Fund of its obligations under this
         Agreement and the Fund Agreements have been duly and
         validly authorized by the Fund and this Agreement and
         the Fund Agreements have been duly executed and
         delivered by the Fund and constitute the valid and
         legally binding agreements of the Fund, enforceable
         against the Fund in accordance with their terms, except


                               14



<PAGE>

         as rights to indemnity and contribution hereunder may be
         limited by federal or state securities laws and subject
         to the qualification that the enforceability of the
         Fund's obligations hereunder and thereunder may be
         limited by bankruptcy, insolvency, reorganization,
         moratorium and other laws relating to or affecting
         creditors' rights generally and by general equitable
         principles.

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

              (n)  The Fund has not distributed and, prior to the
         later to occur of (i) the Closing Date and (ii)
         completion of the distribution of the Shares, will not
         distribute to the public any offering material in
         connection with the offering and sale of the Shares
         other than the Registration Statement, the Prepricing
         Prospectus included in Pre-Effective Amendment No. 1 to
         the Registration Statement, the Prospectus and the
         advertisements/sales literature filed with the NASD on
         December 5, 2001.

              (o)  The Fund has such licenses, permits, and
         authorizations of governmental or regulatory authorities
         ("permits") as are necessary to own its property and to
         conduct its business in the manner described in the
         Prospectus (and any amendment or supplement thereto);
         the Fund has fulfilled and performed all its material
         obligations with respect to such permits and no event
         has occurred which allows or, after notice or lapse of
         time, would allow, revocation or termination thereof or
         results in any other material impairment of the rights
         of the Fund under any such permit, subject in each case
         to such qualification as may be set forth in the
         Prospectus (and any amendment or supplement thereto);


                               15



<PAGE>

         and, except as described in the Prospectus (and any
         amendment or supplement thereto), none of such permits
         contains any restriction that is materially burdensome
         to the Fund.

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

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

              (r)  Except as stated in this Agreement and in the
         Prospectus (and any amendment or supplement thereto),
         the Fund has not taken and will not take, directly or
         indirectly, any action designed to or which should
         reasonably be expected to cause or result in or which
         will constitute stabilization or manipulation of the
         price of the Common Shares in violation of federal
         securities laws and the Fund is not aware of any such
         action taken or to be taken by any affiliates of the
         Fund.

              (s)  The Fund is duly registered under the 1940 Act
         as a closed-end, non-diversified management investment
         company and the 1940 Act Notification has been duly
         filed with the Commission and, at the time of filing
         thereof and at the time of filing any amendment or
         supplement thereto, conformed in all material respects
         with all applicable provisions of the 1940 Act and the
         Rules and Regulations.  The Fund has not received any


                               16



<PAGE>

         notice from the Commission pursuant to Section 8(e) of
         the 1940 Act with respect to the 1940 Act Notification
         or the Registration Statement (or any amendment or
         supplement to either of them).

              (t)  All advertising, sales literature or other
         promotional material (including "prospectus wrappers"
         and "broker kits"), whether in printed or electronic
         form, authorized in writing by or prepared by the Fund
         or the Manager for use in connection with the offering
         and sale of the Shares (collectively, "sales material")
         complied and comply in all material respects with the
         applicable requirements of the 1933 Act, the 1933 Act
         Rules and Regulations and the rules and interpretations
         of the NASD and if required to be filed with the NASD
         under the NASD's conduct rules were so filed. No sales
         material, when read together with the Prospectus,
         contained or contains an untrue statement of a material
         fact or omitted or omits to state a material fact
         required to be stated therein or necessary to make the
         statements therein, in light of the circumstances under
         which they were made, not misleading.

              (u)  This Agreement and each of the Fund Agreements
         complies in all material respects with all applicable
         provisions of the 1940 Act, the 1940 Act Rules and
         Regulations, the Investment Advisers Act of 1940, as
         amended (the "Advisers Act") and the rules and
         regulations adopted by the Commission under the Advisers
         Act (the "Advisers Act Rules and Regulations").

              (v)  No holder of any security of the Fund has any
         right to require registration of Common Shares or any
         other security of the Fund because of the filing of the
         registration statement or consummation of the
         transactions contemplated by this Agreement.

              (w)  The Shares have been duly approved for listing
         upon notice of issuance on the NYSE and the Fund's
         registration statement on Form 8-A, under the 1934 Act,
         has become effective.

              (x)  The Fund intends to direct the investment of
         the proceeds of the offering of the Shares in such a
         manner as to comply with the requirements of Subchapter
         M of the Code.

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




                               17



<PAGE>

              (a)  The Manager has been duly formed and is
         validly existing and in good standing under the laws of
         Delaware, with power and authority (partnership and
         other) to own its properties and conduct its business as
         described in the Prospectus, and has been duly qualified
         as a foreign partnership for the transaction of business
         and is in good standing under the laws of each other
         jurisdiction in which it owns or leases properties, or
         conducts any business, so as to require such
         qualification, other than where the failure to be so
         qualified or in good standing would not have a material
         adverse effect on the Manager and its subsidiaries taken
         as a whole.

              (b)  The Manager is duly registered as an
         investment adviser under the Advisers Act and is not
         prohibited by any provision of the Advisers Act or the
         1940 Act, or the rules and regulations under such Acts,
         from acting as an investment adviser for the Company as
         contemplated in the Prospectus and the Management
         Agreement.  There does not exist to the knowledge of the
         Manager any proceeding, which might materially adversely
         affect the registration of the Manager with the
         Commission.

              (c)  Each of this Agreement, the Management
         Agreement and any other Fund Agreement to which the
         Manager is a party has been duly authorized, executed
         and delivered by the Manager and complies with all
         applicable provisions of the Advisers Act, the 1940 Act,
         and the rules and regulations under such Acts.

              (d)  Neither the execution, delivery or performance
         by the Manager of its obligations under this Agreement,
         the Management Agreement or any other Fund Agreement to
         which the Manager is a party nor the consummation of the
         transactions contemplated therein or in the Registration
         Statement or Prospectus nor the fulfillment of the terms
         thereof will conflict with or result in a breach of any
         of the terms or provisions of, or constitute a default
         under, any indenture, mortgage, deed of trust, loan
         agreement or other agreement or instrument to which the
         Manager is a party or by which the Manager is bound or
         to which any of the property or assets of the Manager is
         subject, nor will any such action result in any
         violation of the provisions of the organizational
         documents of the Manager or any applicable law or
         statute or any order, rule or regulation of any court or
         governmental agency or body having jurisdiction over the
         Manager or any of its properties.



                               18



<PAGE>

              (e)  Other than as set forth in (i) Part II, Item 1
         of the Quarterly Report on Form 10-Q filed by the
         Manager with the Commission with respect to the
         quarterly periods ended March 31, 2001, June 30, 2001
         and September 30, 2001 pursuant to Section 13 or 15(d)
         of the 1934 Act and (ii) the Current Report on Form 8-K
         filed by the Manager with the Commission on December 13,
         2001 and January 10, 2002 pursuant to Section 13 or
         15(d) of the 1934 Act, there are no legal or
         governmental investigations, actions, suits or
         proceedings pending or, to the knowledge of the Manager,
         threatened against or affecting the Manager or any of
         its subsidiaries or any of their respective properties
         or to which the Manager or any of its subsidiaries is or
         may be a party or to which any property of the Manager
         or any of its subsidiaries is or may be the subject
         which, if determined adversely to the Manager or any of
         its subsidiaries, would individually or in the aggregate
         have, or reasonably be expected to have, a material
         adverse effect on the Manager's ability to perform its
         obligations under the Management Agreement and, to the
         Manager's knowledge, no such proceedings are threatened
         or contemplated by governmental authorities or
         threatened by others.

              (f)  No consent, approval, authorization, order,
         license, registration or qualification of, or any filing
         with, any court or governmental agency or body, whether
         foreign or domestic, is required for the consummation by
         the Manager of the transactions contemplated by this
         Agreement.

              (g)  The Manager owns or possesses all material
         governmental licenses, permits, consents, orders,
         approvals or other authorizations, whether foreign or
         domestic, to enable the Manager to perform its
         obligations under the Management Agreement.

              (h)  The information regarding the Manager in the
         Registration Statement and the Prospectus complies in
         all material respects with the requirements of Form N-2
         and, as of the date of the Prospectus, such information
         regarding the Manager did 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.

              (i)  Except as stated in this Agreement and in the
         Prospectus (and in any amendment or supplement thereto),


                               19



<PAGE>

         the Manager has not taken and will not take, directly or
         indirectly, any action designed to or which should
         reasonably be expected to cause or result in or which
         will constitute, stabilization or manipulation of the
         price of the Common Shares in violation of federal
         securities laws and the Manager is not aware of any such
         action taken or to be taken by any affiliates of the
         Manager.

              (j)  In the event that the Fund or the Manager
         makes available any promotional materials intended for
         use only by qualified broker-dealers and registered
         representatives thereof by means of an Internet web site
         or similar electronic means, the Manager will install
         and maintain pre-qualification and password-protection
         or similar procedures which are reasonably designed to
         effectively prohibit access to such promotional
         materials by persons other than qualified broker-dealers
         and registered representatives thereof.

         8.   Indemnification and Contribution.

              (a)  The Fund and the Manager, jointly and
         severally, agree to indemnify and hold harmless each of
         you and each other 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, from and against any and all losses, claims,
         damages, liabilities and expenses, joint or several
         (including reasonable costs of investigation) arising
         out of or based upon any untrue statement or alleged
         untrue statement of a material fact contained in the
         Registration Statement, the Prospectus, any Prepricing
         Prospectus, any sales material (or any amendment or
         supplement to any of the foregoing) or arising out of or
         based upon any omission or alleged omission to state
         therein a material fact required to be stated therein or
         necessary to make the statements therein (in the case of
         a prospectus, in light of the circumstances under which
         they were made) not misleading, except insofar as such
         losses, claims, damages, liabilities or expenses arise
         out of or are based upon any untrue statement or
         omission or alleged untrue statement or omission which
         has been made therein or omitted therefrom in reliance
         upon and in conformity with the information relating to
         such Underwriters furnished in writing to the Fund by or
         on behalf of any Underwriter through you expressly for
         use in connection therewith; provided, however, that the
         foregoing indemnity with respect to the Registration
         Statement, the Prospectus or any Prepricing Prospectuses
         (or any amendment or supplement to any of the foregoing)


                               20



<PAGE>

         shall not inure to the benefit of any Underwriter from
         whom the person asserting any loss, claim, damage,
         liability or expense purchased Shares, if it is shown
         that a copy of the Prospectus, as then amended or
         supplemented, which would have cured any defect giving
         rise to such loss, claim, damage, liability or expense
         was not sent or delivered to such person by or on behalf
         of such Underwriter, if required by law to be so
         delivered, at or prior to the confirmation of the sale
         of such Shares to such person and such Prospectus,
         amendments and supplements had been provided by the Fund
         to the Underwriters in the requisite quantity and on a
         timely basis to permit proper delivery.  The foregoing
         indemnity agreement shall be in addition to any
         liability which the Fund or the Manager may otherwise
         have.

              (b)  If any action, suit or proceeding shall be
         brought against any Underwriter or any person
         controlling any Underwriter in respect of which
         indemnity may be sought against the Fund or the Manager,
         such Underwriter or such controlling person shall
         promptly notify the Fund or the Manager and the Fund or
         the Manager shall assume the defense thereof, including
         the employment of counsel and the payment of all fees
         and expenses. Such Underwriter or any such controlling
         person shall have the right to employ separate counsel
         in any such action, suit or proceeding and to
         participate in the defense thereof, but the fees and
         expenses of such counsel shall be at the expense of such
         Underwriter or controlling person unless (i) the Fund or
         the Manager have agreed in writing to pay such fees and
         expenses, (ii) the Fund and the Manager have failed
         within a reasonable time to assume the defense and
         employ counsel or (iii) the named parties to any such
         action, suit or proceeding (including any impleaded
         parties) include both such Underwriter or such
         controlling person and the Fund or the Manager and such
         Underwriter or such controlling person shall have been
         advised by its counsel that representation of such
         indemnified party and the Fund or the Manager by the
         same counsel would be inappropriate under applicable
         standards of professional conduct (whether or not such
         representation by the same counsel has been proposed)
         due to actual or potential differing interests between
         them (in which case the Fund and the Manager shall not
         have the right to assume the defense of such action,
         suit or proceeding on behalf of such Underwriter or such
         controlling person).  It is understood, however, that
         the Fund and the Manager shall, in connection with any
         one such action, suit or proceeding or separate but


                               21



<PAGE>

         substantially similar or related actions, suits or
         proceedings in the same jurisdiction arising out of the
         same general allegations or circumstances be liable for
         the reasonable fees and expenses of only one separate
         firm of attorneys (in addition to any local counsel if
         there is any action, suit or proceeding in more than one
         jurisdiction) at any time for all such Underwriters and
         controlling persons not having actual or potential
         differing interests with you or among themselves, which
         firm shall be designated in writing by Salomon Smith
         Barney Inc. and that, subject to the requirements of
         1940 Act Release No. 11330, all such fees and expenses
         shall be reimbursed promptly as they are incurred.  The
         Fund and the Manager shall not be liable for any
         settlement of any such action, suit or proceeding
         effected without the written consent of the Fund or the
         Manager, but if settled with such written consent or if
         there be a final judgment for the plaintiff in any such
         action, suit or proceeding, the Fund and the Manager
         agree to indemnify and hold harmless any Underwriter, to
         the extent provided in the preceding paragraph, and any
         such controlling person from and against any loss,
         liability, damage or expense by reason by such
         settlement or judgment.

              (c)  Each Underwriter agrees, severally and not
         jointly, to indemnify and hold harmless the Fund and the
         Manager, their trustees, directors, any officers of the
         Fund who sign the Registration Statement and any person
         who controls the Fund or the Manager within the meaning
         of Section 15 of the 1933 Act or Section 20 of the 1934
         Act, to the same extent as the foregoing indemnity from
         the Fund and the Manager to each Underwriter, but only
         with respect to information relating to such Underwriter
         furnished in writing by or on behalf of such Underwriter
         through you expressly for use in the Registration
         Statement or the Prospectus (or any amendment or
         supplement to either of them).  If any action, suit or
         proceeding shall be brought against the Fund or the
         Manager, any of their trustees, directors, any such
         officer or any such controlling person, based on the
         Registration Statement or the Prospectus (or any
         amendment or supplement to either of them) and in
         respect of which indemnity may be sought against any
         Underwriter pursuant to this paragraph (c), such
         Underwriter shall have the rights and duties given to
         the Fund by paragraph (b) above (except that if the Fund
         or the Manager shall have assumed the defense thereof
         such Underwriter shall not be required to do so, but may
         employ separate counsel therein and participate in the
         defense thereof, but the fees and expenses of such


                               22



<PAGE>

         counsel shall be at such Underwriter's expense) and the
         Fund and the Manager, their trustees, directors, any
         such officer and any such controlling person shall have
         the rights and duties given to the Underwriters by
         paragraph (b) above.  The foregoing indemnity agreement
         shall be in addition to any liability which the
         Underwriters may otherwise have.

              (d)  If the indemnification provided for in this
         Section 8 is unavailable to an indemnified party under
         paragraphs (a) or (c) hereof in respect of any losses,
         claims, damages, liabilities or expenses referred to
         therein, then an indemnifying party, in lieu of
         indemnifying such indemnified party, shall contribute to
         the amount paid or payable by such indemnified party as
         a result of such losses, claims, damages, liabilities or
         expenses (i) in such proportion as is appropriate to
         reflect the relative benefits received by the Fund and
         the Manager on the one hand (treated jointly for this
         purpose as one person) and the Underwriters on the other
         hand from the offering of the Shares or (ii) if the
         allocation provided by clause (i) above is not permitted
         by applicable law, in such proportion as is appropriate
         to reflect not only the relative benefits referred to in
         clause (i) above but also the relative fault of the Fund
         and the Manager on the one hand (treated jointly for
         this purpose as one person) and of the Underwriters on
         the other hand in connection with the statements or
         omissions which resulted in such losses, claims,
         damages, liabilities or expenses, as well as any other
         relevant equitable considerations.  The relative
         benefits received by the Fund and the Manager on the one
         hand (treated jointly for this purpose as one person)
         and the Underwriters on the other hand shall be deemed
         to be in the same proportion as the total net proceeds
         from the offering (before deducting expenses) received
         by the Fund as set forth in the table on the cover page
         of the Prospectus bear to the total payments received by
         the Underwriters with respect to the Firm Shares as set
         forth in the table on the cover page of the Prospectus.
         The relative fault of the Fund and the Manager on the
         one hand (treated jointly for this purpose as one
         person) and of the Underwriters on the other hand shall
         be determined by reference to, among other things,
         whether the untrue or alleged untrue statement of a
         material fact or the omission or alleged omission to
         state a material fact relates to information supplied by
         the Fund and the Manager on the one hand (treated
         jointly for this purpose as one person) or by the
         Underwriters on the other hand and the parties' relative



                               23



<PAGE>

         intent, knowledge, access to information and opportunity
         to correct or prevent such statement or omission.

              (e)  The Fund, the Manager and the Underwriters
         agree that it would not be just and equitable if
         contribution pursuant to this Section 8 were determined
         by pro rata allocation (even if the Underwriters were
         treated as one entity for such purpose) or by any other
         method of allocation that does not take account of the
         equitable considerations referred to in paragraph (d)
         above. The amount paid or payable by an indemnified
         party as a result of the losses, claims, damages,
         liabilities and expenses referred to in paragraph (d)
         above shall be deemed to include, subject to the
         limitations set forth above, any legal or other expenses
         reasonably incurred by such indemnified party in
         connection with defending any such action, suit or
         proceeding. Notwithstanding the provisions of this
         Section 8, no Underwriter shall be required to
         contribute any amount in excess of the amount by which
         the total price of the Shares underwritten by it and
         distributed to the public exceeds the amount of any
         damages which such Underwriter has otherwise been
         required to pay by reason of 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. The
         Underwriters' obligations to contribute pursuant to this
         Section 8 are several in proportion to the respective
         number of Firm Shares set forth opposite their names in
         Schedule I (or such numbers of Firm Shares increased as
         set forth in Section 10 hereof) and not joint.

              (f)  No indemnifying party shall, without the prior
         written consent of the indemnified party, effect any
         settlement of any pending or threatened action, suit or
         proceeding in respect of which any indemnified party is
         or could have been a party and indemnity could have been
         sought hereunder by such indemnified party, unless such
         settlement includes an unconditional release of such
         indemnified party from all liability from claimants on
         claims that are the subject matter of such action, suit
         or proceeding.

              (g)  Any losses, claims, damages, liabilities or
         expenses for which an indemnified party is entitled to
         indemnification or contribution under this Section 8
         shall be paid by the indemnifying party to the
         indemnified party as such losses, claims, damages,


                               24



<PAGE>

         liabilities or expenses are incurred. The indemnity and
         contribution agreements contained in this Section 8 and
         the representations and warranties of the Fund and the
         Manager set forth in this Agreement shall remain
         operative and in full force and effect, regardless of
         (i) any investigation made by or on behalf of any
         Underwriter or any person controlling any Underwriter,
         the Fund, the Manager or their trustees, directors or
         officers or any person controlling the Fund or the
         Manager, (ii) acceptance of any Shares and payment
         therefor hereunder and (iii) any termination of this
         Agreement. A successor to any Underwriter or to the
         Fund, the Manager or their trustees, directors or
         officers or any person controlling any Underwriter, the
         Fund or the Manager shall be entitled to the benefits of
         the indemnity, contribution and reimbursement agreements
         contained in this Section 8.

         9.   Conditions of Underwriters' Obligations.  The
several obligations of the Underwriters to purchase any Shares
hereunder are subject to, in the good faith judgment of the
Underwriters, the accuracy of and compliance with the
representations, warranties and agreements of and by the Fund and
the Manager contained herein on and as of the date hereof, the
date on which the Registration Statement becomes or became
effective, the date of the Prospectus (and of any amendment or
supplement thereto), the Closing Date and, with respect to any
Additional Shares, any Option Closing Date; to the accuracy and
completeness of all statements made by the Fund, the Manager or
any of their officers in any certificate delivered to the
Representatives or their counsel pursuant to this Agreement and
to the following conditions:

              (a)  If, at the time this Agreement is executed and
         delivered, it is necessary for the Registration
         Statement or a post-effective amendment thereto to be
         declared effective before the offering of the Shares may
         commence, the Registration Statement or such
         post-effective amendment shall have become effective not
         later than 5:30 p.m., New York City time, on the date
         hereof or at such later date and time as shall be
         consented to in writing by you and all filings, if any,
         required by Rules 497 and 430A under the 1933 Act Rules
         and Regulations shall have been timely made; no order
         suspending the effectiveness of the Registration
         Statement shall have been issued and no proceeding for
         that purpose shall have been instituted or, to the
         knowledge of the Fund, the Manager or any Underwriter,
         threatened by the Commission and any request of the
         Commission for additional information (to be included in
         the Registration Statement or the Prospectus or


                               25



<PAGE>

         otherwise) shall have been complied with to your
         satisfaction.

              (b)  You shall have received on the Closing Date an
         opinion of Seward & Kissel LLP, counsel for the Fund,
         dated the Closing Date and addressed to you, as
         Representatives of the several Underwriters, 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
              with full corporate power and authority to own,
              lease and operate its properties and to conduct its
              business as described in the Registration Statement
              and the Prospectus (and any amendment or supplement
              thereto through the date of the opinion) and is
              duly registered and qualified to conduct its
              business and is in good standing in each
              jurisdiction where the nature of its properties or
              the conduct of its business requires such
              registration or qualification, except where the
              failure so to register or to qualify does not have
              a material, adverse effect on the condition
              (financial or other), business, properties, net
              assets or results of operations of the Fund;

                  (ii)  The authorized and outstanding capital
              stock of the Fund is as set forth in the
              Registration Statement and Prospectus (or any
              amendment or supplement thereto through the date of
              the opinion); and the description of the authorized
              capital stock of the Fund contained in the
              Prospectus (or any amendment or supplement thereto
              through the date of the opinion) under the caption
              "Description of Shares" conforms in all material
              respects as to legal matters to the terms thereof
              contained in the Fund's Articles of Incorporation;

                 (iii)  All the shares of capital stock of the
              Fund outstanding prior to the issuance of the
              Shares have been duly authorized and validly issued
              and are fully paid and nonassessable;

                  (iv)  The Shares have been duly authorized and,
              when issued and delivered to the Underwriters
              against payment therefor in accordance with the
              terms hereof, will be validly issued, fully paid
              and nonassessable and not subject to any preemptive
              rights that entitle or will entitle any person to



                               26



<PAGE>

              acquire any Shares upon the issuance thereof by the
              Fund;

                   (v)  The form of certificates for the Shares
              is in due and proper form and complies with the
              requirements of all applicable laws and the NYSE;

                  (vi)  The Fund has the power and authority to
              enter into this Agreement and the Fund Agreements
              and to issue, sell and deliver the Shares to the
              Underwriters as provided herein and this Agreement
              and each of the Fund Agreements have been duly
              authorized, executed and delivered by the Fund and
              assuming due authorization, execution and delivery
              by the other parties thereto, constitute the valid,
              legal and binding agreements of the Fund,
              enforceable against the Fund in accordance with
              their terms, except as enforcement of rights to
              indemnity hereunder may be limited by Federal or
              state securities laws or principles of public
              policy and subject to the qualification that the
              enforceability of the Fund's obligations hereunder
              and thereunder may be limited by bankruptcy,
              insolvency, reorganization, moratorium and other
              laws relating to or affecting creditors' rights
              generally and by general equitable principles,
              whether enforcement is considered in a proceeding
              in equity or at law;

                 (vii)  The Manager has corporate power and
              authority to enter into this Agreement and the
              Management Agreement and each of this Agreement and
              the Management Agreement has been duly authorized,
              executed and delivered by the Manager and each of
              this Agreement and the Management Agreement is a
              valid, legal and binding agreement of the Manager,
              enforceable against the Manager in accordance with
              its terms, except as enforcement of rights to
              indemnity and contribution hereunder may be limited
              by Federal or state securities laws or principles
              of public policy and subject to the qualification
              that the enforceability of the Manager's
              obligations hereunder and thereunder may be limited
              by bankruptcy, insolvency, reorganization,
              moratorium and other laws relating to or affecting
              creditors' rights generally and by general
              equitable principles, whether enforcement is
              considered in a proceeding in equity or at law;

                (viii)  The Fund Agreements comply in all
              material respects with all applicable provisions of


                               27



<PAGE>

              the 1933 Act, the 1940 Act, the Advisers Act, the
              Rules and Regulations and the Advisers Act Rules
              and Regulations;

                  (ix)  The Fund is not in violation of its
              Articles of Incorporation or By-Laws or to the best
              knowledge of such counsel after reasonable inquiry,
              is not in default in the performance of any
              material obligation, agreement or condition
              contained in any bond, debenture, note or other
              evidence of indebtedness, except as may be
              disclosed in the Prospectus (and any amendment or
              supplement thereto);

                   (x)  No consent, approval, authorization or
              order of or registration or filing with the
              Commission, the NASD, any state securities
              commission, any national securities exchange, any
              arbitrator, any court or any other governmental
              body, agency or regulatory, self-regulatory or
              administrative agency or any official is required
              on the part of the Fund (except as have been
              obtained under the 1933 Act and the 1934 Act or
              such as may be required under state securities or
              Blue Sky laws governing the purchase and
              distribution of the Shares) for the valid issuance
              and sale of the Shares to the Underwriters as
              contemplated by this Agreement, performance of the
              Fund Agreements or this Agreement by the Fund, the
              consummation by the Fund of the transactions
              contemplated thereby or hereby or the adoption of
              the Fund's Dividend Reinvestment Plan;

                  (xi)  Neither the offer, sale or delivery of
              the Shares, the execution, delivery or performance
              of this Agreement or the Fund Agreements,
              compliance by the Fund with the provisions hereof
              or thereof, consummation by the Fund of the
              transactions contemplated hereby or thereby nor the
              adoption of the Fund's Dividend Reinvestment Plan
              violates the Articles of Incorporation or By-Laws
              of the Fund or any material agreement, indenture,
              lease or other instrument to which the Fund is a
              party or by which it or any of its properties is
              bound that is an exhibit to the Registration
              Statement or that is known to such counsel after
              reasonable inquiry or, to the best of such
              counsel's knowledge after reasonable inquiry, will
              result in the creation or imposition of any
              material lien, charge or encumbrance upon any
              property or assets of the Fund, nor, to the best of


                               28



<PAGE>

              such counsel's knowledge after reasonable inquiry,
              will any such action result in any violation of any
              existing material law, regulation, ruling (assuming
              compliance with all applicable state securities and
              Blue Sky laws), judgment, injunction, order or
              decree applicable to the Fund or any of its
              properties;

                 (xii)  The Registration Statement and all
              post-effective amendments, if any, have become
              effective under the 1933 Act and, to the best
              knowledge of such counsel after reasonable inquiry,
              no order suspending the effectiveness of the
              Registration Statement has been issued and no
              proceedings for that purpose are pending before or
              contemplated by the Commission; and any filing of
              the Prospectus and any amendments or supplements
              thereto required pursuant to Rule 497 of the 1933
              Act Rules and Regulations prior to the date of such
              opinion have been made in accordance with Rule 497;

                (xiii)  The Fund is duly registered with the
              Commission under the 1940 Act as a closed-end, non-
              diversified management investment company and all
              action has been taken by the Fund as required by
              the 1933 Act and the 1940 Act and the Rules and
              Regulations in connection with the issuance and
              sale of the Shares to make the public offering and
              consummate the sale of the Shares as contemplated
              by this Agreement;

                 (xiv)  The statements made in the Registration
              Statement and the Prospectus (and any amendment or
              supplement to either of them through the date of
              the opinion) under the caption "Tax Matters" have
              been reviewed by such counsel and to the extent
              they describe or summarize tax laws, doctrines or
              practices of the United States, present a fair and
              accurate description or summary thereof as of the
              date of the opinion;

                  (xv)  The statements in the Registration
              Statement and Prospectus (and any amendment or
              supplement to either of them through the date of
              the opinion), insofar as they are descriptions of
              contracts, agreements or other legal documents or
              refer to statements of law or legal conclusions,
              are accurate and present fairly the information
              required to be shown;




                               29



<PAGE>

                 (xvi)  The Registration Statement and the
              Prospectus (and any amendment or supplement to
              either of them through the date of the opinion)
              comply as to form in all material respects with the
              requirements of the 1933 Act, the 1940 Act and the
              Rules and Regulations (except that no opinion need
              be expressed as to the financial statements and the
              notes thereto and the schedules and other financial
              and statistical data included therein as to which
              such counsel need not express any opinion);

                (xvii)  To the best knowledge of such counsel
              after reasonable inquiry, (A) other than as
              described or contemplated in the Prospectus (or any
              amendment or supplement thereto through the date of
              the opinion), there are no actions, suits or other
              legal or governmental proceedings pending or
              expressly threatened against the Fund and (B) there
              are no material agreements, contracts, indentures,
              leases or other instruments that are required to be
              described in the Registration Statement or the
              Prospectus (or any amendment or supplement to
              either of them through the date of the opinion) or
              to be filed as an exhibit to the Registration
              Statement that are not described or filed as
              required, as the case may be;

               (xviii)  To the best knowledge of such counsel
              after reasonable inquiry, the Fund is not in
              violation of any law, ordinance, administrative or
              governmental rule or regulation applicable to the
              Fund or of any decree of the Commission, the NASD,
              any state securities commission, any national
              securities exchange, any arbitrator, any court or
              any other governmental, regulatory, self-regulatory
              or administrative agency or any official having
              jurisdiction over the Fund; and

                 (xix)  The Shares are duly authorized for
              listing, subject to official notice of issuance, on
              the NYSE and the Fund's registration statement on
              Form 8-A under the 1934 Act is effective.

              Such counsel shall also state that although counsel
         has not undertaken, except as otherwise indicated in
         their opinion, to determine independently and does not
         assume any responsibility for, the accuracy or
         completeness of the statements in the Registration
         Statement, such counsel has participated in the
         preparation of the Registration Statement and the
         Prospectus, including review and discussion of the


                               30



<PAGE>

         contents thereof, and nothing has come to the attention
         of such counsel that has caused it to believe that the
         Registration Statement, at the time the Registration
         Statement became effective or the Prospectus, as of its
         date and as of the Closing Date or the Option Closing
         Date, as the case may be, 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 (in the case of a prospectus, in
         light of the circumstances under which they were made)
         not misleading or that any amendment or supplement to
         the Prospectus, as of the Closing Date or the Option
         Closing Date, contained an untrue statement of a
         material fact or omitted to state a material fact
         necessary in order to make the statements therein, in
         light of the circumstances under which they were made,
         not misleading (it being understood that such counsel
         need express no view with respect to the financial
         statements and the notes thereto and the schedules and
         other financial and statistical data included in the
         Registration Statement or the Prospectus).

              In rendering such opinion, such counsel may limit
         such opinion to matters involving the application of the
         laws of the State of New York, the State of Maryland,
         the State of Delaware and the United States. To the
         extent they deem proper and to the extent specified in
         such opinion, such counsel may rely, as to matters
         involving the application of laws of the State of
         Maryland, upon the opinion of Ballard Spahr Andrews &
         Ingersoll LLP and, [as to matters involving the
         application of laws of the State of [California], upon
         the opinion of ___________________ or, in either case,
         other counsel of good standing whom they believe to be
         reliable and who are satisfactory to the
         Representatives; provided that (X) such reliance is
         expressly authorized by the opinion so relied upon and a
         copy of each such opinion is delivered to the
         Representatives and is, in form and substance,
         satisfactory to them and their counsel and (Y) Seward &
         Kissel LLP states in their opinion that they believe
         that they and the Underwriters are justified in relying
         thereon.]

              (c)  You shall have received on the Closing Date an
         opinion of David R. Brewer, Jr., Senior Vice President
         and General Counsel of Alliance Capital Management
         Corporation, the general partner of the Manager, dated
         the Closing Date and addressed to you, as
         Representatives of the several Underwriters, to the
         effect that:


                               31



<PAGE>

                   (i)  The Manager has been duly formed and is
              validly existing and in good standing under the
              laws of Delaware, with power and authority
              (partnership and other) to own its properties and
              conduct its business as described in the
              Prospectus;

                  (ii)  The Manager has been duly qualified as a
              foreign partnership for the transaction of business
              and is in good standing under the laws of each
              other jurisdiction in which it owns or leases
              properties, or conducts any business, so as to
              require such qualification, other than where the
              failure to be so qualified or in good standing
              would not have a material adverse effect on the
              Manager and its subsidiaries taken as a whole;

                 (iii)  The Manager is duly registered as an
              investment adviser under the Advisers Act and is
              not prohibited by the Advisers Act, the 1940 Act,
              or the rules and regulations under such Acts, from
              acting as an investment adviser for the Company as
              contemplated in the Prospectus and the Management
              Agreement;

                  (iv)  Neither the performance by the Manager of
              its obligations under this Agreement nor the
              consummation of the transactions contemplated
              therein or in the Registration Statement nor the
              fulfillment of the terms thereof is, or with the
              giving of notice or lapse of time or both would be,
              in violation of or constitute a default under, the
              limited partnership agreement of the Manager or any
              agreement known to such counsel to which the
              Manager is a party or by which it or any of its
              properties is bound, except for violations and
              defaults which individually and in the aggregate
              are not material to the Manager and its
              subsidiaries taken as a whole; or, to the knowledge
              of such counsel, the terms and provisions of any
              applicable order, law, rule or regulation of any
              court or governmental agency or body under the laws
              of Delaware, federal law or the laws of any other
              jurisdiction in the United States having
              jurisdiction over the Manager or any of its
              properties;

                   (v)  Other than as set forth in (i) Part II,
              Item 1 of the Quarterly Report on Form 10-Q filed
              by the Manager with the Commission with respect to
              the quarterly periods ended March 31, 2001,


                               32



<PAGE>

              June 30, 2001 and September 30, 2001 pursuant to
              Section 13 or 15(d) of the 1934 Act and (ii) the
              Current Report on Form 8-K filed by the Manager
              with the Commission on December 13, 2001 and
              January 10, 2002 pursuant to Section 13 or 15(d) of
              the 1934 Act, to the knowledge of such counsel,
              there is no pending or threatened action, suit or
              proceeding to which the Manager is a party before
              or by any court or governmental agency, authority
              or body or any arbitrator, whether foreign or
              domestic, which reasonably might result in a
              material adverse effect on the          Manager's
              ability to perform its obligations under the
              Management Agreement.

              In rendering such opinion, such counsel may limit
         such opinion to matters involving the application of the
         laws of the State of New York, the State of Delaware and
         the United States.

              (d)  (i)  You shall have received on the Closing
         Date an opinion of _________, special [California] [New
         York] counsel to the Fund, dated the Closing Date and
         addressed to you, as Representatives of the several
         Underwriters, to the effect that:

                        The statements contained in the
              Prospectus under the headings "Prospectus Summary -
              Special Risk Considerations - Concentration Risk",
              "Risks - Concentration Risk" and "Tax Matters -
              [California] [New York] Tax Matters" and in
              Appendix C to the statement of additional
              information under the heading "Factors Pertaining
              to [California] [New York]", to the extent that
              such statements constitute matters of law or legal
              conclusions, provide a fair and accurate summary of
              such law or conclusions. Such statements are based
              on current law and special counsel's understanding
              of the Fund's proposed operations, as disclosed in
              the Prospectus.

              Such counsel shall also state that although special
         counsel does not pass upon or assume any responsibility
         for the accuracy, completeness or fairness of the
         statements contained in the Registration Statement or
         the Prospectus (other than to the extent set forth
         above), and has not made any independent check or
         verification thereof, no facts have come to the
         attention of such special counsel which would lead it to
         believe that the material contained in the Registration
         Statement, at the time it became effective, and the


                               33



<PAGE>

         Prospectus, as of its date and as of the Closing Date or
         the Option Closing Date, as the case may be, under the
         headings "Prospectus Summary - Special Risk
         Considerations - Concentration Risk",  "Risks -
         Concentration Risk" and "Tax Matters - [California] [New
         York] Tax Matters" and in Appendix C to the statement of
         additional information under the heading "Factors
         Pertaining to [California] [New York]", contained any
         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 (in the case of
         a prospectus, in light of the circumstances under which
         they were made) not misleading or that any statement
         contained in any amendment or supplement to the
         Prospectus under such headings, as of the Closing Date
         or the Option Closing Date, as the case may be,
         contained any untrue statement of a material fact or
         omitted or omits to state a material fact necessary in
         order to make the statements therein, in light of the
         circumstances under which they were made, not
         misleading.

         In rendering such opinion, such special counsel may rely
         as to matters of fact, to the extent such special
         counsel deems proper, on certificates of responsible
         officers of the Fund and of the Manager, and of public
         officials.

                 [(ii)  You shall have received on the Closing
         Date a letter, substantially in the form heretofore
         approved by you, from __________, special counsel to the
         Fund, dated the Closing Date and addressed to you, as
         Representatives of the several Underwriters, with
         respect to the taxable equivalent yield tables under the
         heading "Performance Related and Comparative
         Information" in the statement of additional
         information.]

              (e)  That you shall have received on the Closing
         Date, an opinion, dated the Closing Date, of Simpson
         Thacher & Bartlett, counsel for the Underwriters, dated
         the Closing Date and addressed to you, as
         Representatives of the several Underwriters, with
         respect to such matters as the Underwriters may require
         and the Fund, the Manager and their respective counsels
         shall have furnished to such counsel such documents as
         they may request for the purpose of enabling them to
         pass upon such matters.

              (f)  That you shall have received letters addressed
         to you, as Representatives of the several Underwriters,


                               34



<PAGE>

         and dated the date hereof and the Closing Date from
         Ernst & Young LLP, independent certified public
         accountants, substantially in the forms heretofore
         approved by you.

              (g)  (i)  No order suspending the effectiveness of
         the Registration Statement or prohibiting or suspending
         the use of the Prospectus (or any amendment or
         supplement thereto) or any Prepricing Prospectus or any
         sales material shall have been issued and no proceedings
         for such purpose or for the purpose of commencing an
         enforcement action against the Fund, the Manager or,
         with respect to the transactions contemplated by the
         Prospectus (or any amendment or supplement thereto) and
         this Agreement, any Underwriter, may be pending before
         or, to the knowledge of the Fund, the Manager or any
         Underwriter or in the reasonable view of counsel to the
         Underwriters, shall be threatened or contemplated by the
         Commission at or prior to the Closing Date and that any
         request for additional information on the part of the
         Commission (to be included in the Registration
         Statement, the Prospectus or otherwise) be complied with
         to the satisfaction of the Representatives, (ii)  there
         shall not have been any change in the capital stock of
         the Fund nor any material increase in debt of the Fund
         from that set forth in the Prospectus (and any amendment
         or supplement thereto) and the Fund shall not have
         sustained any material liabilities or obligations,
         direct or contingent, other than those reflected in the
         Prospectus (and any amendment or supplement thereto);
         (iii)  since the date of the Prospectus there shall not
         have been any material, adverse change in the condition
         (financial or other), business, prospects, properties,
         net assets or results of operations of the Fund or the
         Manager; (iv)  the Fund and the Manager must not have
         sustained any material loss or interference with its
         business from any court or from legislative or other
         governmental action, order or decree or from any other
         occurrence not described in the Registration Statement
         and the Prospectus (and any amendment or supplement to
         either of them); and (v)  all of the representations and
         warranties of the Fund and the Manager contained in this
         Agreement shall be true and correct on and as of the
         date hereof and as of the Closing Date as if made on and
         as of the Closing Date.

              (h)  Subsequent to the effective date of this
         Agreement, there shall not have occurred (i) any change
         or any development involving a prospective change in or
         affecting the condition (financial or other), business,
         prospects, properties, net assets or results of


                               35



<PAGE>

         operations of the Fund or the Manager not contemplated
         by the Prospectus (and any amendment or supplement
         thereto), which in your opinion, as Representatives of
         the several Underwriters, would materially, adversely
         affect the market for the Shares or (ii)any event or
         development relating to or involving the Fund, the
         Manager or any officer or trustee or director of the
         Fund or the Manager which makes any statement of a
         material fact made in the Prospectus (or any amendment
         or supplement thereto) untrue or which, in the opinion
         of the Fund and its counsel or the Underwriters and
         their counsel, requires the making of any addition to or
         change in the Prospectus (or any amendment or supplement
         thereto) in order to state a material fact required by
         the 1933 Act, the 1940 Act, the Rules and Regulations or
         any other law to be stated therein or necessary in order
         to make the statements therein (in the case of a
         prospectus, in light of the circumstances under which
         they were made) not misleading, if amending or
         supplementing the Prospectus (or any amendment or
         supplement thereto) to reflect such event or development
         would, in your opinion, as Representatives of the
         several Underwriters, materially, adversely affect the
         market for the Shares.

              (i)  That neither the Fund nor the Manager shall
         have failed at or prior to the Closing Date to have
         performed or complied with any of the agreements herein
         contained and required to be performed or complied with
         by them at or prior to the Closing Date.

              (j)  That you shall have received on the Closing
         Date a certificate, dated such date, of the president or
         any vice president and of the controller or treasurer of
         each of the Fund and the Manager certifying that
         (i)  the signers have carefully examined the
         Registration Statement, the Prospectus (and any
         amendments or supplements to either of them) and this
         Agreement, (ii)  the representations and warranties of
         the Fund (with respect to the certificates from such
         Fund officers) and the representations of the Manager
         (with respect to the certificates from such officers of
         the Manager) in this Agreement are true and correct on
         and as of the date of the certificate as if made on such
         date, (iii)  since the date of the Prospectus (and any
         amendment or supplement thereto) there has not been any
         material, adverse change in the condition (financial or
         other), business, prospects (other than as a result of a
         change in the financial markets generally), properties,
         net assets or results of operations of the Fund (with
         respect to the certificates from such Fund officers) or


                               36



<PAGE>

         the Manager (with respect to the certificates from such
         officers of the Manager), (iv)  to the knowledge of such
         officers after reasonable investigation, no order
         suspending the effectiveness of the Registration
         Statement or prohibiting the sale of any of the Shares
         or having a material, adverse effect on the Fund (with
         respect to the certificates from such Fund officers) or
         the Manager (with respect to the certificates from such
         officers of the Manager) has been issued and no
         proceedings for any such purpose are pending before or
         threatened by the Commission or any court or other
         regulatory body, the NASD, any state securities
         commission, any national securities exchange, any
         arbitrator, any court or any other governmental,
         regulatory, self-regulatory or administrative agency or
         any official, (v)  each of the Fund (with respect to
         certificates from such Fund officers) and the Manager
         (with respect to certificates from such officers of the
         Manager) has performed and complied with all agreements
         that this Agreement require it to perform by such
         Closing Date, (vi)  neither the Fund (with respect to
         the certificate from such officers of the Fund) nor the
         Manager (with respect to the certificate from such
         officers of the Manager) has sustained any material loss
         or interference with its business from any court or from
         legislative or other governmental action, order or
         decree or from any other occurrence not described in the
         Registration Statement and the Prospectus and any
         amendment or supplement to either of them and
         (vii)  with respect to the certificate from such
         officers of the Fund, there has not been any change in
         the capital stock of the Fund nor any material increase
         in the debt of the Fund from that set forth in the
         Prospectus (and any amendment or supplement thereto) and
         the Fund has not sustained any material liabilities or
         obligations, direct or contingent, other than those
         reflected in the Prospectus (and any amendment or
         supplement thereto).

              (k)  That the Fund and the Manager shall have
         furnished to you such further certificates, documents
         and opinions of counsel as you shall reasonably request
         (including certificates of officers of the Fund and the
         Manager).

              All such opinions, certificates, letters and other
         documents will be in compliance with the provisions
         hereof only if they are satisfactory in form and
         substance to you and your counsel acting in good faith.




                               37



<PAGE>

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

              The several obligations of the Underwriters to
         purchase Additional Shares hereunder are subject to (i)
         the accuracy of and compliance with the representations
         and warranties of the Fund and the Manager contained
         herein on and as of the Option Closing Date as though
         made on any Option Closing Date, (ii) satisfaction on
         and as of any Option Closing Date of the conditions set
         forth in this Section 9 except that, if any Option
         Closing Date is other than the Closing Date, the
         certificates, opinions and letters referred to in
         paragraphs (b), (c), (d), (e), (f), (j), (k) and this
         paragraph shall be dated the Option Closing Date in
         question and the opinions and letters called for by
         paragraphs (b), (c), (d) and (e) shall be revised to
         reflect the sale of Additional Shares and (iii) the
         absence of circumstances on or prior to the Option
         Closing Date which would permit termination of this
         Agreement pursuant to Section 11 hereof if they existed
         on or prior to the Closing Date.

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

         If any one or more of the Underwriters shall fail or
refuse to purchase Firm Shares which it or they have agreed to
purchase hereunder and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate
number of the Firm Shares, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the aggregate
number of Firm Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all non-defaulting Underwriters or in such
other proportion as you may specify in accordance with Section 20


                               38



<PAGE>

of the Salomon Smith Barney Master Agreement Among Underwriters,
to purchase Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase. If any
Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate
number of Firm Shares and arrangements satisfactory to you and
the Fund for the purchase of such Firm Shares by one or more
non-defaulting Underwriters or other party or parties approved by
you and the Fund are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Fund. In any such case
which does not result in termination of this Agreement, either
you or the Fund shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement and
the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve
any defaulting Underwriter from liability in respect to any such
default of any such Underwriter under this Agreement. The term
"Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I
hereto who, with your approval and the approval of the Fund,
purchases Firm Shares which a defaulting Underwriter agreed, but
failed or refused, to purchase.

          Any notice under this Section 10 may be made by
telegram, telecopy or telephone but shall be subsequently
confirmed by letter.

         11.  Termination of Agreement.  This Agreement shall be
subject to termination in your absolute discretion, without
liability on the part of any Underwriter to the Fund or the
Manager by notice to the Fund or the Manager if prior to the
Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the
case may be, (i) trading in the Shares or securities generally on
the NYSE, American Stock Exchange, Nasdaq National Market or the
Nasdaq Stock Market shall have been suspended or materially
limited, (ii) additional material governmental restrictions not
in force on the date of this Agreement have been imposed upon
trading in securities generally or a general moratorium on
commercial banking activities in New York shall have been
declared by either Federal or state authorities or (iii) any
outbreak or material escalation of hostilities or other
international or domestic calamity, crisis or change in
political, financial or economic conditions, occurs, the effect
of which is such as to make it, in your judgment, impracticable
or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page
of the Prospectus or to enforce contracts for the resale of the


                               39



<PAGE>

Shares by the Underwriters. Notice of such termination may be
given to the Fund or the Manager by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

         12.  Expenses.  The Fund agrees to pay the following
costs and expenses and all other costs and expenses incident to
the performance by the Fund of its obligations hereunder: (a) the
preparation, printing or reproduction, filing (including, without
limitation, the filing fees prescribed by the 1933 Act, the 1940
Act and the Rules and Regulations) and distribution of the
Registration Statement (including exhibits thereto), the
Prospectus, each Prepricing Prospectus and the 1940 Act
Notification and all amendments or supplements to any of them,
(b) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the
Prospectus, each Prepricing Prospectus, any sales material and
all amendments or supplements to any of them as may be reasonably
requested for use in connection with the offering and sale of the
Shares, (c) the preparation, printing, authentication, issuance
and delivery of certificates for the Shares, including any stamp
taxes and transfer agent and registrar fees payable in connection
with the original issuance and sale of such Shares, (d) the
registrations or qualifications of the Shares for offer and sale
under the securities or Blue Sky laws of the several states as
provided in Section 5(g) hereof (including the reasonable fees,
expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction and
delivery of the preliminary and supplemental Blue Sky Memoranda
and such registration and qualification), (e) the fees and
expenses of the Fund's independent accountants, counsel for the
Fund and of the transfer agent, (f) the expenses of delivery to
the Underwriters and dealers (including postage, air freight and
the cost of counting and packaging) of copies of the Prospectus,
the Prepricing Prospectus, any sales material and all amendments
or supplements to the Prospectus as may be requested for use in
connection with the offering and sale of the Shares, (g) the
printing (or reproduction) and delivery of this Agreement, any
dealer agreements, the preliminary and supplemental Blue Sky
Memoranda and all other company-authorized agreements or other
documents printed (or reproduced) and delivered in connection
with the offering of the Shares, (h) the filing fees and the fees
and expenses of counsel for the Underwriters in connection with
any filings required to be made with the NASD and incurred with
respect to the review of the offering of the Shares by the NASD,
(i) the registration of the Shares under the 1934 Act and the
listing of the Shares on the NYSE, and (j) an amount equal to (A)
$20,000 plus (B) $.0025 per Share for each Share in excess of
2,000,000 sold pursuant to this Agreement, payable no later than
45 days from the date of this Agreement to the Underwriters in
partial reimbursement of their expenses (but not including


                               40



<PAGE>

reimbursement for the cost of one tombstone advertisement in a
newspaper that is one-quarter of a newspaper page or less in
size) in connection with the offering.

         Notwithstanding the foregoing, in the event that the
sale of the Firm Shares is not consummated pursuant to Section 2
hereof, the Manager will pay the costs and expenses of the Fund
set forth above in this Section 12 (a) through (i), and
reimbursements of Underwriter expenses in connection with the
offering shall be made in accordance with Section 5(k) hereof.

         13.  Information Furnished by the Underwriters.  The
names of the underwriters and numbers of Shares listed opposite
such names in the first paragraph under the caption
"Underwriting" in the Prospectus, as well as, under the same
caption, the third paragraph, the first sentence of the tenth
paragraph, the eleventh paragraph and the fourteenth paragraph
constitute the only information relating to any Underwriter
furnished to the Fund in writing by or on behalf of the
Underwriters through you as such information is referred to
herein, expressly for use in the Prospectus.

         14.  Miscellaneous.  Except as otherwise provided in
Sections 5, 10 and 11 hereof, notice given pursuant to any
provision of this Agreement shall be in writing and shall be
delivered (a) if to the Fund, Attn: Edmund P. Bergan, Jr., c/o
Alliance Capital Management L.P., 1345 Avenue of the Americas,
New York, New York 10105, or if to the Manager, Attn:  David R.
Brewer, Jr., 1345 Avenue of the Americas, New York, New York
10105, or (b) if to you, as Representatives of the Underwriters,
at the office of Salomon Smith Barney Inc. at 388 Greenwich
Street, New York, New York 10013, Attention:  Manager, Investment
Banking Division.

         This Agreement has been and is made solely for the
benefit of the several Underwriters, the Fund, the Manager, their
trustees, directors and officers and the other controlling
persons referred to in Section 8 hereof and their respective
successors and assigns to the extent provided herein and no other
person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" or the term "successors
and assigns" as used in this Agreement shall include a purchaser
from any Underwriter of any of the Shares in his status as such
purchaser.

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

         This Agreement may be signed in various counterparts
which together constitute one and the same instrument.  If signed


                               41



<PAGE>

in counterparts, this Agreement shall not become effective unless
at least one counterpart hereof shall have been executed and
delivered on behalf of each party hereto.


















































                               42



<PAGE>

         Please confirm that the foregoing correctly sets forth
the agreement among the Fund and the Manager and the several
Underwriters.


                             Very truly yours,

                             ALLIANCE [CALIFORNIA] [NEW YORK]
                             MUNICIPAL INCOME FUND, INC.


                             By: ___________________________
                                  Name:
                                  Title:


                             ALLIANCE CAPITAL MANAGEMENT L.P.

                             By: ALLIANCE CAPITAL MANAGEMENT
                                  CORPORATION, its general
                                  partner


                             By: ____________________________
                                  Name:
                                  Title:



























                               43



<PAGE>

Confirmed as of the date
first above written on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.

By:                          SALOMON SMITH BARNEY INC.
                             A.G. EDWARDS & SONS, INC.
                             PRUDENTIAL SECURITIES INCORPORATED
                             UBS WARBURG LLC
                             CROWELL, WEEDON & CO.
                             WEDBUSH MORGAN SECURITIES, INC.
                             WELLS FARGO VAN KASPER, LLC


AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS

By: SALOMON SMITH BARNEY INC.


    By: _____________________
        Title:  Director































                               44



<PAGE>

                           SCHEDULE I


Name of Underwriters                   Number of Common Shares

Salomon Smith Barney Inc.





     Total









































                               45
00250209.A01

</TEXT>
</DOCUMENT>
