<DOCUMENT>
<TYPE>EX-99.2H
<SEQUENCE>8
<FILENAME>purchaseagmt.txt
<TEXT>

                           Evergreen Managed Income Fund
                           (a Delaware statutory trust)


                     [ ] Common Shares of Beneficial Interest
                                  (No Par Value)


                            FORM OF PURCHASE AGREEMENT

                                                              June [ ], 2003

Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
               Incorporated
Wachovia Securities, Inc.
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
UBS Warburg LLC

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

Ladies and Gentlemen:

     Evergreen Managed Income Fund, a Delaware  statutory trust (the "Fund") and
the Fund's investment adviser,  Evergreen Investment  Management Company, LLC, a
Delaware  limited  liability  company (the  "Adviser")  and First  International
Advisors,  LLC,  d/b/a  Evergreen  International  Advisors,  a Delaware  limited
liability  company  (the  "Sub-adviser,"  and  together  with the  Adviser,  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,  Wachovia  Securities,
Inc., A.G.  Edwards & Sons,  Inc.,  Prudential  Securities  Incorporated and UBS
Warburg   LLC  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 common shares of beneficial interest,  no par value, 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.  333-104569  and No.
811-21331)  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")
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,  that  was  omitted  from  such
registration  statement at the time it became effective but that is deemed to be
part  of  such  registration  statement  at the  time it  became  effective,  if
applicable,  (a) pursuant to paragraph  (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration  statement
became effective, and any prospectus that omitted, as applicable,  the Rule 430A
Information or the Rule 434 Information,  that was used after such effectiveness
and prior to the  execution  and delivery of this  Agreement,  including in each
case any statement of additional information  incorporated therein by reference,
is  herein  called a  "preliminary  prospectus."  Such  registration  statement,
including  the  exhibits  thereto  and  schedules  thereto at the time it became
effective and including the Rule 430A  Information or the Rule 434  Information,
as applicable,  is herein called the "Registration  Statement." Any registration
statement  filed pursuant to Rule 462(b) of the Rules and  Regulations is herein
referred to as the "Rule 462(b)  Registration  Statement," and after such filing
the term  "Registration  Statement"  shall include the Rule 462(b)  Registration
Statement.  The final prospectus in the form first furnished to the Underwriters
for use in  connection  with  the  offering  of the  Securities,  including  the
statement of additional information incorporated therein by reference, is herein
called the "Prospectus." If Rule 434 is relied on, the term  "Prospectus"  shall
refer to the preliminary prospectus dated [ ], 2003 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 Adviser. The Fund and the
Adviser  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 Adviser,  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 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.

     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 the financial  position of the Fund at
     the date  indicated;  said  statement has been prepared in conformity  with
     generally accepted accounting principles ("GAAP").

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

     (v) No Material  Adverse  Change.  Since the  respective  dates as of which
     information  is given in the  Registration  Statement  and the  Prospectus,
     except as otherwise stated therein,  (A) there has been no material adverse
     change  in the  condition,  financial  or  otherwise,  or in the  earnings,
     business affairs or business  prospects of the 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 trust in good standing under the laws of the State of
     Delaware  and has the 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  trust to transact  business and is in
     good standing in each other  jurisdiction  in which such  qualification  is
     required,  whether by reason of the ownership or leasing of property or the
     conduct of  business,  except  where the  failure so to qualify or to be in
     good standing would not result in a Material Adverse Effect.

     (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  diversified  management
     investment  company,  and no  order of  suspension  or  revocation  of such
     registration  has  been  issued  or  proceedings   therefor   initiated  or
     threatened by the Commission.

     (ix) Officers and  Trustees.  No person is serving or acting as an officer,
     trustee or  investment  adviser of the Fund except in  accordance  with the
     provisions of the 1940 Act and the Rules and Regulations and the Investment
     Advisers Act of 1940, as amended (the  "Advisers  Act"),  and the rules and
     regulations  of the  Commission  promulgated  under the  Advisers  Act (the
     "Advisers  Act  Rules  and  Regulations").   Except  as  disclosed  in  the
     Registration  Statement and the  Prospectus (or any amendment or supplement
     to either of them),  no trustee of the 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
     beneficial interest of the Fund is as set forth in the Prospectus as of the
     date  thereof  under the caption  "Description  of Shares."  All issued and
     outstanding  shares  of  beneficial  interest  of the Fund  have  been duly
     authorized and validly issued and are fully paid and non-assessable, except
     as provided for in the Fund's  declaration of trust,  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  beneficial  interest of the Fund was 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,  except as provided for in the Fund's declaration
     of trust.  The Common Shares  conform to all  statements  relating  thereto
     contained in the Prospectus and such description conforms to the rights set
     forth in the  instruments  defining the same;  no holder of the  Securities
     will be subject to personal liability by reason of being such a holder; and
     the issuance of the  Securities  is not subject to the  preemptive or other
     similar rights of any securityholder of the Fund.

     (xii)  Absence of Defaults and  Conflicts.  The Fund is not in violation of
     its  declaration  of trust or bylaws,  or in default in the  performance or
     observance of any obligation, agreement, covenant or condition contained in
     any contract, indenture, mortgage, deed of trust, loan or credit agreement,
     note,  lease or other  agreement or instrument to which it is a party or by
     which it may be  bound,  or to which any of the  property  or assets of the
     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 Administration Agreement, the Custodian Agreement
     and the Transfer  and Dividend  Disbursing  Agent and  Registrar  Agreement
     referred to in the Registration  Statement (as used herein, the "Management
     Agreement," the "Administration  Agreement," the "Custodian  Agreement" and
     the "Transfer  and Dividend  Disbursing  Agency and  Registrar  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  declaration  of trust or bylaws 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.  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.

     (xiii)  Absence  of  Proceedings.  There is no  action,  suit,  proceeding,
     inquiry or  investigation  before or  brought by any court or  governmental
     agency or body, domestic or foreign,  now pending,  or, to the knowledge of
     the Fund or the Adviser,  threatened,  against or affecting the Fund, which
     is required to be disclosed in the  Registration  Statement  (other than as
     disclosed  therein),  or which might  reasonably be expected to result in a
     Material  Adverse  Effect,   or  which  might  reasonably  be  expected  to
     materially and adversely affect the properties or assets of the 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.

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

     (xv) Possession of Intellectual  Property.  The 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.

     (xvi) Absence of Further  Requirements.  No filing with, or  authorization,
     approval,  consent, license, order,  registration,  qualification or decree
     of, any court or governmental  authority or agency is necessary or required
     for the performance by the 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 American Stock Exchange  ("AMEX") or
     the  National  Association  of  Securities  Dealers,  Inc ("NASD") or state
     securities laws.

     (xvii) 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.

     (xviii)  Advertisements.   Any  advertising,   sales  literature  or  other
     promotional material (including "prospectus wrappers", "broker kits," "road
     show   slides"  and  "road  show   scripts"  and   "electronic   road  show
     presentations")  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  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.

     (xix)  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.

(xx) Distribution of Offering Materials. The Fund has not distributed and, prior
to the  later  to  occur  of (A) the  Closing  Time  and (B)  completion  of the
distribution  of the  Shares,  will not  distribute  any  offering  material  in
connection with the offering and sale of the Shares other than the  Registration
Statement, a preliminary prospectus,  the Prospectus or other materials, if any,
permitted by the 1933 Act or the 1940 Act or the Rules and Regulations.

(xxi) Accounting  Controls.  The Fund maintains a system of internal  accounting
controls  sufficient to provide reasonable  assurances that (A) transactions are
executed in accordance with management's  general or specific  authorization and
with the applicable  requirements of the 1940 Act, the Rules and Regulations and
the Code; (B)  transactions  are recorded as necessary to permit  preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain  accountability  for assets and to maintain  compliance with the
books and records requirements under the 1940 Act and the Rules and Regulations;
(C)  access to assets is  permitted  only in  accordance  with the  management's
general or  specific  authorization;  and (D) the  recorded  accountability  for
assets is compared with existing assets at reasonable  intervals and appropriate
action is taken with respect to any differences.

(xxii) Absence of Undisclosed  Payments.  To the Fund's  knowledge,  neither the
Fund nor any  employee or agent of the Fund has made any payment of funds of the
Fund or received or retained any funds,  which payment,  receipt or retention of
funds is of a character required to be disclosed in the Prospectus.

(xxiii)  Material  Agreements.  This Agreement,  the Management  Agreement,  the
Sub-Advisory Agreement,  the Administration  Agreement,  the Custodian Agreement
and the Transfer and Dividend  Disbursing  Agency and Registrar  Agreement  have
each been duly  authorized by all  requisite  action on the part of the Fund and
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  Management  Agreement,  the  Administration  Agreement,  the  Custodian
Agreement  and  the  Transfer  and  Dividend  Disbursing  Agency  and  Registrar
Agreement,  each of the Management Agreement, the Administration  Agreement, the
Custodian  Agreement  and  the  Transfer  and  Dividend  Disbursing  Agency  and
Registrar  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).

(xxiv)  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.

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

(b)  Representations  and  Warranties  by the  Advisers.  Each  of the  Advisers
represents  and warrants 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. Each Adviser 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 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 company
     to transact business and is in good standing in each other  jurisdiction in
     which such qualification is required.

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

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

     (v)  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 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 and general equitable  principles (whether considered in a
     proceeding in equity or at law);  and neither the execution and delivery of
     this Agreement, the Management Agreement, the Sub-Advisory Agreement or 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, any agreement or instrument to which either Adviser is a party or by
     which  it is  bound,  the  agreement  and  articles  of  organization,  the
     operating agreement,  the bylaws or other organizational  documents of each
     Adviser, or to each Adviser's knowledge, by any law, order, decree, rule or
     regulation  applicable to it of any jurisdiction,  court,  federal or state
     regulatory body,  administrative  agency or other  governmental body, stock
     exchange or securities association having jurisdiction over the Advisers or
     its properties or operations;  and no consent,  approval,  authorization or
     order of any court or governmental  authority or agency is required for the
     consummation  by the  Advisers  of the  transactions  contemplated  by this
     Agreement,  the Management  Agreement,  the Sub-Advisory  Agreement and the
     Additional Compensation  Agreement,  except as have been obtained or may be
     required under the 1933 Act, the 1940 Act, the 1934 Act or state securities
     laws.

     (vi) No Material  Adverse  Change.  Since the respective  dates as of which
     information  is given in the  Registration  Statement  and the  Prospectus,
     except as otherwise stated therein,  there 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 or Sub-Advisory Agreement
     to which it is a party.

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

     (viii) Absence of Violation or Default. Each Adviser is not in violation of
     its agreement and articles of organization,  operating agreement, bylaws or
     other organizational documents or in default under any agreement, indenture
     or instrument.

(c) Officer's Certificates. Any certificate signed by any officer of the Fund or
an Adviser delivered to the  Representatives  or to counsel for the Underwriters
shall be  deemed  a  representation  and  warranty  by the Fund or the  relevant
Adviser,  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 after the exercise of said option,  nor in any event prior to
the Closing Time, as hereinafter  defined.  If the option is exercised as to all
or any  portion  of the  Option  Securities,  each of the  Underwriters,  acting
severally and not jointly,  will purchase that proportion of the total number of
Option  Securities then being  purchased which the number of Initial  Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number  of  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, 200 Park Avenue,  New York,  New York 10166 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  and the  Adviser,  jointly  and  severally,  covenant  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 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  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.

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

     (vii) Rule 158. The 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 reasonable  best efforts to effect the
     listing  of the  Securities  on the AMEX,  subject  to notice of  issuance,
     concurrently with the effectiveness of the Registration Statement.

     (x) Restriction on Sale of Securities. During a period of 180 days from the
     date of the  Prospectus,  the 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  comply  with  the  requirements  of
     Subchapter M of the Code to qualify as a regulated investment company under
     the Code.

     (xiii) No  Manipulation  of Market  for  Securities.  The Fund will not (a)
     take, directly or indirectly, any action designed to cause or to result in,
     or that might  reasonably be expected to constitute,  the  stabilization or
     manipulation  of the price of any  security of the 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 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) The Adviser  covenants with each  Underwriter  that for a period of 180 days
from the date of the  Prospectus,  the  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 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 advisers, (v) the qualification of the Securities
under  securities  laws in accordance  with the  provisions of Section  3(a)(vi)
hereof,  including  filing fees and the  reasonable  fees and  disbursements  of
counsel for the Underwriters in connection  therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and  delivery  to the  Underwriters  of copies of each  preliminary  prospectus,
Prospectus  and any amendments or supplements  thereto,  (vii) the  preparation,
printing and delivery to the  Underwriters  of copies of the Blue Sky Survey and
any  supplement  thereto,  (viii) the fees and expenses of any transfer agent or
registrar  for the  Securities,  (ix)  the  filing  fees  incident  to,  and the
reasonable fees and  disbursements  of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (x) the
fees and expenses  incurred in connection  with the listing of the Securities on
the AMEX and (xi) the printing of any sales  material.  Also, the Fund shall pay
to  Merrill  Lynch,  on  behalf  of the  Underwriters,  $.0067  per share of the
securities  purchased  pursuant to this  agreement as partial  reimbursement  of
expenses incurred in connection with the offering. The Adviser has agreed to pay
organizational  expenses and offering  costs (other than sales load) of the Fund
that exceed $.04 per Common Share.

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

SECTION 5.        Conditions of Underwriters' Obligations.

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

(a)  Effectiveness  of  Registration  Statement.   The  Registration  Statement,
including any Rule 462(b)  Registration  Statement,  has become effective and at
Closing Time no stop order  suspending  the  effectiveness  of the  Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued,  and no proceedings with
respect to either shall have been initiated or threatened by the Commission, and
any request on the part of the Commission for additional  information shall have
been  complied  with  to  the   reasonable   satisfaction   of  counsel  to  the
Underwriters.  A prospectus containing the Rule 430A Information shall have been
filed  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 on upon Rule 434,  a Term  Sheet  shall have been filed with the
Commission in accordance with Rule 497.

(b)  Opinion  of  Counsel  for Fund  and the  Advisers.  At  Closing  Time,  the
Representatives shall have received the favorable opinions,  dated as of Closing
Time, from Sullivan & Worcester LLP, counsel for the Fund and Michael H. Koonce,
Esq.,  counsel for the Advisers,  in form and substance  satisfactory to counsel
for the Underwriters,  together with signed or reproduced copies of such letters
for each of the other  Underwriters  substantially  to the  effect  set forth in
Exhibit A hereto and to such further effect as counsel to the  Underwriters  may
reasonably request.

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

(d) Officers'  Certificates.  At Closing Time,  there shall not have been, since
the date hereof or since the respective  dates as of which  information is given
in the Prospectus,  any material  adverse change in the condition,  financial or
otherwise,  or in the earnings,  business  affairs or business  prospects of the
Fund,  whether  or not  arising  in the  ordinary  course of  business,  and the
Representatives  shall have  received  (A) a  certificate  of a duly  authorized
officer of the Fund and of the chief  financial or chief  accounting  officer of
the Fund and of the  President or a Vice  President or Managing  Director of the
Adviser, 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
Adviser,  respectively,  has complied  with all  agreements  and  satisfied  all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and  (iv)  no  stop  order  suspending  the  effectiveness  of the  Registration
Statement,  or order of suspension or  revocation  of  registration  pursuant to
Section  8(e) of the 1940 Act, has been issued and no  proceedings  for any such
purpose  have  been  instituted  or  are  pending  or  are  contemplated  by the
Commission  and  (B) a  certificate  of the  President  or a Vice  President  or
Managing  Director of the  Sub-Adviser,  dated as of Closing Time, to the effect
that  (i)  there  has  been  no  such  material  adverse  change  and  (ii)  the
representations  and warranties in Section 1(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 Sub-Adviser,  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) the  description of the Sub-Adviser in the
Registration  Statement and the  Prospectus  (and any amendment or supplement to
either of them) is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.

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

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

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

(h) 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 the Adviser.

(i) 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.

(j)  Conditions  to  Purchase  of  Option  Securities.  In the  event  that  the
Underwriters  exercise their option  provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities,  the representations and warranties
of the 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 a duly
authorized  officer of the Fund and of the chief  financial or chief  accounting
officer  of the  Fund  and of the  President  or a Vice  President  or  Managing
Director of each of the Advisers  confirming that the  information  contained in
the  certificate  delivered  by each of them at the  Closing  Time  pursuant  to
Section 5(d) hereof remains true and correct as of such Date of Delivery.

(ii) Opinions of Counsel for the Fund and the Advisers.  The favorable  opinions
of Sullivan & Worcester LLP, counsel for the Fund, and Michael H. Koonce,  Esq.,
counsel for the Advisers, in form and substance  satisfactory to counsel for the
Underwriters,  dated such Date of Delivery, relating to the Option Securities to
be purchased  on such Date of Delivery  and  otherwise to the same effect as the
opinion required by Section 5(b) hereof.

(iii) Opinion of Counsel for the Underwriters. The favorable opinion of Clifford
Chance 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) Bring-down  Comfort  Letter.  A letter from KPMG LLP, in form and substance
satisfactory   to  the   Representatives   and  dated  such  Date  of  Delivery,
substantially  in the same form and  substance  as the letter  furnished  to the
Representatives  pursuant to Section  5(f)  hereof,  except that the  "specified
date" in the letter  furnished  pursuant to this  paragraph  shall be a date not
more than five days prior to such Date of Delivery.

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

(l) Termination of Agreement.  If any condition  specified in this Section shall
not have been  fulfilled when and as required to be fulfilled,  this  Agreement,
or, in the case of any condition to the purchase of Option Securities, on a Date
of Delivery  which is after the Closing  Time,  the  obligations  of the several
Underwriters  to purchase the relevant Option  Securities,  may be terminated by
the  Representatives  by notice  to the 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 14 shall survive any such  termination
and remain in full force and effect.

SECTION 6.        Indemnification.

(a)  Indemnification  of  Underwriters.  The Fund and the  Adviser,  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 written consent of the
     Fund; and

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

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

(b)  Indemnification of Fund, Adviser,  Trustees and Officers.  Each Underwriter
severally agrees to indemnify and hold harmless the Fund and the Adviser,  their
respective  trustees,  each of the Fund's  officers who signed the  Registration
Statement,  and each person, if any, who controls the Fund or the Adviser within
the  meaning of Section 15 of the 1933 Act 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 Adviser 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 Adviser also, jointly and severally, agree to
indemnify  and hold  harmless  each  Underwriter  and each  person,  if any, who
controls  any  Underwriter  within the  meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss,  liability,  claim, damage
and expense described in the indemnity  contained in Section 6(a), as limited by
the proviso set forth therein, with respect to any sales material.

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

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

SECTION 7.        Contribution.

If the  indemnification  provided  for in  Section  6 hereof  is for any  reason
unavailable to or insufficient to hold harmless an indemnified  party in respect
of any losses,  liabilities,  claims,  damages or expenses  referred to therein,
then each  indemnifying  party shall  contribute to the aggregate amount of such
losses,  liabilities,  claims, damages and expenses incurred by such indemnified
party,  as incurred,  (i) in such  proportion as is  appropriate  to reflect the
relative  benefits  received by the Fund and the Adviser 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  Adviser 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 Adviser on the one hand
and the  Underwriters  on the other hand in connection  with the offering of the
Securities  pursuant  to  this  Agreement  shall  be  deemed  to be in the  same
respective  proportions  as the  total net  proceeds  from the  offering  of the
Securities  pursuant to this Agreement (before deducting  expenses)  received by
the  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  Adviser  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  Adviser 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 Adviser and the Underwriters  agree that it would not be just
and equitable if contribution  pursuant to this Section 7 were determined by pro
rata allocation  (even if the  Underwriters  were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable  considerations  referred  to above in this  Section 7. The  aggregate
amount of losses,  liabilities,  claims,  damages  and  expenses  incurred by an
indemnified  party and  referred  to above in this  Section 7 shall be deemed to
include any legal or other  expenses  reasonably  incurred  by such  indemnified
party in investigating,  preparing or defending  against any litigation,  or any
investigation  or proceeding by any  governmental  agency or body,  commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

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

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

     For  purposes  of this  Section 7, each  person,  if any,  who  controls an
Underwriter  within  the  meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Fund and each  director of the Adviser,  respectively,  each
officer of the Fund who signed the Registration  Statement,  and each person, if
any, who  controls the Fund or the Adviser,  within the meaning of Section 15 of
the  1933  Act or  Section  20 of the 1934 Act  shall  have the same  rights  to
contribution  as the  Fund  and the  Adviser,  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,  the  Adviser or the  Sub-Adviser
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,  the  Adviser  or  the
Sub-Adviser, 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 time of  execution of this  Agreement  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,  the  Adviser or the  Sub-Adviser,
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 American Stock Exchange 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
14 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.

SECTION 11.       Tax Disclosure.

     Notwithstanding   any  other   provision  of  this   Agreement,   from  the
commencement  of  discussions  with  respect  to the  transactions  contemplated
hereby, the Fund (and each employee,  representative or other agent of the Fund)
may disclose to any and all persons,  without  limitation  of any kind,  the tax
treatment and tax structure (as such terms are used in Sections  6011,  6111 and
6112 of the U.S. Code and the Treasury  Regulations  promulgated  thereunder) of
the  transactions  contemplated  by this Agreement and all materials of any kind
(including  opinions or other tax analyses)  that are provided  relating to such
tax treatment and tax structure.

SECTION 12.       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, Merrill Lynch & Co., North Tower, 4 World Financial Center, New
York, New York 10080,  attention of Equity Capital  Markets;  and notices to the
Fund or the  Advisers  shall be  directed,  as  appropriate,  to the  office  of
Evergreen  Investment  Management  Company,  LLC,  200 Berkley  Street,  MA9000,
Boston, Massachusetts 02116, attention of Michael H. Koonce.

SECTION 13.       Parties.

     This  Agreement  shall both inure to the benefit of and be binding upon the
Underwriters,  the Fund,  the  Adviser,  the  Sub-Adviser  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 Adviser and their respective successors and
the controlling  persons and officers and trustees 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
Adviser, the Sub-Adviser and their respective partners and successors,  and said
controlling  persons and  officers,  trustees and  directors and their heirs and
legal  representatives,  and  for  the  benefit  of no  other  person,  firm  or
corporation.  No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.

SECTION 14.       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 15.       Effect of Headings.

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


<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 Adviser in accordance with its terms.



                              Very truly yours,


                              EVERGREEN MANAGED INCOME FUND


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


                              EVERGREEN INVESTMENT MANAGEMENT COMPANY, LLC


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


                              FIRST INTERNATIONAL ADVISORS, LLC,
                              d/b/a EVERGREEN INTERNATIONAL ADVISORS


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



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

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
                     INCORPORATED
WACHOVIA SECURITIES, INC.
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
UBS Warburg LLC

By:  Merrill Lynch, Pierce, Fenner & Smith Incorporated



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

For itself and as
Representative of the
other Underwriters named
in Schedule A hereto.





<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                       <C>

                           SCHEDULE A

                                                                                               Number of
                  Name of Underwriter                                                      Initial Securities
                  -------------------
Merrill Lynch, Pierce, Fenner & Smith
-------------------------------------------------------------------------------
             Incorporated
             .............................................................
Wachovia Securities, Inc.
..........................................................................
A.G. Edwards & Sons, Inc.
..........................................................................
Prudential Securities Incorporated
.........................................................................
UBS Warburg LLC
.........................................................................

             Total.......................................................

</TABLE>


<PAGE>



                                           SCHEDULE B

                                  Evergreen Managed Income Fund
                            [ ] Common Shares of Beneficial Interest
                                         (No Par Value)



1. The initial public offering price per share for the Securities, determined as
provided in said Section 2, shall be $20.00.

2. The  purchase  price per share for the  Securities  to be paid by the several
Underwriters  shall be  $19.10,  being an  amount  equal to the  initial  public
offering  price set forth above less $.90 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.





<PAGE>


                                                                    Exhibit A

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



(A)      With respect to the Fund:

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

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

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

     (v) The authorized, issued and outstanding shares of beneficial interest 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
     beneficial  interest  of the Fund  have been duly  authorized  and  validly
     issued and are fully paid and non-assessable, except as provided for in the
     Fund's declaration of trust, 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
     as to legal matters to all  statements  relating  thereto  contained in the
     Prospectus  and such  description  conforms  to the rights set forth in the
     instruments  defining  the  same;  and none of the  outstanding  shares  of
     beneficial  interest of the 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,  except as provided for in the Fund's declaration of trust,
     and no holder of the Securities is or will be subject to personal liability
     by reason of being such a holder.

     (vii) The issuance of the  Securities is not subject to preemptive or other
     similar rights of any securityholder of the 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 and the 1940 Act;
     any  required  filing of the  Prospectus  pursuant  to Rule  497(c) or Rule
     497(h) has been made in the manner and within the time  period  required by
     Rule 497; and, to the best of our knowledge,  no stop order  suspending the
     effectiveness of the Registration Statement or any Rule 462(b) Registration
     Statement  has been  issued  under  the 1933 Act,  and,  to the best of our
     knowledge, no order of suspension or revocation of registration pursuant to
     Section 8(e) of the 1940 Act has been issued,  and no  proceedings  for any
     such  purpose  have been  instituted  or are pending or  threatened  by the
     Commission.

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

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

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

     (xiii) To the best of our knowledge, there is not pending or threatened any
     action, suit, proceeding, inquiry or investigation,  to which the 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,  domestic or foreign,  which
     might  reasonably be expected to result in a Material  Adverse  Effect,  or
     which might  reasonably be expected to materially and adversely  affect the
     properties or assets of the 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"   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  declaration of trust and bylaws 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 Administration  Agreement,  the
     Custodian  Agreement,  the  Transfer  and  Dividend  Disbursing  Agency and
     Registrar  Agreement  and the  Purchase  Agreement  comply in all  material
     respects with all applicable  provisions of the 1940 Act, Advisers Act, the
     Rules and Regulations and the Advisers Act Rules and Regulations.

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

     (xvii) To the best of our  knowledge,  no person is serving as an  officer,
     trustee or  investment  adviser of the 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 and  Prospectus  (or any amendment or supplement to
     either of them), to the best of our knowledge, no trustee 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)  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 the best of our knowledge, there are no franchises, contracts,
     indentures,  mortgages, loan agreements, notes, leases or other instruments
     required to be described or referred to in the Registration Statement or to
     be filed as  exhibits  thereto  other than those  described  or referred to
     therein or filed or incorporated by reference as exhibits thereto,  and the
     descriptions  thereof or  references  thereto are  correct in all  material
     respects.

     (xx) To the  best of our  knowledge,  the Fund is not in  violation  of its
     declaration of trust or bylaws 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) No filing with, or authorization,  approval, consent, license, order,
     registration,  qualification  or  decree  of,  any  court  or  governmental
     authority or agency  (other than under the 1933 Act, the 1934 Act, the 1940
     Act and the Rules and Regulations,  which have been obtained,  or as may be
     required under the securities or blue sky laws of the various states, as to
     which we need express no opinion) is  necessary  or required in  connection
     with  the  due  authorization,  execution  and  delivery  of  the  Purchase
     Agreement or for the  offering,  issuance or sale of the  Securities or the
     consummation of the transactions contemplated by this Agreement.

     (xxii) The execution,  delivery and  performance of the Purchase  Agreement
     and the  consummation  of the  transactions  contemplated  in the  Purchase
     Agreement and in the  Registration  Statement  (including  the issuance and
     sale of the  Securities  and the use of the  proceeds  from the sale of the
     Securities  as  described  in the  Prospectus  under  the  caption  "Use of
     Proceeds")  and  compliance  by the 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)(xii) of the
     Purchase  Agreement)  under or result in the creation or  imposition of any
     lien,  charge  or  encumbrance  upon any  property  or  assets  of the 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 or any of them may be
     bound,  or to which any of the  property  or assets of the Fund is subject,
     nor will such  action  result in any  violation  of the  provisions  of the
     charter  or bylaws of the  Fund,  or any  applicable  law,  statute,  rule,
     regulation,   judgment,  order,  writ  or  decree,  known  to  us,  of  any
     government,  government  instrumentality  or court,  domestic  or  foreign,
     having  jurisdiction  over the  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 and
     Dividend  Disbursing  Agency and  Registrar  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 and Dividend  Disbursing Agency and Registrar  Agreement,  each of
     the  Management  Agreement,  the  Administration  Agreement,  the Custodian
     Agreement  and the Transfer and Dividend  Disbursing  Agency and  Registrar
     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) and an implied covenant of good faith and fair dealing.



<PAGE>



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

(B)      With respect to the Adviser:

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

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

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

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

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

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

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

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

     In addition,  we have  participated in the preparation of the  Registration
     Statement and the Prospectus and  participated in discussions  with certain
     officers,  trustees and employees of the Fund, representatives of KPMG LLP,
     the  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,
     except to the  extent  necessary  to enable  us to give the  opinions  with
     respect to the Fund in paragraphs (A)(v),  (xiv) and (xix), on the basis of
     such participation and review, nothing has come to our attention that would
     lead us to believe that the  Registration  Statement  (except for financial
     statements,  supporting schedules and other financial data included therein
     or omitted  therefrom,  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,  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.



<PAGE>



                               FORM OF OPINION OF SUB-ADVISER'S
                              COUNSEL TO BE DELIVERED PURSUANT TO
                                         SECTION 5(b)

(C)      With respect to the Sub-Adviser:

     (i) The Sub-Adviser has been duly organized and is validly  existing as
     a limited liability company in good standing under the laws of the State of
     Delaware.

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

     (iv) The  Sub-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 Sub-Advisory  Agreement for the
     Fund as contemplated by the Prospectus.

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

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

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

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

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

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

     In addition,  we have  participated in the preparation of the  Registration
Statement  and the  Prospectus  and  participated  in  discussions  with certain
officers,  trustees and employees of the Fund,  representatives of KPMG LLP, the
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,  except to the extent  necessary to enable us to
give the  opinions  with  respect to the Fund in  paragraphs  (A)(v),  (xiv) and
(xix), on the basis of such  participation  and review,  nothing has come to our
attention that would lead us to believe that the Registration  Statement (except
for financial statements, supporting schedules and other financial data included
therein or omitted therefrom,  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,  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.




</TEXT>
</DOCUMENT>
