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<SEC-DOCUMENT>0000950137-08-009183.txt : 20080708
<SEC-HEADER>0000950137-08-009183.hdr.sgml : 20080708
<ACCEPTANCE-DATETIME>20080708151831
ACCESSION NUMBER:		0000950137-08-009183
CONFORMED SUBMISSION TYPE:	497
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20080708
DATE AS OF CHANGE:		20080708
EFFECTIVENESS DATE:		20080708

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALAMOS GLOBAL TOTAL RETURN FUND
		CENTRAL INDEX KEY:			0001285650
		IRS NUMBER:				203377281
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		497
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-146944
		FILM NUMBER:		08942906

	BUSINESS ADDRESS:	
		STREET 1:		2020 CALAMOS COURT
		STREET 2:		C/O CALAMOS ADVISORS LLC
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60563
		BUSINESS PHONE:		6302451046

	MAIL ADDRESS:	
		STREET 1:		2020 CALAMOS COURT
		STREET 2:		C/O CALAMOS ADVISORS LLC
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60563
</SEC-HEADER>
<DOCUMENT>
<TYPE>497
<SEQUENCE>1
<FILENAME>c19483fe497.htm
<DESCRIPTION>DEFINITIVE MATERIAL
<TEXT>
<HTML>
<HEAD>
<TITLE>e497</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 92%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Filed
    Pursuant to Rule&#160;497</FONT></B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Registration
    <FONT style="white-space: nowrap">No.&#160;333-146944</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Prospectus Supplement<BR>
    (To Prospectus dated March&#160;11, 2008)</B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 20pt">Calamos Global Total Return
    Fund</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Up to 3,000,000 Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos Global Total Return Fund (the &#147;Fund,&#148;
    &#147;we,&#148; or &#147;our&#148;) has entered into a sales
    agreement (the &#147;sales agreement&#148;) with JonesTrading
    Institutional Services LLC (&#147;JonesTrading&#148;) relating
    to the common shares of beneficial interest, no par value per
    share, (&#147;common shares&#148;) offered by this prospectus
    supplement and the accompanying prospectus. In accordance with
    the terms of the sales agreement, we may offer and sell up to
    3,000,000 of our common shares from time to time through
    JonesTrading as our agent for the offer and sale of the common
    shares. Under the Investment Company Act of 1940, as amended
    (the &#147;1940 Act&#148;), the Fund may not sell any common
    shares at a price below the current net asset value of such
    common shares, exclusive of any distributing commission or
    discount. The Fund is a diversified, closed-end management
    investment company which commenced investment operations in
    October 2005. Our investment objective is to provide total
    return through a combination of capital appreciation and current
    income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the New York Stock Exchange
    under the symbol &#147;CGO.&#148; As of June&#160;16, 2008, the
    last reported sale price for our common shares on the New York
    Stock Exchange was $16.17&#160;per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales of our common shares, if any, under this prospectus
    supplement and the accompanying prospectus may be made in
    negotiated transactions or transactions that are deemed to be
    &#147;at the market&#148; as defined in Rule&#160;415 under the
    Securities Act of 1933, as amended (the &#147;1933 Act&#148;),
    including sales made directly on the New York Stock Exchange or
    sales made to or through a market maker other than on an
    exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    JonesTrading will be entitled to compensation of 100 to
    250&#160;basis points of the gross sales price per share for any
    common shares sold under the sales agreement, with the exact
    amount of such compensation to be mutually agreed upon by the
    Fund and JonesTrading from time to time. In connection with the
    sale of the common shares on our behalf, JonesTrading may be
    deemed to be an &#147;underwriter&#148; within the meaning of
    the 1933&#160;Act and the compensation of JonesTrading may be
    deemed to be underwriting commissions or discounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our securities involves certain risks. You could
    lose some or all of your investment. See &#147;Risk
    Factors&#148; beginning on
    <FONT style="white-space: nowrap">page&#160;S-10</FONT>
    of this prospectus supplement and page&#160;30 of the
    accompanying prospectus. You should consider carefully these
    risks together with all of the other information contained in
    this prospectus supplement and the accompanying prospectus
    before making a decision to purchase our securities.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus supplement or the
    accompanying prospectus is truthful or complete. Any
    representation to the contrary is a criminal offense.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 24pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">&#160;</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="c19483fi1948302.gif" alt="(JONESTRADING LOGO)"><B><FONT style="font-size: 24pt">
    </FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 24pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">&#160;</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prospectus Supplement dated July&#160;8, 2008
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 92%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus supplement, together with the accompanying
    prospectus, sets forth concisely the information that you should
    know before investing. You should read the prospectus and
    prospectus supplement, which contain important information,
    before deciding whether to invest in our securities. You should
    retain the prospectus and prospectus supplement for future
    reference. A statement of additional information, dated
    March&#160;11, 2008, as supplemented from time to time,
    containing additional information, has been filed with the
    Securities and Exchange Commission (&#147;Commission&#148;) and
    is incorporated by reference in its entirety into this
    prospectus supplement and the accompanying prospectus. This
    prospectus supplement, the accompanying prospectus and the
    statement of additional information are part of a
    &#147;shelf&#148; registration statement that we filed with the
    Commission. This prospectus supplement describes the specific
    details regarding this offering, including the method of
    distribution. If information in this prospectus supplement is
    inconsistent with the accompanying prospectus or the statement
    of additional information, you should rely on this prospectus
    supplement. You may request a free copy of the statement of
    additional information, the table of contents of which is on
    page&#160;62 of the accompanying prospectus, request a free copy
    of our annual and semi-annual reports, request other information
    or make shareholder inquiries, by calling toll-free
    <FONT style="white-space: nowrap">1-800-582-6959</FONT>
    or by writing to the Fund at 2020 Calamos Court, Naperville,
    Illinois 60563. The Fund&#146;s annual and semi-annual reports
    also are available on our website at www.calamos.com, which also
    provides a link to the Commission&#146;s website, as described
    below, where the Fund&#146;s statement of additional information
    can be obtained. Information included on our website does not
    form part of this prospectus supplement or the accompanying
    prospectus. You can review and copy documents we have filed at
    the Commission&#146;s Public Reference Room in
    Washington,&#160;D.C. Call 1-202-551-8090 for information. The
    Commission charges a fee for copies. You can get the same
    information free from the Commission&#146;s website
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
    You may also
    <FONT style="white-space: nowrap">e-mail</FONT>
    requests for these documents to publicinfo@sec.gov or make a
    request in writing to the Commission&#146;s Public Reference
    Section, Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our securities do not represent a deposit or obligation of, and
    are not guaranteed or endorsed by, any bank or other insured
    depository institution and are not federally insured by the
    Federal Deposit Insurance Corporation, the Federal Reserve Board
    or any other government agency.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Prospectus
    Supplement</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>Prospectus Supplement Summary</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>Capitalization</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#140'>Financial Highlights</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>Summary of Fund&#160;Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-6
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>Market and Net Asset Value Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-7
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-9
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-10
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-10
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>Experts</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>Available Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="5">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Prospectus</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>Prospectus Summary</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>Summary of Fund&#160;Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>Financial Highlights</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>Market And Net Asset Value Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>The Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>Investment Objective and Principal Investment
    Strategies</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>Leverage</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>Interest Rate Transactions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>Risk Factors</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'>Management of the Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'>Closed-End Fund&#160;Structure</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'>Certain Federal Income Tax Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#125'>Net Asset Value</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#126'>Dividends and Distributions; Automatic Dividend
    Reinvestment Plan</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#127'>Description of Securities</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#128'>Rating Agency Guidelines</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#129'>Certain Provisions of the Agreement and
    Declaration of Trust&#160;And Bylaws</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#130'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#131'>Custodian, Transfer Agent, Dividend Disbursing
    Agent And Registrar</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#132'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#133'>Available Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#134'>Table of Contents of the Statement of Additional
    Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should rely only on the information contained or
    incorporated by reference in this prospectus supplement and the
    accompanying prospectus in making your investment decisions. We
    have not authorized any other person to provide you with
    different or inconsistent information. If anyone provides you
    with different or inconsistent information, you should not rely
    on it. This prospectus supplement and the accompanying
    prospectus do not constitute an offer to sell or solicitation of
    an offer to buy any securities in any jurisdiction where the
    offer or sale is not permitted. The information appearing in
    this prospectus supplement and in the accompanying prospectus is
    accurate only as of the dates on their covers. Our business,
    financial condition and prospects may have changed since such
    dates. We will advise investors of any material changes to the
    extent required by applicable law.</B>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    NOTICE REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus supplement, the accompanying prospectus and the
    statement of additional information contain
    &#147;forward-looking statements.&#148; Forward-looking
    statements can be identified by the words &#147;may,&#148;
    &#147;will,&#148; &#147;intend,&#148; &#147;expect,&#148;
    &#147;estimate,&#148; &#147;continue,&#148; &#147;plan,&#148;
    &#147;anticipate,&#148; and similar terms and the negative of
    such terms. Such forward-looking statements may be contained in
    this prospectus supplement as well as in the accompanying
    prospectus. By their nature, all forward-looking statements
    involve risks and uncertainties, and actual results could differ
    materially from those contemplated by the forward-looking
    statements. Several factors that could materially affect our
    actual results are the performance of the portfolio of
    securities we hold, the price at which our shares will trade in
    the public markets and other factors discussed in our periodic
    filings with the Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we believe that the expectations expressed in our
    forward-looking statements are reasonable, actual results could
    differ materially from those projected or assumed in our
    forward-looking statements. Our future financial condition and
    results of operations, as well as any forward-looking
    statements, are subject to change and are subject to inherent
    risks and uncertainties, such as those disclosed in the
    &#147;Risk Factors&#148; sections of this prospectus supplement
    and the accompanying prospectus. All forward-looking statements
    contained or incorporated by reference in this prospectus
    supplement or the accompanying prospectus are made as of the
    date of this prospectus supplement or the accompanying
    prospectus, as the case may be. Except for our ongoing
    obligations under the federal securities laws, we do not intend,
    and we undertake no obligation, to update any forward-looking
    statement. The forward-looking statements contained in this
    prospectus supplement, the accompanying prospectus and the
    statement of additional information are excluded from the safe
    harbor protection provided by section&#160;27A of the
    1933&#160;Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Currently known risk factors that could cause actual results to
    differ materially from our expectations include, but are not
    limited to, the factors described in the &#147;Risk
    Factors&#148; sections of this prospectus supplement and the
    accompanying prospectus. We urge you to review carefully those
    sections for a more detailed discussion of the risks of an
    investment in our securities.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUPPLEMENT SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following summary contains basic information about us and
    our securities. It is not complete and may not contain all of
    the information you may want to consider. You should review the
    more detailed information contained in this prospectus
    supplement and in the accompanying prospectus and in the
    statement of additional information, especially the information
    set forth under the heading &#147;Risk Factors&#148; beginning
    on
    <FONT style="white-space: nowrap">page&#160;S-10</FONT>
    of this prospectus supplement and page&#160;30 of the
    accompanying prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a diversified, closed-end management investment
    company, with total managed assets (as such term is defined
    below) of approximately $201,397,100 as of May&#160;31, 2008. We
    commenced operations in October 2005 following our initial
    public offering. Our investment objective is to provide total
    return through a combination of capital appreciation and current
    income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos Advisors LLC (the &#147;Adviser&#148; or
    &#147;Calamos&#148;) serves as our investment adviser. Calamos
    is responsible on a day-to-day basis for investment of the
    Fund&#146;s portfolio in accordance with its investment
    objective and policies. Calamos makes all investment decisions
    for the Fund and places purchase and sale orders for the
    Fund&#146;s portfolio securities. As of May&#160;31, 2008,
    Calamos managed approximately $44.6&#160;billion in assets of
    individuals and institutions. Calamos is a wholly-owned
    subsidiary of Calamos Holdings, LLC and an indirect subsidiary
    of Calamos Asset Management, Inc., a publicly traded holding
    company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund pays Calamos an annual fee, payable monthly, for its
    investment management services equal to 1.00% of the Fund&#146;s
    average weekly managed assets. &#147;Managed assets&#148; means
    the total assets of the Fund (including any assets attributable
    to any leverage that may be outstanding) minus the sum of
    accrued liabilities (other than debt representing financial
    leverage). See &#147;Management of the Fund&#148; on
    page&#160;38 of the accompanying prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal business address of the Adviser is 2020 Calamos
    Court, Naperville, Illinois 60563.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund and Calamos entered into a sales agreement with
    JonesTrading Institutional Services LLC
    (&#147;JonesTrading&#148;) relating to the common shares offered
    by this prospectus supplement and the accompanying prospectus.
    In accordance with the terms of the sales agreement, we may
    offer and sell up to 3,000,000 of our common shares from time to
    time through JonesTrading as our agent for the offer and sale of
    the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the New York Stock Exchange
    under the symbol &#147;CGO.&#148; As of June&#160;16, 2008, the
    last reported sale price for our common shares was $16.17.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales of our common shares, if any, under this prospectus
    supplement and the accompanying prospectus may be made in
    negotiated transactions or transactions that are deemed to be
    &#147;at the market&#148; as defined in Rule&#160;415 under the
    1933&#160;Act, including sales made directly on the New York
    Stock Exchange or sales made to or through a market maker other
    than on an exchange. See &#147;Plan of Distribution&#148; in
    this prospectus supplement. Our common shares may not be sold
    through agents, underwriters or dealers without delivery or
    deemed delivery of a prospectus and a prospectus supplement
    describing the method and terms of the offering of our
    securities. Under the 1940 Act, the Fund may not sell any common
    shares at a price below the current net asset value of such
    common shares, exclusive of any distributing commission or
    discount.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Developments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On April&#160;23, 2008, we announced that we had secured an
    alternative form of borrowing that enabled us to redeem 100%, or
    $59,000,000, of our previously outstanding Auction Rate
    Preferred Shares (&#147;Preferred Shares&#148; or
    &#147;ARPS&#148;) at par.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The borrowing is in the form of a margin loan. The interest rate
    on the committed facility will vary, based on LIBOR plus 0.70%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The borrowing facility has a 180&#160;day rolling margin
    commitment. We may terminate the borrowing on thirty days prior
    written notice to the lender. The loan is collateralized with
    certain securities of the Fund&#146;s portfolio, which may be
    substituted from time to time. At present, we do not believe the
    margin requirements, lending parameters or the collateral and
    asset tests associated with the loan will affect our investment
    activities in any material way.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of the refinancing described above, which the
    board of trustees of the Fund has approved, our leverage ratio
    did not change materially. The Fund is expected to continue to
    satisfy the asset coverage requirements imposed by the 1940 Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table illustrates the hypothetical effect on the
    return to a holder of the Fund&#146;s common shares of the
    leverage obtained by borrowing under the margin loan program
    described above. The purpose of this table is to assist you in
    understanding the effects of leverage. As the table shows,
    leverage generally increases the return to shareholders when
    portfolio return is positive and greater than the cost of
    leverage and decreases the return when the portfolio return is
    negative or less than the cost of leverage. The figures
    appearing in the table are hypothetical and actual returns may
    be greater or less than those appearing in the table.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="66%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assumed Portfolio Return (Net of Expenses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Corresponding Common Share Return
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15.51
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (8.45
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.39
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.67
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12.73
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For further information about leveraging, see &#147;Risk
    Factors&#160;&#151; Additional Risks to Common
    Shareholders&#160;&#151; Leverage Risk&#148; on page&#160;35 of
    the accompanying prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Use of
    Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise specified in this prospectus supplement, we
    currently intend to invest the net proceeds from the sale of our
    common shares in this offering in accordance with our investment
    objective and policies as described under &#147;Investment
    Objective and Principal Investment Strategies&#148; beginning on
    page&#160;18 of the accompanying prospectus, within
    approximately three months of receipt of such proceeds. In
    addition, we may use sale proceeds to retire all or a portion of
    any short-term debt, and for working capital purposes, including
    the payment of interest and operating expenses, although there
    is currently no intent to issue common shares for this purpose.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer and sell up to 3,000,000 of our common shares from
    time to time through JonesTrading as our agent for the offer and
    sale of the common shares under this prospectus supplement and
    the accompanying prospectus. There is no guaranty that there
    will be any sales of our common shares pursuant to this
    prospectus supplement and the accompanying prospectus. The table
    below assumes that we will sell 3,000,000 common shares, at a
    price of $16.17&#160;per share (the last reported sale price per
    share of our common shares on the New York Stock Exchange on
    June&#160;16, 2008). Actual sales, if any, of our common shares
    under this prospectus supplement and the accompanying prospectus
    may be less than as set forth in the table below. In addition,
    the price per share of any such sale may be greater or less than
    $16.17, depending on the market price of our common shares at
    the time of any such sale. To the extent that the market price
    per share of our common shares on any given day is less than the
    net asset value per share on such day, we will instruct
    JonesTrading not to make any sales on such day.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth our capitalization at
    April&#160;30, 2008:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on a historical basis;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    on a pro forma as adjusted basis to reflect (1)&#160;the assumed
    sale of 3,000,000 of our common shares at $16.17&#160;per share
    (the last reported sale price for our common shares on the New
    York Stock Exchange on June&#160;16, 2008), in an offering under
    this prospectus supplement and the accompanying prospectus,
    (2)&#160;the investment of net proceeds assumed from such
    offering in accordance with our investment objective and
    policies, after deducting the assumed commission of $485,100
    (representing an estimated commission paid to JonesTrading of 1%
    of the gross sales price per share in connection with sales of
    common shares effected by JonesTrading in this offering) and
    offering expenses payable by us of $200,000, and (3)&#160;the
    margin loan of $59,000,000, the proceeds of which were used to
    redeem an equal amount of ARPS. See &#147;Prospectus Supplement
    Summary&#160;&#151;&#160;Recent Developments.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="73%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As Adjusted</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Loan</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Shareholder&#146;s equity</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Preferred shares, no par value per share, $25,000&#160;stated
    value per share, at liquidation value; unlimited shares
    authorized, 2,360&#160;shares outstanding (actual) and
    no&#160;shares outstanding (as adjusted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Common shares, no par value per share, unlimited shares
    authorized, 8,006,981&#160;shares outstanding (actual) and
    11,006,981&#160;shares outstanding (as adjusted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    113,591,761
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    161,416,661
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Undistributed net investment income (loss)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,952,055
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,952,055
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Accumulated net realized gain (loss) on investments, written
    options, and foreign currency transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,471,567
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16,471,567
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Net unrealized appreciation (depreciation) on investments,
    written options, and foreign currency transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,740,814
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14,740,814
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Net assets applicable to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142,852,087
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    190,676,987
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>Total Capitalization</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    201,852,087
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    249,676,987
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='140'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    HIGHLIGHTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information in the following table shows selected data for a
    common share outstanding throughout each period listed below.
    Except as otherwise noted, the information in this table is
    derived from our financial statements audited by
    Deloitte&#160;&#038; Touche LLP, whose report on such financial
    statements is contained in our 2007 Annual Report and is
    included in the statement of additional information, both of
    which are available from us. The information as of and for the
    six months ended April&#160;30, 2008 appears in our unaudited
    interim financial statements for such period, as filed with the
    Commission in our most recent shareholder report. See
    &#147;Available Information&#148; in this prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>October&#160;27,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Six Months Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>2005*<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>April&#160;30,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>For the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>through<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(unaudited)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended October&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>October&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.32
</TD>
<TD nowrap align="left" valign="bottom">
    (a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from investment operations:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.43
</TD>
<TD nowrap align="left" valign="bottom">
    **
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.96
</TD>
<TD nowrap align="left" valign="bottom">
    **
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.86
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized and unrealized gain (loss) from investments,
    written options and foreign currency
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.78
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to preferred shareholders from:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (common share equivalent basis)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.08
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.39
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.29
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Capital gains (common share equivalent basis)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (b)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total from investment operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.52
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Less distributions to common shareholders from:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.57
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.65
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Capital gains
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.12
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.12
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.19
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capital charge resulting from issuance of common and preferred
    shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Market value, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total investment return based on(c):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net asset value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11.84
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38.30
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.77
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.24
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Market value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11.38
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33.84
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.19
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ratios and supplemental data:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net assets applicable to common shareholders, end of period
    (000&#146;s omitted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    142,852
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    168,551
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    130,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    114,439
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred shares, at redemption value ($25,000 per share
    liquidation preference) (000&#146;s omitted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ratios to average net assets applicable to common shareholders:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net expenses(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.72
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.33
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Gross expenses(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.72
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.37
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss)(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.37
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.57
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.33
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Preferred share distributions from net investment income(d)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.90
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.17
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.89
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss), net of preferred share
    distributions from net investment income(d)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.85
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.20
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.68
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Portfolio turnover rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    49
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    85
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Average commission rate paid
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.0497
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.0377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.0258
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Asset coverage per preferred share, at end of period(f)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    85,533
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    96,423
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    80,358
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    Commencement of operations.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Net investment income allocated based on average shares method.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (a) </TD>
    <TD></TD>
    <TD valign="bottom">
    Net of sales load of $0.675 on initial shares issued and
    beginning net asset value of $14.325.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (b) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amount equated to less than $0.005 per common share.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (c) </TD>
    <TD></TD>
    <TD valign="bottom">
    Total investment return is calculated assuming a purchase of
    common stock on the opening of the first day and a sale on the
    closing of the last day of the period reported. Dividends and
    distributions are assumed, for purposes of this calculation, to
    be reinvested at prices obtained under the Fund&#146;s dividend
    reinvestment plan. Total return is not annualized for periods
    less than one year. Brokerage commissions are not reflected. NAV
    per share is determined by dividing the value of the Fund&#146;s
    portfolio securities, cash and other assets, less all
    liabilities, by the total number of common shares outstanding.
    The common share market price is the price the market is willing
    to pay for shares of the Fund at a given time. Common share
    market price is influenced by a range of factors, including
    supply and demand and market conditions.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (d) </TD>
    <TD></TD>
    <TD valign="bottom">
    Annualized for periods less than one year.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (e) </TD>
    <TD></TD>
    <TD valign="bottom">
    Does not reflect the effect of dividend payments to the
    shareholders of Preferred Shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (f) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculated by subtracting the Fund&#146;s total liabilities (not
    including Preferred Shares) from the Fund&#146;s total assets
    and dividing this by the number of Preferred Shares outstanding.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF FUND&#160;EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table and example contain information about the
    costs and expenses that an investor in this offering will bear
    directly or indirectly. In accordance with Commission
    requirements, the table below shows our expenses, including
    leverage costs, as a percentage of our average net assets as of
    April&#160;30, 2008, and not as a percentage of gross assets or
    managed assets. By showing expenses as a percentage of average
    net assets, expenses are not expressed as a percentage of all of
    the assets we invest. The table and example are based on our
    capital structure as of April&#160;30, 2008, except that such
    expenses include anticipated expenses to be incurred in
    connection with the borrowing under the recently completed
    margin loan program described herein. See &#147;Prospectus
    Supplement Summary&#160;&#151; Recent Developments.&#148; The
    table and example reflect interest expense associated with such
    borrowing, such borrowing being in the aggregate principal
    amount of $59,000,000 utilized entirely to redeem an equal
    aggregate liquidation amount of ARPS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of April&#160;30, 2008, we had $59,000,000 in ARPS
    outstanding, representing 29.2% of managed assets as of that
    date. The table and example assume we had no ARPS outstanding as
    of April&#160;30, 2008.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shareholder
    Transaction Expense</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="93%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sales Load (as a percentage of offering price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.00
</TD>
<TD nowrap align="left" valign="bottom">
    %(1)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Offering Expenses Borne by the Fund (as a percentage of offering
    price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    .41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Automatic Dividend Reinvestment Plan Fees(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="17%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage of Net<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Assets Attributable to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Annual Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Shareholders</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management Fee(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Leverage Costs(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    .19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Annual Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Less Fee Reductions(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net Annual Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Example:</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following example illustrates the expenses that common
    shareholders would pay on a $1,000 investment in common shares,
    assuming (1)&#160;net annual expenses of 2.92% of net assets
    attributable to common shares in years 1 through 10; (2)&#160;a
    5% annual return; and (3)&#160;all distributions are reinvested
    at net asset value:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1&#160;Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Expenses Paid by Common Shareholders(6)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    30
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    90
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    154
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    324
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The example should not be considered a representation of
    future expenses. Actual expenses may be greater or less than
    those assumed. Moreover, our actual rate of return may be
    greater or less than the hypothetical 5% return shown in the
    example.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the estimated commission with respect to our common
    shares being sold in this offering, which we will pay to
    JonesTrading in connection with sales of common shares effected
    by JonesTrading in this offering. While JonesTrading is entitled
    to a commission of 1% to 2.5% of the gross sales price for
    common shares sold, with the exact amount to be agreed upon by
    the parties, we have assumed, for purposes of this offering,
    that JonesTrading will receive a commission of 1% of such gross
    sales price. This is the only sales load to be paid in
    connection with this offering. There is no guaranty that there
    will be any sales of our common shares pursuant to this
    prospectus supplement and the accompanying prospectus. Actual
    sales of our common shares under this prospectus supplement and
    the accompanying prospectus, if any, may be less than as set
    forth in the table. In addition, the price per share of any such
    sale may be greater or less than the price set forth in the
    table, depending on the market price of our common shares at the
    time of any such sale.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shareholders will pay a transaction fee plus brokerage charges
    if they direct the Plan Agent to sell common shares held in a
    Plan account. See &#147;Automatic Dividend Reinvestment
    Plan&#148; on page&#160;50 of the accompanying prospectus.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund pays Calamos an annual management fee, payable monthly,
    for its investment management services equal to 1.00% of the
    Fund&#146;s average weekly managed assets. In accordance with
    the requirements of the Commission, the table above shows the
    Fund&#146;s management fee as a percentage of average net
    assets. By showing the management fee as a percentage of net
    assets, the management fee is not expressed as a percentage of
    all of the assets the Fund intends to invest. For purposes of
    the table, the management fee has been converted to 1.40% of the
    Fund&#146;s average daily net assets as of April&#160;30, 2008
    by dividing the total dollar amount of the management fee by the
    Fund&#146;s average daily net assets (managed assets less
    outstanding leverage).</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Reflects interest expense on $59,000,000 in borrowings under our
    margin loan and an arrangement fee of .25% of the margin loan.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund may invest a portion of its assets in Calamos
    Government Money Market Fund, a series of Calamos Investment
    Trust (&#147;GMMF&#148;). Calamos has contractually agreed to
    waive, through February&#160;29, 2009, a portion of its advisory
    fee charged to the Fund, in an amount equal to the advisory fee
    payable by GMMF to Calamos that is attributable to the
    Fund&#146;s investment in GMMF, based on managed assets. The
    amount equated to less than 0.005% of net assets attributable to
    common shareholders.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    The example does not include sales load or estimated offering
    costs.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of the table and the example above is to help
    investors understand the fees and expenses that they, as common
    shareholders, would bear directly or indirectly. For additional
    information with respect to our expenses, see &#147;Management
    of the Fund&#148; on page&#160;38 of the accompanying prospectus.
</DIV>
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MARKET
    AND NET ASSET VALUE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the New York Stock Exchange
    (&#147;NYSE&#148;) under the symbol &#147;CGO.&#148; Our common
    shares commenced trading on the NYSE in October&#160;2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares have traded both at a premium and at a
    discount in relation to net asset value or NAV. We cannot
    predict whether our shares will trade in the future at a premium
    or discount to NAV. The provisions of the 1940 Act generally
    require that the public offering price of common shares (less
    any underwriting commissions and discounts) must equal or exceed
    the NAV per share of a company&#146;s common stock (calculated
    within 48&#160;hours of pricing). Our issuance of common shares
    may have an adverse effect on prices in the secondary market for
    our common shares by increasing the number of common shares
    available, which may put downward pressure on the market price
    for our common shares. Shares of common stock of closed-end
    investment companies frequently trade at a discount from NAV.
    See &#147;Risk Factors&#160;&#151; Additional Risks to Common
    Shareholders&#160;&#151; Market Discount Risk&#148; on
    page&#160;37 of the accompanying prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth for each of the periods indicated
    the high and low closing market prices for our common shares on
    the NYSE, the NAV per share and the premium or discount to NAV
    per share at which our common shares were trading. NAV is
    determined on the last business day of each month. See &#147;Net
    Asset Value&#148; on page&#160;47 of the accompanying prospectus
    for information as to the determination of our NAV.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="56%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Premium/ (Discount)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Market Price(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Net Asset<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>to Net Asset Value(3)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Quarter Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    January&#160;31, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.17
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7.99
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    April&#160;30, 2008
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    .06
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14.97
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source: Bloomberg Financial and Fund&#160;Accounting Records.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on high and low closing market price during the respective
    quarter.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on the NAV calculated on the close of business on the last
    business day of each calendar quarter.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on the Fund&#146;s computations.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The last reported sale price, NAV per common share and
    percentage premium (discount) to NAV per common share on
    June&#160;16, 2008 were $16.17, $17.10 and (5.44)%,
    respectively. As of June&#160;16, 2008, we had
    8,006,981&#160;common shares outstanding and net assets of
    approximately $136,944,468.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table provides information about our outstanding
    securities as of June&#160;16, 2008:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="62%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Held by the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fund or for<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title of Class</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>its Account</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding(1)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,006,981
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    As described in &#147;Prospectus Supplement Summary&#160;&#151;
    Recent Developments,&#148; we redeemed 100%, or $59,000,000, of
    our previously outstanding ARPS with the proceeds of a margin
    loan. </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Sales of our common shares, if any, under this prospectus
    supplement and the accompanying prospectus may be made in
    negotiated transactions or transactions that are deemed to be
    &#147;at the market&#148; as defined in Rule&#160;415 under the
    1933 Act, including sales made directly on the New York Stock
    Exchange or sales made to or through a market maker other than
    on an exchange. There is no guaranty that there will be any
    sales of our common shares pursuant to this prospectus
    supplement and the accompanying prospectus. Actual sales, if
    any, of our common shares under this prospectus supplement and
    the accompanying prospectus may be less than as set forth in
    this paragraph. In addition, the price per share of any such
    sale may be greater or less than the price set forth in this
    paragraph, depending on the market price of our common shares at
    the time of any such sale. As a result, the actual net proceeds
    we receive may be more or less than the amount of net proceeds
    estimated in this prospectus supplement. Assuming the sale of
    all of our common shares offered under this prospectus
    supplement and the accompanying prospectus, at the last reported
    sale price of $16.17&#160;per share for our common shares on the
    New York Stock Exchange as of June&#160;16, 2008, we estimate
    that the net proceeds of this offering will be approximately
    $47,824,900 after deducting the estimated underwriting discount
    and our estimated offering expenses. We currently expect to use
    proceeds of this offering to invest in accordance with our
    investment objective and policies within approximately three
    months of receipt of such proceeds. In addition, we may use
    proceeds from the sale of our common shares to retire all or a
    portion of any short-term debt we incur in pursuit of our
    investment objective and policies, and for working capital
    purposes, including the payment of interest and operating
    expenses, although there is currently no intent to issue common
    shares for this purpose. Pending such use of proceeds, we
    anticipate that we will invest the proceeds in securities issued
    by the U.S.&#160;government or its agencies or instrumentalities
    or in high quality, short-term or long-term debt obligations.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Investing in our common shares involves risk, including the
    risk that you may receive little or no return on your investment
    or even that you may lose part or all of your investment.
    Therefore, before investing in our common shares you should
    consider carefully the risk factors described in the
    accompanying prospectus.</I>
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>
<A name='107'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the sales agreement among the Fund, Calamos and
    JonesTrading, upon written instructions from the Fund,
    JonesTrading will use its commercially reasonable efforts
    consistent with its sales and trading practices, to solicit
    offers to purchase the common shares under the terms and subject
    to the conditions set forth in the sales agreement.
    JonesTrading&#146;s solicitation will continue until we instruct
    JonesTrading to suspend the solicitations and offers. We will
    instruct JonesTrading as to the amount of common shares to be
    sold by JonesTrading. We may instruct JonesTrading not to sell
    common shares if the sales cannot be effected at or above the
    price designated by the Fund in any instruction. We or
    JonesTrading may suspend the offering of common shares upon
    proper notice and subject to other conditions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    JonesTrading will provide written confirmation to the Fund not
    later than the opening of the trading day on the New York Stock
    Exchange following the trading day on which common shares are
    sold under the sales agreement. Each confirmation will include
    the number of shares sold on the preceding day, the net proceeds
    to us and the compensation payable by the Fund to JonesTrading
    in connection with the sales.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will pay JonesTrading commissions for its services in acting
    as agent in the sale of common shares. JonesTrading will be
    entitled to compensation of 100 to 250&#160;basis points of the
    gross sales price per share of any common shares sold under the
    sales agreement, with the exact amount of such compensation to
    be mutually agreed upon by the Fund and JonesTrading from time
    to time. There is no guaranty that there will be any sales of
    our common shares pursuant to this prospectus supplement and the
    accompanying prospectus. Actual sales, if any, of our common
    shares under this prospectus supplement and the accompanying
    prospectus may be less than as set forth in this paragraph. In
    addition, the price per share of any such sale may be greater or
    less than the price set forth in this paragraph, depending on
    the market price of our common shares at the time of any such
    sale. Assuming 3,000,000 of our common shares offered hereby are
    sold at a market price of $16.17&#160;per share (the last
    reported sale price for our common shares on the New York Stock
    Exchange on June&#160;16, 2008), we estimate that the total
    expenses for the offering, excluding compensation payable to
    JonesTrading under the terms of the sales agreement, would be
    approximately $200,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Settlement for sales of common shares will occur on the third
    trading day following the date on which such sales are made, or
    on some other date that is agreed upon by the Fund and
    JonesTrading in connection with a particular transaction, in
    return for payment of the net proceeds to the Fund. There is no
    arrangement for funds to be received in an escrow, trust or
    similar arrangement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with the sale of the common shares on our behalf,
    JonesTrading may, and will with respect to sales effected in an
    &#147;at the market offering&#148;, be deemed to be an
    &#147;underwriter&#148; within the meaning of the 1933&#160;Act,
    and the compensation of JonesTrading may be deemed to be
    underwriting commissions or discounts. We have agreed to provide
    indemnification and contribution to JonesTrading against certain
    civil liabilities, including liabilities under the 1933&#160;Act.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The offering of our common shares pursuant to the sales
    agreement will terminate upon the earlier of (1)&#160;the sale
    of all common shares subject the sales agreement or
    (2)&#160;termination of the sales agreement. The sales agreement
    may be terminated by us in our sole discretion at any time by
    giving notice to JonesTrading. In addition, JonesTrading may
    terminate the sales agreement under the circumstances specified
    in the sales agreement and in its sole discretion at any time
    following a period of 12&#160;months from the date of the sales
    agreement by giving notice to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal business address of JonesTrading is 780
    Third&#160;Avenue,
    3<SUP style="font-size: 85%; vertical-align: text-top">rd</SUP>&#160;Floor,
    New&#160;York, New&#160;York 10017.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Bell, Boyd&#160;&#038; Lloyd LLP (&#147;Bell Boyd&#148;),
    Chicago, Illinois, which is serving as counsel to the Fund in
    connection with the offering, will pass on the legality of the
    issuance of the common shares offered hereby.
    Kirkland&#160;&#038; Ellis LLP is serving as counsel to Calamos.
    Bell Boyd may rely on the opinion of Morris, Nichols,
    Arsht&#160;&#038; Tunnell LLP, Wilmington, Delaware, with
    respect to certain matters of Delaware law.
</DIV>
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The financial statements and financial highlights in the
    accompanying statement of additional information have been
    audited by Deloitte&#160;&#038; Touche LLP, an independent
    registered public accounting firm, as stated in their report
    appearing herein and elsewhere in the Registration Statement.
    Such financial statements and financial highlights are included
    in reliance upon the report of such firm given upon their
    authority as experts in accounting and auditing.
</DIV>
<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AVAILABLE
    INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to the informational requirements of the
    Securities Exchange Act of 1934, as amended (the &#147;Exchange
    Act&#148;) and the 1940 Act and are required to file reports,
    including annual and semi-annual reports, proxy statements and
    other information with the Commission. Our most recent
    shareholder report and most recent quarterly schedule of
    portfolio holdings filed with the Commission are for the period
    ended April&#160;30, 2008. These documents are available on the
    Commission&#146;s EDGAR system and can be inspected and copied
    for a fee at the Commission&#146;s public reference room,
    100&#160;F&#160;Street, N.E., Room&#160;1580,
    Washington,&#160;D.C. 20549. Additional information about the
    operation of the public reference room facilities may be
    obtained by calling the Commission at
    <FONT style="white-space: nowrap">(202)&#160;551-5850.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus supplement and the accompanying prospectus do
    not contain all of the information in our registration
    statement, including amendments, exhibits, and schedules.
    Statements in this prospectus supplement and the accompanying
    prospectus about the contents of any contract or other document
    are not necessarily complete and in each instance reference is
    made to the copy of the contract or other document filed as an
    exhibit to the registration statement, each such statement being
    qualified in all respects by this reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additional information about us can be found in our registration
    statement (including amendments, exhibits, and schedules) on
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT>
    filed with the Commission. The Commission maintains a web site
    <FONT style="white-space: nowrap">(http://www.sec.gov)</FONT>
    that contains our registration statement, other documents
    incorporated by reference, and other information we have filed
    electronically with the Commission, including proxy statements
    and reports filed under the Exchange Act.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    S-11
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Base Prospectus
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">$75,000,000</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 20pt">Calamos Global Total Return
    Fund</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Common Shares </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Preferred Shares </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Debt Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos Global Total Return Fund (the &#147;Fund,&#148;
    &#147;we&#148; or &#147;our&#148;) is a diversified, closed-end
    management investment company which commenced investment
    operations in October 2005. Our investment objective is to
    provide total return through a combination of capital
    appreciation and current income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer, on an immediate, continuous or delayed basis, up
    to $75,000,000 aggregate initial offering price of our common
    shares (no par value per share), preferred shares (liquidation
    preference of $25,000 per share) or debt securities, which we
    refer to in this prospectus collectively as our securities, in
    one or more offerings. We may offer our common shares, preferred
    shares and debt securities separately or together, in amounts,
    at prices and on terms set forth in a prospectus supplement to
    this prospectus. You should read this prospectus and the related
    prospectus supplement carefully before you decide to invest in
    any of our securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer our securities directly to one or more purchasers,
    through agents that we or they designate from time to time, or
    to or through underwriters or dealers. The prospectus supplement
    relating to the particular offering will identify any agents or
    underwriters involved in the sale of our securities, and will
    set forth any applicable purchase price, fee, commission or
    discount arrangement between us and such agents or underwriters
    or among the underwriters or the basis upon which such amount
    may be calculated. For more information about the manner in
    which we may offer our securities, see &#147;Plan of
    Distribution.&#148; Our securities may not be sold through
    agents, underwriters or dealers without delivery of a prospectus
    supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the New York Stock Exchange
    under the symbol &#147;CGO.&#148; As of March&#160;6, 2008, the
    last reported sale price for our common shares was $16.06.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our securities involves certain risks.&#160;You
    could lose some or all of your investment. See &#147;Risk
    Factors&#148; beginning on page&#160;30 of this prospectus. You
    should consider carefully these risks together with all of the
    other information contained in this prospectus and any
    prospectus supplement before making a decision to purchase our
    securities.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prospectus dated March&#160;11, 2008
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus, together with any prospectus supplement, sets
    forth concisely the information that you should know before
    investing. You should read the prospectus and prospectus
    supplement, which contain important information, before deciding
    whether to invest in our securities. You should retain the
    prospectus and prospectus supplement for future reference. A
    statement of additional information, dated March&#160;11, 2008,
    as supplemented from time to time, containing additional
    information, has been filed with the Securities and Exchange
    Commission (&#147;Commission&#148;) and is incorporated by
    reference in its entirety into this prospectus. You may request
    a free copy of the statement of additional information, the
    table of contents of which is on page&#160;62 of this
    prospectus, request a free copy of our annual and semi-annual
    reports, request other information or make shareholder
    inquiries, by calling toll-free
    <FONT style="white-space: nowrap">1-800-582-6959</FONT>
    or by writing to the Fund at 2020 Calamos Court, Naperville,
    Illinois 60563. The Fund&#146;s annual and semi-annual reports
    also are available on our website at www.calamos.com, which also
    provides a link to the Commission&#146;s website, as described
    below, where the Fund&#146;s statement of additional information
    can be obtained. Information included on our website does not
    form part of this prospectus. You can review and copy documents
    we have filed at the Commission&#146;s Public Reference Room in
    Washington,&#160;D.C. Call 1-202-551-8090 for information. The
    Commission charges a fee for copies. You can get the same
    information free from the Commission&#146;s website
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
    You may also
    <FONT style="white-space: nowrap">e-mail</FONT>
    requests for these documents to publicinfo@sec.gov or make a
    request in writing to the Commission&#146;s Public Reference
    Section,
    <FONT style="white-space: nowrap">Washington,&#160;D.C.&#160;20549-0102.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our securities do not represent a deposit or obligation of, and
    are not guaranteed or endorsed by, any bank or other insured
    depository institution and is not federally insured by the
    Federal Deposit Insurance Corporation, the Federal Reserve Board
    or any other government agency.
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Prospectus Summary
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Summary of Fund&#160;Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Financial Highlights
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Market and Net Asset Value Information
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Use of Proceeds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    The Fund
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment Objective and Principal Investment Strategies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Leverage
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest Rate Transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Risk Factors
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    30
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management of the Fund
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Closed-End Fund&#160;Structure
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    41
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Certain Federal Income Tax Matters
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net Asset Value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    47
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dividends and Distributions; Automatic Dividend Reinvestment Plan
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    48
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Description of Securities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    52
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Rating Agency Guidelines
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Certain Provisions of the Agreement and Declaration of Trust and
    Bylaws
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    57
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Plan of Distribution
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    59
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Custodian, Transfer Agent, Dividend Disbursing Agent and
    Registrar
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal Matters
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Available Information
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Table of Contents of the Statement of Additional Information
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>You should rely only on the information contained or
    incorporated by reference in this prospectus and any related
    prospectus supplement in making your investment decisions. We
    have not authorized any other person to provide you with
    different or inconsistent information. If anyone provides you
    with different or inconsistent information, you should not rely
    on it. This prospectus and any prospectus supplement do not
    constitute an offer to sell or solicitation of an offer to buy
    any securities in any jurisdiction where the offer or sale is
    not permitted. The information appearing in this prospectus and
    in any prospectus supplement is accurate only as of the dates on
    their covers. Our business, financial condition and prospects
    may have changed since such dates. We will advise investors of
    any material changes to the extent required by applicable
    law.</B>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    NOTICE REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus, any accompanying prospectus supplement and the
    statement of additional information contain
    &#147;forward-looking statements.&#148; Forward-looking
    statements can be identified by the words &#147;may,&#148;
    &#147;will,&#148; &#147;intend,&#148; &#147;expect,&#148;
    &#147;estimate,&#148; &#147;continue,&#148; &#147;plan,&#148;
    &#147;anticipate,&#148; and similar terms and the negative of
    such terms. Such forward-looking statements may be contained in
    this prospectus as well as in any accompanying prospectus
    supplement. By their nature, all forward-looking statements
    involve risks and uncertainties, and actual results could differ
    materially from those contemplated by the forward-looking
    statements. Several factors that could materially affect our
    actual results are the performance of the portfolio of
    securities we hold, the price at which our shares will trade in
    the public markets and other factors discussed in our periodic
    filings with the Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we believe that the expectations expressed in our
    forward-looking statements are reasonable, actual results could
    differ materially from those projected or assumed in our
    forward-looking statements. Our future financial condition and
    results of operations, as well as any forward-looking
    statements, are subject to change and are subject to inherent
    risks and uncertainties, such as those disclosed in the
    &#147;Risk Factors&#148; section of this prospectus. All
    forward-looking statements contained or incorporated by
    reference in this prospectus or any accompanying prospectus
    supplement are made as of the date of this prospectus or the
    accompanying prospectus supplement, as the case may be. Except
    for our ongoing obligations under the federal securities laws,
    we do not intend, and we undertake no obligation, to update any
    forward-looking statement. The forward-looking statements
    contained in this prospectus, any accompanying prospectus
    supplement and the statement of additional information are
    excluded from the safe harbor protection provided by
    section&#160;27A of the Securities Act of 1933, as amended (the
    &#147;1933&#160;Act&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Currently known risk factors that could cause actual results to
    differ materially from our expectations include, but are not
    limited to, the factors described in the &#147;Risk
    Factors&#148; section of this prospectus. We urge you to review
    carefully that section for a more detailed discussion of the
    risks of an investment in securities.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following summary contains basic information about us and
    our securities. It is not complete and may not contain all of
    the information you may want to consider. You should review the
    more detailed information contained in this prospectus and in
    any related prospectus supplement and in the statement of
    additional information, especially the information set forth
    under the heading &#147;Risk Factors&#148; beginning on
    page&#160;33 of this prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a diversified, closed-end management investment
    company. We commenced operations in October 2005 following our
    initial public offering. As of the date of this prospectus, we
    have $59&#160;million of auction rate cumulative preferred
    shares (&#147;Preferred Shares&#148;) outstanding. Our fiscal
    year ends on October&#160;31. Our investment objective is to
    provide total return through a combination of capital
    appreciation and current income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos Advisors LLC (the &#147;Adviser&#148; or
    &#147;Calamos&#148;) serves as our investment adviser. Calamos
    is responsible on a day-to-day basis for investment of the
    Fund&#146;s portfolio in accordance with its investment
    objective and policies. Calamos makes all investment decisions
    for the Fund and places purchase and sale orders for the
    Fund&#146;s portfolio securities. As of December&#160;31, 2007,
    Calamos managed approximately $46.2&#160;billion in assets of
    individuals and institutions. Calamos is a wholly-owned
    subsidiary of Calamos Holdings, LLC (&#147;Holdings&#148;) and
    an indirect subsidiary of Calamos Asset Management, Inc., a
    publicly traded holding company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund pays Calamos an annual fee, payable monthly, for its
    investment management services equal to 1.00% of the Fund&#146;s
    average weekly managed assets. &#147;Managed Assets&#148; means
    the total assets of the Fund (including any assets attributable
    to any leverage that may be outstanding) minus the sum of
    accrued liabilities (other than debt representing financial
    leverage). See &#147;Management of the Fund.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The principal business address of the Adviser is 2020 Calamos
    Court, Naperville, Illinois 60563.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer, on an immediate, continuous or delayed basis, up
    to $75,000,000 of our securities on terms to be determined at
    the time of the offering. Our securities will be offered at
    prices and on terms to be set forth in one or more prospectus
    supplements to this prospectus. Preferred shares and debt
    securities (collectively, &#147;senior securities&#148;) may be
    auction rate securities, in which case the senior securities
    will not be listed on any exchange or automated quotation
    system. Rather, investors generally may only buy and sell senior
    securities through an auction conducted by an auction agent and
    participating broker-dealers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer our securities directly to one or more purchasers,
    through agents that we or they designate from time to time, or
    to or through underwriters or dealers. The prospectus supplement
    relating to the offering will identify any agents or
    underwriters involved in the sale of our securities, and will
    set forth any applicable purchase price, fee, commission or
    discount arrangement between us and such agents or underwriters
    or among underwriters or the basis upon which such amount may be
    calculated. See &#147;Plan of Distribution.&#148; Our securities
    may not be sold through agents, underwriters or dealers without
    delivery of a prospectus supplement describing the method and
    terms of the offering of our securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Use of
    Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise specified in a prospectus supplement, we intend
    to use the net proceeds from the sale of our securities
    primarily to invest in accordance with our investment objective
    and policies within approximately three months of receipt of
    such proceeds. We also may use sale proceeds to retire all or a
    portion of any short-term debt, and for working capital
    purposes, including the payment of interest and operating
    expenses, although there is currently no intent to issue
    securities primarily for this purpose.
</DIV>
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    <BR>
    1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends
    and Distributions on Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has made regular monthly distributions to its common
    shareholders in amounts ranging from $0.0750 to $0.1150 since
    January 2006. Additionally, the Fund made a distribution of
    $0.0250 in January&#160;2006. The Fund intends to distribute to
    common shareholders all or a portion of its net investment
    income monthly and net realized capital gains, if any, at least
    annually.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund currently intends to make monthly distributions to
    common shareholders at a level rate established by the Board of
    Trustees. The rate may be modified by the Board of Trustees from
    time to time. Monthly distributions may include net investment
    income, net realized short-term capital gain and, if necessary
    to maintain a level distribution, return of capital. The Fund
    may at times in its discretion pay out less than the entire
    amount of net investment income earned in any particular period
    and may at times pay out such accumulated undistributed income
    in addition to net investment income earned in other periods in
    order to permit the Fund to maintain a more stable level of
    distributions. As a result, the dividends paid by the Fund to
    holders of common shares for any particular period may be more
    or less than the amount of net investment income earned by the
    Fund during such period. Net realized short-term capital gains
    distributed to shareholders will be taxed as ordinary income for
    federal income tax purposes. In addition, one distribution per
    calendar year may include net realized long-term capital gain
    (if any), which will be taxed for federal income tax purposes at
    long-term capital gain rates. To the extent the Fund distributes
    an amount in excess of the Fund&#146;s current and accumulated
    earnings and profits, such excess, if any, will be treated by a
    shareholder for federal income tax purposes as a tax-free return
    of capital to the extent of the shareholder&#146;s adjusted tax
    basis in his, her or its shares and thereafter as a gain from
    the sale or exchange of such shares. Any such distributions made
    by the Fund will reduce the shareholder&#146;s adjusted tax
    basis in his, her or its shares to the extent that the
    distribution constitutes a return of capital. To date, however,
    none of the Fund&#146;s distributions have included a return of
    capital as determined on a tax basis during any calendar year.
    To the extent that the Fund&#146;s distributions exceed the
    Fund&#146;s current and accumulated earnings and profits, the
    distribution payout rate will exceed the yield generated from
    the Fund&#146;s investments. There is no guarantee that the Fund
    will realize capital gain in any given year. Pursuant to the
    requirements of the 1940 Act and other applicable laws, a notice
    would accompany each monthly distribution with respect to the
    estimated source of the distribution made. Distributions are
    subject to re-characterization for federal income tax purposes
    after the end of the fiscal year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2004, Calamos, on behalf of itself and certain funds
    that it manages, filed an exemptive application with the
    Commission seeking an order under the 1940 Act facilitating the
    implementation of a dividend policy calling for monthly
    distributions of a fixed percentage of its net asset value
    (&#147;Managed Dividend Policy&#148;). In March 2007, an amended
    and restated exemptive application was filed with the
    Commission. If, and when, Calamos, on behalf of itself and other
    parties, receives the requested relief, the Fund may, subject to
    the determination of its Board of Trustees, implement a Managed
    Dividend Policy. Under a Managed Dividend Policy, if, for any
    distribution, net investment income and net realized capital
    gains were less than the amount of the distribution, the
    differences would be distributed from the Fund&#146;s other
    assets. There can be no assurance that the Fund will receive the
    requested relief.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Fund&#146;s Automatic Dividend Reinvestment
    Plan, unless a shareholder is ineligible or elects otherwise,
    all dividends and capital gain distributions on common shares
    are automatically reinvested in additional common shares of the
    Fund. However, an investor can choose to receive dividends and
    distributions in cash. Since investors can participate in the
    automatic dividend reinvestment plan only if their broker or
    nominee participates in our plan, you should contact your broker
    or nominee to confirm that you are eligible to participate in
    the plan. See &#147;Dividends and Distributions; Automatic
    Dividend Reinvestment Plan.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Primary Investments.</I>&#160;&#160;Under normal
    circumstances, the Fund will invest primarily in a portfolio of
    common and preferred stocks, convertible securities and income
    producing securities such as investment grade and below
    investment grade (high yield/high risk) debt securities. The
    Fund, under normal circumstances, will invest at least 50% of
    its managed assets in equity securities (including securities
    that are convertible into
</DIV>
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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    equity securities). The Fund may invest up to 100% of its
    managed assets in securities of foreign issuers, including debt
    and equity securities of corporate issuers and debt securities
    of government issuers, in developed and emerging markets. Under
    normal circumstances, the Fund will invest at least 30% of its
    managed assets in securities of foreign issuers. The Fund will
    invest in the securities of issuers of several different
    countries throughout the world, in addition to the United States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos will dynamically allocate the Fund&#146;s investments
    among multiple asset classes (rather than maintaining a fixed or
    static allocation), seeking to obtain an appropriate balance of
    risk and reward through all market cycles using multiple
    strategies and combining them to seek to achieve favorable risk
    adjusted returns. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will attempt to keep a consistent balance between risk
    and reward over the course of different market cycles, through
    various combinations of stocks, bonds,
    <FONT style="white-space: nowrap">and/or</FONT>
    convertible securities, to achieve what Calamos believes to be
    an appropriate blend for the then current market. As the market
    environment changes, portfolio securities may change in an
    attempt to achieve a relatively consistent risk level over time.
    At some points in a market cycle, one type of security may make
    up a substantial portion of the Fund&#146;s portfolio, while at
    other times certain securities may have minimal or no
    representation, depending on market conditions. See
    &#147;Investment Objective and Principal Investment
    Strategies&#160;&#151; Principal Investment Strategies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may also seek to generate income from option premiums
    by writing (selling) options (with an aggregate notional value
    of up to 33% of the value of the Fund&#146;s managed assets).
    The Fund will opportunistically employ a strategy of writing
    options. The extent of option writing activity will depend upon
    market conditions and Calamos&#146; ongoing assessment of the
    attractiveness of writing options on the Fund&#146;s equity
    holdings. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Equity Securities.</I>&#160;&#160;Equity securities include
    common and preferred stocks, warrants, rights, and depository
    receipts. Under normal circumstances, the Fund will invest at
    least 50% of its managed assets in equity securities (including
    securities that are convertible into equity securities). The
    Fund may invest in preferred stocks and convertible securities
    of any rating, including below investment grade. See
    &#147;&#151; High Yield Securities&#148; below. An investment in
    the equity securities of a company represents a proportionate
    ownership interest in that company. Therefore, the Fund
    participates in the financial success or failure of any company
    in which it has an equity interest. See &#147;Investment
    Objective and Principal Investment Strategies&#160;&#151;
    Principal Investment Strategies&#160;&#151; Equity
    Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>High Yield Securities.</I>&#160;&#160;The Fund may invest in
    high yield securities for either current income or capital
    appreciation or both. These securities are rated below
    investment grade (i.e., rated Ba or lower by Moody&#146;s or BB
    or lower by Standard&#160;&#038; Poor&#146;s) or are unrated
    securities of comparable quality as determined by Calamos, the
    Fund&#146;s investment adviser. The Fund may invest in high
    yield securities of any rating. Non-convertible debt securities
    rated below investment grade are commonly referred to as
    &#147;junk bonds&#148; and are considered speculative with
    respect to the issuer&#146;s capacity to pay interest and repay
    principal. They involve greater risk of loss, are subject to
    greater price volatility and are less liquid, especially during
    periods of economic uncertainty or change, than higher rated
    debt securities. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; High Yield Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Securities.</I>&#160;&#160;The Fund may invest up to
    100% of its managed assets in securities of foreign issuers in
    developed and emerging markets, including debt and equity
    securities of corporate issuers and debt securities of
    government issuers. Under normal circumstances, the Fund will
    invest at least 30% of its managed assets in securities of
    foreign issuers; however, the Fund anticipates that ordinarily
    Calamos&#146; investment process will result in the Fund
    investing at least 40% of its managed assets in securities of
    foreign issuers. The Fund will invest in the securities of
    issuers of several different countries throughout the world, in
    addition to the United States. A foreign issuer is a foreign
    government or a company organized under the laws of a foreign
    country. In analyzing the foreign issuers in which the Fund may
    invest, Calamos will generally consider a number of factors that
    may characterize the issuer&#146;s economic ties to a particular
    foreign country or region. Such factors may include any or all
    of the following: the characteristics of the economy in the
    principal country or countries in which the issuer sells it
    goods <FONT style="white-space: nowrap">and/or</FONT>
    services; the stability of the currency in
</DIV>
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    <BR>
    3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the issuer&#146;s country of organization; the laws with respect
    to international trade and property rights in the issuer&#146;s
    country of organization; and the tax, accounting and regulatory
    requirements of the issuer&#146;s country of organization. See
    &#147;Investment Objective and Principal Investment
    Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; Foreign Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Convertible Securities.</I>&#160;&#160;The Fund may invest in
    convertible securities. A convertible security is a debt
    security or preferred stock that is exchangeable for an equity
    security (typically of the same issuer) at a predetermined price
    (the &#147;conversion price&#148;). Depending upon the
    relationship of the conversion price to the market value of the
    underlying security, a convertible security may trade more like
    an equity security than a debt instrument. The Fund may invest
    in convertible securities of any rating. Securities that are
    convertible into equity securities are considered equity
    securities for purposes of the Fund&#146;s policy to invest at
    least 50% of its managed assets in equity securities. See
    &#147;Investment Objective and Principal Investment
    Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; Convertible Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Synthetic Convertible Securities.</I>&#160;&#160;The Fund may
    invest in &#147;synthetic&#148; convertible securities. A
    synthetic convertible security is a financial instrument that is
    designed to simulate the characteristics of another instrument
    (i.e., a convertible security) through the combined features of
    a collection of other securities or assets. Calamos may create a
    synthetic convertible security by combining separate securities
    that possess the two principal characteristics of a true
    convertible security, i.e., a fixed-income security
    (&#147;fixed-income component&#148;, which may be a convertible
    or non-convertible security) and the right to acquire an equity
    security (&#147;convertible component&#148;). The fixed-income
    component is achieved by investing in non-convertible,
    fixed-income securities such as bonds, preferred stocks and
    money market instruments. The convertible component is achieved
    by investing in warrants or options to buy common stock at a
    certain exercise price, or options on a stock index.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may also invest in synthetic convertible securities
    created by third parties, typically investment banks. Synthetic
    convertible securities created by such parties may be designed
    to simulate the characteristics of traditional convertible
    securities or may be designed to alter or emphasize a particular
    feature. Traditional convertible securities typically offer
    stable cash flows with the ability to participate in capital
    appreciation of the underlying common stock. Because traditional
    convertible securities are exercisable at the option of the
    holder, the holder is protected against downside risk. Synthetic
    convertible securities may alter these characteristics by
    offering enhanced yields in exchange for reduced capital
    appreciation or less downside protection, or any combination of
    these features. Synthetic convertible instruments may include
    structured notes, equity-linked notes, mandatory convertibles
    and combinations of securities and instruments, such as a debt
    instrument combined with a forward contract. The Fund&#146;s
    holdings of synthetic convertible securities are considered
    equity securities for purposes of the Fund&#146;s policy to
    invest at least 50% of its managed assets in equity securities.
    If the Fund purchases a synthetic convertible security, a
    component of which is an option, such option will not be
    considered an option for the purpose of the Fund&#146;s
    limitations on options described below. See &#147;Investment
    Objective and Principal Investment Strategies&#160;&#151;
    Principal Investment Strategies&#160;&#151; Synthetic
    Convertible Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options.</I>&#160;&#160;The Fund may also seek to generate
    income from option premiums by writing (selling) options (with
    an aggregate notional value of up to 33% of the value of the
    Fund&#146;s managed assets). The Fund may write (sell) call
    options (i)&#160;on a portion of the equity securities
    (including securities that are convertible into equity
    securities) in the Fund&#146;s portfolio and (ii)&#160;on
    broad-based securities indices (such as the S&#038;P 500 or MSCI
    EAFE) or certain ETFs (exchange traded funds) that trade like
    common stocks but seek to replicate such market indices. See
    &#147;Investment Objective and Principal Investment
    Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; Options.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rule&#160;144A Securities.</I>&#160;&#160;The Fund may invest
    without limit in certain securities (&#147;Rule&#160;144A
    Securities&#148;), such as convertible and debt securities, that
    are typically purchased in transactions exempt from the
    registration requirements of the 1933&#160;Act pursuant to
    Rule&#160;144A under that act. Rule&#160;144A Securities may
    only be sold to qualified institutional buyers, such as the
    Fund. Any resale of these securities must generally be effected
    through a sale that is registered under the 1933&#160;Act or
    otherwise exempted or excepted from such registration
    requirements. Under the supervision of the Fund&#146;s Board of
    Trustees, Calamos will determine whether
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Rule&#160;144A Securities are illiquid. Typically, the Fund
    purchases Rule&#160;144A Securities only if Calamos has
    determined them to be liquid. If any Rule&#160;144A Security
    held by the Fund should become illiquid, the value of the
    security may be reduced and a sale of the security may be more
    difficult. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; Rule&#160;144A Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Zero Coupon Securities.</I>&#160;&#160;The securities in
    which the Fund invests may include zero coupon securities, which
    are debt obligations that are issued or purchased at a
    significant discount from face value. The discount approximates
    the total amount of interest the security will accrue and
    compound over the period until maturity or the particular
    interest payment date at a rate of interest reflecting the
    market rate of the security at the time of issuance. Zero coupon
    securities do not require the periodic payment of interest.
    These investments benefit the issuer by mitigating its need for
    cash to meet debt service, but generally require a higher rate
    of return to attract investors who are willing to defer receipt
    of cash. These investments may experience greater volatility in
    market value than U.S.&#160;government or other securities that
    make regular payments of interest. The Fund accrues income on
    these investments for tax and accounting purposes, which is
    distributable to shareholders and which, because no cash is
    received at the time of accrual, may require the liquidation of
    other portfolio securities to satisfy the Fund&#146;s
    distribution obligations, in which case the Fund will forego the
    opportunity to purchase additional income producing assets with
    the liquidation proceeds. Zero coupon U.S.&#160;government
    securities include STRIPS and CUBES, which are issued by the
    U.S.&#160;Treasury as component parts of U.S.&#160;Treasury
    bonds and represent scheduled interest and principal payments on
    the bonds. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies&#160;&#151; Zero Coupon Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Securities.</I>&#160;&#160;The Fund may invest in other
    securities of various types to the extent consistent with its
    investment objective. Normally, the Fund invests substantially
    all of its assets to meet its investment objective. For
    temporary defensive purposes, the Fund may depart from its
    principal investment strategies and invest part or all of its
    assets in securities with remaining maturities of less than one
    year, cash equivalents, or may hold cash. During such periods,
    the Fund may not be able to achieve its investment objective.
    There are no restrictions as to the ratings of debt securities
    acquired by the Fund or the portion of the Fund&#146;s assets
    that may be invested in debt securities in a particular ratings
    category. See &#147;Investment Objective and Principal
    Investment Strategies&#160;&#151; Principal Investment
    Strategies.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Use of
    Leverage by the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund currently uses, and may in the future use, financial
    leverage. On January&#160;6, 2006, the Fund issued Preferred
    Shares with an aggregate liquidation preference of $59,000,000.
    As of December&#160;31, 2007, the aggregate liquidation
    preference of outstanding Preferred Shares represented
    approximately 27.39% of the Fund&#146;s total assets. The Fund
    may make further use of financial leverage through the issuance
    of additional preferred shares or may borrow money or issue debt
    securities. As a non-fundamental policy, the aggregate
    liquidation preference of preferred shares and the aggregate
    principal amount of debt securities or borrowings may not exceed
    38% of the Fund&#146;s total assets. However, the Board of
    Trustees reserves the right to issue preferred shares or debt
    securities or borrow to the extent permitted by the 1940 Act.
    See &#147;Leverage.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may not be leveraged at all times and the amount of
    leverage, if any, may vary depending upon a variety of factors,
    including Calamos&#146; outlook for the market and the costs
    that the Fund would incur as a result of such leverage. Leverage
    involves greater risks to common shareholders. The Fund&#146;s
    leveraging strategy may not be successful. By leveraging its
    investment portfolio, the Fund creates an opportunity for
    increased net income or capital appreciation. However, the use
    of leverage also involves risks, which can be significant. These
    risks include the possibility that the value of the assets
    acquired with the proceeds of leverage decreases although the
    Fund&#146;s liability to holders of preferred shares or other
    types of leverage is fixed, greater volatility in the
    Fund&#146;s net asset value and the market price of the
    Fund&#146;s common shares, and higher expenses. In addition, the
    rights of lenders, the holders of preferred shares and the
    holders of debt securities issued by the Fund will be senior to
    the rights of the holders of common shares with respect to the
    payment of dividends or upon liquidation. Holders of preferred
    shares have voting rights in addition to, and separate from, the
    voting rights of common shareholders. See &#147;Description of
    Securities&#160;&#151; Preferred Shares&#148; and &#147;Certain
    Provisions of the Agreement and Declaration of Trust and
    Bylaws.&#148; The holders of preferred
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    shares, on the one hand, and the holders of the common shares,
    on the other, may have interests that conflict in certain
    situations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because Calamos&#146; management fee is based upon a percentage
    of the Fund&#146;s managed assets, which include assets
    attributable to any outstanding leverage, Calamos&#146; fee is
    higher when the Fund is leveraged and Calamos will have an
    incentive to leverage the Fund. See &#147;Leverage&#148; and
    &#147;Risk Factors&#160;&#151; Leverage.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interest
    Rate Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to seek to reduce the interest rate risk inherent in
    the Fund&#146;s underlying investments and capital structure,
    the Fund, if market conditions are deemed favorable, may enter
    into interest rate swap or cap transactions to attempt to
    protect itself from increasing dividend or interest expenses on
    its leverage. The use of interest rate swaps and caps is a
    highly specialized activity that involves investment techniques
    and risks different from those associated with ordinary
    portfolio security transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In an interest rate swap, the Fund would agree to pay to the
    other party to the interest rate swap (which is known as the
    &#147;counterparty&#148;) a fixed rate payment in exchange for
    the counterparty agreeing to pay to the Fund a payment at a
    variable rate that is expected to approximate the rate on any
    variable rate payment obligation on the Fund&#146;s leverage.
    The payment obligations would be based on the notional amount of
    the swap.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In an interest rate cap, the Fund would pay a premium to the
    counterparty to the interest rate cap and, to the extent that a
    specified variable rate index exceeds a predetermined fixed
    rate, would receive from the counterparty payments of the
    difference based on the notional amount of such cap. Depending
    on the state of interest rates in general, the Fund&#146;s use
    of interest rate swap or cap transactions could enhance or harm
    the overall performance of the common shares. See &#147;Interest
    Rate Transactions.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conflicts
    of Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise from the fact that Calamos and
    its affiliates carry on substantial investment activities for
    other clients, in which we have no interest. Calamos or its
    affiliates may have financial incentives to favor certain of
    these accounts over us. Any of their proprietary accounts or
    other customer accounts may compete with us for specific trades.
    Calamos or its affiliates may give advice and recommend
    securities to, or buy or sell securities for, other accounts and
    customers, which advice or securities recommended may differ
    from advice given to, or securities recommended or bought or
    sold for, us, even though their investment objectives may be the
    same as, or similar to, our objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Situations may occur when we could be disadvantaged because of
    the investment activities conducted by Calamos and its
    affiliates for their other accounts. Such situations may be
    based on, among other things, the following: (1)&#160;legal or
    internal restrictions on the combined size of positions that may
    be taken for us or the other accounts, thereby limiting the size
    of our position; or (2)&#160;the difficulty of liquidating an
    investment for us or the other accounts where the market cannot
    absorb the sale of the combined position. See &#147;Investment
    Objective and Principal Investment Strategies&#160;&#151;
    Conflicts of Interest.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Fund&#160;Risks</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Equity Securities Risk.</I>&#160;&#160;Equity investments are
    subject to greater fluctuations in market value than other asset
    classes as a result of such factors as the issuer&#146;s
    business performance, investor perceptions, stock market trends
    and general economic conditions. Equity securities are
    subordinated to bonds and other debt instruments in a
    company&#146;s capital structure in terms of priority to
    corporate income and liquidation payments. The Fund may invest
    in preferred stocks and convertible securities of any rating,
    including below investment grade. See &#147;Risk
    Factors&#160;&#151; Fund&#160;Risks&#160;&#151; Equity
    Securities Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>High Yield Securities Risk.</I>&#160;&#160;The Fund may
    invest in high yield securities of any rating. Investment in
    high yield securities involves substantial risk of loss. Below
    investment grade non-convertible debt securities or comparable
    unrated securities are commonly referred to as &#147;junk
    bonds&#148; and are considered predominantly speculative with
    respect to the issuer&#146;s ability to pay interest and
    principal and are susceptible to default or
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    decline in market value due to adverse economic and business
    developments. The market values for high yield securities tend
    to be very volatile, and these securities are less liquid than
    investment grade debt securities. For these reasons, your
    investment in the Fund is subject to the following specific
    risks:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased price sensitivity to changing interest rates and to a
    deteriorating economic environment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    greater risk of loss due to default or declining credit quality;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    greater sensitivity to adverse company specific events, which
    are more likely to render the issuer unable to make interest
    <FONT style="white-space: nowrap">and/or</FONT>
    principal payments;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if a negative perception of the high yield market develops, the
    price and liquidity of high yield securities may be depressed.
    This negative perception could last for a significant period of
    time.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Adverse changes in economic conditions are more likely to lead
    to a weakened capacity of a high yield issuer to make principal
    payments and interest payments than an investment grade issuer.
    The principal amount of high yield securities outstanding has
    proliferated in the past decade as an increasing number of
    issuers have used high yield securities for corporate financing.
    An economic downturn could severely affect the ability of highly
    leveraged issuers to service their debt obligations or to repay
    their obligations upon maturity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The secondary market for high yield securities may not be as
    liquid as the secondary market for more highly rated securities,
    a factor that may have an adverse effect on the Fund&#146;s
    ability to dispose of a particular security. There are fewer
    dealers in the market for high yield securities than for
    investment grade obligations. The prices quoted by different
    dealers may vary significantly and the spread between the bid
    and asked price is generally much larger than for higher quality
    instruments. Under adverse market or economic conditions, the
    secondary market for high yield securities could contract
    further, independent of any specific adverse changes in the
    condition of a particular issuer, and these instruments may
    become illiquid. As a result, the Fund could find it more
    difficult to sell these securities or may be able to sell the
    securities only at prices lower than if such securities were
    widely traded. Prices realized upon the sale of such lower rated
    or unrated securities, under these circumstances, may be less
    than the prices used in calculating the Fund&#146;s net asset
    value. See &#147;Risk Factors&#160;&#151;
    Fund&#160;Risks&#160;&#151; High Yield Securities Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Securities Risk.</I>&#160;&#160;Investments in
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers</FONT>
    may involve unique risks compared to investing in securities of
    U.S.&#160;issuers. These risks are more pronounced to the extent
    that the Fund invests a significant portion of its
    <FONT style="white-space: nowrap">non-U.S.&#160;investments</FONT>
    in one region or in the securities of emerging market issuers.
    These risks may include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less information about
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers</FONT>
    or markets may be available due to less rigorous disclosure or
    accounting standards or regulatory practices;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    many
    <FONT style="white-space: nowrap">non-U.S.&#160;markets</FONT>
    are smaller, less liquid and more volatile. In a changing
    market, Calamos may not be able to sell the Fund&#146;s
    portfolio securities at times, in amounts and at prices it
    considers reasonable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the economies of
    <FONT style="white-space: nowrap">non-U.S.&#160;countries</FONT>
    may grow at slower rates than expected or may experience a
    downturn or recession;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    economic, political and social developments may adversely affect
    the securities markets, including expropriation and
    nationalization;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the difficulty in obtaining or enforcing a court judgment in
    <FONT style="white-space: nowrap">non-U.S.&#160;countries;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on foreign investments in
    <FONT style="white-space: nowrap">non-U.S.&#160;jurisdictions;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    difficulties in effecting the repatriation of capital invested
    in
    <FONT style="white-space: nowrap">non-U.S.&#160;countries;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    withholding and other
    <FONT style="white-space: nowrap">non-U.S.&#160;taxes</FONT>
    may decrease the Fund&#146;s return;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dividend income the Fund receives from foreign securities may
    not be eligible for the special tax treatment applicable to
    qualified dividend income.
</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based upon the Fund&#146;s test for determining whether an
    issuer is a &#147;foreign issuer&#148; as described above, it is
    possible that an issuer of securities in which the Fund invests
    could be organized under the laws of a foreign country, yet
    still conduct a substantial portion of its business in the
    U.S.&#160;or have substantial assets in the U.S.&#160;In this
    case, such a &#147;foreign issuer&#148; may be subject to the
    market conditions in the U.S.&#160;to a greater extent than it
    may be subject to the market conditions in the country of its
    organization. See &#147;Risk Factors&#160;&#151;
    Fund&#160;Risks&#160;&#151; Foreign Securities Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Currency Risk.</I>&#160;&#160;The value of the securities
    denominated or quoted in foreign currencies may be adversely
    affected by fluctuations in the relative currency exchange rates
    and by exchange control regulations. The Fund&#146;s investment
    performance may be negatively affected by a devaluation of a
    currency in which the Fund&#146;s investments are denominated or
    quoted. Further, the Fund&#146;s investment performance may be
    significantly affected, either positively or negatively, by
    currency exchange rates because the U.S.&#160;dollar value of
    securities denominated or quoted in another country will
    increase or decrease in response to changes in the value of such
    currency in relation to the U.S.&#160;dollar. See &#147;Risk
    Factors&#160;&#151; Fund&#160;Risks&#160;&#151; Currency
    Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Risk.</I>&#160;&#160;In addition to the risks
    discussed above, debt securities, including high yield
    securities, are subject to certain risks, including the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if interest rates go up, the value of debt securities in the
    Fund&#146;s portfolio generally will decline;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    during periods of declining interest rates, the issuer of a
    security may exercise its option to prepay principal earlier
    than scheduled, forcing the Fund to reinvest in lower yielding
    securities. This is known as call or prepayment risk. Debt
    securities frequently have call features that allow the issuer
    to repurchase the security prior to its stated maturity. An
    issuer may redeem an obligation if the issuer can refinance the
    debt at a lower cost due to declining interest rates or an
    improvement in the credit standing of the issuer;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    during periods of rising interest rates, the average life of
    certain types of securities may be extended because of slower
    than expected principal payments. This may lock in a below
    market interest rate, increase the security&#146;s duration (the
    estimated period until the security is paid in full) and reduce
    the value of the security. This is known as extension risk;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    rising interest rates could result in an increase in the cost of
    the Funds&#146; leverage and could adversely affect the ability
    of the Fund to meet asset coverage requirements with respect to
    leverage;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    market interest rates currently are near historically low levels.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;Risk Factors&#160;&#151; Fund&#160;Risks&#160;&#151;
    Interest Rate Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Default Risk.</I>&#160;&#160;Default risk refers to the risk
    that a company that issues a debt security will be unable to
    fulfill its obligations to repay principal and interest. The
    lower a debt security is rated, the greater the default risk.
    See &#147;Risk Factors&#160;&#151; Fund&#160;Risks&#160;&#151;
    Default Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Liquidity Risk.</I>&#160;&#160;The Fund may invest up to 15%
    of its managed assets in securities that, at the time of
    investment, are illiquid (determined using the Commission&#146;s
    standard applicable to investment companies,
    i.e.,&#160;securities that cannot be disposed of within
    7&#160;days in the ordinary course of business at approximately
    the value at which the Fund has valued the securities). The Fund
    may also invest without limit in Rule&#160;144A Securities.
    Calamos, under the supervision of the Board of Trustees, will
    determine whether Rule&#160;144A Securities are illiquid (that
    is, not readily marketable) and thus subject to the Fund&#146;s
    limit on investing no more than 15% of its managed assets in
    illiquid securities. Investments in Rule&#160;144A Securities
    could have the effect of increasing the amount of the
    Fund&#146;s assets invested in illiquid securities if qualified
    institutional buyers are unwilling to purchase these
    Rule&#160;144A Securities. Illiquid securities may be difficult
    to dispose of at a fair price at the times when the Fund
    believes it is desirable to do so. Investment of the Fund&#146;s
    assets in illiquid securities may restrict the Fund&#146;s
    ability to take advantage of market opportunities. The market
    price of illiquid securities generally is more volatile than
    that of more liquid securities, which may adversely affect the
    price that the Fund pays for or recovers upon the sale of
    illiquid securities. Illiquid securities are also more difficult
    to value and Calamos&#146; judgment may play a greater role in
    the valuation process. The risks associated with illiquid
    securities may be particularly acute in situations in which the
    Fund&#146;s operations require cash and
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    could result in the Fund borrowing to meet its short-term needs
    or incurring losses on the sale of illiquid securities. See
    &#147;Risk Factors&#160;&#151; Fund&#160;Risks&#160;&#151;
    Liquidity Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Convertible Securities Risk.</I>&#160;&#160;The value of a
    convertible security is influenced by both the yield of
    non-convertible securities of comparable issuers and by the
    value of the underlying common stock. The value of a convertible
    security viewed without regard to its conversion feature (i.e.,
    strictly on the basis of its yield) is sometimes referred to as
    its &#147;investment value.&#148; A convertible security&#146;s
    investment value tends to decline as prevailing interest rate
    levels increase. Conversely, a convertible security&#146;s
    investment value increases as prevailing interest rate levels
    decline.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, the convertible&#146;s market value tends to reflect
    the market price of the common stock of the issuing company when
    that stock price is greater than the convertible&#146;s
    &#147;conversion price.&#148; The conversion price is defined as
    the predetermined price at which the convertible could be
    exchanged for the associated stock. As the market price of the
    underlying common stock declines, the price of the convertible
    security tends to be influenced more by the yield of the
    convertible security. Thus, the convertible security may not
    decline in price to the same extent as the underlying common
    stock. In the event of a liquidation of the issuing company,
    holders of convertible securities would be paid before the
    company&#146;s common stockholders. Consequently, the
    issuer&#146;s convertible securities generally entail less risk
    than its common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Synthetic Convertible Securities Risk.</I>&#160;&#160;The
    value of a synthetic convertible security may respond
    differently to market fluctuations than a convertible security
    because a synthetic convertible security is composed of two or
    more separate securities, each with its own market value. In
    addition, if the value of the underlying common stock or the
    level of the index involved in the convertible component falls
    below the exercise price of the warrant or option, the warrant
    or option may lose all value. Synthetic convertible securities
    created by other parties have the same attributes of a
    convertible security, however, the issuer of the synthetic
    convertible security assumes the credit risk associated with the
    investment, rather than the issuer of the underlying equity
    security into which the instrument is convertible. Therefore,
    the Fund is subject to the credit risk associated with the party
    creating the synthetic convertible security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Risks Associated with Options.</I>&#160;&#160;There are
    several risks associated with transactions in options. For
    example, there are significant differences between the
    securities markets and options markets that could result in an
    imperfect correlation among these markets, causing a given
    transaction not to achieve its objectives. A decision as to
    whether, when and how to use options involves the exercise of
    skill and judgment, and even a well-conceived transaction may be
    unsuccessful to some degree because of market behavior or
    unexpected events. The Fund&#146;s ability to utilize options
    successfully will depend on Calamos&#146; ability to predict
    pertinent market movements, which cannot be assured.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s ability to close out its position as a purchaser
    or seller of an Options Clearing Corporation (&#147;OCC&#148;)
    or exchange listed put or call option is dependent, in part,
    upon the liquidity of the option market. Among the possible
    reasons for the absence of a liquid option market are:
    (i)&#160;insufficient trading interest in certain options;
    (ii)&#160;restrictions on transactions imposed by an exchange;
    (iii)&#160;trading halts, suspensions or other restrictions
    imposed with respect to particular classes or series of options
    or underlying securities, including reaching daily price limits;
    (iv)&#160;interruption of the normal operations of the OCC or an
    exchange; (v)&#160;inadequacy of the facilities of an exchange
    or OCC to handle current trading volume; or (vi)&#160;a decision
    by one or more exchanges to discontinue the trading of options
    (or a particular class or series of options), in which event the
    relevant market for that option on that exchange would cease to
    exist, although outstanding options on that exchange would
    generally continue to be exercisable in accordance with their
    terms. If the Fund were unable to close out an option that it
    had purchased on a security, it would have to exercise the
    option in order to realize any profit or the option would expire
    and become worthless. If the Fund were unable to close out a
    covered call option that it had written on a security, it would
    not be able to sell the underlying security until the option
    expired. As the writer of a covered call option on a security,
    the Fund foregoes, during the option&#146;s life, the
    opportunity to profit from increases in the market value of the
    security covering the call option above the sum of the premium
    and the exercise price of the call.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The hours of trading for listed options may not coincide with
    the hours during which the underlying financial instruments are
    traded. To the extent that the option markets close before the
    markets for the
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    underlying financial instruments, significant price and rate
    movements can take place in the underlying markets that would
    not have been reflected in the option markets at their closing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the parties provide for it, there is no central clearing
    or guaranty function in an over-the-counter (&#147;OTC&#148;)
    option. As a result, if the counterparty fails to make or take
    delivery of the security or other instrument underlying an OTC
    option it has entered into with the Fund or fails to make a cash
    settlement payment due in accordance with the terms of that
    option, the Fund will lose any premium it paid for the option as
    well as any anticipated benefit of the transaction. Accordingly,
    Calamos must assess the creditworthiness of each such
    counterparty or any guarantor or credit enhancement of the
    counterparty&#146;s credit to determine the likelihood that the
    terms of the OTC option will be satisfied. The Fund will engage
    in OTC option transactions only with U.S.&#160;government
    securities dealers recognized by the Federal Reserve Bank of New
    York as &#147;primary dealers&#148; or broker/dealers, domestic
    or foreign banks or other financial institutions that have
    received (or the guarantors of the obligation of which have
    received) a short-term credit rating of
    <FONT style="white-space: nowrap">A-1</FONT> from
    Standard&#160;&#038; Poor&#146;s or
    <FONT style="white-space: nowrap">P-1</FONT> from
    Moody&#146;s or an equivalent rating from any nationally
    recognized statistical rating organization (&#147;NRSRO&#148;)
    or, in the case of OTC currency transactions, are determined to
    be of equivalent credit quality by Calamos.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may sell call options on individual securities and
    securities indices. All calls sold by the Fund must be
    &#147;covered.&#148; Even though the Fund will receive the
    option premium to help protect it against loss, a call option
    sold by the Fund exposes the Fund during the term of the option
    to possible loss of opportunity to realize appreciation in the
    market price of the underlying security or instrument and may
    require the Fund to hold a security or instrument that it might
    otherwise have sold. The Fund may purchase and sell put options
    on individual securities and securities indices. In selling put
    options, there is a risk that the Fund may be required to buy
    the underlying security at a disadvantageous price above the
    market price. See &#147;Risk Factors&#160;&#151;
    Fund&#160;Risks&#160;&#151; Risks Associated with Options.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Risk.</I>&#160;&#160;The Fund may invest in certain
    securities, such as certain convertible and high yield
    securities, for which the federal income tax treatment may not
    be clear or may be subject to re-characterization by the
    Internal Revenue Service (&#147;IRS&#148;). It could be more
    difficult for the Fund to comply with the tax requirements
    applicable to regulated investment companies if the tax
    characterization of the Fund&#146;s investments are not clear or
    if the tax treatment of the income from such investments were
    successfully challenged by the IRS. See &#147;Risk
    Factors&#160;&#151; Fund&#160;Risks&#160;&#151; Tax Risk&#148;
    and &#147;Certain Federal Income Tax Matters.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Management Risk.</I>&#160;&#160;Calamos&#146; judgment about
    the attractiveness, relative value or potential appreciation of
    a particular sector, security or investment strategy may prove
    to be incorrect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Antitakeover Provisions.</I>&#160;&#160;The Fund&#146;s
    Agreement and Declaration of Trust and By-Laws include
    provisions that could limit the ability of other entities or
    persons to acquire control of the Fund or to change the
    composition of its Board of Trustees. Such provisions could
    limit the ability of shareholders to sell their shares at a
    premium over prevailing market prices by discouraging a third
    party from seeking to obtain control of the Fund. These
    provisions include staggered terms of office for the Trustees,
    advance notice requirements for shareholder proposals, and
    super-majority voting requirements for certain transactions with
    affiliates, converting the Fund to an open-end investment
    company or a merger, asset sale or similar transaction. Holders
    of Preferred Shares will have voting rights in addition to and
    separate from the voting rights of common shareholders with
    respect to certain of these matters. See &#147;Description of
    Shares&#160;&#151; Preferred Shares&#148; and &#147;Certain
    Provisions of the Agreement and Declaration of Trust and
    By-Laws.&#148; The holders of Preferred Shares, on the one hand,
    and the holders of the common shares, on the other, may have
    interests that conflict in these situations. &#147;Risk
    Factors&#160;&#151; Fund&#160;Risks&#160;&#151; Antitakeover
    Provisions.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Disruption Risk.</I>&#160;&#160;Certain events have a
    disruptive effect on the securities markets, such as terrorist
    attacks, war and other geopolitical events, earthquakes, storms
    and other disasters. The Fund cannot predict the effects of
    similar events in the future on the U.S.&#160;economy or any
    foreign economy.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Risks to Common Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Leverage Risk.</I>&#160;&#160;The Fund has issued Preferred
    Shares and may issue additional preferred shares or borrow money
    or issue debt securities. The borrowing of money or issuance of
    debt securities and preferred shares, including the outstanding
    Preferred Shares, represents the leveraging of the Fund&#146;s
    common shares. As a non-fundamental policy, the aggregate
    liquidation preference of preferred shares, and the aggregate
    principal amount of debt securities or borrowings, may not
    exceed 38% of the Fund&#146;s total assets. Leverage creates
    risks which may adversely affect the return for the holders of
    common shares, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the likelihood of greater volatility of net asset value and
    market price of the Fund&#146;s common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in the dividend rates on any preferred shares or in
    interest rates on borrowings and short-term debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased operating costs, which are effectively borne by common
    shareholders, may reduce the Fund&#146;s total return;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for a decline in the value of an investment
    acquired with borrowed funds, while the Fund&#146;s obligations
    under such borrowing or preferred shares remain fixed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These risks include the possibility that the value of the assets
    acquired with the proceeds of leverage decreases although the
    Fund&#146;s liability to holders of preferred shares or other
    types of leverage is fixed, greater volatility in the
    Fund&#146;s net asset value and the market price of the
    Fund&#146;s common shares, and higher expenses. In addition, the
    rights of lenders and the holders of Preferred Shares and debt
    securities issued by the Fund will be senior to the rights of
    the holders of common shares with respect to the payment of
    dividends or upon liquidation. Holders of Preferred Shares have
    voting rights in addition to and separate from the voting rights
    of common shareholders. See &#147;Description of
    Shares&#160;&#151; Preferred Shares&#148; and &#147;Certain
    Provisions of the Agreement and Declaration of Trust and
    By-Laws.&#148; The holders of Preferred Shares, on the one hand,
    and the holders of the common shares, on the other, may have
    interests that conflict in certain situations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage is a speculative technique that could adversely affect
    the returns to common shareholders. Leverage can cause the Fund
    to lose money and can magnify the effect of any losses. To the
    extent the income or capital appreciation derived from
    securities purchased with funds received from leverage exceeds
    the cost of leverage, the Fund&#146;s return will be greater
    than if leverage had not been used. Conversely, if the income or
    capital appreciation from the securities purchased with such
    funds is not sufficient to cover the cost of leverage or if the
    Fund incurs capital losses, the return of the Fund will be less
    than if leverage had not been used, and therefore the amount
    available for distribution to common shareholders as dividends
    and other distributions will be reduced or potentially
    eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will pay, and common shareholders will effectively
    bear, any costs and expenses relating to any borrowings and to
    the issuance and ongoing maintenance of Preferred Shares or debt
    securities. Such costs and expenses include the higher
    management fee resulting from the use of any such leverage,
    offering
    <FONT style="white-space: nowrap">and/or</FONT>
    issuance costs, and interest
    <FONT style="white-space: nowrap">and/or</FONT>
    dividend expense and ongoing maintenance. The markets for
    auction rate securities have continued to face widening spreads,
    reduced demand and, more recently, an increased number of failed
    auctions. These conditions may result in higher leverage costs
    to common stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain types of borrowings may result in the Fund being subject
    to covenants in credit agreements, including those relating to
    asset coverage, borrowing base and portfolio composition
    requirements and additional covenants that may affect the
    Fund&#146;s ability to pay dividends and distributions on common
    shares in certain instances. The Fund may also be required to
    pledge its assets to the lenders in connection with certain
    types of borrowings. The Fund may be subject to certain
    restrictions on investments imposed by guidelines of one or more
    NRSROs which may issue ratings for the preferred shares or
    short-term debt instruments issued by the Fund. These guidelines
    may impose asset coverage or portfolio composition requirements
    that are more stringent than those imposed by the 1940 Act. See
    &#147;Risk Factors&#160;&#151; Leverage.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Transactions Risk.</I>&#160;&#160;The Fund may
    enter into an interest rate swap or cap transaction to attempt
    to protect itself from increasing dividend or interest expenses
    on its leverage resulting from increasing short-term interest
    rates. A decline in interest rates may result in a decline in
    the value of the swap or cap,
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    which may result in a decline in the net asset value of the
    Fund. See &#147;Risk Factors&#160;&#151; Interest Rate
    Transactions Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Impact Risk.</I>&#160;&#160;The sale of our common
    shares (or the perception that such sales may occur) may have an
    adverse effect on prices in the secondary market for our common
    shares by increasing the number of shares available, which may
    put downward pressure on the market price for our common shares.
    These sales also might make it more difficult for us to sell
    additional equity securities in the future at a time and price
    we deem appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dilution Risk.</I>&#160;&#160;The voting power of current
    shareholders will be diluted to the extent that such
    shareholders do not purchase shares in any future common share
    offerings or do not purchase sufficient shares to maintain their
    percentage interest. In addition, if we are unable to invest the
    proceeds of such offering as intended, our per share
    distribution may decrease (or may consist of return of capital)
    and we may not participate in market advances to the same extent
    as if such proceeds were fully invested as planned.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Discount Risk.</I>&#160;&#160;The Fund&#146;s common
    shares have traded both at a premium and at a discount relative
    to net asset value. Common shares of closed-end investment
    companies frequently trade at prices lower than their net asset
    value. Depending on the premium of the Fund&#146;s common
    shares, the Fund&#146;s net asset value may be reduced
    immediately following an offering of the Fund&#146;s common
    shares by the offering expenses paid by the Fund, including the
    sales load. See &#147;Use of Proceeds.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to net asset value, the market price of the
    Fund&#146;s common shares may be affected by such factors as the
    Fund&#146;s use of leverage, dividend stability, portfolio
    credit quality, liquidity, market supply and demand of the
    common shares and the Fund&#146;s dividends paid (which are, in
    turn, affected by expenses), call protection for portfolio
    securities and interest rate movements. See
    &#147;Leverage,&#148; &#147;Risk Factors&#148; and
    &#147;Description of Securities.&#148; The Fund&#146;s common
    shares are designed primarily for long-term investors, and you
    should not purchase common shares if you intend to sell them
    shortly after purchase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;Risk Factors&#160;&#151; Additional Risks to Common
    Shareholders&#148; for a more detailed discussion of these risks.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Risks to Senior Security Holders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Additional
    risks of investing in senior securities include the
    following:</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Risk.</I>&#160;&#160;To the extent that senior
    securities trade through an auction, such securities pay
    dividends or interest based on short-term interest rates. If
    short-term interest rates rise, dividends or interest on the
    auction rate senior securities may rise so that the amount of
    dividends or interest due to holders of auction rate senior
    securities would exceed the cash flow generated by our portfolio
    securities. This might require that we sell portfolio securities
    at a time when we would otherwise not do so, which may affect
    adversely our future ability to generate cash flow. In addition,
    rising market interest rates could impact negatively the value
    of our investment portfolio, reducing the amount of assets
    serving as asset coverage for the senior securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Senior Leverage Risk.</I>&#160;&#160;Our preferred shares
    will be junior in liquidation and with respect to distribution
    rights to our debt securities and any other borrowings. Senior
    securities representing indebtedness may constitute a
    substantial lien and burden on preferred shares by reason of
    their prior claim against our income and against our net assets
    in liquidation. We may not be permitted to declare dividends or
    other distributions with respect to any series of our preferred
    shares unless at such time we meet applicable asset coverage
    requirements and the payment of principal or interest is not in
    default with respect to any borrowings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Ratings and Asset Coverage Risk.</I>&#160;&#160;To the extent
    that senior securities are rated, a rating does not eliminate or
    necessarily mitigate the risks of investing in our senior
    securities, and a rating may not fully or accurately reflect all
    of the credit and market risks associated with that senior
    security. A rating agency could downgrade the rating of our
    preferred shares or debt securities, which may make such
    securities less liquid at an auction or in the secondary market,
    though probably with higher resulting interest rates. If a
    rating agency downgrades the rating assigned to a senior
    security, we may alter our portfolio or redeem the senior
    security. We may voluntarily redeem senior securities under
    certain circumstances.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Inflation Risk.</I>&#160;&#160;Inflation is the reduction in
    the purchasing power of money resulting from an increase in the
    price of goods and services. Inflation risk is the risk that the
    inflation adjusted or &#147;real&#148; value of an investment in
    preferred shares or debt securities or the income from that
    investment will be worth less in the future. As inflation
    occurs, the real value of the preferred shares or debt
    securities and the dividend payable to holders of preferred
    shares or interest payable on debt securities declines.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Auction Risk.</I>&#160;&#160;To the extent that senior
    securities trade through an auction, there are certain risks
    associated with participating in an auction and certain risks if
    you try to sell senior securities outside of an auction in the
    secondary market. The markets for auction rate securities have
    continued to face widening spreads, reduced demand and, more
    recently, an increased number of failed auctions. A failed
    auction results when there are not enough bidders in the auction
    at rates below the maximum rate as prescribed by the terms of
    the security. When an auction fails, all holders receive the
    maximum rate and may be unable to sell their shares until the
    next auction, which may be for an indefinite period of time.
    Auction risk will be described in an applicable prospectus
    supplement if we issue senior securities pursuant to this
    registration statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Decline in Net Asset Value Risk.</I>&#160;&#160;A material
    decline in our net asset value (&#147;NAV&#148;) may impair our
    ability to maintain required levels of asset coverage for our
    preferred shares or debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;Risk Factors&#160;&#151; Additional Risks to Senior
    Security Holders&#148; for a more detailed discussion of these
    risks.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF FUND&#160;EXPENSES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table and example contain information about the
    costs and expenses that common shareholders will bear directly
    or indirectly. In accordance with Commission requirements, the
    table below shows our expenses, including leverage costs, as a
    percentage of our average net assets as of October&#160;31,
    2007, and not as a percentage of gross assets or managed assets.
    By showing expenses as a percentage of average net assets,
    expenses are not expressed as a percentage of all of the assets
    we invest. The table and example are based on our capital
    structure as of October&#160;31, 2007. As of that date, we had
    $59&#160;million in senior securities outstanding. Such senior
    securities represent 25.93% of total assets as of
    October&#160;31, 2007.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Shareholder
    Transaction Expense</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="93%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sales Load (as a percentage of offering price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.5
</TD>
<TD nowrap align="left" valign="bottom">
    %(1)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Offering Expenses Borne by the Fund (as a percentage of offering
    price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Automatic Dividend Reinvestment Plan Fees(2)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="79%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="17%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Percentage of Net<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Assets Attributable to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Annual Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Common Shareholders</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management Fee(3)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Leverage Costs(4)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    .11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    .20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Annual Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.72
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Example:</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following example illustrates the expenses that common
    shareholders would pay on a $1,000 investment in common shares,
    assuming (1)&#160;net annual expenses of 1.72% of net assets
    attributable to common shares; (2)&#160;a 5% annual return; and
    (3)&#160;all distributions are reinvested at net asset value:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1&#160;Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Expenses Paid by Common Shareholders(5)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    203
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The example should not be considered a representation of
    future expenses. Actual expenses may be greater or less than
    those assumed. Moreover, our actual rate of return may be
    greater or less than the hypothetical 5% return shown in the
    example.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    If the securities to which this prospectus relates are sold to
    or through underwriters, the prospectus supplement will set
    forth any applicable sales load and the estimated offering
    expenses borne by us.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shareholders will pay a transaction fee plus brokerage charges
    if they direct the Plan Agent to sell common shares held in a
    Plan account. See &#147;Automatic Dividend Reinvestment
    Plan.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund pays Calamos an annual management fee, payable monthly,
    for its investment management services equal to 1.00% of the
    Fund&#146;s average weekly managed assets. In accordance with
    the requirements of the Commission, the table above shows the
    Fund&#146;s management fee as a percentage of average net
    assets. By showing the management fee as a percentage of net
    assets, the management fee is not expressed as a percentage of
    all of the assets the Fund intends to invest. For purposes of
    the table, the management fee has been converted to 1.41% of the
    Fund&#146;s average daily net assets as of October&#160;31, 2007
    by dividing the total dollar amount of the management fee by the
    Fund&#146;s average daily net assets (managed assets less
    outstanding leverage).</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Leverage Costs in the table reflect the cost of auction and
    rating agency fees on preferred shares, expressed as a
    percentage of net assets. The table assumes outstanding
    Preferred Shares of $59&#160;million, which reflects leverage in
    an amount representing approximately 25.93% of total assets.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    The example does not include sales load or estimated offering
    costs.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The purpose of the table and the example above is to help
    investors understand the fees and expenses that they, as common
    shareholders, would bear directly or indirectly. For additional
    information with respect to our expenses, see &#147;Management
    of the Fund.&#148;
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    HIGHLIGHTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information in this table is derived from our financial
    statements audited by Deloitte&#160;&#038; Touche LLP, whose
    report on such financial statements is contained in our 2007
    Annual Report and included in the statement of additional
    information, both of which are available from us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>October&#160;27, 2005*<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Year Ended October&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>through October&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.32
</TD>
<TD nowrap align="left" valign="bottom">
    (a)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from investment operations:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.96
</TD>
<TD nowrap align="left" valign="bottom">
    **
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.86
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (b)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized and unrealized gain (loss) from investments,
    written options and foreign currency
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Distributions to preferred shareholders from:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (common share equivalent basis)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.39
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.29
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Capital gains (common share equivalent basis)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
    (b)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Total from investment operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Less distributions to common shareholders from:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.65
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Capital gains
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.12
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.19
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Capital charge resulting from issuance of common and preferred
    shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net asset value, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    21.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    16.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Market value, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total investment return based on(c):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net asset value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38.30
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.77
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.24
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Market value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33.84
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.19
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ratios and supplemental data:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net assets applicable to common shareholders, end of period
    (000&#146;s omitted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    168,551
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    130,588
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    114,439
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred shares, at redemption value ($25,000 per share
    liquidation preference) (000&#146;s omitted)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ratios to average net assets applicable to common shareholders:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net expenses(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.72
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.33
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Gross expenses(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.72
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.70
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.37
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss)(d)(e)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.37
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.57
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.33
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Preferred share distributions from net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.17
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.89
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income (loss), net of preferred share
    distributions from net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.20
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.68
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Portfolio turnover rate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    85
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Average commission rate paid
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.0377
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.0258
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Asset coverage per preferred share, at end of period(f)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    96,423
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    80,358
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Commencement of operations.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Net investment income allocated based on average shares method.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (a) </TD>
    <TD></TD>
    <TD valign="bottom">
    Net of sales load of $0.675 on initial shares issued and
    beginning net asset value of $14.325.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (b) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amount equated to less than $0.005 per common share.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (c) </TD>
    <TD></TD>
    <TD valign="bottom">
    Total investment return is calculated assuming a purchase of
    common shares on the opening of the first day and a sale on the
    closing of the last day of the period reported. Dividends and
    distributions are assumed, for purposes of this calculation, to
    be reinvested at prices obtained under the Fund&#146;s dividend
    reinvestment plan. Total return is not annualized for periods
    less than one year. Brokerage commissions are not reflected. NAV
    per share is determined by dividing the value of the Fund&#146;s
    portfolio securities, cash and other assets, less all
    liabilities, by the total number of common shares outstanding.
    The common share market price is the price the market is willing
    to pay for shares of the Fund at a given time. Common share
    market price is influenced by a range of factors, including
    supply and demand and market conditions.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (d) </TD>
    <TD></TD>
    <TD valign="bottom">
    Annualized for periods less than one year.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (e) </TD>
    <TD></TD>
    <TD valign="bottom">
    Does not reflect the effect of dividend payments to the
    shareholders of Preferred Shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (f) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculated by subtracting the Fund&#146;s total liabilities (not
    including Preferred Shares) from the Fund&#146;s total assets
    and dividing this by the number of Preferred Shares outstanding.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MARKET
    AND NET ASSET VALUE INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares are listed on the New York Stock Exchange
    (&#147;NYSE&#148;) under the symbol &#147;CGO.&#148; Our common
    shares commenced trading on the NYSE on October&#160;27, 2005.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our common shares have traded both at a premium and at a
    discount in relation to NAV. We cannot predict whether our
    shares will trade in the future at a premium or discount to NAV.
    The provisions of the 1940 Act generally require that the public
    offering price of common shares (less any underwriting
    commissions and discounts) must equal or exceed the NAV per
    share of a company&#146;s common stock (calculated within
    48&#160;hours of pricing). Our issuance of common shares may
    have an adverse effect on prices in the secondary market for our
    common shares by increasing the number of common shares
    available, which may put downward pressure on the market price
    for our common shares. Shares of common stock of closed-end
    investment companies frequently trade at a discount from NAV.
    See &#147;Risk Factors&#160;&#151; Additional Risks to Common
    Shareholders&#160;&#151; Market Discount Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth for each of the periods indicated
    the high and low closing market prices for our common shares on
    the NYSE, the NAV per share and the premium or discount to NAV
    per share at which our common shares were trading. NAV is
    determined on the last business day of each month. See
    &#147;Determination of Net Asset Value&#148; for information as
    to the determination of our NAV.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="57%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>Premium/<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>(Discount)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom">
    <B>to Net Asset<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Market Price(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Net Asset<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value(3)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Quarter Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Value(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    October&#160;31, 2005
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.04
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.97
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    January&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.22
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.16
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14.71
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    April&#160;30, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.96
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14.60
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    July&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.57
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.60
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11.50
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    October&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.64
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (8.40
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    January&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.35
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.61
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.23
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9.82
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    April&#160;30, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.56
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (12.51
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    July&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18.59
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.20
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (4.09
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    October&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    21.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7.32
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (31.69
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source: Bloomberg Financial and Fund&#160;Accounting Records.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on high and low closing market price during the respective
    quarter.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on the NAV calculated on the close of business on the last
    business day of each calendar quarter.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on the Fund&#146;s computations.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The last reported sale price, NAV per common share and
    percentage discount to NAV per common share on December&#160;31,
    2007 were $19.10, $19.54 and -2.25%, respectively. As of
    December&#160;31, 2007, we had 8,006,981 common shares
    outstanding and net assets of approximately $215,433,704.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless otherwise specified in a prospectus supplement, we will
    invest the net proceeds of any sales of securities in accordance
    with our investment objective and policies as described under
    &#147;Investment Objective and Principal Investment
    Strategies&#148; within approximately three months of receipt of
    such proceeds. We may also use proceeds from the sale of our
    securities to retire all or a portion of any short-term debt we
    incur in pursuit of our investment objective and policies, and
    for working capital purposes, including the payment of interest
    and operating expenses, although there is currently no intent to
    issue securities primarily for this purpose. Such investments
    may be delayed if suitable investments are unavailable at the
    time or for other reasons. Pending such investment, we
    anticipate that we will invest the proceeds in securities issued
    by the U.S.&#160;government or its agencies or instrumentalities
    or in high quality, short-term or long-term debt obligations. A
    delay in the anticipated use of proceeds could lower returns,
    reduce our distribution to common shareholders and reduce the
    amount of cash available to make dividend and interest payments
    on preferred shares and debt securities, respectively.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    FUND</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos Global Total Return Fund is a diversified, closed-end
    management investment company which commenced investment
    operations in October 2005. The Fund was organized under the
    laws of the State of Delaware on March&#160;30, 2004, and has
    registered under the 1940 Act. On October&#160;31, 2005, the
    Fund issued an aggregate of 8,000,000 common shares, no par
    value, in an initial public offering and commenced its
    operations. The Fund granted the underwriters an option to
    purchase up to 1,021,536 additional common shares at the public
    offering price less the sales load. The Fund did not issue any
    common shares in connection with the over-allotment option. The
    net proceeds of the initial public offering were approximately
    $114,700,003 after the payment of offering expenses. On
    January&#160;6, 2006, the Fund issued Preferred Shares,
    liquidation preference $25,000 per share ($59,000,000 in the
    aggregate). The Fund&#146;s common shares are listed on the NYSE
    under the symbol &#147;CGO.&#148; The Fund&#146;s principal
    office is located at 2020 Calamos Court, Naperville, Illinois
    60563, and its telephone number is
    <FONT style="white-space: nowrap">1-800-582-6959.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table provides information about our outstanding
    securities as of December&#160;31, 2007:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="64%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Held by the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fund or for<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title of Class</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>its Account</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,006,981
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    Unlimited
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,360
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Series&#160;T
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,360
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following sets forth information about the Fund&#146;s
    outstanding Preferred Shares as of the dates indicated below:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="44%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="15%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="15%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Asset Coverage per<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Average Fair Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total Liquidation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>per $25,000<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Preference<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>($25,000 Liquidation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Denomination or<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Fiscal Year Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Outstanding</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Preference)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>per Share Amount(a)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    October&#160;31, 2007
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    96,423
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    October&#160;31, 2006
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    59,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    80,358
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    (a) </TD>
    <TD></TD>
    <TD valign="bottom">
    Fair value of the Preferred Shares approximates the liquidation
    preference because dividend rates payable on the Preferred
    Shares are determined at auctions and fluctuate with changes in
    current market interest rates.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES</FONT></B>
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    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Objective</FONT></B>
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    The Fund&#146;s investment objective is to provide total return
    through a combination of capital appreciation and current
    income. The Fund&#146;s investment objective may be changed by
    its Board of Trustees without a shareholder vote, except that
    the Fund will give shareholders at least 60&#160;days&#146;
    notice of any change to the Fund&#146;s investment objective.
    The Fund makes no assurance that it will realize its objective.
    An investment in the Fund may be speculative in that it involves
    a high degree of risk and should not constitute a complete
    investment program. See &#147;Risk Factors.&#148;
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    <B><FONT style="font-family: 'Times New Roman', Times">Principal
    Investment Strategies</FONT></B>
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    Under normal circumstances, the Fund will invest primarily in a
    portfolio of common and preferred stocks, convertible securities
    and income producing securities such as investment grade and
    below investment grade (high yield/high risk) debt securities.
    The Fund, under normal circumstances, will invest at least 50%
    of its managed assets in equity securities (including securities
    that are convertible into equity securities). The Fund may
    invest up to 100% of its managed assets in securities of foreign
    issuers, including debt and equity securities of corporate
    issuers and debt securities of government issuers, in developed
    and emerging markets. Under normal circumstances, the Fund will
    invest at least 30% of its managed assets in securities of
    foreign issuers. The Fund will invest in the securities of
    issuers of several different countries throughout the world, in
    addition to the United States.
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    Calamos will dynamically allocate the Fund&#146;s investments
    among multiple asset classes (rather than maintaining a fixed or
    static allocation), seeking to obtain an appropriate balance of
    risk and reward on a long-term basis through all market cycles
    using multiple strategies and combining them to seek to achieve
    favorable risk adjusted returns.
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    The Fund will attempt to keep a consistent balance between risk
    and reward over the course of different market cycles, through
    various combinations of stocks, bonds,
    <FONT style="white-space: nowrap">and/or</FONT>
    convertible securities, to achieve what Calamos believes to be
    an appropriate blend for the then current market. As the market
    environment changes, portfolio securities may change in an
    attempt to achieve a relatively consistent risk level over time.
    At some points in a market cycle, one type of security may make
    up a substantial portion of the Fund&#146;s portfolio, while at
    other times certain securities may have minimal or no
    representation, depending on market conditions.
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    The Fund may also seek to generate income from option premiums
    by writing (selling) options (with an aggregate notional value
    of up to 33% of the value of the Fund&#146;s managed assets).
    The Fund will opportunistically employ a strategy of writing
    options. The extent of option writing activity will depend upon
    market conditions and Calamos&#146; ongoing assessment of the
    attractiveness of writing options on the Fund&#146;s equity
    holdings.
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    <I>Equity Securities.</I>&#160;&#160;Equity securities include
    common and preferred stocks, warrants, rights, and depository
    receipts. Under normal circumstances, the Fund will invest at
    least 50% of its managed assets in equity securities (including
    securities that are convertible into equity securities). The
    Fund may invest in preferred stocks and convertible securities
    of any rating, including below investment grade. See
    &#147;&#151;&#160;High Yield Securities&#148; below. An
    investment in the equity securities of a company represents a
    proportionate ownership interest in that company. Therefore, the
    Fund participates in the financial success or failure of any
    company in which it has an equity interest.
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    <I>High Yield Securities.</I>&#160;&#160;The Fund may invest in
    high yield securities for either current income or capital
    appreciation or both. The high yield securities in which the
    Fund invests are rated below investment grade (i.e., rated Ba or
    lower by Moody&#146;s or BB or lower by S&#038;P&#146;s) or are
    unrated but determined by Calamos to be of comparable quality.
    The Fund may invest in high yield securities of any rating.
    Non-convertible debt securities rated below investment grade are
    commonly referred to as &#147;junk bonds&#148; and are
    considered speculative with respect to the issuer&#146;s
    capacity to pay interest and repay principal. Below investment
    grade
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    non-convertible debt securities involve greater risk of loss,
    are subject to greater price volatility and are less liquid,
    especially during periods of economic uncertainty or change,
    than higher rated debt securities.
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    <I>Other Income Securities.</I>&#160;&#160;The Fund may also
    invest in investment grade debt securities. The Fund&#146;s
    investments in investment grade debt securities may have fixed
    or variable principal payments and all types of interest rate
    and dividend payment and reset terms, including fixed rate,
    adjustable rate, zero coupon, contingent, deferred, payment in
    kind and auction rate features.
</DIV>

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    <I>Foreign Securities.</I>&#160;&#160;The Fund may invest up to
    100% of its managed assets in securities of foreign issuers in
    developed and emerging markets, including debt and equity
    securities of corporate issuers and debt securities of
    government issuers. Under normal circumstances, the Fund will
    invest at least 30% of its managed assets in securities of
    foreign issuers; however, the Fund anticipates that ordinarily
    Calamos&#146; investment process will result in the Fund
    investing at least 40% of its managed assets in securities of
    foreign issuers. The Fund will invest in the securities of
    issuers of several different countries throughout the world, in
    addition to the United States. A foreign issuer is a foreign
    government or a company organized under the laws of a foreign
    country. In analyzing the foreign issuers in which the Fund may
    invest, Calamos will generally consider a number of factors that
    may characterize the issuer&#146;s economic ties to a particular
    foreign country or region. Such factors may include any or all
    of the following: the characteristics of the economy in the
    principal country or countries in which the issuer sells it
    goods <FONT style="white-space: nowrap">and/or</FONT>
    services; the stability of the currency in the issuer&#146;s
    country of organization; the laws with respect to international
    trade and property rights in the issuer&#146;s country of
    organization; and the tax, accounting and regulatory
    requirements of the issuer&#146;s country of organization.
</DIV>

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    <I>Convertible Securities.</I>&#160;&#160;The Fund may invest in
    convertible securities. A convertible security is a debt
    security or preferred stock that is exchangeable for an equity
    security (typically of the same issuer) at a predetermined price
    (the &#147;conversion price&#148;). Depending upon the
    relationship of the conversion price to the market value of the
    underlying security, a convertible security may trade more like
    an equity security than a debt instrument. The Fund may invest
    in convertible securities of any rating including below
    investment grade. See &#147;&#151;&#160;High Yield
    Securities&#148; above. Securities that are convertible into
    equity securities are considered equity-securities for purposes
    of the Fund&#146;s policy to invest at least 50% of its managed
    assets in equity securities.
</DIV>

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    <I>Synthetic Convertible Securities.</I>&#160;&#160;The Fund may
    invest in &#147;synthetic&#148; convertible securities. A
    synthetic convertible security is a financial instrument that is
    designed to simulate the characteristics of another instrument
    (i.e., a convertible security) through the combined features of
    a collection of other securities or assets. Calamos may create a
    synthetic convertible security by combining separate securities
    that possess the two principal characteristics of a true
    convertible security, i.e., a fixed-income security
    (&#147;fixed-income component&#148;, which may be a convertible
    or non-convertible security) and the right to acquire an equity
    security (&#147;convertible component&#148;). The fixed-income
    component is achieved by investing in non-convertible,
    fixed-income securities such as bonds, preferred stocks and
    money market instruments. The convertible component is achieved
    by investing in warrants or options to buy common stock at a
    certain exercise price, or options on a stock index. The Fund
    may also purchase synthetic convertible securities created by
    other parties, typically investment banks, including convertible
    structured notes. Convertible structured notes are fixed income
    debentures linked to equity. Convertible structured notes have
    the attributes of a convertible security; however, the
    investment bank that issued the convertible note assumes the
    credit risk associated with the investment, rather than the
    issuer of the underlying common stock into which the note is
    convertible. Different companies may issue the fixed-income and
    convertible components, which may be purchased separately and at
    different times.
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    The Fund may also invest in synthetic convertible securities
    created by third parties, typically investment banks. Synthetic
    convertible securities created by such parties may be designed
    to simulate the characteristics of traditional convertible
    securities or may be designed to alter or emphasize a particular
    feature. Traditional convertible securities typically offer
    stable cash flows with the ability to participate in capital
    appreciation of the underlying common stock. Because traditional
    convertible securities are exercisable at the option of the
    holder, the holder is protected against downside risk. Synthetic
    convertible securities may alter these
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    characteristics by offering enhanced yields in exchange for
    reduced capital appreciation or less downside protection, or any
    combination of these features. Synthetic convertible instruments
    may include structured notes, equity-linked notes, mandatory
    convertibles and combinations of securities and instruments,
    such as a debt instrument combined with a forward contract.
</DIV>

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    Some examples of these securities include:
</DIV>

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    Preferred equity redeemable cumulative stock (&#147;PERCS&#148;)
    are shares that automatically convert into one ordinary share
    upon maturity. They are usually issued at the prevailing share
    price, convertible into one ordinary share, with an enhanced
    dividend yield. PERCS pay a higher dividend than common shares,
    but the equity upside is capped. Above a certain share price,
    the conversion ratio will fall as the stock rises, capping the
    upside at that level. Below this level, the conversion ratio
    remains one-for-one, giving the same downside exposure as the
    ordinary shares, excluding the income difference.
</DIV>

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    Dividend enhanced convertible stock (&#147;DECS&#148;) are
    either preference shares or subordinated bonds. These, like
    PERCS, mandatorily convert into ordinary shares at maturity, if
    not already converted. DECS give no significant downside
    protection and are very equity sensitive with minimal direct
    bond characteristics and interest rate exposure. As with PERCS,
    some of the upside performance is given away and in return, the
    investor receives an enhanced yield over the ordinary shares.
    Unlike PERCS, however, the investor&#146;s upside is not capped.
    Instead, the investor trades a zone of flat exposure to the
    share price for the enhanced income.
</DIV>

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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Preferred Redeemable Increased Dividend Equity Security
    (&#147;PRIDES&#148;) are synthetic securities consisting of a
    forward contract to purchase the issuer&#146;s underlying
    security and an interest bearing deposit. Interest payments are
    made at regular intervals, and conversion into the underlying
    security is mandatory at maturity. Similar to convertible
    securities, PRIDES allow investors to earn stable cash flows
    while still participating in the capital gains of an underlying
    stock. This is possible because these products are valued along
    the same lines as the underlying security.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s holdings of synthetic convertible securities are
    considered equity securities for purposes of the Fund&#146;s
    policy to invest at least 50% of its managed assets in equity
    securities. If the Fund purchases a synthetic convertible
    instrument, a component of which is an option, such option will
    not be considered an option for the purpose of the Fund&#146;s
    limitations on options described below.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options Strategy.</I>&#160;&#160;The Fund may seek to
    generate income from option premiums by writing (selling)
    options (with an aggregate notional value of up to 33% of the
    value of the Fund&#146;s managed assets). The Fund may write
    (sell) call options (i)&#160;on a portion of the equity
    securities (including securities that are convertible into
    equity securities) in the Fund&#146;s portfolio and (ii)&#160;on
    broad-based securities indices (such as the S&#038;P 500 or MSCI
    EAFE) or certain ETFs (exchange traded funds) that trade like
    common stocks but seek to replicate such market indices.
</DIV>

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    In addition, to seek to offset some of the risk of a large
    potential decline in the event the overall stock market has a
    sizeable short-term or intermediate-term decline, the Fund may
    also, to a limited extent, purchase put options on broad-based
    securities indices (such as the S&#038;P 500 or MSCI EAFE) or
    certain ETFs (exchange-traded funds) that trade like common
    stocks but seek to replicate such market indices.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Options in General.</I>&#160;&#160;A call option, upon
    payment of a premium, gives the purchaser of the option the
    right to buy, and the seller the obligation to sell, the
    underlying security, index or other instrument at the exercise
    price. A put option gives the purchaser of the option, upon
    payment of a premium, the right to sell, and the seller the
    obligation to buy, the underlying security, index, or other
    instrument at the exercise price.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain options, known as &#147;American style&#148; options,
    may be exercised at any time during the term of the option.
    Other options, known as &#147;European style&#148; options, may
    be exercised only on the expiration date of the option. The Fund
    expects that substantially all of the options written by the
    Fund will be American style options.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is authorized to purchase and sell exchange listed
    options and over-the-counter options (&#147;OTC options&#148;).
    Exchange listed options are issued by a regulated intermediary
    such as the OCC, which guarantees
</DIV>
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    the performance of the obligations of the parties to such
    options. In addition, the Fund may purchase instruments
    structured by broker-dealers or investment banks that package or
    possess economic characteristics of options. The discussion
    below uses the OCC as an example, but is also applicable to
    other financial intermediaries.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With certain exceptions, OCC issued and exchange listed options
    generally settle by physical delivery of the underlying
    security, although in the future cash settlement may become
    available. Index options are cash settled for the net amount, if
    any, by which the option is &#147;in-the-money&#148; (i.e.,
    where the value of the underlying instrument exceeds, in the
    case of a call option, or is less than, in the case of a put
    option, the exercise price of the option) at the time the option
    is exercised. Frequently, rather than taking or making delivery
    of the underlying instrument through the process of exercising
    the option, listed options are closed by entering into
    offsetting purchase or sale transactions that do not result in
    ownership of the new option.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OTC options are purchased from or sold to securities dealers,
    financial institutions or other parties
    (&#147;Counterparties&#148;) through direct bilateral agreement
    with the Counterparty. In contrast to exchange listed options,
    which generally have standardized terms and performance
    mechanics, all the terms of an OTC option, including such terms
    as method of settlement, term, exercise price, premium,
    guarantees and security, are set by negotiation of the parties.
    The Fund may sell OTC options (other than OTC currency options)
    that are subject to a buy-back provision permitting the Fund to
    require the Counterparty to sell the option back to the Fund at
    a formula price within seven days. The Fund expects generally to
    enter into OTC options that have cash settlement provisions,
    although it is not required to do so. The staff of the
    Commission currently takes the position that OTC options
    purchased by a fund, and portfolio securities
    &#147;covering&#148; the amount of a fund&#146;s obligation
    pursuant to an OTC option sold by it (or the amount of assets
    equal to the formula price for the repurchase of the option, if
    any, less the amount by which the option is in-the-money) are
    illiquid. OTC options purchased by the Fund and any portfolio
    securities used to cover obligations pursuant to such options
    are not considered illiquid by Calamos for the purposes of the
    Fund&#146;s limitation on investments in illiquid securities.
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may also purchase and sell options on stocks, indices,
    rates, credit spreads or currencies. Options on securities
    indices and other financial indices are similar to options on a
    security or other instrument except that, rather than settling
    by physical delivery of the underlying instrument, they settle
    by cash settlement, i.e., an option on an index gives the holder
    the right to receive, upon exercise of the option, an amount of
    cash if the closing level of the index upon which the option is
    based exceeds, in the case of a call, or is less than, in the
    case of a put, the exercise price of the option (except if, in
    the case of an OTC option, physical delivery is specified). This
    amount of cash is equal to the excess of the closing price of
    the index over the exercise price of the option, which also may
    be multiplied by a formula value. The seller of the option is
    obligated, in return for the premium received, to make delivery
    of this amount. The gain or loss on an option on an index
    depends on price movements in the instruments making up the
    market, market segment, industry or other composite on which the
    underlying index is based, rather than price movements in
    individual securities, as is the case with respect to options on
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will write call options and put options only if they
    are &#147;covered.&#148; For example, a call option written by
    the Fund will require the Fund to hold the securities subject to
    the call (or securities convertible into those securities
    without additional consideration) or to segregate cash or liquid
    assets sufficient to purchase and deliver the securities if the
    call is exercised. A call option sold by the Fund on an index
    will require the Fund to own portfolio securities that correlate
    with the index or to segregate cash or liquid assets equal to
    the excess of the index value over the exercise price on a
    current basis. A put option written by the Fund requires the
    Fund to segregate cash or liquid assets equal to the exercise
    price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    OTC options entered into by the Fund will generally provide for
    cash settlement. As a result, when the Fund sells these
    instruments it will only segregate an amount of cash or liquid
    assets equal to its accrued net obligations, as there is no
    requirement for payment or delivery of amounts in excess of the
    net amount. Those amounts will equal 100% of the exercise price
    in the case of a non cash-settled put, the same as an OCC
    guaranteed listed option sold by the Fund, or the in-the-money
    amount plus any sell-back formula amount in the case of a
    cash-settled put or call. In addition, when the Fund sells a
    call option on an index at a time when
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the in-the-money amount exceeds the exercise price, the Fund
    will segregate, until the option expires or is closed out, cash
    or cash equivalents equal in value to such excess. OTC options
    other than those above may also settle with physical delivery,
    or with an election of either physical delivery or cash
    settlement and the Fund will segregate an amount of cash or
    liquid assets equal to the full value of the option. OTC options
    settling with physical delivery, or with an election of either
    physical delivery or cash settlement, will be treated the same
    as other options settling with physical delivery.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an option written by the Fund expires, the Fund will
    generally realize a short-term capital gain equal to the premium
    received at the time the option was written. If an option
    purchased by the Fund expires, the Fund realizes a capital loss
    equal to the premium paid, which will either be short-term or
    long-term depending on the Fund&#146;s holding period for the
    option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will generally realize a capital gain from a closing
    purchase transaction if the cost of the closing option is less
    than the premium received from writing the option, or, if it is
    more, the Fund will generally realize a capital loss. If the
    premium received from a closing sale transaction is more than
    the premium paid to purchase the option, the Fund will generally
    realize a capital gain or, if it is less, the Fund will
    generally realize a capital loss. The principal factors
    affecting the market value of a put or a call option include
    supply and demand, interest rates, the current market price of
    the underlying security or index in relation to the exercise
    price of the option, the volatility of the underlying security
    or index, and the time remaining until the expiration date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A put option purchased by the Fund is an asset of the Fund,
    valued initially at the premium paid for the option. The premium
    received for an option written by the Fund is recorded as a
    deferred credit. The value of an option purchased or written is
    marked-to-market daily and is valued at the closing price on the
    exchange on which it is traded or, if not traded on an exchange
    or no closing price is available, at the mean between the last
    bid and asked prices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rule&#160;144A Securities.</I>&#160;&#160;The Fund may invest
    without limit in Rule&#160;144A Securities. Calamos, under the
    supervision of the Board of Trustees, will consider whether
    securities purchased under Rule&#160;144A are illiquid and thus
    subject to the Fund&#146;s limit on investing no more than 15%
    of its managed assets in illiquid securities. A determination of
    whether a Rule&#160;144A Security is liquid or not is a question
    of fact. In making this determination, Calamos will consider the
    trading markets for the specific security, taking into account
    the unregistered nature of a Rule&#160;144A Security. In
    addition, Calamos could consider the (1)&#160;frequency of
    trades and quotes, (2)&#160;number of dealers and potential
    purchasers, (3)&#160;dealer undertakings to make a market and
    (4)&#160;nature of a security and of marketplace trades (e.g.,
    the time needed to dispose of the security, the method of
    soliciting offers and the mechanics of transfer). The liquidity
    of Rule&#160;144A Securities will be monitored and, if as a
    result of changed conditions, it is determined that a
    Rule&#160;144A Security is no longer liquid, the Fund&#146;s
    holdings of illiquid securities would be reviewed to determine
    what, if any, steps are required to assure that the Fund does
    not invest more than 15% of its managed assets in illiquid
    securities. Investing in Rule&#160;144A Securities could have
    the effect of increasing the amount of the portfolio&#146;s
    assets invested in illiquid securities if qualified
    institutional buyers are unwilling to purchase such securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>U.S.&#160;Government
    Securities.</I>&#160;&#160;U.S.&#160;government securities in
    which the Fund invests include debt obligations of varying
    maturities issued by the U.S.&#160;Treasury or issued or
    guaranteed by an agency or instrumentality of the
    U.S.&#160;government, including the Federal Housing
    Administration, Federal Financing Bank, Farmers Home
    Administration, Export-Import Bank of the United States, Small
    Business Administration, Government National Mortgage
    Association, General Services Administration, Central Bank for
    Cooperatives, Federal Farm Credit Banks, Federal Home Loan
    Banks, Federal Home Loan Mortgage Corporation, Federal National
    Mortgage Association (&#147;FNMA&#148;), Maritime
    Administration, Tennessee Valley Authority, District of Columbia
    Armory Board, Student Loan Marketing Association, Resolution
    Fund&#160;Corporation and various institutions that previously
    were or currently are part of the Farm Credit System (which has
    been undergoing reorganization since 1987). Some
    U.S.&#160;government securities, such as U.S.&#160;Treasury
    bills, Treasury notes and Treasury bonds, which differ only in
    their interest rates, maturities and times of issuance, are
    supported by the full faith and credit of the United States.
    Others are supported by: (i)&#160;the right of the issuer to
    borrow from the U.S.&#160;Treasury, such as securities of the
    Federal Home Loan Banks; (ii)&#160;the discretionary
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    authority of the U.S.&#160;government to purchase the
    agency&#146;s obligations, such as securities of the FNMA; or
    (iii)&#160;only the credit of the issuer. No assurance can be
    given that the U.S.&#160;government will provide financial
    support in the future to U.S.&#160;government agencies,
    authorities or instrumentalities that are not supported by the
    full faith and credit of the United States. Securities
    guaranteed as to principal and interest by the
    U.S.&#160;government, its agencies, authorities or
    instrumentalities include: (i)&#160;securities for which the
    payment of principal and interest is backed by an irrevocable
    letter of credit issued by the U.S.&#160;government or any of
    its agencies, authorities or instrumentalities; and
    (ii)&#160;participations in loans made to
    <FONT style="white-space: nowrap">non-U.S.&#160;governments</FONT>
    or other entities that are so guaranteed. The secondary market
    for certain of these participations is limited and, therefore,
    may be regarded as illiquid. U.S.&#160;Government securities
    include STRIPS and CUBES, which are issued by the
    U.S.&#160;Treasury as component parts of U.S.&#160;Treasury
    bonds and represent scheduled interest and principal payments on
    the bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Zero Coupon Securities.</I>&#160;&#160;The securities in
    which the Fund invests may include zero coupon securities, which
    are debt obligations that are issued or purchased at a
    significant discount from face value. The discount approximates
    the total amount of interest the security will accrue and
    compound over the period until maturity or the particular
    interest payment date at a rate of interest reflecting the
    market rate of the security at the time of issuance. Zero coupon
    securities do not require the periodic payment of interest.
    These investments benefit the issuer by mitigating its need for
    cash to meet debt service, but generally require a higher rate
    of return to attract investors who are willing to defer receipt
    of cash. These investments may experience greater volatility in
    market value than U.S.&#160;government or other securities that
    make regular payments of interest. The Fund accrues income on
    these investments for tax and accounting purposes, which is
    distributable to shareholders and which, because no cash is
    received at the time of accrual, may require the liquidation of
    other portfolio securities to satisfy the Fund&#146;s
    distribution obligations, in which case the Fund will forgo the
    opportunity to purchase additional income producing assets with
    the liquidation proceeds. Zero coupon U.S.&#160;government
    securities include STRIPS and CUBES, which are issued by the
    U.S.&#160;Treasury as component parts of U.S.&#160;Treasury
    bonds and represent scheduled interest and principal payments on
    the bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Investment Companies.</I>&#160;&#160;The Fund may
    invest in the securities of other investment companies to the
    extent that such investments are consistent with the Fund&#146;s
    investment objective and policies and are permissible under the
    1940 Act. Under the 1940 Act, the Fund may not acquire the
    securities of other domestic or
    <FONT style="white-space: nowrap">non-U.S.&#160;investment</FONT>
    companies if, as a result, (1)&#160;more than 10% of the
    Fund&#146;s total assets would be invested in securities of
    other investment companies, (2)&#160;such purchase would result
    in more than 3% of the total outstanding voting securities of
    any one investment company being held by the Fund, or
    (3)&#160;more than 5% of the Fund&#146;s total assets would be
    invested in any one investment company. These limitations do not
    apply to the purchase of shares of money market funds or of any
    investment company in connection with a merger, consolidation,
    reorganization or acquisition of substantially all the assets of
    another investment company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund, as a holder of the securities of other investment
    companies, will bear its pro rata portion of the other
    investment companies&#146; expenses, including advisory fees.
    These expenses are in addition to the direct expenses of the
    Fund&#146;s own operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Temporary Defensive Investments.</I>&#160;&#160;Under unusual
    market or economic conditions or for temporary defensive
    purposes, the Fund may invest up to 100% of its total assets in
    securities issued or guaranteed by the U.S.&#160;government or
    its instrumentalities or agencies, certificates of deposit,
    bankers&#146; acceptances and other bank obligations, commercial
    paper rated in the highest category by a NRSRO or other fixed
    income securities deemed by Calamos to be consistent with a
    defensive posture, or may hold cash. The yield on such
    securities may be lower than the yield on lower rated fixed
    income securities. During such periods, the Fund may not be able
    to achieve its investment objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Repurchase Agreements.</I>&#160;&#160;The Fund may enter into
    repurchase agreements with broker-dealers, member banks of the
    Federal Reserve System and other financial institutions.
    Repurchase agreements are arrangements under which the Fund
    purchases securities and the seller agrees to repurchase the
    securities within a specific time and at a specific price. The
    repurchase price is generally higher than the Fund&#146;s
    purchase price, with the difference being income to the Fund.
    The counterparty&#146;s obligations under the repurchase
    agreement are
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    collateralized with U.S.&#160;Treasury
    <FONT style="white-space: nowrap">and/or</FONT>
    agency obligations with a market value of not less than 100% of
    the obligations, valued daily. Collateral is held by the
    Fund&#146;s custodian in a segregated, safekeeping account for
    the benefit of the Fund. Repurchase agreements afford the Fund
    an opportunity to earn income on temporarily available cash at
    low risk. In the event of commencement of bankruptcy or
    insolvency proceedings with respect to the seller of the
    security before repurchase of the security under a repurchase
    agreement, the Fund may encounter delay and incur costs before
    being able to sell the security. Such a delay may involve loss
    of interest or a decline in price of the security. If a court
    characterizes a repurchase transaction as a loan and the Fund
    has not perfected a security interest in the security, the Fund
    may be required to return the security to the seller&#146;s
    estate and be treated as an unsecured creditor of the seller. As
    an unsecured creditor, the Fund would be at risk of losing some
    or all of the principal and interest involved in the transaction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Lending of Portfolio Securities.</I>&#160;&#160;The Fund may
    lend portfolio securities to registered broker-dealers or other
    institutional investors deemed by Calamos to be of good standing
    under agreements which require that the loans be secured
    continuously by collateral in cash, cash equivalents or
    U.S.&#160;Treasury bills maintained on a current basis at an
    amount at least equal to the market value of the securities
    loaned. The Fund continues to receive the equivalent of the
    interest or dividends paid by the issuer on the securities
    loaned as well as the benefit of an increase and the detriment
    of any decrease in the market value of the securities loaned and
    would also receive compensation based on investment of the
    collateral. The Fund would not, however, have the right to vote
    any securities having voting rights during the existence of the
    loan, but could call the loan in anticipation of an important
    vote to be taken among holders of the securities or of the
    giving or withholding of consent on a material matter affecting
    the investment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As with other extensions of credit, there are risks of delay in
    recovery or even loss of rights in the collateral should the
    borrower of the securities fail financially. At no time would
    the value of the securities loaned exceed
    33<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of the value of the Fund&#146;s total assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Portfolio Turnover.</I>&#160;&#160;Although the Fund does not
    purchase securities with a view to rapid turnover, there are no
    limitations on the length of time that portfolio securities must
    be held. Portfolio turnover can occur for a number of reasons,
    including calls for redemption, general conditions in the
    securities markets, more favorable investment opportunities in
    other securities, or other factors relating to the desirability
    of holding or changing a portfolio investment. The portfolio
    turnover rates may vary greatly from year to year. A high rate
    of portfolio turnover in the Fund would result in increased
    transaction expense, which must be borne by the Fund. High
    portfolio turnover may also result in the realization of capital
    gains or losses and, to the extent net short-term capital gains
    are realized, any distributions resulting from such gains will
    be considered ordinary income for federal income tax purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conflicts
    of Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Conflicts of interest may arise from the fact that Calamos and
    its affiliates carry on substantial investment activities for
    other clients, in which we have no interest, some of which may
    have similar investment strategies as us. Calamos or its
    affiliates may have financial incentives to favor certain of
    such accounts over us. Any of their proprietary accounts and
    other customer accounts may compete with us for specific trades.
    Calamos or its affiliates may give advice and recommend
    securities to, or buy or sell securities for, us which advice or
    securities may differ from advice given to, or securities
    recommended or bought or sold for, other accounts and customers,
    even though their investment objectives may be the same as, or
    similar to, our objectives. When two or more clients advised by
    Calamos or its affiliates seek to purchase or sell the same
    publicly traded securities, the securities actually purchased or
    sold will be allocated among the clients on a good faith
    equitable basis by Calamos in its discretion and in accordance
    with the client&#146;s various investment objectives and
    Calamos&#146; procedures. In some cases, this system may
    adversely affect the price or size of the position we may obtain
    or sell. In other cases, our ability to participate in volume
    transactions may produce better execution for us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos will evaluate a variety of factors in determining
    whether a particular investment opportunity or strategy is
    appropriate and feasible for the relevant account at a
    particular time, including, but not limited to, the following:
    (1)&#160;the nature of the investment opportunity taken in the
    context of the other investments at the
</DIV>
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    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    time; (2)&#160;the liquidity of the investment relative to the
    needs of the particular entity or account; (3)&#160;the
    availability of the opportunity (i.e., size of obtainable
    position); (4)&#160;the transaction costs involved; and
    (5)&#160;the investment or regulatory limitations applicable to
    the particular entity or account. Because these considerations
    may differ when applied to us and relevant accounts under
    management in the context of any particular investment
    opportunity, our investment activities, on the one hand, and
    other managed accounts, on the other hand, may differ
    considerably from time to time. In addition, our fees and
    expenses will differ from those of the other managed accounts.
    Accordingly, investors should be aware that our future
    performance and future performance of other accounts of Calamos
    may vary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Situations may occur when we could be disadvantaged because of
    the investment activities conducted by Calamos and its
    affiliates for its other funds or accounts. Such situations may
    be based on, among other things, the following: (1)&#160;legal
    or internal restrictions on the combined size of positions that
    may be taken for us or the other accounts, thereby limiting the
    size of our position; (2)&#160;the difficulty of liquidating an
    investment for us or the other accounts where the market cannot
    absorb the sale of the combined position; or (3)&#160;limits on
    co-investing in negotiated transactions under the 1940 Act, as
    discussed further below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos and its principals, officers, employees, and affiliates
    may buy and sell securities or other investments for their own
    accounts and may have actual or potential conflicts of interest
    with respect to investments made on our behalf. As a result of
    differing trading and investment strategies or constraints,
    positions may be taken by principals, officers, employees, and
    affiliates of Calamos that are the same as, different from, or
    made at a different time than positions taken for us.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEVERAGE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may issue preferred shares or debt securities or borrow
    to increase its assets available for investment. The Fund has
    Preferred Shares outstanding with an aggregate liquidation
    preference representing approximately 27.39% of the Fund&#146;s
    total assets as of December&#160;31, 2007. As a non-fundamental
    policy, the aggregate liquidation of preferred shares and the
    aggregate principal amount of debt securities or borrowings may
    not exceed 38% of the Fund&#146;s total assets. However, the
    Board of Trustees reserves the right to issue preferred shares
    or debt securities or borrow to the extent permitted by the 1940
    Act. The Fund generally will not issue preferred shares or debt
    securities or borrow unless Calamos expects that the Fund will
    achieve a greater return on such leverage than the additional
    costs the Fund incurs as a result of such leverage. The Fund
    also may borrow money as a temporary measure for extraordinary
    or emergency purposes, including the payment of dividends and
    the settlement of securities transactions, which otherwise might
    require untimely dispositions of the Fund&#146;s holdings. When
    the Fund leverages its assets, the fees paid to Calamos for
    investment management services will be higher than if the Fund
    did not leverage because Calamos&#146; fees are calculated based
    on the Fund&#146;s managed assets, which include the proceeds of
    the issuance of preferred shares or debt securities or any
    outstanding borrowings. Consequently, the Fund and Calamos may
    have differing interests in determining whether to leverage the
    Fund&#146;s assets. The Fund&#146;s Board of Trustees monitors
    any potential conflicts of interest on an ongoing basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s use of leverage is premised upon the expectation
    that the Fund&#146;s leverage costs will be lower than the
    return the Fund achieves on its investments with the leverage
    proceeds. Such difference in return may result from the
    Fund&#146;s higher credit rating or the short-term nature of its
    borrowing compared to the long-term nature of its investments.
    Because Calamos seeks to invest the Fund&#146;s total assets
    (including the assets obtained from leverage) in the higher
    yielding portfolio investments or portfolio investments with the
    potential for capital appreciation, the holders of common shares
    will be the beneficiaries of any incremental return. Should the
    differential between the underlying assets and cost of leverage
    narrow, the incremental return &#147;pick up&#148; will be
    reduced. Furthermore, if long-term interest rates rise without a
    corresponding increase in the yield on the Fund&#146;s portfolio
    investments or the Fund otherwise incurs losses on its
    investments, the Fund&#146;s net asset value attributable to its
    common shares will reflect the decline in the value of portfolio
    holdings resulting therefrom.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage creates risks which may adversely affect the return for
    the holders of common shares, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the likelihood of greater volatility of net asset value and
    market price of common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in the dividend rates on any preferred shares or in
    interest rates on borrowings and short-term debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased operating costs, which are effectively borne by common
    shareholders, may reduce the Fund&#146;s total return;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for a decline in the value of an investment
    acquired with borrowed funds, while the Fund&#146;s obligations
    under such borrowing remains fixed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage is a speculative technique that could adversely affect
    the returns to common shareholders. Leverage can cause the Fund
    to lose money and can magnify the effect of any losses. To the
    extent the income or capital appreciation derived from
    securities purchased with funds received from leverage exceeds
    the cost of leverage, the Fund&#146;s return will be greater
    than if leverage had not been used. Conversely, if the income or
    capital appreciation from the securities purchased with such
    funds is not sufficient to cover the cost of leverage or if the
    Fund incurs capital losses, the return of the Fund will be less
    than if leverage had not been used, and therefore the amount
    available for distribution to common shareholders as dividends
    and other distributions will be reduced or potentially
    eliminated (or will consist of return of capital).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos may determine to maintain the Fund&#146;s leveraged
    position if it expects that the long-term benefits to the
    Fund&#146;s common shareholders of maintaining the leveraged
    position will outweigh the current reduced return. Capital
    raised through the issuance of preferred shares or debt
    securities or borrowing will be subject to dividend payments or
    interest costs that may or may not exceed the income and
    appreciation on the assets purchased. The issuance of additional
    classes of preferred shares involves offering expenses and other
    costs and may limit the Fund&#146;s freedom to pay dividends on
    common shares or to engage in other activities. The Fund also
    may be required to maintain minimum average balances in
    connection with borrowings or to pay a commitment or other fee
    to maintain a line of credit; either of these requirements would
    increase the cost of borrowing over the stated interest rate.
    The Fund will pay (and common shareholders will bear) any costs
    and expenses relating to any borrowings and to the issuance and
    ongoing maintenance of preferred shares or debt securities (for
    example, distribution-related expenses such as a participation
    fee paid at an annual rate of 0.25% of preferred share
    liquidation preference to broker-dealers successfully
    participating in Preferred Share auctions, the higher management
    fee resulting from the use of any such leverage, and interest
    <FONT style="white-space: nowrap">and/or</FONT>
    dividend expense and ongoing maintenance). Net asset value will
    be reduced immediately following any additional offering of
    preferred shares or debt securities by the costs of that
    offering paid by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the 1940 Act, the Fund is not permitted to issue preferred
    shares unless immediately after such issuance the Fund has an
    asset coverage of at least 200% of the liquidation value of the
    aggregate amount of outstanding preferred shares (i.e., such
    liquidation value may not exceed 50% of the value of the
    Fund&#146;s total assets). Under the 1940 Act, the Fund may only
    issue one class of senior securities representing equity. So
    long as preferred shares are outstanding, additional senior
    equity securities must rank on a parity with the preferred
    shares. In addition, the Fund is not permitted to declare any
    cash dividend or other distribution on its common shares unless,
    at the time of such declaration, the net asset value of the
    Fund&#146;s portfolio (determined after deducting the amount of
    such dividend or distribution) is at least 200% of such
    liquidation value. Under the 1940 Act, the Fund is not permitted
    to incur indebtedness unless immediately after such borrowing
    the Fund has an asset coverage of at least 300% of the aggregate
    outstanding principal balance of indebtedness (i.e., such
    indebtedness may not exceed
    33<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of the value of the Fund&#146;s total assets). Under the 1940
    Act, the Fund may only issue one class of senior securities
    representing indebtedness. Additionally, under the 1940 Act, the
    Fund may not declare any dividend or other distribution upon any
    class of its shares, or purchase any such shares, unless the
    aggregate indebtedness of the Fund has, at the time of the
    declaration of any such dividend or distribution or at the time
    of any such purchase, an asset coverage of at least 300% after
    deducting the amount of such dividend, distribution, or purchase
    price, as the case may be.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is subject to certain restrictions on investments
    imposed by guidelines of Standard&#160;&#038; Poor&#146;s and
    Fitch, which have issued ratings for the Preferred Shares and
    may do so for any debt securities or preferred shares issued by
    the Fund in the future. These guidelines impose asset coverage
    and portfolio composition requirements that are more stringent
    than those imposed by the 1940 Act. Certain types of borrowings
    may result in the Fund being subject to covenants in credit
    agreements, including those relating to asset coverage,
    borrowing base and portfolio composition requirements and
    additional covenants that may affect the Fund&#146;s ability to
    pay dividends and distributions on common shares in certain
    instances. The Fund also may be required to pledge its assets to
    the lenders in connection with certain types of borrowings.
    Calamos does not anticipate that these covenants or restrictions
    will adversely affect its ability to manage the Fund&#146;s
    portfolio in accordance with the Fund&#146;s investment
    objective and policies. Due to these covenants or restrictions,
    the Fund may be forced to liquidate investments at times and at
    prices that are not favorable to the Fund, or the Fund may be
    forced to forgo investments that Calamos otherwise views as
    favorable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The extent to which the Fund employs leverage will depend on
    many factors, the most important of which are investment
    outlook, market conditions and interest rates. Successful use of
    a leveraging strategy depends on Calamos&#146; ability to
    predict correctly interest rates and market movements. There is
    no assurance that a leveraging strategy will be successful
    during any period in which it is employed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effects
    of Leverage</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;6, 2006, the Fund issued Preferred Shares with
    an aggregate liquidation preference of $59,000,000. The
    aggregate liquidation preference of Preferred Shares represented
    approximately&#160;27.39%&#160;of the Fund&#146;s total assets
    as of December&#160;31, 2007. Asset coverage with respect to the
    Preferred Shares was 365.14% as of that date. The dividend rate
    payable by the Fund on the Preferred Shares varies based on
    auctions normally held every 7 or 28&#160;days. As of
    December&#160;31, 2007, a dividend rate of 6.00% per year was in
    effect for Series&#160;T Preferred Shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table illustrates the hypothetical effect on the
    return to a holder of the Fund&#146;s common shares of the
    leverage obtained by issuing preferred shares with a liquidation
    value equal to 33% of the Fund&#146;s total assets, assuming
    hypothetical annual returns of the Fund&#146;s portfolio of
    minus 10% to plus 10% and dividends on preferred shares at an
    annual dividend rate of 6.00%. The purpose of the table is to
    assist you in understanding the effects of leverage. As the
    table shows, leverage generally increases the return to
    shareholders when portfolio return is positive and greater than
    the cost of leverage and decreases the return when the portfolio
    return is negative or less than the cost of leverage. The
    figures appearing in the table are hypothetical and actual
    returns may be greater or less than those appearing in the table.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assumed Portfolio Return (Net of Expenses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Corresponding Common Share Return
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18.00
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.50
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.00
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12.00
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For further information about leveraging, see &#147;Risk
    Factors&#160;&#151; Additional Risks to Common
    Shareholders&#160;&#151; Leverage.&#148;
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INTEREST
    RATE TRANSACTIONS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to reduce the interest rate risk inherent in the
    Fund&#146;s underlying investments and capital structure, the
    Fund, if market conditions are deemed favorable, may enter into
    interest rate swap or cap transactions to attempt to protect
    itself from increasing dividend or interest expenses on its
    leverage and to hedge portfolio securities from interest rate
    changes. Interest rate swaps involve the Fund&#146;s agreement
    with the swap counterparty to pay a fixed rate payment in
    exchange for the counterparty agreeing to pay the Fund a payment
    at a variable rate that is expected to approximate the rate of
    any variable rate payment obligation on the Fund&#146;s
    leverage. The payment obligations would be based on the notional
    amount of the swap.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may use an interest rate cap, which would require it to
    pay a premium to the counterparty and would entitle it, to the
    extent that a specified variable rate index exceeds a
    predetermined fixed rate, to receive from the counterparty
    payment of the difference based on the notional amount of such
    cap. The Fund would
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    use interest rate swaps or caps only with the intent to reduce
    or eliminate the risk that an increase in short-term interest
    rates could have on common share net earnings as a result of
    leverage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will usually enter into swaps or caps on a net basis;
    that is, the two payment streams will be netted out in a cash
    settlement on the payment date or dates specified in the
    instrument, with the Fund receiving or paying, as the case may
    be, only the net amount of the two payments. The Fund intends to
    segregate with its custodian cash or liquid securities having a
    value at least equal to the Fund&#146;s net payment obligations
    under any swap transaction, marked-to-market daily.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The use of interest rate swaps and caps is a highly specialized
    activity that involves investment techniques and risks different
    from those associated with ordinary portfolio security
    transactions. Depending on the state of interest rates in
    general, the Fund&#146;s use of interest rate swaps or caps
    could enhance or harm the overall performance of the Fund&#146;s
    common shares. To the extent that there is a decline in interest
    rates for maturities equal to the remaining maturity on the
    Fund&#146;s fixed rate payment obligation under the interest
    rate swap or equal to the remaining term of the interest rate
    cap, the value of the swap or cap (which initially has a value
    of zero) could decline, and could result in a decline in the net
    asset value of the common shares. If, on the other hand, such
    rates were to increase, the value of the swap or cap could
    increase, and thereby increase the net asset value of the common
    shares. As interest rate swaps or caps approach their maturity,
    their positive or negative value due to interest rate changes
    will approach zero.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if the short-term interest rates effectively
    received by the Fund during the term of an interest rate swap
    are lower than the Fund&#146;s fixed rate of payment on the
    swap, the swap will increase the Fund&#146;s operating expenses
    and reduce common share net earnings. For example, if the Fund
    were to (A)&#160;issue Preferred Shares representing 33% of the
    Fund&#146;s total assets and (B)&#160;enter into one or more
    interest rate swaps in a notional amount equal to 75% of its
    outstanding Preferred Shares under which the Fund would receive
    a short-term swap rate of 5.01% and pay a fixed swap rate of
    5.35% over the term of the swap, the swap would effectively
    increase Fund expenses and reduce Fund common share net earnings
    by approximately 0.13% as a percentage of net assets
    attributable to common shares and approximately 0.08% as a
    percentage of managed assets. If, on the other hand, the
    short-term interest rates effectively received by the Fund are
    higher than the Fund&#146;s fixed rate of payment on the
    interest rate swap, the swap would enhance common share net
    earnings. In either case, the swap would have the effect of
    reducing fluctuations in the Fund&#146;s cost of leverage due to
    changes in short-term interest rates during the term of the
    swap. The example above is purely for illustrative purposes and
    is not predictive of the actual percentage of the Fund&#146;s
    leverage that will be hedged by a swap, the actual fixed rates
    that the Fund will pay under the swap (which will depend on
    market interest rates for the applicable maturities at the time
    the Fund enters into swaps) or the actual short-term rates that
    the Fund will receive on any swaps (which fluctuate frequently
    during the term of the swap, and may change significantly from
    initial levels), or the actual impact such swaps will have on
    the Fund&#146;s expenses and common share net earnings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Buying interest rate caps could enhance the performance of the
    Fund&#146;s common shares by providing a maximum leverage
    expense. Buying interest rate caps could also increase the
    operating expenses of the Fund and decrease the net earnings of
    the common shares in the event that the premium paid by the Fund
    to the counterparty exceeds the additional amount the Fund would
    have been required to pay on its preferred shares due to
    increases in short-term interest rates during the term of the
    cap had it not entered into the cap agreement. The Fund has no
    current intention of selling an interest rate swap or cap. The
    Fund will monitor any interest rate swaps or caps with a view to
    ensuring that it remains in compliance with the federal income
    tax requirements for qualification as a regulated investment
    company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest rate swaps and caps do not involve the delivery of
    securities or other underlying assets or principal. Accordingly,
    the risk of loss with respect to interest rate swaps and caps is
    limited to the net amount of interest payments that the Fund is
    contractually obligated to make. If the counterparty defaults,
    the Fund would not be able to use the anticipated net receipts
    under the swap or cap to offset the dividend or interest
    payments on the Fund&#146;s leverage. Depending on whether the
    Fund would be entitled to receive net payments from the
    counterparty on the swap or cap, which in turn would depend on
    the general state of short-term
</DIV>
</DIV><!-- End box 1 -->

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    <BR>
    28
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    interest rates at that point in time, such a default could
    negatively impact the performance of the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will not enter into an interest rate swap or cap
    transaction with any counterparty that Calamos believes does not
    have the financial resources to honor its obligation under the
    interest rate swap or cap transaction. Further, Calamos will
    continually monitor the financial stability of a counterparty to
    an interest rate swap or cap transaction in an effort to
    proactively protect the Fund&#146;s investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, at the time the interest rate swap or cap
    transaction reaches its scheduled termination date, there is a
    risk that the Fund will not be able to obtain a replacement
    transaction or that the terms of the replacement will not be as
    favorable as on the expiring transaction. If this occurs, it
    could have a negative impact on the performance of the
    Fund&#146;s common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may choose or be required to redeem some or all
    preferred shares or prepay any borrowings. This redemption or
    prepayment would likely result in the Fund seeking to terminate
    early all or a portion of any swap or cap transaction. Such
    early termination of a swap could result in a termination
    payment by or to the Fund. An early termination of a cap could
    result in a termination payment to the Fund.
</DIV>
</DIV><!-- End box 1 -->

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    <BR>
    29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Investing in any of our securities involves risk, including
    the risk that you may receive little or no return on your
    investment or even that you may lose part or all of your
    investment. Therefore, before investing in any of our securities
    you should consider carefully the following risks, as well as
    any risk factors included in the applicable prospectus
    supplement.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Fund&#160;Risks</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;The Fund is a diversified, closed-end
    management investment company designed primarily as a long-term
    investment and not as a trading tool. The Fund invests primarily
    in a diversified portfolio of common and preferred stocks,
    convertible securities and income-producing securities such as
    investment grade and below investment grade debt securities. An
    investment in the Fund&#146;s common shares may be speculative
    and it involves a high degree of risk. The Fund should not
    constitute a complete investment program. Due to the uncertainty
    in all investments, there can be no assurance that the Fund will
    achieve its investment objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Equity Securities Risk.</I>&#160;&#160;Equity investments are
    subject to greater fluctuations in market value than other asset
    classes as a result of such factors as the issuer&#146;s
    business performance, investor perceptions, stock market trends
    and general economic conditions. Equity securities are
    subordinated to bonds and other debt instruments in a
    company&#146;s capital structure in terms of priority to
    corporate income and liquidation payments. The Fund may invest
    in preferred stocks and convertible securities of any rating,
    including below investment grade.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>High Yield Securities Risk.</I>&#160;&#160;The Fund may
    invest in high yield securities of any rating. Investment in
    high yield securities involves substantial risk of loss. Below
    investment grade non-convertible debt securities or comparable
    unrated securities are commonly referred to as &#147;junk
    bonds&#148; and are considered predominantly speculative with
    respect to the issuer&#146;s ability to pay interest and
    principal and are susceptible to default or decline in market
    value due to adverse economic and business developments. The
    market values for high yield securities tend to be very
    volatile, and these securities are less liquid than investment
    grade debt securities. For these reasons, your investment in the
    Fund is subject to the following specific risks:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased price sensitivity to changing interest rates and to a
    deteriorating economic environment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    greater risk of loss due to default or declining credit quality;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    adverse company specific events are more likely to render the
    issuer unable to make interest
    <FONT style="white-space: nowrap">and/or</FONT>
    principal payments;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if a negative perception of the high yield market develops, the
    price and liquidity of high yield securities may be depressed.
    This negative perception could last for a significant period of
    time.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Securities rated below investment grade are speculative with
    respect to the capacity to pay interest and repay principal in
    accordance with the terms of such securities. A rating of C from
    Moody&#146;s means that the issue so rated can be regarded as
    having extremely poor prospects of ever attaining any real
    investment standing. Standard&#160;&#038; Poor&#146;s assigns a
    rating of C to issues that are currently highly vulnerable to
    nonpayment, and the C rating may be used to cover a situation in
    which a bankruptcy petition has been filed or similar action
    taken, but payments on the obligation are being continued (a C
    rating is also assigned to a preferred stock issue in arrears on
    dividends or sinking fund payments, but that is currently
    paying). See the statement of additional information for a
    description of Moody&#146;s and Standard&#160;&#038; Poor&#146;s
    ratings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Adverse changes in economic conditions are more likely to lead
    to a weakened capacity of a high yield issuer to make principal
    payments and interest payments than an investment grade issuer.
    The principal amount of high yield securities outstanding has
    proliferated in the past decade as an increasing number of
    issuers have used high yield securities for corporate financing.
    An economic downturn could severely affect the ability of highly
    leveraged issuers to service their debt obligations or to repay
    their obligations upon maturity. Similarly, downturns in
    profitability in specific industries could adversely affect the
    ability of high yield issuers in those industries to meet their
    obligations. The market values of lower quality debt securities
    tend to reflect individual developments of the issuer to a
    greater extent than do higher quality securities, which
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    react primarily to fluctuations in the general level of interest
    rates. Factors having an adverse impact on the market value of
    lower quality securities may have an adverse effect on the
    Fund&#146;s net asset value and the market value of its common
    shares. In addition, the Fund may incur additional expenses to
    the extent it is required to seek recovery upon a default in
    payment of principal or interest on its portfolio holdings. In
    certain circumstances, the Fund may be required to foreclose on
    an issuer&#146;s assets and take possession of its property or
    operations. In such circumstances, the Fund would incur
    additional costs in disposing of such assets and potential
    liabilities from operating any business acquired.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The secondary market for high yield securities may not be as
    liquid as the secondary market for more highly rated securities,
    a factor that may have an adverse effect on the Fund&#146;s
    ability to dispose of a particular security. There are fewer
    dealers in the market for high yield securities than for
    investment grade obligations. The prices quoted by different
    dealers may vary significantly and the spread between the bid
    and asked price is generally much larger than for higher quality
    instruments. Under adverse market or economic conditions, the
    secondary market for high yield securities could contract
    further, independent of any specific adverse changes in the
    condition of a particular issuer, and these instruments may
    become illiquid. As a result, the Fund could find it more
    difficult to sell these securities or may be able to sell the
    securities only at prices lower than if such securities were
    widely traded. Prices realized upon the sale of such lower rated
    or unrated securities, under these circumstances, may be less
    than the prices used in calculating the Fund&#146;s net asset
    value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since investors generally perceive that there are greater risks
    associated with lower quality debt securities of the type in
    which the Fund may invest a portion of its assets, the yields
    and prices of such securities may tend to fluctuate more than
    those for higher rated securities. In the lower quality segments
    of the debt securities market, changes in perceptions of
    issuers&#146; creditworthiness tend to occur more frequently and
    in a more pronounced manner than do changes in higher quality
    segments of the debt securities market, resulting in greater
    yield and price volatility.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund invests in high yield securities that are rated C or
    below, the Fund will incur significant risk in addition to the
    risks associated with investments in high yield securities and
    corporate loans. Distressed securities frequently do not produce
    income while they are outstanding. The Fund may purchase
    distressed securities that are in default or the issuers of
    which are in bankruptcy. The Fund may be required to bear
    certain extraordinary expenses in order to protect and recover
    its investment. The Fund also will be subject to significant
    uncertainty as to when and in what manner and for what value the
    obligations evidenced by the distressed securities will
    eventually be satisfied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Securities Risk.</I>&#160;&#160;Investments in
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers</FONT>
    may involve unique risks compared to investing in securities of
    U.S.&#160;issuers. These risks are more pronounced to the extent
    that the Fund invests a significant portion of its
    <FONT style="white-space: nowrap">non-U.S.&#160;investments</FONT>
    in one region or in the securities of emerging market issuers.
    These risks may include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less information about
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers</FONT>
    or markets may be available due to less rigorous disclosure or
    accounting standards or regulatory practices;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    many
    <FONT style="white-space: nowrap">non-U.S.&#160;markets</FONT>
    are smaller, less liquid and more volatile. In a changing
    market, Calamos may not be able to sell the Fund&#146;s
    portfolio securities at times, in amounts and at prices it
    considers reasonable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the economies of
    <FONT style="white-space: nowrap">non-U.S.&#160;countries</FONT>
    may grow at slower rates than expected or may experience a
    downturn or recession;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    economic, political and social developments may adversely affect
    the securities markets, including expropriation and
    nationalization;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the difficulty in obtaining or enforcing a court judgment in
    <FONT style="white-space: nowrap">non-U.S.&#160;countries;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    restrictions on foreign investments in
    <FONT style="white-space: nowrap">non-U.S.&#160;jurisdictions;</FONT>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    difficulties in effecting the repatriation of capital invested
    in
    <FONT style="white-space: nowrap">non-U.S.&#160;countries;</FONT>
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    withholding and other
    <FONT style="white-space: nowrap">non-U.S.&#160;taxes</FONT>
    may decrease the Fund&#146;s return;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dividend income the Fund receives from foreign securities may
    not be eligible for the special tax treatment applicable to
    qualified dividend income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There may be less publicly available information about
    <FONT style="white-space: nowrap">non-U.S.&#160;markets</FONT>
    and issuers than is available with respect to
    U.S.&#160;securities and issuers.
    <FONT style="white-space: nowrap">Non-U.S.&#160;companies</FONT>
    generally are not subject to accounting, auditing and financial
    reporting standards, practices and requirements comparable to
    those applicable to U.S.&#160;companies. The trading markets for
    most
    <FONT style="white-space: nowrap">non-U.S.&#160;securities</FONT>
    are generally less liquid and subject to greater price
    volatility than the markets for comparable securities in the
    United States. The markets for securities in certain emerging
    markets are in the earliest stages of their development. Even
    the markets for relatively widely traded securities in certain
    <FONT style="white-space: nowrap">non-U.S.&#160;markets,</FONT>
    including emerging market countries, may not be able to absorb,
    without price disruptions, a significant increase in trading
    volume or trades of a size customarily undertaken by
    institutional investors in the United States.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, market making and arbitrage activities are
    generally less extensive in such markets, which may contribute
    to increased volatility and reduced liquidity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Economies and social and political conditions in individual
    countries may differ unfavorably from the United States.
    <FONT style="white-space: nowrap">Non-U.S.&#160;economies</FONT>
    may have less favorable rates of growth of gross domestic
    product, rates of inflation, currency valuation, capital
    reinvestment, resource self-sufficiency and balance of payments
    positions. Many countries have experienced substantial, and in
    some cases extremely high, rates of inflation for many years.
    Inflation and rapid fluctuations in inflation rates have had,
    and may continue to have, very negative effects on the economies
    and securities markets of certain emerging market countries.
    Unanticipated political or social developments may also affect
    the values of the Fund&#146;s investments and the availability
    to the Fund of additional investments in such countries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Based upon the Fund&#146;s test for determining whether an
    issuer is a &#147;foreign issuer&#148; as described above, it is
    possible that an issuer of securities in which the Fund invests
    could be organized under the laws of a foreign country, yet
    still conduct a substantial portion of its business in the
    U.S.&#160;or have substantial assets in the U.S.&#160;In this
    case, such a &#147;foreign issuer&#148; may be subject to the
    market conditions in the U.S.&#160;to a greater extent than it
    may be subject to the market conditions in the country of its
    organization.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Currency Risk.</I>&#160;&#160;The value of the securities
    denominated or quoted in foreign currencies may be adversely
    affected by fluctuations in the relative currency exchange rates
    and by exchange control regulations. The Fund&#146;s investment
    performance may be negatively affected by a devaluation of a
    currency in which the Fund&#146;s investments are denominated or
    quoted. Further, the Fund&#146;s investment performance may be
    significantly affected, either positively or negatively, by
    currency exchange rates because the U.S.&#160;dollar value of
    securities denominated or quoted in another currency will
    increase or decrease in response to changes in the value of such
    currency in relation to the U.S.&#160;dollar.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Risk.</I>&#160;&#160;Fixed income securities,
    including high yield securities, are subject to certain common
    risks, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if interest rates go up, the value of debt securities in the
    Fund&#146;s portfolio generally will decline;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    during periods of declining interest rates, the issuer of a
    security may exercise its option to prepay principal earlier
    than scheduled, forcing the Fund to reinvest in lower yielding
    securities. This is known as call or prepayment risk. Debt
    securities frequently have call features that allow the issuer
    to repurchase the security prior to its stated maturity. An
    issuer may redeem an obligation if the issuer can refinance the
    debt at a lower cost due to declining interest rates or an
    improvement in the credit standing of the issuer;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    during periods of rising interest rates, the average life of
    certain types of securities may be extended because of slower
    than expected principal payments. This may lock in a below
    market interest rate, increase the security&#146;s duration (the
    estimated period until the security is paid in full) and reduce
    the value of the security. This is known as extension risk;
</TD>
</TR>

</TABLE>

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    <BR>
    32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    rising interest rates could result in an increase in the cost of
    the Funds&#146; leverage and could adversely affect the ability
    of the Fund to meet asset coverage requirements with respect to
    leverage;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    market interest rates currently are at historically low levels.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Default Risk.</I>&#160;&#160;Default risk refers to the risk
    that a company that issues a debt security will be unable to
    fulfill its obligations to repay principal and interest. The
    lower a debt security is rated, the greater its default risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Liquidity Risk.</I>&#160;&#160;The Fund may invest up to 15%
    of its managed assets in securities that, at the time of
    investment, are illiquid (determined using the Commission&#146;s
    standard applicable to investment companies,
    i.e.,&#160;securities that can not be disposed of within
    7&#160;days in the ordinary course of business at approximately
    the value at which the Fund has valued the securities). The Fund
    may also invest without limit in Rule&#160;144A Securities.
    Calamos, under the supervision of the Board of Trustees, will
    determine whether securities purchased under Rule&#160;144A are
    illiquid (that is, not readily marketable) and thus subject to
    the Fund&#146;s limit on investing no more than 15% of its
    managed assets in illiquid securities. Investments in
    Rule&#160;144A Securities could have the effect of increasing
    the amount of the Fund&#146;s assets invested in illiquid
    securities if qualified institutional buyers are unwilling to
    purchase these Rule&#160;144A Securities. Illiquid securities
    may be difficult to dispose of at a fair price at the times when
    the Fund believes it is desirable to do so. Investment of the
    Fund&#146;s assets in illiquid securities may restrict the
    Fund&#146;s ability to take advantage of market opportunities.
    The market price of illiquid securities generally is more
    volatile than that of more liquid securities, which may
    adversely affect the price that the Fund pays for or recovers
    upon the sale of illiquid securities. Illiquid securities are
    also more difficult to value and Calamos&#146; judgment may play
    a greater role in the valuation process. The risks associated
    with illiquid securities may be particularly acute in situations
    in which the Fund&#146;s operations require cash and could
    result in the Fund borrowing to meet its short-term needs or
    incurring losses on the sale of illiquid securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Convertible Securities Risk.</I>&#160;&#160;The value of a
    convertible security is influenced by both the yield of
    non-convertible securities of comparable issuers and by the
    value of the underlying common stocks. The value of a
    convertible security viewed without regard to its conversion
    feature (i.e., strictly on the basis of its yield) is sometimes
    referred to as its &#147;investment value.&#148; A convertible
    security&#146;s investment value tends to decline as prevailing
    interest rate levels increase. Conversely, a convertible
    security&#146;s investment value increases as prevailing
    interest rate levels decline.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, a convertible security&#146;s market value will also be
    influenced by its &#147;conversion price,&#148; which is the
    market value of the underlying common stock that would be
    obtained if the convertible security were converted. A
    convertible security&#146;s conversion price tends to increase
    as the price of the underlying common stock increases, and
    decrease as the price of the underlying common stock decreases.
    As the market price of the underlying common stock declines such
    that the conversion price is substantially below the investment
    value of the convertible security, the price of the convertible
    security tends to be influenced more by the yield of the
    convertible security. Thus, the convertible security may not
    decline in price to the same extent as the underlying common
    stock. If the market price of the underlying common stock
    increases to a point where the conversion value approximates or
    exceeds the investment value, the price of the convertible
    security tends to be influenced more by the market price of the
    underlying common stock. In the event of a liquidation of the
    issuing company, holders of convertible securities would be paid
    before the company&#146;s common stockholders. Consequently, an
    issuer&#146;s convertible securities generally entail less risk
    than its common stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Synthetic Convertible Securities Risk.</I>&#160;&#160;The
    value of a synthetic convertible security may respond
    differently to market fluctuations than a convertible security
    because a synthetic convertible security is composed of two or
    more separate securities, each with its own market value. In
    addition, if the value of the underlying common stock or the
    level of the index involved in the convertible component falls
    below the exercise price of the warrant or option, the warrant
    or option may lose all value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Risks Associated with Options.</I>&#160;&#160;There are
    several risks associated with transactions in options. For
    example, there are significant differences between the
    securities markets and options markets that could result in an
    imperfect correlation among these markets, causing a given
    transaction not to achieve its objectives. A
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    decision as to whether, when and how to use options involves the
    exercise of skill and judgment, and even a well-conceived
    transaction may be unsuccessful to some degree because of market
    behavior or unexpected events. The ability of the Fund to
    utilize options successfully will depend on Calamos&#146;
    ability to predict pertinent market movements, which cannot be
    assured.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s ability to close out its position as a purchaser
    or seller of an OCC or exchange listed put or call option is
    dependent, in part, upon the liquidity of the option market.
    Among the possible reasons for the absence of a liquid option
    market are: (i)&#160;insufficient trading interest in certain
    options; (ii)&#160;restrictions on transactions imposed by an
    exchange; (iii)&#160;trading halts, suspensions or other
    restrictions imposed with respect to particular classes or
    series of options or underlying securities, including reaching
    daily price limits; (iv)&#160;interruption of the normal
    operations of the OCC or an exchange; (v)&#160;inadequacy of the
    facilities of an exchange or OCC to handle current trading
    volume; or (vi)&#160;a decision by one or more exchanges to
    discontinue the trading of options (or a particular class or
    series of options), in which event the relevant market for that
    option on that exchange would cease to exist, although
    outstanding options on that exchange would generally continue to
    be exercisable in accordance with their terms. If the Fund were
    unable to close out an option that it has purchased on a
    security, it would have to exercise the option in order to
    realize any profit or the option would expire and become
    worthless. If the Fund were unable to close out a covered call
    option that it had written on a security, it would not be able
    to sell the underlying security until the option expired. As the
    writer of a covered call option on a security, the Fund
    foregoes, during the option&#146;s life, the opportunity to
    profit from increases in the market value of the security
    covering the call option above the sum of the premium and the
    exercise price of the call.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The hours of trading for listed options may not coincide with
    the hours during which the underlying financial instruments are
    traded. To the extent that the option markets close before the
    markets for the underlying financial instruments, significant
    price and rate movements can take place in the underlying
    markets that cannot be reflected in the option markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unless the parties provide for it, there is no central clearing
    or guaranty function in an OTC option. As a result, if the
    Counterparty (as described above under &#147;Principal
    Investment Strategies&#160;&#151; Options in General&#148;)
    fails to make or take delivery of the security or other
    instrument underlying an OTC option it has entered into with the
    Fund or fails to make a cash settlement payment due in
    accordance with the terms of that option, the Fund will lose any
    premium it paid for the option as well as any anticipated
    benefit of the transaction. Accordingly, Calamos must assess the
    creditworthiness of each such Counterparty or any guarantor or
    credit enhancement of the Counterparty&#146;s credit to
    determine the likelihood that the terms of the OTC option will
    be satisfied. The Fund will engage in OTC option transactions
    only with U.S.&#160;government securities dealers recognized by
    the Federal Reserve Bank of New York as &#147;primary
    dealers&#148; or broker/dealers, domestic or foreign banks or
    other financial institutions that have received (or the
    guarantors of the obligation of which have received) a
    short-term credit rating of
    <FONT style="white-space: nowrap">A-1</FONT> from
    S&#038;P or
    <FONT style="white-space: nowrap">P-1</FONT> from
    Moody&#146;s or an equivalent rating from any NRSRO or, in the
    case of OTC currency transactions, are determined to be of
    equivalent credit quality by Calamos.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may sell options on individual securities and
    securities indices. All calls sold by the Fund must be
    &#147;covered.&#148; Even though the Fund will receive the
    option premium to help protect it against loss, a call option
    sold by the Fund exposes the Fund during the term of the option
    to possible loss of opportunity to realize appreciation in the
    market price of the underlying security or instrument and may
    require the Fund to hold a security or instrument that it might
    otherwise have sold. The Fund may purchase and sell put options
    on individual securities and securities indices. In selling put
    options, there is a risk that the Fund may be required to buy
    the underlying security at a disadvantageous price above the
    market price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Risk.</I>&#160;&#160;The Fund may invest in certain
    securities, such as certain convertible and high yield
    securities, for which the federal income tax treatment may not
    be clear or may be subject to re-characterization by the IRS. It
    could be more difficult for the Fund to comply with certain
    federal income tax requirements applicable to regulated
    investment companies if the tax characterization of the
    Fund&#146;s investments is uncertain or if the tax treatment of
    the income from such investments were successfully challenged by
    the IRS. See &#147;Certain Federal Income Tax Matters.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the Fund&#146;s investment practices are subject to
    special and complex federal income tax provisions that may,
    among other things, (i)&#160;disallow, suspend or otherwise
    limit the allowance of certain losses or deductions,
    (ii)&#160;convert tax-advantaged, long-term capital gains and
    qualified dividend income into higher taxed short-term capital
    gain or ordinary income, (iii)&#160;convert an ordinary loss or
    a deduction into a capital loss (the deductibility of which is
    more limited), (iv)&#160;cause the Fund to recognize income or
    gain without a corresponding receipt of cash, (v)&#160;adversely
    affect the timing as to when a purchase or sale of stock or
    securities is deemed to occur, and (vi)&#160;adversely alter the
    characterization of certain complex financial transactions. The
    Fund will monitor its transactions and may make certain tax
    elections where applicable in order to mitigate the effect of
    these provisions, if possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Management Risk.</I>&#160;&#160;Calamos&#146; judgment about
    the attractiveness, relative value or potential appreciation of
    a particular sector, security or investment strategy may prove
    to be incorrect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Antitakeover Provisions.</I>&#160;&#160;The Fund&#146;s
    Agreement and Declaration of Trust and Bylaws include provisions
    that could limit the ability of other entities or persons to
    acquire control of the Fund or to change the composition of its
    Board of Trustees. Such provisions could limit the ability of
    shareholders to sell their shares at a premium over prevailing
    market prices by discouraging a third party from seeking to
    obtain control of the Fund. These provisions include staggered
    terms of office for the Trustees, advance notice requirements
    for shareholder proposals, and super-majority voting
    requirements for certain transactions with affiliates,
    converting the Fund to an open-end investment company or a
    merger, asset sale or similar transaction. Holders of preferred
    shares have voting rights in addition to and separate from the
    voting rights of common shareholders with respect to certain of
    these matters. See &#147;Description of Shares&#160;&#151;
    Preferred Shares&#148; and &#147;Certain Provisions of the
    Agreement and Declaration of Trust and Bylaws.&#148; The holders
    of preferred shares, on the one hand, and the holders of the
    common shares, on the other, may have interests that conflict in
    these situations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Disruption Risk.</I>&#160;&#160;Certain events have a
    disruptive effect on the securities markets, such as terrorist
    attacks, war and other geopolitical events, earthquakes, storms
    and other disasters. The Fund cannot predict the effects of
    similar events in the future on the U.S.&#160;economy or any
    foreign economy.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Risks to Common Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Leverage Risk.</I>&#160;&#160;The Fund has issued Preferred
    Shares and may issue additional preferred shares or borrow money
    or issue debt securities. The Fund&#146;s use of leverage
    creates risk. As a non-fundamental policy, such preferred
    shares, borrowing or debt securities may not exceed 38% of the
    Fund&#146;s total assets. However, the Board of Trustees
    reserves the right to issue preferred shares or borrow to the
    extent permitted by the 1940&#160;Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage creates risks which may adversely affect the return for
    the holders of common shares, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the likelihood of greater volatility of net asset value and
    market price of common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in the dividend rates on any preferred shares or in
    interest rates on borrowings and short-term debt;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    increased operating costs, which are effectively borne by common
    shareholders, may reduce the Fund&#146;s total return;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for a decline in the value of an investment
    acquired with borrowed funds, while the Fund&#146;s obligations
    under such borrowing remain fixed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s use of leverage is premised upon the expectation
    that the Fund&#146;s preferred share dividends or borrowing cost
    will be lower than the return the Fund achieves on its
    investments with the proceeds of the issuance of preferred
    shares or debt securities or borrowing. Such difference in
    return may result from the Fund&#146;s higher credit rating or
    the short-term nature of its borrowing compared to the long-term
    nature of its investments. Because Calamos seeks to invest the
    Fund&#146;s total assets (including the assets obtained from
    leverage) in the higher yielding portfolio investments or
    portfolio investments with the potential for capital
</DIV>

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    <BR>
    35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    appreciation, the holders of common shares will be the
    beneficiaries of the incremental return. Should the differential
    between the underlying assets and cost of leverage narrow, the
    incremental return &#147;pick up&#148; will be reduced.
    Furthermore, if long-term interest rates rise without a
    corresponding increase in the yield on the Fund&#146;s portfolio
    investments or the Fund otherwise incurs losses on its
    investments, the Fund&#146;s net asset value attributable to its
    common shares will reflect the decline in the value of portfolio
    holdings resulting therefrom.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Leverage is a speculative technique that could adversely affect
    the returns to common shareholders. Leverage can cause the Fund
    to lose money and can magnify the effect of any losses. To the
    extent the income or capital appreciation derived from
    securities purchased with funds received from leverage exceeds
    the cost of leverage, the Fund&#146;s return will be greater
    than if leverage had not been used. Conversely, if the income or
    capital appreciation from the securities purchased with such
    funds is not sufficient to cover the cost of leverage or if the
    Fund incurs capital losses, the return of the Fund will be less
    than if leverage had not been used, and therefore the amount
    available for distribution to common shareholders as dividends
    and other distributions will be reduced or potentially
    eliminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will pay, and common shareholders will effectively
    bear, any costs and expenses relating to any borrowings and to
    the issuance and ongoing maintenance of preferred shares or debt
    securities. Such costs and expenses include the higher
    management fee resulting from the use of any such leverage,
    offering
    <FONT style="white-space: nowrap">and/or</FONT>
    issuance costs, and interest
    <FONT style="white-space: nowrap">and/or</FONT>
    dividend expense and ongoing maintenance. The markets for
    auction rate securities have continued to face widening spreads,
    reduced demand and, more recently, an increased number of failed
    auctions. When a failed auction occurs, the dividend rate for
    the Fund&#146;s auction rate preferred shares is set at the
    maximum rate as determined by the terms of such securities. In
    summary, the maximum rate that goes into effect in the event of
    a failed auction is determined by a formula equal to the
    applicable percentage of a reference rate, which percentage
    ranges from 150% to 275%, depending upon the rating then
    assigned to the preferred shares. The reference rate is LIBOR
    for dividend periods of less than 365&#160;days, and a
    U.S.&#160;Treasury average index rate for dividend periods of
    more than 365&#160;days. These reference rates, and thus the
    maximum rate, can fluctuate over time. The formula for
    determining the maximum rate will be described in more detail in
    an applicable prospectus supplement if the Fund issues senior
    securities pursuant to this registration statement. These
    conditions may result in higher leverage costs to common
    stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain types of borrowings may result in the Fund being subject
    to covenants in credit agreements, including those relating to
    asset coverage, borrowing base and portfolio composition
    requirements and additional covenants that may affect the
    Fund&#146;s ability to pay dividends and distributions on common
    shares in certain instances. The Fund may also be required to
    pledge its assets to the lenders in connection with certain
    types of borrowings. The Fund is subject to certain restrictions
    on investments imposed by guidelines of Standard&#160;&#038;
    Poor&#146;s and Fitch, which have issued ratings for the
    Preferred Shares and may do so for short-term debt instruments
    issued by the Fund. These guidelines may impose asset coverage
    or portfolio composition requirements that are more stringent
    than those imposed by the 1940 Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund&#146;s ability to make dividends and distributions
    on its common shares is limited, such limitation could, under
    certain circumstances, impair the ability of the Fund to
    maintain its qualification for taxation as a regulated
    investment company, which would have adverse tax consequences
    for common shareholders. To the extent that the Fund is
    required, in connection with maintaining 1940 Act asset coverage
    requirements or otherwise, or elects to redeem any preferred
    shares or debt securities or prepay any borrowings, the Fund may
    need to liquidate investments to fund such redemptions or
    prepayments. Liquidation at times of adverse economic conditions
    may result in capital loss and reduce returns to common
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because Calamos&#146; investment management fee is a percentage
    of the Fund&#146;s managed assets, Calamos&#146; fee will be
    higher if the Fund is leveraged and Calamos will have an
    incentive to be more aggressive and leverage the Fund.
    Consequently, the Fund and Calamos may have differing interests
    in determining whether to leverage the Fund&#146;s assets. Any
    additional use of leverage by the Fund would require approval by
    the Board of Trustees of the Fund. In considering whether to
    approve the use of additional leverage, the Board would be
    presented with all relevant information necessary to make a
    determination whether or not additional leverage would be in the
    best interests of the Fund, including information regarding any
    potential conflicts of interest.
</DIV>

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    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Transactions Risk.</I>&#160;&#160;The Fund may
    enter into an interest rate swap or cap transaction to attempt
    to protect itself from increasing dividend or interest expenses
    on its leverage resulting from increasing short-term interest
    rates. A decline in interest rates may result in a decline in
    the value of the swap or cap, which may result in a decline in
    the net asset value of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Depending on the state of interest rates in general, the
    Fund&#146;s use of interest rate swap or cap transactions could
    enhance or harm the overall performance of the common shares. To
    the extent there is a decline in interest rates, the value of
    the interest rate swap or cap could decline, and could result in
    a decline in the net asset value of the common shares. In
    addition, if the counterparty to an interest rate swap or cap
    defaults, the Fund would not be able to use the anticipated net
    receipts under the swap or cap to offset the dividend or
    interest payments on the Fund&#146;s leverage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Depending on whether the Fund would be entitled to receive net
    payments from the counterparty on the swap or cap, which in turn
    would depend on the general state of short-term interest rates
    at that point in time, such a default could negatively impact
    the performance of the common shares. In addition, at the time
    an interest rate swap or cap transaction reaches its scheduled
    termination date, there is a risk that the Fund would not be
    able to obtain a replacement transaction or that the terms of
    the replacement would not be as favorable as on the expiring
    transaction. If either of these events occurs, it could have a
    negative impact on the performance of the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund fails to maintain a required 200% asset coverage of
    the liquidation value of the outstanding preferred shares or if
    the Fund loses its rating on its preferred shares or fails to
    maintain other covenants with respect to the preferred shares,
    the Fund may be required to redeem some or all of the preferred
    shares. Similarly, the Fund could be required to prepay the
    principal amount of any debt securities or other borrowings.
    Such redemption or prepayment would likely result in the Fund
    seeking to terminate early all or a portion of any swap or cap
    transaction. Early termination of a swap could result in a
    termination payment by or to the Fund. Early termination of a
    cap could result in a termination payment to the Fund. The Fund
    intends to segregate with its custodian cash or liquid
    securities having a value at least equal to the Fund&#146;s net
    payment obligations under any swap transaction, marked-to-market
    daily.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Impact Risk.</I>&#160;&#160;The sale of our common
    shares (or the perception that such sales may occur) may have an
    adverse effect on prices in the secondary market for our common
    shares. An increase in the number of common shares available may
    put downward pressure on the market price for our common shares.
    These sales also might make it more difficult for us to sell
    additional equity securities in the future at a time and price
    we deem appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dilution Risk.</I>&#160;&#160;The voting power of current
    shareholders will be diluted to the extent that current
    shareholders do not purchase shares in any future common share
    offerings or do not purchase sufficient shares to maintain their
    percentage interest. In addition, if we are unable to invest the
    proceeds of such offering as intended, our per share
    distribution may decrease and we may not participate in market
    advances to the same extent as if such proceeds were fully
    invested as planned.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Discount Risk.</I>&#160;&#160;The Fund&#146;s common
    shares have traded both at a premium and at a discount in
    relation to net asset value. Shares of closed-end investment
    companies frequently trade at a discount from net asset value,
    but in some cases trade above net asset value. The risk of the
    common shares trading at a discount is a risk separate from the
    risk of a decline in the Fund&#146;s net asset value as a result
    of investment activities. The Fund&#146;s net asset value may be
    reduced immediately following this offering by the offering
    costs for common shares, including the sales load, which will be
    borne entirely by all common shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Whether shareholders will realize a gain or loss upon the sale
    of the Fund&#146;s common shares depends upon whether the market
    value of the shares at the time of sale is above or below the
    price the shareholder paid, taking into account transaction
    costs for the shares, and is not directly dependent upon the
    Fund&#146;s net asset value. Because the market value of the
    Fund&#146;s common shares will be determined by factors such as
    the relative demand for and supply of the shares in the market,
    general market conditions and other factors beyond the control
    of the Fund, the Fund cannot predict whether its common shares
    will trade at, below or above net asset value, or below or above
    the public offering price for the common shares.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Risks to Senior Security Holders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, an investment in preferred shares or debt securities
    (collectively, &#147;senior securities&#148;) is subject to the
    following risks:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest Rate Risk.</I>&#160;&#160;Auction rate senior
    securities pay dividends or interest based on short-term
    interest rates. If short-term interest rates rise, dividends or
    interest on the auction rate senior securities may rise so that
    the amount of dividends or interest due to holders of auction
    rate senior securities would exceed the cash flow generated by
    our portfolio securities. This might require us to sell
    portfolio securities at a time when we would otherwise not do
    so, which may affect adversely our future ability to generate
    cash flow. In addition, rising market interest rates could
    impact negatively the value of our investment portfolio,
    reducing the amount of assets serving as asset coverage for the
    senior securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Senior Leverage Risk.</I>&#160;&#160;Preferred shares will be
    junior in liquidation and with respect to distribution rights to
    debt securities and any other borrowings. Senior securities
    representing indebtedness may constitute a substantial lien and
    burden on preferred shares by reason of their prior claim
    against our income and against our net assets in liquidation. We
    may not be permitted to declare dividends or other distributions
    with respect to any series of preferred shares unless at such
    time we meet applicable asset coverage requirements and the
    payment of principal or interest is not in default with respect
    to any borrowings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Ratings and Asset Coverage Risk.</I>&#160;&#160;To the extent
    that senior securities are rated, a rating does not eliminate or
    necessarily mitigate the risks of investing in our senior
    securities, and a rating may not fully or accurately reflect all
    of the credit and market risks associated with a security. A
    rating agency could downgrade the rating of our shares of
    preferred stock or debt securities, which may make such
    securities less liquid at an auction or in the secondary market,
    though probably with higher resulting interest rates. If a
    rating agency downgrades the rating assigned to a senior
    security, we may alter our portfolio or redeem the senior
    security. We may voluntarily redeem a senior security under
    certain circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Inflation Risk.</I>&#160;&#160;Inflation is the reduction in
    the purchasing power of money resulting from an increase in the
    price of goods and services. Inflation risk is the risk that the
    inflation adjusted or &#147;real&#148; value of an investment in
    preferred stock or debt securities or the income from that
    investment will be worth less in the future. As inflation
    occurs, the real value of the preferred stock or debt securities
    and the dividend payable to holders of preferred stock or
    interest payable to holders of debt securities declines. In an
    inflationary period, however, it is expected that, through the
    auction process, dividend or interest rates would increase,
    tending to offset this risk.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Auction Risk.</I>&#160;&#160;To the extent that senior
    securities trade through an auction, there are certain risks
    associated with participating in an auction and certain risks if
    you try to sell senior securities outside of an auction in the
    secondary market. The markets for auction rate securities have
    continued to face widening spreads, reduced demand and, more
    recently, an increased number of failed auctions. A failed
    auction results when there are not enough bidders in the auction
    at rates below the maximum rate as prescribed by the terms of
    the security. When an auction fails, all holders receive the
    maximum rate and may be unable to sell their shares until the
    next auction, which may be for an indefinite period of time.
    Auction risk will be described in an applicable prospectus
    supplement if we issue senior securities pursuant to this
    registration statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Decline in Net Asset Value Risk.</I>&#160;&#160;A material
    decline in our NAV may impair our ability to maintain required
    levels of asset coverage for our preferred shares or debt
    securities.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT
    OF THE FUND</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Trustees
    and Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s Board of Trustees provides broad supervision
    over the affairs of the Fund. The officers of the Fund are
    responsible for the Fund&#146;s operations. There are seven
    Trustees of the Fund, one of whom is an
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;interested person&#148; of the Fund (as defined in the
    1940 Act) and six of whom are not &#147;interested
    persons.&#148; The names and business addresses of the trustees
    and officers of the Fund and their principal occupations and
    other affiliations during the past five years are set forth
    under &#147;Management of the Fund&#148; in the statement of
    additional information.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s investments are managed by Calamos, 2020 Calamos
    Court, Naperville, IL. On December&#160;31, 2007 Calamos managed
    approximately $46.2&#160;billion in assets of individuals and
    institutions. Calamos is a wholly-owned subsidiary of Holdings
    and indirect subsidiary of Calamos Asset Management, Inc., a
    publicly traded holding company whose shares are listed on the
    NASDAQ exchange under the ticker symbol &#147;CLMS.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Management Agreement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the overall authority of the Board of Trustees,
    Calamos regularly provides the Fund with investment research,
    advice and supervision and furnishes continuously an investment
    program for the Fund. In addition, Calamos furnishes for use of
    the Fund such office space and facilities as the Fund may
    require for its reasonable needs, supervises the business and
    affairs of the Fund and provides the following other services on
    behalf of the Fund and not provided by persons not a party to
    the investment management agreement: (a)&#160;preparing or
    assisting in the preparation of reports to and meeting materials
    for the Trustees; (b)&#160;supervising, negotiating contractual
    arrangements with, to the extent appropriate, and monitoring the
    performance of, accounting agents, custodians, depositories,
    transfer agents and pricing agents, accountants, attorneys,
    printers, underwriters, brokers and dealers, insurers and other
    persons in any capacity deemed to be necessary or desirable to
    Fund operations; (c)&#160;assisting in the preparation and
    making of filings with the Commission and other regulatory and
    self-regulatory organizations, including, but not limited to,
    preliminary and definitive proxy materials, amendments to the
    Fund&#146;s registration statement on
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT>
    and semi-annual reports on
    <FONT style="white-space: nowrap">Form&#160;N-SAR;</FONT>
    (d)&#160;overseeing the tabulation of proxies by the Fund&#146;s
    transfer agent; (e)&#160;assisting in the preparation and filing
    of the Fund&#146;s federal, state and local tax returns;
    (f)&#160;assisting in the preparation and filing of the
    Fund&#146;s federal excise tax return pursuant to
    Section&#160;4982 of the Code; (g)&#160;providing assistance
    with investor and public relations matters; (h)&#160;monitoring
    the valuation of portfolio securities and the calculation of net
    asset value; (i)&#160;monitoring the registration of shares of
    beneficial interest of the Fund under applicable federal and
    state securities laws; (j)&#160;maintaining or causing to be
    maintained for the Fund all books, records and reports and any
    other information required under the 1940 Act, to the extent
    that such books, records and reports and other information are
    not maintained by the Fund&#146;s custodian or other agents of
    the Fund; (k)&#160;assisting in establishing the accounting
    policies of the Fund; (l)&#160;assisting in the resolution of
    accounting issues that may arise with respect to the Fund&#146;s
    operations and consulting with the Fund&#146;s independent
    accountants, legal counsel and the Fund&#146;s other agents as
    necessary in connection therewith; (m)&#160;reviewing the
    Fund&#146;s bills; (n)&#160;assisting the Fund in determining
    the amount of dividends and distributions available to be paid
    by the Fund to its shareholders, preparing and arranging for the
    printing of dividend notices to shareholders, and providing the
    transfer and dividend paying agent, the custodian, and the
    accounting agent with such information as is required for such
    parties to effect the payment of dividends and distributions;
    and (o)&#160;otherwise assisting the Fund as it may reasonably
    request in the conduct of the Fund&#146;s business, subject to
    the direction and control of the Trustees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the investment management agreement, the Fund pays Calamos
    a fee based on the average weekly managed assets that is
    computed weekly and paid on a monthly basis. The fee paid by the
    Fund is at the annual rate of 1.00% of managed assets. Because
    the fees paid to Calamos are determined on the basis of the
    Fund&#146;s managed assets, Calamos&#146; interest in
    determining whether to leverage the Fund may differ from the
    interests of the Fund and its common shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the terms of its investment management agreement, except
    for the services and facilities provided by Calamos as set forth
    therein, the Fund shall assume and pay all expenses for all
    other Fund operations and activities and shall reimburse Calamos
    for any such expenses incurred by Calamos. The expenses borne by
    the Fund shall include, without limitation:
    (a)&#160;organization expenses of the Fund (including
    out-of-pocket expenses, but not including Calamos&#146; overhead
    or employee costs); (b)&#160;fees payable to Calamos;
    (c)&#160;legal
</DIV>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    expenses; (d)&#160;auditing and accounting expenses;
    (e)&#160;maintenance of books and records that are required to
    be maintained by the Fund&#146;s custodian or other agents of
    the Fund; (f)&#160;telephone, telex, facsimile, postage and
    other communications expenses; (g)&#160;taxes and governmental
    fees; (h)&#160;fees, dues and expenses incurred by the Fund in
    connection with membership in investment company trade
    organizations and the expense of attendance at professional
    meetings of such organizations; (i)&#160;fees and expenses of
    accounting agents, custodians, subcustodians, transfer agents,
    dividend disbursing agents and registrars; (j)&#160;payment for
    portfolio pricing or valuation services to pricing agents,
    accountants, bankers and other specialists, if any;
    (k)&#160;expenses of preparing share certificates;
    (l)&#160;expenses in connection with the issuance, offering,
    distribution, sale, redemption or repurchase of securities
    issued by the Fund; (m)&#160;expenses relating to investor and
    public relations provided by parties other than Calamos;
    (n)&#160;expenses and fees of registering or qualifying shares
    of beneficial interest of the Fund for sale; (o)&#160;interest
    charges, bond premiums and other insurance expenses;
    (p)&#160;freight, insurance and other charges in connection with
    the shipment of the Fund&#146;s portfolio securities;
    (q)&#160;the compensation and all expenses (specifically
    including travel expenses relating to Fund business) of
    Trustees, officers and employees of the Fund who are not
    affiliated persons of Calamos; (r)&#160;brokerage commissions or
    other costs of acquiring or disposing of any portfolio
    securities of the Fund; (s)&#160;expenses of printing and
    distributing reports, notices and dividends to shareholders;
    (t)&#160;expenses of preparing and setting in type, printing and
    mailing prospectuses and statements of additional information of
    the Fund and supplements thereto; (u)&#160;costs of stationery;
    (v)&#160;any litigation expenses; (w)&#160;indemnification of
    Trustees and officers of the Fund; (x)&#160;costs of
    shareholders&#146; and other meetings; (y)&#160;interest on
    borrowed money, if any; and (z)&#160;the fees and other expenses
    of listing the Fund&#146;s shares on the NYSE or any other
    national stock exchange.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Managers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Calamos employs a team approach to portfolio management, with
    teams led by the Co-Chief Investment Officers (the
    &#147;Co-CIOs&#148;) and comprised generally of the Co-CIOs,
    senior strategy analysts, intermediate analysts and junior
    analysts. The Co-CIOs and senior strategy analysts are supported
    by and lead a team of investment professionals whose valuable
    contributions create a synergy of expertise that can be applied
    across many different investment strategies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Portfolio holdings are reviewed and trading activity is
    discussed on a regular basis by team members. Team members
    generally may make trading decisions guided by the Fund&#146;s
    investment objective and strategy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While day-to-day management of each portfolio is a team effort,
    the Co-CIOs, along with the Director of Fixed Income and certain
    of the senior strategy analysts, have joint primary and
    supervisory responsibility for the Fund and work with all team
    members in developing and executing each respective
    portfolio&#146;s investment program. The Fund&#146;s portfolio
    investment program includes implementation of distinct
    strategies, including a fixed income approach which is lead by
    the Director of Fixed Income of Calamos. All team leaders are
    further identified below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    John P. Calamos,&#160;Sr., Co-CIO of Calamos, generally focuses
    on the top-down approach of diversification by industry sector
    and macro-level investment themes. Nick P. Calamos, Co-CIO of
    Calamos, also focuses on the top-down approach of
    diversification by industry sector and macro-level investment
    themes and, in addition, focuses on the
    <FONT style="white-space: nowrap">bottom-up</FONT>
    approach and corresponding research and analysis. Matthew Toms
    is Director of Fixed Income. John P. Calamos,&#160;Jr., John
    Hillenbrand, Steve Klouda, Jeff Scudieri and Jon Vacko are each
    senior strategy analysts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    During the past five years, John P. Calamos,&#160;Sr. has been
    President and Trustee of the Fund and chairman, CEO and Co-CIO
    of Calamos and its predecessor company. Nick P. Calamos has been
    Vice President of the Fund and Senior Executive Vice President
    and Co-CIO of Calamos and its predecessor company. Matthew Toms
    joined Calamos in March 2007 as Director of Fixed Income. John
    P. Calamos,&#160;Jr., Executive Vice President of Calamos,
    joined the firm in 1985 and has held various senior investment
    positions since that time. John Hillenbrand joined Calamos in
    2002 and has been a senior strategy analyst since August 2002.
    Steve&#160;Klouda joined Calamos in 1994 and has been a senior
    strategy analyst since July 2002. Jeff Scudieri joined Calamos
    in 1997 and has been a senior strategy analyst since September
    2002. Jon Vacko joined Calamos in 2000 and has been a senior
    strategy analyst since July 2002.
</DIV>

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    <BR>
    40
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For over 20&#160;years, the Calamos portfolio management team
    has managed money for its clients in convertible, high yield and
    global strategies. Furthermore, Calamos has extensive experience
    investing in foreign markets through its convertible securities
    and high yield securities strategies. Such experience has
    included investments in established as well as emerging foreign
    markets. The Fund&#146;s statement of additional information
    provides additional information about the team leaders,
    including other accounts they manage, their ownership in the
    Calamos Family of Funds and their compensation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Fund&#160;Accounting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the arrangements with State Street to provide fund
    accounting services, State Street provides certain
    administrative and accounting services to the Fund and such
    other funds advised by Calamos that may be part of those
    arrangements (the Fund and such other fund are collectively
    referred to as the &#147;Calamos Funds&#148;) as described more
    fully in the statement of additional information. For the
    services rendered to the Calamos Funds, State Street receives
    fees based on the combined managed assets of the Calamos Funds
    (&#147;Combined Assets&#148;). Each fund of the Calamos Funds
    pays its pro-rata share of the fees payable to State Street
    described below based on relative managed assets of each fund.
    State Street receives a fee at the annual rate of .009% for the
    first $5.0&#160;billion of Combined Assets, .0075% for the next
    $5.0&#160;billion of Combined Assets, .005% for the next
    $5.0&#160;billion of Combined Assets and .0035% for the Combined
    Assets in excess of $15.0&#160;billion. Because the fees payable
    to State Street are based on the managed assets of the Calamos
    Funds, the fees increase as the Calamos Funds increase their
    leverage.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, Calamos also provides certain other financial
    accounting services to the Calamos Funds described more fully in
    the statement of additional information. For providing those
    services, Calamos receives a fee at the annual rate of .0175% on
    the first $1&#160;billion of the daily average net assets of the
    Calamos Funds; .0150% on the next $1&#160;billion of the daily
    average net assets of the Calamos Funds; and .0110% on the daily
    average net assets of the Calamos Funds above $2&#160;billion
    (&#147;financial accounting service fee&#148;). Each fund of the
    Calamos Funds will pay its pro-rata share of the financial
    accounting service fee to Calamos based on relative net assets
    of each fund.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CLOSED-END
    FUND&#160;STRUCTURE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is a diversified, closed-end management investment
    company (commonly referred to as a closed-end fund) which
    commenced investment operations in October 2005. Closed-end
    funds differ from open-end management investment companies
    (which are generally referred to as mutual funds) in that
    closed-end funds generally list their shares for trading on a
    stock exchange and do not redeem their shares at the request of
    the shareholder. This means that if you wish to sell your shares
    of a closed-end fund you must trade them on the market like any
    other stock at the prevailing market price at that time. In a
    mutual fund, if the shareholder wishes to sell shares of the
    fund, the mutual fund will redeem or buy back the shares at
    &#147;net asset value.&#148; Also, mutual funds generally offer
    new shares on a continuous basis to new investors, and
    closed-end funds generally do not. The continuous inflows and
    outflows of assets in a mutual fund can make it difficult to
    manage the fund&#146;s investments. By comparison, closed-end
    funds are generally able to stay more fully invested in
    securities that are consistent with their investment objectives
    and also have greater flexibility to make certain types of
    investments and to use certain investment strategies, such as
    financial leverage and investments in illiquid securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shares of closed-end funds frequently trade at a discount to
    their net asset value. To the extent the common shares do trade
    at a discount, the Fund&#146;s Board of Trustees may from time
    to time engage in open-market repurchases or tender offers for
    shares after balancing the benefit to shareholders of the
    increase in the net asset value per share resulting from such
    purchases against the decrease in the assets of the Fund and
    potential increase in the expense ratio of expenses to assets of
    the Fund. The Board of Trustees believes that in addition to the
    beneficial effects described above, any such purchases or tender
    offers may result in the temporary narrowing of any discount but
    will not have any long-term effect on the level of any discount.
    We cannot guarantee or assure, however, that the Fund&#146;s
    Board of Trustees will decide to engage in any of these actions.
    Nor is there any guarantee or assurance that such actions, if
    undertaken, would result in the shares
</DIV>

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    <BR>
    41
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trading at a price equal or close to net asset value per share.
    The Board of Trustees might also consider converting the Fund to
    an open-end mutual fund, which would also require a vote of the
    shareholders of the Fund. Conversion of the Fund to an open-end
    mutual fund would require an amendment to the Fund&#146;s
    Declaration of Trust. Such an amendment would require the
    favorable vote of the holders of at least 75% of the Fund&#146;s
    outstanding shares (including any preferred shares) entitled to
    be voted on the matter, voting as a single class (or a majority
    of such shares if the amendment were previously approved,
    adopted or authorized by 75% of the total number of Trustees
    fixed in accordance with the By-laws), and, assuming preferred
    shares are issued, the affirmative vote of a majority of
    outstanding preferred shares, voting as a separate class.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    FEDERAL INCOME TAX MATTERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a general summary of certain federal income tax
    considerations affecting us and our security holders. This
    discussion does not purport to be complete or to deal with all
    aspects of federal income taxation that may be relevant to
    shareholders in light of their particular circumstances or who
    are subject to special rules, such as banks, thrift institutions
    and certain other financial institutions, REITs, regulated
    investment companies, insurance companies, brokers and dealers
    in securities or currencies, certain securities traders,
    tax-exempt investors, individual retirement accounts, certain
    tax-deferred accounts, and foreign investors. Tax matters are
    very complicated, and the tax consequences of an investment in
    and holding of our securities will depend on the particular
    facts of each investor&#146;s situation. Investors are advised
    to consult their own tax advisors with respect to the
    application to their own circumstances of the general federal
    income taxation rules described below and with respect to other
    federal, state, local or foreign tax consequences to them before
    making an investment in our securities. Unless otherwise noted,
    this discussion assumes that investors are U.S.&#160;persons and
    hold our securities as capital assets. More detailed information
    regarding the federal income tax consequences of investing in
    our securities is in the statement of additional information.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to U.S.&#160;Treasury Department Circular 230, we are
    informing you that (1)&#160;this discussion is not intended to
    be used, was not written to be used, and cannot be used, by any
    taxpayer for the purpose of avoiding penalties under the
    U.S.&#160;federal tax laws, (2)&#160;this discussion was written
    by us in connection with the registration of our securities and
    our promotion or marketing, and (3)&#160;each taxpayer should
    seek advice based on his, her or its particular circumstances
    from an independent tax advisor.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Federal
    Income Taxation of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has elected to be treated, and intends to qualify each
    year, as a &#147;regulated investment company&#148; under
    Subchapter M of the Internal Revenue Code of 1986, as amended
    (the &#147;Code&#148;), so that it will not pay
    U.S.&#160;federal income tax on income and capital gains timely
    distributed to shareholders. If the Fund qualifies as a
    regulated investment company and distributes to its shareholders
    at least 90% of the sum of (i)&#160;its &#147;investment company
    taxable income&#148; as that term is defined in the Code (which
    includes, among other things, dividends, taxable interest, the
    excess of any net short-term capital gains over net long-term
    capital losses and certain net foreign exchange gains, less
    certain deductible expenses) without regard to the deduction for
    dividends paid, and (ii)&#160;the excess of its gross tax-exempt
    interest, if any, over certain disallowed deductions, the Fund
    will be relieved of U.S.&#160;federal income tax on any income
    of the Fund, including long-term capital gains, distributed to
    shareholders. However, if the Fund retains any investment
    company taxable income or net capital gain (i.e., the excess of
    net long-term capital gain over net short-term capital loss), it
    will be subject to U.S.&#160;federal income tax at regular
    corporate federal income tax rates (currently at a maximum rate
    of 35%) on the amount retained. The Fund intends to distribute
    at least annually all or substantially all of its investment
    company taxable income, net tax-exempt interest, and net capital
    gain. Under the Code, the Fund will generally be subject to a
    nondeductible 4% federal excise tax on its undistributed
    ordinary income and capital gains if it fails to meet certain
    distribution requirements with respect to each calendar year.
    The Fund intends to make distributions in a timely manner in
    amounts necessary to avoid the excise tax and accordingly does
    not expect to be subject to this tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, for any taxable year, the Fund does not qualify as a
    regulated investment company for U.S.&#160;federal income tax
    purposes, it would be treated in the same manner as a regular
    corporation subject to U.S.&#160;federal
</DIV>

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    <BR>
    42
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    income tax and distributions to its shareholders would not be
    deducted by the Fund in computing its taxable income. In such
    event, the Fund&#146;s distributions, to the extent derived from
    the Fund&#146;s current or accumulated earnings and profits,
    would generally constitute ordinary dividends, which would
    generally be eligible for the dividends received deduction
    available to corporate shareholders, and noncorporate
    shareholders would generally be able to treat such distributions
    as &#147;qualified dividend income&#148; eligible for reduced
    rates of U.S.&#160;federal income taxation in taxable years
    beginning on or before December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain of the Fund&#146;s investment practices are subject to
    special and complex federal income tax provisions that may,
    among other things, (i)&#160;disallow, suspend or otherwise
    limit the allowance of certain losses or deductions,
    (ii)&#160;convert tax-advantaged, long-term capital gains and
    qualified dividend income into higher taxed short-term capital
    gain or ordinary income, (iii)&#160;convert an ordinary loss or
    a deduction into a capital loss (the deductibility of which is
    more limited), (iv)&#160;cause the Fund to recognize income or
    gain without a corresponding receipt of cash, (v)&#160;adversely
    affect the timing as to when a purchase or sale of stock or
    securities is deemed to occur, and (vi)&#160;adversely alter the
    characterization of certain complex financial transactions. The
    Fund will monitor its transactions and may make certain tax
    elections where applicable in order to mitigate the effect of
    these provisions, if possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends, interest and some capital gains received by the Fund
    on foreign securities may be subject to foreign tax withholdings
    or other foreign taxes. If it meets certain requirements, the
    Fund may make an election under the Code to pass through such
    taxes to shareholders of the Fund. If such an election is not
    made, any foreign taxes paid or accrued by the Fund will
    represent an expense of the Fund. If an election is made,
    shareholders will generally be able to claim a credit or
    deduction on their federal income tax return for, and will be
    required to treat as part of the amounts distributed to them,
    their pro rata portion of the income taxes paid by the Fund to
    foreign countries (which taxes relate primarily to investment
    income).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Federal
    Income Taxation of Common and Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Federal Income Tax Treatment of Common Share
    Distributions.</I>&#160;&#160;Unless a shareholder is ineligible
    to participate or elects otherwise, all distributions will be
    automatically reinvested in additional shares of common stock of
    the Fund pursuant to the Fund&#146;s Automatic Dividend
    Reinvestment Plan (the &#147;Plan&#148;). For taxpayers subject
    to U.S.&#160;federal income tax, all dividends will generally be
    taxable regardless of whether a shareholder takes them in cash
    or they are reinvested pursuant to the Plan in additional shares
    of the Fund. Distributions of the Fund&#146;s investment company
    taxable income (determined without regard to the deduction for
    dividends paid) will generally be taxable at ordinary federal
    income tax rates to the extent of the Fund&#146;s current and
    accumulated earnings and profits. However, a portion of such
    distributions derived from certain corporate dividends, if any,
    may qualify for either the dividends received deduction
    available to corporate shareholders under Section&#160;243 of
    the Code or the reduced rates of U.S.&#160;federal income
    taxation for &#147;qualified dividend income&#148; currently
    available to noncorporate shareholders under
    Section&#160;1(h)(11) of the Code, provided certain holding
    period and other requirements are met at both the Fund and
    shareholder levels. The provisions of the Code applicable to
    &#147;qualified dividend income&#148; are currently effective
    for taxable years beginning on or before December&#160;31, 2010.
    Distributions of net capital gain, if any, are generally taxable
    as long-term capital gains for U.S.&#160;federal income tax
    purposes without regard to the length of time a shareholder has
    held shares of the Fund. A distribution of an amount in excess
    of the Fund&#146;s current and accumulated earnings and profits,
    if any, will be treated by a shareholder as a tax-free return of
    capital, which is applied against and reduces the
    shareholder&#146;s basis in his, her or its shares. To the
    extent that the amount of any such distribution exceeds the
    shareholder&#146;s basis in his, her or its shares, the excess
    will be treated by the shareholder as gain from the sale or
    exchange of shares. The U.S.&#160;federal income tax status of
    all dividends and distributions will be designated by the Fund
    and reported to the shareholders annually.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Fund retains any net capital gain, the Fund may designate
    the retained amount as undistributed capital gains in a notice
    to shareholders who, if subject to U.S.&#160;federal income tax
    on long-term capital gains, (i)&#160;will be required to include
    in income as long-term capital gain their proportionate share of
    such undistributed amount, and (ii)&#160;will be entitled to
    credit their proportionate share of the federal income tax paid
    by the Fund on the undistributed amount against their
    U.S.&#160;federal income tax liabilities, if any, and to claim
    refunds to the extent the credit exceeds such liabilities. If
    such an event occurs, the tax basis of shares owned
</DIV>

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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    by a shareholder of the Fund will, for U.S.&#160;federal income
    tax purposes, generally be increased by the difference between
    the amount of undistributed net capital gain included in the
    shareholder&#146;s gross income and the federal income tax
    deemed paid by the shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a shareholder&#146;s distributions are automatically
    reinvested pursuant to the Plan and the plan agent invests the
    distribution in shares acquired on behalf of the shareholder in
    open-market purchases, for U.S.&#160;federal income tax
    purposes, the shareholder will be treated as having received a
    taxable distribution in the amount of the cash dividend that the
    shareholder would have received if the shareholder had elected
    to receive cash. If a shareholder&#146;s distributions are
    automatically reinvested pursuant to the Plan and the plan agent
    invests the distribution in newly issued shares of the Fund, the
    shareholder will be treated as receiving a taxable distribution
    equal to the fair market value of the stock the shareholder
    receives.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends declared by the Fund in October, November or December
    with a record date in such month that are paid during the
    following January will be treated for federal income tax
    purposes as paid by the Fund and received by the shareholders on
    December 31 of the calendar year in which they were declared.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Federal Income Tax Treatment of Preferred Share
    Distributions.</I>&#160;&#160;Under present law, we are of the
    opinion that our preferred shares will constitute equity, and
    thus distributions with respect to preferred shares (other than
    distributions in redemption of preferred shares subject to
    Section&#160;302(b) of the Code) will generally constitute
    dividends to the extent of the Fund&#146;s current or
    accumulated earnings and profits, as calculated for federal
    income tax purposes. Except in the case of distributions of net
    capital gain, such dividends generally will be taxable to
    holders at ordinary federal income tax rates but may qualify for
    the dividends received deduction available to corporate
    shareholders under Section&#160;243 of the Code or the reduced
    rates of U.S.&#160;federal income taxation under
    Section&#160;1(h)(11) of the Code that apply to qualified
    dividend income received by noncorporate shareholders.
    Distributions designated by the Fund as net capital gain
    distributions will be taxable as long-term capital gain
    regardless of the length of time a shareholder has held shares
    of the Fund. Please see the discussion above on qualified
    dividend income, dividends received deductions and net capital
    gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Internal Revenue Service (&#147;IRS&#148;) currently
    requires that a regulated investment company that has two or
    more classes of stock allocate to each such class proportionate
    amounts of each type of its income (such as ordinary income and
    capital gains). Accordingly, the Fund intends to designate
    distributions made with respect to preferred shares as ordinary
    income, capital gain distributions, dividends qualifying for the
    dividends received deduction, if any, and qualified dividend
    income, if any, in proportion to the preferred shares&#146;
    share of total dividends paid during the year. See &#147;Federal
    Income Tax Matters&#148; in the statement of additional
    information.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Earnings and profits are generally treated, for federal income
    tax purposes, as first being used to pay distributions on the
    preferred shares, and then to the extent remaining, if any, to
    pay distributions on the common shares. Distributions in excess
    of the Fund&#146;s earnings and profits, if any, will first
    reduce a shareholder&#146;s adjusted tax basis in his or her
    preferred shares and, after the adjusted tax basis is reduced to
    zero, will constitute capital gains to a shareholder who holds
    such shares as a capital asset.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Dividends declared by the Fund in October, November or December
    with a record date in such month that are paid during the
    following January will be treated for federal income tax
    purposes as paid by the Fund and received by the shareholders on
    December 31 of the calendar year in which they were declared.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Sale of Shares.</I>&#160;&#160;Sales and other dispositions
    of the Fund&#146;s shares generally are taxable events for
    shareholders that are subject to U.S.&#160;federal income tax.
    Shareholders should consult their own tax advisors with
    reference to their individual circumstances to determine whether
    any particular transaction in the Fund&#146;s shares is properly
    treated as a sale or exchange for federal income tax purposes,
    as the following discussion assumes, and the tax treatment of
    any gains or losses recognized in such transactions. Gain or
    loss will generally be equal to the difference between the
    amount of cash and the fair market value of other property
    received and the shareholder&#146;s adjusted tax basis in the
    shares sold or exchanged. Such gain or loss will generally be
    characterized as capital gain or loss and will be long-term or
    short-term depending on the shareholder&#146;s holding period in
    the shares disposed. However, any loss realized by a shareholder
    upon the sale
</DIV>

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    <BR>
    44
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    or other disposition of shares with a federal income tax holding
    period of six months or less will be treated as a long-term
    capital loss to the extent of any amounts treated as
    distributions of long-term capital gain with respect to such
    shares. The ability to deduct capital losses may be limited. In
    addition, losses on sales or other dispositions of shares may be
    disallowed under the &#147;wash sale&#148; rules in the event
    that substantially identical stock or securities are acquired
    (including those made pursuant to reinvestment of dividends)
    within a period of 61&#160;days beginning 30&#160;days before
    and ending 30&#160;days after a sale or other disposition of
    shares. In such a case, the disallowed portion of any loss
    generally would be included in the U.S.&#160;federal tax basis
    of the shares acquired.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Backup Withholding.</I>&#160;&#160;The Fund is required in
    certain circumstances to withhold federal income tax
    (&#147;backup withholding&#148;) at a current rate of 28% on
    reportable payments including dividends, capital gain
    distributions, and proceeds of sales or other dispositions of
    the Fund&#146;s shares paid to certain holders of the
    Fund&#146;s shares who do not furnish the Fund with their
    correct social security number or other taxpayer identification
    number and certain other certifications, or who are otherwise
    subject to backup withholding. Backup withholding is not an
    additional tax. Any amounts withheld from payments made to a
    shareholder may be refunded or credited against such
    shareholder&#146;s U.S.&#160;federal income tax liability, if
    any, provided that the required information is furnished to the
    IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Federal
    Income Taxation of Debt Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Federal Income Tax Treatment of Holders of Debt
    Securities.</I>&#160;&#160;Under present law, we are of the
    opinion that the debt securities will constitute indebtedness of
    the Fund for federal income tax purposes, which the discussion
    below assumes. We intend to treat all payments made with respect
    to the debt securities consistent with this characterization.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Taxation of Interest.</I>&#160;&#160;Payments or accruals of
    interest on debt securities generally will be taxable to you as
    ordinary interest income at the time such interest is received
    (actually or constructively) or accrued, in accordance with your
    regular method of accounting for federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Purchase, Sale and Redemption of Debt
    Securities.</I>&#160;&#160;Initially, your tax basis in debt
    securities acquired generally will be equal to your cost to
    acquire such debt securities. This basis will increase by the
    amounts, if any, that you include in income under the rules
    governing market discount, and will decrease by the amount of
    any amortized premium on such debt securities, as discussed
    below. When you sell or exchange any of your debt securities, or
    if any of your debt securities are redeemed, you generally will
    recognize gain or loss equal to the difference between the
    amount you realize on the transaction (less any accrued and
    unpaid interest, which will be subject to federal income tax as
    interest in the manner described above) and your tax basis in
    the debt securities relinquished.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as discussed below with respect to market discount, the
    gain or loss that you recognize on the sale, exchange or
    redemption of any of your debt securities generally will be
    capital gain or loss. Such gain or loss will generally be
    long-term capital gain or loss if the disposed debt securities
    were held for more than one year and will be short-term capital
    gain or loss if the disposed debt securities were held for one
    year or less. Net long-term capital gain recognized by a
    noncorporate U.S.&#160;holder generally will be subject to
    federal income tax at a lower rate (currently a maximum rate of
    15%, although this rate will increase to 20% for taxable years
    beginning after December&#160;31, 2010)&#160;than net short-term
    capital gain or ordinary income (currently a maximum rate of
    35%). For corporate holders, capital gain is generally taxed for
    federal income tax purposes at the same rate as ordinary income,
    that is, currently at a maximum rate of 35%. A holder&#146;s
    ability to deduct capital losses may be limited.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Amortizable Premium.</I>&#160;&#160;If you purchase debt
    securities at a cost greater than their stated principal amount,
    plus accrued interest, you will be considered to have purchased
    the debt securities at a premium, and you generally may elect to
    amortize this premium as an offset to interest income, using a
    constant yield method, over the remaining term of the debt
    securities. If you make the election to amortize the premium, it
    generally will apply to all debt instruments that you hold at
    the beginning of the first taxable year to which the election
    applies, as well as any debt instruments that you subsequently
    acquire. In addition, you may not revoke the election without
    the consent of the IRS. If you elect to amortize the premium,
    you will be required
</DIV>

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    <BR>
    45
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    to reduce your tax basis in the debt securities by the amount of
    the premium amortized during your holding period. If you do not
    elect to amortize premium, the amount of premium will be
    included in your tax basis in the debt securities. Therefore, if
    you do not elect to amortize the premium and you hold the debt
    securities to maturity, you generally will be required to treat
    the premium as a capital loss when the debt securities are
    redeemed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market Discount.</I>&#160;&#160;If you purchase debt
    securities at a price that reflects a &#147;market
    discount,&#148; any principal payments on, or any gain that you
    realize on the disposition of the debt securities generally will
    be treated as ordinary interest income to the extent of the
    market discount that accrued on the debt securities during the
    time you held such debt securities. &#147;Market discount&#148;
    is defined under the Code as, in general, the excess of the
    stated redemption price at maturity over the purchase price of
    the debt security, except that if the market discount is less
    than 0.25% of the stated redemption price at maturity multiplied
    by the number of complete years to maturity, the market discount
    is considered to be zero. In addition, you may be required to
    defer the deduction of all or a portion of any interest paid on
    any indebtedness that you incurred or continued to purchase or
    carry the debt securities that were acquired at a market
    discount. In general, market discount will be treated as
    accruing ratably over the term of the debt securities, or, at
    your election, under a constant yield method.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may elect to include market discount in gross income
    currently as it accrues (on either a ratable or constant yield
    basis), in lieu of treating a portion of any gain realized on a
    sale of the debt securities as ordinary income. If you elect to
    include market discount on a current basis, the interest
    deduction deferral rule described above will not apply and you
    will increase your basis in the debt security by the amount of
    market discount you include in gross income. If you do make such
    an election, it will apply to all market discount debt
    instruments that you acquire on or after the first day of the
    first taxable year to which the election applies. This election
    may not be revoked without the consent of the IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Information Reporting and Backup
    Withholding.</I>&#160;&#160;In general, information reporting
    requirements will apply to payments of principal, interest, and
    premium, if any, paid on debt securities and to the proceeds of
    the sale of debt securities paid to U.S.&#160;holders other than
    certain exempt recipients (such as certain corporations).
    Information reporting generally will apply to payments of
    interest on the debt securities to
    <FONT style="white-space: nowrap">non-U.S.&#160;Holders</FONT>
    (as defined below) and the amount of tax, if any, withheld with
    respect to such payments. Copies of the information returns
    reporting such interest payments and any withholding may also be
    made available to the tax authorities in the country in which
    the
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    resides under the provisions of an applicable income tax treaty.
    In addition, for
    <FONT style="white-space: nowrap">non-U.S.&#160;Holders,</FONT>
    information reporting will apply to the proceeds of the sale of
    debt securities within the United States or conducted through
    United States-related financial intermediaries unless the
    certification requirements described below have been complied
    with and the statement described below in &#147;Taxation of
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holders&#148;</FONT>
    has been received (and the payor does not have actual knowledge
    or reason to know that the holder is a United States person) or
    the holder otherwise establishes an exemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be required to withhold, for U.S.&#160;federal income tax
    purposes, a portion of all payments (including redemption
    proceeds) payable to holders of debt securities who fail to
    provide us with their correct taxpayer identification number,
    who fail to make required certifications or who have been
    notified by the IRS that they are subject to backup withholding
    (or if we have been so notified). Certain corporate and other
    shareholders specified in the Code and the regulations
    thereunder are exempt from backup withholding. Backup
    withholding is not an additional tax. Any amounts withheld may
    be credited against the holder&#146;s U.S.&#160;federal income
    tax liability provided the appropriate information is furnished
    to the IRS. If you are a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder,</FONT>
    you may have to comply with certification procedures to
    establish your
    <FONT style="white-space: nowrap">non-U.S.&#160;status</FONT>
    in order to avoid backup withholding tax requirements. The
    certification procedures required to claim the exemption from
    withholding tax on interest income described below will satisfy
    these requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Taxation of
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holders.</FONT></I>&#160;&#160;If
    you are a non-resident alien individual or a foreign corporation
    (a
    <FONT style="white-space: nowrap">&#147;non-U.S.&#160;Holder&#148;),</FONT>
    the payment of interest on the debt securities generally will be
    considered &#147;portfolio interest&#148; and thus generally
    will be exempt from U.S.&#160;federal withholding tax. This
    exemption will apply to you provided that (1)&#160;interest paid
    on the debt securities is not effectively connected with your
    conduct of a
</DIV>

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    <BR>
    46
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trade or business in the United States, (2)&#160;you are not a
    bank whose receipt of interest on the debt securities is
    described in Section&#160;881(c)(3)(A) of the Code, (3)&#160;you
    do not actually or constructively own 10&#160;percent or more of
    the combined voting power of all classes of the Fund&#146;s
    stock entitled to vote, (4)&#160;you are not a controlled
    foreign corporation that is related, directly or indirectly, to
    the Fund through stock ownership, and (5)&#160;you satisfy the
    certification requirements described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To satisfy the certification requirements, either (1)&#160;the
    holder of any debt securities must certify, under penalties of
    perjury, that such holder is a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    and must provide such owner&#146;s name, address and taxpayer
    identification number, if any, on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN,</FONT>
    or (2)&#160;a securities clearing organization, bank or other
    financial institution that holds customer securities in the
    ordinary course of its trade or business and holds the debt
    securities on behalf of the holder thereof must certify, under
    penalties of perjury, that it has received a valid and properly
    executed IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    from the beneficial holder and comply with certain other
    requirements. Special certification rules apply for debt
    securities held by a foreign partnership and other
    intermediaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest on debt securities received by a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    that is not excluded from U.S.&#160;federal withholding tax
    under the portfolio interest exemption as described above
    generally will be subject to withholding at a 30% rate, except
    where (1)&#160;the interest is effectively connected with the
    conduct of a U.S.&#160;trade or business, in which case the
    interest will generally be subject to U.S.&#160;income tax on a
    net basis as applicable to U.S.&#160;holders generally or
    (2)&#160;a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    can claim the benefits of an applicable income tax treaty to
    reduce or eliminate such withholding tax. To claim the benefit
    of an income tax treaty or to claim an exemption from
    withholding because the interest is effectively connected with a
    U.S.&#160;trade or business, a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    must timely provide the appropriate, properly executed IRS
    forms. These forms may be required to be periodically updated.
    Also, a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    who is claiming the benefits of an income tax treaty may be
    required to obtain a U.S.&#160;taxpayer identification number
    and to provide certain documentary evidence issued by foreign
    governmental authorities to prove residence in the foreign
    country.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any capital gain that a
    <FONT style="white-space: nowrap">non-U.S.&#160;Holder</FONT>
    realizes on a sale, exchange or other disposition of debt
    securities generally will be exempt from United States federal
    income tax, including withholding tax. This exemption will not
    apply to you if your gain is effectively connected with your
    conduct of a trade or business in the U.S.&#160;or you are an
    individual holder and are present in the U.S.&#160;for a period
    or periods aggregating 183&#160;days or more in the taxable year
    of the disposition and either your gain is attributable to an
    office or other fixed place of business that you maintain in the
    U.S.&#160;or you have a tax home in the United States.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NET ASSET
    VALUE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Net asset value per share is determined no less frequently than
    the close of regular session trading on the New York Stock
    Exchange (usually 4:00&#160;p.m., Eastern time), on the last
    business day in each week, or such other time as the Fund may
    determine. Net asset value is calculated by dividing the value
    of all of the securities and other assets of the Fund, less its
    liabilities (including accrued expenses and indebtedness) and
    the aggregate liquidation value of any outstanding preferred
    shares, by the total number of common shares outstanding.
    Currently, the net asset values of shares of publicly traded
    closed-end investment companies investing in debt securities are
    published in Barron&#146;s, the Monday edition of The Wall
    Street Journal and the Monday and Saturday editions of The New
    York Times.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The values of the securities in the Fund are based on market
    prices from the primary market in which they are traded. As a
    general rule, equity securities listed on a U.S.&#160;securities
    exchange are valued at the last current reported sale price as
    of the time of valuation. Securities quoted on the NASDAQ
    National Market System are valued at the Nasdaq Official Closing
    Price (&#147;NOCP&#148;), as determined by Nasdaq, or lacking an
    NOCP, at the last current reported sale price as of the time of
    valuation. Bonds and other fixed-income securities that are
    traded over the counter and on an exchange will be valued
    according to the broadest and most representative market, and it
    is expected this will ordinarily be the over-the-counter market.
    The foreign securities held by the Fund are traded on exchanges
    throughout the world. Trading on these foreign securities
    exchanges is completed at various times throughout the day and
    often does not coincide with the close of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    47
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    trading on the NYSE. The value of foreign securities is
    generally determined at the close of trading of the exchange on
    which the securities are traded or at the close of trading on
    the NYSE, whichever is earlier.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If market prices are not readily available or the Fund&#146;s
    valuation methods do not produce a value reflective of the fair
    value of the security, securities and other assets are priced at
    a fair value determined in accordance with procedures adopted by
    the Board of Trustees, which may include a systematic fair
    valuation model provided by an independent service provider.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund also may use fair value pricing if the value of a
    security it holds has been affected by events occurring before
    the Fund&#146;s pricing time, but after the close of the primary
    markets or exchanges on which the security is traded. When fair
    value pricing is employed, the prices of portfolio securities
    used to calculate the Fund&#146;s net asset value may differ
    from market quotations or official closing prices for the same
    securities. This means that the Fund may value those securities
    higher or lower than another fund that uses market quotations or
    official closing prices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The fair value pricing procedures recognize that volatility in
    the U.S.&#160;markets may cause prices of foreign securities
    determined at the close of the foreign market or exchange on
    which the securities are traded to no longer be reliable when
    the Fund&#146;s net asset value is determined. As a result, at
    least some of the Fund&#146;s foreign securities may be valued
    at their fair value in accordance with the fair value pricing
    procedures on any day the Fund calculates its net asset value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Values of foreign securities are translated from local
    currencies into U.S.&#160;dollars using current exchange rates.
    Trading in securities in foreign markets takes place on some
    days (including some weekend days and U.S.&#160;holidays) when
    the NYSE is not open, and does not take place on some days when
    the NYSE is open. So, the value of the Fund&#146;s portfolio may
    be affected on days when the Fund does not calculate its net
    asset value.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDENDS
    AND DISTRIBUTIONS ON COMMON SHARES;<BR>
    AUTOMATIC DIVIDEND REINVESTMENT PLAN</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends
    and Distributions on Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund has made regular monthly distributions to its common
    shareholders in an amount ranging from $0.0750 to $0.1150 since
    January 2006. Additionally, the Fund made a distribution of
    $0.0250 in January 2006. The Fund currently intends to make
    monthly distributions to common shareholders at a level rate
    established by the Board of Trustees. The rate may be modified
    by the Board of Trustees from time to time. Monthly
    distributions may include net investment income, net realized
    short-term capital gain and, if necessary, return of capital.
    Net realized short-term capital gains distributed to common
    shareholders will be taxed as ordinary income. In addition, one
    distribution per calendar year may include net realized
    long-term capital gains. There is no guarantee that the Fund
    will realize capital gains in any given year. Pursuant to the
    requirements of the 1940 Act and other applicable laws, a notice
    would accompany each monthly distribution with respect to the
    estimated source of the distribution made. Distributions are
    subject to re-characterization for federal income tax purposes
    after the end of the fiscal year. The Fund may at times in its
    discretion pay out less than the entire amount of net investment
    income earned in any particular period and may at times pay out
    such accumulated undistributed income in addition to net
    investment income earned in other periods in order to permit the
    Fund to maintain its level distribution policy. As a result, the
    dividend paid by the Fund to holders of common shares for any
    particular period may be more or less than the amount of net
    investment income earned by the Fund during such period. In
    addition, in order to make such distributions, the Fund might
    have to sell a portion of its investment portfolio at a time
    when independent investment judgment might not dictate such
    action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For U.S.&#160;federal income tax purposes, the Fund is required
    to distribute substantially all of its net investment income and
    net realized capital gains each year to both reduce its federal
    income tax liability and to avoid a potential excise tax.
    Accordingly, the Fund intends to distribute all or substantially
    all of its net investment income and all net realized capital
    gains, if any. Therefore, the Fund&#146;s final distribution
    with
</DIV>

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    <BR>
    48
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    respect to each calendar year would include any remaining net
    investment income and net realized capital gains, if any,
    undistributed during the year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, for any calendar year, the Fund&#146;s total distributions
    exceeded net investment income and net realized capital gains
    (the &#147;Excess&#148;), the Excess, distributed from the
    Fund&#146;s assets, would generally be treated as dividend
    income to the extent of the Fund&#146;s current and accumulated
    earnings and profits. Thereafter, such Excess would be treated
    as a tax-free return of capital up to the amount of the common
    shareholder&#146;s tax basis in his, her or its common shares,
    with any amounts exceeding such basis treated as gain from the
    sale of common shares. See &#147;Certain Federal Income Tax
    Matters.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event the Fund distributed the Excess, such distribution
    would decrease the Fund&#146;s total assets and, therefore, have
    the likely effect of increasing the Fund&#146;s expense ratio.
    There is a risk that the Fund would not eventually realize
    capital gains in an amount corresponding to a distribution of
    the Excess.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In January 2004, Calamos, on behalf of itself and certain funds,
    filed an exemptive application with the Commission seeking an
    order under the 1940 Act facilitating the implementation of the
    Managed Dividend Policy. In March 2007, an amended and restated
    exemptive application was filed with the Commission. If, and
    when, Calamos, on behalf of itself and other parties, receives
    the requested relief, the Fund may, subject to the determination
    of its Board of Trustees, implement a Managed Dividend Policy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under a Managed Dividend Policy, the Fund would seek to
    distribute a monthly fixed percentage of net asset value to
    common shareholders. If, for any distribution, net investment
    income and net realized capital gains were less than the amount
    of the distribution, the differences would be distributed from
    the Fund&#146;s assets. In addition, in order to make such
    distributions, the Fund might have to sell a portion of its
    investment portfolio at a time when independent investment
    judgment might not dictate such action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the 1940 Act, the Fund is not permitted to incur
    indebtedness unless immediately after such incurrence the Fund
    has an asset coverage of at least 300% of the aggregate
    outstanding principal balance of indebtedness. Additionally,
    under the 1940 Act, the Fund may not declare any dividend or
    other distribution upon any class of its capital shares, or
    purchase any such capital shares, unless the aggregate
    indebtedness of the Fund has, at the time of the declaration of
    any such dividend or distribution or at the time of any such
    purchase, an asset coverage of at least 300% after deducting the
    amount of such dividend, distribution, or purchase price, as the
    case may be.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While any preferred shares are outstanding, the Fund may not
    declare any dividend or other distribution on its common shares,
    unless at the time of such declaration, (1)&#160;all accumulated
    preferred dividends have been paid and (2)&#160;the net asset
    value of the Fund&#146;s portfolio (determined after deducting
    the amount of such dividend or other distribution) is at least
    200% of the liquidation value of the outstanding preferred
    shares (expected to be equal to the original purchase price per
    share plus any accumulated and unpaid dividends thereon).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the limitations imposed by the 1940 Act described
    above, certain lenders may impose additional restrictions on the
    payment of dividends or distributions on common shares in the
    event of a default on the Fund&#146;s borrowings. If the
    Fund&#146;s ability to make distributions on its common shares
    is limited, such limitation could, under certain circumstances,
    impair the ability of the Fund to maintain its qualification for
    federal income taxation as a regulated investment company, which
    would have adverse tax consequences for shareholders. See
    &#147;Leverage&#148; and &#147;Certain Federal Income Tax
    Matters.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See &#147;&#151;&#160;Automatic Dividend Reinvestment Plan&#148;
    for information concerning the manner in which dividends and
    distributions to common shareholders may be automatically
    reinvested in common shares. Dividends and distributions are
    taxable to shareholders for federal income tax purposes whether
    they are reinvested in shares of the Fund or received in cash.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The yield on the Fund&#146;s common shares will vary from period
    to period depending on factors including, but not limited to,
    market conditions, the timing of the Fund&#146;s investment in
    portfolio securities, the securities comprising the Fund&#146;s
    portfolio, changes in interest rates including changes in the
    relationship between short-term rates and long-term rates, the
    amount and timing of the use of borrowings and other leverage by
    the
</DIV>

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    <BR>
    49
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fund, the effects of leverage on the common shares discussed
    above under &#147;Leverage,&#148; the timing of the investment
    of leverage proceeds in portfolio securities, the Fund&#146;s
    net assets and its operating expenses. Consequently, the Fund
    cannot guarantee any particular yield on its common shares and
    the yield for any given period is not an indication or
    representation of future yields on the Fund&#146;s common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Automatic
    Dividend Reinvestment Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the Plan, unless a shareholder is ineligible or
    elects otherwise, all dividend and capital gains distributions
    are automatically reinvested by The Bank of New York, as agent
    for shareholders in administering the Plan (&#147;Plan
    Agent&#148;), in additional common shares of the Fund.
    Shareholders who elect not to participate in the Plan will
    receive all dividends and distributions payable in cash paid by
    check mailed directly to the shareholder of record (or, if the
    shares are held in street or other nominee name, then to such
    nominee) by Plan Agent, as dividend paying agent. Such
    shareholders may elect not to participate in the Plan and to
    receive all dividends and distributions in cash by sending
    written instructions to Plan Agent, as dividend paying agent, at
    the address set forth below. Participation in the Plan is
    completely voluntary and may be terminated or resumed at any
    time without penalty by giving notice in writing to the Plan
    Agent; such termination will be effective with respect to a
    particular dividend or distribution if notice is received prior
    to the record date for the applicable distribution.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Whenever the Fund declares a dividend or distribution payable
    either in shares or in cash, non-participants in the Plan will
    receive cash, and participants in the Plan will receive the
    equivalent in shares of common shares. The shares are acquired
    by the Plan Agent for the participant&#146;s account, depending
    upon the circumstances described below, either (i)&#160;through
    receipt of additional common shares from the Fund (&#147;newly
    issued shares&#148;) or (ii)&#160;by purchase of outstanding
    common shares on the open market (&#147;open-market
    purchases&#148;) on the NYSE or elsewhere. If, on the payment
    date, the net asset value per share of the common shares is
    equal to or less than the market price per common share plus
    estimated brokerage commissions (such condition being referred
    to herein as &#147;market premium&#148;), the Plan Agent will
    receive newly issued shares from the Fund for each
    participant&#146;s account. The number of newly issued common
    shares to be credited to the participant&#146;s account will be
    determined by dividing the dollar amount of the dividend or
    distribution by the greater of (i)&#160;the net asset value per
    common share on the payment date, or (ii)&#160;95% of the market
    price per common share on the payment date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If, on the payment date, the net asset value per common share
    exceeds the market price plus estimated brokerage commissions
    (such condition being referred to herein as &#147;market
    discount&#148;), the Plan Agent has until the last business day
    before the next date on which the shares trade on an
    &#147;ex-dividend&#148; basis or in no event more than
    30&#160;days after the payment date (&#147;last purchase
    date&#148;) to invest the dividend or distribution amount in
    shares acquired in open-market purchases. It is contemplated
    that the Fund will pay monthly income dividends. Therefore, the
    period during which open-market purchases can be made will exist
    only from the payment date on the dividend through the date
    before the next ex-dividend date, which typically will be
    approximately ten days. The weighted average price (including
    brokerage commissions) of all common shares purchased by the
    Plan Agent as Plan Agent will be the price per common share
    allocable to each participant. If, before the Plan Agent has
    completed its open-market purchases, the market price of a
    common share exceeds the net asset value per share, the average
    per share purchase price paid by the Plan Agent may exceed the
    net asset value of the Fund&#146;s shares, resulting in the
    acquisition of fewer shares than if the dividend had been paid
    in newly issued shares on the payment date. Because of the
    foregoing difficulty with respect to open-market purchases, the
    Plan provides that if the Plan Agent is unable to invest the
    full dividend amount in open-market purchases during the
    purchase period or if the market discount shifts to a market
    premium during the purchase period, the Plan Agent will cease
    making open-market purchases and will invest the uninvested
    portion of the dividend or distribution amount in newly issued
    shares at the close of business on the last purchase date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Plan Agent maintains all shareholders&#146; accounts in the
    Plan and furnishes written confirmation of each acquisition made
    for the participant&#146;s account as soon as practicable, but
    in no event later than 60&#160;days after the date thereof.
    Shares in the account of each Plan participant will be held by
    the Plan Agent in non-certificated form in the Plan Agent&#146;s
    name or that of its nominee, and each shareholder&#146;s proxy
    will include
</DIV>

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    <BR>
    50
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    those shares purchased or received pursuant to the Plan. The
    Plan Agent will forward all proxy solicitation materials to
    participants and vote proxies for shares held pursuant to the
    Plan first in accordance with the instructions of the
    participants then with respect to any proxies not returned by
    such participant, in the same proportion as the Plan Agent votes
    the proxies returned by the participants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There will be no brokerage charges with respect to shares issued
    directly by the Fund as a result of dividends or distributions
    payable either in shares or in cash. However, each participant
    will pay a pro rata share of brokerage commissions incurred with
    respect to the Plan Agent&#146;s open-market purchases in
    connection with the reinvestment of dividends or distributions.
    If a participant elects to have the Plan Agent sell part or all
    of his or her common shares and remit the proceeds, such
    participant will be charged his or her pro rata share of
    brokerage commissions on the shares sold, plus a $15 transaction
    fee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The automatic reinvestment of dividends and distributions will
    not relieve participants of any federal, state or local income
    tax that may be payable (or required to be withheld) on such
    dividends. See &#147;Certain Federal Income Tax Matters.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders participating in the Plan may receive benefits not
    available to shareholders not participating in the Plan. If the
    market price plus commissions of the Fund&#146;s shares is
    higher than the net asset value, participants in the Plan will
    receive shares of the Fund at less than they could otherwise
    purchase them and will have shares with a cash value greater
    than the value of any cash distribution they would have received
    on their shares. If the market price plus commissions is below
    the net asset value, participants receive distributions of
    shares with a net asset value greater than the value of any cash
    distribution they would have received on their shares. However,
    there may be insufficient shares available in the market to make
    distributions in shares at prices below the net asset value.
    Also, since the Fund does not redeem its shares, the price on
    resale may be more or less than the net asset value. See
    &#147;Certain Federal Income Tax Matters&#148; for a discussion
    of federal income tax consequences of the Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Experience under the Plan may indicate that changes are
    desirable. Accordingly, the Fund reserves the right to amend or
    terminate the Plan if in the judgment of the Board of Trustees
    such a change is warranted. The Plan may be terminated by the
    Plan Agent or the Fund upon notice in writing mailed to each
    participant at least 60&#160;days prior to the effective date of
    the termination. Upon any termination, the Plan Agent will cause
    a certificate or certificates to be issued for the full shares
    held by each participant under the Plan and cash adjustment for
    any fraction of a common share at the then current market value
    of the common shares to be delivered to him or her. If
    preferred, a participant may request the sale of all of the
    common shares held by the Plan Agent in his or her Plan account
    in order to terminate participation in the Plan. If such
    participant elects in advance of such termination to have the
    Plan Agent sell part or all of his shares, the Plan Agent is
    authorized to deduct from the proceeds a $15.00 fee plus the
    brokerage commissions incurred for the transaction. If a
    participant has terminated his or her participation in the Plan
    but continues to have common shares registered in his or her
    name, he or she may re-enroll in the Plan at any time by
    notifying the Plan Agent in writing at the address above. The
    terms and conditions of the Plan may be amended by the Plan
    Agent or the Fund at any time but, except when necessary or
    appropriate to comply with applicable law or the rules or
    policies of the Commission or any other regulatory authority,
    only by mailing to each participant appropriate written notice
    at least 30&#160;days prior to the effective date thereof. The
    amendment shall be deemed to be accepted by each participant
    unless, prior to the effective date thereof, the Plan Agent
    receives notice of the termination of the participant&#146;s
    account under the Plan. Any such amendment may include an
    appointment by the Plan Agent of a successor Plan Agent, subject
    to the prior written approval of the successor Plan Agent by the
    Fund. There is no direct service charge to participants in the
    Plan; however, the Fund reserves the right to amend the Plan to
    include a service charge payable by the participants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All correspondence concerning the Plan should be directed to the
    Plan Agent at Dividend Reinvestment Department,
    P.O.&#160;Box&#160;1958, Newark, NJ
    <FONT style="white-space: nowrap">07101-9774.</FONT>
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    51
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF SECURITIES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund is authorized to issue an unlimited number of common
    shares, without par value. The Fund is also authorized to issue
    preferred shares. The Board of Trustees is authorized to
    classify and reclassify any unissued shares into one or more
    additional classes or series of shares. As of December&#160;31,
    2007, the Fund had 8,006,981 common shares outstanding and 2,360
    Preferred Shares outstanding. The Board of Trustees may
    establish such series or class from time to time by setting or
    changing in any one or more respects the designations,
    preferences, conversion or other rights, voting powers,
    restrictions, limitations as to dividends, qualifications or
    terms or conditions of redemption of such shares and pursuant to
    such classification or reclassification to increase or decrease
    the number of authorized shares of any existing class or series.
    The Board of Trustees, without shareholder approval, is
    authorized to amend the Agreement and Declaration of Trust and
    By-laws to reflect the terms of any such class or series. The
    Fund is also authorized to issue other securities, including
    debt securities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Common shares, when issued and outstanding, will be legally
    issued, fully paid and non-assessable. Shareholders are entitled
    to share pro rata in the net assets of the Fund available for
    distribution to common shareholders upon liquidation of the
    Fund. Common shareholders are entitled to one vote for each
    share held.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    So long as any shares of the Fund&#146;s preferred shares are
    outstanding, holders of common shares will not be entitled to
    receive any net income of or other distributions from the Fund
    unless all accumulated dividends on preferred shares have been
    paid, and unless asset coverage (as defined in the 1940 Act)
    with respect to preferred shares would be at least 200% after
    giving effect to such distributions. See &#147;Leverage.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund will send unaudited reports at least semiannually and
    audited annual financial statements to all of its shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other offerings of common shares, if made, will require approval
    of the Board of Trustees and will be subject to the requirement
    of the 1940 Act that common shares may not be sold at a price
    below the then-current net asset value, exclusive of
    underwriting discounts and commissions, except in limited
    circumstances including in connection with an offering to
    existing shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On January&#160;6, 2006, the Fund issued Preferred Shares,
    liquidation preference of $25,000 per share ($59,000,000 in the
    aggregate). As a non-fundamental policy, the Fund may not issue
    preferred shares or borrow money and issue debt securities with
    an aggregate liquidation preference and aggregate principal
    amount exceeding 38% of the Fund&#146;s total assets. However,
    the Board of Trustees reserves the right to issue preferred
    shares to the extent permitted by the 1940 Act, which currently
    limits the aggregate liquidation preference of all outstanding
    preferred shares to 50% of the value of the Fund&#146;s total
    assets less the Fund&#146;s liabilities and indebtedness. The
    preferred shares pay dividends at dividend rates based on
    auctions normally held every 7 or 28&#160;days. Under the 1940
    Act, the Fund may only issue one class of preferred shares. So
    long as any preferred shares are outstanding, additional
    issuances of preferred shares may not have preference or
    priority over the outstanding preferred shares. It is expected
    that any additional issuance of preferred shares would be
    additional shares of an existing series of preferred shares or
    shares of an additional series of preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of any voluntary or involuntary liquidation,
    dissolution or winding up of the Fund, the holders of preferred
    shares will be entitled to receive a preferential liquidating
    distribution, which is expected to equal the original purchase
    price per preferred share plus accumulated and unpaid dividends,
    whether or not declared, before any distribution of assets is
    made to holders of common shares. After payment of the full
    amount of the liquidating distribution to which they are
    entitled, the holders of preferred shares will not be entitled
    to any further participation in any distribution of assets by
    the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 1940 Act requires that the holders of any preferred shares,
    voting separately as a single class, have the right to elect at
    least two Trustees at all times. The remaining Trustees will be
    elected by holders of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    52
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    common shares and preferred shares, voting together as a single
    class. In addition, subject to the prior rights, if any, of the
    holders of any other class of senior securities outstanding, the
    holders of any preferred shares have the right to elect a
    majority of the Trustees at any time two years&#146; accumulated
    dividends on any preferred shares are unpaid. The 1940 Act also
    requires that, in addition to any approval by shareholders that
    might otherwise be required, the approval of the holders of a
    majority of any outstanding preferred shares, voting separately
    as a class, would be required to (1)&#160;adopt any plan of
    reorganization that would adversely affect the preferred shares,
    and (2)&#160;take any action requiring a vote of security
    holders under Section&#160;13(a) of the 1940 Act, including,
    among other things, changes in the Fund&#146;s subclassification
    as a closed-end investment company or changes in its fundamental
    investment restrictions. See &#147;Certain Provisions of the
    Agreement and Declaration of Trust and Bylaws.&#148; As a result
    of these voting rights, the Fund&#146;s ability to take any such
    actions may be impeded to the extent that there are any
    preferred shares outstanding. Except as otherwise indicated in
    this prospectus and except as otherwise required by applicable
    law, holders of preferred shares have equal voting rights with
    holders of common shares (one vote per share, unless otherwise
    required by the 1940 Act) and will vote together with holders of
    common shares as a single class.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The affirmative vote of the holders of a majority of the
    outstanding preferred shares, voting as a separate class, will
    be required to amend, alter or repeal any of the preferences,
    rights or powers of holders of preferred shares so as to affect
    materially and adversely such preferences, rights or powers, or
    to increase or decrease the authorized number of preferred
    shares. The class vote of holders of preferred shares described
    above will in each case be in addition to any other vote
    required to authorize the action in question.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The terms of the outstanding preferred shares provide that
    (i)&#160;they are redeemable by the Fund in whole or in part at
    the original purchase price per share plus accrued dividends per
    share, (ii)&#160;the Fund may tender for or purchase preferred
    shares and (iii)&#160;the Fund may subsequently resell any
    shares so tendered for or purchased. Any redemption or purchase
    of preferred shares by the Fund will reduce the leverage
    applicable to the common shares, while any resale of shares by
    the Fund will increase that leverage.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Debt
    Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>General.</I>&#160;&#160;Under Delaware law and our Agreement
    and Declaration of Trust, we may borrow money, without prior
    approval of holders of common and preferred shares. We may issue
    debt securities, or other evidence of indebtedness (including
    bank borrowings or commercial paper) and may secure any such
    notes or borrowings by mortgaging, pledging or otherwise
    subjecting as security our assets to the extent permitted by the
    1940 Act or rating agency guidelines. Any borrowings will rank
    senior to preferred shares and the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the 1940 Act, we may only issue one class of senior
    securities representing indebtedness, which in the aggregate,
    may represent no more than
    33<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">3</FONT>%
    of our total assets. A prospectus supplement and indenture (a
    summary of the expected terms of which is attached as
    Appendix&#160;A to the statement of additional information)
    relating to any debt securities will include specific terms
    relating to the offering. These terms are expected to include
    the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the form and title of the security;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the aggregate principal amount of the securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest rate of the securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the maturity dates on which the principal of the securities will
    be payable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the frequency with which auctions will be held;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any changes to or additional events of default or covenants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any optional or mandatory redemption provisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any changes in trustees, auction agents, paying agents or
    security registrar;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other terms of the securities.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    53
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest.</I>&#160;&#160;Unless otherwise stated in a
    prospectus supplement, debt securities will bear interest as
    generally determined by the results of an auction for such
    securities
    <FONT style="white-space: nowrap">and/or</FONT> by
    the Board of Trustees, as more fully described in the related
    prospectus supplement. Interest on debt securities shall be
    payable when due as described in the related prospectus
    supplement. If we do not pay interest when due, it will trigger
    an event of default and we will be restricted from declaring
    dividends and making other distributions with respect to our
    common shares and preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Limitations.</I>&#160;&#160;Under the requirements of the
    1940 Act, immediately after issuing any senior securities
    representing indebtedness, we must have an asset coverage of at
    least 300%. Asset coverage means the ratio which the value of
    our total assets, less all liabilities and indebtedness not
    represented by senior securities, bears to the aggregate amount
    of senior securities representing indebtedness. Other types of
    borrowings also may result in our being subject to similar
    covenants in credit agreements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Events of Default and Acceleration of Maturity of Debt
    Securities; Remedies</I>.&#160;&#160;Unless stated otherwise in
    the related prospectus supplement, any one of the following
    events are expected to constitute an &#147;event of
    default&#148; for that series under the indenture:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the payment of any interest upon a series of debt
    securities when it becomes due and payable and the continuance
    of such default for 30&#160;days;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the payment of the principal of, or premium on, a
    series of debt securities at its stated maturity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the performance, or breach, of any covenant or
    warranty of ours in the indenture, and continuance of such
    default or breach for a period of 90&#160;days after written
    notice has been given to us by the trustee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain voluntary or involuntary proceedings involving us and
    relating to bankruptcy, insolvency or other similar laws;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if, on the last business day of each of twenty-four consecutive
    calendar months, the debt securities have a 1940 Act asset
    coverage of less than 100%;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other &#147;event of default&#148; provided with respect to
    a series, including a default in the payment of any redemption
    price payable on the redemption date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon the occurrence and continuance of an event of default, the
    holders of a majority in principal amount of a series of
    outstanding debt securities or the trustee may declare the
    principal amount of that series of debt securities immediately
    due and payable upon written notice to us. A default that
    relates only to one series of debt securities does not affect
    any other series and the holders of such other series of debt
    securities are not entitled to receive notice of such a default
    under the indenture. Upon an event of default relating to
    bankruptcy, insolvency or other similar laws, acceleration of
    maturity occurs automatically with respect to all series. At any
    time after a declaration of acceleration with respect to a
    series of debt securities has been made, and before a judgment
    or decree for payment of the money due has been obtained, the
    holders of a majority in principal amount of the outstanding
    debt securities of that series, by written notice to us and the
    trustee, may rescind and annul the declaration of acceleration
    and its consequences if all events of default with respect to
    that series of debt securities, other than the non-payment of
    the principal of that series of debt securities which has become
    due solely by such declaration of acceleration, have been cured
    or waived and other conditions have been met.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Liquidation Rights.</I>&#160;&#160;In the event of
    (a)&#160;any insolvency or bankruptcy case or proceeding, or any
    receivership, liquidation, reorganization or other similar case
    or proceeding in connection therewith, relative to us or to our
    creditors, as such, or to our assets, or (b)&#160;any
    liquidation, dissolution or other winding up of the Fund,
    whether voluntary or involuntary and whether or not involving
    insolvency or bankruptcy, or (c)&#160;any assignment for the
    benefit of creditors or any other marshalling of assets and
    liabilities of ours, then (after any payments with respect to
    any secured creditor of ours outstanding at such time) and in
    any such event the holders of debt securities shall be entitled
    to receive payment in full of all amounts due or to become due
    on or in respect of all debt securities (including any interest
    accruing thereon after the commencement of any
</DIV>

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    54
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    such case or proceeding), or provision shall be made for such
    payment in cash or cash equivalents or otherwise in a manner
    satisfactory to the holders of the debt securities, before the
    holders of any common or preferred stock of the Fund are
    entitled to receive any payment on account of any redemption
    proceeds, liquidation preference or dividends from such shares.
    The holders of debt securities shall be entitled to receive, for
    application to the payment thereof, any payment or distribution
    of any kind or character, whether in cash, property or
    securities, including any such payment or distribution which may
    be payable or deliverable by reason of the payment of any other
    indebtedness of ours being subordinated to the payment of the
    debt securities, which may be payable or deliverable in respect
    of the debt securities in any such case, proceeding,
    dissolution, liquidation or other winding up event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Unsecured creditors of ours may include, without limitation,
    service providers including Calamos, custodian, administrator,
    auction agent, broker-dealers and the trustee, pursuant to the
    terms of various contracts with us. Secured creditors of ours
    may include without limitation parties entering into any
    interest rate swap, floor or cap transactions, or other similar
    transactions with us that create liens, pledges, charges,
    security interests, security agreements or other encumbrances on
    our assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A consolidation, reorganization or merger of the Fund with or
    into any other company, or a sale, lease or exchange of all or
    substantially all of our assets in consideration for the
    issuance of equity securities of another company shall not be
    deemed to be a liquidation, dissolution or winding up of the
    Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Voting Rights.</I>&#160;&#160;Debt securities have no voting
    rights, except to the extent required by law or as otherwise
    provided in the Indenture relating to the acceleration of
    maturity upon the occurrence and continuance of an event of
    default. In connection with any other borrowings (if any), the
    1940 Act does in certain circumstances grant to the lenders
    certain voting rights in the event of default in the payment of
    interest on or repayment of principal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Market.</I>&#160;&#160;Unless otherwise stated in a
    prospectus supplement, our debt securities may be bought or sold
    at an auction held periodically by submitting orders through a
    broker-dealer who has entered into an agreement with us (a
    &#147;broker-dealer&#148;). Our debt securities are not listed
    on an exchange or automated quotation system. Debt securities
    may be transferred outside of an auction through a
    broker-dealer, but we cannot assure you that any such secondary
    market will exist or whether it will provide holders of debt
    securities with liquidity. The details of the auction process
    are further described in the related prospectus supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Book-Entry, Delivery and Form.</I>&#160;&#160;Unless
    otherwise stated in the related prospectus supplement, the debt
    securities will be issued in book-entry form and will be
    represented by one or more notes in registered global form. The
    global notes will be deposited with the trustee as custodian for
    The Depository Trust&#160;Company (&#147;DTC&#148;) and
    registered in the name of Cede&#160;&#038; Co., as nominee of
    DTC. DTC will maintain the notes in designated denominations
    through its book-entry facilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the expected terms of the indenture, we and the trustee
    may treat the persons in whose names any notes, including the
    global notes, are registered as the owners thereof for the
    purpose of receiving payments and for any and all other purposes
    whatsoever. Therefore, so long as DTC or its nominee is the
    registered owner of the global notes, DTC or such nominee will
    be considered the sole holder of outstanding notes under the
    indenture. We or the trustee may give effect to any written
    certification, proxy or other authorization furnished by DTC or
    its nominee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A global note may not be transferred except as a whole by DTC,
    its successors or their respective nominees. Interests of
    beneficial owners in the global note may be transferred or
    exchanged for definitive securities in accordance with the rules
    and procedures of DTC. In addition, a global note may be
    exchangeable for notes in definitive form if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    DTC notifies us that it is unwilling or unable to continue as a
    depository and we do not appoint a successor within 60&#160;days;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we, at our option, notify the trustee in writing that we elect
    to cause the issuance of notes in definitive form under the
    indenture;&#160;or
</TD>
</TR>

</TABLE>

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    <BR>
    55
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an event of default has occurred and is continuing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In each instance, upon surrender by DTC or its nominee of the
    global note, notes in definitive form will be issued to each
    person that DTC or its nominee identifies as being the
    beneficial owner of the related notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the expected terms of the indenture, the holder of any
    global note may grant proxies and otherwise authorize any
    person, including its participants and persons who may hold
    interests through DTC participants, to take any action which a
    holder is entitled to take under the indenture.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RATING
    AGENCY GUIDELINES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Rating Agencies, which assign ratings to our senior
    securities, impose asset coverage requirements, which may limit
    our ability to engage in certain types of transactions and may
    limit our ability to take certain actions without confirming
    that such action will not impair the ratings. The outstanding
    preferred shares are currently rated &#147;Aaa&#148; and
    &#147;AAA&#148; by Moody&#146;s Investor Services Inc.
    (&#147;Moody&#146;s&#148;) and Fitch Ratings
    (&#147;Fitch&#148;), respectively. Moody&#146;s and Fitch, and
    any other agency that may rate our debt securities or preferred
    shares in the future, are collectively referred to as the
    &#147;Rating Agencies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, but are not required to, adopt any modification to the
    guidelines that may hereafter be established by any Rating
    Agency. Failure to adopt any modifications, however, may result
    in a change in the ratings described above or a withdrawal of
    ratings altogether. In addition, any Rating Agency may, at any
    time, change or withdraw any rating. The Board may, without
    shareholder approval, modify, alter or repeal certain of the
    definitions and related provisions which have been adopted
    pursuant to each Rating Agency&#146;s guidelines (&#147;Rating
    Agency Guidelines&#148;) only in the event we receive written
    confirmation from the Rating Agency or Agencies that any
    amendment, alteration or repeal would not impair the ratings
    then assigned to the senior securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to satisfy two separate asset maintenance
    requirements with respect to outstanding debt securities and
    with respect to preferred shares: (1)&#160;we must maintain
    assets in our portfolio that have a value, discounted in
    accordance with guidelines set forth by each Rating Agency, at
    least equal to 115% of the aggregate principal
    amount/liquidation preference of the debt securities/preferred
    stock, respectively, plus specified liabilities, payment
    obligations and other amounts (the &#147;Basic Maintenance
    Amount&#148;); and (2)&#160;we must satisfy the 1940 Act asset
    coverage requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Basic Maintenance Amounts.</I>&#160;&#160;We must maintain,
    as of each valuation date on which senior securities are
    outstanding, eligible assets having an aggregate discounted
    value at least equal to 115% of the applicable basic maintenance
    amount (&#147;Basic Maintenance Amount&#148;), which is
    calculated separately for debt securities and preferred shares
    for each Rating Agency that is then rating the senior securities
    and so requires. If we fail to maintain eligible assets having
    an aggregated discounted value at least equal to 115% of the
    applicable Basic Maintenance Amount as of any valuation date and
    such failure is not cured, we will be required in certain
    circumstances to redeem certain of the senior securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The applicable Basic Maintenance Amount is defined in the Rating
    Agency&#146;s Guidelines. Each Rating Agency may amend the
    definition of the applicable Basic Maintenance Amount from time
    to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The market value of our portfolio securities (used in
    calculating the discounted value of eligible assets) is
    calculated using readily available market quotations when
    appropriate, and in any event, consistent with our valuation
    procedures. For the purpose of calculating the applicable Basic
    Maintenance Amount, portfolio securities are valued in the same
    manner as we calculate our NAV. See &#147;Determination of Net
    Asset Value.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each Rating Agency&#146;s discount factors, the criteria used to
    determine whether the assets held in our portfolio are eligible
    assets, and the guidelines for determining the discounted value
    of our portfolio holdings for purposes of determining compliance
    with the applicable Basic Maintenance Amount are based on Rating
    Agency Guidelines established in connection with rating the
    senior securities. The discount factor relating to any asset,
    the applicable basic maintenance amount requirement, the assets
    eligible for inclusion in the calculation of the discounted
    value of our portfolio and certain definitions and methods of
    calculation relating
</DIV>

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    <BR>
    56
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    thereto may be changed from time to time by the applicable
    Rating Agency, without our approval, or the approval of our
    Board of Trustees or shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A Rating Agency&#146;s Guidelines will apply to the senior
    securities only so long as that Rating Agency is rating such
    securities. We will pay certain fees to Moody&#146;s, Fitch and
    any other Rating Agency that may provide a rating for the senior
    securities. The ratings assigned to the senior securities are
    not recommendations to buy, sell or hold the senior securities.
    Such ratings may be subject to revision or withdrawal by the
    assigning Rating Agency at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>1940 Act Asset Coverage.</I>&#160;&#160;We are also required
    to maintain, with respect to senior securities, as of the last
    business day on any month in which any senior securities are
    outstanding, asset coverage of at least 300% for debt securities
    and 200% for preferred stock (or such other percentage as may in
    the future be specified in or under the 1940 Act as the minimum
    asset coverage for senior securities representing shares of a
    closed-end investment company as a condition of declaring
    dividends on its common stock). If we fail to maintain the
    applicable 1940 Act asset coverage as of the last business day
    of any month and such failure is not cured as of the last
    business day of the following month (the &#147;Asset Coverage
    Cure Date&#148;), we will be required to redeem certain senior
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Notices.</I>&#160;&#160;Under the current Rating Agency
    Guidelines, in certain circumstances, we are required to deliver
    to any Rating Agency which is then rating the senior securities
    (1)&#160;a certificate with respect to the calculation of the
    applicable Basic Maintenance Amount; (2)&#160;a certificate with
    respect to the calculation of the applicable 1940 Act asset
    coverage and the value of our portfolio holdings; and (3)&#160;a
    letter prepared by our independent accountants regarding the
    accuracy of such calculations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding anything herein to the contrary, the Rating
    Agency Guidelines, as they may be amended from time to time by
    each Rating Agency will be reflected in a written document and
    may be amended by each Rating Agency without the vote, consent
    or approval of the Fund, the Board of Trustees or any
    shareholder of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A copy of the current Rating Agency Guidelines will be provided
    to any holder of senior securities promptly upon request made by
    such holder to the Fund by writing the Fund at 2020 Calamos
    Court, Naperville, Illinois 60563.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    PROVISIONS OF THE AGREEMENT<BR>
    AND DECLARATION OF TRUST&#160;AND BYLAWS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s Agreement and Declaration of Trust includes
    provisions that could have the effect of limiting the ability of
    other entities or persons to acquire control of the Fund or to
    change the composition of its Board of Trustees and could have
    the effect of depriving shareholders of an opportunity to sell
    their shares at a premium over prevailing market prices by
    discouraging a third party from seeking to obtain control of the
    Fund. These provisions, however, have the advantage of
    potentially requiring persons seeking control of the Fund to
    negotiate with its management regarding the price to be paid and
    facilitating the continuity of the Fund&#146;s investment
    objective and policies. The Board of Trustees of the Fund has
    considered these provisions and concluded that they are in the
    best interests of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Trustees is divided into three classes. The terms
    of the Trustees of the different classes are staggered. A
    Trustee may be removed from office with or without cause by a
    vote of at least a majority of the then Trustees if such removal
    is approved by the holders of at least 75% of the shares
    entitled to vote with respect to the election of such Trustee
    and present in person or by proxy at a meeting of shareholders
    called for such purpose.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the Agreement and Declaration of Trust requires the
    affirmative vote of at least 75% of the outstanding shares
    entitled to vote on the matter for the Trust to merge or
    consolidate with any other corporation, association, trust or
    other organization or to sell, lease or exchange all or
    substantially all of the Fund&#146;s assets; unless such action
    has been approved by the affirmative vote of at least 75% of the
    Trustees
</DIV>

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    <BR>
    57
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    then in office, in which case, the affirmative vote of a
    majority of the outstanding shares entitled to vote on the
    matter is required.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, conversion of the Fund to an open-end investment
    company would require an amendment to the Fund&#146;s Agreement
    and Declaration of Trust. Such an amendment would require the
    favorable vote of a majority of the then Trustees followed by a
    favorable vote of the holders of at least 75% of the shares
    entitled to vote on the matter, voting as separate classes or
    series (or a majority of such shares if the amendment was
    previously approved by 75% of the Trustees). Such a vote also
    would satisfy a separate requirement in the 1940 Act that the
    change be approved by the shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the 1940 Act, shareholders of an open-end investment
    company may require the company to redeem their shares of common
    stock at any time (except in certain circumstances as authorized
    by or under the 1940 Act) at their net asset value, less such
    redemption charge, if any, as might be in effect at the time of
    a redemption. If the Fund is converted to an open-end investment
    company, it could be required to liquidate portfolio securities
    to meet requests for redemption, and the common shares would no
    longer be listed on the NYSE. Conversion to an open-end
    investment company would also require changes in certain of the
    Fund&#146;s investment policies and restrictions. In addition,
    the Fund would be required to redeem all of its outstanding
    preferred shares prior to conversion to an open-end investment
    company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the Agreement and Declaration of Trust requires the
    affirmative vote or consent of a majority of the then Trustees
    followed by the affirmative vote or consent of the holders of at
    least 75% of the shares of each affected class or series of the
    Fund outstanding, voting separately as a class or series, to
    approve certain transactions with a Principal Shareholder,
    unless the transaction has been approved by at least 75% of the
    Trustees, in which case a majority of the outstanding shares
    entitled to vote shall be required. For purposes of these
    provisions, a Principal Shareholder refers to any person who,
    whether directly or indirectly and whether alone or together
    with its affiliates and associates, beneficially owns 5% or more
    of the outstanding shares of any class or series of shares of
    beneficial interest of the Fund. The 5% holder transactions
    subject to these special approval requirements are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the merger or consolidation of the Fund or any subsidiary of the
    Fund with or into any Principal Shareholder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the issuance of any securities of the Fund to any Principal
    Shareholder for cash (other than pursuant to any automatic
    dividend reinvestment plan);&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the sale, lease or exchange to the Fund or any subsidiary of the
    Fund in exchange for securities of the Fund, of any assets of
    any Principal Shareholder, except assets having an aggregate
    fair market value of less than $1,000,000, aggregating for the
    purpose of such computation all assets sold, leased or exchanged
    in any series of similar transactions within a
    <FONT style="white-space: nowrap">12-month</FONT>
    period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund may be terminated by the affirmative vote of not less
    than 75% of the Trustees then in office by written notice to the
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Agreement and Declaration of Trust and Bylaws provide that
    the Board of Trustees has the power, to the exclusion of
    shareholders, to make, alter or repeal any of the Bylaws, except
    for any Bylaw that requires a vote of the shareholders to be
    amended, adopted or repealed by the terms of the Agreement and
    Declaration of Trust, Bylaws or applicable law. Neither this
    provision of the Agreement and Declaration of Trust, nor any of
    the foregoing provisions thereof requiring the affirmative vote
    of 75% of outstanding shares of the Fund, can be amended or
    repealed except by the vote of such required number of shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to proposals by shareholders submitted outside the
    process of
    <FONT style="white-space: nowrap">Rule&#160;14a-8</FONT>
    of the Securities Exchange Act of 1934, as amended (the
    &#147;Exchange Act&#148;), the Fund&#146;s Bylaws generally
    require that advance notice be given to the Fund in the event a
    shareholder desires to nominate a person for election to the
    Board of Trustees or to transact any other business at an annual
    meeting of shareholders. With respect to an annual meeting
    following the first annual meeting of shareholders, notice of
    any such nomination or business must be delivered to the
    principal executive offices of the Fund not less than 90
    calendar days nor more than 120&#160;calendar days prior to the
    anniversary date of the mailing of the notice for the prior
    year&#146;s annual meeting
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (subject to certain exceptions). Any notice by a shareholder
    must be accompanied by certain information as provided in the
    Bylaws, including information regarding the shares held by the
    shareholder and information regarding the candidate&#146;s
    background and qualifications to serve as trustee.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may sell our common shares, preferred shares and debt
    securities, and certain of our shareholders may sell our common
    shares, on an immediate, continuous or delayed basis, in one or
    more offerings under this prospectus and any related prospectus
    supplement. The aggregate amount of securities that may be
    offered by us is limited to $75&#160;million. We may offer our
    common shares, preferred shares and debt securities:
    (1)&#160;directly to one or more purchasers; (2)&#160;through
    agents; (3)&#160;through underwriters; or (4)&#160;through
    dealers. Each prospectus supplement relating to an offering of
    securities will state the terms of the offering, including as
    applicable:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the names of any agents, underwriters or dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any sales loads or other items constituting underwriters&#146;
    compensation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any discounts, commissions, or fees allowed or paid to dealers
    or agents;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the public offering or purchase price of the offered securities
    and the net proceeds we will receive from the sale; provided,
    however, that we will not receive any of the proceeds from a
    sale of our common stock by any selling shareholder;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any securities exchange on which the offered securities may be
    listed.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Direct
    Sales</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may sell our common shares, preferred shares and debt
    securities, or certain of our shareholders may sell our common
    shares, directly to, and solicit offers from, institutional
    investors or others who may be deemed to be underwriters as
    defined in the 1933&#160;Act for any resales of the securities.
    In this case, no underwriters or agents would be involved. We,
    or any selling shareholder, may use electronic media, including
    the Internet, to sell offered securities directly. The terms of
    any of those sales will be described in a prospectus supplement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">By
    Agents</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer our common shares, preferred shares and debt
    securities through agents that we or they designate. Any agent
    involved in the offer and sale will be named and any commissions
    payable by us will be described in the prospectus supplement.
    Unless otherwise indicated in the prospectus supplement, the
    agents will be acting on a best efforts basis for the period of
    their appointment.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">By
    Underwriters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer and sell securities from time to time to one or
    more underwriters who would purchase the securities as principal
    for resale to the public, either on a firm commitment or best
    efforts basis. If we sell securities to underwriters, we will
    execute an underwriting agreement with them at the time of the
    sale and will name them in the prospectus supplement. In
    connection with these sales, the underwriters may be deemed to
    have received compensation from us in the form of underwriting
    discounts and commissions. The underwriters also may receive
    commissions from purchasers of securities for whom they may act
    as agent. Unless otherwise stated in the prospectus supplement,
    the underwriters will not be obligated to purchase the
    securities unless the conditions set forth in the underwriting
    agreement are satisfied, and if the underwriters purchase any of
    the securities, they will be required to purchase all of the
    offered securities. The underwriters may sell the offered
    securities to or through dealers, and those dealers may receive
    discounts, concessions or commissions from the underwriters as
    well as from the purchasers for whom they may act as agent. Any
    public offering price and any discounts or concessions allowed
    or reallowed or paid to dealers may be changed from time to time.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    59
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a prospectus supplement so indicates, we may grant the
    underwriters an option to purchase additional shares of common
    stock at the public offering price, less the underwriting
    discounts and commissions, within 45&#160;days from the date of
    the prospectus supplement, to cover any overallotments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">By
    Dealers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer and sell securities from time to time to one or
    more dealers who would purchase the securities as principal. The
    dealers then may resell the offered securities to the public at
    fixed or varying prices to be determined by those dealers at the
    time of resale. The names of the dealers and the terms of the
    transaction will be set forth in the prospectus supplement.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General
    Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Agents, underwriters or dealers participating in an offering of
    securities may be deemed to be underwriters, and any discounts
    and commission received by them and any profit realized by them
    on resale of the offered securities for whom they act as agent
    may be deemed to be underwriting discounts and commissions under
    the 1933&#160;Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may offer to sell securities either at a fixed price or at
    prices that may vary, at market prices prevailing at the time of
    sale, at prices related to prevailing market prices, or at
    negotiated prices.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Ordinarily, each series of offered securities will be a new
    issue of securities and will have no established trading market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To facilitate an offering of common stock in an underwritten
    transaction and in accordance with industry practice, the
    underwriters may engage in transactions that stabilize,
    maintain, or otherwise affect the market price of the common
    stock or any other security. Those transactions may include
    overallotment, entering stabilizing bids, effecting syndicate
    covering transactions, and reclaiming selling concessions
    allowed to an underwriter or a dealer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    An overallotment in connection with an offering creates a short
    position in the common stock for the underwriter&#146;s own
    account.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    An underwriter may place a stabilizing bid to purchase the
    common stock for the purpose of pegging, fixing, or maintaining
    the price of the common stock.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Underwriters may engage in syndicate covering transactions to
    cover overallotments or to stabilize the price of the common
    stock by bidding for, and purchasing, the common stock or any
    other securities in the open market in order to reduce a short
    position created in connection with the offering.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The managing underwriter may impose a penalty bid on a syndicate
    member to reclaim a selling concession in connection with an
    offering when the common stock originally sold by the syndicate
    member is purchased in syndicate covering transactions or
    otherwise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any of these activities may stabilize or maintain the market
    price of the securities above independent market levels. The
    underwriters are not required to engage in these activities, and
    may end any of these activities at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any underwriters to whom the offered securities are sold for
    offering and sale may make a market in the offered securities,
    but the underwriters will not be obligated to do so and may
    discontinue any market-making at any time without notice. The
    offered securities may or may not be listed on a securities
    exchange. We cannot assure you that there will be a liquid
    trading market for the offered securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under agreements entered into with us, underwriters and agents
    may be entitled to indemnification by us against certain civil
    liabilities, including liabilities under the 1933&#160;Act, or
    to contribution for payments the underwriters or agents may be
    required to make.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters, agents, and their affiliates may engage in
    financial or other business transactions with us and our
    subsidiaries in the ordinary course of business.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    60
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The maximum commission or discount to be received by any member
    of the National Association of Securities Dealers, Inc. or
    independent broker-dealer will not be greater than eight percent
    of the initial gross proceeds from the sale of any security
    being sold.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The aggregate offering price specified on the cover of this
    prospectus relates to the offering of the securities not yet
    issued as of the date of this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent permitted under the 1940 Act and the rules and
    regulations promulgated thereunder, the underwriters may from
    time to time act as a broker or dealer and receive fees in
    connection with the execution of our portfolio transactions
    after the underwriters have ceased to be underwriters and,
    subject to certain restrictions, each may act as a broker while
    it is an underwriter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A prospectus and accompanying prospectus supplement in
    electronic form may be made available on the websites maintained
    by underwriters. The underwriters may agree to allocate a number
    of securities for sale to their online brokerage account
    holders. Such allocations of securities for internet
    distributions will be made on the same basis as other
    allocations. In addition, securities may be sold by the
    underwriters to securities dealers who resell securities to
    online brokerage account holders.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CUSTODIAN,
    TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND
    REGISTRAR</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Fund&#146;s securities and cash are held under a custodian
    agreement with The Bank of New York, One&#160;Wall Street, New
    York, New York 10286. The transfer agent, dividend disbursing
    agent and registrar for the Fund&#146;s shares is also The Bank
    of New York.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Vedder Price P.C. (&#147;Vedder Price&#148;), Chicago, Illinois,
    is serving as our special counsel in connection with the
    offerings under this prospectus and related prospectus
    supplements. Vedder Price is also counsel to Calamos. Morris,
    Nichols, Arsht&#160;&#038; Tunnell, Wilmington, Delaware
    (&#147;Morris Nichols&#148;) will pass on the legality of the
    securities to be offered hereby. If certain legal matters in
    connection with an offering of securities are passed upon by
    counsel for the underwriters of such offering, such matters will
    be passed upon by counsel to be identified in a prospectus
    supplement. Vedder Price and counsel to the underwriters may
    rely on the opinion of Morris Nichols for certain matters of
    Delaware law.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">AVAILABLE
    INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are subject to the informational requirements of the Exchange
    Act and the 1940 Act and are required to file reports, including
    annual and semi-annual reports, proxy statements and other
    information with the Commission. Our most recent shareholder
    report filed with the Commission is for the period ended
    October&#160;31, 2007. These documents are available on the
    Commission&#146;s EDGAR system and can be inspected and copied
    for a fee at the Commission&#146;s public reference room,
    Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
    Additional information about the operation of the public
    reference room facilities may be obtained by calling the
    Commission at
    <FONT style="white-space: nowrap">(202)&#160;551-8090.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus does not contain all of the information in our
    registration statement, including amendments, exhibits, and
    schedules. Statements in this prospectus about the contents of
    any contract or other document are not necessarily complete and
    in each instance reference is made to the copy of the contract
    or other document filed as an exhibit to the registration
    statement, each such statement being qualified in all respects
    by this reference.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additional information about us can be found in our registration
    statement (including amendments, exhibits, and schedules) on
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT>
    filed with the Commission. The Commission maintains a web site
    <FONT style="white-space: nowrap">(http://www.sec.gov)</FONT>
    that contains our registration statement, other documents
    incorporated by reference, and other information we have filed
    electronically with the Commission, including proxy statements
    and reports filed under the Exchange Act.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    61
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OF THE
    STATEMENT OF ADDITIONAL INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Use of Proceeds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment Objective and Policies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment Restrictions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-23
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management of the Fund
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-25
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Portfolio Transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-36
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Net Asset Value
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Repurchase of Common Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Federal Income Tax Matters
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Custodian, Transfer Agent, Dividend Disbursing Agent and
    Registrar
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Independent Registered Public Accounting Firm
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Additional Information
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Additional Information Concerning the Agreement and Declaration
    of Trust
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Financial Statements
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Financial Statements and Report of Independent
    Auditors/Accountants
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Appendix&#160;A&#160;&#151; Summary of Certain Provisions of the
    Indenture and Form of Supplemental Indenture
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    A-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <FONT style="white-space: nowrap">Appendix&#160;A-I&#160;&#151;</FONT>
    Auction Procedures
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    A-I-1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Appendix&#160;B&#160;&#151; Description of Ratings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    B-1
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    62
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=0 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">3,000,000 Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 20pt">Calamos Global Total Return
    Fund</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=149 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">PROSPECTUS SUPPLEMENT</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=149 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>July&#160;8, 2008</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Until August&#160;2, 2008 (25&#160;days after the date of
    this prospectus supplement), all dealers that buy, sell or trade
    the common shares, whether or not participating in this
    offering, may be required to deliver a prospectus. This is in
    addition to the dealers&#146; obligation to deliver a prospectus
    when acting as underwriters.</B>
</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=0 -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CALAMOS GLOBAL TOTAL RETURN FUND</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>STATEMENT OF ADDITIONAL INFORMATION</B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calamos Global Total Return Fund (the &#147;Fund&#148;) is a diversified, closed-end management
investment company. This Statement of Additional Information relates to the offering, on an
immediate, continuous or delayed basis, of up to $75,000,000 aggregate initial offering price
of common shares, preferred shares (&#147;Preferred Shares&#148;), and debt securities in
one or more
offerings. This Statement of Additional Information does not constitute a prospectus, but should
be read in conjunction with the prospectus relating thereto dated
March&nbsp;11, 2008 and any
related prospectus supplement. This Statement of Additional Information does not include all
information that a prospective investor should consider before purchasing any of the Fund&#146;s
securities, and investors should obtain and read the prospectus and any related prospectus
supplement prior to purchasing such securities. A copy of the prospectus and any related prospectus
supplement may be obtained without charge by calling 1-800-582-6959. You may also obtain a copy of
the prospectus and any related prospectus supplement on the Securities and Exchange Commission&#146;s
web site (http://www.sec.gov). Capitalized terms used but not defined in this Statement of
Additional Information have the same meanings ascribed to them in the prospectus and any related
prospectus supplement.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#134">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#135">Investment Objective and Policies</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#136">Investment Restrictions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#137">Management of the Fund</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#138">Portfolio Transactions</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#139">Net Asset Value</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#140">Repurchase of Common Shares</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#141">Federal Income Tax Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#142">Custodian, Transfer Agent, Dividend Disbursing Agent and Registrar</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#143">Independent Registered Public Accounting Firm</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#144">Additional Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#145">Additional Information Concerning the Agreement and Declaration of Trust</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">S-50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial Statements and Report of Independent Auditors/Accountants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">F-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#147">Appendix&nbsp;A &#150; Summary of Certain Provisions of the Indenture and Form of
Supplemental Indenture</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">A-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:30px; text-indent:-15px"><A href="#148">Appendix&nbsp;A-I &#150; Auction Procedures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">A-I-1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#149">Appendix&nbsp;B &#150; Description of Ratings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">B-1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>This Statement of
Additional Information is dated March&nbsp;11, 2008.</B>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="134"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will invest the net proceeds of the offering in accordance with the Fund&#146;s investment
objective and policies as stated below and in the prospectus. It is presently anticipated that the
Fund will invest substantially all of the net proceeds in securities that meet the investment
objective and policies within three months after completion of the offering. Pending such
investment, we anticipate that we will invest the proceeds in
securities issued by the U.S. government or its agencies or
instrumentalities or in high quality, short-term or long-term debt
obligations. If necessary, the Fund may also purchase, as temporary
investments, securities of other open- or closed-end investment companies that invest primarily in
the types of securities in which the Fund may invest directly.
</DIV>
<DIV align="left">
<A name="135"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT OBJECTIVE AND POLICIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The prospectus presents the investment objective and the principal investment strategies and
risks of the Fund. This section supplements the disclosure in the Fund&#146;s prospectus and provides
additional information on the Fund&#146;s investment policies or restrictions. Restrictions or policies
stated as a maximum percentage of the Fund&#146;s assets are only applied immediately after a portfolio
investment to which the policy or restriction is applicable (other than the limitations on
borrowing). Accordingly, any later increase or decrease resulting from a change in values, managed
assets or other circumstances will not be considered in determining whether the investment complies
with the Fund&#146;s restrictions and policies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Primary Investments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under normal circumstances, the Fund will invest primarily in a portfolio of common and
preferred stocks, convertible securities and income producing securities such as investment grade
and below investment grade (high yield/high risk) debt securities. The Fund, under normal
circumstances, will invest at least 50% of its managed assets in equity securities (including
securities that are convertible into equity securities). The Fund may invest up to 100% of its
managed assets in securities of foreign issuers, including debt and equity securities of corporate
issuers and debt securities of government issuers, in developed and emerging markets. Under normal
circumstances, the Fund will invest at least 30% of its managed assets in securities of foreign
issuers. The Fund will invest in the securities of issuers of several different countries
throughout the world, in addition to the United States. &#147;Managed assets&#148; means the total assets of
the Fund (including any assets attributable to any leverage that may be outstanding) minus the sum
of accrued liabilities (other than debt representing financial leverage). For this purpose, the
liquidation preference on any preferred shares will not constitute a liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Foreign Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to 100% of its managed assets in securities of foreign issuers in
developed and emerging markets, including debt and equity securities of corporate issuers and debt
securities of government issuers. Under normal circumstances, the Fund will invest at least 30% of
its managed assets in securities of foreign issuers; however, the Fund anticipates that ordinarily
Calamos&#146; investment process will result in the Fund investing at least 40% of its managed assets in
securities of foreign issuers. The Fund will invest in the securities of issuers of several
different countries throughout the world, in addition to the United States. A foreign issuer is a
foreign government or a company organized under the laws of a foreign country. For these purposes,
foreign securities includes American Depositary Receipts (&#147;ADRs&#148;) or securities guaranteed by a
United States person, and foreign securities in the form of European Depositary Receipts (&#147;EDRs&#148;),
Global Depositary Receipts (&#147;GDRs&#148;) or other securities representing underlying shares of foreign
issuers. Positions in those securities are not
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">necessarily denominated in the same currency as the common stocks into which they may be
converted. ADRs are receipts typically issued by an American bank or trust company evidencing
ownership of the underlying securities. EDRs are European receipts listed on the Luxembourg Stock
Exchange evidencing a similar arrangement. GDRs are U.S. dollar-denominated receipts evidencing
ownership of foreign securities. Generally, ADRs, in registered form, are designed for the U.S.
securities markets and EDRs and GDRs, in bearer form, are designed for use in foreign securities
markets. The Fund may invest in sponsored or unsponsored ADRs. In the case of an unsponsored ADR,
the Fund is likely to bear its proportionate share of the expenses of the depository and it may
have greater difficulty in receiving shareholder communications than it would have with a sponsored
ADR.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent positions in portfolio securities are denominated in foreign currencies, the
Fund&#146;s investment performance is affected by the strength or weakness of the U.S. dollar against
those currencies. For example, if the dollar falls in value relative to the Japanese yen, the
dollar value of a Japanese stock held in the portfolio will rise even though the price of the stock
remains unchanged. Conversely, if the dollar rises in value relative to the yen, the dollar value
of the Japanese stock will fall. (See discussion of transaction hedging and portfolio hedging
below under &#147;Currency Exchange Transactions.&#148;)
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors should understand and consider carefully the risks involved in foreign investing.
Investing in foreign securities, which are generally denominated in foreign currencies, and
utilization of forward foreign currency exchange contracts involve certain considerations
comprising both risks and opportunities not typically associated with investing in U.S. securities.
These considerations include: fluctuations in exchange rates of foreign currencies; possible
imposition of exchange control regulation or currency restrictions that would prevent cash from
being brought back to the United States; less public information with respect to issuers of
securities; less governmental supervision of stock exchanges, securities brokers, and issuers of
securities; lack of uniform accounting, auditing and financial reporting standards; lack of uniform
settlement periods and trading practices; less liquidity and frequently greater price volatility in
foreign markets than in the United States; possible imposition of non-U.S. withholding or other taxes; and sometimes less
advantageous legal, operational and financial protections applicable to foreign sub-custodial
arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Fund intends to invest in companies and government securities of countries having
stable political environments, there is the possibility of expropriation or confiscatory taxation,
seizure or nationalization of foreign bank deposits or other assets, establishment of exchange
controls, the adoption of foreign government restrictions, or other adverse political, social or
diplomatic developments that could affect investment in these nations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in the securities of issuers located in emerging market countries. The
securities markets of emerging countries are substantially smaller, less developed, less liquid and
more volatile than the securities markets of the U.S. and other more developed countries.
Disclosure and regulatory standards in many respects are less stringent than in the U.S. and other
major markets. There also may be a lower level of monitoring and regulation of emerging markets
and the activities of investors in such markets, and enforcement of existing regulations has been
extremely limited. Economies in individual emerging markets may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross domestic product, rates of inflation,
currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments
positions. Many emerging market countries have experienced high rates of inflation for many years,
which has had and may continue to have very negative effects on the economies and securities
markets of those countries.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Currency Exchange Transactions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currency exchange transactions may be conducted either on a spot (i.e., cash) basis at the
spot rate for purchasing or selling currency prevailing in the foreign exchange market or through
forward currency exchange contracts (&#147;forward contracts&#148;). Forward contracts are contractual
agreements to purchase or sell a specified currency at a specified future date (or within a
specified time period) and price set at the time of the contract. Forward contracts are usually
entered into with banks, foreign exchange dealers and broker-dealers, are not exchange traded, and
are usually for less than one year, but may be renewed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward currency exchange transactions may involve currencies of the different countries in
which the Fund may invest and serve as hedges against possible variations in the exchange rate
between these currencies and the U.S. dollar. Currency exchange transactions are limited to
transaction hedging and portfolio hedging involving either specific transactions or portfolio
positions, except to the extent described below under &#147;Synthetic Foreign Money Market Positions.&#148;
Transaction hedging is the purchase or sale of forward contracts with respect to specific
receivables or payables of the Fund accruing in connection with the purchase and sale of its
portfolio securities or the receipt of dividends or interest thereon. Portfolio hedging is the use
of forward contracts with respect to portfolio security positions denominated or quoted in a
particular foreign currency. Portfolio hedging allows the Fund to limit or reduce its exposure in
a foreign currency by entering into a forward contract to sell such foreign currency (or another
foreign currency that acts as a proxy for that currency) at a future date for a price payable in
U.S. dollars so that the value of the foreign denominated portfolio securities can be approximately
matched by a foreign denominated liability. The Fund may not engage in portfolio hedging with
respect to the currency of a particular country to an extent greater than the aggregate market
value (at the time of making such sale) of the securities held in its portfolio denominated or
quoted in that particular currency, except that the Fund may hedge all or part of its foreign
currency exposure through the use of a basket of currencies or a proxy currency where such
currencies or currency act as an effective proxy for other currencies. In such a case, the Fund
may enter into a forward contract where the amount of the foreign currency to be sold exceeds the
value of the securities denominated in such currency. The use of this basket hedging technique may
be more efficient and economical than entering into separate forward contracts for each currency
held in the Fund. The Fund may not engage in &#147;speculative&#148; currency exchange transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund enters into a forward contract, the Fund&#146;s custodian will segregate liquid assets
of the Fund having a value equal to the Fund&#146;s commitment under such forward contract. At the
maturity of the forward contract to deliver a particular currency, the Fund may either sell the
portfolio security related to the contract and make delivery of the currency, or it may retain the
security and either acquire the currency on the spot market or terminate its contractual obligation
to deliver the currency by purchasing an offsetting contract with the same currency trader
obligating it to purchase on the same maturity date the same amount of the currency. It is
impossible to forecast with absolute precision the market value of portfolio securities at the
expiration of a forward contract. Accordingly, it may be necessary for the Fund to purchase
additional currency on the spot market (and bear the expense of such purchase) if the market value
of the security is less than the amount of currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the currency. Conversely, it may be
necessary to sell on the spot market some of the currency received upon the sale of the portfolio
security if its market value exceeds the amount of currency the Fund is obligated to deliver.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund retains the portfolio security and engages in an offsetting transaction, the Fund
will incur a gain or a loss to the extent that there has been movement in forward contract prices.
If the Fund engages in an offsetting transaction, it may subsequently enter into a new forward
contract to sell the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">currency. Should forward prices decline during the period between the Fund&#146;s entering into a
forward contract for the sale of a currency and the date it enters into an offsetting contract for
the purchase of the currency, the Fund will realize a gain to the extent the price of the currency
it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Fund will suffer a loss to the extent the price of the currency it has agreed
to purchase exceeds the price of the currency it has agreed to sell. A default on the contract
would deprive the Fund of unrealized profits or force the Fund to cover its commitments for
purchase or sale of currency, if any, at the current market price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging against a decline in the value of a currency does not eliminate fluctuations in the
value of a portfolio security traded in that currency or prevent a loss if the value of the
security declines. Hedging transactions also preclude the opportunity for gain if the value of the
hedged currency should rise. Moreover, it may not be possible for the Fund to hedge against a
devaluation that is so generally anticipated that the Fund is not able to contract to sell the
currency at a price above the devaluation level it anticipates. The cost to the Fund of engaging
in currency exchange transactions varies with such factors as the currency involved, the length of
the contract period, and prevailing market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Equity Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity securities include common and preferred stocks, warrants, rights, and depository
receipts. Under normal circumstances, the Fund will invest at least 50% of its managed assets in
equity securities (including securities that are convertible into equity securities). An
investment in the equity securities of a company represents a proportionate ownership interest in
that company. Therefore, the Fund participates in the financial success or failure of any company
in which it has an equity interest. Equity investments are subject to greater fluctuations in
market value than other asset classes as a result of such factors as a company&#146;s business
performance, investor perceptions, stock market trends and general economic conditions. Equity
securities are subordinated to bonds and other debt instruments in a company&#146;s capital structure in
terms of priority to corporate income and liquidation payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stocks involve credit risk, which is the risk that a preferred stock in the Fund&#146;s
portfolio will decline in price or fail to make dividend payments when due because the issuer of
the security experiences a decline in its financial status. In addition to credit risk,
investments in preferred stocks involve certain other risks. Certain preferred stocks contain
provisions that allow an issuer under certain circumstances to skip distributions (in the case of
&#147;non-cumulative&#148; preferred stocks) or defer distributions (in the case of &#147;cumulative&#148; preferred
stocks). If the Fund owns a preferred stock that is deferring its distributions, the Fund may be
required to report income for federal income tax purposes while it is not receiving income from
that stock. The Fund must distribute, at least annually, all or substantially all of its net
investment income, including income from such deferred distributions, to shareholders to avoid
federal income and excise taxes. See &#147;U.S. Federal Income Tax Matters.&#148; Therefore, if the Fund
owns a preferred stock that is deferring its distributions, the Fund may have to dispose of
portfolio securities under disadvantageous circumstances to generate cash, or may have to leverage
itself by borrowing the cash, to satisfy distribution requirements. In certain varying
circumstances, an issuer may redeem its preferred stock prior to a specified date in the event of
certain tax or legal changes or at the issuer&#146;s call. In the event of a redemption, the Fund may
not be able to reinvest the proceeds at comparable rates of return. Preferred stocks typically do
not provide any voting rights, except in cases when dividends are in arrears for a specified number
of periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity securities of small and medium-sized companies historically have been subject to
greater investment risk than those of large companies. The risks generally associated with small
and medium-sized companies include more limited product lines, markets and financial resources,
lack of management depth or experience, dependency on key personnel and vulnerability to adverse
market and economic
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">developments. Accordingly, the prices of small and medium-sized company equity securities
tend to be more volatile than prices of large company stocks. Further, the prices of small and
medium-sized company equity securities are often adversely affected by limited trading volumes and
the lack of publicly available information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Debt Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In pursuing its investment objective, the Fund may invest in convertible and non-convertible
debt securities, including lower-rated securities (i.e., securities rated BB or lower by Standard &#038;
Poor&#146;s Corporation, a division of The McGraw-Hill Companies (&#147;S&#038;P&#148;), or Ba or lower by Moody&#146;s
Investor Services, Inc. (&#147;Moody&#146;s&#148;)) and securities that are not rated but are considered by
Calamos to be of similar quality. There are no restrictions as to the ratings of debt securities
acquired by the Fund or the portion of the Fund&#146;s assets that may be invested in debt securities in
a particular ratings category.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities rated BBB or Baa are considered to be medium grade and to have speculative
characteristics. Lower-rated debt securities are predominantly speculative with respect to the
issuer&#146;s capacity to pay interest and repay principal. Investment in medium- or lower-quality debt
securities involves greater investment risk, including the possibility of issuer default or
bankruptcy. An economic downturn could severely disrupt the market for such securities and
adversely affect the value of such securities. In addition, lower-quality bonds are less sensitive
to interest rate changes than higher-quality instruments and generally are more sensitive to
adverse economic changes or individual corporate developments. During a period of adverse economic
changes, including a period of rising interest rates, issuers of such bonds may experience
difficulty in servicing their principal and interest payment obligations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Achievement by the Fund of its investment objective will be more dependent on Calamos&#146; credit
analysis than would be the case if the Fund were investing in higher-quality debt securities.
Because the ratings of rating services (which evaluate the safety of principal and interest
payments, not market risks) are used only as preliminary indicators of investment quality, Calamos
employs its own credit research and analysis. These analyses may take into consideration such
quantitative factors as an issuer&#146;s present and potential liquidity, profitability, internal
capability to generate funds, debt/equity ratio and debt servicing capabilities, and such
qualitative factors as an assessment of management, industry characteristics, accounting
methodology, and foreign business exposure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Medium- and lower-quality debt securities may be less marketable than higher-quality debt
securities because the market for them is less broad. The market for unrated debt securities is
even narrower. During periods of thin trading in these markets, the spread between bid and asked
prices is likely to increase significantly, and the Fund may have greater difficulty selling its
portfolio securities. The market value of these securities and their liquidity may be affected by
adverse publicity and investor perceptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>High Yield Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The high yield securities in which the Fund may invest are rated below investment grade (i.e.,
rated Ba or lower by Moody&#146;s or BB or lower by Standard&nbsp;&#038; Poor&#146;s) or are unrated but determined by
Calamos to be of comparable quality. Non-convertible debt securities rated below investment grade
or comparable unrated securities are commonly referred to as &#147;junk bonds&#148; and are considered
speculative with respect to the issuer&#146;s capacity to pay interest and repay principal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below investment grade non-convertible debt securities or comparable unrated securities are
susceptible to default or decline in market value due to adverse economic and business
developments.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The market values for high yield securities tend to be very volatile, and these securities are
less liquid than investment grade debt securities. For these reasons, your investment in the Fund
is subject to the following specific risks:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased price sensitivity to changing interest rates and to a deteriorating
economic environment;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>greater risk of loss due to default or declining credit quality;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse company specific events are more likely to render the issuer unable to make
interest and/or principal payments; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if a negative perception of the high yield market develops, the price and liquidity
of high yield securities may be depressed. This negative perception could last for a
significant period of time.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities rated below investment grade are speculative with respect to the capacity to pay
interest and repay principal in accordance with the terms of such securities. A rating of C from
Moody&#146;s means that the issue so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing. Standard&nbsp;&#038; Poor&#146;s assigns a rating of C to issues that are
currently highly vulnerable to nonpayment, and the C rating may be used to cover a situation where
a bankruptcy petition has been filed or similar action taken, but payments on the obligation are
being continued (a C rating is also assigned to a preferred stock issue in arrears on dividends or
sinking fund payments, but that is currently paying). See Appendix&nbsp;C to this Statement of
Additional Information for a description of Moody&#146;s and Standard&nbsp;&#038; Poor&#146;s ratings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adverse changes in economic conditions are more likely to lead to a weakened capacity of a
high yield issuer to make principal payments and interest payments than an investment grade issuer.
The principal amount of high yield securities outstanding has proliferated in the past decade as
an increasing number of issuers have used high yield securities for corporate financing. An
economic downturn could severely affect the ability of highly leveraged issuers to service their
debt obligations or to repay their obligations upon maturity. Similarly, down-turns in
profitability in specific industries could adversely affect the ability of high yield issuers in
that industry to meet their obligations. The market values of lower quality debt securities tend
to reflect individual developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of interest rates. Factors
having an adverse impact on the market value of lower quality securities may have an adverse effect
on the Fund&#146;s net asset value and the market value of its common shares. In addition, the Fund may
incur additional expenses to the extent it is required to seek recovery upon a default in payment
of principal or interest on its portfolio holdings. In certain circumstances, the Fund may be
required to foreclose on an issuer&#146;s assets and take possession of its property or operations. In
such circumstances, the Fund would incur additional costs in disposing of such assets and potential
liabilities from operating any business acquired.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The secondary market for high yield securities may not be as liquid as the secondary market
for more highly rated securities, a factor which may have an adverse effect on the Fund&#146;s ability
to dispose of a particular security when necessary to meet its liquidity needs. There are fewer
dealers in the market for high yield securities than investment grade obligations. The prices
quoted by different dealers may vary significantly and the spread between the bid and asked price
is generally much larger than higher quality instruments. Under adverse market or economic
conditions, the secondary market for high yield securities could contract further, independent of
any specific adverse changes in the condition of a
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">particular issuer, and these instruments may become illiquid. As a result, the Fund could
find it more difficult to sell these securities or may be able to sell the securities only at
prices lower than if such securities were widely traded. Prices realized upon the sale of such
lower rated or unrated securities, under these circumstances, may be less than the prices used in
calculating the Fund&#146;s net asset value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because investors generally perceive that there are greater risks associated with lower
quality debt securities of the type in which the Fund may invest a portion of its assets, the
yields and prices of such securities may tend to fluctuate more than those for higher rated
securities. In the lower quality segments of the debt securities market, changes in perceptions of
issuers&#146; creditworthiness tend to occur more frequently and in a more pronounced manner than do
changes in higher quality segments of the debt securities market, resulting in greater yield and
price volatility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund invests in high yield securities that are rated C or below, the Fund will incur
significant risk in addition to the risks associated with investments in high yield securities and
corporate loans. Distressed securities frequently do not produce income while they are
outstanding. The Fund may purchase distressed securities that are in default or the issuers of
which are in bankruptcy. The Fund may be required to bear certain extraordinary expenses in order
to protect and recover its investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Distressed Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may, but currently does not intend to, invest up to 5% of its total assets in
distressed securities, including corporate loans, which are the subject of bankruptcy proceedings
or otherwise in default as to the repayment of principal and/or payment of interest at the time of
acquisition by the Fund or are rated in the lower rating categories (Ca or lower by Moody&#146;s or CC
or lower by Standard&nbsp;&#038; Poor&#146;s) or which are unrated investments considered by Calamos to be of
comparable quality. Investment in distressed securities is speculative and involves significant
risk. Distressed securities frequently do not produce income while they are outstanding and may
require the Fund to bear certain extraordinary expenses in order to protect and recover its
investment. Therefore, to the extent the Fund seeks capital appreciation through investment in
distressed securities, the Fund&#146;s ability to achieve current income for its shareholders may be
diminished. The Fund also will be subject to significant uncertainty as to when and in what manner
and for what value the obligations evidenced by the distressed securities will eventually be
satisfied (e.g., through a liquidation of the obligor&#146;s assets, an exchange offer or plan of
reorganization involving the distressed securities or a payment of some amount in satisfaction of
the obligation). In addition, even if an exchange offer is made or a plan of reorganization is
adopted with respect to distressed securities held by the Fund, there can be no assurance that the
securities or other assets received by the Fund in connection with such exchange offer or plan of
reorganization will not have a lower value or income potential than may have been anticipated when
the investment was made. Moreover, any securities received by the Fund upon completion of an
exchange offer or plan of reorganization may be restricted as to resale. As a result of the Fund&#146;s
participation in negotiations with respect to any exchange offer or plan of reorganization with
respect to an issuer of distressed securities, the Fund may be restricted from disposing of such
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Loans</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to 5% of its total assets in loan participations and other direct
claims against a borrower. The corporate loans in which the Fund may invest primarily consist of
direct obligations of a borrower and may include debtor in possession financings pursuant to
Chapter&nbsp;11 of the U.S. Bankruptcy Code, obligations of a borrower issued in connection with a
restructuring pursuant to Chapter&nbsp;11 of the U.S. Bankruptcy Code, leveraged buy-out loans,
leveraged recapitalization loans, receivables purchase facilities, and privately placed notes. The
Fund may invest in a corporate loan at origination as a co-lender or by acquiring in the secondary
market participations in, assignments of or
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">novations of a corporate loan. By purchasing a participation, the Fund acquires some or all
of the interest of a bank or other lending institution in a loan to a corporate or government
borrower. The participations typically will result in the Fund having a contractual relationship
only with the lender not the borrower. The Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the lender selling the
participation and only upon receipt by the lender of the payments from the borrower. Many such
loans are secured, although some may be unsecured. Such loans may be in default at the time of
purchase. Loans that are fully secured offer the Fund more protection than an unsecured loan in
the event of non-payment of scheduled interest or principal. However, there is no assurance that
the liquidation of collateral from a secured loan would satisfy the corporate borrower&#146;s
obligation, or that the collateral can be liquidated. Direct debt instruments may involve a risk
of loss in case of default or insolvency of the borrower and may offer less legal protection to the
Fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk
of insolvency of the lending bank or other financial intermediary. The markets in loans are not
regulated by federal securities laws or the Securities and Exchange Commission (&#147;SEC&#148; or the
&#147;Commission&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As in the case of other high yield investments, such corporate loans may be rated in the lower
rating categories of the established rating services (Ba or lower by Moody&#146;s or BB or lower by
Standard&nbsp;&#038; Poor&#146;s), or may be unrated investments considered by Calamos to be of comparable
quality. As in the case of other high yield investments, such corporate loans can be expected to
provide higher yields than lower yielding, higher rated fixed income securities, but may be subject
to greater risk of loss of principal and income. There are, however, some significant differences
between corporate loans and high yield bonds. Corporate loan obligations are frequently secured by
pledges of liens and security interests in the assets of the borrower, and the holders of corporate
loans are frequently the beneficiaries of debt service subordination provisions imposed on the
borrower&#146;s bondholders. These arrangements are designed to give corporate loan investors
preferential treatment over high yield investors in the event of a deterioration in the credit
quality of the issuer. Even when these arrangements exist, however, there can be no assurance that
the borrowers of the corporate loans will repay principal and/or pay interest in full. Corporate
loans generally bear interest at rates set at a margin above a generally recognized base lending
rate that may fluctuate on a day-to-day basis, in the case of the prime rate of a U.S. bank, or
which may be adjusted on set dates, typically 30&nbsp;days but generally not more than one year, in the
case of the London Interbank Offered Rate. Consequently, the value of corporate loans held by the
Fund may be expected to fluctuate significantly less than the value of other fixed rate high yield
instruments as a result of changes in the interest rate environment. On the other hand, the
secondary dealer market for certain corporate loans may not be as well developed as the secondary
dealer market for high yield bonds, and therefore presents increased market risk relating to
liquidity and pricing concerns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Synthetic Foreign Money Market Positions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in money market instruments denominated in foreign currencies. In
addition to, or in lieu of, such direct investment, the Fund may construct a synthetic foreign
money market position by (a)&nbsp;purchasing a money market instrument denominated in one currency,
generally U.S. dollars, and (b)&nbsp;concurrently entering into a forward contract to deliver a
corresponding amount of that currency in exchange for a different currency on a future date and at
a specified rate of exchange. For example, a synthetic money market position in Japanese yen could
be constructed by purchasing a U.S. dollar money market instrument, and entering concurrently into
a forward contract to deliver a corresponding amount of U.S. dollars in exchange for Japanese yen
on a specified date and at a specified rate of exchange. Because of the availability of a variety
of highly liquid short-term U.S. dollar money market instruments, a synthetic money market position
utilizing such U.S. dollar instruments may offer greater liquidity than direct investment in
foreign currency and a concurrent construction of a synthetic position in such foreign currency, in
terms of both income yield and gain or loss from changes in currency
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">exchange rates, in general should be similar, but would not be identical because the
components of the alternative investments would not be identical. The Fund
currently does not intend to invest a significant amount of
its assets in synthetic foreign money market positions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Debt Obligations of Non-U.S. Governments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An investment in debt obligations of non-U.S. governments and their political subdivisions
(sovereign debt) involves special risks that are not present in corporate debt obligations. The
non-U.S. issuer of the sovereign debt or the non-U.S. governmental authorities that control the
repayment of the debt may be unable or unwilling to repay principal or interest when due, and the
Fund may have limited recourse in the event of a default. During periods of economic uncertainty,
the market prices of sovereign debt may be more volatile than prices of debt obligations of U.S.
issuers. In the past, certain non-U.S. countries have encountered difficulties in servicing their
debt obligations, withheld payments of principal and interest and declared moratoria on the payment
of principal and interest on their sovereign debt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A sovereign debtor&#146;s willingness or ability to repay principal and pay interest in a timely
manner may be affected by, among other factors, its cash flow situation, the extent of its foreign
currency reserves, the availability of sufficient non-U.S. currency, the relative size of the debt
service burden, the sovereign debtor&#146;s policy toward its principal international lenders and local
political constraints. Sovereign debtors may also be dependent on expected disbursements from
non-U.S. governments, multilateral agencies and other entities to reduce principal and interest
arrearages on their debt. The failure of a sovereign debtor to implement economic reforms, achieve
specified levels of economic performance or repay principal or interest when due may result in the
cancellation of third-party commitments to lend funds to the sovereign debtor, which may further
impair such debtor&#146;s ability or willingness to service its debts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Eurodollar Instruments And Samurai And Yankee Bonds</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in Eurodollar instruments and Samurai and Yankee bonds. Eurodollar
instruments are bonds of corporate and government issuers that pay interest and principal in U.S.
dollars but are issued in markets outside the United States, primarily in Europe. Samurai bonds
are yen-denominated bonds sold in Japan by non-Japanese issuers. Yankee bonds are U.S.
dollar-denominated bonds typically issued in the U.S. by non-U.S. governments and their agencies
and non-U.S. banks and corporations. The Fund may also invest in Eurodollar Certificates of
Deposit (&#147;ECDs&#148;), Eurodollar Time Deposits (&#147;ETDs&#148;) and Yankee Certificates of Deposit (&#147;Yankee
CDs&#148;). ECDs are U.S. dollar-denominated certificates of deposit issued by non-U.S. branches of
domestic banks; ETDs are U.S. dollar-denominated deposits in a non-U.S. branch of a U.S. bank or in
a non-U.S. bank; and Yankee CDs are U.S. dollar-denominated certificates of deposit issued by a
U.S. branch of a non-U.S. bank and held in the U.S. These investments involve risks that are
different from investments in securities issued by U.S. issuers, including potential unfavorable
political and economic developments, non-U.S. withholding or other taxes, seizure of non-U.S.
deposits, currency controls, interest limitations or other governmental restrictions which might
affect payment of principal or interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Convertible Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Convertible securities include any corporate debt security or preferred stock that may be
converted into underlying shares of common stock. The common stock underlying convertible
securities may be issued by a different entity than the issuer of the convertible securities.
Convertible securities entitle the holder to receive interest payments paid on corporate debt
securities or the dividend preference on a preferred stock until such time as the convertible
security matures or is redeemed or until the holder elects to exercise the conversion privilege.
As a result of the conversion feature, however, the interest rate or dividend preference on a
convertible security is generally less than would be the case if the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">securities were issued in non-convertible form. The value of convertible securities is
influenced by both the yield of non-convertible securities of comparable issuers and by the value
of the underlying common stock. The value of a convertible security viewed without regard to its
conversion feature (i.e., strictly on the basis of its yield) is sometimes referred to as its
&#147;investment value.&#148; The investment value of the convertible security typically will fluctuate
inversely with changes in prevailing interest rates. However, at the same time, the convertible
security will be influenced by its &#147;conversion value,&#148; which is the market value of the underlying
common stock that would be obtained if the convertible security were converted. Conversion value
fluctuates directly with the price of the underlying common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If, because of a low price of the common stock, the conversion value is substantially below
the investment value of the convertible security, the price of the convertible security is governed
principally by its investment value. If the conversion value of a convertible security increases
to a point that approximates or exceeds its investment value, the value of the security will be
principally influenced by its conversion value. A convertible security will sell at a premium over
its conversion value to the extent investors place value on the right to acquire the underlying
common stock while holding a fixed income security. Holders of convertible securities have a claim
on the assets of the issuer prior to the common stockholders, but may be subordinated to holders of
similar non-convertible securities of the same issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Synthetic Convertible Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calamos Advisors, LLC (&#147;Calamos&#148;) may create a &#147;synthetic&#148; convertible security by combining
fixed income securities with the right to acquire equity securities. More flexibility is possible
in the assembly of a synthetic convertible security than in the purchase of a convertible security.
Although synthetic convertible securities may be selected where the two components are issued by a
single issuer, thus making the synthetic convertible security similar to the true convertible
security, the character of a synthetic convertible security allows the combination of components
representing distinct issuers, when Calamos believes that such a combination would better promote
the Fund&#146;s investment objective. A synthetic convertible security also is a more flexible
investment in that its two components may be purchased separately. For example, the Fund may
purchase a warrant for inclusion in a synthetic convertible security but temporarily hold
short-term investments while postponing the purchase of a corresponding bond pending development of
more favorable market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A holder of a synthetic convertible security faces the risk of a decline in the price of the
security or the level of the index involved in the convertible component, causing a decline in the
value of the call option or warrant purchased to create the synthetic convertible security. Should
the price of the stock fall below the exercise price and remain there throughout the exercise
period, the entire amount paid for the call option or warrant would be lost. Because a synthetic
convertible security includes the fixed-income component as well, the holder of a synthetic
convertible security also faces the risk that interest rates will rise, causing a decline in the
value of the fixed-income instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may also purchase synthetic convertible securities manufactured by other parties,
including convertible structured notes. Convertible structured notes are fixed income debentures
linked to equity, and are typically issued by investment banks. Convertible structured notes have
the attributes of a convertible security; however, the investment bank that issued the convertible
note assumes the credit risk associated with the investment, rather than the issuer of the
underlying common stock into which the note is convertible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Lending of Portfolio Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may lend its portfolio securities to broker-dealers and banks. Any such loan must be
continuously secured by collateral in cash or cash equivalents maintained on a current basis in an
amount
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">at least equal to the market value of the securities loaned by the Fund. The Fund would
continue to receive the equivalent of the interest or dividends paid by the issuer on the
securities loaned, and would also receive an additional return that may be in the form of a fixed
fee or a percentage of the collateral. The Fund may pay reasonable fees to persons unaffiliated
with the Fund for services in arranging these loans. The Fund would have the right to call the
loan and obtain the securities loaned at any time on notice of not more than five business days.
The Fund would not have the right to vote the securities during the existence of the loan but would
call the loan to permit voting of the securities, if, in Calamos&#146; judgment, a material event
requiring a shareholder vote would otherwise occur before the loan was repaid. In the event of
bankruptcy or other default of the borrower, the Fund could experience both delays in liquidating
the loan collateral or recovering the loaned securities and losses, including (a)&nbsp;possible decline
in the value of the collateral or in the value of the securities loaned during the period while the
Fund seeks to enforce its rights thereto, (b)&nbsp;possible subnormal levels of income and lack of
access to income during this period, and (c)&nbsp;expenses of enforcing its rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Options on Securities, Indexes and Currencies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may seek to generate income from option premiums by writing (selling)&nbsp;options (with
an aggregate notional value of up to 33% of the value of the Fund&#146;s managed assets). The Fund may
write (sell)&nbsp;call options (i)&nbsp;on a portion of the equity securities (including securities that are
convertible into equity securities) in the Fund&#146;s portfolio and (ii)&nbsp;on broad-based securities
indices (such as the S&#038;P 500 or MSCI EAFE) or certain ETFs (exchange traded funds) that trade like
common stocks but seek to replicate such market indices. The Fund may also write (sell)&nbsp;both put
and call options on certain of the equity securities (including securities that are convertible
into equity securities) in the Fund&#146;s portfolio where the Fund will own an equity security and
simultaneously, write call options and write put options on that security. This strategy may
produce a considerably higher return than solely writing call options, but involves a higher degree
of risk and potential volatility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calamos may also utilize covered put option collars, in which the Fund purchases a put option
and simultaneously sells a put option on the same security at a different strike price. The put
option collars in which the Fund will invest are sometimes referred to as debit spreads and credit
spreads (including strike spreads and time spreads). When the Fund engages in debit spreads the
Fund will pay a higher premium for the put option it purchases than it receives for the put option
it writes. In so doing, the Fund hopes to realize current gains from favorable market price
movements in relation to the exercise price of the option it holds. The Fund&#146;s maximum potential
profit would be equal to the difference between the two exercise prices, less the net premium paid.
When the Fund engages in credit spreads the Fund will receive more in premiums for the option it
writes than it will pay for the option it purchases. In so doing, the Fund hopes to realize
current gains in the form of premiums. The Fund&#146;s maximum potential profit would be equal to the
net premium received for the spread. The Fund&#146;s maximum potential loss would be limited to the
difference between the two exercise prices, less the net premium received.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, to seek to offset some of the risk of a large potential decline in the event the
overall stock market has a sizeable short-term or intermediate-term decline, the Fund may also, to
a limited extent purchase put options on broad-based securities indices (such as the S&#038;P&nbsp;500 or MSCI
EAFE) or certain ETFs (exchange traded funds) that trade like common stocks but seek to replicate
such market indices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may also purchase and sell put options and call options on foreign currencies. The
Fund may purchase agreements, sometimes called cash puts, that may accompany the purchase of a new
issue of bonds from a dealer.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A put option gives the purchaser of the option, upon payment of a premium, the right to sell,
and the writer the obligation to buy, the underlying security, commodity, index, currency or other
instrument at the exercise price. For instance, the Fund&#146;s purchase of a put option on a security
might be designed to protect its holdings in the underlying instrument (or, in some cases, a
similar instrument) against a substantial decline in the market value by giving the Fund the right
to sell such instrument at the option exercise price. A call option, upon payment of a premium,
gives the purchaser of the option the right to buy, and the seller the obligation to sell, the
underlying instrument at the exercise price. The Fund&#146;s purchase of a call option on a security,
financial future, index, currency or other instrument might be intended to protect the Fund against
an increase in the price of the underlying instrument that it intends to purchase in the future by
fixing the price at which it may purchase such instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain options, known as &#147;American style&#148; options, may be exercised at any time
during the term of the option. Other options, known as &#147;European style&#148; options, may be exercised only on the expiration date of the option. The Fund expects that substantially
all of the options written by the Fund will be American style options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is authorized to purchase and sell exchange listed options and over-the-counter
options (&#147;OTC options&#148;). Exchange listed options are issued by a regulated intermediary such as
the Options Clearing Corporation (&#147;OCC&#148;), which guarantees the performance of the obligations of
the parties to such options. In addition, the Fund may purchase instruments structured by
broker-dealers or investment banks that package or possess economic characteristics of options.
The discussion below uses the OCC as an example, but is also applicable to other financial
intermediaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With certain exceptions, OCC issued and exchange listed options generally settle by physical
delivery of the underlying security or currency, although in the future cash settlement may become
available. Index options and Eurodollar instruments are cash settled for the net amount, if any,
by which the option is &#147;in-the-money&#148; (i.e., where the value of the underlying instrument exceeds,
in the case of a call option, or is less than, in the case of a put option, the exercise price of
the option) at the time the option is exercised. Frequently, rather than taking or making delivery
of the underlying instrument through the process of exercising the option, listed options are
closed by entering into offsetting purchase or sale transactions that do not result in ownership of
the new option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTC options are purchased from or sold to securities dealers, financial institutions or other
parties (&#147;Counterparties&#148;) through direct bilateral agreement with the Counterparty. In contrast
to exchange listed options, which generally have standardized terms and performance mechanics, all
the terms of an OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The Fund may sell OTC
options (other than OTC currency options) that are subject to a buy-back provision permitting the
Fund to require the Counterparty to sell the option back to the Fund at a formula price within
seven days. The Fund expects generally to enter into OTC options that have cash settlement
provisions, although it is not required to do so. The staff of the SEC currently takes the
position that OTC options purchased by a fund, and portfolio securities &#147;covering&#148; the amount of a
fund&#146;s obligation pursuant to an OTC option sold by it (or the amount of assets equal to the
formula price for the repurchase of the option, if any, less the amount by which the option is in
the money) are illiquid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund may also purchase and sell options on securities indices and
other financial indices, which may include purchasing and selling
options on stocks, indices, rates, credit spreads or currencies.
Options on securities indices and other financial indices are similar to options on a security or
other instrument except that, rather than settling by physical delivery of the underlying
instrument, they settle by cash settlement, i.e., an option or an index gives the holder the right
to receive, upon exercise of the option, an amount of cash if the closing level of the index upon
which the option is based exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the option (except if, in the case of an OTC option, physical delivery is
specified). This amount of cash is equal to the excess of the closing price of the index over the
exercise price of the option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of this amount. The gain
or loss on an option on an index depends on price movements in the instruments making upon
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the market, market segment industry or other composite on which the underlying index is based,
rather than price movements in individual securities, as is the case with respect to options on
securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will write call options and put options only if they are &#147;covered.&#148; For example, a
call option written by the Fund will require the Fund to hold the securities subject to the call
(or securities convertible into the needed securities without additional consideration) or to
segregate cash or liquid assets sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by the Fund on an index will require the Fund to own portfolio
securities which correlate with the index or to segregate cash or liquid assets equal to the excess
of the index value over the exercise price on a current basis. A put option written by the Fund
requires the Fund to segregate cash or liquid assets equal to the exercise price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OTC options entered into by the Fund and OCC issued and exchange listed index options will
generally provide for cash settlement. As a result, when the Fund sells these instruments it will
only segregate an amount of cash or liquid assets equal to its accrued net obligations, as there is
no requirement for payment or delivery of amounts in excess of the net amount. These amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same as an OCC
guaranteed listed option sold by the Fund, or the in-the-money amount plus any sell-back formula
amount in the case of a cash-settled put or call. In addition, when the Fund sells a call option
on an index at a time when the in-the-money amount exceeds the exercise price, the Fund will
segregate, until the option expires or is closed out, cash or cash equivalents equal in value to
such excess. OCC issued and exchange listed options sold by the Fund other than those above
generally settle with physical delivery, or with an election of either physical delivery or cash
settlement and the Fund will segregate an amount of cash or liquid assets equal to the full value
of the option. OTC options settling with physical delivery, or with an election of either physical
delivery or cash settlement, will be treated the same as other options settling with physical
delivery.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an option written by the Fund expires, the Fund will generally realize a short-term capital
gain equal to the premium received at the time the option was written. If an option purchased by
the Fund expires, the Fund realizes a capital loss equal to the premium paid, which may be
short-term or long-term depending on the Fund&#146;s holding period for the option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the earlier of exercise or expiration, an option may be closed out by an offsetting
purchase or sale of an option of the same series (type, exchange, underlying security or index,
exercise price and expiration). There can be no assurance, however, that a closing purchase or
sale transaction can be effected when the Fund desires.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will realize a short-term capital gain from a closing purchase transaction if the
cost of the closing option is less than the premium received from writing the option, or, if it is
more, the Fund will generally realize a short-term capital loss. If the premium received from a
closing sale transaction is more than the premium paid to purchase the option, the Fund will
realize a capital gain or, if it is less, the Fund will realize a capital loss, which in each case
may be long-term or short-term depending on the Fund&#146;s holding period for the option. The
principal factors affecting the market value of a put or a call option include supply and demand,
interest rates, the current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or index, and the time
remaining until the expiration date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A put or call option purchased by the Fund is an asset of the Fund, valued initially at the
premium paid for the option. The premium received for an option written by the Fund is recorded as
a deferred credit. The value of an option purchased or written is marked-to-market daily and is
valued at the closing
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">price on the exchange on which it is traded or, if not traded on an exchange or no closing
price is available, at the mean between the last bid and asked prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Associated with Options</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are several risks associated with transactions in options. For example, there are
significant differences between the securities markets, the currency markets and the options
markets that could result in an imperfect correlation among these markets, causing a given
transaction not to achieve its objectives. A decision as to whether, when and how to use options
involves the exercise of skill and judgment, and even a well-conceived transaction may be
unsuccessful to some degree because of market behavior or unexpected events. The ability of the
Fund to utilize options successfully will depend on Calamos&#146; ability to predict pertinent market
investments which cannot be assured.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s ability to close out its position as a purchaser or seller of an OCC or exchange
listed put or call option is dependent, in part, upon the liquidity of the option market. Among
the possible reasons for the absence of a liquid option market on an exchange are:
(i)&nbsp;insufficient trading interest in certain options; (ii)&nbsp;restrictions on transactions imposed by
an exchange; (iii)&nbsp;trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including reaching daily price
limits; (iv)&nbsp;interruption of the normal operations of the OCC or an exchange; (v)&nbsp;inadequacy of the
facilities of an exchange or OCC to handle current trading volume; or (vi)&nbsp;a decision by one or
more exchanges to discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease to exist, although
outstanding options on that exchange would generally continue to be exercisable in accordance with
their terms. If the Fund were unable to close out an option that it has purchased on a security,
it would have to exercise the option in order to realize any profit or the option would expire and
become worthless. If the Fund were unable to close out a covered call option that it had written
on a security, it would not be able to sell the underlying security until the option expired. As
the writer of a covered call option on a security, the Fund foregoes, during the option&#146;s life, the
opportunity to profit from increases in the market value of the security covering the call option
above the sum of the premium and the exercise price of the call. As the writer of a covered call
option on a foreign currency, the Fund foregoes, during the option&#146;s life, the opportunity to
profit from currency appreciation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The hours of trading for listed options may not coincide with the hours during which the
underlying financial instruments are traded. To the extent that the option markets close before
the markets for the underlying financial instruments, significant price and rate movements can take
place in the underlying markets that cannot be reflected in the option markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless the parties provide for it, there is no central clearing or guaranty function in an OTC
option. As a result, if the Counterparty (as described above under &#147;Options on Securities, Indexes
and Currencies&#148;) fails to make or take delivery of the security, currency or other instrument
underlying an OTC option it has entered into with the Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the Fund will lose any premium it paid for
the option as well as any anticipated benefit of the transaction. Accordingly, Calamos must assess
the creditworthiness of each such Counterparty or any guarantor or credit enhancement of the
Counterparty&#146;s credit to determine the likelihood that the terms of the OTC option will be
satisfied. The Fund will engage in OTC option transactions only with U.S. government securities
dealers recognized by the Federal Reserve Bank of New York as &#147;primary dealers&#148; or broker/dealers,
domestic or foreign banks or other financial institutions which have received (or the guarantors of
the obligation of which have received) a short-term credit rating of A-1 from S&#038;P or P-1 from
Moody&#146;s or an equivalent rating from any nationally recognized statistical
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">rating organization (&#147;NRSRO&#148;) or, in the case of OTC currency transactions, are determined to
be of equivalent credit quality by Calamos.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase and sell call options on securities indices and currencies. All calls
sold by the Fund must be &#147;covered.&#148; Even though the Fund will receive the option premium to help
protect it against loss, a call sold by the Fund exposes the Fund during the term of the option to
possible loss of opportunity to realize appreciation in the market price of the underlying security
or instrument and may require the Fund to hold a security or instrument which it might otherwise
have sold. As described more fully in the accompanying prospectus, this results in the potential
for net asset value erosion. The Fund may purchase and sell put options on securities indices and
currencies. In selling put options, there is a risk that the Fund may be required to buy the
underlying security at a disadvantageous price above the market price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Futures Contracts and Options on Futures Contracts</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may use interest rate futures contracts, index futures contracts and foreign currency
futures contracts. An interest rate, index or foreign currency futures contract provides for the
future sale by one party and purchase by another party of a specified quantity of a financial
instrument or the cash value of an index<SUP style="font-size: 85%; vertical-align: text-top">1</SUP> at a specified price and time. A public
market exists in futures contracts covering a number of indexes (including, but not limited to: the
Standard&nbsp;&#038; Poor&#146;s 500 Index, the Russell 2000 Index, the Value Line Composite Index, and the New
York Stock Exchange Composite Index) as well as financial instruments (including, but not limited
to: U.S. Treasury bonds, U.S. Treasury notes, Eurodollar certificates of deposit and foreign
currencies). Other index and financial instrument futures contracts are available and it is
expected that additional futures contracts will be developed and traded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase and write call and put futures options. Futures options possess many of
the same characteristics as options on securities, indexes and foreign currencies (discussed
above). A futures option gives the holder the right, in return for the premium paid, to assume a
long position (call)&nbsp;or short position (put)&nbsp;in a futures contract at a specified exercise price at
any time during the period of the option. Upon exercise of a call option, the holder acquires a
long position in the futures contract and the writer is assigned the opposite short position. In
the case of a put option, the opposite is true. The Fund might, for example, use futures contracts
to hedge against or gain exposure to fluctuations in the general level of stock prices, anticipated
changes in interest rates or currency fluctuations that might adversely affect either the value of
the Fund&#146;s securities or the price of the securities that the Fund intends to purchase. Although
other techniques could be used to reduce or increase the Fund&#146;s exposure to stock price, interest
rate and currency fluctuations, the Fund may be able to achieve its desired exposure more
effectively and perhaps at a lower cost by using futures contracts and futures options.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will only enter into futures contracts and futures options that are standardized and
traded on an exchange, board of trade or similar entity, or quoted on an automated quotation
system.
</DIV>

 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
success of any futures transaction depends on Calamos correctly predicting
changes in the level and direction of stock prices, interest rates, currency exchange rates and
other factors.
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>A futures contract on an index is an agreement pursuant
to which two parties agree to take or make delivery of an amount of cash equal
to the difference between the value of the index at the close of the last
trading day of the contract and the price at which the index contract was
originally written. Although the value of a securities index is a function of
the value of certain specified securities, no physical delivery of those
securities is made.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">Should those predictions be incorrect, the Fund&#146;s return might have been better had the
transaction not been attempted; however, in the absence of the ability to use futures contracts,
Calamos might have taken portfolio actions in anticipation of the same market
movements with similar investment results, but, presumably, at greater transaction costs. When a
purchase or sale of a futures contract is made by the Fund, the Fund is required to deposit with
its custodian (or broker, if legally permitted) a specified amount of cash or U.S. government
securities or other securities acceptable to the broker (&#147;initial margin&#148;). The margin required
for a futures contract is set by the exchange on which the contract is traded and may be modified
during the term of the contract, although the Fund&#146;s broker may require margin deposits in excess
of the minimum required by the exchange. The initial margin is in the nature of a performance bond
or good faith deposit on the futures contract, which is returned to the Fund upon termination of
the contract, assuming all contractual obligations have been satisfied. The Fund expects to earn
interest income on its initial margin deposits. A futures contract held by the Fund is valued
daily at the official settlement price of the exchange on which it is traded. Each day the Fund
pays or receives cash, called &#147;variation margin,&#148; equal to the daily change in value of the futures
contract. This process is known as &#147;marking-to-market.&#148; Variation margin paid or received by the
Fund does not represent a borrowing or loan by the Fund but is instead settlement between the Fund
and the broker of the amount one would owe the other if the futures contract had expired at the
close of the previous day. In computing net asset value, the Fund will mark-to-market its open
futures positions.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is also required to deposit and maintain margin with respect to put and call options
on futures contracts written by it. Such margin deposits will vary depending on the nature of the
underlying futures contract (and the related initial margin requirements), the current market value
of the option and other futures positions held by the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although some futures contracts call for making or taking delivery of the underlying
securities, usually these obligations are closed out prior to delivery by offsetting purchases or
sales of matching futures contracts (same exchange, underlying security or index, and delivery
month). If an offsetting purchase price is less than the original sale price, the Fund engaging in
the transaction realizes a capital gain, or if it is more, the Fund realizes a capital loss.
Conversely, if an offsetting sale price is more than the original purchase price, the Fund engaging
in the transaction realizes a capital gain, or if it is less, the Fund realizes a capital loss.
The transaction costs must also be included in these calculations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Associated with Futures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are several risks associated with the use of futures contracts and futures options. A
purchase or sale of a futures contract may result in losses in excess of the amount invested in the
futures contract. In trying to increase or reduce market exposure, there can be no guarantee that
there will be a correlation between price movements in the futures contract and in the portfolio
exposure sought. In addition, there are significant differences between the securities and futures
markets that could result in an imperfect correlation between the markets, causing a given
transaction not to achieve its objectives. The degree of imperfection of correlation depends on
circumstances such as: variations in speculative market demand for futures, futures options and the
related securities, including technical influences in futures and futures options trading and
differences between the securities markets and the securities underlying the standard contracts
available for trading. For example, in the case of index futures contracts, the composition of the
index, including the issuers and the weighing of each issue, may differ from the composition of the
Fund&#146;s portfolio, and, in the case of interest rate futures contracts, the interest rate levels,
maturities and creditworthiness of the issues underlying the futures contract may differ from the
financial instruments held in the Fund&#146;s portfolio. A decision as to whether, when and how to use
futures contracts involves the exercise of skill and judgment, and even a well-conceived
transaction may be unsuccessful to some degree because of market behavior or unexpected stock price
or interest rate trends.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Futures exchanges may limit the amount of fluctuation permitted in certain futures contract
prices during a single trading day. The daily limit establishes the maximum amount that the price
of a futures contract may vary either up or down from the previous day&#146;s settlement price at the
end of the current trading session. Once the daily limit has been reached in a futures contract
subject to the limit, no more trades may be made on that day at a price beyond that limit. The
daily limit governs only price movements during a particular trading day and therefore does not
limit potential losses because the limit may work to prevent the liquidation of unfavorable
positions. For example, futures prices have occasionally moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt liquidation of
positions and subjecting some holders of futures contracts to substantial losses. Stock index
futures contracts are not normally subject to such daily price change limitations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There can be no assurance that a liquid market will exist at a time when the Fund seeks to
close out a futures or futures option position. The Fund would be exposed to possible loss on the
position during the interval of inability to close, and would continue to be required to meet
margin requirements until the position is closed. In addition, many of the contracts discussed
above are relatively new instruments without a significant trading history. As a result, there can
be no assurance that an active secondary market will develop or continue to exist.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Limitations on Options and Futures</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If other options, futures contracts or futures options of types other than those described
herein are traded in the future, the Fund may also use those investment vehicles, provided the
Board of Trustees determines that their use is consistent with the Fund&#146;s investment objective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When purchasing a futures contract or writing a put option on a futures contract, the Fund
must maintain with its custodian (or broker, if legally permitted) cash or cash equivalents
(including any margin) equal to the market value of such contract. When writing a call option on a
futures contract, the Fund similarly will maintain with its custodian cash or cash equivalents
(including any margin) equal to the amount by which such option is in-the-money until the option
expires or is closed by the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may not maintain open short positions in futures contracts, call options written on
futures contracts or call options written on indexes if, in the aggregate, the market value of all
such open positions exceeds the current value of the securities in its portfolio, plus or minus
unrealized gains and losses on the open positions, adjusted for the historical relative volatility
of the relationship between the portfolio and the positions. For this purpose, to the extent the
Fund has written call options on specific securities in its portfolio, the value of those
securities will be deducted from the current market value of the securities portfolio.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has claimed an exclusion from registration as a commodity pool under the Commodity
Exchange Act (&#147;CEA&#148;) and, therefore, the Fund and its officers and trustees are not subject to the
registration requirements of the CEA. The Fund reserves the right to engage in transactions
involving futures and options thereon to the extent allowed by Commodity Futures Trading Commission
regulations in effect from time to time and in accordance with the Fund&#146;s policies.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Warrants</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in warrants. A warrant is a right to purchase common stock at a specific
price (usually at a premium above the market value of the underlying common stock at time of
issuance) during a specified period of time. A warrant may have a life ranging from less than a
year to twenty years or longer, but a warrant becomes worthless unless it is exercised or sold
before expiration. In addition, if the market price of the common stock does not exceed the
warrant&#146;s exercise price during the life of the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">warrant, the warrant will expire worthless. Warrants have no voting rights, pay no dividends
and have no rights with respect to the assets of the corporation issuing them. The percentage
increase or decrease in the value of a warrant may be greater than the percentage increase or
decrease in the value of the underlying common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Turnover</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Fund does not purchase securities with a view to rapid turnover, there are no
limitations on the length of time that portfolio securities must be held. Portfolio turnover can
occur for a number of reasons, including calls for redemption, general conditions in the securities
markets, more favorable investment opportunities in other securities, or other factors relating to
the desirability of holding or changing a portfolio investment. The portfolio turnover rates may
vary greatly from year to year. A high rate of portfolio turnover in the Fund would result in
increased transaction expense. High portfolio turnover may also result in the realization of
capital gains or losses and, to the extent net short-term capital gains are realized, any
distributions resulting from such gains will be taxed at ordinary income tax rates for federal
income tax purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Short Sales</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may from time to time sell securities short to enhance income and protect against
market risk by hedging a portion of the equity risk inherent in the Fund&#146;s portfolio. A short sale
is effected when Calamos believes that the price of a security will decline, and involves the sale
of securities that the Fund does not own, in the hope of purchasing the same securities at a later
date at a lower price. There can be no assurance that the Fund will be able to close out a short
position (i.e., purchase the same securities) at any particular time or at an acceptable or
advantageous price. To make delivery to the buyer, the Fund must borrow the securities from a
broker-dealer through which the short sale is executed, and the broker-dealer delivers the
securities, on behalf of the Fund, to the buyer. The broker-dealer is entitled to retain the
proceeds from the short sale until the Fund delivers to it the securities sold short. In addition,
the Fund is required to pay to the broker-dealer the amount of any dividends or interest paid on
the securities sold short.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To secure its obligation to deliver to the broker-dealer the securities sold short, the Fund
must segregate an amount of cash or liquid securities with its custodian equal to any excess of the
current market value of the securities sold short over any cash or liquid securities deposited as
collateral with the broker in connection with the short sale (not including the proceeds of the
short sale). As a result of that requirement, the Fund will not gain any leverage merely by
selling short, except to the extent that it earns interest or other income or gains on the
segregated cash or liquid securities while also being subject to the possibility of gain or loss
from the securities sold short.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is said to have a short position in the securities sold until it delivers to the
broker-dealer the securities sold, at which time the Fund receives the proceeds of the short sale.
The Fund will normally close out a short position by purchasing on the open market and delivering
to the broker-dealer an equal amount of the securities sold short.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will realize a gain if the price of the securities declines between the date of the
short sale and the date on which the Fund purchases securities to replace the borrowed securities.
On the other hand, the Fund will incur a loss if the price of the securities increases between
those dates. The amount of any gain will be decreased and the amount of any loss increased by any
premium or interest that the Fund may be required to pay in connection with the short sale. It
should be noted that possible losses from short sales differ from those that could arise from a
cash investment in a security in that losses from a
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">short sale may be limitless, while the losses from a cash investment in a security cannot
exceed the total amount of the investment in the security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is also a risk that securities borrowed by the Fund and delivered to the buyer of the
securities sold short will need to be returned to the broker-dealer on short notice. If the
request for the return of securities occurs at a time when other short sellers of the security are
receiving similar requests, a &#147;short squeeze&#148; can occur, meaning that the Fund might be compelled,
at the most disadvantageous time, to replace the borrowed securities with securities purchased on
the open market, possibly at prices significantly in excess of the proceeds received earlier.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rule&nbsp;10a-1 under the Securities Exchange Act of 1934 provides that exchange-traded securities
can be sold short only at a price that is higher than the last trade or the same as the last trade
price if that price is higher than the price of the previous reported trade. The requirements of
Rule&nbsp;10a-1 can delay, or in some cases prevent, execution of short sales, resulting in opportunity
costs and increased exposure to market action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may also make short sales &#147;against the box,&#148; meaning that at all times when a short
position is open the Fund owns an equal amount of such securities or securities convertible into or
exchangeable, without payment of further consideration, for securities of the same issue as, and in
an amount equal to, the securities sold short. Short sales &#147;against the box&#148; result in a
&#147;constructive sale&#148; and require the Fund to recognize any taxable gain unless an exception to the
constructive sale rule applies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will not make a short sale of securities (other than a short sale &#147;against the box&#148;),
if more than 20% of its net assets would be deposited with brokers as collateral or allocated to
segregated accounts in connection with all outstanding short sales (other than short sales &#147;against
the box&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to enabling the Fund to hedge against market risk, short sales may afford the Fund
an opportunity to earn additional current income to the extent it is able to enter into
arrangements with broker-dealers through which the short sales are executed to receive income with
respect to the proceeds of the short sales during the period the Fund&#146;s short positions remain
open. The Fund believes that some broker-dealers may be willing to enter into such arrangements,
but there is no assurance that they will be able to enter into such arrangements to the desired
degree.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Swaps, Caps, Floors and Collars</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may enter into interest rate, currency, index, credit default and other swaps and the
purchase or sale of related caps, floors and collars. The Fund expects to enter into these
transactions primarily as a hedge to preserve a return or spread on a particular investment or
portion of its portfolio, to protect against currency fluctuations, as a duration management
technique or to protect against any increase in the price of securities the Fund anticipates
purchasing at a later date. The Fund will not sell interest rate caps or floors where it does not
own securities or other instruments providing the income stream the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their respective
commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional amount of principal. A currency swap is an agreement to
exchange cash flows on a notional amount of two or more currencies based on the relative value
differential among them and an index swap is an agreement to swap cash flows on a notional amount
based on changes in the values of the reference indices. The purchase of a cap entitles the
purchaser to receive payments on a notional principal amount from the party selling such cap to the
extent that a specified index exceeds a predetermined interest rate or amount. The purchase of a
floor entitles the purchaser to receive payments on a notional principal amount from the party
selling such floor to the extent that a specified index falls below a predetermined interest rate
or amount. A collar is a
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">combination of a cap and a floor that preserves a certain return within a predetermined range
of interest rates or values.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will usually enter into swaps or caps on a net basis, that is, the two payment
streams will be netted out in a cash settlement on the payment date or dates specified in the
instrument, with the Fund receiving or paying, as the case may be, only the net amount of the two
payments. The Fund intends to maintain in a segregated account with its custodian cash or liquid
securities having a value at least equal to the Fund&#146;s net payment obligations under any swap
transaction, marked-to-market daily. Inasmuch as the Fund will segregate assets (or enter into
offsetting positions) to cover its obligations under swaps, Calamos and the Fund believe such
obligations do not constitute senior securities under the Investment Company Act of 1940 (the &#147;1940
Act&#148;) and, accordingly, will not treat them as being subject to its borrowing restrictions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund will not enter into any swap, cap, floor or collar transaction unless, at the time of
entering into such transaction, the Fund believes that the Counterparty has the financial resources
to honor its obligation under the transaction. Further, Calamos will continually monitor the
financial stability of a Counterparty to a swap or cap transaction in an effort to proactively
protect the Fund&#146;s investments. The use of swaps and caps is a highly specialized activity that
involves investment techniques and risks different from those associated with ordinary portfolio
security transactions. The Fund&#146;s use of swaps or caps could enhance or harm the overall
performance on the common shares. To the extent there is a decline in interest rates, the value of
the interest rate swap or cap could decline, and could result in a decline in the net asset value
of the common shares. In addition, if short-term interest rates are lower than the Fund&#146;s fixed
rate of payment on the interest rate swap, the swap will reduce common share net earnings. If, on
the other hand, short-term interest rates are higher than the fixed rate of payment on the interest
rate swap, the swap will enhance common share net earnings. Buying caps could enhance the
performance of the common shares by providing a maximum leverage expense. Buying caps could also
decrease the net earnings of the common shares in the event that the premium paid by the Fund to
the Counterparty exceeds the additional amount the Fund would have been required to pay had it not
entered into the cap agreement. The Fund has no current intention of selling swaps or caps.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Swaps and caps do not involve the delivery of securities or other underlying assets or
principal. Accordingly, the risk of loss with respect to swaps is limited to the net amount of
payments that the Fund is contractually obligated to make. If the Counterparty defaults, the Fund
would not be able to use the anticipated net receipts under the swap or cap to offset the payments
required of the Fund. Depending on whether the Fund would be entitled to receive net payments from
the Counterparty on the swap or cap, such a default could negatively impact the performance of the
common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, at the time the swap or cap transaction reaches its scheduled termination date,
there is a risk that the Fund would not be able to obtain a replacement transaction or that the
terms of the replacement would not be as favorable as on the expiring transaction. If this occurs,
it could have a negative impact on the performance of the Fund&#146;s common shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may choose or be required to redeem some or all of the preferred shares or prepay any
borrowings. Such redemption or prepayment would likely result in the Fund seeking to terminate
early all or a portion of any swap or cap transaction. Such early termination of a swap could
result in termination payment by or to the Fund. An early termination of a cap could result in a
termination payment to the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The swap market has grown substantially in recent years with a large number of banks and
investment banking firms acting both as principals and as agents utilizing standardized swap
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">documentation. As a result, the swap market has become relatively liquid, however, some swaps
may be considered illiquid. The markets for some types of caps, floors and collars are less
liquid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Structured Products</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in interests in entities organized and operated for the purpose of
restructuring the investment characteristics of certain other investments. This type of
restructuring involves the deposit with or purchase by an entity, such as a corporation or trust,
of specified instruments and the issuance by that entity of one or more classes of securities
(&#147;structured products&#148;) backed by, or representing interests in, the underlying instruments. The
term &#147;structured products&#148; as used herein excludes synthetic convertibles and interest rate
transactions. The cash flow on the underlying instruments may be apportioned among the newly
issued structured products to create securities with different investment characteristics such as
varying maturities, payment priorities and interest rate provisions, and the extent of the payments
made with respect to structured products is dependent on the extent of the cash flow on the
underlying instruments. The Fund may invest in structured products, which represent derived
investment positions based on relationships among different markets or asset classes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may also invest in other types of structured products, including, among others,
baskets of credit default swaps referencing a portfolio of high-yield securities. A structured
product may be considered to be leveraged to the extent its interest rate varies by a magnitude
that exceeds the magnitude of the change in the index rate. Because they are linked to their
underlying markets or securities, investments in structured products generally are subject to
greater volatility than an investment directly in the underlying market or security. Total return
on the structured product is derived by linking return to one or more characteristics of the
underlying instrument. Because certain structured products of the type in which the Fund may
invest may involve no credit enhancement, the credit risk of those structured products generally
would be equivalent to that of the underlying instruments. The Fund may invest in a class of
structured products that is either subordinated or unsubordinated to the right of payment of
another class. Subordinated structured products typically have higher yields and present greater
risks than unsubordinated structured products. Although the Fund&#146;s purchase of subordinated
structured products would have similar economic effect to that of borrowing against the underlying
securities, the purchase will not be deemed to be leverage for purposes of the Fund&#146;s limitations
related to borrowing and leverage.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain issuers of structured products may be deemed to be &#147;investment companies&#148; as defined
in the 1940 Act. As a result, the Fund&#146;s investments in these structured products may be limited
by the restrictions contained in the 1940 Act. Structured products are typically sold in private
placement transactions, and there currently may be no active trading market for structured
products. As a result, certain structured products in which the Fund invests may be deemed
illiquid. The Fund currently does not intend to invest a significant amount of its assets in structured products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>&#147;When-Issued&#148; and Delayed Delivery Securities and Reverse Repurchase Agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may purchase securities on a when-issued or delayed-delivery basis. Although the
payment and interest terms of these securities are established at the time the Fund enters into the
commitment, the securities may be delivered and paid for a month or more after the date of
purchase, when their value may have changed. The Fund makes such commitments only with the
intention of actually acquiring the securities, but may sell the securities before settlement date
if Calamos deems it advisable for investment reasons. The Fund may utilize spot and forward
foreign currency exchange transactions to reduce the risk inherent in fluctuations in the exchange
rate between one currency and another when securities are purchased or sold on a when-issued or
delayed-delivery basis.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may enter into reverse repurchase agreements with banks and securities dealers. A
reverse repurchase agreement is a repurchase agreement in which the Fund is the seller of, rather
than the investor in, securities and agrees to repurchase them at an agreed-upon time and price.
Use of a reverse repurchase agreement may be preferable to a regular sale and later repurchase of
securities because it avoids certain market risks and transaction costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time when the Fund enters into a binding obligation to purchase securities on a
when-issued basis or enters into a reverse repurchase agreement, liquid securities (cash, U.S.
Government securities or other &#147;high-grade&#148; debt obligations) of the Fund having a value at least
as great as the purchase price of the securities to be purchased will be segregated on the books of
the Fund and held by the custodian throughout the period of the obligation. The use of these
investment strategies may increase net asset value fluctuation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Illiquid Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest up to 15% of its managed assets in securities that, at the time of
investment, are illiquid (determined using the Commission&#146;s standard applicable to investment
companies, i.e., securities that cannot be disposed of within 7&nbsp;days in the ordinary course of
business at approximately the value at which the Fund has valued the securities). The Fund may
invest without limitation in securities that have not been registered for public sale, but that are
eligible for purchase and sale by certain qualified institutional buyers. Calamos, under the
supervision of the Board of Trustees, will determine whether securities purchased under Rule&nbsp;144A
are illiquid (that is, not readily marketable) and thus subject to the Fund&#146;s limit on investing no
more than 15% of its managed assets in illiquid securities. Investments in Rule&nbsp;144A Securities
could have the effect of increasing the amount of the Fund&#146;s assets invested in illiquid securities
if qualified institutional buyers are unwilling to purchase these Rule&nbsp;144A Securities. Illiquid
securities may be difficult to dispose of at a fair price at the times when the Fund believes it is
desirable to do so. The market price of illiquid securities generally is more volatile than that
of more liquid securities, which may adversely affect the price that the Fund pays for or recovers
upon the sale of illiquid securities. Illiquid securities are also more difficult to value and
Calamos&#146; judgment may play a greater role in the valuation process. Investment of the Fund&#146;s
assets in illiquid securities may restrict the Fund&#146;s ability to take advantage of market
opportunities. The risks associated with illiquid securities may be particularly acute in
situations in which the Fund&#146;s operations require cash and could result in the Fund borrowing to
meet its short-term needs or incurring losses on the sale of illiquid securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in bonds, corporate loans, convertible securities, preferred stocks and
other securities that lack a secondary trading market or are otherwise considered illiquid.
Liquidity of a security relates to the ability to easily dispose of the security and the price to
be obtained upon disposition of the security, which may be less than would be obtained for a
comparable more liquid security. Such investments may affect the Fund&#146;s ability to realize the net
asset value in the event of a voluntary or involuntary liquidation of its assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Temporary Defensive Investments</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may make temporary investments without limitation when Calamos determines that a
defensive position is warranted. Such investments may be in money market instruments, consisting
of obligations of, or guaranteed as to principal and interest by, the U.S. Government or its
agencies or instrumentalities; certificates of deposit, bankers&#146; acceptances and other obligations
of domestic banks having total assets of at least $500&nbsp;million and that are regulated by the U.S.
Government, its agencies or instrumentalities; commercial paper rated in the highest category by a
recognized rating agency; and repurchase agreements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Repurchase Agreements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of its strategy for the temporary investment of cash, the Fund may enter into
&#147;repurchase agreements&#148; with member banks of the Federal Reserve System or primary dealers (as
designated by the Federal Reserve Bank of New York) in such securities. A repurchase agreement
arises when the Fund purchases a security and simultaneously agrees to resell it to the vendor at
an agreed upon future date. The resale price is greater than the purchase price, reflecting an
agreed upon market rate of return that is effective for the period of time the Fund holds the
security and that is not related to the coupon rate on the purchased security. Such agreements
generally have maturities of no more than seven days and could be used to permit the Fund to earn
interest on assets awaiting long-term investment. The Fund requires continuous maintenance by the
custodian for the Fund&#146;s account in the Federal Reserve/Treasury Book Entry System of collateral in
an amount equal to, or in excess of, the market value of the securities that are the subject of a
repurchase agreement. Repurchase agreements maturing in more than seven days are considered
illiquid securities. In the event of a bankruptcy or other default of a seller of a repurchase
agreement, the Fund could experience both delays in liquidating the underlying security and losses,
including: (a)&nbsp;possible decline in the value of the underlying security during the period while the
Fund seeks to enforce its rights thereto; (b)&nbsp;possible subnormal levels of income and lack of
access to income during this period; and (c)&nbsp;expenses of enforcing its rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Real Estate Investment Funds (&#147;REITs&#148;) and Associated Risk Factors</B>
</DIV>

 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REITs are pooled investment vehicles which invest primarily in income producing real estate or
real estate related loans or interests. REITs are generally classified as equity REITs, mortgage
REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their
assets directly in real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have appreciated in value.
Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from
the collection of interest payments. REITs are not subject to federal
income tax on income and gains distributed to shareholders
provided they comply with the applicable requirements of the Code. The Fund will indirectly bear
its proportionate share of any management and other expenses paid by REITs in which it invests in
addition to the expenses paid by the Fund. Debt securities issued by REITs are, for the most part,
general and unsecured obligations and are subject to risks associated with REITs.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing in REITs involves certain unique risks in addition to those risks associated with
investing in the real estate industry in general. An equity REIT may be affected by changes in the
value of the underlying properties owned by the REIT. A mortgage REIT may be affected by changes
in interest rates and the ability of the issuers of its portfolio mortgages to repay their
obligations. REITs are dependent upon the skills of their managers and are not diversified. REITs
are generally dependent upon maintaining cash flows to repay borrowings and to make distributions
to shareholders and are subject to the risk of default by lessees or borrowers. REITs whose
underlying assets are concentrated in properties used by a particular industry, such as health
care, are also subject to risks associated with such industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REITs (especially mortgage REITs) are also subject to interest rate risks. When interest
rates decline, the value of a REIT&#146;s investment in fixed rate obligations can be expected to rise.
Conversely, when interest rates rise, the value of a REIT&#146;s investment in fixed rate obligations
can be expected to decline. If the REIT invests in adjustable rate mortgage loans the interest
rates on which are reset periodically, yields on a REIT&#146;s investments in such loans will gradually
align themselves to reflect changes in market interest rates. This causes the value of such
investments to fluctuate less dramatically in response to interest rate fluctuations than would
investments in fixed rate obligations.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REITs may have limited financial resources, may trade less frequently and in a limited volume
and may be subject to more abrupt or erratic price movements than larger company securities.
Historically REITs have been more volatile in price than the larger capitalization stocks included
in Standard&nbsp;&#038; Poor&#146;s 500 Stock Index.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other Investment Companies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in the securities of other investment companies to the extent that such
investments are consistent with the Fund&#146;s investment objective and policies and permissible under
the Investment Company Act of 1940, as amended (the &#147;1940 Act&#148;). Under the 1940 Act, the Fund may
not acquire the securities of other domestic or non-U.S. investment companies if, as a result,
(i)&nbsp;more than 10% of the Fund&#146;s total assets would be invested in securities of other investment
companies, (ii)&nbsp;such purchase would result in more than 3% of the total outstanding voting
securities of any one investment company being held by the Fund, or (iii)&nbsp;more than 5% of the
Fund&#146;s total assets would be invested in any one investment company. These limitations do not
apply to the purchase of shares of money market funds or any investment company in connection with
a merger, consolidation, reorganization or acquisition of substantially all the assets of another
investment company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund, as a holder of the securities of other investment companies, will bear its pro rata
portion of the other investment companies&#146; expenses, including advisory fees. These expenses are
in addition to the direct expenses of the Fund&#146;s own operations.
</DIV>
<DIV align="left">
<A name="136"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INVESTMENT RESTRICTIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following are the Fund&#146;s fundamental investment restrictions. These restrictions may not
be changed without the approval of the holders of a majority of the Fund&#146;s outstanding voting
securities (which for this purpose and under the 1940 Act means the lesser of (i)&nbsp;67% of the common
shares represented at a meeting at which more than 50% of the outstanding common shares are
represented or (ii)&nbsp;more than 50% of the outstanding common shares). As long as preferred shares
are outstanding, the investment restrictions cannot be changed without the approval of a majority
of the outstanding common and preferred shares, voting together as a class, and the approval of a
majority of the outstanding preferred shares, voting separately by class.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may not:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Issue senior securities, except as permitted by the 1940 Act
and the rules and interpretive positions of the Commission thereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Borrow money, except as permitted by the 1940 Act and the rules
and interpretive positions of the Commission thereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Invest in real estate, except that the Fund may invest in
securities of issuers that invest in real estate or interests therein,
securities that are secured by real estate or interests therein, securities of
real estate investment funds and mortgage-backed securities.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Make loans, except by the purchase of debt obligations, by
entering into repurchase agreements or through the lending of portfolio
securities and as otherwise permitted by the 1940 Act and the rules and
interpretive positions of the Commission thereunder.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Invest in physical commodities or contracts relating to
physical commodities.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Act as an underwriter, except as it may be deemed to be an
underwriter in a sale of securities held in its portfolio.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Make any investment inconsistent with the Fund&#146;s classification
as a diversified investment company under the 1940 Act and the rules and
interpretive positions of the Commission thereunder.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(8)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Concentrate its investments in securities of companies in any
particular industry as defined in the 1940 Act and the rules and interpretive
positions of the SEC thereunder.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All other investment policies of the Fund are considered non-fundamental and may be changed by
the Board of Trustees without prior approval of the Fund&#146;s outstanding voting shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently under the 1940 Act, the Fund is not permitted to issue preferred shares unless
immediately after such issuance the net asset value of the Fund&#146;s portfolio is at least 200% of the
liquidation value of the outstanding preferred shares (i.e., such liquidation value may not exceed
50% of the value of the Fund&#146;s total assets). In addition, currently under the 1940 Act, the Fund
is not permitted to declare any cash dividend or other distribution on its common shares unless, at
the time of such declaration, the net asset value of the Fund&#146;s portfolio (determined after
deducting the amount of such dividend or distribution) is at least 200% of such liquidation value
plus any senior securities representing indebtedness. Currently under the 1940 Act, the Fund is
not permitted to incur indebtedness unless immediately after such borrowing the Fund has asset
coverage of at least 300% of the aggregate outstanding principal balance of indebtedness (i.e.,
such indebtedness may not exceed 33 1/3% of the value of the Fund&#146;s total assets). Additionally,
currently under the 1940 Act, the Fund may not declare any dividend or other distribution upon any
class of its shares, or purchase any such shares, unless the aggregate indebtedness of the Fund
has, at the time of the declaration of any such dividend or distribution or at the time of any such
purchase, an asset coverage of at least 300% after deducting the amount of such dividend,
distribution, or purchase price, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently under the 1940 Act, the Fund is not permitted to lend money or property to any
person, directly or indirectly, if such person controls or is under common control with the Fund,
except for a loan from the Fund to a company which owns all of the outstanding securities of the
Fund, except directors&#146; qualifying shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, under interpretive positions of the SEC, the Fund may not have on loan at any time
securities representing more than one third of its total assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently under the 1940 Act, a &#147;senior security&#148; does not include any promissory note or
evidence of indebtedness where such loan is for temporary purposes only and in an amount not
exceeding 5% of the value of the total assets of the issuer at the time the loan is made. A loan
is presumed to be for temporary purposes if it is repaid within sixty days and is not extended or
renewed.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, the Fund would be deemed to &#147;concentrate&#148; in a particular industry if it invested
25% or more of its total assets in that industry.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently under the 1940 Act, a &#147;diversified company&#148; means a management company which meets
the following requirements: at least 75% of the value of its total assets is represented by cash
and cash items (including receivables), government securities, securities of other investment
companies, and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">other securities for the purposes of this calculation limited in respect of any one issuer to
an amount not greater in value than 5% of the value of the total assets of such management company
and not more than 10% of the outstanding voting securities of such issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the 1940 Act, the Fund may invest up to 10% of its total assets in the aggregate in
shares of other investment companies and up to 5% of its total assets in any one investment
company, provided the investment does not represent more than 3% of the voting stock of the
acquired investment company at the time such shares are purchased. These limitations, however, do
not apply to the purchase of shares of money market funds. As a shareholder in any investment
company, the Fund will bear its ratable share of that investment company&#146;s expenses, and would
remain subject to payment of the Fund&#146;s advisory fees and other expenses with respect to assets so
invested. Holders of common shares would therefore be subject to duplicative expenses to the
extent the Fund invests in other investment companies. In addition, the securities of other
investment companies may also be leveraged and will therefore be subject to the same leverage risks
described herein and in the prospectus. As described in the prospectus in the section entitled
&#147;Risks,&#148; the net asset value and market value of leveraged shares will be more volatile and the
yield to shareholders will tend to fluctuate more than the yield generated by unleveraged shares.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, to comply with federal income tax requirements for qualification as a regulated
investment company, the Fund&#146;s investments will be limited by both an income and an asset test.
See &#147;Federal Income Tax Matters.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a non-fundamental policy, the Fund may not issue preferred shares, borrow money or issue
debt securities in an aggregate amount exceeding 38% of the Fund&#146;s total assets.
</DIV>
<DIV align="left">
<A name="137"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>MANAGEMENT OF THE FUND</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trustees and Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund&#146;s Board of Trustees provides broad oversight over the Fund&#146;s affairs. The officers
of the Fund are responsible for the Fund&#146;s operations. The Fund&#146;s Trustees and officers are listed
below, together with their age, positions held with the Fund, term of office and length of service
and principal occupations during the past five years. Asterisks indicates those Trustees who are
interested persons of the Fund within the meaning of the 1940 Act, and they are referred to as
Interested Trustees. Trustees who are not interested persons of the Fund are referred to as
Independent Trustees. Each of the Trustees serves as a Trustee of other investment companies
(17&nbsp;U. S. registered investment portfolios) for which Calamos serves as investment adviser
(collectively, the &#147;Calamos Funds&#148;). The address for all Independent and Interested Trustees and
all officers of the Fund is 2020&nbsp;Calamos Court, Naperville, Illinois 60563.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trustees Who Are Interested Persons of the Fund:</B>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Position(s) with</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Portfolios</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Principal Occupation(s) and Other</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name and Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Fund</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Overseen</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Directorships</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John&nbsp;P. Calamos, Sr., 67*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" nowrap>Trustee and
President
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman, CEO, and Co-Chief
Investment Officer, Calamos
Asset Management, Inc. (&#147;CAM&#148;),
Calamos Holdings LLC (&#147;CHLLC&#148;)
and Calamos Advisors LLC and its
predecessor (&#147;Calamos
Advisors&#148;), and President and
Co-Chief Investment Officer,
Calamos Financial Services LLC
and its predecessor (&#147;CFS&#148;);
Director, CAM</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-26<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Trustees Who Are Not Interested Persons of the Fund:</B>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Position(s) with</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Portfolios</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Principal Occupation(s) and Other</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name and Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Fund</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Overseen</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Directorships</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Joe&nbsp;F.
Hanauer, 70
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Private investor; Director, MAF
Bancorp (bank holding company);
Chairman and Director, Move,
Inc. (internet provider of real
estate information and
products); Director, Combined
Investments, L.P. (investment
management)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Weston&nbsp;W. Marsh, 57
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Of Counsel, Partner, Freeborn&nbsp;&#038; Peters (law firm)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John&nbsp;E. Neal, 57
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Private investor; Managing
Director, Banc One Capital
Markets, Inc. (investment
banking) (2000-2004); Director,
Focused Health Services (private
disease management company),
Equity Residential
(publicly-owned REIT), Ranir LLC
(oral products company) and CBA
Commercial (commercial mortgage
securitization company);
Partner, Private Perfumery LLC
(private label perfume company)
and Linden LLC (health care
private equity)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William&nbsp;R. Rybak, 56
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Private investor; formerly
Executive Vice President and
Chief Financial Officer, Van
Kampen Investments, Inc. and
subsidiaries (investment
manager); Director, Howe Barnes
Hoefer Arnett, Inc. (investment
services firm) and
PrivateBancorp, Inc. (bank
holding company); Trustee, JNL
Series&nbsp;Trust, JNL Investors
Series&nbsp;Trust, JNL Variable Fund
LLC and JNLNY Variable Fund&nbsp;I
LLC**</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stephen&nbsp;B. Timbers, 63
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Private investor; formerly Vice
Chairman, Northern Trust
Corporation (bank holding
company); formerly President and
Chief Executive Officer,
Northern Trust Investments, N.
A. (investment manager);
formerly President, Northern
Trust Global Investments, a
division of Northern Trust
Corporation and Executive Vice
President, The Northern Trust
Corporation; formerly, Director,
Northern Trust Securities, Inc.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">David&nbsp;D. Tripple, 63
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Trustee<BR>
(since 2006)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Private investor; Trustee,
Century Shares Trust and Century
Small Cap Select Fund***</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp; Calamos is an &#147;interested person&#148; of the Trust as defined in the 1940 Act because he is
an affiliate of Calamos Advisors and Calamos Financial Services LLC.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Overseeing 94 portfolios in fund complex.<BR></TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">***</TD>
    <TD>&nbsp;</TD>
    <TD>Overseeing two portfolios in fund complex.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>

    <TD colspan="2">The address of the Trustees is 2020&nbsp;Calamos Court, Naperville, Illinois 60563.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->S-27<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Officers</I>. The preceding table gives information about Mr.&nbsp;John Calamos, who is president of
the Fund. The following table sets forth each other officer&#146;s name and age as of the date of this
statement of additional information, position with the Fund and date first appointed to that
position, and principal occupation(s) during the past five years. Each officer serves until his or
her successor is chosen and qualified or until his or her resignation or removal by the board of
trustees.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="24%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Principal Occupation(s) and</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name and Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position(s) with Fund</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Other&nbsp;Directorships</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->


<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nimish&nbsp;S. Bhatt, 44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President and Chief Financial Officer<BR>
(since 2008)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and
Director of Operations, CAM,
CHLLC, Calamos Advisors and
CFS (since 2004); Treasurer of the Fund (2005-2008); Senior
Vice President, Alternative
Investments and Tax
Services, The BISYS Group,
Inc., prior thereto</TD>
</TR>


<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nick&nbsp;P. Calamos, 46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President (since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Executive Vice
President and Co-Chief
Investment Officer, CAM,
CHLLC, Calamos Advisors and
CFS</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Patrick&nbsp;H.
Dudasik, 52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President (since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President,
Chief Financial Officer,
Chief Operating Officer and
Treasurer, CAM and CHLLC
(since 2004), Calamos
Advisors and CFS (2001-2005)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cheryl
L. Hampton, 38
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Treasurer (since 2007)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Calamos Advisors (since March 2007); Tax Director, PricewaterhouseCoopers LLP
(1999 &#150; 2007)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stathy
Darcy, 41
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Secretary (since 2007)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Associate Counsel,
Calamos Advisors (since 2006); prior
thereto, Partner, Chapman and Cutler LLP
(law firm)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mark&nbsp;J. Mickey, 56
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Compliance Officer<BR>
(since inception)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Compliance Officer,
Calamos Funds (since 2005)
and Chief Compliance
Officer, Calamos Advisors
(2005-2006); Director of
Risk Assessment and Internal
Audit, Calamos Advisors
(2003-2005); President, Mark
Mickey Consulting
(2002-2003)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>

    <TD colspan="2">The address of each officer is 2020 Calamos Court, Naperville, Illinois 60563.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Board of Trustees consists of seven members. In accordance with the Fund&#146;s
Agreement and Declaration of Trust, the Board of Trustees is divided into three classes of
approximately equal size. The terms of the trustees of the different classes are staggered. The
terms of John P. Calamos, Weston W. Marsh and William R. Rybak will expire at the annual meeting of
shareholders in 2008. The terms of Joe F. Hanauer, John E. Neal and David D. Tripple will expire
at the annual meeting of shareholders in 2009. The term of Stephen B. Timbers will expire at the
annual meeting of shareholders in 2010. Messrs.&nbsp;Rybak and Timbers are the Trustees who represent
the holders of preferred shares. Such classification of the Trustees may prevent the replacement
of a majority of the Trustees for up to a two year period. Each of the Fund&#146;s officers serves
until his or her successor is chosen and qualified or until his or her resignation or removal by
the Board of Trustees.
</DIV>





<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Committees of the Board of Trustees</I>. The Fund&#146;s Board of Trustees currently has four standing
committees:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Executive Committee</U>. Messrs.&nbsp;John Calamos and Stephen&nbsp;B. Timbers are members of the
Executive Committee, which has authority during intervals between meetings of the Board of Trustees
to exercise the powers of the Board, with certain exceptions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Audit Committee</U>. Stephen&nbsp;B. Timbers, Joe&nbsp;F. Hanauer, John&nbsp;E. Neal, William&nbsp;R. Rybak,
Weston&nbsp;W. Marsh and David&nbsp;D. Tripple, each a non-interested Trustee, serve on the Audit Committee.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-28<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit Committee approves the selection of the independent auditors to the Trustees,
approves services to be rendered by the auditors, monitors the auditors&#146; performance, reviews the
results of the Fund&#146;s audit, determines whether to recommend to the Board that the Fund&#146;s audited
financial statements be included in the Fund&#146;s annual report and responds to other matters deemed
appropriate by the Board of Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governance Committee</U>. Stephen&nbsp;B. Timbers, Joe&nbsp;F. Hanauer, John&nbsp;E. Neal, William&nbsp;R.
Rybak, Weston&nbsp;W. Marsh and David&nbsp;D. Tripple, each a non-interested Trustee, serve on the Governance
Committee. The Governance Committee oversees the independence and effective functioning of the
Board of Trustees and endeavors to be informed about good practices for fund boards. The members
of the Governance Committee make recommendations to the Board of Trustees regarding candidates for
election as non interested Trustees. The Governance Committee will consider shareholder recommendations regarding potential
candidates for nomination as Trustees properly submitted to the Governance Committee for its
consideration. A Fund shareholder who wishes to nominate a candidate to the Fund&#146;s Board of
Trustees must submit any such recommendation in writing via regular mail to the attention of the
Fund&#146;s Secretary, at the address of the Fund&#146;s principal executive offices. The shareholder
recommendation must include:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number and class of all Fund shares owned beneficially and of record by the
nominating shareholder at the time the recommendation is submitted and the dates on which such shares
were acquired, specifying the number of shares owned beneficially;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a full listing of the proposed candidate&#146;s education, experience (including knowledge of the investment company industry, experience as a director or senior officer of public or
private
companies, and directorships on other boards of other registered investment companies),
current employment, date of birth, business and residence address, and the names and
addresses of at least three professional references;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>information as to whether the candidate is, has been or may be an &#147;interested
person&#148; (as such term is defined in the 1940 Act) of the Fund, Calamos or any of its affiliates, and, if believed
not to be or have been an &#147;interested person,&#148; information regarding the candidate that will be
sufficient for the Committee to make such determination;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the written and signed consent of the candidate to be named as a nominee and to serve as a Trustee of the Fund, if elected;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a description of all arrangements or understandings between the nominating shareholder, the candidate and/or any other person or persons (including their names) pursuant to which
the shareholder recommendation is being made, and if none, so specify;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the class or series and number of all shares of the Fund owned of record or
beneficially by the candidate, as reported by the candidate; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>such other information that would be helpful to the Governance Committee in evaluating the candidate.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Governance Committee may require the nominating shareholder to furnish other information
it may reasonably require or deem necessary to verify any information furnished pursuant to the
procedures delineated above or to determine the qualifications and eligibility of the candidate
proposed by the nominating shareholder to serve as a Trustee. If the nominating shareholder fails
to provide such additional information in writing within seven days of receipt of a written request
from the Governance Committee, the recommendation of such candidate as a nominee will be deemed not
properly submitted for consideration, and the Governance Committee is not required to consider such
candidate. During periods when the Governance Committee is not actively recruiting new Trustees,
shareholder recommendations will be kept on file until active recruitment is under way. After
consideration of a shareholder recommendation, the Governance Committee may dispose of the
shareholder recommendation.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Dividend Committee</U>. Mr.&nbsp;Calamos serves as the sole member of the dividend committee.
The dividend committee is authorized to declare distributions on the Fund&#146;s shares including, but
not limited to, regular dividends, special dividends and short- and long-term capital gains
distributions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Valuation Committee</U>. David&nbsp;D. Tripple, Stephen&nbsp;B. Timbers and Weston&nbsp;W. Marsh, each a
non-interested Trustee, serve on the Valuation Committee. The Valuation Committee oversees the
implementation of the valuation procedures adopted by the Board of Trustees. The members of the
Valuation Committee make recommendations to the Board of Trustees regarding valuation matters
relating to the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the above committees, there is a Board of Trustees directed pricing committee
comprised of officers of the Fund and employees of Calamos.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table identifies the number of meetings the Board of Trustees and each committee held during the fiscal year ended October 31, 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt">
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="center"><B>Number of Meetings During Fiscal</b></TD>
</TR>


<TR style="font-size: 8pt">
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD align="center"><b>Year Ended October 31, 2007</b></TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
<TD>Board of Trustees</TD>
<TD>&nbsp;</TD>
<TD align="center">6</TD>

</TR>
<TR valign="bottom">
<TD>Executive Committee</TD>
<TD>&nbsp;</TD>
<TD align="center">0</TD>
</tr>
<TR valign="bottom" style="background: #cceeff">
<TD>Audit Committee</TD>
<TD>&nbsp;</TD>
<TD align="center">5</TD>
</tr>

<TR valign="bottom">
<TD>Governance Committee</TD>
<TD>&nbsp;</TD>
<TD align="center">2</TD>
</tr>

<TR valign="bottom" style="background: #cceeff">
<TD>Dividend Committee</TD>
<TD>&nbsp;</TD>
<TD align="center">0</TD>
</tr>


<TR>
<TD>Valuation Committee</TD>
<TD>&nbsp;</TD>
<TD align="center">3</TD>
</tr>



<tr style="font-size: 0pt">
<td>                                                        </td>
</tr>




</TABLE>
</DIV>






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Agreement and Declaration of Trust provides that the Fund will indemnify the
Trustees and officers against liabilities and expenses incurred in connection with any claim in
which they may be involved because of their offices with the Fund, unless it is determined in the
manner specified in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the Fund or that such
indemnification would relieve any officer or Trustee of any liability to the Fund or its
shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of
his or her duties.
</DIV>
 <DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation of Officers and Trustees</I>. The Fund pays no salaries or compensation to any of
its officers or to the Trustees who are affiliated persons of Calamos. The following table sets
forth certain information with respect to the compensation paid to each Trustee by the Fund and the
Calamos Fund Complex as a group. Compensation from the Fund is for the current calendar year and
is estimated. Total compensation from the Calamos Fund Complex as a group is for the &#091;calendar
year ended December&nbsp;31, 2007&#093;.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="59%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Estimated Aggregate</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Compensation From</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name of Trustee</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Compensation From Fund</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Calamos Fund Complex</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP><B>*</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;P. Calamos Sr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joe&nbsp;F. Hanauer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,284&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">131,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weston&nbsp;W. Marsh</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,552&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">146,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;E. Neal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,695&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">154,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William&nbsp;R. Rybak</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,517&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">144,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steve&nbsp;B. Timbers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,265&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">186,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David&nbsp;D. Tripple</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,731&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">156,000</TD>
    <TD>&nbsp;</TD>
</TR><tr style="font-size: 6pt">
<td>                                                        </td></tr>

<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes fees that may have been deferred during the year pursuant to a deferred
compensation plan with Calamos Investment Trust. Deferred amounts are treated as though such
amounts have been invested and reinvested in shares of one or more of the portfolios of the
Calamos Investment Trust selected by the Trustee.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->S-29<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>The Calamos Fund Complex consists of seven investment companies and each applicable series
thereunder including the Fund, Calamos Investment Trust, Calamos Advisors Trust, Calamos
Convertible Opportunities and Income Fund, Calamos Convertible and High Income Fund, Calamos
Strategic Total Return Fund and Calamos Global Dynamic Income Fund.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has adopted a deferred compensation plan (the &#147;Plan&#148;). Under the Plan, a Trustee who
is not an &#147;interested person&#148; of Calamos and who has elected to participate in the Plan
(&#147;participating Trustees&#148;) may defer receipt of all or a portion of his compensation from Fund in
order to defer payment of income taxes or for other reasons. The deferred compensation payable to
the participating Trustee is credited to Trustee&#146;s deferral account as of the business day such
compensation would have been paid to the Trustee. The value of a Trustee&#146;s deferred compensation
account at any time is equal to what would be the value if the amounts credited to the account had
instead been invested in shares of one or more of the portfolios of Calamos Investment Trust as
designated by the Trustee. Thus, the value of the account increases with contributions to the
account or with increases in the value of the measuring shares, and the value of the account
decreases with withdrawals from the account or with declines in the value of the measuring shares.
If a participating trustee retires, the Trustee may elect to receive payments under the plan in a
lump sum or in equal installments over a period of five years. If a participating Trustee dies,
any amount payable under the Plan will be paid to the Trustee&#146;s beneficiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Ownership of Shares of the Fund and Other Calamos Funds</I>. The following table indicates the
value of shares that each Trustee beneficially owns in the Fund and the Calamos Fund Complex in the
aggregate. The value of shares of the Calamos Funds is determined on the basis of the net asset
value of the class of shares held as of December&nbsp;31, 2007. The value of the shares held, are
stated in ranges in accordance with the requirements of the Commission. The table reflects the
Trustee&#146;s beneficial ownership of shares of the Calamos Fund Complex. Beneficial ownership is
determined in accordance with the rules of the SEC.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>

    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Aggregate Dollar Range of Equity</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities in all Registered</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollar Range of Equity</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Investment Companies in the</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name of Trustee</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Securities&nbsp;in the Fund</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Calamos Funds</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interested Trustees:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-Interested Trustees:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Joe&nbsp;F. Hanauer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">None</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weston&nbsp;W. Marsh</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">None</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;E. Neal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">William&nbsp;R. Rybak</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">None</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stephen&nbsp;B. Timbers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David&nbsp;D. Tripple</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">$50,001 &#150; $100,000</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Over $100,000</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Code of Ethics</I>. The Fund and Calamos have adopted a code of ethics under Rule&nbsp;17j-1 of the
1940 Act which is applicable to officers, directors/Trustees and designated employees of Calamos
and CFS. Employees of Calamos and CFS are permitted to make personal securities transactions,
including transactions in securities that the Fund may purchase, sell or hold, subject to
requirements and restrictions set forth in the code of ethics of Calamos and CFS. The code of
ethics contains provisions and requirements designed to identify and address certain conflicts of
interest between personal investment activities of Calamos and CFS employees and the interests of
investment advisory clients such as the Fund. Among other things, the code of ethics prohibits
certain types of transactions absent prior approval, imposes time periods during which personal
transactions may not be made in certain securities, and requires the submission of duplicate broker
confirmations and statements and quarterly reporting of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-30<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">securities transactions. Additional restrictions apply to portfolio managers, traders,
research analysts and others involved in the investment advisory process. Exceptions to these and
other provisions of the code of ethics may be granted in particular circumstances after review by
appropriate personnel. Text only versions of the code of ethics can be viewed online or downloaded
from the EDGAR Database on the SEC&#146;s internet web site at <U>www.sec.gov</U>. You may review and
copy the code of ethics by visiting the SEC&#146;s Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 202-551-8090. In addition, copies of the code of ethics may be obtained, after mailing the
appropriate duplicating fee, by writing to the SEC&#146;s Public Reference Section, Washington,
DC 20549-0102 or by e-mail request at <U>publicinfo@sec.gov.</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Proxy Voting Procedures</I>. The Fund has delegated proxy voting responsibilities to Calamos,
subject to the Board of Trustees&#146; general oversight. The Fund expects Calamos to vote proxies
related to the Fund&#146;s portfolio securities for which the Fund has voting authority consistent with
the Fund&#146;s best economic interests. Calamos has adopted its own Proxy Voting Policies and
Procedures (&#147;Policies&#148;). The Policies address, among other things, conflicts of interest that may
arise between the interests of the Fund, and the interests of the adviser and its affiliates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the Policies used by Calamos in voting proxies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To assist it in voting proxies, Calamos has established a Committee comprised of members of
its Portfolio Management and Research Departments. The Committee and/or its members will vote
proxies using the following guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, if Calamos believes that a company&#146;s management and board have interests
sufficiently aligned with the Fund&#146;s interest, Calamos will vote in favor of proposals recommended
by a company&#146;s board. More specifically, Calamos seeks to ensure that the board of directors of a
company is sufficiently aligned with security holders&#146; interests and provides proper oversight of
the company&#146;s management. In many cases this may be best accomplished by having a majority of
independent board members. Although Calamos will examine board member elections on a case-by-case
basis, it will generally vote for the election of directors that would result in a board comprised
of a majority of independent directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of the enormous variety and complexity of transactions that are presented to
shareholders, such as mergers, acquisitions, reincorporations, adoptions of anti-takeover measures
(including adoption of a shareholder rights plan, requiring supermajority voting on particular
issues, adoption of fair price provisions, issuance of blank check preferred stocks and the
creation of a separate class of stock with unequal voting rights), changes to capital structures
(including authorizing additional shares, repurchasing stock or approving a stock split), executive
compensation and option plans, that occur in a variety of industries, companies and market cycles,
it is extremely difficult to foresee exactly what would be in the best interests of the Fund in all
circumstances. Moreover, voting on such proposals involves considerations unique to each
transaction. Accordingly, Calamos will vote on a case-by-case basis on proposals presenting these
transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally, Calamos has established procedures to help resolve conflicts of interests that might
arise when voting proxies for the Fund. These procedures provide that the Committee, along with
Calamos&#146; Legal and Compliance Departments, will examine conflicts of interests with the Fund of
which Calamos is aware and seek to resolve such conflicts in the best interests of the Fund,
irrespective of any such conflict. If a member of the Committee has a personal conflict of
interest, that member will refrain from voting and the remainder of the Committee will determine
how to vote the proxy solely on the investment
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-31<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">merits of any proposal. The Committee will then memorialize the conflict and the procedures
used to address the conflict.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is required to file with the SEC its complete proxy voting record for the
twelve-month period ending June&nbsp;30, by no later than August&nbsp;31 of each year. The Fund&#146;s proxy
voting record for the most recent twelve-month period ending June&nbsp;30 is available by August&nbsp;31 of
each year (1)&nbsp;on the SEC&#146;s website at www.sec.gov and (2)&nbsp;without charge, upon request, by calling
800-582-6959.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may obtain a copy a Calamos&#146; Policies by calling 800.582.6959, by visiting the Fund&#146;s
website at www.calamos.com, by writing Calamos at: Calamos Investments, Attn: Client Services,
2020&nbsp;Calamos Court, Naperville, IL 60563, and on the SEC&#146;s website at <U>www.sec.gov</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Investment Adviser and Investment Management Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the overall authority of the board of trustees, Calamos provides the Fund with
investment research, advice and supervision and furnishes continuously an investment program for
the Fund. In addition, Calamos furnishes for use of the Fund such office space and facilities as
the Fund may require for its reasonable needs and supervises the business and affairs of the Fund
and provides the following other services on behalf of the Fund and not provided by persons not a
party to the investment management agreement: (i)&nbsp;preparing or assisting in the preparation of
reports to and meeting materials for the Trustees; (ii)&nbsp;supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of, accounting agents,
custodians, depositories, transfer agents and pricing agents, accountants, attorneys, printers,
underwriters, brokers and dealers, insurers and other persons in any capacity deemed to be
necessary or desirable to Fund operations; (iii)&nbsp;assisting in the preparation and making of filings
with the SEC and other regulatory and self-regulatory organizations, including, but not
limited to, preliminary and definitive proxy materials, amendments to the Fund&#146;s registration
statement on Form N-2 and semi-annual reports on Form N-SAR and Form N-CSR; (iv)&nbsp;overseeing the
tabulation of proxies by the Fund&#146;s transfer agent; (v)&nbsp;assisting in the preparation and filing of
the Fund&#146;s federal, state and local tax returns; (vi)&nbsp;assisting in the preparation and filing of
the Fund&#146;s federal excise tax return pursuant to Section&nbsp;4982 of the Code; (vii)&nbsp;providing
assistance with investor and public relations matters; (viii)&nbsp;monitoring the valuation of portfolio
securities and the calculation of net asset value; (ix)&nbsp;monitoring the registration of shares of
beneficial interest of the Fund under applicable federal and state securities laws; (x)&nbsp;maintaining
or causing to be maintained for the Fund all books, records and reports and any other information
required under the 1940 Act, to the extent that such books, records and reports and other
information are not maintained by the Fund&#146;s custodian or other agents of the Fund; (xi)&nbsp;assisting
in establishing the accounting policies of the Fund; (xii)&nbsp;assisting in the resolution of
accounting issues that may arise with respect to the Fund&#146;s operations and consulting with the
Fund&#146;s independent accountants, legal counsel and the Fund&#146;s other agents as necessary in
connection therewith; (xiii)&nbsp;reviewing the Fund&#146;s bills; (xiv)&nbsp;assisting the Fund in determining
the amount of dividends and distributions available to be paid by the Fund to its shareholders,
preparing and arranging for the printing of dividend notices to shareholders, and providing the
transfer and dividend paying agent, the custodian, and the accounting agent with such information
as is required for such parties to effect the payment of dividends and distributions; and
(xv)&nbsp;otherwise assisting the Fund as it may reasonably request in the conduct of the Fund&#146;s
business, subject to the direction and control of the Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the investment management agreement, the Fund pays to Calamos a fee based on the average
weekly managed assets that is computed weekly and paid on a monthly basis. The fee paid by the
Fund is at the annual rate of 1.00% of managed assets. Because the management fees paid to
Calamos is based upon a percentage of the Fund&#146;s managed assets, fees paid to Calamos are higher
when the Fund is leveraged; thus, Calamos will have an incentive to use leverage. Calamos intends
to use leverage only when it believes it will serve the best interests of the Fund&#146;s shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of its investment management agreement with the Fund, except for the services
and facilities provided by Calamos as set forth therein, the Fund shall assume and pay all expenses
for all other Fund operations and activities and shall reimburse Calamos for any such expenses
incurred by
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-32<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Calamos. The expenses borne by the Fund shall include, without limitation: (a)&nbsp;organization
expenses of the Fund (including out-of-pocket expenses, but not including Calamos&#146; overhead or
employee costs); (b)&nbsp;fees payable to Calamos; (c)&nbsp;legal expenses; (d)&nbsp;auditing and accounting
expenses; (e)&nbsp;maintenance of books and records that are required to be maintained by the Fund&#146;s
custodian or other agents of the Fund; (f)&nbsp;telephone, telex, facsimile, postage and other
communications expenses; (g)&nbsp;taxes and governmental fees; (h)&nbsp;fees, dues and expenses incurred by
the Fund in connection with membership in investment company trade organizations and the expense of
attendance at professional meetings of such organizations; (i)&nbsp;fees and expenses of accounting
agents, custodians, subcustodians, transfer agents, dividend disbursing agents and registrars;
(j)&nbsp;payment for portfolio pricing or valuation services to pricing agents, accountants, bankers and
other specialists, if any; (k)&nbsp;expenses of preparing share certificates; (l)&nbsp;expenses in connection
with the issuance, offering, distribution, sale, redemption or repurchase of securities issued by
the Fund; (m)&nbsp;expenses relating to investor and public relations provided by parties other than
Calamos; (n)&nbsp;expenses and fees of registering or qualifying shares of beneficial interest of the
Fund for sale; (o)&nbsp;interest charges, bond premiums and other insurance expenses; (p)&nbsp;freight,
insurance and other charges in connection with the shipment of the Fund&#146;s portfolio securities;
(q)&nbsp;the compensation and all expenses (specifically including travel expenses relating to Fund
business)&nbsp;of Trustees, officers and employees of the Fund who are not affiliated persons of
Calamos; (r)&nbsp;brokerage commissions or other costs of acquiring or disposing of any portfolio
securities of the Fund; (s)&nbsp;expenses of printing and distributing reports, notices and dividends to
shareholders; (t)&nbsp;expenses of preparing and setting in type, printing and mailing prospectuses and
statements of additional information of the Fund and supplements thereto; (u)&nbsp;costs of stationery;
(v)&nbsp;any litigation expenses; (w)&nbsp;indemnification of Trustees and officers of the Fund; (x)&nbsp;costs of
shareholders&#146; and other meetings; (y)&nbsp;interest on borrowed money, if any; and (z)&nbsp;the fees and
other expenses of listing the Fund&#146;s shares on the New York Stock Exchange or any other national
stock exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the fiscal years ended October 31,
2005, October 31, 2006, October 31, 2007, the Fund paid $15,685, $1,715,361,
and $2,016,530, respectively, in advisory  fees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
investment management agreement had an initial term ending August&nbsp;1, 2006 and continues in
effect from year to year thereafter so long as such continuation is approved at least annually by
(1)&nbsp;the board of trustees or the vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Fund, and (2)&nbsp;a majority of the trustees who are not interested
persons of any party to the investment management agreement, cast in person at a meeting called for
the purpose of voting on such approval. The investment management agreement may be terminated at
any time, without penalty, by either the Fund or Calamos upon 60&nbsp;days&#146; written notice, and is
automatically terminated in the event of its assignment as defined in the 1940 Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A discussion regarding the basis for the Board of Trustees&#146; decision to approve the renewal of
the Investment Management Agreement is available in the Fund&#146;s Annual Report to shareholders for
the fiscal year ended October&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The use of the name &#147;Calamos&#148; in the name of the Fund is pursuant to licenses granted by
Calamos, and the Fund has agreed to change the names to remove those references if Calamos ceases
to act as investment adviser to the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Managers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calamos employs a team approach to portfolio management, with teams comprised generally of the
Co-Chief Investment Officers (the &#147;Co-CIOs&#148;), senior strategy analysts, intermediate analysts and
junior analysts. The Co-CIOs, directors and senior strategy analysts are supported by and
lead a team of investment professionals whose valuable contributions create a synergy of expertise
that can be
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-33<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">applied across many different investment strategies. John&nbsp;P. Calamos, Sr., Co-CIO of Calamos,
generally focuses on the top-down approach of diversification by industry sector and macro-level
investment themes, Nick&nbsp;P. Calamos, Co-CIO of Calamos, also focuses on the top-down approach of
diversification by industry sector and macro-level investment themes and, in addition, focuses on
the bottom-up approach and corresponding research and analysis. John&nbsp;P. Calamos,&nbsp;Jr., John
Hillenbrand, Steve&nbsp;Klouda, Jeff Scudieri and Jon Vacko are each senior strategy analysts, and
Matthew Toms is Director of Fixed Income. The Co-CIOs, directors and senior strategy analysts are
referred to collectively as &#147;Team Leaders.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Team Leaders also have responsibility for the day-to-day management of accounts other than
the Fund. Information regarding these other accounts is set forth below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Team Leaders are responsible for managing the Fund and other accounts, including
separate accounts and unregistered funds.
</DIV>
<DIV align="center">





<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<tr><td>                                                       </td></tr>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="center" colspan="25" style="border-bottom: 1px solid #000000"><B>Number of Other Accounts Managed and Assets by Account Type as of October&nbsp;31, 2007*</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Registered Investment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Other Pooled Investment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Portfolio Manager</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Companies</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Vehicles</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Other Accounts</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">35,149,492,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">297,610,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nick P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">35,149,492,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">297,610,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John P. Calamos, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">34,678,281,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">297,610,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John Hillenbrand</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">33,129,883,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">242,155,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steve Klouda</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">33,129,883,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">242,155,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeff Scudieri</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">33,129,883,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">242,155,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jon Vacko</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">33,129,883,529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">242,155,204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,371</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">11,308,779,683</TD>
    <TD>&nbsp;</TD>
</TR>

<tr><td>                                                        </td></tr>
<tr><td>                                                       </td></tr>

<tr><td>&nbsp;</td></tr>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="25" style="border-bottom: 1px solid #000000"><B>Number of Accounts Managed and Assets for Which Advisory Fee is Performance Based as of October&nbsp;31, 2007*</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Registered Investment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Other Pooled Investment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Portfolio Manager</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Companies</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Vehicles</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Other Accounts</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Accounts</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Assets</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">148,730,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nick P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">148,730,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John P. Calamos, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">148,730,762</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John Hillenbrand</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">93,275,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steve Klouda</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">93,275,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeff Scudieri</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"></TD>
    <TD align="right">93,275,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jon Vacko</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">565,845,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">93,275,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<tr><td>                                                        </td></tr>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Each Team Leader may invest for his own benefit in securities held in brokerage and mutual
fund accounts. The information shown in the table does not include information about those
accounts where the Team Leader or members of his family have beneficial or pecuniary interest
because no advisory relationship exists with Calamos or any of its affiliates.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Matthew Toms joined Calamos in March&nbsp;2007 and information regarding the number of accounts
managed by Mr.&nbsp;Toms is not yet available.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than potential conflicts between investment strategies, the side-by-side management of
both the Fund and other accounts may raise potential conflicts of interest due to the interest held
by Calamos in an account and certain trading practices used by the portfolio managers (e.g.,
cross-trades between the Fund and another account and allocation aggregated trades). Calamos has
developed policies and procedures reasonably designed to mitigate those conflicts. For example,
Calamos will only place cross-trades in securities held by the Fund in accordance with the rules
promulgated under the 1940 Act and has adopted policies designed to ensure the fair allocation of
securities purchased on an aggregated basis.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-34<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The allocation methodology employed by Calamos varies depending on the type of securities
sought to be bought or sold and the type of client or group of clients. Generally, however, orders
are placed first for those clients that have given Calamos brokerage discretion (including the
ability to step out a portion of trades), and then to clients that have directed Calamos to execute
trades through a specific broker. However, if the directed broker allows Calamos to execute with
other brokerage firms, which then book the transaction directly with the directed broker, the order
will be placed as if the client had given Calamos full brokerage discretion. Calamos and its
affiliates frequently use a &#147;rotational&#148; method of placing and aggregating client orders and will
build and fill a position for a designated client or group of clients before placing orders for
other clients. A client account may not receive an allocation of an order
if: (a)&nbsp;the client
would receive an unmarketable amount of securities based on account size; (b)&nbsp;the client has
precluded Calamos from using a particular broker; (c)&nbsp;the cash balance in the client account will
be insufficient to pay for the securities allocated to it at settlement; (d)&nbsp;current portfolio
attributes make an allocation inappropriate; and (e)&nbsp;account specific guidelines, objectives and
other account specific factors make an allocation inappropriate. Allocation methodology may be
modified when strict adherence to the usual allocation is impractical or leads to inefficient or
undesirable results. Calamos head trader must approve each instance that the usual allocation
methodology is not followed and provide a reasonable basis for such instances and all modifications
must be reported in writing to the Director of Compliance on a monthly basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Team Leaders advise certain accounts under a performance fee arrangement. A performance
fee arrangement may create an incentive for a Team Leader to make investments that are riskier or
more speculative than would be the case in the absence of performance fees. A performance fee
arrangement may result in increased compensation to the Team Leaders from such accounts due to
under-realized appreciation as well as realized gains in the client&#146;s account.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of October&nbsp;31, 2007, Team Leaders John&nbsp;P. Calamos, Sr., Nick&nbsp;P. Calamos and John&nbsp;P.
Calamos,&nbsp;Jr. receive all of their compensation from Calamos Asset Management, Inc. Each has
entered into employment agreements that provide for compensation in the form of an annual base
salary and a discretionary target bonus, each payable in cash. Their discretionary target bonus is
set at a percentage of the respective base salary, ranging from 300% to 600%, with a maximum annual
bonus opportunity of 150% of the target bonus. For example, the discretionary target bonus for a Team Leader who earns $100,000 would range from $300,000 to $600,000 and the Team Leader&#146;s maximum annual bonus opportunity would range from $450,000 to $900,000. Also, due to the ownership and executive management
positions with Calamos and its parent company, additional multiple corporate objectives are
utilized to determine the discretionary target bonus for John&nbsp;P. Calamos, Sr., Nick&nbsp;P. Calamos and
John&nbsp;P. Calamos,&nbsp;Jr. For 2007, the additional corporate objectives were: marketing effectiveness,
as measured by redemption rate compared to an absolute target; advisory fee revenues, measured by
growth in revenues; operating efficiencies, as measured by operating margin percentage compared to
a ranking of the top operating margins of companies in the industry; and stock price performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of October&nbsp;31, 2007, John Hillenbrand, Steve Klouda, Jeff Scudieri and Jon Vacko, and, as
of March&nbsp;2007, Matthew Toms, receive all of their compensation from Calamos. They each receive
compensation in the form of an annual base salary and a discretionary target bonus, each payable in
cash. Their discretionary target bonus is set at a percentage of the respective base salary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amounts paid to all Team Leaders and the criteria utilized to determine the amounts are
benchmarked against industry specific data provided by third party analytical agencies. The Team
Leaders&#146; compensation structure does not differentiate between the funds and other accounts managed
by the Team Leaders, and is determined on an overall basis, taking into consideration the
performance of the various strategies managed by the Team Leaders. Portfolio performance, as
measured by risk-adjusted portfolio performance, is utilized to determine the discretionary target
bonus, as well as overall performance of Calamos.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-35<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Team Leaders are eligible to receive annual equity awards under a long-term incentive
compensation program. With respect to John&nbsp;P. Calamos, Sr., Nick&nbsp;P. Calamos and John&nbsp;P.
Calamos,&nbsp;Jr., the target annual equity awards are set at a percentage of base salary. With respect
to John Hillenbrand, Steve Klouda, Jeff Scudieri, Matthew Toms and Jon Vacko, the target annual
equity awards are each set at a percentage of the respective base salaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Historically, the annual equity awards granted under the long-term incentive compensation
program have been comprised of stock options and restricted stock units. The stock options and
restricted stock units issued to date have vested annually in one-third installments beginning in
the fourth year after the grant date and each award has been subject to accelerated vesting under
certain conditions. Unless terminated early, the stock options have a ten-year term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At October&nbsp;31, 2007, each portfolio manager beneficially owned (as determined pursuant to
Rule&nbsp;16a-1a(a)(2) under the 1934 Act) shares of the Fund having value within the indicated dollar
ranges.
</DIV>




<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Fund</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">Over $100,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nick&nbsp;P. Calamos</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John&nbsp;P. Calamos,&nbsp;Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John Hillenbrand</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Steve Klouda</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeff Scudieri</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Matthew Toms</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jon Vacko</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">None</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Fund Accountant</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the arrangements with State Street Bank and Trust Company (&#147;State Street&#148;) to provide
fund accounting services, State Street provides certain administrative and accounting services
including providing daily reconciliation of cash, trades and positions; maintaining general ledger
and capital stock accounts; preparing daily trial balance; calculating net asset value; providing
selected general ledger reports; preferred share compliance; calculating total returns; and
providing monthly distribution analysis to the Fund and such other funds advised by Calamos that
may be part of those arrangements (the Fund and such other funds are collectively referred to as
the &#147;Calamos Funds&#148;). For the services rendered to the Calamos Funds, State Street receives fees
based on the combined managed assets of the Calamos Funds (&#147;Combined Assets&#148;). State Street
receives a fee at the annual rate of 0.009% for the first $5.0&nbsp;billion of Combined Assets, 0.0075%
for the next $5.0&nbsp;billion of Combined Assets, 0.005% for the next $5.0&nbsp;billion of Combined Assets
and 0.0035% for the Combined Assets in excess of $15.0&nbsp;billion. Each fund of the Calamos Funds
pays its pro-rata share of the fees payable to State Street described below based on relative
managed assets of each fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calamos, and not State Street, will provide the following financial accounting services to
Calamos Funds: management of expenses and expense payment processing; monitor the calculation of
expense accrual amounts for any fund and make any necessary modifications; coordinate any expense
reimbursement calculations and payment; calculate yields on the funds in accordance with rules and
regulations of the SEC; calculate net investment income dividends and capital gains
distributions; calculate, track and report tax adjustments on all assets of each fund, including
but not limited to contingent debt and preferred trust obligations; prepare excise tax and fiscal
year distributions schedules; prepare tax information required for financial statement footnotes;
prepare state and federal income tax returns; prepare specialized calculations of amortization on
convertible securities; prepare year-end dividend disclosure information; calculate trustee
deferred compensation plan accruals and valuations;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and prepare Form&nbsp;1099 information statements for Board members and service providers. For
providing those financial accounting services, Calamos will receive a fee payable monthly at the
annual rate of 0.0175% on the first $1&nbsp;billion of the average daily net assets of the Calamos
Funds; 0.0150% on the next $1&nbsp;billion of the average daily net assets of the Calamos Funds; and
0.0110% on the average daily net assets of the Calamos Funds above $2&nbsp;billion (&#147;financial
accounting service fee&#148;). Each fund of the Calamos Funds will pay its pro-rata share of the
financial accounting service fee payable to Calamos based on relative managed assets of each fund.
</DIV>

<DIV align="left">
<A name="138"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PORTFOLIO TRANSACTIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio transactions on behalf of the Fund effected on stock exchanges involve the payment
of negotiated brokerage commissions. There is generally no stated commission in the case of
securities traded in the over-the-counter markets, but the price paid by the Fund usually includes
an undisclosed dealer commission or mark-up. In underwritten offerings, the price paid by the Fund
includes a disclosed, fixed commission or discount retained by the underwriter or dealer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In executing portfolio transactions, Calamos uses its best efforts to obtain for the Fund the
most favorable combination of price and execution available. In seeking the most favorable
combination of price and execution, Calamos considers all factors it deems relevant, including
price, the size of the transaction, the nature of the market for the security, the amount of
commission, the timing of the transaction taking into account market prices and trends, the
execution capability of the broker-dealer and the quality of service rendered by the broker-dealer
in other transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustees have determined that portfolio transactions for the Fund may be executed through
CFS, an affiliate of Calamos, if, in the judgment of Calamos,
the use of CFS is likely to result in prices and execution at least as favorable to the Funds as
those available from other qualified brokers and if, in such transactions, CFS charges the Fund
commission rates consistent with those charged by CFS to comparable unaffiliated customers in
similar transactions. The Board of Trustees, including a majority of the Trustees who are not
&#147;interested&#148; trustees, has adopted procedures that are reasonably designed to provide that any
commissions, fees or other remuneration paid to CFS are consistent with the foregoing standard.
The Fund will not effect principal transactions with CFS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with the Rules of Fair Practice of the National Association of Securities Dealers,
Inc. and subject to seeking the most favorable combination of net price and execution available
and such other policies as the Trustees may determine, Calamos may consider sales of shares of the
Fund as a factor in the selection of broker-dealers to execute portfolio transactions for that
Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In allocating the Fund&#146;s portfolio brokerage transactions to unaffiliated broker-dealers,
Calamos may take into consideration the research, analytical, statistical and other information and
services provided by the broker-dealer, such as general economic reports and information, reports
or analyses of particular companies or industry groups, market timing and technical information,
and the availability of the brokerage firm&#146;s analysts for consultation. Although Calamos believes
these services have substantial value, they are considered supplemental to Calamos&#146; own efforts in
the performance of its duties under the management agreement. As permitted by Section&nbsp;28(e) of the
Securities Exchange Act of 1934 (&#147;1934 Act&#148;), Calamos may cause the Fund to pay a broker-dealer
that provides brokerage and research services an amount of commission for effecting a securities
transaction for the Fund in excess of the commission that another broker-dealer would have charged
for effecting that transaction if the amount is believed by Calamos to be reasonable in relation to
the value of the overall quality of the brokerage and research services provided. Other clients of
Calamos may indirectly benefit from the provision of these
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">services to Calamos, and the Fund may indirectly benefit from services provided to Calamos as
a result of transactions for other clients.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund paid $0, $0, and $0 in aggregate brokerage commissions for the fiscal years ended October&nbsp;31,
2005, October 31, 2006, and October&nbsp;31, 2007, including $0, $0, and $0 to CFS,
which represented 0%, 0% and 0% of the Fund&#146;s aggregate brokerage fees paid for
the respective fiscal year, and 0%, 0%, and 0% of the Fund&#146;s aggregate dollar amount of transactions involving brokerage
commissions for the respective fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Portfolio Turnover</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our annual portfolio turnover rate may vary greatly from year to year. Although we cannot
accurately predict our annual portfolio turnover rate, it is not expected to exceed 100% under
normal circumstances. For the fiscal years ended October 31, 2005,
October 31, 2006, and October 31, 2007 the portfolio turnover rate
was 0%, 32%, and 85%, respectively.
However, portfolio turnover rate is not considered a limiting factor in the execution of investment
decisions for us. A higher turnover rate results in correspondingly greater brokerage commissions
and other transactional expenses that are borne by us. High portfolio
turnover also may result in the realization of capital gains or losses and, to the extent net short-term
capital gains are realized, any distributions resulting from such gains will be considered ordinary income for
federal income tax purposes.  See &#147;Federal Income Tax Matters.&#148;
</DIV>

<DIV align="left">
<A name="139"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NET ASSET VALUE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net asset value per share is determined as of the close of regular session trading on the New
York Stock Exchange (usually 4:00&nbsp;p.m., Eastern time), on the last business day in each week. Net
asset value is calculated by dividing the value of all of the securities and other assets of the
Fund, less its liabilities (including accrued expenses and indebtedness) and the aggregate
liquidation value of any outstanding preferred shares, by the total number of common shares
outstanding. Currently, the net asset values of shares of publicly traded closed-end investment
companies investing in debt securities are published in Barron&#146;s, the Monday edition of The Wall
Street Journal and the Monday and Saturday editions of The New York Times.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The values of the securities in the Fund are based on market prices from the primary market in
which they are traded. As a general rule, equity securities listed on a U.S. securities exchange
are valued at the last current reported sale price as of the time of valuation. Securities quoted
on the NASDAQ National Market System are valued at the NASDAQ Official Closing Price (the &#147;NOCP&#148;),
as determined by NASDAQ, or lacking an NOCP, at the last current reported sale price as of the time
of valuation. Bonds and other fixed-income securities that are traded over the counter and on an
exchange will be valued according to the broadest and most representative market, and it is
expected this will ordinarily be the over-the-counter market. The foreign securities held by the
Fund are traded on exchanges throughout the world. Trading on these foreign securities exchanges
is completed at various times throughout the day and often does not coincide with the close of
trading on the New York Stock Exchange. The value of foreign securities is determined at the close
of trading of the exchange on which the securities are traded or at the close of trading on the New
York Stock Exchange, whichever is earlier. If market prices are not readily available or the
Fund&#146;s valuation methods do not produce a value reflective of the fair value of the security,
securities and other assets are priced at a fair value as determined by the Board of Trustees or a
committee thereof, subject to the Board of Trustees&#146; responsibility for any such valuation.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="140"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPURCHASE OF COMMON SHARES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund is a closed-end investment company and as such its shareholders will not have the
right to cause the Fund to redeem their shares. Instead, the Fund&#146;s common shares trade in the
open market at a price that is a function of several factors, including dividend levels (which are
in turn affected by expenses), net asset value, call protection, dividend stability, relative
demand for and supply of such shares in the market, general market and economic conditions and
other factors. Because shares of a closed-end investment company may frequently trade at prices
lower than net asset value, the Fund&#146;s Board of Trustees may consider action that might be taken to
reduce or eliminate any material discount from net asset value in respect of common shares, which
may include the repurchase of such shares in the open market or in private transactions, the making
of a tender offer for such shares, or the conversion of the Fund to an open-end investment company.
The Board of Trustees may decide not to take any of these actions. In addition, there can be no
assurance that share repurchases or tender offers, if undertaken, will reduce market discount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, at any time when the Fund&#146;s preferred shares are outstanding,
the Fund may not purchase, redeem or otherwise acquire any of its common shares unless (1)&nbsp;all
accumulated preferred shares dividends have been paid and (2)&nbsp;at the time of such purchase,
redemption or acquisition, the net asset value of the Fund&#146;s portfolio (determined after deducting
the acquisition price of the common shares) is at least 200% of the liquidation value of the
outstanding preferred shares (expected to equal the original purchase price per share plus any
accrued and unpaid dividends thereon). Any service fees incurred in connection with any tender
offer made by the Fund will be borne by the Fund and will not reduce the stated consideration to be
paid to tendering shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to its investment restrictions, the Fund may borrow to finance the repurchase of
shares or to make a tender offer. Interest on any borrowings to finance share repurchase
transactions or the accumulation of cash by the Fund in anticipation of share repurchases or
tenders will reduce the Fund&#146;s net income. Any share repurchase, tender offer or borrowing that
might be approved by the Fund&#146;s Board of Trustees would have to
comply with the 1934 Act, the
1940 Act and the rules and regulations thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the decision to take action in response to a discount from net asset value will be
made by the Board of Trustees at the time it considers such issue, it is not currently anticipated
that the Board of Trustees would authorize repurchases of common shares or a tender offer for such
shares if: (1)&nbsp;such transactions, if consummated, would (a)&nbsp;result in the delisting of the common
shares from the New York Stock Exchange, or (b)&nbsp;impair the Fund&#146;s status as a regulated investment
company under the Code (which would make the Fund a taxable entity, causing the Fund&#146;s income to be
taxed at the corporate level in addition to the taxation of shareholders who receive dividends from
the Fund) or as a registered closed-end investment company under the 1940 Act; (2)&nbsp;the Fund would
not be able to liquidate portfolio securities in an orderly manner and consistent with the Fund&#146;s
investment objective and policies in order to repurchase shares; or (3)&nbsp;there is, in the board&#146;s
judgment, any (a)&nbsp;material legal action or proceeding instituted or threatened challenging such
transactions or otherwise materially adversely affecting the Fund, (b)&nbsp;general suspension of or
limitation on prices for trading securities on the New York Stock Exchange, (c)&nbsp;declaration of a
banking moratorium by federal or state authorities or any suspension of payment by United States or
New York banks, (d)&nbsp;material limitation affecting the Fund or the issuers of its portfolio
securities by federal or state authorities on the extension of credit by lending institutions or on
the exchange of foreign currency, (e)&nbsp;commencement of war, armed hostilities or other international
or national calamity directly or indirectly involving the United States, or (f)&nbsp;other event or
condition which would have a material adverse effect (including any adverse tax effect) on the Fund
or its shareholders if shares were repurchased.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The repurchase by the Fund of its shares at prices below net asset value will result in an
increase in the net asset value of those shares that remain outstanding. However, there can be no
assurance that share repurchases or tender offers at or below net asset value will result in the
Fund&#146;s shares trading at a price equal to their net asset value. Nevertheless, the fact that the
Fund&#146;s shares may be the subject of repurchase or tender offers from time to time, or that the Fund
may be converted to an open-end investment company, may reduce any spread between market price and
net asset value that might otherwise exist.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, a purchase by the Fund of its common shares will decrease the Fund&#146;s total
managed assets which would likely have the effect of increasing the Fund&#146;s expense ratio. Any
purchase by the Fund of its common shares at a time when preferred shares are outstanding will
increase the leverage applicable to the outstanding common shares then remaining.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before deciding whether to take any action if the common shares trade below net asset value,
the Fund&#146;s Board of Trustees would likely consider all relevant factors, including the extent and
duration of the discount, the liquidity of the Fund&#146;s portfolio, the impact of any action that
might be taken on the Fund or its shareholders and market considerations. Based on these
considerations, even if the Fund&#146;s shares should trade at a discount, the Board of Trustees may
determine that, in the interest of the Fund and its shareholders, no action should be taken.
</DIV>

<DIV align="left">
<A name="141"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FEDERAL INCOME TAX MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary discussion of certain U.S. federal income tax consequences that may
be relevant to a shareholder that acquires, holds and/or disposes of the Fund&#146;s securities. This
discussion only addresses certain U.S. federal income tax consequences to U.S. shareholders who hold their
shares as capital assets and does not address all of the U.S. federal income tax consequences that
may be relevant to particular shareholders in light of their individual circumstances. This
discussion also does not address the tax consequences to shareholders who are subject to special
rules, including, without limitation, financial institutions,
regulated investment companies, insurance companies, brokers and dealers in
securities or foreign currencies, certain securities traders, foreign holders, persons who hold their shares as or in a hedge
against currency risk, a constructive sale, or conversion transaction, holders who are subject to
the alternative minimum tax, or tax-exempt or tax-deferred plans, accounts, or entities. In
addition, the discussion does not address any state, local, or foreign tax consequences. The
discussion reflects applicable tax laws of the United States as of the date of this Statement of
Additional Information, which tax laws may be changed or subject to new interpretations by the
courts or the Internal Revenue Service (&#147;IRS&#148;) retroactively or prospectively. No attempt is made
to present a detailed explanation of all U.S. federal income tax concerns affecting the Fund and
its shareholders, and the discussion set forth herein does not constitute tax advice. INVESTORS
ARE URGED TO CONSULT THEIR OWN TAX ADVISERS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES TO THEM OF
INVESTING IN THE FUND, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
TO THEM AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to U.S. Treasury Department Circular 230, we are informing you that (1) this discussion is not intended to be used, was not written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties under the U.S. federal tax laws, (2) this discussion was written by us in connection with the registration of our securities and our promotion or marketing, and (3) each taxpayer should seek advice based on his, her or its particular circumstances from an independent tax advisor.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Federal Income Taxation of the Fund</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund has elected to be treated, and intends to qualify each year, as a &#147;regulated
investment company&#148; under Subchapter M of the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;), so that it will not pay U.S. federal income tax on investment company taxable income
(determined without regard to the deduction for dividends paid) and net capital gains timely
distributed to shareholders. If the Fund qualifies as a regulated investment company and
distributes to its shareholders at least 90% of the sum of (i)&nbsp;its &#147;investment company taxable
income&#148; as that term is defined in the Code (which includes, among
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">other things, dividends, taxable interest, and the excess of any net short-term capital gains
over net long-term capital losses, less certain deductible expenses) without regard to the
deduction for dividends paid and (ii)&nbsp;the excess of its gross tax-exempt interest, if any, over
certain disallowed deductions, the Fund will be relieved of U.S. federal income tax on any income
of the Fund, including long-term capital gains, distributed to shareholders. However, if the Fund
retains any investment company taxable income or &#147;net capital gain&#148; (i.e., the excess of net
long-term capital gain over the sum of net short-term capital loss and any capital loss
carryforward), it will be subject to U.S. federal income tax at regular corporate rates on the
amount retained. The Fund intends to distribute at least annually, all or substantially all of its
investment company taxable income, net tax-exempt interest, if any, and net capital gain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If for any taxable year the Fund does not qualify as a regulated investment company for U.S.
federal income tax purposes, it would be treated in the same manner as a regular corporation
subject to U.S. federal income tax and distributions to its shareholders would not be deductible by
the Fund in computing its taxable income. In such event, the Fund&#146;s distributions, to the extent
derived from the Fund&#146;s current or accumulated earnings and profits, would generally constitute
ordinary dividends, which would generally be eligible for the dividends received deduction
available to corporate shareholders under Section&nbsp;243 of the Code, and noncorporate shareholders of
the Fund would generally be able to treat such distributions as &#147;qualified dividend income&#148;
eligible for reduced rates of federal income taxation in taxable years beginning on or before
December&nbsp;31, 2010 under Section&nbsp;1(h)(11) of the Code, as described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Code, the Fund will be subject to a nondeductible 4% federal excise tax on its
undistributed ordinary income for a calendar year and its capital gains for the one-year period
generally ending on October&nbsp;31 of such calendar year if it fails to meet certain distribution
requirements with respect to that year. The Fund intends to make distributions in a timely manner
and in an amount sufficient to avoid such tax and accordingly does not expect to be subject to this
excise tax.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to qualify as a regulated investment company under Subchapter M of the Code, the Fund
must, among other things, derive at least 90% of its gross income for each taxable year from
(i)&nbsp;dividends, interest, payments with respect to securities loans, gains from the sale or other
disposition of stock, securities or foreign currencies, or other income (including gains from
options, futures and forward contracts) derived with respect to its business of investing in such
stock, securities or currencies and (ii)&nbsp;net income derived from interests in certain publicly
traded partnerships that derive less than 90% of their gross income from the items described in (i)
above (each, a &#147;Qualified Publicly Traded Partnership&#148;) (the &#147;90% income test&#148;). For purposes of
the 90% income test, the character of income earned by certain entities in which the Fund invests
that are not treated as corporations (e.g., partnerships other than Qualified Publicly Traded
Partnerships) for U.S. federal income tax purposes will generally pass through to the Fund.
Consequently, the Fund may be required to limit its equity
investments in certain such entities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the 90% income test, the Fund must also diversify its holdings (the &#147;asset
test&#148;) so that, at the end of each quarter of its taxable year (i)&nbsp;at least 50% of the market value
of the Fund&#146;s total assets is represented by cash and cash items, U.S. government securities,
securities of other regulated investment companies and other securities, with such other securities
of any one issuer limited for the purposes of this calculation to an amount not greater in value
than 5% of the value of the Fund&#146;s total assets and to not more than 10% of the outstanding voting
securities of such issuer, and (ii)&nbsp;not more than 25% of the value of its total assets is invested
in the securities (other than U.S. government securities or securities of other regulated
investment companies) of any one issuer or of two or more issuers controlled by the Fund and
engaged in the same, similar or related trades or businesses or in the securities of one or more
Qualified Publicly Traded Partnerships.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange gains and losses realized by the Fund in connection with certain transactions
involving foreign currency-denominated debt securities, certain options and futures contracts
relating to foreign currency, foreign currency forward contracts, foreign currencies, or payables
or receivables denominated in a foreign currency are subject to Section&nbsp;988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and losses and may affect
the amount, timing and character of distributions to shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund acquires any equity interest (generally including not only stock but also an
option to acquire stock such as is inherent in a convertible bond) in certain foreign corporations
that receive at least 75% of their annual gross income from passive sources (such as interest,
dividends, certain rents and royalties, or capital gains) or that hold at least 50% of their assets
in investments held for the production of such passive income (&#147;passive foreign investment
companies&#148;), the Fund could be subject to U.S. federal income tax and additional interest charges
on &#147;excess distributions&#148; received from such companies or on gain from the sale of equity interests
in such companies, even if all income or gain actually received by the Fund is timely distributed
to its shareholders. These investments could also result in the
treatment as ordinary income of associated gains on a sale of the
investment. The Fund would not be able to pass through to its shareholders any
credit or deduction for such tax. Tax elections may generally be available that would ameliorate
these adverse tax consequences, but any such election could require the Fund to recognize taxable
income or gain (which would be subject to the distribution requirements described above) without
the concurrent receipt of cash. The Fund may limit and/or manage its holdings in passive foreign
investment companies to limit its U.S. federal income tax liability or maximize its return from
these investments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund invests in certain pay-in-kind securities, zero coupon securities, deferred
interest securities or, in general, any other securities with original issue discount (or with
market discount if the Fund elects to include market discount in income currently), the Fund must
accrue income on such investments for each taxable year, which generally will be prior to the
receipt of the corresponding cash payments. However, the Fund must distribute, at least annually,
all or substantially all of its investment company taxable income, including such accrued income,
to shareholders to avoid U.S. federal income and excise taxes. Therefore, the Fund may have to
dispose of its portfolio securities under disadvantageous circumstances to generate cash, or may
have to leverage itself by borrowing the cash, to satisfy distribution requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may acquire market discount bonds.  A market discount bond is a security acquired in the secondary market at a price below its redemption value (or its adjusted issue price if it is also an original issue discount bond).  If the Fund invests in a market discount bond, it will be required to treat any gain recognized on the disposition of such market discount bond as ordinary income
(instead of capital gain) to the extent of the accrued market discount, unless the Fund
elects to include the market discount in income as it accrues as discussed above.
Such market discount will not constitute qualified dividend income.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in debt obligations that are in the lowest rating categories or are
unrated, including debt obligations of issuers not currently paying interest or who are in default.
Investments in debt obligations that are at risk of or in default present special tax issues for
the Fund. The U.S. federal income tax laws are not entirely clear about issues such as when the
Fund may cease to accrue interest, original issue discount or market discount, when and to what
extent deductions may be taken for bad debts or worthless securities and how payments received on
obligations in default should be allocated between principal and income. These and other related
issues will be addressed by the Fund when, as and if it invests in such securities, in order to
seek to ensure that it distributes sufficient income to preserve its status as a regulated
investment company and does not become subject to U.S. federal income or excise taxes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may engage in various transactions utilizing options, futures contracts, forward
contracts, hedge instruments, straddles, swaps and other similar transactions. Such transactions
may be subject to special provisions of the Code that, among other things, affect the character of
any income realized by the Fund from such investments, accelerate recognition of income to the
Fund, defer Fund losses, affect the holding period of the Fund&#146;s securities, affect whether
distributions will be eligible for the dividends received deduction or be treated as qualified
dividend income and affect the determination
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of whether capital gain and loss is characterized as long-term or short-term capital gain or
loss. These rules could therefore affect the character, amount and timing of distributions to
shareholders. These provisions may also require the Fund to &#147;mark-to-market&#148; certain types of the
positions in its portfolio (i.e., treat them as if they were closed out), which may cause the Fund
to recognize income without receiving cash with which to make distributions in amounts necessary to
satisfy the distribution requirements for avoiding U.S. federal income and excise taxes. The Fund
will monitor its transactions and will make the appropriate entries in its books and records when
it acquires an option, futures contract, forward contract, hedge instrument, swap or other similar
investment, and if the Fund deems it advisable, will make appropriate elections in order to
mitigate the effect of these rules, prevent disqualification of the Fund as a regulated investment
company and minimize the imposition of U.S. federal income and excise taxes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s transactions in broad based equity index futures contracts, exchange traded options
on such indices and certain other futures contracts are generally considered &#147;Section&nbsp;1256
contracts&#148; for federal income tax purposes. Any unrealized gains or losses on such Section&nbsp;1256
contracts are treated as though they were realized at the end of each taxable year. The resulting
gain or loss is treated as sixty percent long-term capital gain or loss and forty percent
short-term capital gain or loss. Gain or loss recognized on actual sales of Section&nbsp;1256 contracts
is treated in the same manner. As noted below, distributions of net short-term capital gain are
taxable to shareholders as ordinary income while distributions of net long-term capital gain are
taxable to shareholders as long-term capital gain, regardless of how long the shareholder has held
shares of the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s entry into a short sale transaction, an option or certain other contracts could be
treated as the constructive sale of an appreciated financial position, causing the Fund to realize
gain, but not loss, on the position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may invest in REITs that hold residual interests in real estate mortgage investment
conduits (&#147;REMICs&#148;). Under a notice issued by the IRS, a portion of the Fund&#146;s income from a REIT
that is attributable to the REIT&#146;s residual interest in a REMIC (referred to in the Code as an
&#147;excess inclusion&#148;) will be subject to U.S. federal income tax in all events. This notice also
provides that excess inclusion income of a regulated investment company, such as the Fund, will be
allocated to shareholders of the regulated investment company in proportion to the dividends
received by such shareholders, with the same consequences as if the shareholders held the related
REMIC residual interest directly. In general, excess inclusion income allocated to shareholders
(i)&nbsp;cannot be offset by net operating losses (subject to a limited exception for certain thrift
institutions), (ii)&nbsp;will constitute unrelated business taxable income to entities (including a
qualified pension plan, an individual retirement account, a 401(k) plan, a Keogh plan or other
tax-exempt entity) subject to federal income tax on unrelated business income, thereby potentially
requiring such an entity that is allocated excess inclusion income, and otherwise might not be
required to file a federal income tax return, to file a tax return and pay tax on such income, and
(iii)&nbsp;in the case of a foreign shareholder, will not qualify for any reduction in U.S. federal
withholding tax. In addition, if at any time during any taxable year a &#147;disqualified organization&#148;
(as defined in the Code) is a record holder of a share in a regulated investment company, then the
regulated investment company will be subject to a tax equal to that portion of its excess inclusion
income for the taxable year that is allocable to the disqualified organization, multiplied by the
highest federal income tax rate imposed on corporations. The Fund does not intend to invest in
REITs in which a substantial portion of the assets will consist of residual interests in REMICs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund may be subject to withholding and other taxes imposed by foreign countries, including
taxes on interest, dividends and capital gains with respect to its investments in those countries,
which would, if imposed, reduce the yield on or return from those investments. Tax treaties
between certain
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">countries and the U.S. may reduce or eliminate such taxes in
some cases.
If, however, more than 50% of the value of the Fund&#146;s total assets at the close of any taxable year consists of
stock or securities in foreign corporations, and the Fund distributes at least 90% of its investment company taxable
income and net tax exempt interest, the Fund may file an election with the IRS pursuant to which shareholders of the
Fund will be required to (i) include in gross income (in addition to taxable dividends actually received) their pro
rata share of foreign income taxes paid by the Fund even though not actually received, (ii) treat their respective
pro rata share as foreign income taxes paid by them, and (iii) deduct such pro rata share in computing their U.S.
federal taxable income, or, alternatively, use it as a foreign tax credit, subject to applicable limitations,
against their U.S. federal income tax liability.  Tax-exempt shareholders will not ordinarily benefit from this
election relating to foreign taxes.  Each year, the Fund will notify each shareholder of the amount of (i) the
shareholder&#146;s pro rata share of foreign income taxes paid by the Fund, if any, and (ii) the portion of the
Fund&#146;s dividends which represents income from foreign countries, if the Fund qualifies to pass along such credit.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Common Shares and Preferred Shares</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Common Share Distributions</I>. Unless a shareholder is ineligible to participate or elects
otherwise, all distributions on common shares will be automatically reinvested in additional common shares of the
Fund pursuant to the Automatic Dividend Reinvestment Plan (the
&#147;Dividend Reinvestment Plan&#148;). For U.S. federal income tax
purposes, dividends are generally taxable whether a shareholder takes them in cash or they are
reinvested pursuant to the Dividend Reinvestment Plan in additional shares of the Fund.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions of investment company taxable income (determined without regard to the deduction
for dividends paid), which includes dividends, taxable interest, net
short-term capital gain in
excess of net long-term capital loss and certain net foreign exchange gains, are, except as
discussed below, taxable as ordinary income to the extent of the Fund&#146;s current and accumulated
earnings and profits. A portion of such dividends may qualify for the dividends received deduction
available to corporations under Section&nbsp;243 of the Code and the reduced rate of taxation under Section&nbsp;1(h)(11)
of the Code that applies to qualified dividend income received by noncorporate shareholders. For taxable
years beginning on or before December&nbsp;31, 2010, qualified dividend income
received by noncorporate shareholders is taxed at rates equivalent to
long-term capital gain tax
rates, which currently reach a maximum of 15%. Qualified dividend income generally includes
dividends from domestic corporations and dividends from foreign corporations that meet certain
specified criteria, although dividends paid by REITs will not
generally be eligible for treatment as
qualified dividend income. The Fund generally can pass the tax treatment of qualified dividend
income it receives through to Fund shareholders. For the Fund to receive qualified dividend income,
the Fund must meet certain holding period and other requirements with respect to the stock on which
the otherwise qualified dividend is paid. In addition, the Fund cannot be obligated to make
payments (pursuant to a short sale or otherwise) with respect to substantially similar or related
property. The same provisions, including the holding period requirements, apply to each
shareholder&#146;s investment in the Fund for the dividends received by the shareholder to be eligible
for such treatment. The provisions of the Code applicable to qualified dividend income and the 15%
maximum individual tax rate on long-term capital gains are currently
effective for taxable years beginning on or before December 31, 2010.
Thereafter, unless Congress enacts legislation providing otherwise, qualified dividend income will no longer be taxed at the rates applicable to long-term
capital gains, but rather will be taxed at ordinary federal income tax rates, which reach a current
maximum rate of 35%. Distributions of net
capital gain, if any, are taxable as long term capital gains for U.S. federal income tax purposes
without regard to the length of time the shareholder has held shares of the Fund. A distribution of
an amount in excess of the Fund&#146;s current and accumulated earnings and profits, if any, will be
treated by a shareholder as a tax-free return of capital which is applied against and reduces the
shareholder&#146;s basis in his or her shares. To the extent that the amount of any such distribution
exceeds the shareholder&#146;s basis in his or her shares, the excess will be treated by the shareholder
as gain from the sale or exchange of shares. The U.S. federal income tax status of all
distributions will be designated by the Fund and reported to the shareholders annually.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund retains any net capital gain, the Fund may designate the retained amount as
undistributed capital gains in a notice to shareholders who, if subject to U.S. federal income tax
on long-term capital gains, (i)&nbsp;will be required to include in
income, as long-term capital gain,
their proportionate share of such undistributed amount, and (ii)&nbsp;will be entitled to credit their
proportionate share of the federal income tax paid by the Fund on the undistributed amount against
their U.S. federal income tax liabilities, if any, and to claim refunds to the extent the credit
exceeds such liabilities. For U.S. federal
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">income tax purposes, the tax basis of shares owned by a shareholder of the Fund will be
increased by the difference between the amount of undistributed net capital gain included in the
shareholder&#146;s gross income and the federal income tax deemed paid by the shareholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a shareholder&#146;s distributions are automatically reinvested
pursuant to the Dividend Reinvestment Plan and the
plan agent invests the distribution in shares acquired on behalf of the shareholder in open-market
purchases, for U.S. federal income tax purposes, the shareholder will be treated as having received
a taxable distribution in the amount of the cash dividend that the shareholder would have received
if the shareholder had elected to receive cash. If a shareholder&#146;s distributions are automatically
reinvested pursuant to the Dividend Reinvestment Plan and the plan agent invests the distribution in newly issued shares
of the Fund, the shareholder will be treated as receiving a taxable distribution equal to the fair
market value of the shares the shareholder receives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time of an investor&#146;s purchase of the Fund&#146;s shares, a portion of the purchase price
may be attributable to realized or unrealized appreciation in the Fund&#146;s portfolio or undistributed
taxable income of the Fund. Consequently, subsequent distributions by the Fund with respect to
these shares from such appreciation or income may be taxable to such investor even if the net asset
value of the investor&#146;s shares is, as a result of the distributions, reduced below the investor&#146;s
cost for such shares and the distributions economically represent a return of a portion of the
investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any dividend declared by the Fund in October, November or December with a record date in such
a month and paid during the following January will be treated for U.S. federal income tax purposes
as paid by the Fund and received by shareholders on December&nbsp;31 of the calendar year in which it is
declared.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Preferred Share Distributions</I>. Under present law and based in part on the fact that there is
no express or implied agreement between or among a broker-dealer or any other party, and the Fund
or any owners of preferred shares, that the broker-dealer or any other party will guarantee or
otherwise arrange to ensure that an owner of preferred shares will be able to sell his or her
shares, it is anticipated that the preferred shares will constitute stock of the Fund for federal
income tax purposes, and thus distributions with respect to the preferred shares (other than
distributions in redemption of the preferred shares subject to Section 302(b) of the Code) will
generally constitute dividends to the extent of the Fund&#146;s current or accumulated earnings and
profits, as calculated for U.S. federal income tax purposes. Except in the case of net capital
gain distributions, such dividends generally will be taxable at ordinary income tax rates to
holders of preferred shares but may qualify for the dividends received deduction available to
corporate shareholders under Section&nbsp;243 of the Code and the reduced rates of federal income
taxation that apply to qualified dividend income received by noncorporate shareholders under
Section&nbsp;1(h)(11) of the Code. Distributions designated by the Fund as net capital gain
distributions will be taxable as long-term capital gain regardless of the length of time a
shareholder has held shares of the Fund. Please see the discussion above on qualified dividend
income, dividends received deductions and net capital gain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The character of the Fund&#146;s income will not affect the amount of dividends to which the
holders of preferred shares are entitled to receive. Holders of preferred shares are entitled to
receive only the amount of dividends as determined by periodic auctions. For U.S. federal income
tax purposes, however, the IRS requires that a regulated investment company that has two or more
classes of shares allocate to each such class proportionate amounts of each type of its income
(such as ordinary income and net capital gain) for each tax year. Accordingly, the Fund intends to
designate distributions made with respect to the common shares and preferred shares as consisting
of particular types of income (e.g., net capital gain and ordinary income), in accordance with each
class&#146; proportionate share of the total dividends paid to both classes. Thus, each year the Fund
will designate dividends qualifying for the corporate dividends
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">received deduction, qualified dividend income, ordinary income and net capital gains in a
manner that allocates such income between the preferred shares and common shares in proportion to
the total dividends made to each class with respect to such taxable year, or otherwise as required
by applicable law. In addition, solely for the purpose of satisfying the 90% distribution requirement and the
distribution requirement for avoiding income taxes, certain distributions made after the close of a taxable year of
the Fund may be &#147;spilled back&#148; and treated as paid during such taxable year. In such case, shareholders will
be treated as having received such dividends in the taxable year in which the distribution was actually made.  The IRS
has ruled privately that dividends paid following the close of the taxable year that are treated for federal income tax
purposes as derived from income from the prior year will be treated as dividends &#147;paid&#148; in the prior year for
purposes of determining the proportionate share of a particular type of income for each class. Accordingly, the Fund intends
 to treat any such dividends that are paid following the close of a taxable year as &#147;paid&#148; in the prior year for
purposes of determining a class&#146; proportionate share of a particular type of income. However, the private ruling is
not binding on the IRS, and there can be no assurance that the IRS will respect such treatment. Each shareholder will be
notified of the allocation within 60&nbsp;days after the
end of the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the Fund is required to distribute annually at least 90% of its investment company
taxable income (determined without regard to the deduction for dividends paid), the Fund is not
required to distribute net capital gains to the shareholders. The Fund may retain and reinvest
such gains and pay federal income taxes on such gains (the &#147;net undistributed capital gain&#148;).
Please see the discussion above on undistributed capital gains. However, it is unclear whether a portion of the net undistributed capital gain would have to be
allocated to the preferred shares for U.S. federal income tax purposes. Until and unless the Fund
receives acceptable guidance from the IRS or an opinion of counsel as to the allocation of the net
undistributed capital gain between the common shares and the preferred shares, the Fund intends to
distribute its net capital gain for any year during which it has preferred shares outstanding. Such
distribution will affect the tax character but not the amount of dividends to which holders of
preferred shares are entitled.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although dividends generally
will be treated as distributed when paid, dividends declared in October, November or December with a record date in such
months, and paid in January of the following year, will be treated as having been distributed by the Fund and received by
the shareholders on December 31 of the year in which the dividend was declared.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings and profits are generally treated, for federal income tax purposes, as first being
used to pay distributions on preferred shares, and then to the extent remaining, if any, to pay
distributions on the common shares. Distributions in excess of current and accumulated earnings
and profits of the Fund are treated first as return of capital to the extent of the shareholder&#146;s
basis in the shares and, after the adjusted basis is reduced to zero, will be treated as capital
gain to a shareholder who holds such shares as a capital asset.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Fund utilizes leverage through borrowings, or otherwise, asset coverage limitations
imposed by the 1940 Act as well as additional restrictions that may be imposed by certain lenders
on the payment of dividends or distributions potentially could limit or eliminate the Fund&#146;s
ability to make distributions on its common shares and/or preferred shares until the asset coverage
is restored. These limitations could prevent the Fund from distributing at least 90% of its
investment company taxable income as is required under the Code and therefore might jeopardize the
Fund&#146;s qualification as a regulated investment company and/or might subject the Fund to a
nondeductible 4% federal excise tax. Upon any failure to meet the asset coverage requirements
imposed by the 1940 Act, the Fund may, in its sole discretion and to the extent permitted under the
1940 Act, purchase or redeem preferred shares in order to maintain or restore the requisite asset
coverage and avoid the adverse consequences to the Fund and its shareholders of failing to meet the
distribution requirements. There can be no assurance, however, that any such action would achieve
these objectives. The Fund will endeavor to avoid restrictions on its ability to distribute
dividends.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sales of Fund Shares</I>. Sales and other dispositions of the Fund&#146;s shares are taxable events
for shareholders that are subject to federal income tax. Selling shareholders will generally
recognize gain or loss in an amount equal to the difference between the amount received for such
shares and their adjusted
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">tax basis in the shares sold. If such shares are held as a capital asset at the time of sale,
the gain or loss will generally be a long-term capital gain or loss
if the shares have been held for more than one year and, if not held
for such period, a short-term capital gain or loss. Similarly, a redemption (including a
redemption by the Fund resulting from liquidation of the Fund), if any, of all of the shares
(common and preferred) actually and constructively held by a shareholder generally will give rise
to capital gain or loss under Section&nbsp;302(b) of the Code if the shareholder does not own (and is
not regarded under certain federal income tax law rules of constructive ownership as owning) any
common or preferred shares of the Fund and provided that the redemption proceeds do not represent
declared but unpaid dividends. Other redemptions may also give rise to capital gain or loss, if
several conditions imposed by Section&nbsp;302(b) of the Code are satisfied.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any loss realized by a shareholder upon the sale or other disposition of shares with a tax
holding period of six months or less will be treated as a long-term capital loss to the extent of
any amounts treated as distributions of long-term capital gain with respect to such shares. Losses
on sales or other dispositions of shares may be disallowed under &#147;wash sale&#148; rules in the event of
other investments in the Fund (including those made pursuant to reinvestment of dividends) or other
substantially identical stock or securities within a period of 61&nbsp;days beginning 30&nbsp;days before and
ending 30&nbsp;days after a sale or other disposition of shares. In such a case, the disallowed portion
of any loss generally would be included in the U.S. federal income tax basis of the shares
acquired. Shareholders should consult their own tax advisors regarding their individual
circumstances to determine whether any particular transaction in the Fund&#146;s shares is properly
treated as a sale for U.S. federal income tax purposes and the tax treatment of any gains or losses
recognized in such transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Federal Income Tax Withholding</I>. Federal law requires that the Fund withhold, as &#147;backup
withholding,&#148; 28% of reportable payments, including dividends, capital gain distributions and the
proceeds of sales or other dispositions of the Fund&#146;s shares paid to shareholders who have not
complied with IRS regulations. In order to avoid this withholding requirement, shareholders must
certify on their account applications, or on a separate IRS Form W-9, that the social security
number or other taxpayer identification number they provide is their correct number and that they
are not currently subject to backup withholding, or that they are exempt from backup withholding.
The Fund may nevertheless be required to backup withhold if it receives notice from the IRS or a
broker that the number provided is incorrect or backup withholding is
applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Matters</I>. Treasury regulations provide that if a shareholder recognizes a loss with
respect to shares of $2&nbsp;million or more in a single taxable year (or $4&nbsp;million or more in any
combination of taxable years) for a shareholder who is an individual, S corporation or trust or $10
million or more for a corporate shareholder in any single taxable year (or $20&nbsp;million or more in
any combination of years), the shareholder must file with the IRS a disclosure statement on Form
8886. Direct shareholders of portfolio securities are in many cases excepted from this reporting
requirement, but under current guidance, shareholders of a regulated investment company are not
excepted. Future guidance may extend the current exception from this reporting requirement to
shareholders of most or all regulated investment companies. The fact that a loss is reportable
under these regulations does not affect the legal determination of whether the taxpayer&#146;s treatment
of the loss is proper. Shareholders should consult their tax advisors to determine the
applicability of these regulations in light of their individual circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The description of certain federal income tax provisions above relates only to U.S. federal
income tax consequences for shareholders who are U.S. persons (i.e., U.S. citizens or resident aliens or
U.S. corporations, partnerships, trusts or estates who are subject to U.S. federal income tax on a
net income basis). Investors other than U.S. persons, including non-resident alien individuals,
may be subject to different U.S. federal income tax treatment. With respect to such persons, the
Fund must generally withhold U.S. federal withholding tax at the rate of 30% (or, if the Fund
receives certain certifications
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-47<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">from such non-U.S. shareholder, such lower rate as prescribed by an applicable tax treaty) on
amounts treated as ordinary dividends from the Fund. However, effective for taxable years of the
Fund beginning before January&nbsp;1, 2008, the Fund will generally not be required to withhold tax on
any amounts paid to a non-U.S. person with respect to dividends attributable to &#147;qualified
short-term gain&#148; (i.e., the excess of net short-term capital gain over net long-term capital loss)
designated as such by the Fund and dividends attributable to certain U.S. source interest income
that would not be subject to federal withholding tax if earned directly by a non-U.S. person,
provided such amounts are properly designated by the Fund. SHAREHOLDERS SHOULD CONSULT THEIR OWN
TAX ADVISORS ON THESE MATTERS AND ON ANY SPECIFIC QUESTION OF U.S. FEDERAL, STATE, LOCAL, FOREIGN
AND OTHER APPLICABLE TAX LAWS BEFORE MAKING AN INVESTMENT IN THE FUND.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Debt Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
present law, it is anticipated that our debt securities will constitute indebtedness
for federal income tax purposes, which the discussion below assumes. We intend to treat all
payments made with respect to the debt securities consistent with this characterization.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments or accruals of interest on debt securities generally will be taxable to you as
ordinary interest income at the time such interest is received (actually or constructively) or
accrued, in accordance with your regular method of accounting for federal income tax purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Initially, your tax basis in debt securities acquired generally will be equal to your cost to
acquire such debt securities. This basis will increase by the amounts, if any, that you include in
income under the rules governing market discount, and will decrease by the amount of any amortized
premium on such debt securities, as discussed below. When you sell or exchange any of your debt
securities, or if any of your debt securities are redeemed, you generally will recognize gain or
loss equal to the difference between the amount you realize on the transaction (less any accrued
and unpaid interest, which will be subject to federal income tax as interest in the manner described above) and
your tax basis in the debt securities relinquished.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as discussed below with respect to market discount, the gain or loss that you recognize
on the sale, exchange or redemption of any of your debt securities generally will be capital gain
or loss. Such gain or loss will generally be long-term capital gain or loss if the disposed debt
securities were held for more than one year and will be short-term capital gain or loss if the
disposed debt securities were held for one year or less. Net long-term capital gain recognized by
a noncorporate U.S. holder generally will be subject to federal income tax at a lower rate
(currently a maximum rate of 15%, although this rate will increase to
20% for taxable years beginning after December 31, 2010) than net
short-term capital gain or ordinary income (currently a maximum rate of 35%). For corporate
holders, capital gain is generally taxed for federal income tax
purposes at the same rate as ordinary income, that is, currently at
a maximum rate of 35%. A holder&#146;s ability to deduct capital losses may be limited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you purchase debt securities at a cost greater than their stated principal amount, plus
accrued interest, you will be considered to have purchased the debt securities at a premium, and
you generally may elect to amortize this premium as an offset to interest income, using a constant
yield method, over the remaining term of the debt securities. If you make the election to amortize
the premium, it generally will apply to all debt instruments that you
hold at the beginning of the first taxable year to which the election
applies, as well as any debt instruments that you subsequently acquire. In addition, you may not
revoke the election without the consent of the IRS. If you elect to amortize the premium, you will
be required to reduce your tax basis in the debt securities by the amount of the premium amortized
during your holding period. If you do not elect to amortize premium, the amount of premium will be
included in your tax basis in the debt securities. Therefore, if you do not elect to amortize the
premium and you hold the debt securities to maturity, you generally will be required to treat the
premium as a capital loss when the debt securities are redeemed.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you purchase debt securities at a price that reflects a &#147;market discount,&#148; any principal
payments on, or any gain that you realize on the disposition of, the debt securities generally will
be treated as ordinary interest income to the extent of the market discount that accrued on the
debt securities during the time you held such debt securities. &#147;Market discount&#148; is defined under
the Code as, in general, the excess of the stated redemption price at maturity
over the purchase price of the debt security, except that if the market discount is less than 0.25%
of the stated redemption price at maturity multiplied by the number of complete years to maturity,
the market discount is considered to be zero. In addition, you may be required to defer the
deduction of all or a portion of any interest paid on any indebtedness that you incurred or
continued to purchase or carry the debt securities that were acquired at a market discount. In
general, market discount will be treated as accruing ratably over the term of the debt securities,
or, at your election, under a constant yield method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may elect to include market discount in gross income currently as it accrues (on either a
ratable or constant yield basis), in lieu of treating a portion of any gain realized on a sale of
the debt securities as ordinary income. If you elect to include market discount on a current
basis, the interest deduction deferral rule described above will not apply and you will increase
your basis in the debt security by the amount of market discount you include in gross income. If
you do make such an election, it will apply to all market discount debt instruments that you
acquire on or after the first day of the first taxable year to which the election applies. This
election may not be revoked without the consent of the IRS.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Information Reporting and Backup Withholding</I>. In general, information reporting requirements
will apply to payments of principal, interest, and premium, if any, paid on debt securities and to
the proceeds of the sale of debt securities paid to U.S. holders other than certain exempt
recipients (such as certain corporations). Information reporting generally will apply to payments
of interest on the debt securities to non-U.S. Holders (as defined below) and the amount of tax, if
any, withheld with respect to such payments. Copies of the information returns reporting such
interest payments and any withholding may also be made available to the tax authorities in the
country in which the non-U.S. Holder resides under the provisions of an applicable income tax
treaty. In addition, for non-U.S. Holders, information reporting will apply to the proceeds of the
sale of debt securities within the United States or conducted through United States-related
financial intermediaries unless the certification requirements described below have been complied
with and the statement described below in &#147;Taxation of Non-U.S. Holders&#148; has been received (and the
payor does not have actual knowledge or reason to know that the holder is a United States person)
or the holder otherwise establishes an exemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may be required to withhold, for U.S. federal income tax purposes, a portion of all
payments (including redemption proceeds) payable to holders of debt securities who fail to provide
us with their correct taxpayer identification number, who fail to make required certifications or
who have been notified by the IRS that they are subject to backup withholding (or if we have been
so notified). Certain corporate and other shareholders specified in the Code and
the regulations thereunder are exempt from backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the holder&#146;s U.S. federal income tax
liability provided the appropriate information is furnished to the IRS. If you are a non-U.S.
Holder, you may have to comply with certification procedures to establish your non-U.S. status in
order to avoid backup withholding tax requirements. The certification procedures required to claim
the exemption from withholding tax on interest income described below will satisfy these
requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Taxation of Non-U.S. Holders</I>. If you are a non-resident alien individual or a foreign
corporation (a &#147;non-U.S. Holder&#148;), the payment of interest on the debt securities generally will be
considered &#147;portfolio interest&#148; and thus generally will be exempt from United States federal
withholding tax. This
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-49<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">exemption will apply to you provided that (1)&nbsp;interest paid on the debt securities is not
effectively connected with your conduct of a trade or business in the United States, (2)&nbsp;you are
not a bank whose receipt of interest on the debt securities is described in Section&nbsp;881(c)(3)(A) of
the Internal Revenue Code, (3)&nbsp;you do not actually or constructively own 10&nbsp;percent or more of the
combined voting power of all classes of our stock entitled to vote, (4)&nbsp;you are not a controlled
foreign corporation that is related, directly or indirectly, to us through stock ownership, and
(5)&nbsp;you satisfy the certification requirements described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To satisfy the certification requirements, either (1)&nbsp;the holder of any debt securities must
certify, under penalties of perjury, that such holder is a non-U.S. person and must provide such
owner&#146;s name, address and taxpayer identification number, if any, on IRS Form W-8BEN, or (2)&nbsp;a
securities clearing organization, bank or other financial institution that holds customer
securities in the ordinary course of its trade or business and holds the debt securities on behalf
of the holder thereof must certify, under penalties of perjury, that it has received a valid and
properly executed IRS Form W-8BEN from the beneficial holder and comply with certain other
requirements. Special certification rules apply for debt securities held by a foreign partnership
and other intermediaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest on debt securities received by a non-U.S. Holder that is not excluded from U.S.
federal withholding tax under the portfolio interest exemption as described above generally will be
subject to withholding at a 30% rate, except where (1) the interest is effectively connected with the conduct of a U.S.
trade or business, in which case the interest will be subject to U.S. income tax on a net basis as applicable to U.S.
holders generally or (2) a non-U.S. Holder can claim the benefits of an
applicable income tax treaty to reduce or eliminate such withholding
tax. To claim the benefit of an income tax treaty or to claim an exemption from withholding because the interest is
effectively connected with a U.S. trade or business, a non-U.S. Holder must timely provide the appropriate, properly
executed IRS forms.  These forms may be required to be periodically updated.  Also, a non-U.S. Holder who is claiming
the benefits of an income tax treaty may be required to obtain a U.S. taxpayer identification number and to provide
certain documentary evidence issued by foreign governmental authorities to prove residence in the foreign country.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any capital gain that a non-U.S. Holder realizes on a sale, exchange or other disposition of
debt securities generally will be exempt from U.S. federal income tax, including
withholding tax. This exemption will not apply to you if your gain is effectively connected with
your conduct of a trade or business in the U.S. or you are an individual holder and are present in
the U.S. for a period or periods aggregating 183&nbsp;days or more in the taxable year of the disposition and either your gain is
attributable to an office or other fixed place of business that you maintain in the U.S. or you
have a tax home in the United States.
</DIV>

<DIV align="left">
<A name="142"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CUSTODIAN, TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s securities and cash are held under a custodian agreement with The Bank of New York,
One Wall Street, New York, New York 10286. The transfer agent, dividend disbursing agent and
registrar for the Fund&#146;s shares is also The Bank of New York.
</DIV>
<DIV align="left">
<A name="143"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deloitte
&#038; Touche LLP, 111 S. Wacker Drive, Chicago, Illinois 60606, serves as our independent registered public accounting firm. Deloitte
&#038; Touche LLP provides
audit and audit-related services, and consultation in
connection with the review of our filing with the SEC.
</DIV>
<DIV align="left">
<A name="144"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDITIONAL INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Registration Statement on Form N-2, including amendments thereto,
relating to the securities
offered hereby, has been filed by the Fund with the SEC, Washington, D.C. The prospectus,
prospectus supplement and this Statement of Additional Information do not contain all of the
information set forth in the Registration Statement, including any exhibits and schedules thereto.
For further information with
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->S-50<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">respect to
the Fund and the securities offered hereby, reference is made to the Registration
Statement. Statements contained in the prospectus, prospectus supplement and this Statement of
Additional Information as to the contents of any contract or other document referred to are not
necessarily complete and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. A copy of the Registration Statement may be inspected without
charge at the SEC&#146;s principal office in Washington, D.C., and copies of all or any part thereof may
be obtained from the SEC upon the payment of certain fees prescribed by the SEC.
</DIV>

<DIV align="left">
<A name="145"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDITIONAL INFORMATION CONCERNING THE AGREEMENT<BR>
AND DECLARATION OF TRUST</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund&#146;s Agreement and Declaration of Trust provides that the Fund&#146;s Trustees shall have the
power to cause each shareholder to pay directly, in advance or arrears, for charges of the Fund&#146;s
custodian or transfer, shareholder servicing or similar agent, an amount fixed from time to time by
the Trustees, by setting off such charges due from such shareholder from declared but unpaid
dividends owed such shareholder and/or by reducing the number of shares in the account of such
shareholder by that number of full and/or fractional shares which represents the outstanding amount
of such charges due from such shareholder. The Fund has no present intention of relying on this
provision of the Agreement and Declaration of Trust and would only do so if consistent with the
1940 Act or the rules and regulations or interpretations of the SEC thereunder.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->S-51<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">
Report of Independent Registered Public Accounting Firm
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
To the Board of Trustees and Shareholders of
<FONT STYLE="FONT-VARIANT: SMALL-CAPS">Calamos</FONT> Global Total Return Fund
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have audited the accompanying statement of assets and liabilities, including the schedule of
investments, of CALAMOS Global
Total Return Fund (the &#147;Fund&#148;) as of October&nbsp;31, 2007, and the related statement of operations for
the year then ended, the statements
of changes in net assets for each of the two years then ended, and the financial highlights for
each of the two years then ended
and for the period from October&nbsp;27, 2005 (commencement of operations) through October&nbsp;31, 2005.
These financial statements and
financial highlights are the responsibility of the Fund&#146;s management. Our responsibility is to
express an opinion on these financial
statements and financial highlights based on our audits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States).
Those standards require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements
and financial highlights are free of material misstatement. The Fund is not required to have, nor
were we engaged to perform, an
audit of its internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the
effectiveness of the Fund&#146;s internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. Our procedures
included confirmation of securities owned as of October&nbsp;31, 2007, by correspondence with the Fund&#146;s
custodian and brokers.
We believe that our audits provide a reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our opinion, the financial statements and financial highlights referred to above present fairly,
in all material respects, the financial
position of the Fund as of October&nbsp;31, 2007, the results of its operations for the year then ended,
the changes in its net assets for each
of the two years then ended, and the financial highlights for each of the two years then ended and
for the period from October&nbsp;27,
2005 (commencement of operations) through October&nbsp;31, 2005, in conformity with accounting
principles generally accepted in the
United States of America.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="c19483fc1948300.gif" alt="(DELOITTE &#038; TOUCHE LLP LOGO )"></div>

<DIV align="left" style="font-size: 10pt; margin-top: 0pt">Chicago, Illinois<BR>
December&nbsp;14, 2007
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Statement of Assets and Liabilities
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="4" style="border-bottom: 1px solid #000000"><B>October 31, 2007</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments, at value* (cost $185,586,321)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">240,348,357</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments in affiliated fund (cost $1,952,459)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,952,459</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash with custodian (interest bearing)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,134</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest and dividends receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,012,157</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">244,340,411</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LIABILITIES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Options written, at value (premium $2,344,844)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,130,475</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash collateral for securities on loan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,371,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Affiliates:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Investment advisory fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186,319</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Financial accounting fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,130</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred compensation to Trustees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,669</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Trustee fees and officer compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">257</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,762</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,781,612</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>PREFERRED SHARES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$25,000 liquidation value per share applicable to 2,360 shares, including dividends payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,008,196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,550,603</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>COMPOSITION OF NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common stock, no par value, unlimited shares authorized 8,006,981 shares issued and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">113,591,761</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Undistributed net investment income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(206,348</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated net realized gain (loss)&nbsp;on investments, written options, and foreign currency transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,166,189</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net unrealized appreciation (depreciation)&nbsp;on investments, written options, and foreign currency translations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,999,001</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,550,603</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net asset value per common share based on 8,006,981 shares issued and outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21.05</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">*Including securities on loan with a value of $13,457,659.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Financial Statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Statement of Operations
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="4" style="border-bottom: 1px solid #000000"><B>Year Ended October 31, 2007</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>INVESTMENT INCOME</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,068,902</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends (net of foreign taxes withheld of $92,485)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,959,321</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends from affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,656</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Securities lending income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,793</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,117,672</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>EXPENSES</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investment advisory fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,016,530</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial accounting fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,829</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Auction agent and rating agency fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">165,167</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit and legal fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,739</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Custodian fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,366</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Printing and mailing fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Transfer agent fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,401</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Registration fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,386</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trustees&#146; fees and officer compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,851</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accounting fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,587</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investor support services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,717</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,182</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,460,281</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Less expense reductions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8,309</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,451,972</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">NET INVESTMENT INCOME(LOSS)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,665,700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>REALIZED AND UNREALIZED GAIN(LOSS) FROM INVESTMENTS,
WRITTEN OPTIONS, AND FOREIGN CURRENCY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net realized gain (loss)&nbsp;from:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,396,512</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Written options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,797,667</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Foreign currency transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,472</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Change in net unrealized appreciation/depreciation on:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,380,232</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Written options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,015,939</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Foreign currency translations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,564</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">NET REALIZED AND UNREALIZED GAIN (LOSS)&nbsp;FROM INVESTMENTS, WRITTEN OPTIONS, AND FOREIGN CURRENCY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,062,052</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">NET INCREASE (DECREASE)&nbsp;IN NET ASSETS RESULTING FROM OPERATIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,727,752</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>DISTRIBUTIONS TO PREFERRED SHAREHOLDERS FROM</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,095,387</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21,448</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">NET INCREASE (DECREASE)&nbsp;IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47,610,917</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Financial Statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Statements of Changes in Net Assets
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Year Ended October 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>OPERATIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,665,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,878,195</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net realized gain (loss)&nbsp;from investments, written options, and foreign currency transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,648,317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,569,858</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in net unrealized appreciation/depreciation on investments, written options, and foreign currency translations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,413,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,585,266</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions to preferred shareholders from:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,095,387</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,331,114</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21,448</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase (decrease)&nbsp;in net assets applicable to common shareholders resulting from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,610,917</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,702,205</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8,697,994</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,173,457</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(950,430</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,532,399</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net decrease in net assets from distributions to common shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,648,424</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,705,856</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>CAPITAL SHARE TRANSACTIONS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Offering costs on preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(847,169</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net increase (decrease)&nbsp;in net assets from capital share transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(847,169</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TOTAL
INCREASE (DECREASE)&nbsp;IN NET ASSETS APPLICABLE TO COMMON <br>SHAREHOLDERS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,962,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,149,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">130,588,110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">114,438,930</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">End of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168,550,603</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,588,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Undistributed net investment income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(206,348</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">481,284</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Financial Statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-4<!-- /Folio -->
</DIV>




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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NOTE 1 &#151; ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Organization. </B>CALAMOS Global Total Return Fund (the ''Fund&#146;&#146;) was organized as a Delaware statutory
trust on March&nbsp;30, 2004 and is registered under the Investment Company Act of 1940 (the &#147;1940 Act&#148;)
as a diversified, closed-end management investment company. The Fund commenced operations on
October&nbsp;27, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund&#146;s investment objective is to provide total return through a combination of capital
appreciation and current income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Portfolio Valuation. </B>Calamos Advisors LLC, the Fund&#146;s investment adviser (&#147;Calamos Advisors&#148;),
overseas the valuation of the Fund&#146;s portfolio securities in accordance with policies and
procedures on the valuation of securities adopted by and under the ultimate supervision of the
Board of Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Portfolio securities that are traded on U.S. securities exchanges, except option securities, are
valued at the last current reported sales price at the time as of which a Fund determines its net
asset value (&#147;NAV&#148;). Securities traded in the over-the-counter (''OTC&#146;&#146;) market and quoted on The
NASDAQ Stock Market are valued at the NASDAQ Official Closing Price (''NOCP&#146;&#146;), as determined by
NASDAQ, or lacking a NOCP, the last current reported sale price on NASDAQ at the time as of which a
Fund determines its NAV.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When a most recent last sale or closing price is not available, portfolio securities, other than
option securities, that are traded on a U.S. securities exchange and other securities traded in the
OTC market are valued at the mean between the most recent bid and asked quotations in accordance
with guidelines adopted by the Board of Trustees. Each option security traded on a U.S. securities
exchange is valued at the mid-point of the consolidated bid/ask quote for the option security, also
in accordance with guidelines adopted by the Board of Trustees. Each OTC option that is not traded
through the Options Clearing Corporation is valued based on a quotation provided by the
counterparty to such option under the ultimate supervision of the Board of Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Trading in securities on European and Far Eastern securities exchanges and OTC markets is typically
completed at various times before the close of business on each day on which the New York Stock
Exchange (&#147;NYSE&#148;) is open. Each security trading on these exchanges or OTC markets is evaluated
utilizing a systematic fair valuation model provided by an independent pricing service approved by
the Board of Trustees. The valuation of each security that meets certain criteria in relation to
the valuation model is systematically adjusted to reflect the impact of movement in the U.S. market
after the foreign markets close. Securities that do not meet the criteria, or that are principally
traded in other foreign markets, are valued as of the last current sale price at the time as of
which the Fund determines its NAV, or when reliable market prices or quotations are not readily
available, at the mean between the most recent bid and asked quotations as of the close of the
appropriate exchange or other designated time, in accordance with guidelines adopted by the Board
of Trustees. Trading of foreign securities may not take place on every NYSE business day. In
addition, trading may take place in various foreign markets on Saturdays or on other days when the
NYSE is not open and on which the Fund&#146;s NAV is not calculated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the pricing committee determines that the valuation of a security in accordance with the methods
described above is not reflective of a fair value for such security, the security, including any
thinly-traded security, below investment grade bond or synthetic convertible instrument, is valued
at a fair value by the pricing committee, under the ultimate supervision of the Board of Trustees,
following the guidelines and/or procedures adopted by the Board of Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund also may use fair value pricing, pursuant to guidelines adopted by the Board of Trustees and under the ultimate supervision of the Board of Trustees, if the value of a foreign
security it holds is materially affected by events occurring before the Fund&#146;s pricing time but
after the close of the primary markets or exchanges on which the security is traded. Those
procedures may utilize valuations furnished by pricing services approved by the Board of Trustees,
which may be based on market transactions for comparable securities and various relationships
between securities that are generally recognized by institutional traders, a computerized matrix
system, or appraisals derived from information concerning the securities or similar securities
received from recognized dealers in those securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When fair value pricing of securities is employed, the prices of securities used by the Fund to
calculate its NAV may differ from market quotations or official closing prices. In light of the
judgment involved in fair valuations, there can be no assurance that a fair value assigned to a
particular security is accurate.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Investment Transactions. </B>Short-term and long-term investment transactions are recorded on a trade
date basis as of October&nbsp;31, 2007. Net realized gains and losses from investment transactions are
reported on an identified cost basis. Interest income is recognized using the accrual method and
includes accretion of original issue and market discount and amortization of premium. Dividend
income is recognized on the ex-dividend date, except that certain dividends from foreign securities
are recorded as soon as the information becomes available.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Foreign Currency Translation. </B>Values of investments and other assets and liabilities denominated in
foreign currencies are translated into U.S. dollars using a rate quoted by a major bank or dealer
in the particular currency market, as reported by a recognized quotation dissemination service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund does not isolate that portion of the results of operations resulting from changes in
foreign exchange rates on investments from the fluctuations arising from changes in market prices
of securities held. Such fluctuations are included with the net realized and unrealized gain or
loss from investments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Recorded net realized foreign currency gains or losses arise from disposition of foreign currency,
the difference in the foreign exchange rates between the trade and settlement dates on securities
transactions, and the difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the ex-date or accrual date and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses arise from changes (due
to the changes in the exchange rate) in the value of foreign currency and other assets and
liabilities denominated in foreign currencies held at period end.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Option Transactions. </B>For hedging and investment purposes, the Fund may purchase or write (sell)&nbsp;put
and call options. One of the risks associated with purchasing an option is that the Fund pays a
premium whether or not the option is exercised. Additionally, the Fund bears the risk of loss of
premium and change in market value should the counterparty not perform under the contract. Put and
call options purchased are accounted for in the same manner as portfolio securities. The cost of
securities acquired through the exercise of call options is increased by premiums paid. The
proceeds from securities sold through the exercise of put options are decreased by the premiums paid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current value of the option written. Premiums
received from writing options that expire unexercised are treated by the Fund on the expiration
date as realized gains from written options. The difference between the premium and the amount paid
on effecting a closing purchase transaction, including brokerage commissions, is also treated as a
realized gain, or, if the premium is less than the amount paid for the closing purchase
transaction, as a realized loss. If a written call option is exercised, the premium is added to the
proceeds from the sale of the underlying security or currency in determining whether the Fund has
realized a gain or loss. If a written put option is exercised, the premium reduces the cost basis
of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of
an unfavorable change in the price of the security underlying the written option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Allocation of Expenses Among Funds. </B>Expenses directly attributable to the Fund are charged to the
Fund; certain other expenses of Calamos Investment Trust, Calamos Advisors Trust, Calamos
Convertible Opportunities and Income Fund, Calamos Convertible and High Income Fund, Calamos
Strategic Total Return Fund, Calamos Global Total Return Fund and Calamos Global Dynamic Income
Fund are allocated proportionately among each fund in relation to the net assets of each fund or on
another reasonable basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Use of Estimates. </B>The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual results may differ
from those estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Income Taxes. </B>No provision has been made for U.S. income taxes because the Fund&#146;s policy is to
continue to qualify as regulated investment company under the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;), and distribute to shareholders substantially all of its taxable income and
net realized gains.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-6<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends and distributions paid to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income and net realized capital gains is
determined in accordance with federal income tax regulations, which may differ from U.S. generally
accepted accounting principles. To the extent these &#147;book/tax&#148; differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal tax-basis
treatment. These differences are primarily due to differing treatments for foreign currency
transactions, contingent payment debt instruments and methods of amortizing and accreting on fixed
income securities. The financial statements are not adjusted for temporary differences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Indemnifications. </B>Under the Fund&#146;s organizational documents, the Fund is obligated to indemnify its
officers and trustees against certain liabilities incurred by them by reason of having been an
officer or trustee of the Fund. In addition, in the normal course of business, the Fund
may enter into contracts that provide general indemnifications to other parties. The Fund&#146;s maximum
exposure under these arrangements is unknown as this would involve future claims that may be made
against the Fund that have not yet occurred. Currently, the Fund&#146;s management expects the risk of
material loss in connection to a potential claim to be remote.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>New Accounting Pronouncements. </B>On July&nbsp;13, 2006, the Financial Accounting Standards Board (FASB)
released FASB Interpretation No.&nbsp;48 Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 provides guidance
for how uncertain tax positions should be recognized, measured, presented and disclosed in the
financial statements. FIN 48 requires the evaluation of tax positions taken in the course of
preparing the Fund&#146;s tax returns to determine whether the tax positions are &#147;more-likely-than-not&#148;
of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet
the more-likely-than-not threshold would be recorded as a tax expense in the current year. Adoption
of FIN 48 is required for fiscal years beginning after December&nbsp;15, 2006 and is to be applied to
all open tax years as of the effective date. At this time, management is evaluating the
implications of FIN 48, and its impact on the financial statements has not yet been determined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, in September&nbsp;2006, the Statement of Financial Accounting Standards No.&nbsp;157, <I>Fair Value
Measurements </I>(SFAS 157), was issued and is effective for fiscal years beginning after November&nbsp;15,
2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund&#146;s financial statements, and their disclosures and its
impact has not yet been determined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 2 &#151; INVESTMENT ADVISOR AND TRANSACTIONS WITH AFFILIATES OR CERTAIN OTHER PARTIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to an investment advisory agreement with Calamos Advisors LLC (&#147;Calamos Advisors&#148;), the
Fund pays an annual fee, payable monthly, equal to 1.00% based on the average weekly managed
assets. Calamos Advisors has contractually agreed to waive a portion of its advisory fee charged to
the Fund on the Fund&#146;s investments in the Calamos Government Money Market Fund (&#147;GMMF,&#148; an
affiliated fund and a series of Calamos Investments Trust), equal to the advisory fee attributable
to the Fund&#146;s investment in GMMF, based on daily net assets. For the year ended October&nbsp;31, 2007,
the total advisory fee waived pursuant to such agreement was $2,477 and is included in the
statement of operations under the caption &#147;Less expense reduction&#148;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to a financial accounting services agreement, the Fund also pays Calamos Advisors a fee
for financial accounting services payable monthly at the annual rate of 0.0175% on the first $1
billion of combined assets; 0.0150% on the next $1&nbsp;billion of combined assets and 0.0110% on
combined assets above $2&nbsp;billion (for purposes of this calculation &#147;combined assets&#148; means the sum
of the total average daily net assets of Calamos Investment Trust and Calamos Advisors Trust, and
the total average weekly managed assets of Calamos Convertible and High Income Fund, Calamos
Convertible Opportunities and Income Fund, Calamos Strategic Total Return Fund, Calamos Global
Total Return Fund and Calamos Global Dynamic Income Fund). &#147;Managed assets&#148; means the Fund&#146;s total
assets (including any assets attributable to any leverage that may be outstanding) minus total
liabilities (other than debt representing financial leverage). Financial accounting services
include, but are not limited to, the following: managing expenses and expenses payment processing;
monitoring the calculation of expense accrual amounts; calculating, tracking and reporting tax
adjustments on all assets; and monitoring trustee deferred compensation plan accruals and
valuations. The Fund pays its pro rata share of the financial accounting services fee to Calamos
Advisors based on the Fund&#146;s respective managed assets and/or net assets used in calculating the
fee.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-7<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund reimburses Calamos Advisors for a portion of compensation paid to the Fund&#146;s Chief
Compliance Officer. This compensation is reported as part of &#147;Trustees&#146; fee and officer
compensation&#148; expenses on the Statement of Operations. Included in the statement of operations under
the caption &#147;Less expense reduction&#148; are expense offsets of $5,832, arising from credits on cash
balances maintained on deposit with the Fund&#146;s custodian.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain officers and trustees of the Fund are also officers and directors of Calamos Financial
Services LLC (&#147;CFS&#148;) and Calamos Advisors. All such officers and affiliated trustees serve without
direct compensation from the Fund, except for the Chief Compliance Officer as described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund has adopted a deferred compensation plan (the &#147;Plan). Under the Plan, a trustee who is not
an &#147;interested person&#148; (as defined in the 1940 Act) of the Fund and has elected to participate in
the Plan (a &#147;participating trustee&#148;) may defer receipt of all or a portion of his compensation from
the Fund. The deferred compensation payable to the participating trustee is credited to the
trustee&#146;s deferral account as of the business day such compensation would have been paid to the
participating trustee. The value of amount deferred for a participating trustee is determined by
reference to the change in value of Class&nbsp;I shares of one or more funds of Calamos Investment Trust
designated by the participant. The value of the account increases with contributions to the account
or with increases in the value of the measuring shares, and the value of the account decreases with
withdrawals from the account or with declines in the value of the measuring shares. Deferred
compensation investments of $17,669 is included in &#147;Other assets&#148; on the Statement of Assets and
Liabilities at October&nbsp;31, 2007. The Fund&#146;s obligation to make payments under the Plan is a general
obligation of the Fund and is included in &#147;Payable for deferred compensation to Trustees&#148; on the
Statement of Assets and Liabilities at October&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 3 &#151; INVESTMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Purchases and sales of investments, other than short-term investments, for the year ended October
31, 2007 were as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">171,519,737</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Proceeds from sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">179,153,867</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following information is presented on a Federal income tax basis as of October&nbsp;31, 2007.
Differences between the cost basis under U.S. generally accepted accounting principals and federal
income tax purposes are primarily due to timing differences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The cost basis of investments for Federal income tax purposes at October&nbsp;31, 2007 was as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross basis of investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">187,685,356</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross unrealized appreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">57,484,707</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross unrealized depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,869,247</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net unrealized appreciation (depreciation)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">54,615,460</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 4 &#151; INCOME TAXES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the year ended October&nbsp;31, 2007, the Fund recorded the following permanent reclassifications to
reflect tax character. Results of operations and net assets were not affected by these
reclassifications.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Undistributed net investment income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,440,049</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated net realized gain/(loss) on investments, written options and foreign currency transactions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,440,049</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Distributions during the fiscal year ended October&nbsp;31, 2006 and October&nbsp;31, 2007 were characterized
for Federal income tax purposes as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Distributions paid from:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ordinary income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,287,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,980,754</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,526,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-8<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of October&nbsp;31, 2007, the components of accumulated earnings/(loss) on a tax basis were as
follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Undistributed ordinary income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Undistributed capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,129,096</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total undistributed earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,129,096</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated capital and other losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net unrealized gains/(losses)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53,852,425</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total accumulated earnings/(losses)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54,981,521</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,679</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">113,591,761</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net assets applicable to common shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,550,603</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 5
&#150; COMMON SHARES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are unlimited common shares of beneficial interest authorized and 8,006,981 shares
outstanding at October&nbsp;31, 2007. Calamos Advisors owned 7,915 of the outstanding shares at October
31, 2007. Transactions in common shares were as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>For the Year Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>For the Year Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>October 31, 2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>October 31, 2006</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beginning shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,006,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,006,981</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shares issued through reinvestment of distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ending shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,006,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,006,981</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 6
&#150; FORWARD FOREIGN CURRENCY CONTRACTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund may engage in portfolio hedging with respect to changes in currency exchange rates by
entering into foreign currency contracts to purchase or sell currencies. A forward foreign currency
contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated
forward rate. Risks associated with such contracts include, among other things, movement in the
value of the foreign currency relative to U.S. dollar and the ability of the counterparty to
perform. The net unrealized gain, if any, represents the credit risk to the Fund on a forward
foreign currency contract. The contracts are valued daily at forward foreign exchange rates and an
unrealized gain or loss is recorded. The Fund realizes a gain or loss when a position is closed or
upon settlement of the contracts. There were no open forward currency contracts at October&nbsp;31,
2007.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 7 &#151; PREFERRED SHARES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are unlimited shares of Auction Rate Cumulative Preferred Shares (&#147;Preferred Shares&#148;)
authorized. The Preferred Shares have rights as determined by the Board of Trustees. The 2,360
shares of Preferred Shares outstanding consist of one series, 2,360 shares of T. The Preferred
Shares have a liquidation value of $25,000 per share plus any accumulated but unpaid dividends,
whether or not declared.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dividends on the Preferred Shares are cumulative at a rate typically reset every seven or
twenty-eight days based on the results of an auction. Dividend rates ranged from 4.90% to 6.25% for
the year ended October&nbsp;31, 2007. Under the 1940 Act, the Fund may not declare dividends or make
other distributions on its common shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred
Shares would be less than 200%.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Preferred Shares are redeemable at the Fund&#146;s option, in whole or in part, on any dividend
payment date at $25,000 per share plus any accumulated but unpaid dividends. The Preferred Shares
are also subject to mandatory redemption at $25,000 per share plus any accumulated but unpaid
dividends, whether or not declared, if certain requirements relating to the composition of the
assets and liabilities of the Fund as set forth in the Statement of Preferences are not satisfied.
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->F-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The holders of Preferred Shares have voting rights equal to the holders of common shares (one vote
per share) and will vote together with holders of common shares as a single class except on matters
affecting only the holders of Preferred Shares or only the holders of common shares, when the
respective classes vote alone.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 8
&#150; WRITTEN OPTIONS TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund may engage in option transactions and in doing so achieve the similar objectives to what
it would achieve through the sale or purchase of individual securities. For the fiscal year ended
October, 31, 2007, the Fund had the following transactions in options written:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Premiums</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Contracts</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Received</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>

    <TD colspan="8" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options outstanding at October&nbsp;31, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,441,680</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options written</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,960,197</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options closed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,598</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,669,986</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options expired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,252</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(387,047</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD colspan="8" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options outstanding at October&nbsp;31, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,344,844</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 0px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE 9
&#150; SECURITIES LENDING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the fiscal year ended October&nbsp;31, 2007, the Fund loaned one or more of its securities to
broker-dealers and banks. Any such loan must be continuously secured by collateral in cash or cash
equivalents maintained on a current basis in an amount at least equal to the market value of the
securities loaned by the Fund. The Fund continues to receive the equivalent of the interest or
dividends paid by the issuer on the securities loaned and also receives an additional return that
may be in the form of a fixed fee or a percentage of the collateral. The Fund may pay reasonable
fees to persons unaffiliated with the Fund for services in arranging these loans. The Fund has the
right to call the loan and obtain the securities loaned at any time on notice of not less than five
business days. The Fund does not have the right to vote the securities during the existence of the
loan but could call the loan in an attempt to permit voting of the securities in certain
circumstances. Upon return of the securities loaned, the cash or cash equivalent collateral will be
returned to the borrower. In the event of bankruptcy or other default of the borrower, the Fund
could experience both delays in liquidating the loan collateral or recovering the loaned securities
and losses, including (a)&nbsp;possible decline in the value of the collateral or in the value of the
securities loaned during the period while the Fund seeks to enforce its rights thereto, (b)
possible subnormal levels of income and lack of access to income during this period, and (c)&nbsp;the
expenses of enforcing its rights. The market value of the loaned securities is determined at the
close of business of the Fund and any additional required collateral is delivered to the Fund the
next day. In an effort to reduce these risks, the Fund&#146;s security lending agent monitors and
reports to Calamos Advisors on the creditworthiness of the firms to which the Fund lends
securities. At October&nbsp;31, 2007, the Fund had securities valued at $13,457,659 on loan to
broker-dealers and banks and $13,371,000 in cash or
cash equivalent collateral.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>NOTE
10 &#150; SYNTHETIC CONVERTIBLE SECURITIES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund
may establish a &#147;synthetic&#146;&#146; convertible instrument by combining separate securities that
possess the economic characteristics similar to a convertible security, i.e., fixed-income
securities (&#147;fixed-income component&#146;&#146;, which may be a convertible or non-convertible security) and
the right to acquire equity securities (&#147;convertible component&#146;&#146;). The fixed-income component is
achieved by investing in fixed income securities such as bonds, preferred stocks and money market
instruments. The convertible component is achieved by investing in warrants or options to buy
common stock at a certain exercise price, or options on a stock index. In establishing a synthetic
instrument, the Fund may pool a basket of fixed-income securities and a basket of warrants or
options that produce the economic characteristics similar to a convertible security. Within each
basket of fixed-income securities and warrants or options, different companies may issue the
fixed-income and convertible components, which may be purchased separately and at different times.
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->F-10<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Notes to Financial Statements
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Fund may also purchase synthetic securities created by other parties, typically investment
banks, including convertible structured notes. Convertible structured notes are fixed-income
debentures linked to equity. Convertible structured notes have the attributes of a convertible
security; however, the investment bank that issued the convertible note assumes the credit risk
associated with the investment, rather than the issuer of the underlying common stock into which
the note is convertible. Purchasing synthetic convertible securities may offer more flexibility
than purchasing a convertible security.
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->F-11<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Financial Highlights
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Selected data for a common share outstanding throughout each period were as follows:</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">October 27,</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">2005*</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">For the</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">through</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Year Ended October 31,</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">October 31,</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2007</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2005</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net asset value, beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">14.32</TD>
    <TD nowrap>(a)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income from investment operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.96</TD>
    <TD nowrap>**</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>(b)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net realized and unrealized gain (loss)&nbsp;from investments, written options
and foreign currency</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distributions to preferred shareholders from:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income (common share equivalent basis)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.39</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.29</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital gains (common share equivalent basis)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&#151;</TD>
    <TD>b&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total from investment operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Less distributions to common shareholders from:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.09</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.65</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital gains</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.19</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital charge resulting from issuance of common and preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net asset value, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Market value, end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15.00</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total investment return based on(c):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net asset value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">38.30</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20.77</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(0.24</TD>
    <TD nowrap>)%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Market value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">33.84</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratios and supplemental data:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net assets applicable to common shareholders, end of period (000&#146;s omitted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">168,551</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">130,588</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">114,439</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred shares, at redemption value ($25,000 per share liquidation
preference) (000&#146;s omitted)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">59,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">59,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ratios to average net assets applicable to common shareholders:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net expenses(d)(e)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.72</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.70</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.33</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross expenses(d)(e)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.72</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.70</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.37</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income (loss)(d)(e)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5.57</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1.33</TD>
    <TD nowrap>)%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Preferred share distributions from net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.17</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.89</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net investment income (loss), net of preferred share distributions from net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.68</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.00</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Portfolio turnover rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">85</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">32</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average commission rate paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.0377</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.0258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Asset coverage per preferred share, at end of period(f)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">96,423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">80,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Commencement of operations.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">**</TD>
    <TD>&nbsp;</TD>
    <TD>Net investment income allocated based on average shares method.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Net of sales load of $0.675 on initial shares issued and
beginning net asset value of $14.325. </TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Amount equated to less
than $0.005 per common share.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(c)</TD>
    <TD>&nbsp;</TD>
    <TD>Total investment return is calculated assuming a purchase of common shares on the opening of
the first day and a sale on the closing of the last day of the period reported. Dividends and
distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained
under the Fund&#146;s dividend reinvestment plan. Total return is not annualized for periods less than
one year. Brokerage commissions are not reflected. NAV per share is determined by dividing the
value of the Fund&#146;s portfolio securities, cash and other assets, less all liabilities, by the total
number of common shares outstanding. The common share market price is the price the market is
willing to pay for shares of the Fund at a given time. Common share market price is influenced by a
range of factors, including supply and demand and market conditions.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(d)</TD>
    <TD>&nbsp;</TD>
    <TD>Annualized for periods less than one year.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(e)</TD>
    <TD>&nbsp;</TD>
    <TD>Does not reflect the effect of dividend payments to the shareholders of Preferred Shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(f)</TD>
    <TD>&nbsp;</TD>
    <TD>Calculated by subtracting the Fund&#146;s total liabilities (not including Preferred Shares)
from the Fund&#146;s total assets and dividing this by the number of Preferred Shares outstanding.</TD>
</TR>

</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-12<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Schedule of Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>OCTOBER 31, 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>PRINCIPAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>AMOUNT</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>CORPORATE BONDS (28.3%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (14.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">$</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Asbury Automotive Group, Inc.^<BR>
7.625%, 03/15/17</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,410,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,060,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">DIRECTV Financing Company,
Inc.~<BR>
8.375%, 03/15/13</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,163,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Expedia, Inc.~<BR>
7.456%, 08/15/18</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,033,693</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,600,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Ford Motor Company~<BR>
9.875%, 08/10/11</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,598,811</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">General Motors Corp.^<BR>
7.200%, 01/15/11</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">960,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,875,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Goodyear Tire &#038; Rubber Company~<BR>
7.857%, 08/15/11</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,950,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Hanes Brands, Inc.~&#135;<BR>
8.784%, 12/15/14</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,020,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Idearc, Inc.~<BR>
8.000%, 11/15/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,015,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">440,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Jarden Corp.~<BR>
7.500%, 05/01/17</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Liberty Media Corp.~<BR>
8.250%, 02/01/30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,976,040</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Mandalay Resort Group~<BR>
7.625%, 07/15/13</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,995,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,325,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">NCL Holding, ASA~<BR>
10.625%, 07/15/14</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,365,688</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Royal Caribbean Cruises, Ltd.~<BR>
7.500%, 10/15/27</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,900,012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Service Corp. International~<BR>
7.500%, 04/01/27</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,880,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,687,444</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Staples (2.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Del Monte Foods Company~<BR>
8.625%, 12/15/12</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,537,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Pilgrim&#146;s Pride Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">8.375%, 05/01/17^</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,518,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">7.625%, 05/01/15~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">505,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,561,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Energy (0.5%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">750,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Petr&#243;leo Brasileiro, SA~<BR>
8.375%, 12/10/18</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">885,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Financials (0.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">E*TRADE Financial Corp.~<BR>
7.875%, 12/01/15</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">460,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">920,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Leucadia National Corp.~<BR>
8.125%, 09/15/15</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">932,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,392,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Health Care (1.7%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,800,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">HCA, Inc.*<BR>
9.250%, 11/15/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,899,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Tenet Healthcare Corp.~<BR>
9.250%, 02/01/15</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">885,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,784,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Industrials (1.0%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,800,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">H&#038;E Equipment Service, Inc.~<BR>
8.375%, 07/15/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,755,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Information Technology (2.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">900,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Avago Technologies~<BR>
11.875%, 12/01/15</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,012,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">iPayment, Inc.~<BR>
9.750%, 05/15/14</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">965,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,700,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">SunGard Data Systems, Inc.~<BR>
9.125%, 08/15/13</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,767,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,745,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Materials (2.6%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">900,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Ineos Group Holdings, PLC*<BR>
7.875%, 02/15/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,205,917</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Mosaic Company~*<BR>
7.625%, 12/01/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,165,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Polyone Corp.<BR>
8.875%, 05/01/12</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,040,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,410,917</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Telecommunication Services (2.7%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,700,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Citizens Communications Company~<BR>
9.000%, 08/15/31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,757,375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Leap Wireless International, Inc.~<BR>
9.375%, 11/01/14</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,995,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">750,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Windstream Corp.~<BR>
8.625%, 08/01/16</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">806,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,558,625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL CORPORATE BONDS</B><BR>
(Cost $47,917,608)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,779,886</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="11" valign="top" align="left"><B>CONVERTIBLE BONDS (15.2%)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (5.4%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,000,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Amazon.com, Inc.~<BR>
4.750%, 02/01/09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,192,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Ford Motor Company~<BR>
4.250%, 12/15/36</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,803,750</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">General Motors Corp.~<BR>
6.250% 07/15/33</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,542,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Intralot SA<BR>
2.250%, 12/20/13</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,498,747</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">850,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Punch Taverns Redwood Jersey
Company Ltd.<BR>
5.000%, 12/14/10</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,047,842</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,084,839</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Health Care (1.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,700,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Wyeth~&#135;<BR>
4.886%, 01/15/24</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,822,842</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Schedule of Investments.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Schedule of Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>OCTOBER 31, 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>PRINCIPAL</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" colspan="4">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>AMOUNT</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="CENTER" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Industrials (2.7%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">$</TD>
    <TD valign="top" align="right">1,700,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">MTU Aero Engines Holdings, AG<BR>
2.750%, 02/01/12</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,699,545</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,175,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Quanta Services, Inc.~*<BR>
3.750%, 04/30/26</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,863,844</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,563,389</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Information Technology (3.6%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">3,300,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Business Objects, SA<BR>
2.250%, 01/01/27</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,409,226</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">2,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Intel Corp.^~<BR>
2.950%, 12/15/35</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,681,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">900,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">VeriSign, Inc.~*<BR>
3.250%, 08/15/37</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,078,875</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,169,351</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Telecommunication Services (0.5%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">900,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">NII Holdings, Inc.*<BR>
3.125%, 06/15/12</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">835,875</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Utilities (1.9%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,550,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">International Power, PLC<BR>
3.250%, 07/20/13</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,139,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL CONVERTIBLE BONDS</B><BR>
(Cost $22,679,858)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,615,496</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>SYNTHETIC CONVERTIBLE SECURITIES (5.1%)</B></TD>
</TR>
<TR valign="bottom">
    <TD colspan="11" valign="top" align="left"><B><I>Sovereign Bonds (3.4%)</I></B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (3.4%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,800,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Deutschland Republic Treasury<BR>
4.500%, 07/04/09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,621,596</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">United Kingdom Treasury<BR>
5.750%, 12/07/09</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,159,802</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">TOTAL SOVEREIGN BONDS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,781,398</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>CONTRACTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="6" valign="top" align="LEFT"><B><I>Options (1.7%)</I></B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (0.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">65</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Garmin, Ltd.#<BR>
Call, 01/17/09, Strike $100.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">195,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Industrials (0.2%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">90</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Alliant Techsystems, Inc.#<BR>
Call, 01/17/09, Strike $110.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">140,850</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">165</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Honeywell International, Inc.#<BR>
Call, 01/17/09, Strike $55.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">324,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Information Technology (1.4%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Apple, Inc.#<BR>
Call, 01/17/09, Strike $130.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">752,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">235</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Cisco Systems, Inc.#<BR>
Call, 01/17/09, Strike $30.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">166,263</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">35</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Google, Inc.#<BR>
Call, 01/17/09, Strike $520.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">828,625</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">90</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Research In Motion, Ltd.#<BR>
Call, 01/17/09, Strike $73.30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">548,100</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,295,488</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">TOTAL OPTIONS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,815,138</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL SYNTHETIC
CONVERTIBLE SECURITIES</B><BR>
(Cost $6,940,621)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,596,536</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>SHARES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>CONVERTIBLE PREFERRED STOCKS (8.1%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Financials (1.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">32,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">MetLife, Inc.~<BR>
6.375%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,072,640</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Swiss Re<BR>
6.000%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">997,264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">20,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Washington Mutual, Inc.~<BR>
5.375%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">885,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,954,904</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Health Care (2.5%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">16,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Schering-Plough Corp.~<BR>
6.000%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,260,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Materials (3.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">34,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Cia Vale do Rio Doce~<BR>
5.500%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,489,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">450</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Givaudan SA<BR>
5.375%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,972,851</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,462,331</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL CONVERTIBLE
PREFERRED STOCKS</B><BR>
(Cost $13,230,138)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,677,235</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="11" valign="top" align="left"><B>COMMON STOCKS (77.5%)</B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (6.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">135,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Esprit Holdings, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,254,678</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">53,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Hennes &#038; Mauritz AB</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,541,429</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">20,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Industria de Diseno Textil, SA</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,495,374</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">20,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Nike, Inc.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,325,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">10,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Volkswagen, AG</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,858,583</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,475,264</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Staples (11.7%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">100,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">British American Tobacco, PLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,809,757</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">40,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Coca-Cola Company~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,470,400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">44,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Heineken, NV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,088,679</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">32,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">InBev, NV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,028,713</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">7,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Nestle Holdings, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,233,173</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Schedule of Investments.
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->F-14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Schedule of Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>OCTOBER 31, 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>SHARES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">40,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Reynolds American, Inc.^</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,577,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">50,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Woolworths, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,567,083</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,775,005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Energy (7.8%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">16,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Canadian Natural Resources, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,330,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">30,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Chevron Corp.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,745,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">30,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">ENI S.p.A.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,095,398</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">170,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Nippon Oil Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,505,637</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">24,800</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">PetroChina Company, Ltd.^~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,512,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,189,424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Financials (18.0%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">105,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Australian Stock Exchange, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,661,884</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">33,120</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">EFG Eurobank Ergasias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,292,385</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">7,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Goldman Sachs Group, Inc.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,735,440</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">380,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Henderson Group, PLC</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,486,282</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">40,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">JPMorgan Chase &#038; Company~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,880,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">40,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Manulife Financial Corp.^</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,855,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">52,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Power Financial Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,318,023</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">135,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">QBE Insurance Group, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,131,345</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">916,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Singapore Exchange, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,037,164</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,398,123</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Health Care (9.0%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">22,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Alcon, Inc.^~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,348,620</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">43,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Astellas Pharma, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,908,831</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">63,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">CSL, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,141,753</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">21,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Johnson &#038; Johnson~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,368,570</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">60,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Merck &#038; Company, Inc.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,495,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">72,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Pfizer, Inc.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,771,920</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">6,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Roche Holding, AG</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,024,819</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,060,113</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Industrials (1.4%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">40,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Leighton Holdings, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,341,717</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Information Technology (19.7%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">37,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Canon, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,872,178</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">90,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Infosys Technologies, Ltd.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,584,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">68,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Microsoft Corp.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,503,080</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">13,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Nintendo Company, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,256,023</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">225,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Nokia Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,935,979</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">37,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">SAP, AG</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000,720</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">17,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">TDK Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,395,183</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">185,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Toshiba Corp.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,566,632</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">240,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Vtech Holdings, Ltd.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,049,380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,163,775</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Telecommunication Services (3.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">38,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">America Movil, S.A. de C.V.~</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,484,820</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">400,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">BT Group, PLC#</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,718,892</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,203,712</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL COMMON STOCKS</B><BR>
(Cost $80,851,087)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">130,607,133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>WARRANTS (0.1%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Consumer Discretionary (0.1%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">36,362</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Expedia, Inc.#<BR>
05/07/12, Strike $24.46<BR>
(Cost $72,179)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">253,443</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>CONTRACTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>PUT OPTIONS (0.3%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Financials (0.3%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">SPDR Trust Series&nbsp;1#</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,235</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Put, 03/22/08, Strike $144.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">235</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Put, 11/17/07, Strike $138.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,763</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">230</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Put, 11/07/07, Strike $137.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,265</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL OPTIONS</B><BR>
(Cost $523,830)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">447,628</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>SHARES</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>INVESTMENT IN AFFILIATED FUND (1.2%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,952,459</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Calamos Government Money Market<BR>
Fund &#151; Class&nbsp;I Shares 3<BR>
4.711%<BR>
(Cost $1,952,459)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,952,459</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>INVESTMENTS OF CASH COLLATERAL FOR
SECURITIES ON LOAN (7.9%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">13,371,000</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Bank of New York Institutional<BR>
Cash Reserve Fund<BR>
current rate 5.158%<BR>
(Cost $13,371,000)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,371,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="7" valign="top" align="left"><DIV style="margin-left:15px; text-indent:-0px"><B>TOTAL INVESTMENTS (143.7%)</B><BR>
(Cost $187,538,780) </div></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242,300,816</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="7" valign="top" align="left">PAYABLE UPON RETURN OF SECURITIES ON LOAN (-7.9%) </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(13,371,000</TD>
    <TD>)&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="7" valign="top" align="left">LIABILITIES, LESS OTHER ASSETS (-0.8%) </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(1,371,017</TD>
    <TD>)&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="7" valign="top" align="left">PREFERRED SHARES AT REDEMPTION VALUE INCLUDING
DIVIDENDS PAYABLE (-35.0%)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">(59,008,196</TD>
    <TD>)&nbsp;</TD>
</tr>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="7" valign="top" align="left"><B>NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS (100.0%) </B></TD>
    <TD>&nbsp;</TD>
    <TD>$&nbsp;</TD>
    <TD align="right">168,550,603</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Schedule of Investments.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Schedule of Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>OCTOBER 31, 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>NUMBER OF</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="2"><B>CONTRACTS</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>VALUE</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="11" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD colspan="11" valign="top" align="left"><B>WRITTEN OPTIONS (-1.9%)</B></TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B><I>Financials (-1.9%)</I></B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">iShares MSCI EAFE Index Fund#</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,500</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $85.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(517,500</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,360</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $83.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(666,400</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,350</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $84.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(567,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">1,200</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 03/22/08, Strike $85.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(552,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">540</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $80.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(399,600</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">SPDR Trust Series&nbsp;1#</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">400</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $158.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(102,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">250</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 11/17/07, Strike $159.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11,750</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">115</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 03/22/08, Strike $152.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(113,850</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 12/22/07, Strike $157.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30,500</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 03/22/08, Strike $150.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(112,500</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">85</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">Call, 03/22/08, Strike $157.00</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(57,375</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>TOTAL WRITTEN OPTIONS</B><BR>
(Premium $2,344,844)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,130,475</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" align="left">&nbsp;</TD>
    <TD valign="top" align="right">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NOTES TO SCHEDULE OF INVESTMENTS</B>

</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD align="left" colspan="3">Note: Value for Securities denominated in foreign
currencies is shown in U.S. dollars. The principal amount
for such securities are shown in the respective foreign
currency. The date shown on options represents the
expiration date of the option contract. The option
contract may be exercised at any date on or before the
date shown.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">^</TD>
    <TD>&nbsp;</TD>
    <TD>Security, or portion of security, is on loan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">~</TD>
    <TD>&nbsp;</TD>
    <TD>Security, or portion of security, is held in a
segregated account as collateral for written options
aggregating a total market value of $86,650,848.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">&#135;</TD>
    <TD>&nbsp;</TD>
    <TD>Variable rate or step bond security. The rate
shown is the rate in effect at October&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Securities issued and sold pursuant to a Rule&nbsp;144A
transaction are excepted from the registration
requirement of the Securities Act of 1933, as
amended. These securities may only be sold to
qualified institutional buyers (&#147;QIBs&#148;), such as the
Fund. Any resale of these securities must generally
be effected through a sale that is registered under
the Act or otherwise exempted or excepted from such
registration requirements. At October&nbsp;31, 2007 the
value of 144A securities that could not be exchanged
to the registered form is $6,348,792 or 3.8% of net
assets.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">#</TD>
    <TD>&nbsp;</TD>
    <TD>Non-income producing security.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><FONT style="font-family: Symbol">&#087;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>Investment in an affiliated fund. During the period
from November&nbsp;1, 2006, through October&nbsp;31, 2007, the
fund had net purchases of $1,952,459, and received
$63,656 in dividend payments from the affiliated
fund. As of October&nbsp;31, 2006, the Fund had no
holdings of the affiliated fund.</TD>
</TR>

</TABLE>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Financial Statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-16<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Schedule of Investments
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>OCTOBER 31, 2007</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>COUNTRY ALLOCATION AS OF OCTOBER 31, 2007</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Country</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of Portfolio</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">United States</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">38.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Japan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">United Kingdom</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Australia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Switzerland</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Singapore</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finland</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Germany</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bermuda</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">China</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Canada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">India</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Greece</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sweden</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brazil</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Netherlands</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Belgium</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mexico</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">France</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Liberia</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Spain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Italy</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cayman Islands</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Country allocations vary over time.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying Notes to Financial Statements.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="147"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>APPENDIX&nbsp;A &#150;<BR>
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE<BR>
AND FORM OF SUPPLEMENTAL INDENTURE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of certain provisions of the indenture (the &#147;Original Indenture&#148;)
and the supplemental indenture (&#147;Supplemental Indenture&#148;) that the Fund expects to enter into in
connection with the issuance of debt securities. This summary does not purport to be complete and
is qualified in its entirety by reference to the indenture, a copy of which will be filed with the
Commission in connection with an offering of debt securities by the Fund.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DEFINITIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>&#145;AA&#146; Composite Commercial Paper Rate</B>&#148; on any date means (i)&nbsp;the interest equivalent of
(1)&nbsp;the 7-day rate, in the case of a Rate Period which is 7&nbsp;days or shorter, (2)&nbsp;the 30-day rate,
in the case of a Rate Period which is a Standard Rate Period greater than 7&nbsp;days but fewer than or
equal to 31&nbsp;days, or (3)&nbsp;the 180-day rate, in the case of all other Rate Periods, on financial
commercial paper on behalf of issuers whose corporate bonds are rated &#147;AA&#148; by S&#038;P, or the
equivalent of such rating by another nationally recognized rating agency, as announced by the
Federal Reserve Bank of New York for the close of business on the Business Day immediately
preceding such date; or (ii)&nbsp;if the Federal Reserve Bank of New York does not make available such a
rate, then the arithmetic average of the interest equivalent of such rates on financial commercial
paper placed on behalf of such issuers, as quoted on a discount basis or otherwise by the
Commercial Paper Dealers to the Auction Agent for the close of business on the Business Day
immediately preceding such date (rounded to the next highest .001 of 1%). If any Commercial Paper
Dealer does not quote a rate required to determine the &#147;AA&#148; Composite Commercial Paper Rate, such
rate shall be determined on the basis of the quotations (or quotation) furnished by the remaining
Commercial Paper Dealers (or Dealer), if any, or, if there are no such Commercial Paper Dealers, a
nationally recognized dealer in commercial paper of such issues then making such quotations
selected by the Issuer. For purposes of this definition, (A) &#147;Commercial Paper Dealers&#148; shall mean
(1)&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>; (2)&nbsp;in lieu of any thereof, its respective Affiliate or
successor; and (3)&nbsp;in the event that any of the foregoing shall cease to quote rates for financial
commercial paper of issuers of the sort described above, in substitution therefor, a nationally
recognized dealer in financial commercial paper of such issuers then making such quotations
selected by the Issuer, and (B)&nbsp;&#147;interest equivalent&#148; of a rate stated on a discount basis for
financial commercial paper of a given number of days&#146; maturity shall mean a number equal to the
quotient (rounded upward to the next higher one-thousandth of 1%) of (1)&nbsp;such rate expressed as a
decimal, divided by (2)&nbsp;the difference between (x)&nbsp;1.00 and (y)&nbsp;a fraction, the numerator of which
shall be the product of such rate expressed as a decimal, multiplied by the number of days in which
such commercial paper shall mature and the denominator of which shall be 360.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Affiliate</B>&#148; means any person controlled by, in control of or under common control with the
Issuer; provided that no Broker-Dealer controlled by, in control of or under common control with
the Issuer shall be deemed to be an Affiliate nor shall any corporation or any person controlled
by, in control of or under common control with such corporation one of the directors or executive
officers of which is also a Director of the Issuer be deemed to be an Affiliate solely because such
director or executive officer is also a Director of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Agent Member</B>&#148; means a member of or participant in the Securities Depository that will act on
behalf of a Bidder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>All Hold Rate</B>&#148; means 80% of the &#147;AA&#148; Composite Commercial Paper Rate.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Applicable Rate</B>&#148; means the rate determined in accordance with the procedures in
Section&nbsp;2.02(c)(i) of this Supplemental Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction</B>&#148; means each periodic implementation of the Auction Procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Agent</B>&#148; means <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> unless and until another commercial bank, trust company, or
other financial institution appointed by a resolution of the Board of Directors enters into an
agreement with the Issuer to follow the Auction Procedures for the purpose of determining the
Applicable Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Agreement</B>&#148; means the agreement between the Auction Agent and the Issuer pursuant to
which the Auction Agent agrees to follow the procedures specified in
Appendix&nbsp;A-I to this
Supplemental Indenture, as such agreement may from time to time be amended or supplemented.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Date</B>&#148; means the first Business Day next preceding the first day of a Rate Period for
each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Desk</B>&#148; means the business unit of a Broker-Dealer that fulfills the responsibilities
of the Broker-Dealer under a Broker-Dealer Agreement, including soliciting Bids for the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, and units of the Broker-Dealer which are not separated by information
controls appropriate to control, limit and monitor the inappropriate dissemination of information
about Bids.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Period</B>&#148; means with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, either a Standard Auction
Period or a Special Auction Period, as applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction
Procedures</B>&#148; means the procedures for conducting Auctions set forth in Appendix&nbsp;A-I
hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Auction Rate</B>&#148; means for each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for each Auction Period, (i)&nbsp;if
Sufficient Clearing Bids exist, the Winning Bid Rate, provided, however, if all of the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are the subject of Submitted Hold Orders, the All Hold Rate for such series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and (ii)&nbsp;if Sufficient Clearing Bids do not exist, the Maximum Rate for such
series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Authorized Denomination</B>&#148; means $25,000 and any integral multiple thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Available </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B> Notes</B>&#148; means for each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes on each Auction
Date, the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series that are not the subject of
Submitted Hold Orders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Beneficial Owner</B>,&#148; with respect to each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, means a customer of a
Broker-Dealer who is listed on the records of that Broker-Dealer (or, if applicable, the Auction
Agent) as a holder of such series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bid</B>&#148;
shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Bidder</B>&#148; means each Beneficial Owner, Potential Beneficial Owner and Broker Dealer who places
an Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Board of Directors</B>&#148; or &#147;<B>Board</B>&#148; means the Board of Directors of the Issuer or any duly
authorized committee thereof as permitted by applicable law.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Broker-Dealer</B>&#148; means any broker-dealer or broker-dealers, or other entity permitted by law to
perform the function required of a Broker-Dealer by the Auction Procedures, that has been selected
by the Issuer and that is a party to a Broker-Dealer Agreement with the Auction Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Broker-Dealer Agreement</B>&#148; means an agreement between the Auction Agent and a Broker-Dealer,
pursuant to which such Broker-Dealer agrees to follow the Auction Procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Broker-Dealer Deadline</B>&#148; means, with respect to an Order, the internal deadline established by
the Broker-Dealer through which the Order was placed after which it will not accept Orders or any
change in any Order previously placed with such Broker-Dealer; provided, however, that nothing
shall prevent the Broker-Dealer from correcting Clerical Errors by the Broker-Dealer with respect
to Orders from Bidders after the Broker-Dealer Deadline pursuant to the provisions herein. Any
Broker-Dealer may change the time or times of its Broker-Dealer Deadline as it relates to such
Broker-Dealer by giving notice not less than two Business Days prior to the date such change is to
take effect to Bidders who place Orders through such Broker-Dealer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Business Day</B>&#148; means a day on which the New York Stock Exchange is open for trading and which
is not a Saturday, Sunday or other day on which banks in the City of New York, New York are
authorized or obligated by law to close, days on which the Federal Reserve Bank of New York is not
open for business, days on which banking institutions or trust companies located in the state in
which the operations of the Auction Agent are conducted are authorized or required to be closed by
law, regulation or executive order of the state in which the Auction Agent conducts operations with
respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Clerical Error</B>&#148; means a clerical error in the processing of an Order, and includes, but is
not limited to, the following: (i)&nbsp;a transmission error, including but not limited to, an Order
sent to the wrong address or number, failure to transmit certain pages or illegible transmission,
(ii)&nbsp;failure to transmit an Order received from one or more Existing Holders or Potential
Beneficial Owners (including Orders from the Broker-Dealer which were not originated by the Auction
Desk) prior to the Broker-Dealer Deadline or generated by the Broker-Dealer&#146;s Auction Desk for its
own account prior to the Submission Deadline or (iii)&nbsp;a typographical error. Determining whether
an error is a &#147;Clerical Error&#148; is within the reasonable judgment of the Broker-Dealer, provided
that the Broker-Dealer has a record of the correct Order that shows it was so received or so
generated prior to the Broker-Dealer Deadline or the Submission Deadline, as applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Code</B>&#148; means the Internal Revenue Code of 1986, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Commercial Paper Dealers</B>&#148; has the meaning set forth in the definition of AA Composite
Commercial Paper Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Commission</B>&#148; means the Securities and Exchange Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Default Rate</B>&#148; means the Reference Rate multiplied by three (3).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Deposit Securities</B>&#148; means cash and any obligations or securities, including short term money
market instruments that are Eligible Assets, rated at least &#95;&#95;&#95;, &#95;&#95;&#95;or &#95;&#95;&#95;by &#95;&#95;&#95;, except that,
such obligations or securities shall be considered &#147;Deposit Securities&#148; only if they are also rated
at least P-2 by Moody&#146;s.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Discount Factor</B>&#148; means the Moody&#146;s Discount Factor (if Moody&#146;s is then rating the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes), &#95;&#95;&#95;Discount Factor (if &#95;&#95;&#95;is then rating the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes) or an
Other Rating Agency Discount Factor, whichever is applicable.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Discounted Value</B>&#148; means the quotient of the Market Value of an Eligible Asset divided by the
applicable Discount Factor, provided that with respect to an Eligible Asset that is currently
callable, Discounted Value will be equal to the quotient as calculated above or the call price,
whichever is lower, and that with respect to an Eligible Asset that is prepayable, Discounted Value
will be equal to the quotient as calculated above or the par value, whichever is lower.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Eligible Assets</B>&#148; means Moody&#146;s Eligible Assets or &#95;&#95;&#95;&#146;s Eligible Assets (if Moody&#146;s or &#95;&#95;&#95;
are then rating the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes) and/or Other Rating Agency Eligible Assets, whichever is
applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Error Correction Deadline</B>&#148; means one hour after the Auction Agent completes the dissemination
of the results of the Auction to Broker-Dealers without regard to the time of receipt of such
results by any Broker-Dealer; provided, however, in no event shall the Error Correction Deadline
extend past 4:00&nbsp;p.m., New York City time unless the Auction Agent experiences technological
failure or force majeure in disseminating the Auction results which causes a delay in dissemination
past 3:00&nbsp;p.m., New York City time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Existing Holder</B>,&#148; with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of a series, shall mean a
Broker-Dealer (or any such other Person as may be permitted by the Issuer) that is listed on the
records of the Auction Agent as a holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>&#95;&#95;&#95;</B>&#148; means &#95;&#95;&#95;Ratings and its successors at law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>&#95;&#95;&#95;Discount Factor</B>&#148; means the discount factors set forth in the &#95;&#95;&#95;Guidelines for use in
calculating the Discounted Value of the Issuer&#146;s assets in connection with &#95;&#95;&#95;&#146;s ratings of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;_<B>&#95;&#95;&#95;Eligible Asset</B>&#148; means assets of the Issuer set forth in the &#95;&#95;&#95;Guidelines as eligible
for inclusion in calculating the Discounted Value of the Issuer&#146;s assets in connection with &#95;&#95;&#95;&#146;s
ratings of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>&#95;&#95;&#95;Guidelines</B>&#148; mean the guidelines provided by &#95;&#95;&#95;, as may be amended from time to time,
in connection with &#95;&#95;&#95;&#146;s ratings of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Hold
Order</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto or an Order deemed to
have been submitted as provided in paragraph (c)&nbsp;of
Section&nbsp;1 of Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Holder</B>&#148; means, with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the registered holder of notes of each
series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes as the same appears on the books or records of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Index</B>&#148; means on any Auction Date with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes in any Auction Period
of 35&nbsp;days or less the applicable LIBOR rate. The Index with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes in
any Auction Period of more than 35&nbsp;days shall be the rate on United States Treasury Securities
having a maturity which most closely approximates the length of the Auction Period as last
published in The Wall Street Journal or such other source as may be mutually agreed upon by the
Trustee and the Broker-Dealers. If either rate is unavailable, the Index shall be an index or rate
agreed to by all Broker-Dealers and consented to by the Issuer. For the purpose of this definition
an Auction Period of 35&nbsp;days or less means a 35-day Auction Period or shorter Auction Period, i.e.,
a 35-day Auction Period which is extended because of a holiday would still be considered an Auction
Period of 35&nbsp;days or less.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Interest Payment Date</B>&#148; when used with respect to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, means the date on
which an installment of interest on such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be due and payable which
generally shall be the day next following an Auction Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>LIBOR</B>&#148; means, for purposes of determining the Reference Rate, (i)&nbsp;the rate for deposits in
U.S. dollars for the designated Rate Period, which appears on display page&nbsp;3750 of Moneyline&#146;s
Telerate Service (&#147;Telerate Page&nbsp;3750&#148;) (or such other page&nbsp;as may replace that page&nbsp;on that
service, or such other service as may be selected by Lehman Brothers Inc. or its successors) as of
11:00&nbsp;a.m., London time, on the day that is the Business Day on the Auction Date or, if the Auction
Date is not a Business Day, the Business Day preceding the Auction Date (the &#147;LIBOR Determination
Date&#148;), or (ii)&nbsp;if such rate does not appear on Telerate Page&nbsp;3750 or such other page&nbsp;as may
replace such Telerate Page&nbsp;3750, (A)&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shall determine the arithmetic mean of the
offered quotations of the reference banks to leading banks in the London interbank market for
deposits in U.S. dollars for the designated Rate Period in an amount determined by <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
by reference to requests for quotations as of approximately 11:00&nbsp;a.m. (London time) on such date
made by <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to the reference banks, (B)&nbsp;if at least two of the reference banks provide
such quotations, LIBOR shall equal such arithmetic mean of such quotations, (C)&nbsp;if only one or none
of the reference banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean of
the offered quotations that leading banks in The City of New York, New York selected by
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (after obtaining the Issuer&#146;s approval) are quoting on the relevant LIBOR
Determination Date for deposits in U.S. dollars for the designated Rate Period in an amount
determined by <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (after obtaining the Issuer&#146;s approval) that is representative of a
single transaction in such market at such time by reference to the principal London office of
leading banks in the London interbank market; provided, however, that if <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> is not a
Broker-Dealer or does not quote a rate required to determine LIBOR, LIBOR will be determined on the
basis of the quotation or quotations furnished by any other Broker-Dealer selected by the Issuer to
provide such rate or rates not being supplied by <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>; provided further, that if
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> and/or a substitute Broker-Dealer are required but unable to determine a rate in
accordance with at least one of the procedures provided above, LIBOR shall be the most recently
determinable LIBOR. If the number of Rate Period days shall be (i)&nbsp;7 or more but fewer than 21
days, such rate shall be the seven-day LIBOR rate; (ii)&nbsp;more than 21 but fewer than 49&nbsp;days, such
rate shall be one-month LIBOR rate; (iii)&nbsp;49 or more but fewer than 77&nbsp;days, such rate shall be the
two-month LIBOR rate; (iv)&nbsp;77 or more but fewer than 112&nbsp;days, such rate shall be the three-month
LIBOR rate; (v)&nbsp;112 or more but fewer than 140&nbsp;days, such rate shall be the four-month LIBOR rate;
(vi)&nbsp;140 or more but fewer than 168&nbsp;days, such rate shall be the five-month LIBOR rate; (vii)&nbsp;168
or more but fewer 189&nbsp;days, such rate shall be the six-month LIBOR rate; (viii)&nbsp;189 or more but
fewer than 217&nbsp;days, such rate shall be the seven-month LIBOR rate; (ix)&nbsp;217 or more but fewer than
252&nbsp;days, such rate shall be the eight-month LIBOR rate; (x)&nbsp;252 or more but fewer than 287&nbsp;days,
such rate shall be the nine-month LIBOR rate; (xi)&nbsp;287 or more but fewer than 315&nbsp;days, such rate
shall be the ten-month LIBOR rate; (xii)&nbsp;315 or more but fewer than 343&nbsp;days, such rate shall be
the eleven-month LIBOR rate; and (xiii)&nbsp;343 or more days but fewer than 365&nbsp;days, such rate shall
be the twelve-month LIBOR rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Market Value</B>&#148; means the market value of an asset of the Issuer determined as follows: For
equity securities, the value obtained from readily available market quotations. If an equity
security is not traded on an exchange or not available from a Board-approved pricing service, the
value obtained from written broker-dealer quotations. For fixed-income securities, the value
obtained from readily available market quotations based on the last sale price of a security on the
day the Issuer values its assets or the market value obtained from a pricing service or the value
obtained from a direct written broker-dealer quotation from a dealer who has made a market in the
security. &#147;Market Value&#148; for other securities will mean the value obtained pursuant to the
Issuer&#146;s valuation procedures. If the market value of a security cannot be obtained, or the
Issuer&#146;s investment adviser determines that the value of a security as so
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">obtained does not represent the fair value of a security, fair value for that security shall be
determined pursuant to the valuation procedures adopted by the Board of Directors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Maximum Rate</B>&#148; means, on any date on which the Applicable Rate is determined, the rate equal
to the applicable percentage of the Reference Rate, subject to upward but not downward adjustment
in the discretion of the Board of Directors after consultation with the Broker-Dealers, provided
that immediately following any such increase the Issuer would be in compliance with the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Minimum Rate</B>&#148; means, on any Auction Date with respect to a Rate Period of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> days or fewer,
70% of the AA Composite Commercial Paper Rate at the close of business on the Business Day next
preceding such Auction Date. There shall be no Minimum Rate on any Auction Date with respect to a
Rate Period of more than the Standard Rate Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Moody&#146;s</B>&#148; means Moody&#146;s Investors Service, Inc., a Delaware corporation, and its successors at
law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Moody&#146;s Discount Factor</B>&#148; means the discount factors set forth in the Moody&#146;s Guidelines for
use in calculating the Discounted Value of the Issuer&#146;s assets in connection with Moody&#146;s ratings
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Moody&#146;s Eligible Assets</B>&#148; means assets of the Issuer set forth in the Moody&#146;s Guidelines as
eligible for inclusion in calculating the Discounted Value of the Issuer&#146;s assets in connection
with Moody&#146;s ratings of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Moody&#146;s Guidelines</B>&#148; mean the guidelines provided by Moody&#146;s, as may be amended from time to
time, in connection with Moody&#146;s ratings of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>1940 Act </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B> Notes Asset Coverage</B>&#148; means asset coverage, as determined in
accordance with Section&nbsp;18(h) of the Investment Company Act, of at least 300% with respect to all
outstanding senior securities representing indebtedness of the Issuer, including all Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes (or such other asset coverage as may in the future be specified in or under
the Investment Company Act as the minimum asset coverage for senior securities representing
indebtedness of a closed-end investment company as a condition of declaring dividends on its common
stock), determined on the basis of values calculated as of a time within 48 hours next preceding
the time of such determination.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Notes</B>&#148; means Securities of the Issuer ranking on a parity with the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes that
may be issued from time to time pursuant to the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Order</B>&#148; means a Hold Order, Bid or Sell Order.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Original Issue Date</B>&#148; means, with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Other Rating Agency</B>&#148; means each rating agency, if any, other than Moody&#146;s or <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> then
providing a rating for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes pursuant to the request of the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Other Rating Agency Discount Factor</B>&#148; means the discount factors set forth in the Other Rating
Agency Guidelines of each Other Rating Agency for use in calculating the Discounted Value of the
Issuer&#146;s assets in connection with the Other Rating Agency&#146;s rating of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Other Rating Agency Eligible Assets</B>&#148; means assets of the Issuer set forth in the Other Rating
Agency Guidelines of each Other Rating Agency as eligible for inclusion in calculating the
Discounted Value of the Issuer&#146;s assets in connection with the Other Rating Agency&#146;s rating of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Other Rating Agency Guidelines</B>&#148; mean the guidelines provided by each Other Rating Agency, as
may be amended from time to time, in connection with the Other Rating Agency&#146;s rating of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Outstanding</B>&#148; or &#147;<B>outstanding</B>&#148; means, as of any date, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes theretofore issued
by the Issuer except, without duplication, (i)&nbsp;any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes theretofore canceled,
redeemed or repurchased by the Issuer, or delivered to the Trustee for cancellation or with respect
to which the Issuer has given notice of redemption and irrevocably deposited with the Paying Agent
sufficient funds to redeem such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and (ii)&nbsp;any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes represented
by any certificate in lieu of which a new certificate has been executed and delivered by the
Issuer. Notwithstanding the foregoing, (A)&nbsp;in connection with any Auction, any series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes as to which the Issuer or any person known to the Auction Agent to be an
Affiliate of the Issuer shall be the Existing Holder thereof shall be disregarded and deemed not to
be Outstanding; and (B)&nbsp;for purposes of determining the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance
Amount, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes held by the Issuer shall be disregarded and not deemed Outstanding but
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes held by any Affiliate of the Issuer shall be deemed Outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Paying Agent</B>&#148; means <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;unless and until another entity appointed by a resolution of
the Board of Directors enters into an agreement with the Issuer to serve as paying agent, transfer
agent, registrar, and redemption agent with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, which Paying Agent
may be the same as the Trustee or the Auction Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Person</B>&#148; or &#147;<B>person</B>&#148; means and includes an individual, a partnership, a trust, a company, an
unincorporated association, a joint venture or other entity or a government or any agency or
political subdivision thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Potential Beneficial Owner</B>,&#148; with respect to a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, shall mean a
customer of a Broker-Dealer that is not a Beneficial Owner of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series
but that wishes to purchase <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series, or that is a Beneficial Owner of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series that wishes to purchase additional <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such
series; provided, however, that for purposes of conducting an Auction, the Auction Agent may
consider a Broker-Dealer acting on behalf of its customer as a Potential Beneficial Owner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Potential Holder</B>,&#148; with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series, shall mean a
Broker-Dealer (or any such other person as may be permitted by the Issuer) that is not an Existing
Holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series or that is an Existing Holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
of such series that wishes to become the Existing Holder of additional <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such
series; provided, however, that for purposes of conducting an Auction, the Auction Agent may
consider a Broker-Dealer acting on behalf of its customer as a Potential Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Rate Period</B>&#148; means, with respect to a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the period commencing
on the Original Issue Date thereof and ending on the date specified for such series on the Original
Issue Date thereof and thereafter, as to such series, the period commencing on the day following
each Rate Period for such series and ending on the day established for such series by the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Rating Agency</B>&#148; means each of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (if <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> is then rating <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes), Moody&#146;s (if
Moody&#146;s is then rating <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes) and any Other Rating Agency.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Rating Agency Guidelines</B>&#148; mean <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Guidelines (if <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> is then rating <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes),
Moody&#146;s Guidelines (if Moody&#146;s is then rating <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes) and any Other Rating Agency
Guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Redemption Date</B>,&#148; when used with respect to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Note to be redeemed, means the
date fixed for such redemption by or pursuant to the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Redemption Price</B>,&#148; when used with respect to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Note to be redeemed, means
the price at which it is to be redeemed pursuant to the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Reference Rate</B>&#148; means, with respect to the determination of the Maximum Rate and Default
Rate, the greater of (i)&nbsp;the applicable AA Composite Commercial Paper Rate (for a Rate Period of
fewer than 184&nbsp;days) or the applicable Treasury Index Rate (for a Rate Period of 184&nbsp;days or more),
or (ii)&nbsp;the applicable LIBOR Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Securities Act</B>&#148; means the Securities Act of 1933, as amended from time to time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Securities Depository</B>&#148; means The Depository Trust Company and its successors and assigns or
any successor securities depository selected by the Issuer that agrees to follow the procedures
required to be followed by such securities depository in connection with the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
Series&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Sell
Order</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Special Auction Period</B>&#148; means an Auction Period that is not a Standard Auction Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Special Rate Period</B>&#148; means a Rate Period that is not a Standard Rate Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Specific Redemption Provisions</B>&#148; means, with respect to any Special Rate Period of more than
one year, either, or any combination of a period (a &#147;Non-Call Period&#148;) determined by the Board of
Directors after consultation with the Broker-Dealers, during which the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes subject
to such Special Rate Period are not subject to redemption at the option of the Issuer consisting of
a number of whole years as determined by the Board of Directors after consultation with the
Broker-Dealers, during each year of which the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes subject to such Special Rate
Period shall be redeemable at the Issuer&#146;s option and/or in connection with any mandatory
redemption at a price equal to the principal amount plus accrued but unpaid interest plus a premium
expressed as a percentage or percentages of $25,000 or expressed as a formula using specified
variables as determined by the Board of Directors after consultation with the Broker-Dealers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Standard Auction Period</B>&#148; means an Auction Period of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Standard Rate Period</B>&#148; means a Rate Period of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Stated Maturity</B>&#148; with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Series <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, shall mean <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Submission Deadline</B>&#148; means 1:00&nbsp;P.M., New York City time, on any Auction Date or such other
time on such date as shall be specified by the Auction Agent from time to time pursuant to the
Auction Agreement as the time by which the Broker-Dealers are required to submit Orders to the
Auction Agent. Notwithstanding the foregoing, the Auction Agent will follow the Securities
Industry and Financial Markets Association&#146;s Early Market Close Recommendations for shortened
trading days for the bond markets (the &#147;SIFMA Recommendation&#148;) unless the Auction Agent is
instructed otherwise in writing by the Issuer. In the event of a SIFMA Recommendation with respect
to an Auction Date, the Submission Deadline will be 11:30&nbsp;A.M., instead of 1:00&nbsp;P.M., New York City
time.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-8<!-- /Folio -->
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Submitted
Bid</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Submitted
Hold Order</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Submitted
Order</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Submitted
Sell Order</B>&#148; shall have the meaning specified in Appendix&nbsp;A-I hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Sufficient Clearing Bids</B>&#148; means for each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, an Auction for which
the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series that are the subject of Submitted Bids
by Potential Beneficial Owners specifying one or more rates not higher than the Maximum Rate is not
less than the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series that are the subject of
Submitted Sell Orders and of Submitted Bids by Existing Holders specifying rates higher than the
Maximum Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B> Notes Basic Maintenance Amount</B>&#148; as of any Valuation Date has the meaning set
forth in the Rating Agency Guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><B> Notes Series </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#148; means the Series <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes or any other Notes
hereinafter designated as Series&nbsp;&#95;&#95;&#95;of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Treasury Index Rate</B>&#148; means the average yield to maturity for actively traded marketable U.S.
Treasury fixed interest rate securities having the same number of 30-day periods to maturity as the
length of the applicable Rate Period, determined, to the extent necessary, by linear interpolation
based upon the yield for such securities having the next shorter and next longer number of 30-day
periods to maturity treating all Rate Periods with a length greater than the longest maturity for
such securities as having a length equal to such longest maturity, in all cases based upon data set
forth in the most recent weekly statistical release published by the Board of Governors of the
Federal Reserve System (currently in H.15(519)); provided, however, if the most recent such
statistical release shall not have been published during the 15&nbsp;days preceding the date of
computation, the foregoing computations shall be based upon the average of comparable data as
quoted to the Issuer by at least three recognized dealers in U.S. Government securities selected by
the Issuer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Trustee</B>&#148; means <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;or such other person who is named as a trustee pursuant to the
terms of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Unit</B>&#148; means, with respect to each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the principal amount of the
minimum Authorized Denomination of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Valuation Date</B>&#148; means every Friday, or, if such day is not a Business Day, the next preceding
Business Day; provided, however, that the first Valuation Date may occur on any other date
established by the Issuer; provided, further, however, that such first Valuation Date shall be not
more than one week from the date on which <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Series <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> initially are issued.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Winning Bid Rate</B>&#148; means for each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the lowest rate specified in
any Submitted Bid of such series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes which if selected by the Auction Agent as
the Applicable Rate would cause the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series that are
the subject of Submitted Bids specifying a rate not greater than such rate to be not less than the
number of Units of Available <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-9<!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>NOTE DETAILS, FORM OF NOTES AND REDEMPTION OF NOTES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Interest</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Holders of any series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be entitled to receive interest
payments on their <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes at the Applicable Rate, determined as set forth in paragraph
(c)&nbsp;of this Section&nbsp;2.02, and no more, payable on the respective dates determined as set forth in
paragraph (b)&nbsp;of this Section&nbsp;2.02. Interest on the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series
issued on the Original Issue Date shall accumulate from the Original Issue Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;(i)&nbsp;Interest shall be payable, subject to subparagraph (b)(ii) of this Section&nbsp;2.02, on
each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, with respect to any Rate Period on the first Business Day
following the last day of such Rate Period; provided, however, if the Rate Period is greater than
30&nbsp;days then on a monthly basis on the first Business Day of each month within such Rate Period,
not including the initial Rate Period, and on the Business Day following the last day of such Rate
Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If a day for payment of interest resulting from the application of subparagraph
(b)(i) above is not a Business Day, then the Interest Payment Date shall be the first
Business Day following such day for payment of interest in the case of a series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes designated as &#147;Series <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Issuer shall pay to the Paying Agent not later than 3:00&nbsp;p.m., New York City
time, on the Business Day next preceding each Interest Payment Date for each series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, an aggregate amount of funds available on the next Business Day in the
City of New York, New York, equal to the interest to be paid to all Holders of such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes on such Interest Payment Date. The Issuer shall not be required to
establish any reserves for the payment of interest.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) All moneys paid to the Paying Agent for the payment of interest shall be held in
trust for the payment of such interest by the Paying Agent for the benefit of the Holders
specified in subparagraph (b)(v) of this Section&nbsp;2.02. Any moneys paid to the Paying Agent
in accordance with the foregoing but not applied by the Paying Agent to the payment of
interest, including interest earned on such moneys, will, to the extent permitted by law, be
repaid to the Issuer at the end of 90&nbsp;days from the date on which such moneys were to have
been so applied.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Each interest payment on a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be paid on the
Interest Payment Date therefor to the Holders of that series as their names appear on the
security ledger or security records of the Issuer on the Business Day next preceding such
Interest Payment Date. Interest in arrears for any past Rate Period may be declared and
paid at any time, without reference to any regular Interest Payment Date, to the Holders as
their names appear on the books or records of the Issuer on such date, not exceeding 15&nbsp;days
preceding the payment date thereof, as may be fixed by the Board of Directors. No interest
will be payable in respect of any Interest Payment or payments which may be in arrears.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;(i)&nbsp;The interest rate on Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of each series during the period
from and after the Original Issue Date to and including the last day of the initial Rate Period
therefor shall be equal to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>%. For each subsequent Rate Period with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes Outstanding thereafter, the interest rate shall be equal to the rate per annum that results
from an Auction; provided, however, that if an Auction for any subsequent Rate Period of a series
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes is not held for any reason or if Sufficient Clearing Bids have not been
made in an Auction (other than as a result of all series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes being the subject
of Submitted
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hold Orders), then the interest rate on a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for any such Rate
Period shall be the Maximum Rate (except during a Default Period (as defined below) when the
interest rate shall be the Default Rate, as set forth in Section&nbsp;2.02(c)(ii) below). The All Hold
Rate will apply automatically following an Auction in which all of the Outstanding series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are subject (or are deemed to be subject) to Hold Orders. The rate per annum
at which interest is payable on a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes as determined pursuant to this
Section&nbsp;2(c)(i) shall be the &#147;Applicable Rate.&#148; For Standard Rate Periods or shorter periods only,
the Applicable Rate resulting from an Auction will not be less than the Minimum Rate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to the cure provisions below, a &#147;Default Period&#148; with respect to a
particular series will commence on any date the Issuer fails to deposit irrevocably in trust
in same-day funds, with the Paying Agent by 12:00 noon, New York City time, (A)&nbsp;the full
amount of any redemption price (the &#147;Redemption Price&#148;) payable on the date fixed for
redemption (the &#147;Redemption Date&#148;) (a &#147;Redemption Default,&#148; which shall constitute an Event
of Default pursuant to Section&nbsp;5.1(7) of the Original Indenture) or (B)&nbsp;the full amount of
any accrued interest on that series payable on the Interest Payment Date (an &#147;Interest
Default&#148; and together with a Redemption Default, hereinafter referred to as &#147;Default&#148;).
Subject to the cure provisions of Section&nbsp;2(c)(iii) below, a Default Period with respect to
an Interest Default or a Redemption Default shall end on the Business Day on which, by 12:00
noon, New York City time, all unpaid interest and any unpaid Redemption Price shall have
been deposited irrevocably in trust in same-day funds with the Paying Agent. In the case of
an Interest Default, the Applicable Rate for each Rate Period commencing during a Default
Period will be equal to the Default Rate, and each subsequent Rate Period commencing after
the beginning of a Default Period shall be a Standard Rate Period; provided, however, that
the commencement of a Default Period will not by itself cause the commencement of a new Rate
Period. No Auction shall be held during a Default Period with respect to an Interest
Default applicable to that series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) No Default Period with respect to an Interest Default or Redemption Default shall
be deemed to commence if the amount of any interest or any Redemption Price due (if such
default is not solely due to the willful failure of the Issuer) is deposited irrevocably in
trust, in same-day funds with the Paying Agent by 12:00 noon, New York City time within
three Business Days after the applicable Interest Payment Date or Redemption Date, together
with an amount equal to the Default Rate applied to the amount of such non-payment based on
the actual number of days comprising such period divided by 360 for each series. The
Default Rate shall be equal to the Reference Rate multiplied by three (3).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The amount of interest per Unit of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes payable on each Interest
Payment Date of each Rate Period of less than one (1)&nbsp;year (or in respect of interest on
another date in connection with a redemption during such Rate Period) shall be computed by
multiplying the Applicable Rate (or the Default Rate) for such Rate Period (or a portion
thereof) by a fraction, the numerator of which will be the number of days in such Rate
Period (or portion thereof) that such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes were outstanding and for which
the Applicable Rate or the Default Rate was applicable and the denominator of which will be
360, multiplying the amount so obtained by $25,000, and rounding the amount so obtained to
the nearest cent. During any Rate Period of one (1)&nbsp;year or more, the amount of interest
per Unit of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes payable on any Interest Payment Date (or in respect of
interest on another date in connection with a redemption during such Rate Period) shall be
computed as described in the preceding sentence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Any Interest Payment made on any series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall first be credited
against the earliest accrued but unpaid interest due with respect to such series.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Redemption</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;(i)&nbsp;After the initial Rate Period, subject to the provisions of this Section&nbsp;2.03 and to
the extent permitted under the Investment Company Act, the Issuer may, at its option, redeem in
whole or in part out of funds legally available therefor a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes herein
designated as (A)&nbsp;having a Rate Period of one year or less, on the Business Day after the last day
of such Rate Period by delivering a notice of redemption not less than 15&nbsp;days and not more than
40&nbsp;days prior to the date fixed for such redemption, at a redemption price equal to the aggregate
principal amount, plus an amount equal to accrued but unpaid interest thereon (whether or not
earned) to the date fixed for redemption (&#147;Redemption Price&#148;), or (B)&nbsp;having a Rate Period of more
than one year, on any Business Day prior to the end of the relevant Rate Period by delivering a
notice of redemption not less than 15&nbsp;days and not more than 40&nbsp;days prior to the date fixed for
such redemption, at the Redemption Price, plus a redemption premium, if any, determined by the
Board of Directors after consultation with the Broker-Dealers and set forth in any applicable
Specific Redemption Provisions at the time of the designation of such Rate Period as set forth in
Section&nbsp;2.04 hereof; provided, however, that during a Rate Period of more than one year no series
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes will be subject to optional redemption except in accordance with any
Specific Redemption Provisions approved by the Board of Directors after consultation with the
Broker-Dealers at the time of the designation of such Rate Period. Notwithstanding the foregoing,
the Issuer shall not give a notice of or effect any redemption pursuant to this
Section&nbsp;2.03(a)(i)&nbsp;unless, on the date on which the Issuer intends to give such notice and on the
date of redemption (a)&nbsp;the Issuer has available certain Deposit Securities with maturity or tender
dates not later than the day preceding the applicable redemption date and having a value not less
than the amount (including any applicable premium) due to Holders of a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes by reason of the redemption of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes on such date fixed for the
redemption and (b)&nbsp;the Issuer would have Eligible Assets with an aggregate Discounted Value at
least equal the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount immediately subsequent to such
redemption, if such redemption were to occur on such date, it being understood that the provisions
of paragraph (d)&nbsp;of this Section&nbsp;2.03 shall be applicable in such circumstances in the event the
Issuer makes the deposit and takes the other action required thereby.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Issuer fails to maintain, as of any Valuation Date, Eligible Assets with an
aggregate Discounted Value at least equal to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance
Amount or, as of the last Business Day of any month, the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset
Coverage, and such failure is not cured within ten Business Days following such Valuation
Date in the case of a failure to maintain the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount
or on the last Business Day of the following month in the case of a failure to maintain the
1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage as of such last Business Day (each an &#147;Asset
Coverage Cure Date&#148;), the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes will be subject to mandatory redemption out
of funds legally available therefor. The aggregate principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
to be redeemed in such circumstances will be equal to the lesser of (A)&nbsp;the minimum
principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes the redemption of which, if deemed to have occurred
immediately prior to the opening of business on the relevant Asset Coverage Cure Date, would
result in the Issuer having Eligible Assets with an aggregate Discounted Value at least
equal to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount, or sufficient to satisfy 1940
Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage, as the case may be, in either case as of the
relevant Asset Coverage Cure Date (provided that, if there is no such minimum principal
amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes the redemption of which would have such result, all
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes then Outstanding will be redeemed), and (B)&nbsp;the maximum principal
amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes that can be redeemed out of funds expected to be available
therefor on the Mandatory Redemption Date at the Mandatory Redemption Price set forth in
subparagraph (a)(iii) of this Section&nbsp;2.03.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In determining the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes required to be redeemed in accordance
with the foregoing Section&nbsp;2.03(a)(ii), the Issuer shall allocate the aggregate principal
amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes required to be redeemed to satisfy the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
Basic Maintenance Amount or the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage, as the case
may be, pro rata among the Holders of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes in proportion to the aggregate
principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes they hold, by lot or by such other method as the
Issuer shall deem equitable, subject to the further provisions of this subparagraph (iii).
The Issuer shall effect any required mandatory redemption pursuant to subparagraph (a)(ii)
of this Section&nbsp;2.03 no later than 40&nbsp;days after the Asset Coverage Cure Date (the
&#147;Mandatory Redemption Date&#148;), except that if the Issuer does not have funds legally
available for the redemption of, or is not otherwise legally permitted to redeem, the
aggregate principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes which would be required to be redeemed by
the Issuer under clause (A)&nbsp;of subparagraph (a)(ii) of this Section&nbsp;2.03 if sufficient funds
were available, or the Issuer otherwise is unable to effect such redemption on or prior to
such Mandatory Redemption Date, the Issuer shall redeem those <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, and
other Notes, on the earliest practicable date on which the Issuer will have such funds
available, upon notice pursuant to Section&nbsp;2.03(b) to record owners of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes to be redeemed and the Paying Agent. The Issuer will deposit with the Paying Agent
funds sufficient to redeem the specified aggregate principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
with respect to a redemption required under subparagraph (a)(ii) of this Section&nbsp;2.03, by
1:00&nbsp;p.m., New York City time, of the Business Day immediately preceding the Mandatory
Redemption Date. If fewer than all of the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are to be
redeemed pursuant to this Section&nbsp;2.03(a)(iii), the aggregate principal amount of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be redeemed shall be redeemed pro rata from the Holders of such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes in proportion to the aggregate principal amount of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes held by such Holders, by lot or by such other method as the Issuer shall deem fair and
equitable, subject, however, to the terms of any applicable Specific Redemption Provisions.
&#147;Mandatory Redemption Price&#148; means the Redemption Price plus (in the case of a Rate Period
of one year or more only) a redemption premium, if any, determined by the Board of Directors
after consultation with the Broker-Dealers and set forth in any applicable Specific
Redemption Provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event of a redemption pursuant to Section&nbsp;2.03(a), the Issuer will file a notice of
its intention to redeem with the Commission so as to provide at least the minimum notice required
under Rule&nbsp;23c-2 under the Investment Company Act or any successor provision. In addition, the
Issuer shall deliver a notice of redemption to the Auction Agent and the Trustee (the &#147;Notice of
Redemption&#148;) containing the information set forth below (i)&nbsp;in the case of an optional redemption
pursuant to subparagraph (a)(i) above, at least three Business Days prior to the giving of notice
to the Holders and (ii)&nbsp;in the case of a mandatory redemption pursuant to subparagraph (a)(ii)
above, on or prior to the 30th day preceding the Mandatory Redemption Date. The Trustee will use
its reasonable efforts to provide notice to each Holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes called for
redemption by electronic or other reasonable means not later than the close of business on the
Business Day immediately following the day on which the Trustee determines the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
to be redeemed (or, during a Default Period with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, not later
than the close of business on the Business Day immediately following the day on which the Trustee
receives Notice of Redemption from the Issuer). The Trustee shall confirm such notice in writing
not later than the close of business on the third Business Day preceding the date fixed for
redemption by providing the Notice of Redemption to each Holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes called for
redemption, the Paying Agent (if different from the Trustee) and the Securities Depository. Notice
of Redemption will be addressed to the registered owners of each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes at
their addresses appearing on the books or records of the Issuer. Such Notice of Redemption will
set forth (i)&nbsp;the date fixed for redemption, (ii)&nbsp;the principal amount and identity of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be redeemed, (iii)&nbsp;the redemption price (specifying the amount of accrued
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">interest to be included therein and any redemption premium, if any), (iv)&nbsp;that interest on the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be redeemed will cease to accrue on such date fixed for redemption,
(v)&nbsp;applicable cusip number(s) and (vi)&nbsp;the provision under which redemption shall be made. No
defect in the Notice of Redemption or in the transmittal or mailing thereof will affect the
validity of the redemption proceedings, except as required by applicable law. If fewer than all
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes held by any Holder are to be redeemed, the Notice of Redemption mailed to such
Holder shall also specify the principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be redeemed from such
Holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Notwithstanding the provisions of paragraph (a)&nbsp;of this Section&nbsp;2.03, no <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes may be redeemed unless all interest on the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and all Notes of
the Issuer ranking on a parity with the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, have been or are being
contemporaneously paid or set aside for payment; provided, however, that the foregoing shall not
prevent the purchase or acquisition of all Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes pursuant to the
successful completion of an otherwise lawful purchase or exchange offer made on the same terms to,
and accepted by, Holders of all Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Upon the deposit of funds sufficient to redeem any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes with the Paying
Agent and the giving of the Notice of Redemption to the Trustee under paragraph (b)&nbsp;of this
Section&nbsp;2.03, interest on such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall cease to accrue and such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes shall no longer be deemed to be Outstanding for any purpose (including, without limitation,
for purposes of calculating whether the Issuer has maintained the requisite <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
Basic Maintenance Amount or the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage), and all rights of
the Holder of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes so called for redemption shall cease and terminate, except
the right of such Holder to receive the redemption price specified herein, but without any interest
or other additional amount. Such redemption price shall be paid by the Paying Agent to the nominee
of the Securities Depository. The Issuer shall be entitled to receive from the Paying Agent,
promptly after the date fixed for redemption, any cash deposited with the Paying Agent in excess of
(i)&nbsp;the aggregate redemption price of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes called for redemption on such date
and (ii)&nbsp;such other amounts, if any, to which Holders of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes called for
redemption may be entitled. Any funds so deposited that are unclaimed at the end of two years from
such redemption date shall, to the extent permitted by law, be paid to the Issuer, after which time
the Holders of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes so called for redemption may look only to the Issuer for
payment of the redemption price and all other amounts, if any, to which they may be entitled. The
Issuer shall be entitled to receive, from time to time after the date fixed for redemption, any
interest earned on the funds so deposited.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;To the extent that any redemption for which Notice of Redemption has been given is not
made by reason of the absence of legally available funds therefor, or is otherwise prohibited, such
redemption shall be made as soon as practicable to the extent such funds become legally available
or such redemption is no longer otherwise prohibited. Failure to redeem any series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be deemed to exist at any time after the date specified for redemption
in a Notice of Redemption when the Issuer shall have failed, for any reason whatsoever, to deposit
in trust with the Paying Agent the redemption price with respect to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for
which such Notice of Redemption has been given. Notwithstanding the fact that the Issuer may not
have redeemed any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for which a Notice of Redemption has been given, interest
may be paid on a series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and shall include those <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for
which Notice of Redemption has been given but for which deposit of funds has not been made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;All moneys paid to the Paying Agent for payment of the redemption price of any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes called for redemption shall be held in trust by the Paying Agent for the
benefit of Holders of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be redeemed.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;So long as any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are held of record by the nominee of the Securities
Depository, the redemption price for such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes will be paid on the date fixed for
redemption to the nominee of the Securities Depository for distribution to Agent Members for
distribution to the persons for whom they are acting as agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Except for the provisions described above, nothing contained herein limits any right of
the Issuer to purchase or otherwise acquire any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes outside of an Auction at any
price, whether higher or lower than the price that would be paid in connection with an optional or
mandatory redemption, so long as, at the time of any such purchase, there is no arrearage in the
payment of interest on, or the mandatory or optional redemption price with respect to, any series
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for which Notice of Redemption has been given and the Issuer is in
compliance with the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage and has Eligible Assets with an
aggregate Discounted Value at least equal to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount
after giving effect to such purchase or acquisition on the date thereof. If fewer than all the
Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series are redeemed or otherwise acquired by the Issuer,
the Issuer shall give notice of such transaction to the Trustee, in accordance with the procedures
agreed upon by the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;The Board of Directors may, without further consent of the holders of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes or the holders of shares of capital stock of the Issuer, authorize, create or issue any class
or series of Notes, including other series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, ranking prior to or on a parity
with the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to the extent permitted by the Investment Company Act, if, upon
issuance, either (A)&nbsp;the net proceeds from the sale of such Notes (or such portion thereof needed
to redeem or repurchase the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes) are deposited with the Trustee in
accordance with Section&nbsp;2.03(d), Notice of Redemption as contemplated by Section&nbsp;2.03(b)&nbsp;has been
delivered prior thereto or is sent promptly thereafter, and such proceeds are used to redeem all
Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes or (B)&nbsp;the Issuer would meet the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
Asset Coverage, the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount and the requirements of
Section&nbsp;2.08 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;If any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are to be redeemed and such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are held by
the Securities Depository, the Issuer shall include in the notice of redemption delivered to the
Securities Depository: (i)&nbsp;under an item entitled &#147;Publication Date for Securities Depository
Purposes&#148;, the Interest Payment Date prior to the Redemption Date, and (ii)&nbsp;an instruction to the
Securities Depository to (x)&nbsp;determine on such Publication Date after the Auction held on the
immediately preceding Auction Date has settled, the Depository participants whose Securities
Depository positions will be redeemed and the principal amount of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to be
redeemed from each such position (the &#147;Securities Depository Redemption Information&#148;), and
(y)&nbsp;notify the Auction Agent immediately after such determination of (A)&nbsp;the positions of the
Depository Participants in such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes immediately prior to such Auction settlement,
(B)&nbsp;the positions of the Depository Participants in such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes immediately following
such Auction settlement and (C)&nbsp;the Securities Depository Redemption Information. &#147;Publication
Date&#148; shall mean three Business Days after the Auction Date next preceding such Redemption Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Designation of Rate Period</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The initial Rate Period for each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes is as set forth under
&#147;Designation&#148; in Section&nbsp;2.01(a) above. The Issuer will designate the duration of subsequent Rate
Periods of each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes; provided, however, that no such designation is
necessary for a Standard Rate Period and, provided further, that any designation of a Special Rate
Period shall be effective only if (i)&nbsp;notice thereof shall have been given as provided herein,
(ii)&nbsp;any failure to pay
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in a timely manner to the Trustee the full amount of any interest on, or the redemption price
of, <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall have been cured as provided above, (iii)&nbsp;Sufficient Clearing Bids
shall have existed in an Auction held on the Auction Date immediately preceding the first day of
such proposed Special Rate Period, (iv)&nbsp;if the Issuer shall have mailed a Notice of Redemption with
respect to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the redemption price with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
shall have been deposited with the Paying Agent, and (v)&nbsp;in the case of the designation of a
Special Rate Period, the Issuer has confirmed that as of the Auction Date next preceding the first
day of such Special Rate Period, it has Eligible Assets with an aggregate Discounted Value at least
equal to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount, and the Issuer has consulted with the
Broker-Dealers and has provided notice of such designation and otherwise complied with the Rating
Agency Guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Issuer proposes to designate any Special Rate Period, not fewer than 7 (or two Business
Days in the event the duration of the Rate Period prior to such Special Rate Period is fewer than
8&nbsp;days) nor more than 30 Business Days prior to the first day of such Special Rate Period, notice
shall be (i)&nbsp;made by press release and (ii)&nbsp;communicated by the Issuer by telephonic or other means
to the Trustee and confirmed in writing promptly thereafter. Each such notice shall state (A)&nbsp;that
the Issuer proposes to exercise its option to designate a succeeding Special Rate Period,
specifying the first and last days thereof and (B)&nbsp;that the Issuer will by 3:00&nbsp;p.m., New York City
time, on the second Business Day next preceding the first day of such Special Rate Period, notify
the Auction Agent and the Trustee, who will promptly notify the Broker-Dealers, of either (x)&nbsp;its
determination, subject to certain conditions, to proceed with such Special Rate Period, subject to
the terms of any Specific Redemption Provisions, or (y)&nbsp;its determination not to proceed with such
Special Rate Period, in which latter event the succeeding Rate Period shall be a Standard Rate
Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No later than 3:00&nbsp;p.m., New York City time, on the second Business Day next preceding the
first day of any proposed Special Rate Period, the Issuer shall deliver to the Auction Agent and
Trustee, who will promptly deliver to the Broker-Dealers and Existing Holders, either:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a notice stating (A)&nbsp;that the Issuer has determined to designate the next
succeeding Rate Period as a Special Rate Period, specifying the first and last days thereof
and (B)&nbsp;the terms of any Specific Redemption Provisions; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a notice stating that the Issuer has determined not to exercise its option to
designate a Special Rate Period.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the Issuer fails to deliver either such notice with respect to any designation of any proposed
Special Rate Period to the Auction Agent or is unable to make the confirmation provided in
clause&nbsp;(v) of Paragraph&nbsp;(a) of this Section&nbsp;2.04 by 3:00&nbsp;p.m., New York City time, on the second
Business Day next preceding the first day of such proposed Special Rate Period, the Issuer shall be
deemed to have delivered a notice to the Auction Agent with respect to such Rate Period to the
effect set forth in clause (ii)&nbsp;above, thereby resulting in a Standard Rate Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restrictions on Transfer</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes may be transferred only (a)&nbsp;pursuant to an order placed in an Auction,
(b)&nbsp;to or through a Broker-Dealer or (c)&nbsp;to the Issuer or any Affiliate. Notwithstanding the
foregoing, a transfer other than pursuant to an Auction will not be effective unless the selling
Existing Holder or the Agent Member of such Existing Holder, in the case of an Existing Holder
whose <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are listed in its own name on the books of the Auction Agent, or the
Broker-Dealer or Agent Member of such Broker-Dealer, in the case of a transfer between persons
holding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes through different Broker-Dealers, advises the Auction Agent of such
transfer. The certificates representing the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes issued to the Securities Depository will bear legends
with respect to the
restrictions described above and stop-transfer instructions will be issued to the Transfer Agent
and/or Registrar.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Issuer shall maintain, as of the last Business Day of each month in which any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are Outstanding, asset coverage with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes which
is equal to or greater than the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage; provided, however,
that Section&nbsp;2.03(a)(ii) shall be the sole remedy in the event the Issuer fails to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So long as the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are
Outstanding and any Rating Agency is then rating the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the Issuer shall maintain, as of each Valuation Date, Eligible Assets having
an aggregate Discounted Value equal to or greater than the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance
Amount; provided, however, that Section&nbsp;2.03(a)(ii) shall be the sole remedy in the event the
Issuer fails to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certain Other Restrictions</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For so long as any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are
Outstanding and any Rating Agency is then rating
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the Issuer will not engage in certain proscribed transactions set forth
in the Rating Agency Guidelines, unless it has received written confirmation from each such Rating
Agency that proscribes the applicable transaction in its Rating Agency Guidelines that any such
action would not impair the rating then assigned by such Rating Agency to a series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For so long as any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are
Outstanding, the Issuer will not declare, pay or
set apart for payment any dividend or other distribution (other than a dividend or distribution
paid in shares of, or options, warrants or rights to subscribe for or purchase, common shares or
other shares of capital stock of the Issuer) upon any class of shares of capital stock of the
Issuer, unless, in every such case, immediately after such transaction, the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes Asset Coverage would be achieved after deducting the amount of such dividend, distribution,
or purchase price, as the case may be; provided, however, that dividends may be declared upon any
preferred shares of capital stock of the Issuer if the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and any other senior
securities representing indebtedness of the Issuer have an asset coverage of at least 200% at the
time of declaration thereof, after deducting the amount of such dividend.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A declaration of a dividend or other distribution on or purchase or redemption of any common
or preferred shares of capital stock of the Issuer is prohibited (i)&nbsp;at any time that an Event of
Default under the Indenture has occurred and is continuing, (ii)&nbsp;if after giving effect to such
declaration, the Issuer would not have Eligible Assets with an aggregate Discounted Value at least
equal to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount or the 1940 Act
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
Asset Coverage, or (iii)&nbsp;the Issuer has not redeemed the full amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
required to be redeemed by any provisions for mandatory redemption contained herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compliance Procedures for Asset Maintenance Tests</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For so long as any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are
Outstanding and any Rating Agency is then rating
such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;As of each Valuation Date, the Issuer shall determine in accordance with the procedures
specified herein (i)&nbsp;the Market Value of each Eligible Asset owned by the Issuer on that date,
(ii)&nbsp;the Discounted Value of each such Eligible Asset using the Discount Factors, (iii)&nbsp;whether the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount is met as of that date, (iv)&nbsp;the value of the total
assets of the Issuer, less all liabilities, and (v)&nbsp;whether the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset
Coverage is met as of that date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Upon any failure to maintain the required
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount or
1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage on any Valuation Date, the Issuer may use reasonable
commercial efforts (including, without limitation, altering the composition of its portfolio,
purchasing <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes outside of an Auction or in the event of a failure to file a Rating
Agency Certificate (as defined below) on a timely basis, submitting the requisite Rating Agency
Certificate) to re-attain (or certify in the case of a failure to file on a timely basis, as the
case may be) the required <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount or 1940 Act
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes Asset Coverage on or prior to the Asset Coverage Cure Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Compliance with the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes Basic Maintenance Amount and 1940 Act
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage tests shall be determined with reference to those
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes which are deemed to be Outstanding hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Issuer shall deliver to each Rating Agency which is then rating
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
and any other party specified in the Rating Agency Guidelines all certificates that are set forth
in the respective Rating Agency Guidelines regarding 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage,
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount and/or related calculations at such times and
containing such information as set forth in the respective Rating Agency Guidelines (each, a
&#147;Rating Agency Certificate&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;In the event that any Rating Agency Certificate is not delivered within the time periods
set forth in the Rating Agency Guidelines, the Issuer shall be deemed to have failed to maintain
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount or the 1940 Act
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset
Coverage, as the case may be, on such Valuation Date for purposes of Section&nbsp;2.09(b). In the event
that any Rating Agency Certificate with respect to an applicable Asset Coverage Cure Date is not
delivered within the time periods set forth in the Rating Agency Guidelines, the Issuer shall be
deemed to have failed to have Eligible Assets with an aggregate Discounted Value at least equal to
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Basic Maintenance Amount or to meet the 1940
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset
Coverage, as the case may be, as of the related Valuation Date, and such failure shall be deemed
not to have been cured as of such Asset Coverage Cure Date for purposes of the mandatory redemption
provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Delivery of Notes</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the execution and delivery of this Supplemental Indenture, the Issuer shall execute and
deliver to the Trustee and the Trustee shall authenticate the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and deliver them
to The Depository Trust Company and as hereinafter in this Section provided.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the delivery by the Trustee of any of the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, there shall have been
filed with or delivered to the Trustee the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;A resolution duly adopted by the Issuer, certified by the Secretary or other Authorized
Officer thereof, authorizing the execution and delivery of this Supplemental Indenture and the
issuance of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Duly executed copies of this Supplemental Indenture and a copy of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Rating letters from each Rating Agency rating the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;An Opinion of Counsel and an Officers&#146; Certificate pursuant to Sections&nbsp;3.3 and 9.3 of the
Original Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Trustee&#146;s Authentication Certificate</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee&#146;s authentication certificate upon the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be substantially
in the forms provided in Appendix&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> hereto. No
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Note shall be secured hereby or
entitled to the benefit hereof, or shall be valid or obligatory for any purpose, unless a
certificate of authentication, substantially in such form, has been duly executed by the Trustee;
and such certificate of the Trustee upon any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Note shall be conclusive evidence and
the only competent evidence that such Bond has been authenticated and delivered hereunder. The
Trustee&#146;s certificate of authentication shall be deemed to have been duly executed by it if
manually signed by an authorized officer of the Trustee, but it shall not be necessary that the
same person sign the certificate of authentication on all of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes issued
hereunder.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EVENTS OF DEFAULT; REMEDIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Events of Default</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An &#147;Event of Default&#148; means any one of the following events set forth below (whatever the
reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;default in the payment of any interest upon a series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes when it
becomes due and payable and the continuance of such default for thirty (30)&nbsp;days; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;default in the payment of the principal of, or any premium on, a series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes at its Stated Maturity; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;default in the performance, or breach, of any covenant or warranty of the Company in the
Indenture, and continuance of such default or breach for a period of ninety (90)&nbsp;days after there
has been given, by registered or certified mail, to the Company by the Trustee a written notice
specifying such default or breach and requiring it to be remedied and stating that such notice is a
&#147;Notice of Default;&#148; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the entry by a court having jurisdiction in the premises of (A)&nbsp;a decree or order for
relief in respect of the Company in an involuntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law or (B)&nbsp;a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;the commencement by the Company of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or order for relief in respect of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of
a petition or answer or consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;if, pursuant to Section&nbsp;18(a)(1)(c)(ii) of the 1940 Act on the last business day of each
of twenty-four (24)&nbsp;consecutive calendar months, the 1940 Act <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Asset Coverage
is less than 100%; or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;any other Event of Default provided with respect to a series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes,
including a default in the payment of any Redemption Price payable on the date fixed for
redemption.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise noted, an Event of Default that relates only to one series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes will not affect any other series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Acceleration of Maturity; Rescission and Annulment</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of a series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the holders of not
less than a majority in principal amount of the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series may
declare the principal amount of all the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given by holders), and
upon any such declaration such principal amount (or specified amount) shall become immediately due
and payable. If an Event of Default specified in paragraphs (d)&nbsp;and (e)&nbsp;above with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series at the time Outstanding occurs, the principal amount of all the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series shall automatically, and without any declaration or other
action on the part of the Trustee or any holder, become immediately due and payable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At any time after such a declaration of acceleration with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of
any series has been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in principal amount of the Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Company has paid or deposited with the Trustee a sum sufficient to pay
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all overdue interest on all
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the principal of (and premium, if any, on) any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series
which have become due otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all sums paid or advanced by the Trustee and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;all Events of Default with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series, other than the
non-payment of the principal of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series which have become due solely by
such declaration of acceleration, have been cured or waived.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No such rescission shall affect any subsequent default or impair any right consequent thereon.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Collection of Indebtedness and Suits for Enforcement by Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company covenants that if:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;default is made in the payment of any interest on any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes when such
interest becomes due and payable and such default continues for a period of 90&nbsp;days, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;default is made in the payment of the principal of (or premium, if any, on) any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes at the Maturity thereof, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the whole amount then due and
payable on such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor in such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an Event of Default with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the holders of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the
exercise of any power granted in the Indenture, or to enforce any other proper remedy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Application of Money Collected</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any money collected by the Trustee pursuant to the provisions of the Indenture relating to an
Event of Default shall be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or any premium or interest,
upon presentation of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST: To the payment of all amounts due the Trustee under the Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECOND: To the payment of the amounts then due and unpaid for principal of and any premium
and interest on the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind, according to the amounts
due and payable on such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for principal and any premium and interest,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Limitation On Suits</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No holder of any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any
series shall have any right to institute any
proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;such holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the holders of not less than a majority in principal amount of the Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;such holder or holders have offered to the Trustee indemnity reasonably satisfactory to it
against the costs, expenses and liabilities to be incurred in compliance with such request;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the Trustee for 60&nbsp;days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the holders of a majority in principal amount of the Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that series;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">it being understood and intended that no one or more of such holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of the Indenture to affect, disturb
or prejudice the rights of any other of such holders, or to obtain or to seek to obtain priority or
preference over any other of such holders or to enforce any right under the Indenture, except in
the manner provided and for the equal and ratable benefit of all of such holders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Unconditional Right of Holders to Receive Principal, Premium and Interest</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provision in the Indenture, the holder of any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
shall have the right, which is absolute and unconditional, to receive payment of the principal of
and any premium and (subject to the provisions of any supplemental indenture) interest on such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes on the respective Stated Maturities expressed in such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
(or, in the case of redemption, on the Redemption Date), and to institute suit for the enforcement
of any such payment and such rights shall not be impaired without the consent of such holder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Restoration of Rights and Remedies</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Trustee or any holder has instituted any proceeding to enforce any right or remedy
under the Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the holders shall be restored
severally and respectively to their former positions and thereafter all rights and remedies of the
Trustee and the holders shall continue as though no such proceeding had been instituted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Rights and Remedies Cumulative</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, no right or remedy conferred upon or reserved to
the Trustee or to the holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Control By Holders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of not less than a majority in principal amount of the Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes of any series shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series, provided that
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;such direction shall not be in conflict with any rule of law or with the Indenture, and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Waiver of Past Defaults</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of not less than a majority in principal amount of the Outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes of any series may on behalf of the holders of all the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series
waive any past default hereunder with respect to such series and its consequences, except a default
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;in the payment of the principal of or any premium or interest on any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
of such series, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;in respect of a covenant or provision which cannot be modified or amended without the
consent of the holder of each Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series affected.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other default or impair any right consequent thereon.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SATISFACTION AND DISCHARGE OF INDENTURE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Indenture shall upon request of the Company cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes expressly
provided for herein or in the terms of such security), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and discharge of the
Indenture, when
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Either:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
theretofore authenticated and delivered (other than
(1)&nbsp;securities which have been destroyed, lost or stolen and which have been replaced or
paid as provided in the Indenture; and (2)&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in the
Indenture) have been delivered to the Trustee for cancellation; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, or will become due and payable at their Stated
Maturity within one year, or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company, and the Company, in the case of
this subsection (ii)&nbsp;has deposited or caused to be deposited with the Trustee as trust funds
in trust money in an amount sufficient to pay and discharge the entire indebtedness on such
securities not theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the case of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Company has paid or caused to be paid all other sums payable hereunder by the Trust;
and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the Company has delivered to the Trustee an Officers&#146; Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of the Indenture have been complied with.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Notwithstanding the satisfaction and discharge of the Indenture, the obligations of the Company to
the Trustee under the Indenture and, if money shall have been deposited with the Trustee pursuant
to subparagraph (ii)&nbsp;of paragraph (a)&nbsp;above, the obligations of the Trustee under certain
provisions of the Indenture shall survive.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>THE TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certain Duties and Responsibilities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;Except during the continuance of an Event of Default,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the Indenture and as required by the Trust Indenture Act, and no
implied covenants or obligations shall be read into the Indenture against the Trustee; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of the
Indenture; but in the case of any such certificates or opinions which by any provision of
the Indenture are specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to the
requirements of the Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;In case an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by the Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, strikes, work stoppages, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;No provision of the Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful misconduct, except
that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) this Subsection shall not be construed to limit the effect of Subsection&nbsp;(1)(A) of
this Section;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the holders of a majority in
principal amount of the Outstanding securities of any series, determined as provided in the
Indenture, relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under the Indenture with respect to the Securities of such series; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) no provision of the Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Notice of Defaults</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a default occurs hereunder with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series, the Trustee
shall give the Holders of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series notice of such default as and to the
extent provided by the Trust Indenture Act; provided, however, that in the case of any default with
respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series, no such notice to Holders shall be given until at
least 90&nbsp;days after the occurrence thereof. For the purpose hereof, the term &#147;default&#148; means any
event which is, or after notice or lapse of time or both would become, an Event of Default with
respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Certain Rights of Trustee</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions under &#147;Certain Duties and Responsibilities&#148; above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Trustee may conclusively rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or
parties;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;any request or direction of the Company shall be sufficiently evidenced by a Company
Request or Company Order, and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;whenever in the administration of the Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any action hereunder, the
Trustee may, in the absence of bad faith on its part, rely upon an Officers&#146; Certificate;
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;the Trustee may consult with counsel of its selection and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it in good faith and in reliance thereon;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by the Indenture at the request or direction of any of the holders pursuant to the Indenture,
unless such holders shall have offered to the Trustee security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;the Trustee may execute any of the trusts or powers or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;the Trustee shall not be liable for any action taken, suffered or omitted to be taken by
it in good faith and reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by the Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the Trustee shall not be deemed to have notice of any default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and the Indenture;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;the rights, privileges, protections, immunities and benefits given to the Trustee,
including its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee
in each of its capacities hereunder; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;the Trustee may request that the Company deliver an Officers&#146; Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to the Indenture, which Officers&#146; Certificate may be signed by any person
authorized to sign an Officers&#146; Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superceded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation and Reimbursement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company agrees:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;to pay to the Trustee from time to time such compensation as shall be agreed in writing
between the parties for all services rendered by it (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;except as otherwise expressly provided, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with
any provision of the Indenture (including the reasonable compensation and the expenses and
disbursements of
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-26<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">its agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;to indemnify each of the Trustee or any predecessor Trustee for, and to hold it harmless
against, any and all losses, liabilities, damages, claims or expenses including taxes (other than
taxes imposed on the income of the Trustee) incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any claim (whether asserted
by the Company, a holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Trustee incurs expenses or renders services in connection with an Event of Default,
the expenses (including the reasonable charges and expenses of its counsel) and the compensation
for the services are intended to constitute expenses of administration under any applicable Federal
or State bankruptcy, insolvency or other similar law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provisions hereof shall survive the termination of the Indenture.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Conflicting Interests</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and the Indenture.
To the extent not prohibited by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under the Indenture with respect to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of more than one series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Resignation and Removal; Appointment of Successor</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No resignation or removal of the Trustee and no appointment of a successor Trustee shall
become effective until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee may resign at any time with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of one or more
series by giving written notice thereof to the Company. If the instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 60&nbsp;days after the giving of
such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any
court of competent jurisdiction for the appointment of a successor Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Trustee may be removed at any time with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series
by Act of the holders of a majority in principal amount of the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of
such series, delivered to the Trustee and to the Company. If the instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30&nbsp;days after the giving of a
notice of removal pursuant to this paragraph, the Trustee being removed may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If at any time:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the Trustee shall fail to comply after written request therefor by the Company or by any
holder who has been a bona fide holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for at least six months, or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-27<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the Trustee shall cease to be eligible and shall fail to resign after written request
therefor by the Company or by any such holder, or
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i)&nbsp;the Company by a Board Resolution may
remove the Trustee with respect to all <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, or (ii)&nbsp;any holder who has been a bona
fide holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and the appointment of a successor Trustee or
Trustees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of one or
more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of one or more
or all of such series and that at any time there shall be only one Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any particular series) and shall comply with the applicable requirements.
If, within one year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series shall be
appointed by Act of the holders of a majority in principal amount of the Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes of such series delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements, become the successor Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of
such series and to that extent supersede the successor Trustee appointed by the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If no successor Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series shall have been
so appointed by the Company or the holders and accepted appointment in the manner required, any
holder who has been a bona fide holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series for at least six
months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of
such series.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall give notice of each resignation and each removal of the Trustee with respect
to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series and each appointment of a successor Trustee with respect
to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of any series to all holders of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series in
the manner provided. Each notice shall include the name of the successor Trustee with respect to
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series and the address of its Corporate Trust Office.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Acceptance of Appointment by Successor</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case of the appointment hereunder of a successor Trustee with respect to all
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes, every such successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-28<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In case of the appointment hereunder of a successor Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes of one or more (but not all) series, the Company, the retiring Trustee and each successor
Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of one or more series shall execute and deliver a
supplemental indenture wherein each successor Trustee shall accept such appointment and which
(1)&nbsp;shall contain such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that or those series to which the appointment
of such successor Trustee relates, (2)&nbsp;if the retiring Trustee is not retiring with respect to all
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3)&nbsp;shall add to or change any of the provisions
of the Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing in the Indenture shall
constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee
of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered
by any other such Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of that or those series to which the
appointment of such successor Trustee relates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon request of any such successor Trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Merger, Conversion, Consolidation or Succession to Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes shall have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Company May Consolidate, Etc., Only On Certain Terms</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and the Company shall
not permit any Person to consolidate with or merge into the Company, unless:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-29<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;in case the Company shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of the Company substantially as
an entirety shall be a corporation, partnership or trust, shall be organized and validly existing
under the laws of any domestic or foreign jurisdiction and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of and any premium and interest on all the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and the performance or observance of every covenant of the Indenture on the
part of the Company to be performed or observed;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;immediately after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any subsidiary as a result of such transaction as having
been incurred by the Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;the Company has delivered to the Trustee an Officers&#146; Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction, such supplemental indenture
comply and that all conditions precedent in the Indenture provided for relating to such transaction
have been complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Successor Substituted</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon any consolidation of the Company with, or merger of the Company into, any other Person or
any conveyance, transfer or lease of the properties and assets of the Company substantially as an
entirety, the successor Person formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the Indenture with the same effect as if
such successor Person had been named as the Company in the Indenture, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of all obligations and covenants under
the Indenture and the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DEFEASANCE AND COVENANT DEFEASANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Defeasance and Discharge</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the Company&#146;s exercise of its option (if any) to have the provisions of the Indenture
relating to Defeasance applied to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes or any series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes,
as the case may be, the Company shall be deemed to have been discharged from its obligations, with
respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes as provided in the Indenture on and after the date the
conditions set forth are satisfied (hereinafter called &#147;Defeasance&#148;). For this purpose, such
Defeasance means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and to have satisfied all its other
obligations under such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and the Indenture insofar as such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until otherwise terminated or
discharged hereunder: (1)&nbsp;the rights of holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes to receive, solely
from the trust fund, payments in respect of the principal of and any premium and interest on such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes when payments are due, (2)&nbsp;the Company&#146;s obligations with respect to such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, (3)&nbsp;the rights, powers, trusts, duties and immunities of the Trustee.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Covenant Defeasance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the Company&#146;s exercise of its option (if any) to have provisions of the Indenture
relating to Covenant Defeasance applied to any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes or any series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes, as the case may be, (1)&nbsp;the Company shall be released from its obligations under certain
provisions of the Indenture for the benefit of the holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and (2)&nbsp;the
occurrence of any event specified in the Indenture, and any such covenants provided pursuant to
certain provisions of the Indenture shall be deemed not to be or result in an Event of Default, in
each case with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes as provided in the Indenture on and after the
date the conditions are satisfied (hereinafter called &#147;Covenant Defeasance&#148;). For this purpose,
such Covenant Defeasance means that, with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, the Company may
omit to comply with and shall have no liability in respect of any term, condition or limitation set
forth in any such specified section of the Indenture, whether directly or indirectly by reason of
any reference elsewhere in the Indenture, or by reason of any reference in any such section or
article of the Indenture to any other provision in the Indenture or in any other document, but the
remainder of the Indenture and such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall be unaffected thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Conditions to Defeasance or Covenant Defeasance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee which satisfies the requirements and agrees to comply with the provisions of
the relevant Article&nbsp;of the Indenture applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and dedicated solely to, the
benefits of the holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, (i)&nbsp;money in an amount, or (ii)&nbsp;U.S.
Government Obligations which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day before the due date of
any payment, money in an amount, or (iii)&nbsp;such other obligations or arrangements as may be
specified with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, or (iv)&nbsp;a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge,
the principal of and any premium and interest on such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes on the respective Stated
Maturities, in accordance with the terms of the Indenture and such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes. As used
in the Indenture, &#147;U.S. Government Obligation&#148; means (x)&nbsp;any security which is (i)&nbsp;a direct
obligation of the United States of America for the payment of which the full faith and credit of
the United States of America is pledged or (ii)&nbsp;an obligation of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America the payment of which
is unconditionally guaranteed as a full faith and credit obligation by the United States of
America, which, in either case (i)&nbsp;or (ii), is not callable or redeemable at the option of the
Company thereof, and (y)&nbsp;any depositary receipt issued by a bank (as defined in Section&nbsp;3(a)(2) of
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes Act) as custodian with respect to any U.S. Government Obligation which is
specified in Clause (x)&nbsp;above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event of an election to have Defeasance and Discharge apply to any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Notes or any series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, as the case may be, the Company shall have delivered
to the Trustee an Opinion of Counsel stating that (i)&nbsp;the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (ii)&nbsp;since the date of this instrument,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">there has been a change in the applicable Federal income tax law, in either case (i)&nbsp;or (ii)
to the effect that, and based thereon such opinion shall confirm that, the holders of such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes will not recognize gain or loss for Federal income tax purposes as a result of
the deposit, Defeasance and discharge to be effected with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and
will be subject to Federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not to occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In the event of an election to have Covenant Defeasance apply to any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes
or any series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, as the case may be, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes will not
recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as would be the case if
such deposit and Covenant Defeasance were not to occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Company shall have delivered to the Trustee an Officers&#146; Certificate to the effect
that neither such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes nor any other
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of the same series, if
then listed on any <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes exchange, will be delisted as a result of such deposit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;No event which is, or after notice or lapse of time or both would become, an Event of
Default with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes or any other
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes shall have
occurred and be continuing at the time of such deposit or, with regard to any such event specified,
at any time on or prior to the 90th day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until after such 90th day).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act (assuming all <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes are in
default within the meaning of such Act).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the Company is a party or by
which it is bound.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Such Defeasance or Covenant Defeasance shall not result in the trust arising from such
deposit constituting an investment company within the meaning of the Investment Company Act unless
such trust shall be registered under the Investment Company Act or exempt from registration
thereunder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;No event or condition shall exist that would prevent the Company from making payments of
the principal of (and any premium) or interest on the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes of such series on the
date of such deposit or at any time on or prior to the 90th day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until after such 90th day).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;The Company shall have delivered to the Trustee an Officers&#146; Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;The Company shall have delivered to the Trustee an Opinion of Counsel substantially to the
effect that (i)&nbsp;the trust funds deposited pursuant hereto will not be subject to any rights of any
holders of indebtedness or equity of the Company, and (ii)&nbsp;after the 90th day following the
deposit, the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors&#146; rights generally, except that if a
court were to rule under any such law in any case or
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">proceeding that the trust funds remained property of the Company, no opinion is given as to
the effect of such laws on the trust funds except the following: (A)&nbsp;assuming such trust funds
remained in the possession of the trustee with whom such funds were deposited prior to such court
ruling to the extent not paid to holders of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Notes, such trustee would hold, for
the benefit of such holders, a valid and perfected security interest in such trust funds that is
not avoidable in bankruptcy or otherwise and (B)&nbsp;such holders would be entitled to receive adequate
protection of their interests in such trust funds if such trust funds were used.
</DIV>


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<DIV align="left">
<A name="148"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>APPENDIX&nbsp;A-I</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>AUCTION PROCEDURES</B></DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;<U>Orders by Existing Holders and Potential Beneficial Owners</U>. (a)&nbsp;Prior to the
Broker-Dealer Deadline for each Series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes on each Auction Date:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) each Existing Holder may submit to a Broker-Dealer, in writing or by such other
method as shall be reasonably acceptable to such Broker-Dealer, one or more Orders as to:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series held
by the Existing Holder which the Existing Holder commits to continue to hold for the
next succeeding Auction Period without regard to the Applicable Rate for such
Auction Period;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series held
by the Existing Holder which the Existing Holder commits to continue to hold for the
next succeeding Auction Period if the Applicable Rate for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes for
the next succeeding Auction Period is not less than the rate per annum specified in
such Bid (and if the Auction Rate is less than such specified rate, the effect of
the Order shall be as set forth in paragraph (b)(i)(A) of this Section); and/or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series held
by the Existing Holder which the Existing Holder offers to sell on the first
Business Day of the next succeeding Auction Period without regard to the Applicable
Rate for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes for the next succeeding Auction Period; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) each Potential Beneficial Owner may submit to a Broker-Dealer, in writing or by
such other method as shall be reasonably acceptable to such Broker-Dealer, an Order as to
the principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series which each such
Potential Beneficial Owner offers to purchase if the Applicable Rate for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes of such series for the next succeeding Rate Period is not less than the rate per annum
then specified by such Potential Beneficial Owner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of the Auction Procedures, an Order containing the information referred to in
clause (i)(A) of this paragraph (a)&nbsp;is referred to as a &#147;Hold Order,&#148; an Order containing the
information referred to in clause (i)(B) or (ii)&nbsp;of this paragraph (a)&nbsp;is referred to as a &#147;Bid,&#148;
and an Order containing the information referred to in clause (i)(C) of this paragraph (a)&nbsp;is
referred to as a &#147;Sell Order.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Auction Desk of a Broker-Dealer shall accept as an Order a submission (whether received
from an Existing Holder or a Potential Beneficial Owner or generated by the Broker-Dealer for its
own account) which does not conform to the requirements of the Auction Procedures, including, but
not limited to, submissions which are not in Authorized Denominations, specify a rate which
contains more than three figures to the right of the decimal point or specify an amount greater
than the amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes. No Auction Desk of a Broker-Dealer shall
accept a Bid or Sell Order which is conditioned on being filled in whole or a Bid which does not
specify a specific interest rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i)&nbsp;A Bid by an Existing Holder shall constitute an offer to sell on the first Business
Day of the next succeeding Auction Period:
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes specified in the
Bid if the Applicable Rate for the next succeeding Auction Period shall be less than
the rate specified in such Bid; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the principal amount or a lesser principal amount of outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes to be determined as described in clause (v)&nbsp;of paragraph (a)
of Section&nbsp;5 of this Appendix&nbsp;A-I if the Applicable Rate for the next succeeding
Auction Period shall be equal to such specified rate; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) a lesser principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes be
determined as described in clause (iv)&nbsp;of paragraph (b)&nbsp;of Section&nbsp;5 of this
Appendix&nbsp;A-I if the rate specified therein shall be higher than the Maximum Rate and
Sufficient Clearing Bids do not exist.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) A Sell Order by an Existing Holder shall constitute an offer to sell:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series
specified in the Sell Order; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the principal amount or a lesser principal amount of outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series as set forth in clause (iv)&nbsp;of paragraph (b)&nbsp;of
Section&nbsp;5 of this Appendix&nbsp;A-I if Sufficient Clearing Bids for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes
of the series do not exist;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) A Bid by a Potential Holder of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes shall constitute an offer to
purchase:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series
specified in the Bid if the Applicable Rate for the next succeeding Auction Period
shall be higher than the rate specified therein; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the principal amount or a lesser principal amount of outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series as set forth in clause (vi)&nbsp;of paragraph (a)&nbsp;of
Section&nbsp;5 of this Appendix&nbsp;A-I if the Applicable Rate for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes
determined on the Auction Date shall be equal to the rate specified therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) Anything herein to the contrary notwithstanding:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) if an Order or Orders covering all of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of
a particular series held by any Existing Holder is not submitted to the
Broker-Dealer prior to the Broker-Dealer Deadline, such Broker-Dealer shall
deem a Hold Order to have been submitted on behalf of the Existing Holder
covering the principal amount of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the
series held by the Existing Holder and not subject to Orders submitted to
the Auction Agent; provided, however, that if there is a conversion from one
Auction Period to a longer Auction Period and Orders have not been submitted
to such Broker-Dealer prior to the Broker-Dealer Deadline covering the
aggregate principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a particular series
to be converted held by such Existing Holder, such Broker-Dealer shall deem
a Sell Order to have been submitted on behalf of the Existing Holder
covering the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">principal amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;
Notes to be converted held by the
Existing Holder and not subject to Orders submitted to such Broker-Dealer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) for purposes of any Auction, any Order by an Existing Holder or
Potential Holder shall be revocable until the Broker-Dealer Deadline, and
after the Broker-Dealer Deadline all such Orders shall be irrevocable except
as provided in Sections&nbsp;2(e)(ii) and 2(f); and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 6%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) for purposes of any Auction, any
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes sold or
purchased pursuant to clauses (i), (ii)&nbsp;or (iii)&nbsp;of paragraph (b)&nbsp;of this
Section&nbsp;1 shall be sold or purchased at a price equal to 100% of the
principal amount thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;<U>Submission of Orders by Broker-Dealers to Auction Agent</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each Broker-Dealer shall submit to the Auction Agent in writing, or by such other
electronic means, as shall be reasonably acceptable to the Auction Agent, prior to the Submission
Deadline on each Auction Date, all Orders accepted by such Broker-Dealer in accordance with Section
1 above and specifying with respect to each Order or aggregation of Orders pursuant to paragraph
(b)&nbsp;of this Section&nbsp;2:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the name of the Broker-Dealer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the number of Bidders placing Orders, if requested by the Auction Agent;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the aggregate number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series, if any,
that are the subject of the Order;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) to the extent that the Bidder is an Existing Holder of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of
the series:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series subject
to any Hold Order placed by the Existing Holder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series subject
to any Bid placed by the Existing Holder and the rate specified in the Bid; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, if any, of the series subject
to any Sell Order placed by the Existing Holder; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) to the extent the Bidder is a Potential Holder of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the
series, the rate specified in such Bid.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If more than one Bid is submitted to a Broker-Dealer on behalf of any single Potential
Beneficial Owner, the Broker-Dealer shall aggregate each Bid on behalf of such Potential Beneficial
Owner submitted with the same rate and consider such Bids as a single Bid and shall consider each
Bid submitted with a different rate a separate Bid with the rate and the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series specified therein.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Broker-Dealer may aggregate the Orders of different Potential Beneficial Owners with those
of other Potential Beneficial Owners on whose behalf the Broker-Dealer is submitting Orders and may
aggregate the Orders of different Existing Holders with other Existing Holders on whose behalf the
Broker-Dealer is submitting Orders; provided, however, Bids may only be aggregated if the interest
rates on the Bids are the same.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;None of the Company, the Trustee or the Auction Agent shall be responsible for the failure
of any Broker-Dealer to submit an Order to the Auction Agent on behalf of any Beneficial Owner,
Potential Beneficial Owner, Existing Holder or Potential Holder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Nothing contained herein shall preclude a Broker-Dealer from placing an Order for some or
all of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series for its own account.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Until the Submission Deadline, a Broker-Dealer may withdraw or modify any Order previously
submitted to the Auction Agent (i)&nbsp;for any reason if the Order was generated by the Auction Desk of
the Broker-Dealer for the account of the Broker-Dealer or (ii)&nbsp;to correct a Clerical Error in the
case of any other Order, including Orders from the Broker-Dealer which were not originated by the
Auction Desk.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;After the Submission Deadline, and prior to the Error Correction Deadline, a Broker-Dealer
may:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) submit to the Auction Agent an Order received from an Existing Holder, Potential
Beneficial Owner or a Broker-Dealer which is not an Order generated by the Auction Desk, in
each case prior to the Broker-Dealer Deadline, or an Order generated by the Broker-Dealer&#146;s
Auction Desk for its own account prior to the Submission Deadline (provided that in each
case the Broker-Dealer has a record of such Order and the time when such Order was received
or generated) and not submitted to the Auction Agent prior to the Submission Deadline as a
result of (A)&nbsp;an event of force majeure or a technological failure which made delivery prior
to the Submission Deadline impossible or, under the conditions then prevailing,
impracticable or (B)&nbsp;a clerical error on the part of the Broker-Dealer; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) modify or withdraw an Order received from an Existing Holder or a Potential
Beneficial Owner or generated by the Broker-Dealer (whether generated by the Broker-Dealer&#146;s
Auction Desk or elsewhere within the Broker-Dealer) for its own account and submitted to the
Auction Agent prior to the Submission Deadline or pursuant to clause (i)&nbsp;above, if the
Broker-Dealer determines that such Order contained a Clerical Error on the part of the
Broker-Dealer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event a Broker-Dealer makes a submission, modification or withdrawal pursuant to this
Section 2(f) and the Auction Agent has already run the Auction, the Auction Agent shall rerun the
Auction, taking into account such submission, modification or withdrawal. Each submission,
modification or withdrawal of an Order submitted pursuant to this Section 2(f) by a Broker-Dealer
after the Submission Deadline and prior to the Error Correction Deadline shall constitute a
representation by the Broker-Dealer that (A)&nbsp;in the case of a newly submitted Order or portion
thereof or revised Order, the failure to submit such Order prior to the Submission Deadline
resulted from an event described in clause (i)&nbsp;above and such Order was received from an Existing
Holder or Potential Beneficial Owner or is an Order received from the Broker-Dealer that was not
originated by the Auction Desk, in each case, prior to the Broker-Dealer Deadline, or generated
internally by such Broker-Dealer&#146;s Auction Desk for its own account prior to the Submission
Deadline or (B)&nbsp;in the case of a modified or withdrawn Order, such Order was received from an
Existing Holder, a Potential Beneficial Owner or the Broker-Dealer which was not
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">originated by the Auction Desk prior to the Broker-Dealer Deadline, or generated internally by
such Broker-Dealer&#146;s Auction Desk for its own account prior to the Submission Deadline and such
Order as submitted to the Auction Agent contained a Clerical Error on the part of the Broker-Dealer
and that such Order has been modified or withdrawn solely to effect a correction of such Clerical
Error, and in the case of either (A)&nbsp;or (B), as applicable, the Broker-Dealer has a record of such
Order and the time when such Order was received or generated. The Auction Agent shall be entitled
to rely conclusively (and shall have no liability for relying) on such representation for any and
all purposes of the Auction Procedures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;If after the Auction Agent announces the results of an Auction, a Broker-Dealer becomes
aware that an error was made by the Auction Agent, the Broker-Dealer shall communicate such
awareness to the Auction Agent prior to 5:00 p.m., New York City time on the Auction Date. If the
Auction Agent determines there has been such an error (as a result of either a communication from a
Broker-Dealer or its own discovery) prior to 3:00 p.m., New York City time on the first day of the
next applicable Auction Period with respect to such Auction, the Auction Agent shall correct the
error and notify each Broker-Dealer that submitted Bids or held a position in the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes of the series subject to such Auction of the corrected results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Nothing contained herein shall preclude the Auction Agent from:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) advising a Broker-Dealer prior to the Submission Deadline that it has not received
Sufficient Clearing Bids for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series, provided, however, that if
the Auction Agent so advises any Broker-Dealer, it shall so advise all Broker-Dealers; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) verifying the Orders of a Broker-Dealer prior to the Submission Deadline,
provided, however, that if the Auction Agent verifies the Orders of any Broker-Dealer, it
shall verify the Orders of all Broker-Dealers requesting such verification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;<U>Treatment of Orders by the Auction Agent</U>. Anything herein to the contrary
notwithstanding:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If the Auction Agent receives an Order which does not conform to the requirements of the
Auction Procedures, the Auction Agent may contact the Broker-Dealer submitting such Order until one
hour after the Submission Deadline and inform such Broker-Dealer that it may resubmit such Order so
that it conforms to the requirements of the Auction Procedures. Upon being so informed, such
Broker-Dealer may correct and resubmit to the Auction Agent any such Order that, solely as a result
of a Clerical Error on the part of such Broker-Dealer, did not conform to the requirements of the
Auction Procedures when previously submitted to the Auction Agent. Any such resubmission by a
Broker-Dealer shall constitute a representation by such Broker-Dealer that the failure of such
Order to have so conformed was solely as a result of a Clerical Error on the part of such
Broker-Dealer. If the Auction Agent has not received a corrected conforming Order within one hour
and fifteen minutes of the Submission Deadline, the Auction Agent shall, if and to the extent
applicable, adjust or apply such Order, as the case may be, in conformity with the provisions of
subsections (b), (c)&nbsp;or (d)&nbsp;of this Section&nbsp;3 and, if the Auction Agent is unable to so adjust or
apply such Order, the Auction Agent shall reject such Order.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;If any rate specified in any Bid contains more than three figures to the right of the
decimal point, the Auction Agent shall round the rate up to the next highest one thousandth of one
percent (0.001%).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If one or more Orders covering in the aggregate more than the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a particular series are submitted by a Broker-Dealer to the Auction Agent,
such Orders shall be considered valid as follows:
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Hold Orders for
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series shall be considered Hold
Orders, but only up to and including in the aggregate the number of Units of outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series for which such Broker-Dealer is the Broker-Dealer of
record;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) (A)&nbsp;any Bid of a Broker-Dealer shall be considered valid as a Bid of an Existing
Holder up to and including the excess of the number of Units of outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes of such series for which such Broker-Dealer is the Broker-Dealer of record over the
number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series subject to any Hold Orders referred
to in clause&nbsp;(i) above;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) subject to subclause (A), all Bids of a Broker-Dealer with the same rate
shall be aggregated and considered a single Bid of an Existing Holder up to and
including the excess of the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series
for which such Broker-Dealer is the Broker-Dealer of record over the number of Units
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series for which the Broker-Dealer is the
Broker-Dealer of record subject to any Hold Orders referred to in clause (i)&nbsp;above;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) subject to subclause (A), if more than one Bid with different rates is
submitted by a Broker-Dealer, such Bids shall be considered Bids of an Existing
Holder in the ascending order of their respective rates up to the amount of excess
of the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series for which such
Broker-Dealer is the Broker-Dealer of record over the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such Series for which such Broker-Dealer is the
Broker-Dealer of record subject to any Hold Orders referred to in clause (i)&nbsp;above;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) the number of Units, if any, of outstanding
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the
series subject to Bids not considered to be Bids for which such Broker-Dealer is the
Broker-Dealer of record under this clause (ii)&nbsp;shall be treated as the subject of a
Bid for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series by a Potential Beneficial Owner; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) all Sell Orders shall be considered Sell Orders, but only up to and including the
number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series equal to the excess of the number of
Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series for which such Broker-Dealer is the
Broker-Dealer of record over the sum of the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such
series subject to Hold Orders referred to in clause (i)&nbsp;above and the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series considered to be subject to Bids for which such
Broker-Dealer is the Broker-Dealer of record pursuant to clause (ii)&nbsp;above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;If an Order is for other than an integral number of Units, then the Auction Agent shall
round the number down to the nearest number of whole Units, and the Auction Agent shall conduct the
Auction Procedures as if such Order had been submitted in such number of Units.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;If the Auction Agent has been notified by the Trustee or the Company that any portion of
an Order by a Broker-Dealer relates to a <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Note of a series that has been called for
redemption on or prior to the Interest Payment Date next succeeding such Auction, the Order shall
be invalid with respect to such portion and the Auction Agent shall conduct the Auction Procedures
as if such portion of such Order had not been submitted.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;No
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Note of a series which the Auction Agent has been notified by the
Trustee or the Company has been called for redemption on or prior to the Interest Payment
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date next succeeding such Auction shall be included in the calculation of Available
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes for such Auction.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;If an Order or Orders covering all of the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a particular series is
not submitted by a Broker-Dealer of record prior to the Submission Deadline, the Auction Agent
shall deem a Hold Order to have been submitted on behalf of such Broker-Dealer covering the number
of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes for which such Broker-Dealer is the Broker-Dealer of record and
not subject to Orders submitted to the Auction Agent; provided, however, that if there is a
conversion from one Auction Period to a longer Auction Period and Orders have not been submitted by
such Broker-Dealer prior to the Submission Deadline covering the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes of a particular series to be converted for which such Broker-Dealer is the Broker-Dealer of
record, the Auction Agent shall deem a Sell Order to have been submitted on behalf of such
Broker-Dealer covering the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes to be converted for which such
Broker-Dealer is the Broker-Dealer of record not subject to Orders submitted by such Broker-Dealer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;<U>Determination of Applicable Rate</U>. (a)&nbsp;If requested by the Trustee or a
Broker-Dealer, not later than 10:30&nbsp;a.m., New York City time (or such other time as may be agreed
to by the Auction Agent and all Broker-Dealers), on each Auction Date for each series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, the Auction Agent shall advise such Broker-Dealer (and thereafter confirm to
the Trustee, if requested) the All Hold Rate. Such advice, and confirmation, shall be made by
telephone or other electronic means acceptable to the Auction Agent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Promptly after the Submission Deadline for the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series on each
Auction Date, the Auction Agent shall assemble all Orders submitted or deemed submitted to it by
the Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-Dealer being
hereinafter referred to as a &#147;Submitted Hold Order,&#148; a &#147;Submitted Bid&#148; or a &#147;Submitted Sell Order,&#148;
as the case may be, and collectively as a &#147;Submitted Order&#148;) and shall determine (i)&nbsp;the Available
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, (ii)&nbsp;whether there are Sufficient Clearing Bids, and (iii)&nbsp;the Applicable
Rate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;In the event the Auction Agent shall fail to calculate or, for any reason, fails to
provide the Auction Rate on the Auction Date, for any Auction Period (i)&nbsp;if the preceding Auction
Period was a period of 35&nbsp;days or less, (A)&nbsp;a new Auction Period shall be established for the same
length of time as the preceding Auction Period, if the failure to make such calculation was because
there was not at the time a duly appointed and acting Auction Agent or Broker-Dealer, and the
Applicable Rate for the new Auction Period shall be the percentage of the Index set forth in
Section 4(f) below if the Index is ascertainable on such date (by the Auction Agent, if there is at
the time an Auction Agent, or the Trustee, if at the time there is no Auction Agent) or, (B)&nbsp;if the
failure to make such calculation was for any other reason or if the Index is not ascertainable on
such date, the prior Auction Period shall be extended for seven days and the Applicable Rate for
the period as so extended shall be the same as the Applicable Rate for the Auction Period prior to
the extension, and (ii)&nbsp;if the preceding Auction Period was a period of greater than 35&nbsp;days, (A)&nbsp;a
new Auction Period shall be established for a period that ends on the seventh day following the day
that was the last day of the preceding Auction Period, (or if such seventh day is not followed by a
Business Day then to the next succeeding day which is followed by a Business Day) if the failure to
make such calculation was because there was not at the time a duly appointed and acting Auction
Agent or Broker-Dealer, and the Applicable Rate for the new Auction Period shall be the percentage
of the Index set forth in Section 4(f) below if the Index is ascertainable on such date (by the
Auction Agent, if there is at the time an Auction Agent, or the Trustee, if at the time there is no
Auction Agent) or, (B)&nbsp;if the failure to make such calculation was for any other reason or if the
Index is not ascertainable on such date, the prior Auction Period shall be extended to the seventh
day following the day that would have been the last day of the preceding Auction Period (or if such
seventh day is not followed by a Business Day then to the next succeeding day that is followed by a
Business Day) and the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-7<!-- /Folio -->
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Applicable Rate for the period as so extended shall be the same as the Applicable Rate for the
Auction Period prior to the extension. In the event a new Auction Period is established as set
forth in clause (ii) (A)&nbsp;above, an Auction shall be held on the last Business Day of the new
Auction Period to determine an Auction Rate for an Auction Period beginning on the Business Day
immediately following the last day of the new Auction Period and ending on the date on which the
Auction Period otherwise would have ended had there been no new Auction Period or Auction Periods
subsequent to the last Auction Period for which a Winning Bid Rate had been determined. In the
event an Auction Period is extended as set forth in clause (i) (B)&nbsp;or (ii) (B)&nbsp;above, an Auction
shall be held on the last Business Day of the Auction Period as so extended to determine an Auction
Rate for an Auction Period beginning on the Business Day immediately following the last day of the
extended Auction Period and ending on the date on which the Auction Period otherwise would have
ended had there been no extension of the prior Auction Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, neither new nor extended Auction Periods shall total more than
35&nbsp;days in the aggregate. If at the end of the 35&nbsp;days the Auction Agent fails to calculate or
provide the Auction Rate, or there is not at the time a duly appointed and acting Auction Agent or
Broker-Dealer, the Applicable Rate shall be the Maximum Rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;In the event of a failed conversion from an Auction Period to any other period or in the
event of a failure to change the length of the current Auction Period due to the lack of Sufficient
Clearing Bids at the Auction on the Auction Date for the first new Auction Period, the Applicable
Rate for the next Auction Period shall be the Maximum Rate and the Auction Period shall be a
seven-day Auction Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;If the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes are no longer maintained in book-entry-only form by the
Securities Depository, then the Auctions shall cease and the Applicable Rate shall be the Maximum
Rate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The percentage of the Index in Section 4(c) is 100%.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;<U>Allocation of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes</U>. (a)&nbsp;In the event of Sufficient Clearing Bids
for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series subject to the further provisions of paragraphs (c)&nbsp;and
(d)&nbsp;of this Section&nbsp;5. Submitted Orders for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series shall be accepted
or rejected as follows in the following order of priority:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Submitted Hold Order of each Existing Holder shall be accepted, thus requiring
each such Existing Holder to continue to hold the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the subject
of such Submitted Hold Order;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Submitted Sell Order of each Existing Holder shall be accepted and the
Submitted Bids of each Existing Holder specifying any rate that is higher than the Winning
Bid Rate shall be rejected, thus requiring each Existing Holder to sell the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes that are the subject of such Submitted Sell Order or Submitted Bid;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Submitted Bid of each Existing Holder specifying any rate that is lower than
the Winning Bid Rate shall be accepted, thus requiring each such Existing Holder to continue
to hold the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the subject of the Submitted Bid;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Submitted Bid of each Potential Holder specifying any rate that is lower than
the Winning Bid Rate for <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series shall be accepted, thus
requiring each such Potential Holder to purchase the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the
subject of the Submitted Bid;
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Submitted Bid of each Existing Holder specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Existing Holder to continue to
hold the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series that are the subject of the Submitted Bid, but
only up to and including the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series
obtained by multiplying (A)&nbsp;the aggregate number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes which are
not the subject of Submitted Hold Orders described in clause (i)&nbsp;of this paragraph (a)&nbsp;or of
Submitted Bids described in clauses (iii)&nbsp;and (iv)&nbsp;of this paragraph (a)&nbsp;by (B)&nbsp;a fraction,
the numerator of which shall be the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes held by such
Existing Holder subject to such Submitted Bid and the denominator of which shall be the
aggregate number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes subject to such Submitted Bids made by
all such Existing Holders that specified a rate equal to the Winning Bid Rate, and the
remainder, if any, of such Submitted Bid shall be rejected, thus requiring each such
Existing Holder to sell any excess amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Submitted Bid of each Potential Holder specifying a rate that is equal to the
Winning Bid Rate shall be accepted, thus requiring each such Potential Holder to purchase
the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series that are the subject of such Submitted Bid, but only
in an amount equal to the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series obtained
by multiplying (A)&nbsp;the aggregate number of Units of Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes which
are not the subject of Submitted Hold Orders described in clause (i)&nbsp;of this paragraph (a)
or of Submitted Bids described in clauses (iii), (iv)&nbsp;or (v)&nbsp;of this paragraph (a)&nbsp;by (B)&nbsp;a
fraction, the numerator of which shall be the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes
subject to such Submitted Bid and the denominator of which shall be the sum of the aggregate
number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes subject to such Submitted Bids made by all such
Potential Holders that specified a rate equal to the Winning Bid Rate, and the remainder of
such Submitted Bid shall be rejected; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the Submitted Bid of each Potential Holder specifying any rate that is higher
than the Winning Bid Rate shall be rejected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;In the event there are not Sufficient Clearing Bids for the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a
series, Submitted Orders for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series shall be accepted or rejected
as follows in the following order of priority:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Submitted Hold Order of each Existing Holder shall be accepted, thus requiring
each such Existing Holder to continue to hold the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the subject
of such Submitted Hold Order;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Submitted Bid of each Existing Holder specifying any rate that is not higher
than the Maximum Rate shall be accepted, thus requiring each such Existing Holder to
continue to hold the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the subject of such Submitted Bid;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Submitted Bids specifying any rate that is not higher than the Maximum Rate
for the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes shall be accepted, thus requiring each such Potential Holder
to purchase the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes that are the subject of such Submitted Bid; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Submitted Sell Orders of each Existing Holder shall be accepted as Submitted
Sell Orders and the Submitted Bids of each Existing Holder specifying any rate that is
higher than the Maximum Rate shall be deemed to be and shall be accepted as Submitted Sell
Orders, in both cases only up to and including the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes
of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">such series obtained by multiplying (A)&nbsp;the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp; Notes
subject to Submitted Bids described in clause (iii)&nbsp;of this paragraph (b)&nbsp;by (B)&nbsp;a fraction,
the numerator of which shall be the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp; Notes held by such
Existing Holder subject to such Submitted Sell Order or such Submitted Bid deemed to be a
Submitted Sell Order and the denominator of which shall be the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp; Notes subject to all such Submitted Sell Orders and such Submitted Bids
deemed to be Submitted Sell Orders, and the remainder of each such Submitted Sell Order or
Submitted Bid shall be deemed to be and shall be accepted as a Hold Order and each such
Existing Holder shall be required to continue to hold such excess amount of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Submitted Bid of each Potential Holder specifying any rate that is higher than
the Maximum Rate shall be rejected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;<U>Notice of Applicable Rate</U>. (a)&nbsp;On each Auction Date, the Auction Agent shall
notify each Broker-Dealer that participated in the Auction held on such Auction Date by electronic
means acceptable to the Auction Agent and the applicable Broker-Dealer of the following, with
respect to the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series for which an Auction was held on such Auction
Date:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Applicable Rate determined on such Auction Date for the succeeding Auction
Period;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) whether Sufficient Clearing Bids existed for the determination of the Winning Bid
Rate;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if such Broker-Dealer submitted a Bid or a Sell Order on behalf of an Existing
Holder, whether such Bid or Sell Order was accepted or rejected and the number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series, if any, to be sold by such Existing Holder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential Holder, whether
such Bid was accepted or rejected and the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the
series, if any, to be purchased by such Potential Holder;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) if the aggregate number of Units of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series to be sold by
all Existing Holders on whose behalf such Broker-Dealer submitted Bids or Sell Orders is
different from the aggregate number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series to be
purchased by all Potential Holders on whose behalf such Broker-Dealer submitted a Bid, the
name or names of one or more Broker-Dealers (and the Agent Member, if any, of each such
other Broker-Dealer) and the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series to be
(A)&nbsp;purchased from one or more Existing Holders on whose behalf such other Broker-Dealers
submitted Bids or Sell Orders or (B)&nbsp;sold to one or more Potential Holders on whose behalf
such Broker-Dealer submitted Bids; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the immediately succeeding Auction Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;On each Auction Date, with respect to each series of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes for which an
Auction was held on such Auction Date, each Broker-Dealer that submitted an Order on behalf of any
Existing Holder or Potential Holder shall: (i)&nbsp;if requested by an Existing Holder or a Potential
Holder advise such Existing Holder or Potential Holder on whose behalf such Broker-Dealer submitted
an Order as to (A)&nbsp;the Applicable Rate determined on such Auction Date, (B)&nbsp;whether any Bid or Sell
Order submitted on behalf of each such Owner was accepted or rejected and (C)&nbsp;the immediately
succeeding Auction Date; (ii)&nbsp;instruct each Potential Holder on whose behalf such Broker-Dealer
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">submitted a Bid that was accepted, in whole or in part, to instruct such Potential Holder&#146;s
Agent Member to pay to such Broker-Dealer (or its Agent Member) through the Securities Depository
the amount necessary to purchase the number of Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series to be
purchased pursuant to such Bid against receipt of such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes; and (iii)&nbsp;instruct
each Existing Holder on whose behalf such Broker-Dealer submitted a Sell Order that was accepted or
a Bid that was rejected in whole or in part, to instruct such Existing Holder&#146;s Agent Member to
deliver to such Broker-Dealer (or its Agent Member) through the Securities Depository the number of
Units of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series to be sold pursuant to such Bid or Sell Order against
payment therefor.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Auction Agent shall give notice of the Auction Rate to the Company and the Trustee by
mutually acceptable electronic means and the Trustee shall promptly give notice of such Auction
Rate to the Securities Depository.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;<U>Miscellaneous
Provisions Regarding Auctions</U>. (a)&nbsp;In this Appendix&nbsp;A-I, each
reference to the purchase, sale or holding of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes shall refer to beneficial
interests in <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, unless the context clearly requires otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;During an auction Rate Period with respect to each series of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes, the
provisions of the Indenture and the definitions contained therein and described in this Appendix
A-I, including without limitation the definitions of All Hold Rate, Interest Payment Date, Maximum
Rate, and Applicable Rate, may be amended pursuant to the Indenture by obtaining the consent of the
majority of the owners of the affected Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series bearing
interest at the Applicable Rate as follows. If on the first Auction Date occurring at least 20
days after the date on which the Trustee mailed notice of such proposed amendment to the registered
owners of the affected Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series, (i)&nbsp;the Applicable Rate
which is determined on such date is the Winning Bid Rate or the All Hold Rate and (ii)&nbsp;there is
delivered to the Company and the Trustee an opinion of counsel to the effect that such amendment
shall not adversely affect the validity of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series or any exemption
from federal income tax to which the interest on the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series would
otherwise be entitled, the proposed amendment shall be deemed to have been consented to by the
owners of all affected Outstanding <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series bearing interest at the
Applicable Rate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If the Securities Depository notifies the Company that it is unwilling or unable to
continue as registered owner of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series or if at any time the
Securities Depository shall no longer be registered or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor to the
Securities Depository is not appointed by the Company within 90&nbsp;days after the Company receives
notice or becomes aware of such condition, as the case may be, the Auctions shall cease and the
Company shall execute and the Trustee shall authenticate and deliver certificates representing the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series. Such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes shall be registered in such names
and Authorized Denominations as the Securities Depository, pursuant to instructions from the Agent
Members or otherwise, shall instruct the Company and the Trustee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;During an Auction Period, so long as the ownership of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a
series is maintained in book-entry form by the Securities Depository, an Existing Holder or a
Beneficial Owner may sell, transfer or otherwise dispose of a <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Note only pursuant to
a Bid or Sell Order in accordance with the Auction Procedures or to or through a Broker-Dealer,
provided that (i)&nbsp;in the case of all transfers other than pursuant to Auctions such Existing Holder
or its Broker-Dealer or its Agent Member advises the Auction Agent of such transfer and (ii)&nbsp;a
sale, transfer or other disposition of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series from a customer of a
Broker-Dealer who is listed on
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the records of that Broker-Dealer as the holder of such
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes to that
Broker-Dealer or another customer of that Broker-Dealer shall not be deemed to be a sale, transfer
or other disposition for purposes of this paragraph if such Broker-Dealer remains the Existing
Holder of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes so sold, transferred or disposed or immediately after such
sale, transfer or disposition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;<U>Changes in Auction Period or Auction Date</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <I>Changes in Auction Period</I>.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) During any Auction Period, the Issuer, may, from time to time on the Interest
Payment Date immediately following the end of any Auction Period, change the length of the
Auction Period with respect to all of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of a series in order to
accommodate economic and financial factors that may affect or be relevant to the length of
the Auction Period and the rate of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of such series. The Company shall
initiate the change in the length of the Auction Period by giving written notice to the
Trustee, Auction Agent, the Broker-Dealers and the Securities Depository that the Auction
Period shall change if the conditions described herein are satisfied and the proposed
effective date of the change, at least 10 Business Days prior to the Auction Date for such
Auction Period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any such changed Auction Period shall be for a period of one day, seven-days,
28-days, 35-days, three months, six months and shall be for all of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes
of such series.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The change in length of the Auction Period shall take effect only if Sufficient
Clearing Bids exist at the Auction on the Auction Date for such new Auction Period. For
purposes of the Auction for such new Auction Period only, except to the extent such Existing
Holder submits an Order with respect to such <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes each Existing Holder
shall be deemed to have submitted Sell Orders with respect to all of its <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>_
Notes of such series if the change is to a longer Auction Period and a Hold Order if the
change is to a shorter Auction Period. If there are not Sufficient Clearing Bids for the
first Auction Period, the Auction Rate for the new Auction Period shall be the Maximum Rate,
and the Auction Period shall be a seven-day Auction Period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <I>Changes in Auction Date</I>. During any Auction Period, the Auction Agent, at the direction
of the Company, may specify an earlier or later Auction Date (but in no event more than five
Business Days earlier or later) than the Auction Date that would otherwise be determined in
accordance with the definition of &#147;Auction Date&#148; in order to conform with then current market
practice with respect to similar securities or to accommodate economic and financial factors that
may affect or be relevant to the day of the week constituting an Auction Date and the rate of the
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&#95;&#95;&#95;Notes of the series. The Auction Agent shall provide notice of the Company&#146;s
direction to specify an earlier Auction Date for an Auction Period by means of a written notice
delivered at least 45&nbsp;days prior to the proposed changed Auction Date to the Company, the
Broker-Dealers and the Securities Depository. In the event that Auction Agent is instructed to
specify an earlier Auction Date, the days of the week on which an Auction Period begins and ends
and the Interest Payment Date shall be adjusted accordingly.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <I>Changes Resulting from Unscheduled Holidays</I>. If, in the opinion of the Auction Agent and
the Broker-Dealers, there is insufficient notice of an unscheduled holiday to allow the efficient
implementation of the Auction Procedures set forth herein, the Auction Agent and the Broker-Dealers
may, as they deem appropriate, and after providing notice to the Company, set a different Auction
Date and adjust any Interest Payment Dates and Auction Periods affected by such unscheduled
holiday. In the event there is not agreement among the Broker-Dealers, the Auction Agent shall set
the different Auction
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date and make such adjustments as directed by a majority of the Broker-Dealers (based on the
number of Units for which a Broker-Dealer is listed as the Broker-Dealer in the Existing Holder
registry maintained by the Auction Agent pursuant to Section&nbsp;2.2 of the Auction Agreement), and, if
there is not a majority so directing, the Auction Date shall be moved to the next succeeding
Business Day following the scheduled Auction Date, and the Interest Payment Date and the Auction
Period shall be adjusted accordingly.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;Index.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If for any reason on any Auction Date the Index shall not be determined as provided in
Appendix&nbsp;A-I <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> Auction Procedures, the Index shall be the Index for the prior Business Day.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The
determination of the Index as provided in the Indenture and Appendix&nbsp;A-I <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
Auction Procedures shall be conclusive and binding upon the Company, the Trustee, the
Broker-Dealers, the Auction Agent and the holders of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->A-I-13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="149"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>APPENDIX
B &#150; DESCRIPTION OF RATINGS</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Moody&#146;s Prime Rating System</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s short-term ratings are opinions of the ability of issuers to honor senior financial
obligations and contracts. Such obligations generally have an original maturity not exceeding one
year, unless explicitly noted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s employs the following designations, all judged to be investment grade, to indicate the
relative repayment ability of rated issuers:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Prime-1</U>: Issuers rated Prime-1 (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be
evidenced by many of the following characteristics:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leading market positions in well-established industries. High rates of return on funds
employed. Conservative capitalization structure with moderate reliance on debt and ample asset
protection. Broad margins in earnings coverage of fixed financial charges and high internal cash
generation. Well-established access to a range of financial markets and assured sources of
alternate liquidity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Prime-2</U>: Issuers (or supporting institutions) rated Prime-2 have a strong ability to
repay senior short-term debt obligations. This will normally be evidenced by many of the
characteristics cited above, but to a lesser degree. Earnings trends and coverage ratios, while
sound, may be more subject to variation than is the case for Prime-1 securities. Capitalization
characteristics, while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Prime-3</U>: Issuers (or supporting institutions) rated Prime-3 have an acceptable
ability for repayment of senior short-term obligations. The effect of industry characteristics and
market compositions may be more pronounced. Variability in earnings and profitability may result
in changes in the level of debt-protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Not Prime</U>: Issuers rated Not Prime do not fall within any of the Prime rating
categories.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in certain countries the prime rating may be modified by the issuer&#146;s or
guarantor&#146;s senior unsecured long-term debt rating.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Moody&#146;s Debt Ratings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Aaa</U>: Bonds and preferred stock which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally referred to as &#147;gilt
edged.&#148; Interest payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong position of such issues.
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The ratings indicated herein are believed to be the
most recent ratings available at the date of this prospectus for the securities
listed. Ratings are generally given to securities at the time of issuance.
While the rating agencies may from time to time revise such ratings, they
undertake no obligation to do so, and the ratings indicated do not necessarily
represent ratings which will be given to these securities on the date of the
fund&#146;s fiscal year-end.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->B-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Aa</U>: Bonds and preferred stock which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection may not be as large
as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risk in Aa-rated securities appear somewhat
larger than those securities rated Aaa.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>A</U>: Bonds and preferred stock which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present which suggest a
susceptibility to impairment some time in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Baa</U>: Bonds and preferred stock which are rated Baa are considered as medium-grade
obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Ba</U>: Bonds and preferred stock which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate, and thereby not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this class.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>B</U>: Bonds and preferred stock which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Caa</U>: Bonds and preferred stock which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger with respect to principal or interest.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Ca</U>: Bonds and preferred stock which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other marked shortcomings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>C</U>: Bonds and preferred stock which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s assigns ratings to individual debt securities issued from medium-term note (MTN)
programs, in addition to indicating ratings to MTN programs themselves. Notes issued under MTN
programs with such indicated ratings are rated at issuance at the rating applicable to all pari
passu notes issued under the same program, at the program&#146;s relevant indicated rating, provided
such notes do not exhibit any of the characteristics listed below. For notes with any of the
following characteristics, the rating of the individual note may differ from the indicated rating
of the program:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notes containing features which link the cash flow and/or market value to the
credit performance of any third party or parties.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notes allowing for negative coupons, or negative principal.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notes containing any provision which could obligate the investor to make any
additional payments.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->B-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market participants must determine whether any particular note is rated, and if so, at what
rating level.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note: Moody&#146;s applies numerical modifiers 1, 2, and 3 in each generic rating classification
from Aa through Caa. The modifier&nbsp;1 indicates that the obligation ranks in the higher end of its
generic rating category; the modifier&nbsp;2 indicates a mid-range ranking; and the modifier&nbsp;3 indicates
a ranking in the lower end of that generic rating category.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Standard&nbsp;&#038; Poor&#146;s Short-Term Issue Credit Ratings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>A-1</U>: A short-term obligation rated A-1 is rated in the highest category by Standard&nbsp;&#038;
Poor&#146;s. The obligor&#146;s capacity to meet its financial commitment on the obligation is strong.
Within this category, certain obligations are designated with a plus sign (&#043;). This indicates that
the obligor&#146;s capacity to meet its financial commitment on these obligations is extremely strong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>A-2</U>: A short-term obligation rated A-2 is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor&#146;s capacity to meet its financial commitment on the obligation is
satisfactory.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>A-3</U>: A short-term obligation rated A-3 exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>B</U>: A short-term obligation rated B is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial commitment on the
obligation; however, it faces major ongoing uncertainties which could lead to the obligor&#146;s
inadequate capacity to meet its financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>C</U>: A short-term obligation rated C is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the obligor to meet its
financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>D</U>: A short-term obligation rated D is in payment default. The D rating category is
used when payments on an obligation are not made on the date due even if the applicable grace
period has not expired, unless Standard&nbsp;&#038; Poor&#146;s believes that such payments will be made during
such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Standard&nbsp;&#038; Poor&#146;s Long-Term Issue Credit Ratings</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issue credit ratings are based, in varying degrees, on the following considerations:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the obligation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Nature of and provisions of the obligation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">-&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and
other laws affecting creditors&#146; rights.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue rating definitions are expressed in terms of default risk. As such, they pertain to
senior obligations of an entity. Junior obligations are typically rated lower than senior
obligations, to reflect the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">lower priority in bankruptcy, as noted above. (Such differentiation applies when an entity
has both senior and subordinated obligations, secured and unsecured obligations, or operating
company and holding company obligations.) Accordingly, in the case of junior debt, the rating may
not conform exactly with the category definition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>AAA</U>: An obligation rated AAA has the highest rating assigned by Standard&nbsp;&#038; Poor&#146;s.
The obligor&#146;s capacity to meet its financial commitment on the obligation is extremely strong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>AA</U>: An obligation rated AA differs from the highest rated obligations only in small
degree. The obligor&#146;s capacity to meet its financial commitment on the obligation is very strong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>A</U>: An obligation rated A is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher rated categories.
However, the obligor&#146;s capacity to meet its financial commitment on the obligation is still strong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>BBB</U>: An obligation rated BBB exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to a weakened
capacity of the obligor to meet its financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative
characteristics. BB indicates the least degree of speculation and C the highest. While such
obligations will likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major exposures to adverse conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>BB</U>: An obligation rated BB is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial,
or economic conditions which could lead to the obligor&#146;s inadequate capacity to meet its financial
commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>B</U>: An obligation rated B is more vulnerable to nonpayment than obligations rated BB,
but the obligor currently has the capacity to meet its financial commitment on the obligation.
Adverse business, financial, or economic conditions will likely impair the obligor&#146;s capacity or
willingness to meet its financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CCC</U>: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to meet its financial
commitment on the obligation. In the event of adverse business, financial, or economic conditions,
the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>CC</U>: An obligation rated CC is currently highly vulnerable to nonpayment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>C</U>: A subordinated debt or preferred stock obligation rated C is <B>currently highly
vulnerable </B>to nonpayment. The C rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action taken, but payments on this obligation are being
continued. A C also will be assigned to a preferred stock issue in arrears on dividends or sinking
fund payments, but that is currently paying.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>D</U>: An obligation rated D is in payment default. The D rating category is used when
payments on an obligation are not made on the date due even if the applicable grace period has not
expired, unless Standard&nbsp;&#038; Poor&#146;s believes that such payments will be made during such grace
period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Plus (&#043;) or Minus (-)</U>: The ratings from AA to CCC may be modified by the addition of
a plus or minus sign to show relative standing within the major rating categories.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>r</U>: This symbol is attached to the ratings of instruments with significant noncredit
risks. It highlights risks to principal or volatility of expected returns which are not addressed
in the credit rating.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>N.R.</U>: This indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that Standard&nbsp;&#038; Poor&#146;s does not rate a particular
obligation as a matter of policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Local Currency and Foreign Currency Risks</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Country risk considerations are a standard part of Standard&nbsp;&#038; Poor&#146;s analysis for credit
ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An
obligor&#146;s capacity to repay foreign currency obligations may be lower than its capacity to repay
obligations in its local currency due to the sovereign government&#146;s own relatively lower capacity
to repay external versus domestic debt. These sovereign risk considerations are incorporated in
the debt ratings assigned to specific issues. Foreign currency issuer ratings are also
distinguished from local currency issuer ratings to identify those instances where sovereign risks
make them different for the same issuer.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->B-5<!-- /Folio -->
</DIV>

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