EXHIBIT H

                       Taxable Auctioned Preferred Shares

                         NUVEEN REAL ESTATE INCOME FUND

                               __ Shares, Series M
                               __ Shares, Series T
                               __ Shares, Series W
                               __ Shares, Series F

                    Liquidation Preference $25,000 Per Share

                             UNDERWRITING AGREEMENT
                             ----------------------

                                                                January __, 2002


SALOMON SMITH BARNEY INC.
[_______________________]
c/o Salomon Smith Barney Inc.
    388 Greenwich Street
    New York, New York 10013


Ladies and Gentlemen:

                  Nuveen Real Estate Income Fund, a Massachusetts business trust
(the "Fund"), proposes, upon the terms and conditions set forth herein, to issue
and sell an aggregate of [ ] shares of its Series M Taxable Auctioned Preferred
Shares ("Series M Shares"), [ ] shares of its Series T Taxable Auctioned
Preferred Shares ("Series T Shares"), [ ] shares of its Series W Taxable
Auctioned Preferred Shares ("Series W Shares") and [ ] shares of its Series F
Taxable Auctioned Preferred Shares ("Series F Shares"), par value $.01 per
share, with a liquidation preference of $25,000 per share (the Series M Shares,
the Series T Shares, the Series W Shares and the Series F Shares to be sold
hereby are referred to herein, collectively, as the "Shares"). The Shares will
be authorized by, and subject to the terms and conditions of, the Statement
Establishing and Fixing the Rights and Preferences of Taxable Auctioned
Preferred Shares (the "Statement") in the form filed as an exhibit to the
registration statement referred to in Section 1 of this agreement. Nuveen
Institutional Advisory Corp., a Delaware corporation (the "Investment Adviser"),
is the Fund's investment adviser. Security Capital Research & Management
Incorporated, a Delaware corporation (the "Subadviser", and together with the
Investment Adviser, the "Advisers"), is the Fund's subadviser. This is to
confirm the agreement concerning the purchase of the Shares from the Fund by
Salomon Smith Barney Inc. (the "Representative"), [ ] (each an "Underwriter",
and together with the Representative, the "Underwriters"). The Representative
has been duly authorized by each of the Underwriters to execute this
Underwriting Agreement (the "Agreement") on behalf of such Underwriters and has
been duly authorized to act hereunder on behalf of each of the Underwriters.



                                                                               2

                 The Fund has entered into an investment management agreement
with the Investment Adviser dated October 3, 2001, an exchange traded fund
custody agreement with JPMorgan Chase Bank dated October 29, 2001 and a
shareholder transfer agency agreement with JPMorgan Chase Bank dated October 29,
2001, and an auction agency agreement, including the Basic Terms in respect
thereof, with [Bankers Trust Company] dated __________. Such agreements are
hereinafter referred to as the "Investment Management Agreement", the "Custodian
Agreement", the "Transfer Agency Agreement" and the "Auction Agency Agreement",
respectively. The Investment Adviser entered into an investment sub-advisory
agreement with the Subadviser dated October 3, 2001 and such agreement is herein
referred to as the "Sub-Advisory Agreement". Collectively, the Investment
Management Agreement, the Sub-Advisory Agreement, the Custodian Agreement, the
Transfer Agency Agreement and the Auction Agency Agreement are hereinafter
referred to as the "Fund Agreements". This Underwriting Agreement is herein
referred to as the "Agreement".

                  1. Registration Statement and Prospectus. The Fund has
prepared, in conformity with the provisions of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940, as amended (the
"1940 Act"), and the rules and regulations of the Securities and Exchange
Commission (the "Commission"), promulgated under the 1933 Act (the "1933 Act
Rules and Regulations") and the 1940 Act (the "1940 Act Rules and Regulations"
and, together with the 1933 Act Rules and Regulations, the "Rules and
Regulations"), a registration statement on Form N-2 under the 1933 Act and the
1940 Act (the "registration statement"), including a prospectus relating to the
Shares, and has filed the registration statement and prospectus in accordance
with the 1933 Act and the 1940 Act. The Fund also has filed a notification of
registration of the Fund as an investment company under the 1940 Act on Form
N-8A (the "1940 Act Notification"). The term "Registration Statement" as used in
this Agreement means the registration statement (including all financial
schedules and exhibits), as amended at the time it becomes effective under the
1933 Act, or, if the registration statement became effective under the 1933 Act
prior to the execution of this Agreement, as amended or supplemented at the time
it became effective, prior to the execution of this Agreement. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed under the 1933 Act and
must be declared effective before the offering of the Shares may commence, the
term "Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If the Fund has filed an
abbreviated registration statement to register an additional amount of Shares
pursuant to Rule 462(b) under the 1933 Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall include such Rule 462 Registration Statement. The term "Prospectus" as
used in this Agreement means the prospectus and statement of additional
information in the forms included in the Registration Statement or, if the
prospectus or statement of additional information included in the Registration
Statement omit information in reliance on Rule 430A under the 1933 Act, all
references to the Prospectus shall be deemed to include, without limitation, the
prospectus, the statement of additional information and the term sheet, taken
together, provided to the Underwriters by the Fund in reliance on Rule 434 under
the 1933 Act and filed with the Commission pursuant to Rule 497(h) under the
1933 Act. The term "Prepricing Prospectus" as used in this Agreement means the
prospectus and statement of additional information subject to completion in the
forms included in the registration statement at the time of filing of
pre-effective amendment No. 1 to the registration statement under the 1933 Act
with the Commission on ______ __, 2001, and as such prospectus



                                                                               3

and statement of additional information shall have been amended from time to
time prior to the date of the Prospectus, together with any other prospectus and
statement of additional information relating to the Fund other than the
Prospectus approved in writing by or directly or indirectly prepared by the Fund
or the Adviser; it being understood that the definition of Prepricing Prospectus
above shall not include any Prepricing Prospectus prepared by the Underwriters
unless approved in writing by the Fund or Adviser. The terms "Registration
Statement", "Prospectus" and "Prepricing Prospectus" shall also include any
financial statements incorporated by reference therein.

                  The Fund has furnished the Underwriters with copies of such
Registration Statement, each amendment to such Registration Statement filed with
the Commission and each Prepricing Prospectus.

                  2. Agreements to Sell and Purchase. The Fund hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
the Underwriters, and, upon the basis of the representations, warranties and
agreements of the Fund and the Advisers herein contained and subject to all the
terms and conditions set forth herein, each Underwriter agrees to purchase from
the Fund, at a purchase price of [ ] per Share, the number of Series M Shares,
the number of Series T Shares, the number of Series W Shares and the number of
Series F Shares set forth opposite the name of such Underwriter in Schedule I
hereto.

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

                  4. Delivery of the Shares and Payment Therefor. Delivery to
the Underwriters of and payment for the Shares shall be made at the office of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, at 9:30
A.M., New York City time, on January 11, 2002 (the "Closing Date"). The place of
closing for the Shares and the Closing Date may be varied by agreement between
the Representative and the Fund.

                  A certificate for each of the Series M Shares, the Series T
Shares, the Series W Shares and the Series F Shares shall be delivered to and
registered at The Depository Trust Company, against payment of the purchase
price therefor in immediately available funds.

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

                  (a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective under the 1933 Act before the offering of the
Shares may commence, the Fund will endeavor to cause the Registration Statement
or such post-effective amendment to become effective under the 1933 Act as soon
as possible and will advise the Underwriters promptly and, if requested by the
Underwriters, will confirm such advice in writing when the Registration
Statement or such post-effective amendment has become effective.



                                                                               4

                  (b) The Fund will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing: (i) of any
request made by the Commission for amendment of or a supplement to the
Registration Statement, any Prepricing Prospectus or the Prospectus (or any
amendment or supplement to any of the foregoing) or for additional information,
(ii) of the issuance by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD"), any state securities commission, any national
securities exchange, any arbitrator, any court or any other governmental,
regulatory, self-regulatory or administrative agency or any official of any
order suspending the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any Prepricing Prospectus, or any sales
material (as hereinafter defined), of any notice pursuant to Section 8(e) of the
1940 Act, of the suspension of qualification of the Shares for offering or sale
in any jurisdiction, or the initiation of any proceeding for any such purposes,
(iii) of receipt by the Fund, the Advisers, any affiliate of the Fund or the
Advisers or any representative or attorney of the Fund or the Advisers of any
other material communication from the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court or any
other governmental, regulatory, self-regulatory or administrative agency or any
official relating to the Fund (if such communication relating to the Fund is
received by such person within three years after the date of this Agreement),
the Registration Statement, the 1940 Act Notification, the Prospectus, any
Prepricing Prospectus, any sales material (as herein defined) (or any amendment
or supplement to any of the foregoing) or this Agreement or any of the Fund
Agreements and (iv) within the period of time referred to in paragraph (f)
below, of any material adverse change in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the Fund
or the Advisers or of the happening of any other event which makes any statement
of a material fact made in the Registration Statement or the Prospectus or any
sales material (as herein defined) (or any amendment or supplement to any of the
foregoing) untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus, or any Prepricing Prospectus or
any sales material (as herein defined) (or any amendment or supplement to any of
the foregoing) in order to state a material fact required by the 1933 Act, the
1940 Act or the Rules and Regulations to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading or of the necessity to amend or supplement the
Registration Statement, the Prospectus, or any Prepricing Prospectus or any
sales material (as herein defined) (or any amendment or supplement to any of the
foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and Regulations
or any other law or order of any court or regulatory body. If at any time the
Commission, the NASD, any state securities commission, any national securities
exchange, any arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official shall issue any order
suspending the effectiveness of the Registration Statement, prohibiting or
suspending the use of the Prospectus or any sales material (as herein defined)
(or any amendment or supplement to any of the foregoing) or suspending the
qualification of the Shares for offering or sale in any jurisdiction, the Fund
will make every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.

                  (c) The Fund will furnish to the Underwriters, without charge,
three signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to the Underwriters, without charge,
such number of conformed copies of the Registration



                                                                               5

Statement as originally filed and of each amendment thereto, but without
exhibits, as the Underwriters may request.

                  (d) The Fund will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus, or
any sales material (as herein defined), of which the Underwriters shall not
previously have been advised or to which the Underwriters shall reasonably
object after being so advised or (ii) so long as, in the opinion of counsel for
the Underwriters, a Prospectus is required by the 1933 Act to be delivered in
connection with sales by the Underwriters or any dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "1934 Act") or the 1940 Act, without delivering a copy of such information,
documents or reports to the Underwriters prior to or concurrently with such
filing.

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

                  (f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales by the Underwriters or any dealer, the Fund
will expeditiously deliver to the Underwriters and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriters may request. The Fund consents to the use of the Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriters or any dealer. If during such period of time any event shall occur
that in the judgment of the Fund or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Registration Statement or the Prospectus to comply with the 1933 Act,
the 1940 Act, the Rules and Regulations or any other federal law, rule or
regulation, or any state securities or blue sky disclosure laws, rules or
regulations, the Fund will forthwith prepare and, subject to the provisions of
paragraph (d) above, promptly file with the Commission an appropriate supplement
or amendment thereto, and will expeditiously furnish to the Underwriters and
dealers, without charge, a reasonable number of copies thereof. In the event
that the Fund and the Representative agree that the Registration Statement or
the Prospectus should be amended or supplemented, the Fund, if requested by the
Representative, will promptly issue a press release announcing or disclosing the
matters to be covered by the proposed amendment or supplement.

                  (g) The Fund will make generally available to its security
holders an earnings statement, which need not be audited, covering a
twelve-month period ending not later than 15



                                                                               6

months after the effective date of the Registration Statement as soon as
practicable after the end of such period, which earnings statement shall satisfy
the provisions of Section 11(a) of the 1933 Act and Rule 158 of the 1933 Act
Rules and Regulations.

                  (h) During the period of five years hereafter, the Fund will
furnish to the Underwriters (i) as soon as available, a copy of each report of
the Fund mailed to stockholders or filed with the Commission or furnished to the
American Stock Exchange (the "AMEX") other than reports on Form N-SAR, and (ii)
from time to time such other information concerning the Fund as the Underwriters
may reasonably request.

                  (i) The Fund will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus and in such a manner as to comply with the investment objectives,
policies and restrictions of the Fund as described in the Prospectus.

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

                  (k) Except as provided in this Agreement, the Fund will not
sell, contract to sell, or otherwise dispose of any senior securities (as
defined in the 1940 Act) of the Fund, or grant any options or warrants to
purchase senior securities of the Fund, for a period of 120 days after the date
of the Prospectus, without the prior written consent of the Representative.

                  (l) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Fund nor the Adviser has taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares.

                  (m) The Fund will use its best efforts to cause the Shares,
prior to the Closing Date, to be assigned a rating of `Aaa' by Moody's Investors
Service, Inc. ("Moody's") and AAA by Standard & Poor's Rating Group ("S&P" and,
together with Moody's, the "Rating Agencies").

                  (n) The Fund and the Advisers will use their best efforts to
perform all of the agreements required of them and discharge all conditions to
closing as set forth in this Agreement.

                  6. Representations and Warranties of the Fund and the
Advisers. The Fund and the Advisers, jointly and severally, represent and
warrant to the Underwriters that:

                  (a) Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 497 of the 1933 Act Rules and
Regulations, complied when so filed in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations. The Commission has
not issued any order preventing or suspending the use of any Prepricing
Prospectus.



                                                                               7

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

                  (c) All the outstanding shares of beneficial interest of the
Fund have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights, except that, as
set forth in the Registration Statement, shareholders of a Massachusetts
business trust may under certain circumstances be held personally liable for its
obligations; the Shares have been duly authorized and, when issued and delivered
to the Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights that entitle or will entitle any person to acquire
any Shares upon issuance thereof by the Fund, except as stated above, and will
conform to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them); and the shares
of beneficial interest of the Fund conforms to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them).

                  (d) The Fund has been duly organized and is validly existing
and in good standing as a voluntary association (commonly referred to as a
"Massachusetts business trust") under the laws of the Commonwealth of
Massachusetts, with full power and authority to conduct its business as
described in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them), and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification; and the Fund has no subsidiaries.

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

                  (f) The Fund is not in violation of its Declaration of Trust,
as amended (the "Declaration"), the Statement or by-laws (the "By-Laws"), or
other organizational documents (together, the "Organizational Documents") of the
Fund or of any law, ordinance, administrative or governmental rule or regulation
of any decree of the Commission, the NASD, any state



                                                                               8

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

                  (g) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or any of the Fund
Agreements by the Fund, nor the consummation by the Fund of the transactions
contemplated hereby or thereby (A) requires any consent, approval, authorization
or other order of or registration or filing with, the Commission, the NASD, any
state securities commission, any national securities exchange, any arbitrator,
any court, regulatory body, administrative agency or other governmental body,
agency or official (except such as may have been obtained prior to the date
hereof and such as may be required for compliance with the state securities or
blue sky laws of various jurisdictions and the filing of the statement with the
Secretary of State of the Commonwealth of Massachusetts which have been or will
be effected in accordance with this Agreement) or conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under, the
Organizational Documents of the Fund or (B) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Fund is a party or by which it
or any of its properties may be bound, or violates or will violate any statute,
law, regulation or judgment, injunction, order or decree applicable to the Fund
or any of its properties, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Fund pursuant to
the terms of any agreement or instrument to which it is a party or by which it
may be bound or to which any of its property or assets is subject. The Fund is
not subject to any order of any court or of any arbitrator, governmental
authority or administrative agency.

                  (h) The accountants, Arthur Andersen LLP, who have certified
or shall certify the financial statements included or incorporated by reference
in the Registration Statement and the Prospectus (or any amendment or supplement
to either of them), are independent public accountants as required by the 1933
Act, the 1940 Act and the Rules and Regulations.

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

                  (j) The execution and delivery of, and the performance by the
Fund of its obligations under, this Agreement and the Fund Agreements have been
duly and validly authorized by the Fund, and this Agreement and the Fund
Agreements have been duly executed



                                                                               9

and delivered by the Fund and constitute the valid and legally binding
agreements of the Fund, enforceable against the Fund in accordance with their
terms, except as rights to indemnity and contribution hereunder and thereunder
may be limited by federal or state securities laws.

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

                  (l) The Fund has filed all tax returns required to be filed,
which returns are complete and correct in all material respects, and the Fund is
not in material default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto.

                  (m) The Fund is registered under the 1940 Act as a closed-end
non-diversified management investment company, and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing thereof and any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations. The Fund
is, and at all times through the completion of the transactions contemplated
hereby, will be, in compliance in all material respects with the terms and
conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment adviser of the Fund except in accordance with
the provisions of the 1940 Act and the Rules and Regulations and 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").

                  (n) As required by Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), the Fund is currently in compliance with the
requirements to qualify as a regulated investment company under the Code.

                  (o) The Fund's Common Shares (as defined in the Prospectus)
are duly listed on the AMEX.

                  (p) The Fund has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the 1933 Act, the 1940 Act or the Rules and Regulations.



                                                                              10

                  (q) No holder of any security of the Fund has any right to
require registration of shares of beneficial interest or any other security of
the Fund because of the filing of the Registration Statement or consummation of
the transactions contemplated by this Agreement.

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

                  (s) Except as stated in this Agreement and in the Prospectus
(and any amendment or supplement thereto), the Fund has not taken, nor will it
take, directly or indirectly, any action designed to or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Fund to facilitate the sale or resale of the
Shares, and the Fund is not aware of any such action taken or to be taken by any
affiliates of the Fund.

                  (t) The Fund has filed in a timely manner each document or
report required to be filed by it pursuant to the 1940 Act, the 1940 Act Rules
and Regulations, the 1934 Act and the rules and regulations of the Commission
promulgated thereunder (the "1934 Act Rules and Regulations"); each such
document or report at the time it was filed conformed to the requirements of the
1934 Act and the 1934 Act Rules and Regulations; and none of such documents or
reports contained an untrue statement of any material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.

                  (u) All advertising, sales literature or other promotional
material (including "prospectus wrappers," "broker kits," "road show slides" and
"road show scripts") authorized in writing by or prepared by the Fund or the
Adviser for use in connection with the offering and sale of the Shares
(collectively, "sales material") complied and comply in all material respects,
to the Fund's and Advisers' best knowledge, with the applicable requirements of
the 1933 Act, the 1940 Act, the Rules and Regulations and the rules and
interpretations of the NASD and no such sales material contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

                  7. Representations and Warranties of the Advisers. Each of the
Investment Adviser and the Subadviser, severally as to itself only and not
jointly or as to any other party, represents and warrants to each Underwriter
that, as of the date hereof or at such other time or times identified below:

                  (a) Such Adviser is a corporation duly incorporated and
validly existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification.



                                                                              11

                  (b) Such 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 1940 Act Rules
and Regulations from acting under the Investment Management Agreement for the
Fund as contemplated by the Prospectus (or any amendment or supplement thereto).
There does not exist any proceeding, to the best of such Adviser's knowledge
after reasonable investigation, or any facts or circumstances the existence of
which could lead to any proceeding which might adversely affect the registration
of such Adviser with the Commission.

                  (c) There are no legal or governmental proceedings pending or,
to the knowledge of such Adviser, threatened against such Adviser, or to which
such Adviser or any of its properties is subject, that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them), but are not described as required or that may
reasonably be expected to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, assets or
results of operations of such Adviser or on the ability of such Adviser to
perform its obligations under this Agreement or under the Fund Agreements to
which it is a party.

                  (d) Such Adviser is not in violation of its corporate charter
or by-laws, or other organizational documents, in default under any material
agreement, indenture or instrument or in breach or violation of any judgment,
decree, order, rule or regulation of any court or governmental or
self-regulatory agency or body.

                  (e) Neither the execution, delivery or performance of this
Agreement or the Fund Agreements by such Adviser, nor the consummation by such
Adviser of the transactions contemplated hereby or thereby (A) requires such
Adviser to obtain any consent, approval, authorization or other order of or
registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official or conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the corporate charter or by-laws, or other
organizational documents, of such Adviser, except where the failure to obtain
such consent, approval, authorization or other order of, or make such
registration or filing, or such conflict, breach or default would not have a
material adverse effect on the financial condition, business, properties, net
assets or result of operations of such Adviser or on the ability of such Adviser
to perform its obligations under this Agreement and the Fund Agreements or (B)
conflicts or will conflict with or constitutes or will constitute a breach of or
a default under, any material agreement, indenture, lease or other instrument to
which such Adviser is a party or by which it or any of its properties may be
bound, or violates or will violate any statute, law, regulation or filing or
judgment, injunction, order or decree applicable to such Adviser or any of its
properties or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of such Adviser pursuant to the terms of
any agreement or instrument to which it is a party or by which it may be bound
or to which any of the property or assets of such Adviser is subject, except
where such conflict, breach, default or violation would not have a material
adverse effect on the financial condition, business, properties, net assets or
results of operations of such Adviser or on the ability of such Adviser to
perform its obligations under this Agreement and the Fund Agreements. Such
Adviser is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency, except such orders which do not
have a material adverse effect on the financial



                                                                              12

condition, business, properties, net assets or results of operations of such
Adviser or on the ability of such Adviser to perform its obligations under this
Agreement and the Fund Agreements.

                  (f) The execution and delivery of, and the performance by such
Adviser of its obligations under, this Agreement and the Fund Agreements have
been duly and validly authorized by such Adviser, and this Agreement and the
Fund Agreements have been duly executed and delivered by such Adviser and each
constitutes the valid and legally binding agreement of such Adviser, enforceable
against such Adviser in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities laws.

                  (g) Such Adviser has the financial resources available to it
necessary for the performance of its services and obligations as contemplated in
the Prospectus (or any amendment or supplement thereto) and under this Agreement
and the Fund Agreements.

                  (h) The description of such Adviser in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) complied
and comply in all material respects with the provisions the 1933 Act, the 1940
Act, the Advisers Act, the Rules and Regulations and the Advisers Act 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, in light of the circumstances under which they
were made, not misleading.

                  (i) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
such Adviser has not incurred any liability or obligation, direct or contingent,
or entered into any transaction, not in the ordinary course of business, that is
material to such Adviser or the Fund and that is required to be disclosed in the
Registration Statement or the Prospectus and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, assets or results of operations of
such Adviser, whether or not arising in the ordinary course of business, or
which, in each case, could have a material adverse effect on the ability of such
Adviser to perform its obligations under this Agreement and the Fund Agreements.

                  8. Indemnification and Contribution.

                  (a) The Fund and the Advisers, jointly and severally, agree to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls the Underwriters within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation),
joint or several, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or in
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses,



                                                                              13

claims, damages, liabilities or expenses arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which has
been made therein or omitted therefrom in reliance upon and in conformity with
the information relating to the Underwriters furnished in writing to the Fund by
or on behalf of the Underwriters expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of the
Underwriters (or to the benefit of any person controlling the Underwriters) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by the Underwriters to any person if a copy of the Prospectus
shall not have been delivered or sent to such person within the time required by
the 1933 Act and the 1933 Act Rules and Regulations, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in such Prepricing Prospectus was corrected in the Prospectus,
provided that the Fund has delivered the Prospectus to the Underwriters in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which the
Fund or the Advisers may otherwise have.

                  (b) If any action, suit or proceeding shall be brought against
the Underwriters or any person controlling any Underwriter in respect of which
indemnity may be sought against the Fund or the Advisers, the Underwriters or
such controlling person shall promptly notify the Fund or the Advisers, and the
Fund or the Advisers shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. The Underwriters or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Underwriters or
such controlling person unless (i) the Fund or the Advisers has agreed in
writing to pay such fees and expenses, (ii) the Fund and the Advisers have
failed to assume the defense and employ counsel, or (iii) the named parties to
any such action, suit or proceeding (including any impleaded parties) include
both the Underwriters or such controlling person and the Fund or the Advisers
and the Underwriters or such controlling person shall have been advised by its
counsel that representation of such indemnified party and the Fund or the
Advisers by the same counsel would be inappropriate under applicable standards
of professional conduct (whether or not such representation by the same counsel
has been proposed) due to actual or potential differing interests between them
(in which case the Fund and the Advisers shall not have the right to assume the
defense of such action, suit or proceeding on behalf of the Underwriters or such
controlling person). It is understood, however, that the Fund and the Advisers
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for the Underwriters
and controlling persons not having actual or potential differing interests with
you or among themselves, which firm shall be designated in writing by the
Representative, and that all such fees and expenses shall be reimbursed as they
are incurred. The Fund and the Advisers shall not be liable for any settlement
of any such action, suit or proceeding effected without its written consent, but
if settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the Fund and the Advisers
agree to indemnify and hold harmless the Underwriters, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.



                                                                              14

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

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

                  (e) The Fund, the Advisers and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation



                                                                              15

or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions of
this Section 8, the Underwriters shall not be required to contribute any amount
in excess of the amount by which the total price of the Shares underwritten by
it and distributed to the public exceeds the amount of any damages which the
Underwriters have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

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

                  (g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Fund and the Advisers set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of the Underwriters or any person
controlling the Underwriters, the Fund, the Advisers, their directors or
officers, or any person controlling the Fund or the Advisers, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriters or any person controlling any
Underwriter, or to the Fund, the Advisers, their directors or officers, or any
person controlling the Fund or the Advisers, shall be entitled to the benefits
of the indemnity, contribution, and reimbursement agreements contained in this
Section 8.

                  (h) Any indemnification by the Fund shall be subject to the
requirements and limitations of Section 17(i) of the 1940 Act.

                  9. Conditions of Underwriters' Obligations. The obligation of
the Underwriters to purchase the Shares hereunder are subject to the following
conditions:

                  (a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been



                                                                              16

issued and no proceeding for those purposes shall have been instituted or, to
the knowledge of the Fund, the Advisers or the Underwriters, threatened by the
Commission, and any request of the Commission for additional information (to be
included in the registration statement or the prospectus or otherwise) shall
have been complied with to the Underwriters' satisfaction.

                  (b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change or any development involving a
prospective change in or affecting the condition (financial or other), business,
prospects, properties, net assets, or results of operations of the Fund or the
Advisers not contemplated by the Prospectus, which in the Underwriters' opinion
would materially, adversely affect the market for the Shares, or (ii) any event
or development relating to or involving the Fund or the Advisers or any officer
or director of the Fund or the Advisers which makes any statement made in the
Prospectus untrue or which, in the opinion of the Fund and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the 1933 Act,
the 1940 Act or the Rules and Regulations or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
the Underwriters' opinion, materially adversely affect the market for the
Shares.

                  (c) The Fund shall have furnished to the Representative as
soon as practicable from the Closing Date a report showing compliance with the
asset coverage requirements of the 1940 Act and a Basic Maintenance Report (as
defined in the Statement), in form and substance satisfactory to the
Representative.

                  (d) Vedder, Price, Kaufman & Kammholz, counsel to the Fund,
shall have furnished to the Representative on the Closing Date their opinion
addressed to the Underwriters and dated the Closing Date, to the effect that:

                       (i) The Fund has been duly organized and is validly
                  existing and in good standing as a business trust under the
                  laws of the Commonwealth of Massachusetts, with full power and
                  authority to conduct its business as described in the
                  Registration Statement and the Prospectus (and any amendments
                  or supplements to either of them), and is duly registered and
                  qualified to conduct its business and is in good standing in
                  each jurisdiction or place where the nature of its properties
                  or the conduct of its business requires such registration or
                  qualification;

                       (ii) All of the outstanding shares of the Fund have been
                  duly authorized and validly issued, are fully paid and
                  nonassessable and are free of any preemptive or similar
                  rights, except that, as set forth in the Registration
                  Statement, shareholders of a Massachusetts business trust may
                  under certain circumstances be held liable for its
                  obligations;

                       (iii) The Shares have been duly authorized and, when
                  issued and delivered to the Underwriters against payment
                  therefor in accordance with the terms of the Underwriting
                  Agreement, will be validly issued, fully paid and
                  nonassessable and free of any preemptive or similar rights,
                  except that, as set forth in the Registration Statement,
                  shareholders of a Massachusetts business trust may under




                                                                              17
                  certain circumstances be held liable for its obligations.
                  Except as set forth in the Declaration and the Statement,
                  there are no restrictions upon the transfer of any Shares
                  pursuant to the Declaration or By-Laws of the Fund or any
                  agreement or other outstanding instrument known to such
                  counsel; and the certificate evidencing the Shares complies
                  with all formal requirements of Massachusetts law;

                       (iv) The Shares conform in all material respects to the
                  description thereof in the Registration Statement and the
                  Prospectus (and any amendment or supplement to either of them)
                  and the shares of beneficial interest of the Fund (including
                  the TAPS and any other outstanding series of preferred stock)
                  conforms in all material respects to the description thereof
                  in the Registration Statement and the Prospectus (and any
                  amendment or supplement to either of them); and the authorized
                  and outstanding shares of beneficial interest of the Fund is
                  as set forth in the Prospectus;

                       (v) The Registration Statement is effective under the
                  1933 Act and the 1940 Act; any required filing of the
                  Prospectus pursuant to Rule 497 of the Rules and Regulations
                  has been made within the time periods required by Rule 497; to
                  the best of such counsel's knowledge, no stop-order suspending
                  the effectiveness of the Registration Statement or order
                  pursuant to Section 8(e) of the 1940 Act has been issued and
                  no proceeding for any such purpose has been instituted or is
                  pending or threatened by the Commission;

                       (vi) The 1940 Act Notification, the Registration
                  Statement and the Prospectus and each amendment or supplement
                  to the Registration Statement and the Prospectus as of their
                  respective dates (except that no opinion need be expressed as
                  to the financial statements or other financial data contained
                  therein) complied as to form in all material respects with the
                  requirements of the 1933 Act, the 1940 Act and the Rules and
                  Regulations;

                       (vii) The statements made in the Prospectus under the
                  captions "Description of TAPS", "The Auction", "Description of
                  Borrowings" and "Certain Provisions in the Declaration of
                  Trust", insofar as they purport to summarize the provisions of
                  the Statement or other documents or agreements specifically
                  referred to therein, constitute accurate summaries of the
                  terms of any such documents;

                       (viii) The statements made in the Prospectus under the
                  caption "Prospectus Summary-Federal Income Taxes" and "Tax
                  Matters", insofar as they constitute matters of law or legal
                  conclusions, have been reviewed by such counsel and constitute
                  accurate statements of any such matters of law or legal
                  conclusions, and fairly present the information called for
                  with respect thereto by Form N-2;

                       (ix) To the best of such counsel's knowledge, there are
                  no legal or governmental proceedings pending or threatened
                  against the Fund, or to which the Fund or any of its
                  properties is subject, that are required to be described in
                  the



                                                                              18

                  Registration Statement or the Prospectus (and any
                  amendment or supplement to either of them), but are not
                  described as required;

                       (x) To the best of such counsel's knowledge, there are no
                  agreements, contracts, indentures, leases or other instruments
                  that are required to be described in the Registration
                  Statement or the Prospectus (and any amendment or supplement
                  to either of them), or to be filed as an exhibit to the
                  Registration Statement that are not described or filed as
                  required by the 1933 Act, the 1940 Act or the Rules and
                  Regulations;

                       (xi) To the best of such counsel's knowledge, the Fund is
                  not in violation of its Declaration, Statement or By-Laws, or
                  other organizational documents of the Fund or of any law,
                  ordinance, administrative or governmental rule or regulation,
                  of any decree of the Commission, the NASD, any state
                  securities commission, any national securities exchange, any
                  arbitrator, any court or governmental agency, body or official
                  having jurisdiction over the Fund, or in default in any
                  material respect in the performance of any obligation,
                  agreement or condition contained in any bond, debenture, note
                  or any other evidence of indebtedness or in any material
                  agreement, indenture, lease or other instrument to which the
                  Fund is a party or by which it or any of its properties may be
                  bound;

                       (xii) The Underwriting Agreement and the Fund Agreements
                  have each been duly and validly authorized, executed and
                  delivered by the Fund, each complies with all applicable
                  provisions of the 1940 Act and each constitutes the valid and
                  legally binding agreement of the Fund, enforceable against the
                  Fund in accordance with its terms, except as rights to
                  indemnity and contribution under the Underwriting Agreement
                  and the Fund Agreements may be limited by federal or state
                  securities laws, subject as to enforcement to bankruptcy,
                  insolvency, reorganization and other laws of general
                  applicability relating to or affecting creditors' rights and
                  to general equity principles;

                       (xiii) The Fund is registered under the 1940 Act as a
                  closed-end non-diversified management investment company; the
                  provisions of the Declaration, Statement and By-Laws of the
                  Fund and the investment policies and restrictions described in
                  the Prospectus comply with the requirements of the 1940 Act;

                       (xiv) To the best of such counsel's knowledge, no person
                  is serving or acting as an officer, director or investment
                  adviser of the Fund except in accordance with the provisions
                  of the 1940 Act and the 1940 Act Rules and Regulations and the
                  Investment Advisers Act and the Advisers Act Rules and
                  Regulations.

                       (xv) Neither the issuance and sale of the Shares, the
                  execution, delivery or performance of the Underwriting
                  Agreement or any of the Fund Agreements by the Fund, nor the
                  consummation by the Fund of the transactions contemplated in
                  the Underwriting Agreement or any of the Fund Agreements (A)
                  requires any consent, approval, authorization, or other order
                  of or registration or filing with, the Commission, the NASD,
                  any state securities commission, any national



                                                                              19

                  securities exchange, any arbitrator, any court, regulatory
                  body, administrative agency or governmental body, agency or
                  official (except such as may have been obtained prior to the
                  date hereof and such as may be required for compliance with
                  the state securities or blue sky laws of various
                  jurisdictions in accordance with the Underwriting Agreement)
                  or conflicts or will conflict with or constitutes or will
                  constitute a breach of, or a default under, the
                  Organizational Documents of the Fund or (B) conflicts or
                  will conflict with or constitutes or will constitute a
                  breach of, or a default under, any agreement, indenture,
                  lease or other instrument to which the Fund is a party or by
                  which it or any of its properties may be bound, or violates
                  or will violate any statute, law, regulation or judgment,
                  injunction, order or decree applicable to the Fund or any of
                  its properties, or will result in the creation or imposition
                  of any lien, charge or encumbrance upon any property or
                  assets of the Fund pursuant to the terms of any agreement or
                  instrument to which it is a party or by which it may be
                  bound or to which any of its property or assets is subject.
                  The Fund is not subject to any order of any court or of any
                  arbitrator, governmental authority or administrative agency;

                       (xvi) No holder of any security of the Fund has any right
                  to require registration of shares of common stock, shares of
                  [beneficial interest] or any other security of the Fund
                  because of the filing of the Registration Statement or
                  consummation of the transactions contemplated by the
                  Underwriting Agreement; and

                       (xvii) Such counsel shall also state that they have
                  participated in conferences with officers and employees of the
                  Fund, representatives of the independent accountants for the
                  Fund, Massachusetts counsel to the Fund, the Underwriters and
                  counsel for the Underwriters at which the contents of the
                  Registration Statement and the Prospectus and related matters
                  were discussed and, although they are not passing upon, and do
                  not assume any responsibility for, the accuracy, completeness
                  or fairness of the statements contained in the Registration
                  Statement or the Prospectus, except to the limited extent
                  otherwise covered by paragraphs (iv), (vi), (vii), (viii) and
                  (xiii), and have made no independent check or verification
                  thereof, and on the basis of the foregoing, no facts have come
                  to their attention that would have led them to believe that
                  the Registration Statement or any amendment or supplement
                  thereto, at the time it became effective, contained an untrue
                  statement of a material fact or omitted to state any material
                  fact required to be stated therein or necessary to make the
                  statements contained therein not misleading or that the
                  Prospectus or any amendment or supplement thereto, as of its
                  issue date and as of the Closing Date, contained or contains
                  an untrue statement of a material fact or omitted or omits to
                  state a material fact required to be stated therein or
                  necessary to make the statements contained therein, in light
                  of the circumstances under which they were made, not
                  misleading, except that they express no belief with respect to
                  the financial statements, schedules and other financial
                  information and statistical data included therein or excluded
                  therefrom or the exhibits to the Registration Statement.

                  Such opinion shall also contain a statement that such counsel
has no reason to believe that the 1940 Act Notification contains any untrue
statement of a material fact or omits to



                                                                              20

state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading.

                  In giving such opinion, Vedder, Price, Kaufman & Kammholz may
rely on the opinion of Bingham Dana LLP as to matters of Massachusetts law,
provided that Vedder, Price, Kaufman & Kammholz furnish a copy thereof to the
Underwriters and state that such opinion is satisfactory in substance and form
and that the Underwriters and counsel for the Underwriters are entitled to rely
thereon.

                  (e) Gifford R. Zimmerman, Esq., Vice President, Assistant
Secretary and General Counsel for the Investment Adviser, shall have furnished
to the Representative on the Closing Date his opinion addressed to the
Underwriters and dated the Closing Date, to the effect that:


                       (i) The Investment Adviser has been duly organized and is
                  validly existing and in good standing as a corporation under
                  the laws of the State of Delaware, with full corporate power
                  and authority to own, lease and operate its properties and to
                  conduct its business as described in the Registration
                  Statement and the Prospectus (and any amendment or supplement
                  to either of them), and is duly registered and qualified to
                  conduct its business and is in good standing in each
                  jurisdiction or place where the nature of its properties or
                  the conduct of its business requires such registration or
                  qualification;

                       (ii) The Investment Adviser 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, the Advisers Act Rules and Regulations, the 1940 Act or
                  the 1940 Act Rules and Regulations from acting under the
                  Investment Management Agreement for the Fund as contemplated
                  by the Prospectus (or any amendment or supplement thereto);
                  there does not exist any proceeding or, to the best of such
                  counsel's knowledge after reasonable investigation, any facts
                  or circumstances the existence of which could lead to any
                  proceeding which might adversely affect the registration of
                  the Investment Adviser with the Commission;

                       (iii) To the best of such counsel's knowledge, there are
                  no legal or governmental proceedings pending or threatened
                  against the Investment Adviser, or to which the Investment
                  Adviser or any of its properties is subject, that are required
                  to be described in the Registration Statement or the
                  Prospectus (or any amendment or supplement to either of them),
                  but are not described as required or that may reasonably be
                  expected to involve a prospective material adverse change, in
                  the condition (financial or other), business, prospects,
                  properties, assets or results of operations of the Investment
                  Adviser or on the ability of the Investment Adviser to perform
                  its obligations under the Underwriting Agreement and the
                  Investment Management Agreement;

                       (iv) To the best of such counsel's knowledge, the Adviser
                  is not in violation of its corporate charter or by-laws, or
                  other organizational documents, nor is the Investment Adviser
                  in default under any agreement, indenture or instrument or in
                  breach or violation of any judgment, decree, order, rule or
                  regulation of any court or governmental or self-regulatory
                  agency or body;



                                                                              21

                       (v) The Underwriting Agreement and the Investment
                  Management Agreement have each been duly and validly
                  authorized, executed and delivered by the Investment Adviser,
                  each complies with all applicable provisions of the 1940 Act
                  and the Advisers Act and the 1940 Act Rules and Regulations
                  and the Advisers Act Rules and Regulations and each
                  constitutes the valid and legally binding agreement of the
                  Investment Adviser, enforceable against the Investment Adviser
                  in accordance with its terms, subject as to enforcement to
                  bankruptcy, insolvency, reorganization and other laws of
                  general applicability relating to or affecting creditors'
                  rights and to general equity principles;

                       (vi) The description of the Investment Adviser in the
                  Registration Statement and the Prospectus (and any amendment
                  or supplement thereto) complied and comply 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 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, in light of the circumstances
                  under which they were made, not misleading;

                       (vii) Except as disclosed in the Registration Statement
                  and the Prospectus (or any amendment or supplement to either
                  of them), subsequent to the respective dates as of which such
                  information is given in the Registration Statement and the
                  Prospectus (or any amendment or supplement to either of them),
                  the Investment Adviser has not incurred any liability or
                  obligation, direct or contingent, or entered into any
                  transaction, not in the ordinary course of business, that is
                  material to the Investment Adviser or the Fund and that is
                  required to be disclosed in the Registration Statement or the
                  Prospectus and there has not been any material adverse change,
                  or any development involving or which may reasonably be
                  expected to involve, a prospective material adverse change, in
                  the condition (financial or other), business, prospects,
                  properties, assets or results of operations of the Investment
                  Adviser, whether or not arising in the ordinary course of
                  business, or which, in each case, could have a material
                  adverse effect on the ability of the Investment Adviser to
                  perform its obligations under the Underwriting Agreement and
                  the Investment Management Agreement; and

                       (viii) Neither the execution, delivery or performance of
                  the Underwriting Agreement or the Investment Management
                  Agreement by the Investment Adviser, nor the consummation by
                  the Investment Adviser of the transactions contemplated in the
                  Underwriting Agreement or the Investment Management Agreement
                  (A) requires the Investment Adviser to obtain any consent,
                  approval, authorization or other order of or registration or
                  filing with, the Commission, the NASD, any state securities
                  commission, any national securities exchange, any arbitrator,
                  any court, regulatory body, administrative agency or other
                  governmental body, agency or official (except such as may have
                  been obtained prior to the date hereof and such as may be
                  required for compliance with the state securities or blue sky
                  laws of various jurisdictions in accordance with the
                  Underwriting Agreement) or conflicts or will conflict with or
                  constitutes or will constitute a breach of or a default under,
                  the corporate charter or by-laws, or other organizational
                  documents, of the



                                                                              22

                  Investment Adviser or (B) conflicts or will conflict with or
                  constitutes or will constitute a breach of or a default under,
                  any agreement, indenture, lease or other instrument to which
                  the Investment Adviser is a party or by which it or any of its
                  properties may be bound, or violates or will violate any
                  statute, law, regulation or filing or judgment, injunction,
                  order or decree applicable to the Investment Adviser or any of
                  its properties or will result in the creation or imposition of
                  any lien, charge or encumbrance upon any property or assets of
                  the Investment Adviser pursuant to the terms of any agreement
                  or instrument to which it is a party or by which it may be
                  bound or to which any of the property or assets of the
                  Investment Adviser is subject. The Investment Adviser is not
                  subject to any order of any court or of any arbitrator,
                  governmental authority or administrative agency.

                  (f) David Novick, Chief Compliance Officer for the Subadviser,
shall have furnished to the Representative on the Closing Date his opinion
addressed to the Underwriters and dated the Closing Date, to the effect that:

                       (i) The Subadviser has been duly organized and is validly
                  existing and in good standing as a corporation under the laws
                  of the State of Delaware, with full corporate power and
                  authority to own, lease and operate its properties and to
                  conduct its business as described in the Registration
                  Statement and the Prospectus (and any amendment or supplement
                  to either of them), and is duly registered and qualified to
                  conduct its business and is in good standing in each
                  jurisdiction or place where the nature of its properties or
                  the conduct of its business requires such registration or
                  qualification;

                       (ii) The Subadviser 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,
                  the Advisers Act Rules and Regulations, the 1940 Act or the
                  1940 Act Rules and Regulations from acting under the
                  Investment Management Agreement for the Fund as contemplated
                  by the Prospectus (or any amendment or supplement thereto);
                  there does not exist any proceeding or, to the best of such
                  counsel's knowledge after reasonable investigation, any facts
                  or circumstances the existence of which could lead to any
                  proceeding which might adversely affect the registration of
                  the Subadviser with the Commission;

                       (iii) To the best of such counsel's knowledge, there are
                  no legal or governmental proceedings pending or threatened
                  against the Subadviser, or to which the Subadviser or any of
                  its properties is subject, that are required to be described
                  in the Registration Statement or the Prospectus (or any
                  amendment or supplement to either of them), but are not
                  described as required or that may reasonably be expected to
                  involve a prospective material adverse change, in the
                  condition (financial or other), business, prospects,
                  properties, assets or results of operations of the Subadviser
                  or on the ability of the Subadviser to perform its obligations
                  under the Underwriting Agreement and the Sub-Advisory
                  Agreement;

                       (iv) To the best of such counsel's knowledge, the
                  Subadviser is not in violation of its corporate charter or
                  by-laws, or other organizational documents, nor is the
                  Subadviser in default under any agreement, indenture or
                  instrument or



                                                                              23

                  in breach or violation of any judgment, decree, order, rule or
                  regulation of any court or governmental or self-regulatory
                  agency or body;

                       (v) The Underwriting Agreement and the Sub-Advisory
                  Agreement have each been duly and validly authorized, executed
                  and delivered by the Subadviser, each complies with all
                  applicable provisions of the 1940 Act and the Advisers Act and
                  the 1940 Act Rules and Regulations and the Advisers Act Rules
                  and Regulations and each constitutes the valid and legally
                  binding agreement of the Subadviser, enforceable against the
                  Subadviser in accordance with its terms, subject as to
                  enforcement to bankruptcy, insolvency, reorganization and
                  other laws of general applicability relating to or affecting
                  creditors' rights and to general equity principles;

                       (vi) The description of the Subadviser in the
                  Registration Statement and the Prospectus (and any amendment
                  or supplement thereto) complied and comply 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 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, in light of the circumstances
                  under which they were made, not misleading;

                       (vii) Except as disclosed in the Registration Statement
                  and the Prospectus (or any amendment or supplement to either
                  of them), subsequent to the respective dates as of which such
                  information is given in the Registration Statement and the
                  Prospectus (or any amendment or supplement to either of them),
                  the Subadviser has not incurred any liability or obligation,
                  direct or contingent, or entered into any transaction, not in
                  the ordinary course of business, that is material to the
                  Subadviser or the Fund and that is required to be disclosed in
                  the Registration Statement or the Prospectus and there has not
                  been any material adverse change, or any development involving
                  or which may reasonably be expected to involve, a prospective
                  material adverse change, in the condition (financial or
                  other), business, prospects, properties, assets or results of
                  operations of the Subadviser, whether or not arising in the
                  ordinary course of business, or which, in each case, could
                  have a material adverse effect on the ability of the
                  Subadviser to perform its obligations under the Underwriting
                  Agreement and the Sub-Advisory Agreement; and

                       (viii) Neither the execution, delivery or performance of
                  the Underwriting Agreement or the Investment Management
                  Agreement by the Subadviser, nor the consummation by the
                  Subadviser of the transactions contemplated in the
                  Underwriting Agreement or the Sub-Advisory Agreement (A)
                  requires the Subadviser to obtain any consent, approval,
                  authorization or other order of or registration or filing
                  with, the Commission, the NASD, any state securities
                  commission, any national securities exchange, any arbitrator,
                  any court, regulatory body, administrative agency or other
                  governmental body, agency or official (except such as may have
                  been obtained prior to the date hereof and such as may be
                  required for compliance with the state securities or blue sky
                  laws of



                                                                              24

                  various jurisdictions in accordance with the Underwriting
                  Agreement) or conflicts or will conflict with or constitutes
                  or will constitute a breach of or a default under, the
                  corporate charter or by-laws, or other organizational
                  documents, of the Subadviser or (B) conflicts or will conflict
                  with or constitutes or will constitute a breach of or a
                  default under, any agreement, indenture, lease or other
                  instrument to which the Subadviser is a party or by which it
                  or any of its properties may be bound, or violates or will
                  violate any statute, law, regulation or filing or judgment,
                  injunction, order or decree applicable to the Subadviser or
                  any of its properties or will result in the creation or
                  imposition of any lien, charge or encumbrance upon any
                  property or assets of the Subadviser pursuant to the terms of
                  any agreement or instrument to which it is a party or by which
                  it may be bound or to which any of the property or assets of
                  the Subadviser is subject. The Subadviser is not subject to
                  any order of any court or of any arbitrator, governmental
                  authority or administrative agency.

                  (g) The Representative shall have received on the Closing Date
an opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated
the Closing Date and addressed to the Underwriters, with respect to such matters
as the Underwriters may reasonably request.

                  (h) The Fund shall have furnished to the Representative on the
Closing Date a certificate, dated the Closing Date, of its President or a Vice
President and its Controller or Treasurer stating that:

                       (i) The representations, warranties and agreements of the
                  Fund in Section 6 hereof are true and correct as of the
                  Closing Date; the Fund has complied with all its agreements
                  contained herein; and the conditions set forth in Section 9(a)
                  have been fulfilled; and

                       (ii) They have carefully examined the Registration
                  Statement and the Prospectus and, in their opinion, (A) as of
                  the date of its effectiveness (or the most recent
                  post-effective amendment thereto), the Registration Statement
                  did not include any untrue statement of a material fact and
                  did not omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading and on such Closing Date, the Prospectus did not
                  include any untrue statement of a material fact and did not
                  omit to state any material fact required to be stated therein
                  or necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading, and
                  (B) since the date of effectiveness of the Registration
                  Statement (or the most recent post-effective amendment
                  thereto), no event has occurred which should have been set
                  forth in a supplement to or amendment of the Prospectus which
                  has not been set forth in such a supplement or amendment.

                  (i) The Investment Adviser shall have furnished to the
Representative on the Closing Date a certificate, dated the Closing Date, of its
Chairman of the Board, President or a Vice President and its Controller or
Treasurer stating that:



                                                                              25

                       (i) The representations, warranties and agreements of the
                  Investment Adviser in Sections 6 and 7 hereof are true and
                  correct as of such Closing Date and the Adviser has complied
                  with all its agreements contained herein; and

                       (ii) They have carefully examined the Registration
                  Statement and the Prospectus and, in their opinion, (A) as of
                  the date of its effectiveness (or the most recent
                  post-effective amendment thereto), the Registration Statement
                  did not include any untrue statement of a material fact and
                  did not omit to state any material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading and on such Closing Date, the Prospectus did not
                  include any untrue statement of a material fact and did not
                  omit to state a material fact required to be stated therein or
                  necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading, and
                  (B) since the date of its effectiveness, (or the most recent
                  post-effective amendment thereto) the Registration Statement,
                  no event has occurred which should have been set forth in a
                  supplement to or amendment of the Prospectus which has not
                  been set forth in such a supplement or amendment.

                  (j) The Subadviser shall have furnished to the Representative
on the Closing Date a certificate, dated the Closing Date, of its Chairman of
the Board, President or a Vice President and its Controller or Treasurer stating
that:

                       (i) The representations, warranties and agreements of the
                  Subadviser in Sections 6 and 7 hereof are true and correct as
                  of such Closing Date and the Subadviser has complied with all
                  its agreements contained herein; and

                       (ii) They have carefully examined the Registration
                  Statement and the Prospectus and, in their opinion, (A) as of
                  the date of its effectiveness (or the most recent
                  post-effective amendment thereto), the Registration Statement
                  did not include any untrue statement of a material fact and
                  did not omit to state any material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading and on such Closing Date, the Prospectus did not
                  include any untrue statement of a material fact and did not
                  omit to state a material fact required to be stated therein or
                  necessary to make the statements therein, in light of the
                  circumstances under which they were made, not misleading, and
                  (B) since the date of its effectiveness, (or the most recent
                  post-effective amendment thereto) the Registration Statement,
                  no event has occurred which should have been set forth in a
                  supplement to or amendment of the Prospectus which has not
                  been set forth in such a supplement or amendment.

                  (k) The Representative shall have received letters addressed
to the Underwriters, and dated the date hereof and the Closing Date from Arthur
Andersen LLP, independent certified public accountants, substantially in the
forms heretofore approved by the Representative.

                  (l) Subsequent to the date of effectiveness of the
Registration Statement (or the most recent post-effective amendment thereto),
there shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or financial



                                                                              26

affairs of the Fund or the Advisers which, in the opinion of the Underwriters,
would materially and adversely affect the market for the Shares.

                  (m) (i) No order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus
(or any amendment or supplement thereto) or any Prepricing Prospectus or any
sales material shall have been issued and no proceedings for such purpose or for
the purpose of commencing an enforcement action against the Fund, the Advisers
or, with respect to the transactions contemplated by the Prospectus (or any
amendment or supplement thereto) and this Agreement, the Underwriters, may be
pending before or, to the knowledge of the Fund, the Advisers or the
Underwriters or in the reasonable view of counsel to the Underwriters, shall be
threatened or contemplated by the Commission at or prior to the Closing Date and
that any request for additional information on the part of the Commission (to be
included in the Registration Statement, the Prospectus or otherwise) be complied
with to the satisfaction of the Underwriters; (ii) there shall not have been any
change in the shares of beneficial interest of the Fund nor any material
increase in the short-term or long-term debt of the Fund (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), except as may otherwise be stated in
the Registration Statement and Prospectus (or any amendment or supplement
thereto), any material adverse change in the condition (financial or other),
business, prospects, properties, net assets or results of operations of the Fund
or the Advisers; (iv) the Fund shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Fund, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement to either of them);
and (v) all the representations and warranties of the Fund and the Adviser
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date.

                  (n) Neither the Fund nor the Advisers shall have failed at or
prior to the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.

                  (o) The Fund shall have delivered and the Underwriters shall
have received evidence satisfactory to the Representative that the shares of
TAPS are rated `Aaa' by Moody's and AAA by S&P as of the Closing Date, and there
shall not have been given any notice of any intended or potential downgrading,
or of any review for a potential downgrading, in the rating accorded to any
outstanding shares of beneficial interest of the Fund by any Rating Agency.

                  (p) The Fund and the Adviser shall have furnished or caused to
be furnished to the Underwriters such further certificates and documents as the
Representative shall have reasonably requested.

                  All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to the Representative and the Underwriters' counsel.



                                                                              27

                  Any certificate or document signed by any officer of the Fund
or the Advisers and delivered to the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Fund or the
Advisers to the Underwriters as to the statements made therein.

                  10. Expenses. The Fund agrees to pay the costs incident to the
authorization, issuance, sale and delivery of the Shares to be sold by the Fund
to the Underwriters and any taxes payable in that connection; the costs incident
to the preparation, printing and filing under the 1933 Act and 1940 Act of the
Registration Statement and any amendments and exhibits thereto; the costs of
preparing, printing and distributing the Registration Statement as originally
filed and each amendment and any post-effective amendment thereto (including
exhibits), any Prepricing Prospectus, the Prospectus and any amendment or
supplement to the Prospectus; the costs of printing this Agreement and
distributing the terms of agreements relating to the organization of any
underwriting syndicate by mail, telex or other means of communication; the fees
paid to Rating Agencies in connection with the rating of the Shares; the fees
and expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in this Section and of preparing and printing a blue
sky survey (including related fees and expenses of counsel to the Underwriters);
the fees and expenses of the Auction Agent as set forth in the Auction Agency
Agreement; and all other costs and expenses incident to the performance of the
obligations of the Fund under this Agreement; provided that (i) the Fund, the
Advisers and each Underwriter shall pay its own costs and expenses in attending
any information meeting relating to the Fund, (ii) each Underwriter shall pay
the costs and expenses of any sales material prepared by it in connection with
the public offering of the Shares, (iii) the Underwriters shall pay the costs
and expenses of any "tombstone" advertisements, and (iv) except as provided in
this Section and in Section 5 hereof, the Underwriters shall pay their own costs
and expenses, including the fees and expenses of their counsel and any transfer
taxes on the Shares which they may sell.

                  If notice shall have been given pursuant to Paragraph 12
terminating the Underwriters' obligations hereunder, or if the sale of the
Shares provided for herein is not consummated because of any failure, refusal or
inability on the part of the Fund or Adviser to perform any agreement on its
part to be performed or if the Underwriters shall decline to purchase the Shares
for any reason permitted under this Agreement, the Fund shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Shares, and upon demand the Fund
shall pay the full amount thereof to the Underwriters; it being understood that
the Fund shall not in any event be liable to any of the Underwriters for damages
on account of loss of anticipated profits from the sale by them of the Shares.
If the Fund fails to reimburse the Underwriters for such fees and expenses, the
Advisers shall upon demand, pay the full amount thereof to the Underwriters.

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



                                                                              28

become effective, it may be terminated by the Fund, by notifying the
Underwriters, or by the Underwriters, by notifying the Fund.

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

                  Any notice under this Section 11 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.

                  12. Termination of Agreement. This Agreement shall be subject
to termination in the Representative's absolute discretion, without liability on
the part of the Underwriters to the Fund or the Advisers, by notice to the Fund
or the Advisers, if prior to the Closing Date (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or state authorities, or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
to make it, in the Representative's judgment, impracticable or inadvisable to
commence or continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to enforce contracts for
the resale of the Shares by the Underwriters. Notice of such termination may be
given to the Fund by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.

                  13. Information Furnished by the Underwriters. The statements
set forth in the last paragraph of the cover page and the first and third
paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in
the Prospectus, constitute the only



                                                                              29

information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 6(b) and 8 hereof.

                  14. Miscellaneous. Except as otherwise provided in Sections 5,
11 and 12 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Fund or the Investment
Adviser, at the office of the Fund at 333 West Wacker Drive, Chicago, IL 60606,
Attention: Gifford R. Zimmerman, Vice President, Assistant Secretary and General
Counsel to the Investment Adviser; (ii) if to the Subadviser, at the offices of
Security Capital Research & Management at 11 South LaSalle Street, 2nd Floor,
Chicago, Illinois 60603, Attention: David Novick or (iii) if to the
Underwriters, to Salomon Smith Barney Inc., 388 Greenwich Street, New York, New
York 10013, Attention: Manager, Investment Banking Division.

                  This Agreement has been and is made solely for the benefit of
the Underwriters, the Fund, the Adviser, their directors and officers, and the
other controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriters of any of the Shares in his
status as such purchaser.

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

                  16. Limitation of Liability. Consistent with the Fund's
Declaration, notice is hereby given and the parties hereto agree that this
instrument is executed on behalf of the Trustees of the Fund as Trustees and not
individually and that the obligations of this instrument are not binding on any
of the Trustees or shareholders of the Fund individually but are binding only
upon the assets and property of the Fund.

                  This Agreement may be signed in various counterparts which
together constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

                                  [End of Text]






                  Please confirm that the foregoing correctly sets forth the
agreement among the Fund, the Advisers and the Underwriters.


                                        Very truly yours,

                                        NUVEEN REAL ESTATE INCOME FUND

                                        By: ____________________________________
                                        Name:
                                        Title  :

                                        NUVEEN INSTITUTIONAL ADVISORY CORP.

                                        By: ____________________________________
                                        Name:
                                        Title :

                                        SECURITY CAPITAL RESEARCH &
                                        MANAGEMENT INCORPORATED

                                        By: ____________________________________
                                        Name:
                                        Title :

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

SALOMON SMITH BARNEY INC.

By:_________________________________
Name:
Title :

For itself and the other Underwriters
named in Schedule I to the foregoing
Agreement




                                   SCHEDULE I



                         NUVEEN REAL ESTATE INCOME FUND


                                                             Number of Shares
Underwriters                                                     of Series
------------                                                     ---------
Salomon Smith Barney Inc........................................    [ ]

[                       ].......................................    [ ]

                        ].......................................    [ ]

[                       ].......................................    [ ]

[                       ].......................................    [ ]

[                       ].......................................    [ ]

Total...........................................................    [ ]

                                                             ===================