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                             [_______________], 2002




The Depository Trust Company
55 Water Street
New York, New York  10041

Attention:  General Counsel's Office

    Re:  Alliance National Municipal Income Fund, Inc. -
         National Municipal Income Preferred Shares

Ladies and Gentlemen:

         The purpose of this letter is to set forth certain
matters relating to the issuance and sale by Alliance National
Municipal Income Fund, Inc. (the "Fund") of 1,950 shares of its
preferred stock, par value $.001 per share, liquidation
preference $25,000 per share, designated National Municipal
Income Preferred Shares, Series M ("Preferred Shares Series M"),
1,950 shares of its preferred stock, par value $.001 per share,
liquidation preference $25,000 per share, designated National
Municipal Income Preferred Shares, Series T ("Preferred Shares
Series T"), 1,950 shares of its preferred stock, par value $.001
per share, liquidation preference $25,000 per share, designated
National Municipal Income Preferred Shares, Series W ("Preferred
Shares Series W"), 1,950 shares of its preferred stock, par value
$.001 per share, liquidation preference $25,000 per share,
designated National Municipal Income Preferred Shares, Series TH
("Preferred Shares Series TH") (collectively, the Preferred
Shares Series M, Preferred Shares Series T, Preferred Shares
Series W and Preferred Shares Series TH are referred to herein as
the "Preferred Shares"), pursuant to the Fund's Articles
Supplementary establishing the four series of and setting forth
the rights and preferences of the Preferred Shares (the "Articles
Supplementary").  Pursuant to the Auction Agency Agreement, dated
as of [_____________], 2002 (the "Auction Agency Agreement"),
between the Fund and The Bank of New York, The Bank of New York
will act as the auction agent, transfer agent, registrar and
dividend and redemption price disbursing agent and agent for
certain notifications for the Fund in connection with the shares
of each series of Preferred Shares (hereinafter referred to, when
acting in any such capacity, as the "Auction Agent").




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         Pursuant to an Underwriting Agreement, dated
[_________], 2002 (the "Underwriting Agreement"), among the Fund,
Alliance Capital Management L.P. (the "Adviser"), Salomon Smith
Barney Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and UBS Warburg LLC (the "Underwriters"), the Underwriters have
agreed to purchase from the Fund, and the Fund has agreed to
issue and sell to the Underwriters, the shares of each of
Preferred Shares Series M, Preferred Shares Series T, Preferred
Shares Series W and Preferred Shares Series TH.

         Pursuant to the requirements of the Securities Act of
1933, as amended, the Fund has filed with the Securities and
Exchange Commission a Registration Statement on Form N-2 and a
prospectus and statement of additional information contained
therein (the "Registration Statement") concerning the issuance of
the Preferred Shares, which includes, among other things, a
description of the role of The Depository Trust Company ("DTC")
with respect to the Preferred Shares.  Attached hereto is a copy
of the Registration Statement.

         Capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Articles
Supplementary, a copy of which is attached hereto, unless the
context otherwise requires.

         To induce DTC to accept the Preferred Shares as eligible
for deposit at DTC and to act in accordance with its rules with
respect to the Preferred Shares, the Fund and the Auction Agent
agree with DTC as follows:

         1.   The Fund shall cause the Underwriters to deliver at
the closing with respect to the Underwriting Agreement, which is
scheduled for [________], 2002, for deposit with DTC one share
certificate with respect to each series of Preferred Shares (each
a "Preferred Shares Certificate"), which certificate will
represent the total number of shares of each respective series of
Preferred Shares issued and registered in the name of DTC's
nominee, Cede & Co. ("Cede"), and each such Preferred Shares
Certificate shall remain in DTC's custody as provided herein.

         2.   The Articles Supplementary provide for the
solicitation of consents from and voting by Holders of the shares
of each series of Preferred Shares under certain circumstances.
The Fund shall establish a record date for such purposes and give
DTC notice of such record date not less than 15 calendar days in
advance of such record date to the extent possible.

         3.   If fewer than all of the shares of any series of
Preferred Shares are to be redeemed pursuant to Part I,
Section 11 of the Articles Supplementary, the number of shares of
such series of Preferred Shares to be redeemed shall be


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determined by the Board of Directors of the Fund and the Fund
shall notify the Auction Agent and DTC by 1:00 p.m., New York
City time, at least 30 days prior to the earliest date on which
such redemption shall occur except that, in the case of a
mandatory redemption, if the Fund shall have received the relief
from the Securities and Exchange Commission described in the
Registration Statement with respect to mandatory redemptions,
such notification shall occur no later than 1:00 p.m., New York
City time, on the second Business Day preceding the redemption
date established by the Board of Directors and specified in such
notice.  By the close of business on the day on which the Auction
Agent receives a Notice of Redemption from the Fund, the Auction
Agent will give telephonic notice to DTC, and the Auction Agent
shall give DTC a hand delivered copy of such notice which will be
marked "TIME CRITICAL" and shall include a copy addressed to Vice
President, Reorganization Department (which call notice shall
include the aggregate number of shares of such series of
Preferred Shares to be redeemed).  Unless certificates
representing the shares of such series of Preferred Shares are
held by Holders other than DTC or its nominee, DTC, upon receipt
of a Notice of Redemption from the Auction Agent, will determine
by lot the number of shares of such series of Preferred Shares to
be redeemed from the account of each DTC Participant
("Participant").  DTC shall use its best efforts to complete such
lottery and notify the Auction Agent of the results of such
lottery by 10:00 a.m., New York City time, on the Business Day
following the date on which DTC receives the call notice from the
Auction Agent.  DTC shall notify the Auction Agent by such time
of each Participant that has credited to its DTC account shares
of such series of Preferred Shares that are selected for
redemption by DTC and shall, using its best efforts, provide the
Auction Agent with the names of the persons or departments at
each such Participant to be contacted regarding such redemption.
The Auction Agent will in turn determine by lot the number of
shares of such series of Preferred Shares to be redeemed from the
accounts of the Existing Holders of shares of such series of
Preferred Shares whose Participants have been selected in
sufficient time to enable the Auction Agent to notify the Broker-
Dealer and such Existing Holders as provided in the Auction
Agency Agreement.

         4.   The Articles Supplementary provide that the
dividend rate for the shares of each series of Preferred Shares
may vary from time to time based upon the results of the
implementation of the Auction Procedures set forth in Part II of
the Articles Supplementary.  The Auction Agent shall telecopy
notice to Manager, Announcements, Dividends Department, The
Depository Trust Company, at (212) 709-1723, of the Applicable
Rate and the Dividend Payment Date with respect to the shares of
each series of Preferred Shares (the "Dividend Rate Notices") no
later than the day following each Auction after implementation of


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such procedures and shall verify receipt by DTC of such notice by
contacting the Supervisor, Announcements, Dividends Department,
The Depository Trust Company, at (212) 709-1270.  The Auction
Agent shall make available, by telecopy, facsimile or other
similar means, to Interactive Data Services, Inc., or any other
announcement service to which DTC may subscribe, the Applicable
Rate and the Dividend Payment Date on each Auction Date after
implementation of such procedures.

         5.   All notices and payment advices sent to DTC shall
contain the CUSIP number set forth in the respective Preferred
Shares Certificate.

         6.   Except as may be otherwise set forth herein,
notices to DTC by facsimile transmission shall be sent to (212)
709-1093 or (212) 709-1094.  Notices to DTC by any other means
shall be sent to:

              Manager, Reorganization Department
              Reorganization Window
              The Depository Trust Company
              7 Hanover Square, 23rd Floor
              New York, New York  10004

         7.   Dividend payments shall be received by Cede, as
nominee of DTC, or its registered assigns in same-day funds on
each payment date (or the equivalent in accordance with existing
arrangements between the Fund or the Auction Agent and DTC).
Such payments shall be made payable to the order of "Cede & Co."
Absent any other existing arrangements such payments shall be
addressed as follows:

              Manager, Cash Receipts, Dividends
              The Depository Trust Company
              7 Hanover Square, 24th Floor
              New York, New York  10004

         8.   Redemption payments shall be made in same-day funds
by the Auction Agent in the manner set forth in the SDFS Paying
Agent Operating Procedures (a copy of which previously has been
furnished to the Auction Agent).

         9.   DTC may direct the Auction Agent to use any other
telephone number for facsimile transmission, address or
department of DTC as the number, address or department to which
payments of dividends, redemption proceeds or notices may be
sent.

         10.  In the event of a partial redemption necessitating
a reduction in the number of outstanding shares of any series of
Preferred Shares, DTC, in its discretion, (a) may request the


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Fund to direct the Auction Agent to issue and authenticate a new
Preferred Shares Certificate with respect to the shares of the
respective series of Preferred Shares in exchange for surrender
of the old Preferred Shares Certificate with respect to such
series or (b) shall make an appropriate notation on the Preferred
Shares Certificate with respect to such series indicating the
date and amounts of such reduction in the outstanding shares of
such series of Preferred Shares, except in the case of a final
redemption of shares of such series of Preferred Shares, in which
case the Preferred Shares Certificate with respect to such series
must be surrendered to the Auction Agent prior to payment.

         11.  In the event that beneficial owners of shares of
any series of Preferred Shares shall be able to obtain certified
shares, the Auction Agent may notify DTC of the availability of
certificates representing the ownership of shares of such series
of Preferred Shares.  In such event, the Auction Agent will
issue, transfer and exchange Preferred Shares Certificates with
respect to such series as required by DTC and others in
appropriate amounts.

         12.  Whenever DTC requests the Fund and the Auction
Agent to do so, the Auction Agent and the Fund will cooperate
with DTC in taking appropriate action to make available one or
more separate certificates evidencing shares of any series of
Preferred Shares to any Participant having shares of such series
of Preferred Shares credited to its DTC account.

         13.  DTC may determine to discontinue providing its
services as securities depository with respect to shares of any
series of Preferred Shares at any time by giving 90 days written
notice to the Fund and the Auction Agent (at which time DTC will
confirm with the Auction Agent the aggregate amount of
outstanding shares of such series of Preferred Shares).  Under
such circumstances, at DTC's request the Fund or the Auction
Agent will cooperate with DTC in taking appropriate action to
make available one or more separate certificates evidencing
shares of such series of Preferred Shares to any Participant
having shares of such series of Preferred Shares credited to its
DTC account.

         14.  The Fund hereby authorizes DTC to provide to the
Auction Agent position listings of its Participants with respect
to shares of any series of Preferred Shares from time to time at
the request of the Auction Agent and upon DTC's receipt of its
customary fee, and also authorizes DTC in the event of a partial
redemption of shares of any series of Preferred Shares to provide
the Auction Agent, upon request, with the names of those
Participants whose position in such Preferred Shares has been
selected for redemption by DTC.  DTC agrees to use its best
efforts to notify the Auction Agent of those Participants whose


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position in shares of such series of Preferred Shares has been
selected for redemption by DTC and to provide the Auction Agent
with the names of the person or department at such Participants
to contact regarding such redemption.  The Fund authorizes the
Auction Agent to provide DTC with such signatures, examples of
signatures and authorizations to act as may be deemed necessary
to DTC to permit DTC to discharge its obligations to its
Participants and appropriate regulatory authorities.

         This authorization, unless revoked by the Fund, shall
continue with respect to shares of each series of Preferred
Shares while shares of each such series of Preferred Shares are
on deposit at DTC, until and unless the Auction Agent shall no
longer be acting.  In such event, the Fund shall provide DTC with
similar evidence of authorization of any successor thereto to so
act.  Such requests for securities positions shall be addressed
as follows:

              Supervisory; Proxy
              Reorganization Department
              The Depository Trust Company
              7 Hanover Square; 23rd Floor
              New York, NY  10004-2695
              Phone (212) 789-6870
              Fax (212) 709-6896

         15.  (a) The Registration Statement indicates that the
Fund may at any time designate a Special Rate Period with respect
to any series of Preferred Shares prior to the commencement of
such Special Rate Period.  In the event of such designation, the
Fund will notify DTC in writing at least seven days prior to the
Auction Date relating to such Special Rate Period of all details
concerning the Special Rate Period.  If the new dividend for a
Special Rate Period is to be payable on more than one Dividend
Payment Date, such notice shall state all such Dividend Payment
Dates and payment factors associated with such Rate Period.  The
Auction Agent shall also notify DTC of each upcoming Dividend
Payment Date on the business day after the preceding Dividend
Payment Date.

              (b)  The Fund will notify DTC, at least 10 business
days prior to the payment date for a Gross-up Payment (as defined
in the Registration Statement) in respect of shares of any series
of Preferred Shares, of (i) the record date for Holders of shares
of such series of Preferred Shares entitled to receive Gross-up
Payments, (ii) the amount of Gross-up Payments payable on a per
share basis to such Holders and (ii) the CUSIP number set forth
on the share certificate representing shares of such series of
Preferred Shares.




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         If you are in agreement with the terms of this Letter
Agreement, please execute the Letter Agreement in the space
provided below.

                             Very truly yours,

                             ALLIANCE NATIONAL MUNICIPAL INCOME
                              FUND, INC.

                             By: _____________________________
                             Name:
                             Title:


                             [______________________]
                             as Auction Agent

                             By: _____________________________
                             Name:
                             Title:


Accepted as of the date
first written above

THE DEPOSITORY TRUST COMPANY

By:  _______________________
Name:
Title:

(enclosures)

cc:   Salomon Smith Barney Inc.
      Merrill Lynch, Pierce, Fenner & Smith Incorporated
      UBS Warburg LLC

















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00250209.AX8

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