<DOCUMENT>
<TYPE>EX-99.2H
<SEQUENCE>7
<FILENAME>exhibit99-2h1_535797.txt
<DESCRIPTION>EXHIBIT 99.2H(1) UNDERWRITING
<TEXT>


              Neuberger Berman Intermediate Municipal Fund Inc.
                            (a Maryland corporation)


                           [ ] Shares of Common Stock
                          (Par Value $.0001 Per Share)


                               PURCHASE AGREEMENT

                                                        September [    ], 2002

Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
          Incorporated
[other Underwriters]

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

Ladies and Gentlemen:

Neuberger Berman Intermediate  Municipal Fund Inc., a Maryland  corporation (the
"Fund"), the Fund's investment adviser,  Neuberger Berman Management Inc., a New
York corporation ("NB Management"),  and its investment  sub-adviser,  Neuberger
Berman, LLC, a Delaware limited liability company ("NB LLC") (each, an "Adviser"
and together, the "Advisers"),  each confirms its agreement with Merrill Lynch &
Co., Merrill Lynch,  Pierce,  Fenner & Smith Incorporated  ("Merrill Lynch") and
each of the other  Underwriters  named in Schedule A hereto  (collectively,  the
"Underwriters",  which term shall also include any  underwriter  substituted  as
hereinafter  provided in Section 10 hereof),  for whom Merrill  Lynch and [other
Underwriters]   are   acting  as   representatives   (in  such   capacity,   the
"Representatives"),  with  respect  to the  issue  and  sale by the Fund and the
purchase  by  the  Underwriters,  acting  severally  and  not  jointly,  of  the
respective  number of shares of common stock, par value $.0001 per share, of the
Fund  ("Common  Shares")  set forth in said  SCHEDULE A, and with respect to the
grant by the Fund to the Underwriters,  acting severally and not jointly, of the
option  described  in Section  2(b) hereof to purchase  all or any part of [   ]
additional Common Shares to cover  over-allotments,  if any. The aforesaid [   ]
Common Shares (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the [   ] Common  Shares  subject to the option  described in
Section  2(b)  hereof  (the  "Option   Securities")   are  hereinafter   called,
collectively, the "Securities."

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

      The Fund has  filed  with the  Securities  and  Exchange  Commission  (the
"Commission")  a  registration  statement  on Form  N-2 (No.  333-97283  and No.
811-21168)  covering the registration of the Securities under the Securities Act
of 1933,  as  amended  (the  "1933  Act"),  including  the  related  preliminary
prospectus or  prospectuses,  and a notification on Form N-8A of registration of
the Fund as an investment  company under the Investment  Company Act of 1940, as
amended (the "1940 Act"),  and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the  "Rules  and  Regulations").  Promptly  after
execution and delivery of this  Agreement,  the Fund will either (i) prepare and
file a prospectus in accordance  with the  provisions of Rule 430A ("Rule 430A")
of the Rules and  Regulations  and paragraph (c) or (h) of Rule 497 ("Rule 497")


<PAGE>

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

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

      SECTION 1. Representations and Warranties.

      (a) REPRESENTATIONS AND WARRANTIES BY THE FUND AND THE ADVISERS.  The Fund
and the Advisers jointly and severally represent and warrant to each Underwriter
as of the date  hereof,  as of the  Closing  Time  referred  to in Section  2(c)
hereof,  and as of each Date of Delivery  (if any)  referred to in Section  2(b)
hereof, and agree with each Underwriter, as follows:

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

            At the respective times the Registration Statement,  any Rule 462(b)
      Registration  Statement and any  post-effective  amendments thereto became
      effective  and at the  Closing  Time (and,  if any Option  Securities  are
      purchased, at the Date of Delivery),  the Registration Statement, the Rule
      462(b)  Registration  Statement,  the  notification  of Form  N-8A and any
      amendments  and  supplements  thereto  complied  and  will  comply  in all
      material  respects with the requirements of the 1933 Act, the 1940 Act and
      the  Rules  and  Regulations  and did not and will not  contain  an untrue
      statement of a material  fact or omit to state a material fact required to
      be  stated  therein  or  necessary  to make  the  statements  therein  not


                                       2
<PAGE>

      misleading.  Neither the  Prospectus  nor any  amendments  or  supplements
      thereto,  at the time the  Prospectus or any such  amendment or supplement
      was issued and at the  Closing  Time (and,  if any Option  Securities  are
      purchased,  at the Date of  Delivery),  included or will include an untrue
      statement  of a material  fact or omitted or will omit to state a material
      fact  necessary in order to make the statements  therein,  in the light of
      the circumstances under which they were made, not misleading.  If Rule 434
      is used,  the Fund will comply with the  requirements  of Rule 434 and the
      Prospectus  shall not be "materially  different",  as such term is used in
      Rule 434, from the prospectus  included in the  Registration  Statement at
      the time it became effective.  The  representations and warranties in this
      subsection  shall  not  apply  to  statements  in or  omissions  from  the
      Registration  Statement  or  Prospectus  made  in  reliance  upon  and  in
      conformity  with  information  furnished  to the  Fund in  writing  by any
      Underwriter  through Merrill Lynch  expressly for use in the  Registration
      Statement or Prospectus.

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

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

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

            (iii) FINANCIAL STATEMENTS.  The statement of assets and liabilities
      included in the Registration  Statement and the Prospectus,  together with
      the related notes,  presents fairly in accordance with generally  accepted
      accounting  principals  ("GAAP") in all material  respects  the  financial
      position  of the  Fund at the  date  indicated;  said  statement  has been
      prepared in conformity with GAAP.

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

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

            (vi) GOOD STANDING OF THE FUND. The Fund has been duly organized and
      is validly  existing as a corporation  in good standing  under the laws of
      the State of Maryland and has corporate  power and authority to own, lease
      and operate its properties and to conduct its business as described in the
      Prospectus  and to enter  into and  perform  its  obligations  under  this
      Agreement;  and the Fund is duly  qualified  as a foreign  corporation  to


                                        3
<PAGE>

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

            (vii) NO SUBSIDIARIES. The Fund has no subsidiaries.

            (viii) INVESTMENT  COMPANY STATUS.  The Fund is duly registered with
      the  Commission  under  the  1940  Act  as  a  closed-end  non-diversified
      management investment company, and no order of suspension or revocation of
      such registration has been issued or proceedings therefor initiated or, to
      the knowledge of the Fund, threatened by the Commission.

            (ix)  OFFICERS AND  DIRECTORS.  No person is serving or acting as an
      officer,  director or investment  adviser of the Fund except in accordance
      with the provisions of the 1940 Act and the Rules and  Regulations  and no
      person is serving or acting as an investment adviser of the Fund except in
      accordance with the provisions of the Investment  Advisers Act of 1940, as
      amended  (the  "Advisers  Act"),  and the  rules  and  regulations  of the
      Commission promulgated under the Advisers Act (the "Advisers Act Rules and
      Regulations").  Except as disclosed in the  Registration  Statement or the
      Prospectus  (or any  amendment or  supplement  to either of them),  to the
      knowledge  of the Fund after due  inquiry,  no  director of the Fund is an
      "interested  person"  (as  defined  in the  1940  Act)  of the  Fund or an
      "affiliated person" (as defined in the 1940 Act) of any Underwriter.

            (x) CAPITALIZATION. The authorized, issued and outstanding shares of
      common stock of the Fund are as set forth in the Prospectus as of the date
      thereof  under  the  caption  "Description  of  Shares."  All  issued  and
      outstanding  shares of common stock of the Fund have been duly  authorized
      and  validly  issued and are fully paid and  non-assessable  and have been
      offered  and  sold  or  exchanged  by the  Fund  in  compliance  with  all
      applicable  laws  (including,   without  limitation,   federal  and  state
      securities  laws);  none of the outstanding  shares of common stock of the
      Fund were issued in violation of the preemptive or other similar rights of
      any securityholder of the Fund.

            (xi) AUTHORIZATION AND DESCRIPTION OF SECURITIES.  The Securities to
      be purchased by the  Underwriters  from the Fund have been duly authorized
      for issuance and sale to the Underwriters  pursuant to this Agreement and,
      when issued and delivered by the Fund pursuant to this  Agreement  against
      payment of the consideration set forth herein,  will be validly issued and
      fully paid and  non-assessable.  The Common Shares conform in all material
      respects to all statements  relating  thereto  contained in the Prospectus
      and such description  conforms in all material  respects to the rights set
      forth in the  instruments  defining  the  same;  and the  issuance  of the
      Securities is not subject to the preemptive or other similar rights of any
      securityholder of the Fund.

            (xii)  AUTHORIZATION  OF  AGREEMENT.  This  Agreement  has been duly
      authorized, executed and delivered by the Fund.

            (xiii)  ABSENCE  OF  DEFAULTS  AND  CONFLICTS.  The  Fund  is not in
      violation of its articles of  incorporation  or by-laws,  or in default in
      the  performance or observance of any obligation,  agreement,  covenant or
      condition contained in any contract,  indenture,  mortgage, deed of trust,
      loan or credit agreement,  note, lease or other agreement or instrument to
      which  it is a party  or by which  it is  bound,  or to  which  any of the
      property or assets of the Fund is subject  (collectively,  "Agreements and
      Instruments") except for such violations or defaults that would not result
      in a Material Adverse Effect; and the execution,  delivery and performance
      of this Agreement,  the Management Agreement,  the Sub-Advisory Agreement,
      the  Administration  Agreement,  the Custodian  Agreement and the Transfer


                                        4
<PAGE>

      Agent and Service Agreement referred to in the Registration  Statement (as
      used herein, the "Management Agreement," the "Sub-Advisory  Agreement, the
      "Administration  Agreement,"  the "Custodian  Agreement" and the "Transfer
      Agency Agreement,"  respectively) and the consummation of the transactions
      contemplated  herein  and in the  Registration  Statement  (including  the
      issuance and sale of the  Securities  and the use of the proceeds from the
      sale of the  Securities as described in the  Prospectus  under the caption
      "Use of  Proceeds")  and  compliance  by the  Fund  with  its  obligations
      hereunder have been duly authorized by all necessary  corporate action and
      do not and will  not,  whether  with or  without  the  giving of notice or
      passage  of time or both,  conflict  with or  constitute  a breach  of, or
      default or  Repayment  Event (as defined  below)  under,  or result in the
      creation  or  imposition  of any  lien,  charge  or  encumbrance  upon any
      property or assets of the Fund pursuant to, the Agreements and Instruments
      (except for such  conflicts,  breaches  or  defaults or liens,  charges or
      encumbrances that would not result in a Material Adverse Effect), nor will
      such action result in any  violation of the  provisions of the articles of
      incorporation or by-laws of the Fund or any applicable law, statute, rule,
      regulation, judgment, order, writ or decree of any government,  government
      instrumentality or court,  domestic or foreign,  having  jurisdiction over
      the Fund or any of its assets,  properties or operations  (except for such
      violations that would not result in a Material  Adverse  Effect).  As used
      herein,  a "Repayment  Event" means any event or condition which gives the
      holder of any note,  debenture or other evidence of  indebtedness  (or any
      person  acting  on  such  holder's   behalf)  the  right  to  require  the
      repurchase,   redemption  or  repayment  of  all  or  a  portion  of  such
      indebtedness by the Fund.

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

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

            (xvi)  POSSESSION  OF  INTELLECTUAL   PROPERTY.  The  Fund  owns  or
      possesses,  or can acquire on reasonable terms,  adequate patents,  patent
      rights,  licenses,  inventions,   copyrights,  know-how  (including  trade
      secrets  and  other   unpatented   and/or   unpatentable   proprietary  or
      confidential  information,  systems or  procedures),  trademarks,  service
      marks,   trade  names  or  other  intellectual   property   (collectively,
      "Intellectual  Property")  necessary to carry on the business now operated
      by the Fund,  and the Fund has not received any notice or is not otherwise
      aware of any  infringement  of or conflict with asserted  rights of others
      with respect to any Intellectual Property or of any facts or circumstances
      which would render any  Intellectual  Property  invalid or  inadequate  to
      protect  the  interest  of the Fund  therein,  and which  infringement  or
      conflict (if the subject of any unfavorable  decision,  ruling or finding)
      or invalidity or inadequacy, singly or in the aggregate, would result in a
      Material Adverse Effect.



                                        5
<PAGE>

            (xvii)  ABSENCE  OF  FURTHER   REQUIREMENTS.   No  filing  with,  or
      authorization,    approval,   consent,   license,   order,   registration,
      qualification or decree of, any court or governmental  authority or agency
      is  necessary  or  required  for  the  performance  by  the  Fund  of  its
      obligations hereunder,  in connection with the offering,  issuance or sale
      of the  Securities  hereunder  or  the  consummation  of the  transactions
      contemplated by this Agreement,  except such as have been already obtained
      or as may be required  under the 1933 Act,  the 1940 Act,  the  Securities
      Exchange Act of 1934,  as amended (the "1934 Act"),  or under the rules of
      the National  Association of Securities Dealers,  Inc. ("NASD"),  or state
      securities laws.

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

            (xix)  ADVERTISEMENTS.  Any  advertising,  sales literature or other
      promotional  material  (including  "prospectus  wrappers",  "broker kits,"
      "road show slides" and "road show  scripts")  authorized  in writing by or
      prepared by the Fund or the Advisers  used in  connection  with the public
      offering  of the  Securities  (collectively,  "Sales  Material")  does not
      contain an untrue statement of a material fact or omit to state a material
      fact  required to be stated  therein or necessary  to make the  statements
      therein  in light of the  circumstances  under  which  they  were made not
      misleading.  Moreover,  all Sales Material complied and will comply in all
      material  respects with the applicable  requirements  of the 1933 Act, the
      1940 Act, the Rules and Regulations and the rules and  interpretations  of
      the NASD.

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

            (xxi) MATERIAL AGREEMENTS. This Agreement, the Management Agreement,
      the  Administration  Agreement,  the Custodian  Agreement and the Transfer
      Agency Agreement have each been duly authorized by all requisite action on
      the part of the Fund,  executed and delivered by the Fund, as of the dates
      noted therein and each complies with all applicable provisions of the 1940
      Act.  Assuming  due  authorization,  execution  and  delivery by the other
      parties  thereto  with  respect  to  the  Administration   Agreement,  the
      Custodian  Agreement  and  the  Transfer  Agency  Agreement,  each  of the
      Management  Agreement,   the  Administration   Agreement,   the  Custodian
      Agreement  and the  Transfer  Agency  Agreement  constitutes  a valid  and
      binding agreement of the Fund,  enforceable  against it in accordance with
      its  terms,  except as  affected  by  bankruptcy,  insolvency,  fraudulent
      conveyance, reorganization,  moratorium and other similar laws relating to
      or affecting  creditors'  rights generally,  general equitable  principles
      (whether  considered  in a  proceeding  in equity or at law) or an implied
      covenant of good faith and fair dealing.



                                        6
<PAGE>

            (xxii) REGISTRATION  RIGHTS.  There are no persons with registration
      rights or other similar rights to have any securities  registered pursuant
      to the  Registration  Statement or otherwise  registered by the Fund under
      the 1933 Act.

      (b) REPRESENTATIONS AND WARRANTIES BY THE ADVISERS. The Advisers represent
and warrant to each  Underwriter  as of the date hereof,  as of the Closing Time
referred to in Section  2(c)  hereof,  and as of each Date of Delivery  (if any)
referred to in Section 2(b) hereof as follows:

            (i) GOOD  STANDING  OF THE  ADVISERS.  NB  Management  has been duly
      organized  and is validly  existing and in good  standing as a corporation
      under  the  laws  of the  State  of New  York,  and NB LLC has  been  duly
      organized  and is  validly  existing  and in good  standing  as a  limited
      liability  company  under  the laws of the  State of  Delaware  with  full
      corporate or limited liability company, respectively,  power and authority
      to own,  lease and operate its  properties  and to conduct its business as
      described  in the  Prospectus  and  each is duly  qualified  as a  foreign
      corporation  or  limited  liability  company,  respectively,  to  transact
      business and is in good standing in each other  jurisdiction in which such
      qualification  is  required  except as would not,  individually  or in the
      aggregate, result in a material adverse change in the condition, financial
      or otherwise,  or in the earnings,  business affairs or business prospects
      of such Adviser, whether or not arising in the ordinary course of business
      (an "Adviser Material Adverse Effect").

            (ii)  INVESTMENT  ADVISER  STATUS.  Each  of the  Advisers  is  duly
      registered  and in good  standing  with the  Commission  as an  investment
      adviser under the Advisers Act, and is not  prohibited by the Advisers Act
      or the 1940 Act, or the rules and regulations under such acts, from acting
      under  the  Management  Agreement  for  the  Fund as  contemplated  by the
      Prospectus.

            (iii)  CAPITALIZATION.  Each  of  the  Advisers  has  the  financial
      resources  available to it necessary for the  performance  of its services
      and obligations as contemplated in the Prospectus.

            (iv) AUTHORIZATION OF AGREEMENTS; ABSENCE OF DEFAULTS AND CONFLICTS.
      This Agreement,  the Management Agreement,  the Sub-Advisory Agreement and
      the  Additional  Compensation  Agreement  have each been duly  authorized,
      executed  and  delivered  by each  Adviser  that is a party  thereto,  and
      (assuming  the due  authorization,  execution  and delivery by each of the
      parties thereto) the Management Agreement,  the Sub-Advisory Agreement and
      the Additional  Compensation Agreement each constitute a valid and binding
      obligation  of  each  respective   Adviser,   enforceable  against  it  in
      accordance with its terms,  except as affected by bankruptcy,  insolvency,
      fraudulent conveyance,  reorganization,  moratorium and other similar laws
      relating to or affecting  creditors' rights  generally,  general equitable
      principles  (whether considered in a proceeding in equity or at law) or an
      implied covenant of good faith and fair dealing; and neither the execution
      and delivery of this Agreement, the Management Agreement, the Sub-Advisory
      Agreement and the Additional Compensation Agreement nor the performance by
      either of the Advisers of its  obligations  hereunder or  thereunder  will
      conflict  with,  or result in a breach of any of the terms and  provisions
      of, or  constitute,  with or without the giving of notice or lapse of time
      or both, a default under,  (i) any agreement or instrument to which either
      Adviser  is a party or by  which it is  bound,  (ii)  the  certificate  of
      incorporation,  the  by-laws  or  other  organizational  documents  of the
      Advisers,  or (iii) to each Adviser's  knowledge,  any law, order, decree,
      rule or regulation applicable to it of any jurisdiction, court, federal or
      state regulatory body,  administrative  agency or other governmental body,
      stock  exchange or securities  association  having  jurisdiction  over the
      Advisers or their  respective  properties  or  operations  other than,  in
      clauses (i) and (iii),  any  conflict,  breach or default  that would not,
      individually  or in the aggregate,  reasonably be expected to result in an
      Adviser Material Adverse Effect; and no consent,  approval,  authorization
      or order of any court or governmental  authority or agency is required for
      the consummation by the Advisers of the transactions  contemplated by this
      Agreement, the Management Agreement or the Sub-Advisory Agreement,  except
      as have been obtained or will have been obtained prior to the Closing Time


                                        7
<PAGE>

      or may be required under the 1933 Act, the 1940 Act, the 1934 Act or state
      securities laws.

            (v) NO MATERIAL  ADVERSE  CHANGE.  Since the respective  dates as of
      which  information  is  given  in  the  Registration   Statement  and  the
      Prospectus, except as otherwise stated therein, there has not occurred any
      event which  should  reasonably  be  expected  to have a material  adverse
      effect  on the  ability  of  either  Adviser  to  perform  its  respective
      obligations under this Agreement and the respective  Management  Agreement
      and Sub-Advisory Agreement to which it is a party.

            (vi) ABSENCE OF PROCEEDINGS.  There is no action, suit,  proceeding,
      inquiry or  investigation  before or brought by any court or  governmental
      agency or body, domestic or foreign,  now pending, or, to the knowledge of
      the  Advisers,  threatened  against  or  affecting  the  Advisers  or  any
      "affiliated  person" of the  Advisers (as such term is defined in the 1940
      Act) or any partners,  directors,  officers or employees of the foregoing,
      whether or not arising in the  ordinary  course of  business,  which would
      reasonably be expected to result in any Adviser Material Adverse Effect or
      materially and adversely affect the ability of the Advisers to function as
      an  investment   adviser  with  respect  to  the  Fund  or  perform  their
      obligations under the Management Agreement or the Sub-Advisory  Agreement,
      or which is required to be disclosed in the Registration Statement and the
      Prospectus.

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

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

      SECTION 2. Sale and Delivery to Underwriters; Closing.

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

      (b) OPTION SECURITIES.  In addition,  on the basis of the  representations
and warranties  herein contained and subject to the terms and conditions  herein
set forth, the Fund hereby grants an option to the  Underwriters,  severally and
not jointly,  to purchase up to an additional [ ] Common Shares in the aggregate
at the price per share set forth in  SCHEDULE  B, less an amount per share equal
to any  dividends  or  distributions  declared  by the Fund and  payable  on the
Initial Securities but not payable on the Option  Securities.  The option hereby
granted  will expire 45 days after the date hereof and may be exercised in whole
or in part from time to time only for the  purpose of  covering  over-allotments
which  may be made in  connection  with the  offering  and  distribution  of the
Initial Securities upon notice by the  Representatives to the Fund setting forth
the number of Option  Securities as to which the several  Underwriters  are then
exercising  the option and the time and date of payment  and  delivery  for such
Option  Securities.  Any such time and date of delivery  (a "Date of  Delivery")
shall be  determined by the  Representatives,  but shall not be later than seven
full business days and no earlier than three business days after the exercise of
said option, nor in any event prior to the Closing Time, as hereinafter defined.
If the option is  exercised  as to all or any portion of the Option  Securities,
each of the Underwriters,  acting severally and not jointly,  will purchase that


                                       8
<PAGE>

proportion of the total number of Option  Securities  then being purchased which
the number of Initial  Securities  set forth in SCHEDULE A opposite  the name of
such  Underwriter  bears to the total number of Initial  Securities,  subject in
each case to such  adjustments as Merrill Lynch in its discretion  shall make to
eliminate any sales or purchases of a fractional number of Option Securities.

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

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

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

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

      SECTION 3. Covenants.

      (a) The Fund covenants with each Underwriter as follows:

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


                                       9
<PAGE>

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

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

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

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

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



                                       10
<PAGE>

            (vi)  BLUE SKY  QUALIFICATIONS.  The Fund  will  cooperate  with the
      Underwriters,  to qualify the  Securities  for offering and sale under the
      applicable  securities laws of such states and other  jurisdictions of the
      United  States as the  Representatives  may designate and to maintain such
      qualifications so long as required for the distribution of the Securities;
      provided,  however,  that  the Fund  shall  not be  obligated  to file any
      general  consent  to  service  of  process  or  to  qualify  as a  foreign
      corporation or as a dealer in securities in any  jurisdiction  in which it
      is not so qualified  or to subject  itself to taxation in respect of doing
      business in any jurisdiction in which it is not otherwise so subject.

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

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

            (ix)  LISTING.  The Fund will use its best  efforts  to  effect  the
      listing of the Securities on the American Stock Exchange ("AMEX").

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

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

            (xii)  SUBCHAPTER  M. The Fund will use its best efforts to maintain
      its qualification as a regulated  investment company under Subchapter M of
      the Code.

            (xiii) NO  MANIPULATION  OF MARKET  FOR  SECURITIES.  Except for the
      authorization  of actions  permitted  to be taken by the  Underwriters  as
      contemplated  herein  or in the  Prospectus,  the Fund  will not (a) take,
      directly or indirectly,  any action  designed to cause or to result in, or
      that would  reasonably be expected to  constitute,  the  stabilization  or
      manipulation  of the price of any security of the Fund to  facilitate  the
      sale or resale of the  Securities,  and (b) until the Closing Date, or the
      Date of Delivery,  if any, (i) sell, bid for or purchase the Securities or
      pay any person any compensation for soliciting purchases of the Securities
      or (ii) pay or agree to pay to any person any  compensation for soliciting
      another to purchase any other securities of the Fund .

            (xiv) RULE 462(B) REGISTRATION STATEMENT. If the Fund elects to rely
      upon Rule 462(b), the Fund shall file a Rule 462(b) Registration Statement
      with the  Commission  in  compliance  with  Rule  462(b)  by  10:00  P.M.,
      Washington,  D.C. time, on the date of this Agreement,  and the Fund shall


                                       11
<PAGE>

      at the time of filing either pay to the  Commission the filing fee for the
      Rule 462(b)  Registration  Statement or give irrevocable  instructions for
      the payment of such fee pursuant to Rule 111(b) under the 1933 Act.

      (b) Each Adviser  covenants with each Underwriter that for a period of 180
days from the date of the Prospectus,  each Adviser will not, without your prior
written  consent  which  consent  shall  not be  unreasonably  withheld,  act as
investment adviser to any other closed end registered investment company,  other
than Neuberger Berman Intermediate  Municipal Fund Inc. and Neuberger Berman New
York Intermediate Municipal Fund Inc., having an investment objective,  policies
and restrictions substantially similar to those of the Fund.

      SECTION 4. Payment of Expenses.

      (a) EXPENSES.  The Fund will pay all expenses  incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration  Statement  (including  financial  statements and
exhibits)  as  originally  filed  and  of  each  amendment  thereto,   (ii)  the
preparation,  printing and delivery to the  Underwriters of this Agreement,  any
Agreement  among  Underwriters  and such other  documents  as may be required in
connection  with the  offering,  purchase,  sale,  issuance  or  delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters,  including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the  Underwriters,  (iv) the fees and  disbursements of the Fund's
counsel, accountants and other advisors, (v) the qualification of the Securities
under  securities  laws in accordance  with the  provisions of Section  3(a)(vi)
hereof,  including  filing fees and the  reasonable  fees and  disbursements  of
counsel for the  Underwriters  in  connection  therewith,  (vi) the printing and
delivery  to  the  Underwriters  of  copies  of  each  preliminary   prospectus,
Prospectus  and any amendments or supplements  thereto,  (vii) the  preparation,
printing and delivery to the  Underwriters  of copies of the Blue Sky Survey and
any  supplement  thereto,  (viii) the fees and expenses of any transfer agent or
registrar  for the  Securities,  (ix)  the  filing  fees  incident  to,  and the
reasonable fees and  disbursements  of counsel to the Underwriters in connection
with,  the  review  by the NASD of the terms of the sale of the  Securities  and
marketing  materials,  (x) the fees and expenses incurred in connection with the
listing  of the  Securities  on the  AMEX,  and (xi) the  printing  of any Sales
Material.  Also,  the  Fund  shall  pay  to  Merrill  Lynch,  on  behalf  of the
Underwriters,  $.005  per share of the  securities  purchased  pursuant  to this
agreement as partial  reimbursement of expenses  incurred in connection with the
offering.  NB Management  shall pay  organizational  expenses and offering costs
(other than sales load) of the Fund that exceed $.03 per share.

      (b)  TERMINATION  OF  AGREEMENT.  If this  Agreement is  terminated by the
Representatives  in accordance  with the provisions of Section 5 or Section 9(a)
hereof,  the Fund or the Advisers shall  reimburse the  Underwriters  for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.

      SECTION 5. Conditions of Underwriters' Obligations.

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

      (a) EFFECTIVENESS OF REGISTRATION  STATEMENT.  The Registration Statement,
including any Rule 462(b)  Registration  Statement,  has become effective and at
Closing Time no stop order  suspending  the  effectiveness  of the  Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued,  and no proceedings with
respect to either shall have been initiated or threatened by the Commission, and


                                       12
<PAGE>

any request on the part of the Commission for additional  information shall have
been  complied  with  to  the   reasonable   satisfaction   of  counsel  to  the
Underwriters.  A prospectus containing the Rule 430A Information shall have been
filed  with the  Commission  in  accordance  with Rule 497 (or a  post-effective
amendment  providing  such  information  shall  have  been  filed  and  declared
effective in accordance with the  requirements of Rule 430A) or, if the Fund has
elected  to rely upon Rule 434,  a Term  Sheet  shall  have been  filed with the
Commission in accordance with Rule 497.

      (b) OPINIONS OF COUNSEL FOR FUND AND THE ADVISERS.  At Closing  Time,  the
Representatives shall have received the favorable opinions,  dated as of Closing
Time, of Kirkpatrick and Lockhart LLP,  counsel for the Fund and of Willkie Farr
& Gallagher,  counsel to the  Advisers,  in form and substance  satisfactory  to
counsel for the Underwriters,  together with signed or reproduced copies of such
letters  for each of the  other  Underwriters  as to the  matters  set  forth in
EXHIBIT A and EXHIBIT B hereto.

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

      (d) OPINION OF SPECIAL  COUNSEL FOR  UNDERWRITERS.  At Closing  Time,  the
Representatives  shall have received the favorable opinion,  dated as of Closing
Time,  of  Cleary,  Gottlieb,   Steen  &  Hamilton,   special  counsel  for  the
Underwriters,   in  form  and   substance   satisfactory   to  counsel  for  the
Underwriters.

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

      (f)  ACCOUNTANT'S  COMFORT  LETTER.  At the time of the  execution of this
Agreement,  the Representatives shall have received from [ ] a letter dated such
date, in form and substance  satisfactory to the Representatives,  together with
signed or  reproduced  copies of such letter for each of the other  Underwriters
containing  statements  and  information  of the  type  ordinarily  included  in
accountants'  "comfort  letters" to  underwriters  with respect to the financial
statements  and certain  financial  information  contained  in the  Registration
Statement and the Prospectus.



                                       13
<PAGE>

      (g) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives  shall
have received from [    ] a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(f) of this Section,  except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.

      (h) APPROVAL OF LISTING.  At Closing Time, the Securities  shall have been
approved for listing on the AMEX, subject only to official notice of issuance.

      (i)  EXECUTION OF  ADDITIONAL  COMPENSATION  AGREEMENT.  At Closing  Time,
Merrill Lynch shall have received the Additional Compensation  Agreement,  dated
the date of the Closing Time, as executed by NB Management.

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

      (k) MATERIAL AGREEMENTS.  At Closing Time, the Representatives  shall have
received a  certificate  from the  President or a Vice  President of each of the
Advisers,  dated as of Closing  Time, to the effect that EXHIBIT D is a true and
complete list of all contracts,  indentures,  mortgages, deeds of trust, loan or
credit agreements,  notes,  leases or other agreements or instruments of each of
the  Advisers  that are material to the  business or  operations  of each of the
Advisers.

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

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

            (ii)  OPINIONS  OF  COUNSEL  FOR  THE  FUND  AND THE  ADVISERS.  The
      favorable  opinions of Kirkpatrick and Lockhart LLP,  counsel for the Fund
      and of Willkie Farr & Gallagher,  counsel to the Advisers, dated such Date
      of  Delivery,  relating to the Option  Securities  to be purchased on such
      Date of Delivery and otherwise to the same effect as the opinion  required
      by Section 5(b) hereof.

            (iii) OPINION OF COUNSEL FOR THE UNDERWRITERS. The favorable opinion
      of Clifford Chance US LLP, counsel for the  Underwriters,  dated such Date
      of  Delivery,  relating to the Option  Securities  to be purchased on such
      Date of Delivery and otherwise to the same effect as the opinion  required
      by Section 5(c) hereof.

            (iv) OPINION OF SPECIAL COUNSEL FOR THE UNDERWRITERS.  The favorable
      opinion of Cleary,  Gottlieb,  Steen & Hamilton,  special  counsel for the
      Underwriters,  in form  and  substance  satisfactory  to  counsel  for the
      Underwriters,  dated  such  Date  of  Delivery,  relating  to  the  Option
      Securities  to be purchases on such Date of Delivery and  otherwise to the
      same effect as the opinion required by Section 5(d) hereof.

            (v) BRING-DOWN  COMFORT LETTER.  A letter from [     ],  in form and
      substance  satisfactory  to the  Representatives  and  dated  such Date of
      Delivery,  substantially  in the same  form and  substance  as the  letter
      furnished to the Representatives  pursuant to Section 5(g) hereof,  except


                                       14
<PAGE>

      that  the  "specified  date"  in the  letter  furnished  pursuant  to this
      paragraph  shall be a date not more than  five days  prior to such Date of
      Delivery.

            (vi) MATERIAL AGREEMENTS.  Certificate, dated such Date of Delivery,
      of the  President or a Vice  President of each of the Advisers  confirming
      that the information contained in the certificate delivered by them at the
      Closing Time  pursuant to Section 5(k) hereof  remains true and correct as
      of such Date of Delivery.

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

      (o) TERMINATION OF AGREEMENT.  If any condition  specified in this Section
shall  not have  been  fulfilled  when and as  required  to be  fulfilled,  this
Agreement,  or,  in  the  case  of  any  condition  to the  purchase  of  Option
Securities,  on a Date  of  Delivery  which  is  after  the  Closing  Time,  the
obligations  of  the  several  Underwriters  to  purchase  the  relevant  Option
Securities,  may be terminated by the  Representatives  by notice to the Fund at
any time at or prior to Closing Time or such Date of  Delivery,  as the case may
be, and such  termination  shall be without  liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7, 8 and 13
shall survive any such termination and remain in full force and effect.

      SECTION 6. Indemnification.

      (a)  INDEMNIFICATION OF UNDERWRITERS.  The Fund and the Advisers,  jointly
and severally,  agree to indemnify and hold harmless each  Underwriter  and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, and any director,  officer, employee
or affiliate thereof as follows:

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

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

            (iii) against any and all expense whatsoever, as incurred (including
      the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
      incurred in investigating,  preparing or defending against any litigation,
      or any  investigation  or proceeding by any  governmental  agency or body,


                                       15
<PAGE>

      commenced  or  threatened,  or any claim  whatsoever  based  upon any such
      untrue  statement or omission,  or any such  alleged  untrue  statement or
      omission,  to the  extent  that any such  expense is not paid under (i) or
      (ii) above;

provided,  however,  that this indemnity  agreement shall not apply to any loss,
liability,  claim,  damage or expense to the  extent  arising  out of any untrue
statement or omission or alleged  untrue  statement or omission made in reliance
upon and in  conformity  with written  information  furnished to the Fund or the
Advisers by any  Underwriter  through  Merrill  Lynch  expressly  for use in the
Registration  Statement  (or any  amendment  thereto),  including  the Rule 430A
Information  and the Rule 434  Information,  if applicable,  or any  preliminary
prospectus  or the  Prospectus  (or any amendment or  supplement  thereto);  and
provided  further  that  the Fund or the  Advisers  will  not be  liable  to any
Underwriter  with respect to any  Prospectus  to the extent that the Fund or the
Advisers  shall  sustain  the burden of proving  that any such loss,  liability,
claim,  damage or  expense  resulted  from the fact that  such  Underwriter,  in
contravention  of a  requirement  of this  Agreement  or  applicable  law,  sold
Securities  to a person to whom such  Underwriter  failed to send or give, at or
prior to the Closing  Time, a copy of the final  Prospectus,  as then amended or
supplemented  if:  (i) the  Company  has  previously  furnished  copies  thereof
(sufficiently  in advance of the Closing Time to allow for  distribution  by the
Closing  Time) to the  Underwriter  and the loss,  liability,  claim,  damage or
expense of such  Underwriter  resulted from an untrue statement or omission of a
material fact contained in or omitted from the preliminary  Prospectus which was
corrected in the final  Prospectus  as, if applicable,  amended or  supplemented
prior to the Closing  Time and such final  Prospectus  was required by law to be
delivered  at or prior to the  written  confirmation  of sale to such person and
(ii) such failure to give or send such final  Prospectus  by the Closing Time to
the party or parties asserting such loss,  liability,  claim,  damage or expense
would have constituted a defense to the claim asserted by such person.

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

      (c) INDEMNIFICATION FOR MARKETING MATERIALS.  In addition to the foregoing
indemnification, the Fund and the Advisers also, jointly and severally, agree to
indemnify  and hold  harmless  each  Underwriter  and each  person,  if any, who
controls  any  Underwriter  within the  meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss,  liability,  claim, damage
and expense described in the indemnity  contained in Section 6(a), as limited by
the proviso set forth  therein,  with respect to any Sales  Material in the form
approved  by the  Fund  and  the  Advisers  or  its  affiliates  for  use by the
Underwriters  and  securities  firms to whom the Fund or the Advisers shall have
disseminated materials in connection with the public offering of the Securities.

      (d) ACTIONS AGAINST PARTIES;  NOTIFICATION.  Each indemnified  party shall
give notice as promptly as reasonably  practicable to each indemnifying party of
any action  commenced  against it in  respect of which  indemnity  may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying  party  from  any  liability  hereunder  to  the  extent  it is not
materially  prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity


                                       16
<PAGE>

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

      (e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE.  If at any time an
indemnified  party shall have requested an  indemnifying  party to reimburse the
indemnified  party for fees and  expenses of counsel,  such  indemnifying  party
agrees that it shall be liable for any settlement of the nature  contemplated by
Section 6(a)(ii)  effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such  indemnifying  party of the
aforesaid  request,  (ii) such indemnifying  party shall have received notice of
the terms of such  settlement  at least 30 days prior to such  settlement  being
entered into and (iii) such  indemnifying  party shall not have  reimbursed such
indemnified  party in  accordance  with such  request  prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, prior to the
date of such  settlement,  (1) reimburses such  indemnified  party in accordance
with such  request  for the amount of such fees and  expenses  of counsel as the
indemnifying  party  believes in good faith to be  reasonable,  and (2) provides
written notice to the indemnified party that the indemnifying  party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.

      (f)  INDEMNIFICATION  BY THE FUND. Any  indemnification or contribution by
the Fund shall be subject to the  requirements  and limitations of Section 17(i)
of the 1940 Act.

      SECTION 7. Contribution.

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

      The  relative  benefits  received by the Fund and the  Advisers on the one
hand and the  Underwriters  on the other hand in connection with the offering of
the  Securities  pursuant  to this  Agreement  shall be deemed to be in the same


                                       17
<PAGE>

respective  proportions  as the  total net  proceeds  from the  offering  of the
Securities  pursuant to this Agreement (before deducting  expenses)  received by
the  Fund and the  total  underwriting  discount  received  by the  Underwriters
(whether from the Fund or otherwise),  in each case as set forth on the cover of
the Prospectus,  or, if Rule 434 is used, the corresponding location on the Term
Sheet,  bear to the aggregate initial public offering price of the Securities as
set forth on such cover.

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

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

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

      No person  guilty of fraudulent  misrepresentation  (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

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

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

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

      SECTION 9. Termination of Agreement.

      (a)  TERMINATION;   GENERAL.   The   Representatives  may  terminate  this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been,  since the date hereof or since the respective dates as of which
information  is given in the  Prospectus,  any  material  adverse  change in the


                                       18
<PAGE>

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

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

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

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

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

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

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

      In the event of any such default which does not result in a termination of
this  Agreement or, in the case of a Date of Delivery which is after the Closing
Time,  which  does  not  result  in a  termination  of  the  obligation  of  the
Underwriters to purchase and the Fund to sell the relevant Option Securities, as
the case may be, either the  Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery,  as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
Registration  Statement or Prospectus or in any other documents or arrangements.
As used herein,  the term  "Underwriter"  includes any person substituted for an
Underwriter under this Section 10.



                                       19
<PAGE>

      SECTION 11. Notices.

      All notices  and other  communications  hereunder  shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication.  Notices to the Underwriters shall be directed to the
Representatives,  c/o Merrill Lynch & Co., North Tower,  World Financial Center,
New York, New York 10080,  attention of Equity Capital  Markets;  notices to the
Fund shall be directed to the office of Neuberger Berman  Management Inc. at 605
Third Avenue, New York, New York 10158-0180,  attention of Peter E. Sundman, cc:
Art Delibert,  Kirkpatrick & Lockhart,  599 Lexington Avenue, New York, New York
10022;  and notices to the Advisers shall be directed to the office of Neuberger
Berman  Management  Inc. at 605 Third  Avenue,  New York,  New York  10158-0180,
attention of Peter E. Sundman,  cc: Ellen Metzger,  Neuberger Berman  Management
Inc., 605 Third Avenue, New York, New York 10158-0180.

      SECTION 12. Parties.

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

      SECTION 13. GOVERNING LAW AND TIME.

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

SECTION 14. Effect of Headings.

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




                                       20
<PAGE>

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



                                          Very truly yours,


                                          Neuberger Berman Intermediate
                                             Municipal Fund Inc.


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


                                          Neuberger Berman Management Inc.


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


                                          Neuberger Berman, LLC


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

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

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
               INCORPORATED
[Other Underwriters]


By:   MERRILL LYNCH, PIERCE, FENNER & SMITH
                     INCORPORATED


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

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





                                       21
<PAGE>

                                   SCHEDULE A







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

Merrill Lynch, Pierce, Fenner & Smith Incorporated ....
                                                                 [          ]
[Other Underwriters]...................................
                                                                 [          ]
      Total............................................
                                                                 [          ]







                                    Sch A-1

<PAGE>


                                   SCHEDULE B

              NEUBERGER BERMAN INTERMEDIATE MUNICIPAL FUND INC.
                   [               ] Shares of Common Stock
                          (Par Value $.0001 Per Share)



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

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















                                     Sch B-1

<PAGE>


                                                                       Exhibit A

                            FORM OF OPINION OF FUND'S
                       COUNSEL TO BE DELIVERED PURSUANT TO
                                  SECTION 5(b)

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

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

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

      (iv) To our knowledge, the Fund does not have any subsidiaries.

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

      (vi) The Securities to be purchased by the Underwriters from the Fund have
been duly authorized for issuance and sale to the  Underwriters  pursuant to the
Purchase  Agreement  and,  when issued and delivered by the Fund pursuant to the
Purchase  Agreement  against  payment  of the  consideration  set  forth  in the
Purchase Agreement, will be validly issued and fully paid and non-assessable.

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

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

      (ix) The Registration  Statement,  including any Rule 462(b)  Registration
Statement,  has been declared  effective under the 1933 Act; any required filing
of the  Prospectus  pursuant  to Rule 497(c) or Rule 497(h) has been made in the
manner and within the time period  required by Rule 497; and, to our  knowledge,
no stop order suspending the effectiveness of the Registration  Statement or any
Rule 462(b)  Registration  Statement has been issued under the 1933 Act, and, to
our knowledge,  no order of suspension or revocation of registration pursuant to
Section 8(e) of the 1940 Act has been issued,  and no  proceedings  for any such
purpose have been instituted or are pending or threatened by the Commission.

      (x) The  Registration  Statement,  including any Rule 462(b)  Registration
Statement,  the  Rule  430A  Information  and  the  Rule  434  Information,   as
applicable,  the Prospectus and each amendment or supplement to the Registration


                                      A-1
<PAGE>

Statement and Prospectus as of their respective  effective or issue dates (other
than the financial  statements  and  supporting  schedules  included  therein or
omitted therefrom, as to which we need express no opinion), and the notification
on Form N-8A complied as to form in all material  respects with the requirements
of the 1933 Act, the 1940 Act and the Rules and Regulations.

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

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

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

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

      (xv) Each of the Management  Agreement,  the Sub-Advisory  Agreement,  the
Administration Agreement, the Custodian Agreement, the Transfer Agency Agreement
and the Purchase Agreement,  as and to the extent they call for representations,
warranties, or performance by the Fund, comply in all material respects with all
applicable  provisions of the 1940 Act,  Advisers Act, the Rules and Regulations
and the Advisers Act Rules and Regulations.

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

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

      (xviii) To our knowledge,  there are no statutes or  regulations  that are
required to be described in the Prospectus that are not described as required.

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


                                      A-2
<PAGE>

incorporated by reference as exhibits thereto,  and the descriptions  thereof or
references thereto are correct in all material respects.

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

      (xxi) To our  knowledge  after  reasonable  inquiry,  no filing  with,  or
authorization, approval, consent, license, order, registration, qualification or
decree of, any federal or Maryland  court or  governmental  authority  or agency
(other  than  under  the 1933 Act,  the 1940 Act and the Rules and  Regulations,
which have been obtained, or as may be required under the securities or blue sky
laws of the  various  states,  in each  case,  as to  which we need  express  no
opinion)  is   necessary  or  required  in   connection   with  the  Fund's  due
authorization,  execution  and  delivery of the  Purchase  Agreement  or for the
offering, issuance or sale of the Securities.

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

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

      In addition,  we have  participated in the preparation of the Registration
Statement  and the  Prospectus  and  participated  in  discussions  with certain
officers,  directors  and  employees  of the Fund,  representatives  of [ ], the



                                      A-3
<PAGE>

independent  accountants who examined the statement of assets and liabilities of
the Fund included or incorporated by reference in the Registration Statement and
the Prospectus,  and you and your  representatives  and we have reviewed certain
Fund records and documents. While we have not independently verified and are not
passing  upon,  and  do  not  assume  any  responsibility   for,  the  accuracy,
completeness  or  fairness  of the  information  contained  in the  Registration
Statement and the  Prospectus,  on the basis of such  participation  and review,
nothing has come to our attention that leads us to believe that the Registration
Statement  (except for  financial  statements,  supporting  schedules  and other
financial  data  included  therein  or  omitted  therefrom  and for  statistical
information  derived from such  financial  statements,  supporting  schedules or
other  financial  data,  as to which we do not express any belief),  at the time
such Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary  to make  the  statements  therein  not  misleading  or  that  the
Prospectus  (except for  financial  statements,  supporting  schedules and other
financial  data  included  therein  or  omitted  therefrom  and for  statistical
information  derived from such  financial  statements,  supporting  schedules or
other financial data, as to which we do not express any belief), at the time the
Prospectus  was issued,  or at the Closing Time,  included or includes an untrue
statement  of a  material  fact or  omitted  or omits to state a  material  fact
necessary  in  order  to  make  the  statements  therein,  in the  light  of the
circumstances under which they were made, not misleading.












                                      A-4
<PAGE>

                                                                       Exhibit B

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

      (i) NB  Management is validly  existing as a corporation  in good standing
under  the  laws  of New  York,  and NB LLC is  validly  existing  as a  limited
liability company in good standing under the laws of Delaware.

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

      (iii) Each Adviser is duly  qualified as a foreign  corporation or limited
liability  company,  as the case may be,  to  transact  business  and is in good
standing  in each  state set  forth  opposite  its name on Annex A hereto  (such
counsel  being  entitled  to rely in respect of the  opinion in this clause upon
certificates  of government  officials in the relevant  jurisdictions  regarding
each  Adviser's  qualification  as a foreign  corporation  or limited  liability
company,  as the case may be, and in good  standing and in respect of matters of
fact upon certificates of the Advisers).

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

      (v) The Purchase  Agreement,  the Management  Agreement,  the Sub-Advisory
Agreement and the Additional  Compensation  Agreement have been duly authorized,
executed  and  delivered  by the  respective  Adviser,  and  (assuming  the  due
authorization,  execution and delivery by each of the other parties thereto) the
Management Agreement, the Sub-Advisory Agreement and the Additional Compensation
Agreement  each  constitutes a valid and binding  obligation  of the  respective
Adviser,  enforceable  against it in  accordance  with its  terms,  as rights to
indemnity and  contribution  hereunder and  thereunder  may be limited by public
policy or federal or state securities laws and except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization,  moratorium and other similar
laws relating to or affecting  creditors'  rights  generally,  general equitable
principles  (whether  considered  in a  proceeding  in  equity or at law) and an
implied  covenant of good faith and fair dealing  (except that counsel may state
that  it  expresses  no  opinion  as  to  the   reasonableness  or  fairness  of
compensation   payable  under  the  Management  Agreement  or  the  Sub-Advisory
Agreement).

      (vi) To our  knowledge,  there is not  pending or  threatened  any action,
suit, proceeding,  inquiry or investigation,  to which the Advisers are a party,
or to which the  property of the  Advisers is subject,  before or brought by any
court or  governmental  agency  or  body,  domestic  or  foreign,  which  would,
individually  or in the  aggregate,  reasonably  be  expected  to  result in any
Adviser  Material  Adverse Effect or materially and adversely affect the ability
of  the  Advisers  to  function  as  an  investment  adviser  or  perform  their
obligations under the Management Agreement or the Sub-Advisory Agreement.

      (vii) To our  knowledge,  no  filing  with,  or  authorization,  approval,
consent, license, order, registration, qualification or decree of, any New York,
Delaware  (insofar as Delaware  limited  liability  company law is concerned) or
United  States  federal  court or  governmental  authority or agency (other than
under the 1933 Act, the 1940 Act and the Rules and Regulations,  which have been
obtained,  or as may be required  under the  securities  or blue sky laws of the


                                      B-1
<PAGE>

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

      (viii) The execution,  delivery and performance of the Purchase Agreement,
the  Management  Agreement,   the  Sub-Advisory  Agreement,  the  Administration
Agreement and the Additional  Compensation Agreement and the consummation of the
transactions  contemplated in the Purchase Agreement,  the Management Agreement,
the  Sub-Advisory  Agreement,  the  Administration  Agreement and the Additional
Compensation  Agreement and in the Registration Statement and compliance by each
Adviser  that is a party  thereto  with  their  obligations  under the  Purchase
Agreement,   the  Management   Agreement,   the  Sub-Advisory   Agreement,   the
Administration  Agreement and the Additional  Compensation  Agreement (i) do not
and will not,  whether  with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xiii) of the Purchase  Agreement) under or result in the
creation or imposition of any lien,  charge or encumbrance  upon any property or
assets of the Advisers pursuant to any contract,  indenture,  mortgage,  deed of
trust,  loan  or  credit  agreement,  note,  lease  or any  other  agreement  or
instrument,  set  forth  in the  certificate  provided  by each of the  Advisers
pursuant to Section 5(l) of the Purchase Agreement,  (except for such conflicts,
breaches or defaults or liens,  charges or  encumbrances  that would not have an
Adviser  Material  Adverse  Effect),  (ii) nor will  such  action  result in any
violation of (A) the  provisions of the charter or by-laws of the  Advisers,  or
(B) any applicable law,  statute,  rule,  regulation,  judgment,  order, writ or
decree,  known to us, of any New York,  Delaware  (insofar as  Delaware  limited
liability  company  law is  concerned)  or  United  States  federal  government,
government  instrumentality or court,  having  jurisdiction over the Advisers or
any of its properties, assets or operations (except for such conflicts, breaches
or defaults  or liens,  charges or  encumbrances  that would not have an Adviser
Material Adverse Effect).





                                      B-2
<PAGE>

                                                                         Annex A

Neuberger Berman Management Inc.
--------------------------------

California
Georgia
Illinois
Maryland
Massachusetts
Texas
Colorado

Neuberger Berman, LLC
---------------------

California
District of Columbia
Florida
Georgia
Illinois
Massachusetts
Missouri
New York
North Dakota
Ohio
Oklahoma
Pennsylvania
Texas






                                      B-3

</TEXT>
</DOCUMENT>
