EXHIBIT A FORM OF AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of this , day of 2000, between Smith Barney Muni Funds, a Massachusetts business trust with its principal place of business at 388 Greenwich Street, New York, New York 10013 ("Muni Funds"), on behalf of the National Portfolio (the "Acquiring Fund"), and Shepmyers Investment Company, a Pennsylvania corporation with its principal place of business at RD 1, Route 194, South Hanover, Pennsylvania 17331 (the "Acquired Fund"). This Agreement is intended to be and is adopted as a plan of reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the "Reorganization") will consist of the transfer of all or substantially all of the assets of the Acquired Fund to the Acquiring Fund in exchange for Class A voting shares of beneficial interest ($.001 par value per share) of the Acquiring Fund, (the "Acquiring Fund Shares"), and the assumption by the Acquiring Fund of all of the stated liabilities of the Acquired Fund, and the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund in complete liquidation of the Acquired Fund as provided herein, all upon the terms and conditions hereinafter set forth. This agreement is also intended to be a plan of asset transfer within the meaning of 15 Pa. C.S. Section 1932. NOW, THEREFORE, in consideration of the premises and of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1.	TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND STATED LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND 1.1.	Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund agrees to transfer to the Acquiring Fund all or substantially all of the Acquired Fund's assets as set forth in section 1.2, and the Acquiring Fund agrees in exchange therefor (i) to simultaneously deliver to the Acquired Fund that number of full and fractional (to the third decimal place) Acquiring Fund Shares determined by dividing the value of the Acquired Fund's net assets transferred to the Acquiring Fund, computed in the manner and as of the time and date set forth in section 2.1, by the net asset value of one Acquiring Fund Share, computed in the manner and as of the time and date set forth in section 2.2; and (ii) to simultaneously assume all of the stated liabilities of the Acquired Fund, as set forth in section 1.3. Such transactions shall take place at the closing provided for in section 3.1 (the "Closing"). 1.2. The assets of the Acquired Fund to be acquired by the Acquiring Fund (collectively "Assets") shall consist of all property and assets, (except cash in an amount necessary to pay any unpaid dividends and distributions described in Section 1.4) including, without limitation, all cash, cash equivalents, securities, commodities and futures interests and dividends or interest or other receivables that are owned by or owed to the Acquired Fund and any deferred or prepaid expenses shown on the unaudited statement of assets and liabilities of the Acquired Fund prepared as of the effective time of the closing (the "Effective Time Statement"), prepared in accordance with generally accepted accounting principles ("GAAP") applied consistently with those of the Acquired Fund's most recent audited balance sheet. The Assets shall constitute at least 90% of the fair market value of the net assets, and at least 70% of the fair market value of the gross assets, held by Acquired Fund immediately before the Closing (excluding for these purposes assets used to pay the dividends and other distributions paid pursuant to section 1.4). 1.3. The Acquired Fund will endeavor to discharge all the Acquired Fund's known liabilities and obligations prior to the Closing Date as defined in section 3.1, other than those liabilities and obligations which would otherwise be discharged at a later date in the ordinary course of business. Upon Closing, the Acquiring Fund shall assume only those stated liabilities of the Acquired Fund reflected in the Effective Time Statement, which the Acquiring Fund shall have the right to review prior to finalization, and shall not assume any other liabilities, whether absolute or contingent, known or unknown, accrued or unaccrued, not reflected thereon. 1.4.	On or as soon as practicable prior to the Closing Date as defined in section 3.1, the Acquired Fund will declare and pay to its shareholders of record one or more dividends and/or other distributions so that it will have distributed substantially all of its investment company taxable income (computed without regard to any deduction for dividends paid), the excess of its interest income excludable from gross income under section 103(a) of the Code over its deductions disallowed under sections 265 and 171(a)(2) of the Code, and realized net capital gain, if any, for the current taxable year through the Closing Date. 1.5.	Immediately after the transfer of assets provided for in section 1.1 (the "Liquidation Time"), the Acquired Fund will distribute to the Acquired Fund's shareholders of record, determined as of the Valuation Time (the "Acquired Fund Shareholders"), on a pro rata basis, the Acquiring Fund Shares received by the Acquired Fund pursuant to section 1.1. In addition, the shareholders of the Acquired Fund shall have the right to receive any unpaid dividends or other distributions payable to them which were declared by the Acquired Fund before the Closing. Such distribution will be accomplished by the transfer of the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund in the names of the Acquired Fund Shareholders. The aggregate net asset value of Acquiring Fund Shares to be so credited to Acquired Fund Shareholders shall be equal to the aggregate net asset value of the Acquired Fund shares owned by such shareholders as of the Valuation Time. All issued and outstanding shares of the Acquired Fund will simultaneously be cancelled on the books of the Acquired Fund, although share certificates representing interests in shares of the Acquired Fund will represent a number of Acquiring Fund Shares after the Closing Date as determined in accordance with section 2.3. The Acquiring Fund will not issue certificates representing Acquiring Fund Shares in connection with such exchange. The Acquired Fund will then, as soon as practicable file an application pursuant to Section 8(f) of the Investment Company Act of 1940, as amended (the "1940 Act") for an order declaring that the Acquired Fund has ceased to be an investment company and, upon receipt of such order, shall make all filings and take all other steps as shall be necessary and proper to effect its complete dissolution under Pennsylvania law. After the Closing, the Acquired Fund shall not conduct any business except in connection with its liquidation, deregistration, and dissolution. 1.6.	Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund. Shares of the Acquiring Fund will be issued in the manner described in the Acquiring Fund's then-current prospectus and statement of additional information. 1.7.	Any reporting responsibility of the Acquired Fund until its dissolution in accordance with Pennsylvania law including, without limitation, the responsibility for filing of regulatory reports, tax returns, or other documents with the Securities and Exchange Commission (the "Commission"), any state securities commission, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the Acquired Fund; provided, however, that notwithstanding any dissolution in accordance with Pennsylvania law, the Acquired Fund shall remain responsible for the filing of any regulatory reports, tax returns or other documents in connection with its termination and deregistration as a management investment company under the 1940 Act and any applicable state laws. 1.8.	All books and records of the Acquired Fund, including all books and records required to be maintained under the 1940 Act and the rules and regulations thereunder, shall be available to the Acquiring Fund from and after the Closing Date and shall be turned over to the Acquiring Fund as soon as practicable following the Closing Date. 1.9	Approval of this Agreement by the Acquired Fund shareholder shall be deemed to constitute approval of a proposal for the voluntary dissolution of the Acquired Fund as required by 15 Pa.Cis. - 1974. 2.	VALUATION 2.1. The value of the Assets shall be computed as of the close of regular trading on The New York Stock Exchange, Inc. on the business day immediately preceding the Closing Date, as defined in Section 3.1 (such time and date being hereinafter called the "Valuation Time") after the declaration and payment of any dividends and/or other distributions on that date, using the valuation procedures set forth in the Acquiring Fund's Declaration of Trust, as amended, and then-current prospectus or statement of additional information. 2.2. The net asset value of an Acquiring Fund share shall be the net asset value per share computed as of the Valuation Time using the valuation procedures referred to in section 2.1. 2.3. The number of the Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Assets shall be determined by dividing the value of the Net Assets with respect to shares of the Acquired Fund determined in accordance with section 2.1 by the net asset value of an Acquiring Fund Share determined in accordance with section 2.2. 2.4. All computations of value at the Valuation Time shall be made by or under the direction of each Fund's respective accounting agent, if applicable, in accordance with its regular practice and the requirements of the 1940 Act and shall be subject to confirmation by each Fund's respective independent accountants. 2.5 The Acquiring Fund shall deliver a copy of its valuation report to the Acquired Fund prior to Closing. 3.	CLOSING AND CLOSING DATE 3.1.	The Closing of the transactions contemplated by this Agreement shall be April 14, 2000, or such later date as the parties may agree in writing (the "Closing Date"). All acts taking place at the Closing shall be deemed to take place simultaneously as of 4:00 P.M., Eastern time, on the Closing Date, unless otherwise agreed to by the parties. The Closing shall be held at the offices of the Acquired Fund or at such other place and time as the parties may agree. 3.2.	Acquired Fund shall deliver to Acquiring Fund on the Closing Date the Effective Time Statement. 3.3.	Investors Trust Company, as custodian for the Acquired Fund, shall deliver at the Closing a certificate of an authorized officer stating that (a) the Assets shall have been delivered in proper form to PNC Bank, National Association, custodian for the Acquiring Fund, prior to or on the Closing Date and (b) all necessary taxes in connection with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made. (Acquired Fund's portfolio securities represented by a certificate or other written instrument shall be presented by Custodian for Acquired Fund to Custodian for Acquiring Fund for examination no later than five business days preceding the Closing Date and transferred and delivered by the Acquired Fund as of the Closing Date by the Acquired Fund for the account of Acquiring Fund duly endorsed in proper form for transfer in such condition as to constitute good delivery thereof.) Acquired Fund's portfolio securities and instruments deposited with a securities depository, as defined in Rule 17f-4 under the 1940 Act, shall be delivered as of the Closing Date by book entry in accordance with the customary practices of such depositories and Custodian for Acquiring Fund. The cash to be transferred by the Acquired Fund shall be delivered by wire transfer of federal funds on the Closing Date. 3.4.	Investors Trust Company (the "Transfer Agent"), on behalf of the Acquired Fund, shall deliver at the Closing a certificate of an authorized officer stating that its records contain the names and addresses of the Acquired Fund Shareholders and the number and percentage ownership (to three decimal places) of outstanding Acquired Fund Shares owned by each such shareholder immediately prior to the Closing. The Acquiring Fund shall issue and deliver a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date to the shareholders of the Acquired Fund or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the accounts of the shareholders of the Acquired Fund on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, share certificates, if any, receipts or other documents as such other party or its counsel may reasonably request to effect the transactions contemplated by this Agreement. 3.5. In the event that immediately prior to the Valuation Time (a) the New York Stock Exchange or another primary trading market for portfolio securities of the Acquiring Fund or the Acquired Fund shall be closed to trading or trading thereupon shall be restricted, or (b) trading or the reporting of trading on such Exchange or elsewhere shall be disrupted so that, in the judgment of the Board of Trustees of Muni Funds and Board of Directors of Acquired Fund, accurate appraisal of the value of the net assets with respect to the Acquiring Fund Shares or the Acquired Fund Shares is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 4.	REPRESENTATIONS AND WARRANTIES 4.1.	The Acquired Fund represents and warrants to the Acquiring Fund as follows: (a)	The Acquired Fund is a corporation duly organized and validly existing under the laws of, and duly authorized to conduct business in, the Commonwealth of Pennsylvania with power under the Acquired Fund's Articles of Incorporation, as amended, and otherwise to own all of its properties and assets, to carry on its business as it is now being conducted and to consummate the transactions contemplated herein, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. (b)	The Acquired Fund is registered with the Commission as a closed-end management investment company under the 1940 Act, and such registration is in full force and effect. (c)	No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Acquired Fund of the transactions contemplated herein, except such as have been or will be obtained under the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act") and the 1940 Act and such as may be required by state corporate and securities laws. (d)	Other than with respect to contracts entered into in connection with the portfolio management of the Acquired Fund which shall terminate on or prior to the Closing Date, the Acquired Fund is not, and the execution, delivery and performance of this Agreement by the Acquired Fund will not result, in violation of law or of the Acquired Fund's Articles of Incorporation, as amended, or By-Laws, or of any material agreement, indenture, instrument, contract, lease or other undertaking to which the Acquired Fund is a party or by which it is bound, and the execution, delivery and performance of this Agreement by the Acquired Fund will not result in the acceleration of any material obligation, or the imposition of any material penalty, under any material agreement, indenture, instrument, contract, lease, judgment or decree to which the Acquired Fund is a party or by which it is bound. (e)	No material litigation, administrative or other proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquired Fund or any properties or assets held by it. The Acquired Fund knows of no facts that might form the basis for the institution of such proceedings that would materially and adversely affect its business and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions herein contemplated. (f)	The Statement of Assets and Liabilities, (including Investments), Statement of Operations, and Statement of Changes in Net Assets, and the Financial Highlights of the Acquired Fund at and for the year ended December 31, 1999, a copy of which is attached hereto as Schedule 4.1(f), have been audited by Beard & Company, independent certified public accountants, and are in accordance with GAAP consistently applied, and such statements (copies of which have been furnished to the Acquiring Fund) present fairly, in all material respects, the financial position, results of operations, changes in net assets and financial highlights of the Acquired Fund as of such date in accordance with GAAP, and there are no known contingent liabilities of the Acquired Fund required to be reflected on a statement of assets and liabilities (including the notes thereto) in accordance with GAAP as of such date not disclosed therein. (g)	Since December 31, 1999, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquired Fund of indebtedness maturing more than one year from the date such indebtedness was incurred except as otherwise disclosed to and accepted in writing by the Acquiring Fund. For purposes of this subsection (g), a decline in net asset value per share of the Acquired Fund due to declines in market values of securities in the Acquired Fund's portfolio, the discharge of Acquired Fund liabilities, or the redemption of Acquired Fund shares by Acquired Fund Shareholders shall not constitute a material adverse change. (h)	At the date hereof and at the Closing Date, all federal and other tax returns and reports of the Acquired Fund required by law to have been filed by such dates (after giving effect to any extensions) shall have been filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on said returns and reports shall have been paid or provision shall have been made for the payment thereof, and, to the best of the Acquired Fund's knowledge, no such return is currently under audit and no unpaid assessment has been asserted with respect to such returns. (i)	For each taxable year of its operation since it became a closed-end investment management company (including the taxable year ending on the Closing Date), the Acquired Fund has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to and has computed its federal income tax under Section 852 of the Code, and will have distributed all of its investment company taxable income and net capital gain (as defined in the Code) that has accrued through the Closing Date. (j)	All issued and outstanding shares of the Acquired Fund (i) have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and applicable state securities laws, (ii) are, and on the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable, and (iii) will be held at the time of the Closing by the persons and in the amounts set forth in the records of the Transfer Agent, as provided in section 3.3. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any of the Acquired Fund shares, nor is there outstanding any security convertible into any of the Acquired Fund shares. (k)	At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Fund's assets to be transferred to the Acquiring Fund pursuant to section 1.1 and, subject to the approval of its shareholders, full right, power, and authority to sell, assign, transfer and deliver such assets hereunder free of any liens or other encumbrances, except those liens or encumbrances as to which the Acquiring Fund has received notice at or prior to the Closing, and upon delivery and payment for such assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the 1933 Act and the 1940 Act, except those restrictions as to which the Acquiring Fund has received notice and necessary documentation prior to the Closing. (l)	The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of the Board of Directors of the Acquired Fund, and, subject to the approval of the Acquired Fund Shareholders, this Agreement constitutes a legal valid and binding obligation of the Acquired Fund, enforceable against the Acquired Fund in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement, moratorium and other laws relating to or affecting creditors' rights and subject to general equity principles. (m)	The information to be furnished by the Acquired Fund for use in applications for orders, registration statements or proxy materials or for use in any other document filed or to be filed with any federal, state or local regulatory authority (including the National Association of Securities Dealers, Inc.), which may be necessary in connection with the transactions contemplated hereby, shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto. (n)	The information provided by the Acquired Fund in the Proxy Statement/Prospectus to be included in the Registration Statement conforms in all material respects to the applicable requirements of the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations of the Commission thereunder and do not include any untrue statement of a material fact or 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 materially misleading. (o)	The proxy statement of the Acquired Fund to be included in the Registration Statement referred to in section 5.7 (the "Proxy Statement"), only insofar as it relates to the Acquired Fund, will, on the effective date of the Registration Statement and on the Closing Date, not contain any 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 such statements were made, not materially misleading; provided, however, that the representations and warranties in this section shall not apply to statements in or omissions from the Proxy Statement and the Registration Statement made in reliance upon and in conformity with information that was furnished or should have been furnished by the Acquiring Fund for use therein. (p) The statement delivered pursuant to Section 7.2 hereof shall list all of the assets transferred to the Acquiring Fund hereunder. (q) At both Valuation Time and Closing there shall be no known material liabilities of the Acquired Fund, whether accrued, absolute, contingent, or otherwise, not reflected in the net asset value per share of the Acquired Shares pursuant to this Agreement. 4.2.	Muni Funds, on behalf of the Acquiring Fund, represents and warrants to the Acquired Fund as follows: (a) Muni Funds is a business trust duly organized and validly existing under the laws of the Commonwealth of Massachusetts with power under the Trust's Declaration of Trust, as amended, to own all of its properties and assets, to carry on its business as it is now being conducted and to consummate the transactions contemplated herein, and has all necessary federal, state and local authorizations to carry on its business as now being conducted and to consummate the transactions contemplated by this Agreement. (b) Muni Funds is registered with the Commission as an open-end management investment company under the 1940 Act, and such registration is in full force and effect. (c) No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Acquiring Fund of the transactions contemplated herein, except such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state securities laws. (d) Muni Funds is not, and the execution, delivery and performance of this Agreement by the Trust will not result, in violation of law or of the Trust's Declaration of Trust, as amended, or By-Laws, or of any material agreement, indenture, instrument, contract, lease or other undertaking to which the Acquiring Fund is a party or by which it is bound, and the execution, delivery and performance of this Agreement by the Acquiring Fund will not result in the acceleration of any material obligation, or the imposition of any material penalty, under any material agreement, indenture, instrument, contract, lease, judgment or decree to which the Acquiring Fund is a party or by which it is bound. (e) No material litigation, administrative or other proceeding or investigation of or before any court or governmental body is presently pending or to its knowledge threatened against the Acquiring Fund or any properties or assets held by it. The Acquiring Fund knows of no facts that might form the basis for the institution of such proceedings that would materially and adversely affect its business and is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions herein contemplated. (f) The Statements of Assets and Liabilities, (including the Investment Portfolio), Operations, and Changes in Net Assets, and the Financial Highlights of the Acquiring Fund at and for the year ended March 31, 1999, a copy of which is attached hereto as Schedule 4.2(f) have been audited by KPMG LLP, independent certified public accountants, and are in accordance with GAAP consistently applied, and such statements present fairly, in all material respects, the financial position, results of operations, changes in net assets and financial highlights of the Acquiring Fund as of such date in accordance with GAAP, and there are no known contingent liabilities of the Acquiring Fund required to be reflected on a statement of assets and liabilities (including the notes thereto) in accordance with GAAP as of such date not disclosed therein. (g) 	Since March 31, 1999, there has not been any material adverse change in the Acquiring Fund's financial condition, assets, liabilities or business other than changes occurring in the ordinary course of business, or any incurrence by the Acquiring Fund of indebtedness maturing more than one year from the date such indebtedness was incurred except as otherwise disclosed to and accepted in writing by the Acquired Fund. For purposes of this subsection (g), a decline in net asset value per share of the Acquiring Fund due to declines in market values of securities in the Acquiring Fund's portfolio, the discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund shares by Acquiring Fund shareholders shall not constitute a material adverse change. (h) At the date hereof and at the Closing Date, all federal and other tax returns and reports of the Acquiring Fund required by law to have been filed by such dates (after giving effect to any extensions) shall have been filed and are or will be correct in all material respects, and all federal and other taxes shown as due or required to be shown as due on said returns and reports shall have been paid or provision shall have been made for the payment thereof, and, to the best of the Acquiring Fund's knowledge, no such return is currently under audit and no unpaid assessment has been asserted with respect to such returns. (i) For each taxable year of its operation, the Acquiring Fund has met the requirements of Subchapter M of the Code for qualification as a regulated investment company and has elected to be treated as such, has been eligible to and has computed its federal income tax under Section 852 of the Code, and will do so for the taxable year including the Closing Date. (j) All issued and outstanding shares of the Acquiring Fund (i) have been offered and sold in every state and the District of Columbia in compliance in all material respects with applicable registration requirements of the 1933 Act and applicable state securities laws and (ii) are, and on the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable (recognizing that, under Massachusetts law, Acquiring Fund Shareholders, under certain circumstances, could be held personally liable for the obligations of the Acquired Fund). The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any of the Acquiring Fund shares, nor is there outstanding any security convertible into any of the Acquiring Fund shares. (k) The Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to the terms of this Agreement, will at the Closing Date have been duly authorized and, when so issued and delivered, shall be registered under the 1933 Act and under applicable state securities laws, shall be duly and validly issued, fully paid and non- assessable, and shall have been offered for sale and sold in conformity with all applicable federal and state securities laws and no shareholder of the Acquiring Fund shall have any preemptive right of subscription or purchase in respect thereto (recognizing that, under Massachusetts law, Acquiring Fund Shareholders, under certain circumstances, could be held personally liable for the obligations of the Acquired Fund). (l) At the Closing Date, the Acquiring Fund will have good and marketable title to the Acquiring Fund's assets, free of any liens or other encumbrances, except those liens or encumbrances as to which the Acquired Fund has received written notice prior to the Closing. (m) The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Trustees of the Muni Funds and this Agreement constitutes a legal valid and binding obligation of the Muni Funds, on behalf of the Acquiring Fund, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement, moratorium and other laws relating to or affecting creditors' rights and subject to general equity principles. (n) The information to be furnished by the Acquiring Fund for use in applications for orders, registration statements or proxy materials or for use in any other document filed or to be filed with any federal, state or local regulatory authority (including the National Association of Securities Dealers, Inc.), that may be necessary in connection with the transactions contemplated hereby, shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto. (o) The current prospectus and statement of additional information of the Acquiring Fund conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and do not include any untrue statement of a material fact or 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 materially misleading. (p) The Registration Statement and the Proxy Statement to be included in the Registration Statement, only insofar as it relates to the Acquiring Fund, will, on the effective date of the Registration Statement and on the Closing Date, (i) comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, the rules and regulations thereunder, and state securities laws, and (ii) not contain any 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 such statements were made, not materially misleading; provided, however, that the representations and warranties in this section shall not apply to statements in or omissions from the Proxy Statement and the Registration Statement made in reliance upon and in conformity with information that was furnished or should have been furnished by the Acquired Fund for use therein. (q) The Acquiring Fund agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act and the 1940 Act and such of the state securities laws as may be necessary in order to continue its operations after the Closing Date. (r) At both the Valuation Time and the Closing, there shall be no known material liabilities of the Acquiring Fund, whether accrued, absolute, contingent or otherwise, not reflected in the net asset value per share of the Acquiring Shares to be issued pursuant to this Agreement. 5.	COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND 5.1. The Acquiring Fund and the Acquired Fund each covenants to operate its business in the ordinary course between the date hereof and the Closing Date, it being understood that (a) such ordinary course of business will include (i) the declaration and payment of customary dividends and other distributions and (ii) such changes as are contemplated by the Funds' normal operations; and (b) each Fund shall retain exclusive control of the composition of its portfolio until the Closing Date. 5.2. Upon reasonable notice, the Acquiring Fund's officers and agents shall have reasonable access to the Acquired Fund's books and records necessary to maintain current knowledge of the Acquired Fund and to ensure that the representations and warranties made by the Acquired Fund are accurate. 5.3. The Acquired Fund covenants to call a meeting of the Acquired Fund Shareholders entitled to vote thereon to consider and act upon this Agreement and to take all other reasonable action necessary to obtain approval of the transactions contemplated herein. Such meeting shall be scheduled for no later than April 12, 2000 or such later date as shall be agreed upon by the parties. 5.4. The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement. 5.5. The Acquired Fund covenants that it will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requests concerning the beneficial ownership of the Acquired Fund Shares and will provide the Acquiring Fund with a list of affiliates of the Acquired Fund. 5.6. Subject to the provisions of this Agreement, the Acquiring Fund and the Acquired Fund will each take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper, and/or advisable to consummate and make effective the transactions contemplated by this Agreement. 5.7. The Acquiring Fund covenants to prepare the Registration Statement on Form N-14 together with any amendments and supplements thereto and the documents contained or incorporated therein by reference, (the "Registration Statement"), in compliance with the 1933 Act, the 1934 Act and the 1940 Act in connection with the meeting of the Acquired Fund Shareholders to consider, among other things, approval of this Agreement and the transactions contemplated herein. The Acquired Fund covenants to prepare the Proxy Statement to be included in the Registration Statement in compliance with the 1934 Act and the 1940 Act in connection with the meeting of the Acquired Fund Shareholders to consider, among other things, approval of this Agreement and the transactions contemplated herein. The Acquiring Fund will file the Registration Statement, including the Proxy Statement and any supplement or amendment to the Registration Statement with the Commission as soon as practicable. The Acquired Fund will provide the Acquiring Fund with information reasonably necessary for the preparation of a prospectus, which will include the Proxy Statement referred to in section 4.1(o), all to be included in the Registration Statement, in compliance in all material respects with the 1933 Act, the 1934 Act and the 1940 Act. Each of the parties has cooperated and shall continue to cooperate with the other, and has furnished and shall continue to furnish the other with the information relating to itself that is required by the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations under each of those Acts and state securities laws, to be included in the Registration Statement. 5.8. The Acquired Fund covenants that it will, from time to time, as and when reasonably requested by the Acquiring Fund, execute and deliver or cause to be executed and delivered all such assignments and other instruments, and will take or cause to be taken such further reasonable action as the Acquiring Fund may reasonably deem necessary or desirable in order to vest in and confirm the Acquiring Fund's title to and possession of all the Assets and otherwise to carry out the intent and purpose of this Agreement. 5.9. The Acquiring Fund covenants to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1934 Act and 1940 Act, and such of the state securities laws as it deems appropriate in order to continue its operations after the Closing Date and to consummate the transactions contemplated herein; provided, however, that the Acquiring Fund may take such actions it reasonably deems advisable after the Closing Date as circumstances change. 5.10. The Acquiring Fund covenants that it will, from time to time, as and when reasonably requested by the Acquired Fund, execute and deliver or cause to be executed and delivered all such assignments, assumption agreements, releases, and other instruments, and will take or cause to be taken such further reasonable action, as the Aquired Fund may reasonably deem necessary or desirable in order to (i) vest and confirm to the Acquired Fund title to and possession of all Acquiring Fund shares to be transferred to Acquired Fund pursuant to this Agreement and (ii) assume the stated liabilities from the Acquired Fund. 5.11. As soon as reasonably practicable after the Closing, the Acquired Fund shall make a liquidating distribution to its shareholders consisting of the Acquiring Fund Shares received at the Closing, file an application pursuant to Section 8(f) of the 1940 Act for an order declaring that the Acquired Fund has ceased to be an investment company and, upon receipt of such order, shall make all filings and take all other steps as shall be necessary to deregister as a closed-end management investment company under the 1940 Act and dissolve and terminate its corporate existence under Pennsylvania law. 5.12. The Acquiring Fund and the Acquired Fund shall each use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to effect the transactions contemplated by this Agreement as promptly as practicable. 5.13. Each party will notify the other party hereto of any material adverse change in such party's business, prospects, results of operations or financial condition as soon as practicable following such change. 6.	CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to consummate the transactions provided for herein shall be subject, at its election, to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions: 6.1. All representations and warranties of Muni Funds contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date; and there shall be (i) no pending or threatened litigation brought by any person (other than Acquired Fund, its adviser or any of their affiliates) against the Acquired Fund, the Acquiring Fund or their advisers, directors, trustees or officers that may result in material liability on the part of any such person or entity and (ii) no facts known to the Acquired Fund which the Acquired Fund reasonably believes might result in such litigation. As of the Valuation Time and the Closing, there shall have been no material adverse change in the financial condition of the Acquiring Fund since March 31, 1999 other than those changes occurring in the ordinary course of business as an investment company. 6.2. The Acquiring Fund shall have delivered to the Acquired Fund on the Closing Date a certificate executed in its name by its President or a Vice President, in a form reasonably satisfactory to the Acquired Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Muni Funds, made in this Agreement are true and correct in all material respects on and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that the Acquiring Fund has performed and complied in all material respects with each of its agreements and covenants required by this Agreement to be performed or complied with by it prior to or at the Valuation Time and the Closing and as to such other matters as the Acquired Fund shall reasonably request. 6.3. The Acquired Fund shall have received on the Closing Date an opinion of Willkie Farr & Gallagher, in a form reasonably satisfactory to the Acquired Fund, and dated as of the Closing Date, to the effect that: (a) Muni Funds has been formed in accordance with its organizational documents under Massachusetts law and is an existing business trust. (b) The Acquiring Fund has the power to carry on its business as presently conducted in accordance with the description thereof in the Muni Funds' registration statement under the 1940 Act. 	(c)	The Agreement has been duly authorized, executed and delivered by Muni Funds, on behalf of the Acquiring Fund, and constitutes a valid and legally binding obligation of Muni Funds, on behalf of the Acquiring Fund, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement, moratorium and laws of general applicability relating to or affecting creditors' rights and subject to general equity principles in any proceeding, whether at law or in equity, provided, however, that no opinion need be given as to the enforceability of any provision of the Agreement relating to indemnification. (d)	The execution and delivery of the Agreement did not, and the consummation of the transactions contemplated herein will not, violate the Acquiring Fund's Declaration of Trust, as amended, or By-laws; or other organizational documents. (e) To the knowledge of such counsel, all regulatory consents, authorizations, approvals or filings required to be obtained or made by the Acquiring Fund under the Federal laws of the United States or the laws of The Commonwealth of Massachusetts for the exchange of the Acquired Fund's assets for Acquiring Fund Shares, pursuant to the Agreement have been obtained or made. (f) The Acquiring Shares are duly authorized and, upon delivery to the Acquired Fund following receipt by the Acquiring Fund of the Assets of the Acquired Fund as provided in the Agreement, will be validly issued, fully paid and non-assessable (recognizing that, under Massachusetts law, Acquiring Fund Shareholders, under certain circumstances could be held personally liable for the obligation of the Acquired Fund) and will not be subject to any preemptive rights arising under Massachusetts Law or under the Declaration of Trust or other organizational documents. (g) To such counsel's knowledge, no shareholder of the Acquiring Fund has any option or warrant to subscribe or purchase in respect to the Acquiring Shares. (h) The execution and delivery of the Agreement did not, and the compliance by the Acquiring Fund with all the provisions of the Agreement will not, violate any material contract known to such counsel; (i) No consent, approval, authorization, order, registration or qualification of or with any federal or Massachusetts governmental agency or body, or any federal or Massachusetts court, is required for the Acquiring Fund to enter into the Agreement or to comply with all of the provisions of the Agreement, except such as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations thereunder and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws. Such opinion may state that it is solely for the benefit of the Acquired Fund, its directors and its officers. Such counsel may rely on certificates of officers or trustees of the Acquiring Fund and as to matters governed by the laws of the Commonwealth of Massachusetts on an opinion of Massachusetts counsel. Such opinion also shall include such other matters incident to the transaction contemplated hereby, as the Acquired Fund may reasonably request. 6.4.	The Acquiring Fund shall have performed all of the covenants and complied with all of the provisions required by this Agreement to be performed or complied with by the Acquiring Fund on or before the Closing Date. 6.5	The Acquiring Fund shall have duly executed and delivered to the Acquired Fund an assumption of stated liabilities certificate and other instruments as the Acquired Fund may deem necessary or desirable dated as of the Closing pursuant to which the Acquiring Fund will assume all of the stated liabilities of the Acquired Fund in connection with the transactions contemplated by this agreement. 7.	CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to consummate the transactions provided for herein shall be subject, at its election, to the performance by the Acquired Fund of all of the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions: 7.1. All representations and warranties of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date; and there shall be (i) no pending or threatened litigation brought by any person (other than Acquiring Fund, its adviser or any of their affiliates) against the Acquiring Fund, the Acquired Fund or their advisers, directors/trustees or officers, that may result in material liability on the part of any such person or entity and (ii) no facts known to the Acquiring Fund that the Acquiring Fund reasonably believes might result in such litigation. 7.2. The Acquired Fund shall have delivered to the Acquiring Fund a statement of the Acquired Fund's assets and liabilities as of the Closing Date, certified by the Treasurer of the Acquired Fund. 7.3.	The Acquired Fund shall have delivered to the Acquiring Fund on the Closing Date a certificate executed in its name by its President or a Vice President, in a form reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date, to the effect that the representations and warranties of the Acquired Fund made in this Agreement are true and correct in all material respects as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Acquiring Fund shall reasonably request. 7.4.	The Acquiring Fund shall have received on the Closing Date an opinion of Drinker Biddle & Reath LLP, in a form reasonably satisfactory to the Acquiring Fund, and dated as of the Closing Date, to the effect that: (a)	The Acquired Fund is a duly incorporated, validly existing Pennsylvania corporation. (b)	The Acquired Fund has the corporate power to carry on its business as presently conducted in accordance with the description thereof in the Acquired Fund's registration statement under the 1940 Act. (c)	The Agreement has been duly authorized, executed and delivered by the Acquired Fund and constitutes a valid and legally binding obligation of the Acquired Fund enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement, moratorium and laws of general applicability relating to or affecting creditors' rights and subject to general equity principles in any proceeding, whether at law or in equity, provided, however, that no opinion need be given as to the enforceability of any provision of the Agreement relating to indemnification. (d)	 The execution and delivery of the Agreement did not and the consummation of the transactions contemplated herein will not, violate the Acquired Fund's Articles of Incorporation, as amended, or By-laws; or other organizational documents. (e) To the knowledge of such counsel, all regulatory consents, authorizations, approvals or filings required to be obtained or made by the Acquired Fund under the Federal laws of the United States or the laws of the Commonwealth of Pennsylvania for the exchange of the Acquired Fund's assets for Acquiring Fund Shares, pursuant to the Agreement have been obtained or made. (f) The execution and delivery of the Agreement did not, and the compliance by the Acquired Fund with all the provisions of the Agreement will not, violate any material contract known to such counsel. (g) No consent, approval, authorization, order, registration or qualification of or with any federal or Pennsylvania governmental agency or body, or any federal or Pennsylvania court, is required for the Acquired Fund to enter into the Agreement or to comply with all of the provisions of the Agreement, except such as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act, the rules and regulations thereunder and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws. Such opinion may state that it is solely for the benefit of the Acquiring Fund, its trustees and its officers. Such counsel may rely on certificates of officers or directors of the Acquired Fund and, as to matters governed by the laws of the Commonwealth of Massachusetts may rely on an opinion of Massachusetts counsel. Such opinion also shall include such other matters incident to the transaction contemplated hereby, as the Acquiring Fund may reasonably request. 7.5.	The Acquired Fund shall have performed all of the covenants and complied with all of the provisions required by this Agreement to be performed or complied with by the Acquired Fund on or before the Closing Date. 8.	FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE ACQUIRED FUND If any of the conditions set forth below have not been met on or before the Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1.	This Agreement and the transactions contemplated herein shall have been approved by the Board of Trustees of the Acquiring Fund and by the requisite vote of the holders of the outstanding shares of the Acquired Fund in accordance with the provisions of the Acquired Fund's Articles of Incorporation, as amended, and By-Laws, applicable Pennsylvania law and the 1940 Act, and certified copies of the resolutions evidencing such approval shall have been delivered to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the conditions set forth in this section 8.1. 8.2.	On the Closing Date, no action, suit or other proceeding shall be pending or to its knowledge threatened before any court or governmental agency in which it is sought to restrain or prohibit, or obtain material damages or other relief in connection with, this Agreement or the transactions contemplated herein (without limiting the generality of the foregoing, the Commission shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act). 8.3.	All consents of other parties and all other consents, orders and permits of Federal, state and local regulatory authorities deemed necessary by the Acquiring Fund or the Acquired Fund to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of the Acquiring Fund or the Acquired Fund, provided that either party hereto may for itself waive any of such conditions. 8.4.	The Registration Statement shall have become effective under the 1933 Act and no stop orders suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933 Act. 8.5.	The Acquired Fund and the Acquiring Fund shall have each received an opinion of Willkie Farr & Gallagher, each} dated the Closing Date, to the effect that, based upon certain facts, assumptions and representations, for Federal income tax purposes: (i) the transfer to the Acquiring Fund of all of the Assets of the Acquired Fund in exchange solely for Shares and the assumption by the Acquiring Fund of all of the stated liabilities of the Acquired Fund, followed by the distribution of such Shares to the Acquired Fund shareholders in exchange for their shares of the Acquired Fund in complete liquidation of the Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a)(1) of the Code, and the Acquiring Fund and the Acquired Fund will each be "a party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by the Acquired Fund upon the transfer of all of its Assets to the Acquiring Fund in exchange solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of all of the stated liabilities of the Acquired Fund, or upon the distribution of such Shares to the shareholders of the Acquired Fund; (iii) the basis of the Assets of the Acquired Fund in the hands of the Acquiring Fund will be the same as the basis of such Assets of the Acquired Fund immediately prior to the transfer; (iv) the holding period of the Assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which such Assets were held by the Acquired Fund; (v) no gain or loss will be recognized by the Acquiring Fund upon the receipt of the Assets of the Acquired Fund in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all of the stated liabilities of the Acquired Fund; (vi) no gain or loss will be recognized by the shareholders of the Acquired Fund upon the receipt of Acquiring Fund Shares solely in exchange for their shares of the Acquired Fund as part of the transaction; (vii) the aggregate basis of Acquiring Fund Shares received by a shareholder of the Acquired Fund will be the same as the aggregate basis of the shares of the Acquired Fund exchanged therefor; and (viii) the holding period of such Shares received by a shareholder of the Acquired Fund will include the holding period during which the shares of the Acquired Fund exchanged therefor were held, provided that at the time of the exchange the shares of the Acquired Fund were held as capital assets by the shareholder. The delivery of such opinion is conditioned upon receipt by Willkie Farr & Gallagher of representations it shall request of the Acquired Fund (including its principal shareholders) if more than 50% of its shares are owned by shareholders who each own 5% or more of its shares and the Acquiring Fund. Notwithstanding anything herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the condition set forth in this section 8.5. 9.	INDEMNIFICATION 9.1.	Each Fund (in such capacity , the "Indemnifying Party") agree to respectively indemnify and hold harmless the other fund and each of the other Fund's respective trustees, directors and officers (such other Fund and its trustees, directors and officers, in such capacity, collectively the "Indemnified Party") from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which jointly and severally the Indemnified Party may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any breach by the indemnifying Party of any of its respective representations, warranties, covenants or agreements set forth in this Agreement. The Indemnified Party further agrees to accept full responsibility for and to indemnify and hold harmless the Indemnified Party from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which jointly and severally the Indemnified Party may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any and all statements, misstatements and/or omissions relating to the Indemnifying Party including (but not limited to) any and all financial information (whether pro forma, audited or unaudited), either included in or incorporated by reference into the Proxy Statement and Registration Statement referred to in Sections 4.1(o) and 5.7, respectively. 10.	FEES AND EXPENSES 10.1.	Muni Funds, on behalf of the Acquiring Fund, and Shepmyers each represents and warrants to the other that it has no obligations to pay any brokers or finders fees in connection with the transactions provided for herein. 10.2.	The Acquiring Fund and the Acquired Fund shall each bear their respective expenses which are incured in connection with the Reorganization. 11.	ENTIRE AGREEMENT 11.1.	The Acquiring Fund and the Acquired Fund agree that neither party has made any representation, warranty or covenant not set forth herein and that this Agreement constitutes the entire agreement between the parties. 12.	TERMINATION This Agreement may be terminated and the transactions contemplated hereby may be abandoned by either party by (i) mutual agreement of the parties, or (ii) either party if the Closing shall not have occurred on or before April 14, 2000, unless such date is extended by mutual agreement of the parties, (iii) either party if the other party shall have materially breached its obligations under this Agreement or made a material and intentional misrepresentation herein or in connection herewith, (iv) the Acquiring Fund if any of the conditions set forth in Sections 7 or 8 are not met as of the Closing, or (v) the Acquired Fund if any of the conditions set forth in Sections 6 or 8 are not met as of the Closing. In the event of any such termination, this Agreement shall become void and there shall be no liability hereunder on the part of any party or their respective directors/trustees or officers, except for any such material breach or intentional misrepresentation, as to each of which all remedies at law or in equity of the party adversely affected shall survive. 13. AMENDMENT AND WAIVER At any time prior to or (to the fullest extent permitted by law) after approval of this Agreement by the shareholders of the Acquired Fund, (a) the parties hereto may, by written agreement authorized by their respective Boards of Directors or Trustees, as the case may be, or their respective Presidents or any Vice Presidents, and with or without the approval of their shareholders, amend any of the provisions of this Agreement, and (b) either party may waive any breach by the other party or the failure to satisfy any of the conditions to its obligations (such waiver to be in writing and authorized by the President or any Vice President of the waiving party with or without the approval of such party's shareholders). 14.	NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be deemed duly given if delivered by hand (including by Federal Express or similar express courier) or transmitted by facsimile or three days after being mailed by prepaid, registered or certified mail, return receipt requested, addressed to the Acquired Fund, Post Office Box 339, Hanover, Pennsylvania 17331 with a copy to Drinker Biddle & Reath LLP, One Logan Square, 18th and Cherry Streets, Philadelphia, PA 19103-6997, Attn.: W. Bruce McConnel, III, Esq., or to the Acquiring Fund, 388 Greenwich Street, New York, New York 10013, with a copy to Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York 10019- 6099, Attn.: Burton M. Leibert, Esq., or to any other address that the Acquired Fund or the Acquiring Fund shall have last designated by notice to the other party. 15.	HEADINGS; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY 15.1.	The Article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 15.2.	This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 15.3.	This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and the shareholders of the Acquiring Fund and the Acquired Fund and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 15.4.	Muni Funds is organized as a Massachusetts business trust, and references in this Agreement to Muni Funds mean and refer to its Trustees from time to time serving under the Declaration of Trust on file with the Secretary of State of the Commonwealth of Massachusetts, as the same may be amended from time to time, pursuant to which Muni Funds conducts its business. It is expressly agreed that the obligations of Muni Funds hereunder shall not be binding upon any of the Trustees, shareholders, nominees, officers, agents, or employees of Muni Funds or the Acquiring Fund personally, but bind only the property of the Acquiring Fund as provided in the Muni Funds' Declaration of Trust. Moreover, no series of Muni Funds other than the Acquiring Fund shall be responsible for the obligations of Muni Funds hereunder, and all persons shall look only to the assets of the Acquiring Fund to satisfy the obligations of Muni Funds hereunder. The execution and the delivery of this Agreement have been authorized by Muni Funds' Board of Trustees, on behalf of the Acquiring Fund, and this Agreement has been signed by authorized officers of the Acquiring Fund acting as such, and neither such authorization by such Trustees, nor such execution and delivery by such officers, shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the Acquiring Fund as provided in Muni Funds' Declaration of Trust. 15.5. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts, without regard to its principles of conflicts of laws. 16. OTHER 16.1 Announcements No announcements or similar publicity with respect to this Agreement or the transactions contemplated herein shall be made at any time and in any manner unless specifically agreed upon and approved by each of the parties and their respective investment advisers; provided, that nothing herein shall prevent either party upon notice to the other party from making such public announcements as such party's counsel may consider advisable in order to satisfy the parties' legal and contractual obligations. 16.2 Further Assurances. Subject to the terms and conditions herein provided, each of the parties hereto shall use its best efforts to take, or cause to be taken, such action, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and under applicable law to consummate and make effective the transactions contemplated by this Agreement. 16.3 Termination of Representations and Warranties. The representations and warranties of the parties set forth in this Agreement shall terminate upon the delivery of the Assets to the Acquiring Fund and the issuance of the Acquiring Fund Shares at the Closing. Notwithstanding anything herein to the contrary, Section 9 shall not terminate as of, and shall remain in full force and effect after, the Closing. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its President or Vice President and its seal to be affixed thereto and attested by its Secretary or Assistant Secretary. Attest of Shepmyers Investment Company 	SHEPM YERS INVESTMENT COMPANY _____________________________________	By : _________________________________ Name: Name: Title: Title: Attest:	SMITH BARNEY MUNI FUNDS on behalf of Smith Barney Muni Funds t h e N A T I O N A L P O R T F O L I O _____________________________________ 	By: _________________________________ Name: Name: Title: 	Title: Attest: Article I. APPENDIX A 5% SHAREHOLDERS OF THE NATIONAL PORTFOLIO As of , 2000 the following shareholders beneficially owned 5% or more of a class of shares of the National Portfolio: