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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001144204-07-052425.txt : 20071002
<SEC-HEADER>0001144204-07-052425.hdr.sgml : 20071002
<ACCEPTANCE-DATETIME>20071002161807
ACCESSION NUMBER:		0001144204-07-052425
CONFORMED SUBMISSION TYPE:	497
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20071002
DATE AS OF CHANGE:		20071002
EFFECTIVENESS DATE:		20071002

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HERZFELD CARIBBEAN BASIN FUND INC
		CENTRAL INDEX KEY:			0000880406
		IRS NUMBER:				650396889
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		497
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-144838
		FILM NUMBER:		071150070

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 161465
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33116
		BUSINESS PHONE:		3052711900

	MAIL ADDRESS:	
		STREET 2:		PO BOX 161465
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33116

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST CUBA FUND INC
		DATE OF NAME CHANGE:	19920929
</SEC-HEADER>
<DOCUMENT>
<TYPE>497
<SEQUENCE>1
<FILENAME>v088600_497.htm
<TEXT>
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  <body bgcolor="#ffffff"><a name="eolPage3"/>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="eolPage1"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a><a name="FIS_TOP_OF_DOCUMENT"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a><a name="V087446_N2A_RED_HTM"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a><a name="FIS_FORM"/><a name="eolPage3"/></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[herzfeld
        logo]</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
        20, 2007</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1,687,556
        Shares</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>THE
        HERZFELD CARIBBEAN BASIN FUND, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Common
        Stock</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Issuable
        Upon Exercise of Rights</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>to
        Subscribe for Such Shares of Common Stock</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Herzfeld Caribbean Basin Fund, Inc. (the &#8220;Fund&#8221;) is issuing non-transferable
        rights to its stockholders of record on September 26, 2007 (the &#8220;Record Date&#8221;),
        entitling the holders of rights to subscribe for an aggregate of approximately
        1,687,556 shares of the Fund&#8217;s common stock (the &#8220;Offer&#8221;). Each stockholder of
        record on the Record Date will receive one right for each full share of the
        Fund&#8217;s common stock owned on the Record Date. The rights will entitle the
        holders to purchase one share of the Fund&#8217;s common stock, par value $0.001 per
        share (&#8220;Common Stock&#8221;) for each right held, and stockholders of record on the
        Record Date who fully exercise their rights will be entitled to subscribe
        for
        additional shares of Common Stock (&#8220;Over-Subscription Shares&#8221;) subject to the
        limitations set forth in this prospectus. The Over-Subscription Shares will
        be
        allocated pro rata to stockholders who over-subscribe based on the number
        of
        rights originally issued to them. The Fund may increase the number of shares
        of
        Common Stock subject to subscription by up to 100% of the shares, or up to
        an
        1,687,556 additional shares of Common Stock, for an aggregate total of 3,375,112
        shares of Common Stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        rights are non-transferable and, therefore, may not be purchased or sold.
        The
        Fund&#8217;s Common Stock is listed, and the shares of Common Stock issued pursuant
        to
        this Offer will be listed on the NASDAQ Capital Market under the symbol
&#8220;CUBA.&#8221;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Offer
        will expire at 5:00 p.m., Eastern Time, on October 26, 2007 (the &#8220;Expiration
        Date&#8221;), unless extended as described herein. The Fund announced its intention
        to
        make the Offer on July 24, 2007. The net asset values (&#8220;NAV&#8221;) per share of
        common stock at the close of business on July 24, 2007 and on September 21,
        2007
        were </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.65
        and
        $9.61, respectively, and the last reported sale prices of a share of Common
        Stock on the NASDAQ Capital Market on those dates were </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.24
        and
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.98,
        respectively.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        subscription price per share will be 85% of the average volume-weighted closing
        sale price at which the Common Stock trades on the NASDAQ Capital Market
        on the
        Expiration Date and the four preceding trading days.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Once
        you subscribe for shares of Common Stock pursuant to the Offer and the Fund
        receives payment or guarantee of payment, you will not be able to change
        your
        investment decision.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Fund
        is a non-diversified, closed-end management investment company organized
        in the
        State of Maryland on March 10, 1992. Its investment adviser is HERZFELD /
        CUBA,
        a division of Thomas J. Herzfeld Advisors, Inc. (the &#8220;Adviser&#8221;). The Fund&#8217;s
        investment objective is long-term capital appreciation. To achieve its
        objective, the Fund invests in issuers that are likely, in the Adviser&#8217;s view,
        to benefit from economic, political, structural and technological developments
        in the countries in the Caribbean Basin, which include, among others, Cuba,
        Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados,
        Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico,
        Mexico,
        Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia, the United States
        and
        Venezuela. The Fund invests at least 80% of its total assets in a broad range
        of
        securities of issuers, including U.S.-based companies which engage in
        substantial trade with, and derive substantial revenue from, operations in
        the
        Caribbean Basin Countries. An investment in the Fund is not appropriate for
        all
        investors and should not constitute a complete investment program. No assurances
        can be given that the Fund&#8217;s objective will be achieved.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Neither
        the Securities and Exchange Commission (&#8220;SEC&#8221;) nor any state securities
        commission has approved or disapproved these securities or determined if
        this
        prospectus is truthful or complete. Any representation to the contrary is
        a
        criminal offense.</strong></font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="15%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="23%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Estimated</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Subscription
                  Price</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>1</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              </td>
              <td align="left" valign="top" width="3%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="14%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Estimated</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Sales
                  Load</strong></font></div>
              </td>
              <td align="left" valign="top" width="3%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Estimated</strong></font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Proceeds
                  to the Fund</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>2</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Per
                  Share</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$12.61</font></div>
              </td>
              <td align="left" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
              </td>
              <td align="left" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="25%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$12.61</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="15%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="23%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$21,280,081</font></div>
              </td>
              <td align="left" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
              </td>
              <td align="left" valign="top" width="3%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="25%">
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              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        a
        result of the terms of the Offer, Stockholders who do not fully exercise
        their
        Rights, including the Over-Subscription Privilege described in the
        section&#160;of this Prospectus entitled &#8220;The Offer&#8212;Over-Subscription
        Privilege,&#8221; will, upon the completion of the Offer, own a smaller proportional
        interest in the Fund than they owned before the Offer. The Offer will result
        in
        either a dilution or accretion of NAV for all Stockholders, whether or not
        they
        exercise some or all of their Rights, because the Subscription Price per
        Share
        may be less than or greater than the then-current NAV. The amount of dilution
        or
        accretion might be significant. See &#8220;Risk Factors and Special Considerations&#8221; on
        page 18 of this prospectus.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        employees of the Fund&#8217;s Adviser and the Directors and officers of the Fund
        may&#160;purchase Shares through the Primary Subscription and the
        Over-Subscription Privilege on the same terms as other
        Stockholders.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        prospectus sets forth concisely certain information about the Fund that a
        prospective investor should know before investing. Please read this prospectus
        carefully before investing and keep it for future reference. All subscription
        questions and inquiries relating to the Offer should be directed to State
        Street
        Bank and Trust Company, P.O. Box 642, Mail Code OPS22, Boston, MA 02116 or
        by
        calling the (617) 937-6870.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Copies
        of
        the Fund&#8217;s Annual Report and Semi-Annual Report may be obtained, free of charge,
        upon request by writing to The Herzfeld Caribbean Basin Fund, P.O. Box 161465,
        Miami, FL 33116, by calling (800) TJH-FUND or on the Fund&#8217;s internet website at
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #0000ff; FONT-FAMILY: Times New Roman"><u>http://herzfeld.com/cuba</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        .</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
        about the Fund can be also be reviewed and copied at the SEC&#8217;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 or toll free at
        (800)
        732-0330. This information is also available on the EDGAR database on the
        SEC&#8217;s
        internet site at: </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #0000ff; FONT-FAMILY: Times New Roman"><u>http://www.sec.gov</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        , and
        copies may be obtained, after paying a duplicating fee, by electronic request
        at
        the following e-mail address: publicinfo@sec.gov or by writing the Public
        Reference Section of the Securities and Exchange Commission, 100 F Street,
        NE,
        Washington, D.C. 20549.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>No
        dealer, salesperson or other person is authorized to give any information
        or to
        represent anything not contained in this prospectus. You must not rely on
        any
        unauthorized information or representations not contained in this prospectus
        as
        if the fund had authorized it. The fund is offering to sell, and seeking
        offers
        to buy, shares of common stock only in jurisdictions where offers and sales
        are
        permitted. This prospectus does not constitute an offer to sell or the
        solicitation of an offer to buy any security other than the shares of common
        stock offered by this prospectus, nor does it constitute an offer to sell
        or the
        solicitation of an offer to buy shares of common stock by anyone in any
        jurisdiction in which such offer or solicitation would be unlawful. The
        information contained in this prospectus is accurate only as of the date
        of this
        prospectus, regardless of the time of delivery of this prospectus or any
        sale of
        common stock.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>1</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        Since
        the Subscription Price will not be determined until after printing and
        distribution of this prospectus, the Subscription Price above is estimated
        based
        on the closing price of a share of common stock of the Fund on September
        21,
        2007 and applying the pricing formula set forth on the cover page of this
        prospectus and described below under &#8220;Subscription Price&#8221; (i.e., 85% of the
        average volume-weighted closing sales price of the Fund&#8217;s shares on the NASDAQ
        Capital Market on September 21, 2007, and the four preceding trading days)
        (the
&#8220;Estimated Subscription Price&#8221;). The average weighted closing sales price of a
        share the Fund&#8217;s common stock on September, 21, 2007 was $12.61. See
&#8220;Subscription Price&#8221; and &#8220;Payment For Shares&#8221; below.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>2</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Proceeds
        to the Fund before deduction of expenses incurred by the Fund in
        connection with the Offer which are estimated to be $155,979. Amounts received
        by check prior to the final due date of this Offer will be deposited in a
        segregated interest-bearing account pending allocation and distribution of
        Common Stock. Interest on subscription monies will be paid to the Fund
        regardless of whether Common Stock is issued by the Fund.</font></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TABLE
        OF CONTENTS</strong></font><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS
                  SUMMARY </strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Important
                  Terms of the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Important
                  Dates for the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Key
                  Elements of the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
                  Regarding the Fund</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
                  Regarding the Adviser and Custodian</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
                  Factors and Special Considerations</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fee
                  Table</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
                  HIGHLIGHTS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
                  FUND</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Share
                  Price Data</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
                  OFFERING</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Terms
                  of the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purpose
                  of the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                  Price</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Over-Subscription
                  Privilege</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expiration
                  of the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                  Agent</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Method
                  of Exercising Rights</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                  for Shares</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Delivery
                  of Stock Certificates</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign
                  Restrictions</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Federal
                  Income Tax Consequences Associated With the Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employee
                  Plan Considerations</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USE
                  OF PROCEEDS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RISK
                  FACTORS AND SPECIAL CONSIDERATIONS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dilution
                  of Net Asset Value and Effect of Non-Participation in the
                  Offer</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Discount
                  From Net Asset Value</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risks
                  of Investing in Caribbean Basin Countries</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Geographic
                  Concentration Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign
                  Securities Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign
                  Economy Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Currency
                  Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Governmental
                  Supervision and Regulation/Accounting Standards</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
                  Risks of Holding Fund Assets Outside the United States</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Settlement
                  Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Emerging
                  Markets Risk</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INVESTMENT
                  OBJECTIVE AND POLICIES</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  Policies - General</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Special
                  Leverage Considerations</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hedging
                  Transactions</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Forward
                  Foreign Currency Exchange Contracts</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
                  on Foreign Currencies</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Futures
                  Contracts</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
                  on Securities and Options on Indices</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div>
      <div>&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Repurchase
                  Agreements</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debt
                  Securities</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                  Lending</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Portfolio
                  Turnover</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">29</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  Restrictions</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">29</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MANAGEMENT
                  OF THE FUND</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Board
                  of Directors</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
                  About Directors and Officers</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><a name="eolPage6"/><a name="FIS_UNIDENTIFIED_TABLE_4"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Committees
                  of the Board</font></a></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ownership
                  of the Fund By Directors</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  Adviser and Portfolio Manager</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  Adviser</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Portfolio
                  Manager</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                  Advisory Agreement</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">34</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Benefit
                  to the Adviser</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenses
                  of the Fund</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PORTFOLIO
                  TRANSACTIONS AND BROKERAGE</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CODE
                  OF ETHICS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROXY
                  VOTING POLICIES AND PROCEDURES</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
                  OF COMMON STOCK</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Share
                  Repurchases and Tender Offers</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
                  Provisions of Articles of Incorporation and Bylaws</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">38</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIVIDENDS
                  AND DISTRIBUTIONS; DIVIDEND REINVESTMENT PLAN</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TAXATION</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">41</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Federal
                  Taxation of the Fund and its Distributions</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">42</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
                  of Shares</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">44</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Backup
                  Withholding</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                  Tax Considerations</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DETERMINATION
                  OF NET ASSET VALUE</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CUSTODIAN,
                  TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND
                  REGISTRAR</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
                  MATTERS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEPENDENT
                  REGISTERED PUBLIC ACCOUNTING FIRM</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
                  STATEMENTS</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
              </td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
                  A</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A-1</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
                  B</strong></font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B-1</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage7"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS
          SUMMARY</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
          summary highlights some information that is described more fully elsewhere
          in
          this prospectus and is qualified in its entirety by the more detailed
          information included elsewhere in the prospectus. The summary may not contain
          all of the information that is important to you. To understand the Offer
          fully
          you should read the entire document carefully, including the risk
          factors.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
          Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          of Directors of the Fund (the &#8220;Board&#8221;) has determined that it is in the best
          interests of the Fund and its existing stockholders to increase the assets
          of
          the Fund so that the Fund may be in a better position to take advantage
          of
          investment opportunities that may arise. In addition, the Board believes
          that
          increasing the size of the Fund may lower the Fund&#8217;s expenses as a proportion of
          average net assets because the Fund&#8217;s fixed costs would be spread over a larger
          asset base. There can be no assurance, however, that an increase in the
          size of
          the Fund will lower the Fund&#8217;s expense ratio. Also the Fund has had significant
          gains in NAV, and has realized gains. For the calendar year ended December
          31,
          2006, the Fund paid a large year-end distribution. In addition, the recent
          announcement that Florida East Coast Industries, currently the Fund&#8217;s largest
          holding, will be acquired by Fortress Investment Group LLC could result
          in
          significant realized gains for the current calendar year ending December
          31,
          2007. Net realized gains of the Fund are required to be distributed to
          stockholders in order to maintain the Fund&#8217;s status as a &#8220;regulated investment
          company&#8221; under Subchapter M of the Internal Revenue Code. Accordingly, the Fund
          may be required to make a large distribution to shareholders to maintain
          its
          status as a regulated investment company, thereby reducing the net assets
          of the
          Fund. If successful, the Offer will allow the Fund to make the required
          distributions without causing a reduction in the amount of cash available
          for
          additional investment opportunities. The Board also believes that a larger
          number of outstanding shares and a larger number of beneficial owners of
          shares
          could increase the level of market interest in and visibility of the Fund
          and
          improve the trading liquidity of the Fund&#8217;s common stock on the NASDAQ Capital
          Market. The Offer seeks to reward existing stockholders by giving them
          the right
          to purchase additional shares at a price below market without incurring
          any
          commission or other transaction charges. See &#8220;Purpose of the
          Offer.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
          a
          Board meeting held on May 16, 2007, the Board discussed at length with
          the
          Adviser and counsel to the Fund the details of a proposed rights offering.
          At
          that meeting, the Board approved a non-transferable rights offering, the
          substantive terms of which would permit stockholders to acquire one new
          share of
          the Fund for each Right held (i.e., a one-for-one rights offering) for
          a
          subscription price equal to 85% of the volume-weighted average market price
          of a
          share of common stock on the Expiration Date and the four immediately preceding
          trading days.</font></div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="35%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="top" width="50%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Important
                    Terms of the Offer</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                </td>
                <td align="left" valign="top" width="50%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    number of shares of Common Stock</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">available
                    for primary subscription:</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,687,556</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">&#160;</td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
                    of Rights you will receive for each</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">outstanding
                    share of Common Stock you own</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">on
                    the Record Date:</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
                    Right for every one Share *</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">&#160;</td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
                    of shares of Common Stock you</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">may
                    purchase with your Rights at the</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                    Price per share</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
                    share for every one Right **</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">&#160;</td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                    Price:</font></div>
                </td>
                <td align="justify" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">85%
                    of the average volume-weighted sales price per share of the Fund&#8217;s Common
                    Stock on the NASDAQ Capital Market on October 26, 2007 and the
                    four
                    preceding trading days.</font></div>
                </td>
                <td align="justify" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">&#160;</td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="35%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Estimated
                    Subscription Price</font></div>
                </td>
                <td align="left" valign="top" width="50%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.61</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>

          </table>
        </div>
        <div align="left">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*
                    </font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    number of Rights to be issued to a stockholder on the Record
                    Date will be
                    rounded up to the nearest whole number of Rights; no fractional
                    Rights
                    will be issued.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt; border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">**</font></div>
                </td>
                <td style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
                    will be able to acquire additional shares of Common Stock pursuant
                    to an
                    over-subscription privilege in certain
                    circumstances.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-1-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="42%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="top" width="46%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Important
                    Dates for the Offer</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
                </td>
                <td align="left" valign="top" width="46%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Record
                    Date:</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">September
                    26, 2007</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                    Period:</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
                    1, 2007 to October 26, 2007</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expiration
                    Date and Pricing Date:</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
                    26, 2007*</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                    Certificate and</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                    for Shares Due**</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
                    26, 2007*</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notice
                    of Guaranteed Delivery Due**</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
                    26, 2007*</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Final
                    Payment for Shares (if any) Due***</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">November
                    2, 2007*</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">&#160;</td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="42%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Confirmation
                    Mailed to Participants</font></div>
                </td>
                <td align="left" valign="top" width="46%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">November
                    11, 2007*</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
                    the Offer is extended.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">**</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Record
                    Date Stockholders (defined below) exercising Rights must deliver
                    to the
                    Subscription Agent by the Expiration Date either (i) the Subscription
                    Certificate together with the estimated payment or (ii) a Notice
                    of
                    Guaranteed Delivery.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt; border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">***</font></div>
                </td>
                <td style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
                    amounts may be due at settlement for additional shares purchased
                    upon
                    exercising Rights because the Estimated Subscription Price may
                    be less
                    than the actual Subscription Price. See &#8220;The Offer -- Payment for
                    Shares.&#8221;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Key
          Elements of the Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>One-for-One
                    Offering</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Offer will give stockholders on the Record Date (&#8220;Record Date
                    Stockholders&#8221;) the right to purchase one share of Common Stock for every
                    one Right received. For example, if you own 100 shares of common
                    stock on
                    the Record Date, you will receive 100 Rights entitling you to
                    purchase 100
                    shares of Common Stock of the Fund. Stockholders may exercise
                    all or some
                    of their Rights. However, stockholders who do not exercise all
                    of their
                    Rights will not be able to participate in the Over-Subscription
                    Privilege.
                    See &#8220;Over-Subscription Privilege&#8221; below.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Non-Transferable
                    Rights</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Rights issued in the Offer will be &#8220;non-transferable&#8221; and, therefore, may
                    not be purchased or sold. Rights not exercised will expire without
                    residual value at the Expiration Date. The Rights will not be
                    listed for
                    trading on the NASDAQ Capital Market or any other securities
                    exchange.
                    However, the shares of Common Stock to be issued pursuant to
                    the Offer
                    will be listed for trading on the NASDAQ Capital Market, subject
                    to the
                    NASDAQ Capital Market being officially notified of the issuance
                    of those
                    shares.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Dilution/Non-Participation
                    in Offer</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Record
                    Date Stockholders who do not fully exercise their Rights including
                    the
                    Over-Subscription Privilege described in the section of this
                    Prospectus
                    entitled &#8220;The Offer - Over-Subscription Privilege,&#8221; will, at the
                    completion of the Offer, own a smaller proportional interest
                    in the Fund
                    than if they exercised their Rights. If the Subscription Price
                    per Share
                    is below the then current NAV per share, stockholders will experience
                    an
                    immediate dilution of the aggregate NAV of their Shares if they
                    do not
                    participate in the Offer and will experience a reduction in the
                    NAV per
                    share whether or not they participate in the Offer. In contrast,
                    Stockholders who fully exercise their rights and over-subscribe
                    benefit
                    from a slight accretion to the value of their shares to the extent
                    the
                    non-subscribing stockholders fail to fully exercise their rights.The
                    Fund
                    cannot state precisely the extent of this dilution (if any) if
                    stockholders do not exercise their Rights because the Fund does
                    not know
                    what the NAV per share will be at the time of the Offer or what
                    proportion
                    of the Rights will be exercised.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-2-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div>&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                    &#8220;Risk Factors and Special Considerations- Dilution of Net Asset
                    Value and
                    Effect of Non-Participation in the Offer.&#8221;</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">&#160;</td>
              </tr>

          </table>
        </div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><a name="FIS_UNIDENTIFIED_TABLE_8"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Subscription
                    Price</em></strong></font></a></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                    of Common Stock issued upon exercise of Rights will be sold at
                    a price
                    equal to 85% of the volume-weighted average closing sales price
                    of a share
                    of common stock on the NASDAQ Capital Market on the Expiration
                    Date and
                    the four preceding trading days. The Subscription Price is discussed
                    further under &#8220;The Offer&#8212;Subscription Price.&#8221; In addition, information
                    with respect to the quarterly high and low sale prices of the
                    Fund&#8217;s
                    Common Stock on the NASDAQ Capital Market and the corresponding
                    NAVs per
                    share of Common Stock is provided under &#8220;The Fund&#8221;.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Over-Subscription
                    Privilege</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                    Record Date Stockholder who fully exercises all Rights issued
                    to him is
                    entitled to subscribe for shares which were not otherwise subscribed
                    for
                    by others in the primary subscription (the &#8220;Over-Subscription Privilege&#8221;).
                    If enough shares are available, all of these requests will be
                    honored in
                    full. If these requests for shares exceed the shares available,
                    the Fund
                    may determine after the expiration of the Offer, at the discretion
                    of the
                    Fund, to issue additional Common Stock up to an amount equal
                    to 100% of
                    the shares available pursuant to the Offer (up to an additional
                    1,687,556
                    shares of Common Stock) in order to cover these requests. Regardless
                    of
                    whether the Fund issues such additional shares, to the extent
                    shares are
                    not available to honor all requests, the available shares will
                    be
                    allocated pro rata among those Record Date Stockholders who over-subscribe
                    based on the number of Rights originally issued to them by the
                    Fund.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Exercising
                    Rights</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
                    as described below, subscription certificates evidencing the
                    Rights
                    (&#8220;Subscription Certificates&#8221;) will be sent to Record Date Stockholders or
                    their nominees. There is no minimum number of Rights which must
                    be
                    exercised for the Offer to close. If you wish to exercise your
                    Rights, you
                    may do so in the following ways:</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
                    Complete, sign and date the Subscription Certificate. Enclose
                    it in the
                    envelope provided, together with payment in full and mail or
                    deliver the
                    envelope to the Subscription Agent at the address indicated on
                    the
                    Subscription Certificate calculating the total payment on the
                    basis of the
                    Estimated Subscription Price of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$12.61
                    per share (i.e., the estimated subscription price based on the
                    Fund&#8217;s
                    market price on September 21, 2007). Your Subscription Certificate
                    and
                    payment must be received by the Expiration Date. Payment pursuant
                    to this
                    method must be in United States dollars by money order or check
                    drawn on a
                    bank located in the United States and must be payable to &#8220;The Herzfeld
                    Caribbean Fund, Inc.&#8221;</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
                    Contact your broker, banker or trust company, which can arrange,
                    on your
                    behalf, to guarantee delivery of payment and delivery of a properly
                    completed and executed Subscription Certificate pursuant to a
                    notice of
                    guaranteed delivery (&#8220;Notice of Guaranteed Delivery&#8221;) by the close of
                    business on the third Business Day after the Expiration Date.
                    For purposes
                    of this prospectus, a &#8220;Business Day&#8221; shall mean any day on which trading
                    is conducted on the NASDAQ Capital Market. A fee may be charged
                    for this
                    service. The Notice of Guaranteed Delivery must be received by
                    the
                    Expiration Date. Rights holders will have no right to rescind
                    a purchase
                    after the Subscription Agent has received the Subscription Certificate
                    or
                    Notice of Guaranteed Delivery. See &#8220;The Offer--Method of Exercising
                    Rights&#8221; and &#8220;The Offer--Payment for Shares.&#8221; The Subscription Agent will
                    deposit all checks received by it prior to the final due date
                    into a
                    segregated interest bearing account at&#160;Colbent Corporation pending
                    distribution of the shares from the Offer. All interest will
                    accrue to the
                    benefit of the Fund and investors will not earn interest on payments
                    submitted.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-3-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div>&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><a name="eolPage10"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Restrictions
                    on Foreign Stockholders</em></strong></font></a></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Fund will not mail Subscription Certificates to stockholders
                    whose record
                    addresses are outside the United States or who have an APO or
                    FPO address.
                    Stockholders whose addresses are outside the United States or
                    who have an
                    APO or FPO address and who wish to subscribe to the Offer either
                    partially
                    or in full should contact the Subscription Agent by written instruction
                    or
                    recorded telephone conversation no later than three Business
                    Days prior to
                    the Expiration Date.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Purpose
                    of the Offer</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Board of the Fund has determined that it is in the best interests
                    of the
                    Fund and its stockholders to increase the assets of the Fund
                    available for
                    investment so that the Fund will be in a better position to take
                    full
                    advantage of investment opportunities. The Board believes that
                    increasing
                    the size of the Fund will increase the liquidity of the Fund&#8217;s shares of
                    Common Stock and also may reduce the Fund&#8217;s expenses as a proportion of
                    average net assets. The Offer also may allow the Fund to make
                    capital gain
                    distributions required to maintain its tax status as a regulated
                    investment company without causing a reduction in the net assets
                    of the
                    Fund. Any such reduction will reduce the amount of cash available
                    for
                    additional investment opportunities. The Board also believes
                    that a larger
                    number of outstanding shares and a larger number of beneficial
                    owners of
                    shares could increase the level of market interest in and visibility
                    of
                    the Fund and improve the trading liquidity of the Fund&#8217;s common stock on
                    the NASDAQ Capital Market.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                    addition, the Offer seeks to reward the Fund&#8217;s stockholders by giving them
                    the right to purchase additional shares of Common Stock at a
                    price that
                    will be below the market price without incurring any direct transaction
                    costs. The Offer will benefit both the Fund and its stockholders
                    by
                    providing the Fund with the ability to make additional investments
                    without
                    selling current investments if otherwise not desirable. Moreover,
                    if the
                    Subscription Price is greater than the NAV per share of Common
                    Stock of
                    the Fund on the Expiration Date (less offering expenses), the
                    Offer will
                    increase the NAV per share. See &#8220;The Offer&#8212;Purpose of the
                    Offer.&#8221;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_9">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Use
                    of Proceeds</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    :</font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    net proceeds of the Offer are estimated to be approximately $21,124,102.
                    This figure is based on the Estimated Subscription Price per
                    share of
                    </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.61
                    and assumes all shares offered are sold and that the expenses
                    related to
                    the Offer estimated at approximately </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">155,979
                    are paid. The Adviser anticipates that it will take no longer
                    than three
                    months for the Fund to invest these proceeds in accordance with
                    its
                    investment objective and policies under current market conditions.
                    Pending
                    investment, the proceeds will be invested in short-term cash-equivalent
                    instruments. Although the Adviser anticipates that a substantial
                    portion
                    of the proceeds will be invested pursuant to its investment objective
                    and
                    policies, some of the proceeds may be used to make capital gain
                    distributions required to maintain its tax status as a regulated
                    investment company. As of June 30, 2007, the aggregate capital
                    gains for
                    calendar year 2007 were $1,670,170. See &#8220;Use of Proceeds&#8221;
                    below.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-4-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Information
          Regarding the Fund</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Herzfeld Caribbean Basin Fund, Inc. is a non-diversified, closed-end management
          investment company organized in the State of Maryland on March 10, 1992.
          The
          Fund&#8217;s investment objective is long-term capital appreciation. To achieve its
          objective, the Fund invests in issuers that are likely, in the Adviser&#8217;s view,
          to benefit from economic, political, structural and technological developments
          in the countries in the Caribbean Basin, which includes, among others,
          of Cuba,
          Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados,
          Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico,
          Mexico,
          Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia, the United States
          and
          Venezuela. The Fund invests at least 80% of its total assets in equity
          and
          equity-linked securities of issuers, which engage in substantial trade
          with, and
          derive substantial revenue from, operations in the Caribbean Basin Countries
          (&#8220;Caribbean Basin Companies&#8221;). See &#8220;Investment Objective and Policies.&#8221; Such
          securities include, but are not limited to, common stock, preferred stock,
          debt
          securities convertible into equity, warrants, options and futures. An investment
          in the Fund is not appropriate for all investors and should not constitute
          a
          complete investment program. No assurances can be given that the Fund&#8217;s
          objective will be achieved.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          of the
          Record Date, the Fund had 1,687,556 shares of common stock outstanding.
          The
          Fund&#8217;s common stock trades on the NASDAQ Capital Market under the symbol &#8220;CUBA.&#8221;
The average weekly trading volume of the common stock on the NASDAQ Capital
          Market during the fiscal year ended June 30, 2007 was approximately 91,544
          shares. As of the September 21, 2007, the aggregate net assets of the Fund
          were
          approximately </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.2
          million.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Information
          Regarding the Adviser and Custodian</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Adviser has acted as the investment adviser to the Fund since the Fund&#8217;s
          inception in 1993. The Fund pays the Adviser a monthly fee at the annual
          rate of
          1.45% of the Fund&#8217;s average daily net assets. See &#8220;Management of the Fund -
          Investment Adviser.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
          Street Bank and Trust Company acts as custodian for the Fund&#8217;s assets. State
          Street Bank and Trust Company also serves as the Fund&#8217;s transfer agent,
          dividend/distribution disbursing agent, dividend reinvestment plan agent
          and as
          registrar for the Fund&#8217;s common stock. For its services as custodian, the Fund
          currently pays State Street Bank and Trust Company a monthly fee of $4,500.
          For
          its services as transfer agent, dividend reinvestment plan agent and registrar
          for the Fund&#8217;s common stock, the Fund currently pays State Street Bank and Trust
          Company a monthly fee of $1,458 plus related expenses.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risk
          Factors and Special Considerations</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
          is
          inherent in all investing. The following discussion summarizes some of
          the risks
          that a potential holder of the Fund&#8217;s Common Stock should consider before
          deciding whether to invest in the Fund&#8217;s Common Stock. For additional
          information about the risks associated with investing in the Fund&#8217;s Common
          Stock, see &#8220;Risk Factors and Special Considerations.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>General</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          . The
          Fund is a non-diversified, closed-end investment company designed primarily
          as a
          long-term investment and not as a trading tool. The Fund invests generally
          in a
          portfolio of Caribbean Basin Companies. An investment in the Fund may be
          speculative and 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.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-5-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Dilution/Non-Participation
                    in Offer</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
                    who do not fully exercise their Rights including the Over-Subscription
                    Privilege described in the section of this Prospectus entitled
&#8220;The
                    Offer-Over-Subscription Privilege,&#8221; will, at the completion of the Offer,
                    own a smaller proportional interest in the Fund than if they
                    exercised
                    their Rights. If the Subscription Price per Share is below the
                    then
                    current NAV per share, stockholders will experience an immediate
                    dilution
                    of the aggregate NAV of their Shares if they do not participate
                    in the
                    Offer and will experience a reduction in the NAV per share whether
                    or not
                    they participate in the Offer. The Fund cannot state precisely
                    the extent
                    of this dilution (if any) if stockholders do not exercise their
                    Rights
                    because the Fund does not know what the NAV per share will be
                    at the time
                    of the Offer or what proportion of the Rights will be exercised.
                    In
                    contrast, Stockholders who fully exercise their rights and over-subscribe
                    benefit from a slight accretion to the value of their shares
                    to the extent
                    the non-subscribing stockholders fail to fully exercise their
                    rights.
                    &#8220;Accretion&#8221; is the dilution experienced by the non-exercising stockholders
                    less the pro-rata share of the offering expenses. &#160; Assuming, for
                    example, that all Rights are exercised, the Estimated Subscription
                    Price
                    is $12.61 and the Fund&#8217;s NAV per share is $9.61, the Fund&#8217;s NAV per share
                    (after payment of estimated offering expenses) would be increased
                    by
                    approximately </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.46
                    per share. See &#8220;Risk Factors and Special Considerations- Dilution of Net
                    Asset Value and Effect of Non-Participation in the
                    Offer&#8221;</font></div>
                </td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">&#160;</td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Discount
                    From NAV</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                    of closed-end funds frequently trade at a market price that is
                    less than
                    the value of the net assets attributable to those shares (a &#8220;discount&#8221;).
                    The possibility that the Fund&#8217;s shares will trade at a discount from NAV
                    is a risk separate and distinct from the risk that the Fund&#8217;s NAV will
                    decrease. The risk of purchasing shares of a closed-end fund
                    that might
                    trade at a discount or unsustainable premium is more pronounced
                    for
                    investors who wish to sell their shares in a relatively short
                    period of
                    time after purchasing them because, for those investors, realization
                    of a
                    gain or loss on their investments is likely to be more dependent
                    upon the
                    existence of a premium or discount than upon portfolio
                    performance.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Caribbean
                    Basin Countries</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investing
                    in the securities of non-U.S. issuers involves certain risks
                    and
                    considerations not typically associated with investing in securities
                    of
                    U.S. issuers. These risks include currency fluctuations, political
                    and
                    economic risks, including nationalization and expropriation,
                    reduced
                    levels of publicly available information concerning issuers and
                    reduced
                    levels of government regulation of foreign securities markets.
                    Also,
                    investment in Caribbean Basin Countries may involve special
                    considerations, such as limited liquidity and small market capitalization
                    of the Caribbean Basin securities markets, currency devaluations,
                    high
                    inflation and repatriation restrictions.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Equity
                    Securities Risk</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    :</font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consistent
                    with its objective, the Fund will invest a substantial portion
                    of its
                    assets in equity securities of Caribbean Basin Companies. Equity
                    securities, such as common stock, generally represent an ownership
                    interest in a company. An adverse event, such as an unfavorable
                    earnings
                    report, may&#160;depress the value of a particular equity security held by
                    the Fund. Also, the prices of equity securities, particularly
                    common
                    stocks, are sensitive to general movements in the stock market.
                    The Fund&#8217;s
                    share price can fall because of weakness in the markets in which
                    it
                    invests, a particular industry or specific holdings. Markets
                    as a whole
                    can decline for many reasons, including adverse political or
                    economic
                    developments, changes in investor psychology, or heavy institutional
                    selling. The prospects for an industry or company may&#160;deteriorate
                    because of a variety of factors, including disappointing earnings
                    or
                    changes in the competitive environment. Investments in futures
                    and
                    options, if any, are subject to additional volatility and potential
                    losses.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-6-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_10">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Cuba
                    Specific Issues</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                    in Cuban securities or any investment in Cuba directly or indirectly
                    is
                    currently prohibited under U.S. law. There can be no assurances
                    that the
                    U.S. trade embargo against Cuba will ever be lifted or eased
                    or, if and
                    when such a normalization commences, that the Adviser will be
                    able to
                    identify direct investments in issuers domiciled in Cuba that
                    are
                    acceptable for the Fund.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="31%">&#160;</td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">However,
                    if investment in securities issued by companies domiciled in
                    Cuba were to
                    be permitted under U.S. law, certain considerations not typically
                    associated with investing in securities of U.S. companies should
                    be
                    considered, including: (1) restrictions on foreign investment
                    and on
                    repatriation of capital invested in Cuba; (2) unstable currency
                    exchange
                    and fluctuation; (3) the cost of converting foreign currency
                    into U.S.
                    Dollars; (4) potential price volatility and lesser or lack of
                    liquidity of
                    shares listed on a securities market (if one is established);
                    (5)
                    continued political and economic risks including a new government
                    that if
                    not properly stabilized may lead to the risk of nationalization
                    or
                    expropriation of assets and the risk of civil war; (6) the absence
                    of a
                    developed legal structure governing private property; (7) the
                    absence of a
                    capital market structure or market oriented economy; and (8)
                    the
                    difficulty of assessing the financial status of particular
                    companies.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage13"/><a name="FIS_UNIDENTIFIED_TABLE_11">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#8220;Non-diversified&#8221;
                    Investment Company</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                    a &#8220;non-diversified&#8221; investment company, the Fund&#8217;s investments involve
                    greater risks than would be the case for a similar diversified
                    investment
                    company because the Fund is not limited by the Investment Company
                    Act of
                    1940, as amended (the &#8220;1940 Act&#8221;), in the proportion of its assets that
                    may be invested in the assets of a single issuer. Although the
                    Fund is not
                    diversified for the purposes of the 1940 Act, it must maintain
                    a certain
                    degree of diversification in order to comply with certain requirements
                    of
                    the U.S. Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;),
                    applicable to regulated investment companies. See &#8220;Risk Factors/Special
                    Considerations&#8221; and &#8220;Taxation.&#8221;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Management
                    Risk</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Adviser&#8217;s judgment about the attractiveness, relative value or potential
                    appreciation of a particular security or investment strategy
                    may&#160;prove to be incorrect.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_12">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Dividends
                    and Distributions</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Fund distributes annually to its stockholders substantially all
                    of its net
                    investment income and net short-term capital gains. The Fund
                    determines
                    annually whether to distribute any net realized long-term capital
                    gains in
                    excess of net realized short-term capital losses. See &#8220;Dividends and
                    Distributions&#8221; and &#8220;Taxation.&#8221;</font></div>
                </td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Certain
                    Charter Provisions</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Fund&#8217;s Articles of Incorporation include provisions that could have
                    the
                    effect of: inhibiting the Fund&#8217;s possible conversion to open-end status;
                    limiting the ability of other entities or persons to acquire
                    control of
                    the Fund or to change the composition of its Board; and depriving
                    stockholders 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. See &#8220;Description of Common
                    Stock.&#8221;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Market
                    Disruption Risk:</em></strong></font></div>
                </td>
                <td align="justify" valign="top" width="57%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
                    events have had a disruptive effect on the securities markets,
                    such as
                    terrorist attacks, war and other geopolitical events, hurricanes,
                    droughts, floods and other disasters. The Fund cannot predict
                    the effects
                    of similar events in the future on the markets or economies of
                    Caribbean
                    Basin Countries.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 153pt; TEXT-INDENT: -153pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-7-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Fee
          Table</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following Fee Table is intended to assist prospective investors in understanding
          the costs and expenses that an investor in the Offer will bear directly
          or
          indirectly.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_13">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholder
                    Transaction Expenses:</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
                    Load</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenses
                    of the Offer (as a percentage of offering price)</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0.73%</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividend
                    Reinvestment Plan Fees</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Annual
                    Expenses (as a percentage of net assets):</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management
                    Fees</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.45%</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    Expenses (1)</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.83%</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Acquired
                    Fund Fees and Expenses (2)</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0.07%</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="48%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Annual Expenses</font></div>
                </td>
                <td align="left" valign="top" width="40%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.35%</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;Other
                    Expenses&#8221; does not include expenses of the Fund incurred in connection
                    with the Offer, estimated at $155,979. However, these expenses
                    will be
                    borne by the holders of the shares of Common Stock of the Fund
                    and result
                    in a reduction in the NAV of the shares of Common
                    Stock.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fees
                    and expenses incurred indirectly as a result of investment in
                    shares of
                    one or more &#8220;Acquired Funds,&#8221; which include (i) investment companies, or
                    (ii) companies that would be an investment company under Section
                    3(a) of
                    the 1940 Act except for exceptions under Sections 3(c)(1) and
                    3(c)(7)
                    under the 1940 Act.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="19%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
                    </font></div>
                </td>
                <td colspan="4" valign="top" width="72%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Cumulative
                    Expenses Paid for the Period of:</u></strong></font></div>
                </td>
              </tr>
              <tr>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><a name="FIS_UNIDENTIFIED_TABLE_14"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Example</font></a></div>
                </td>
                <td valign="top" width="18%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1
                    year</font></div>
                </td>
                <td valign="top" width="18%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3
                    years</font></div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5
                    years</font></div>
                </td>
                <td valign="top" width="17%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10
                    years</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                    investor would pay the following expenses on a $1,000 investment,
                    assuming
                    a 5% annual return throughout the periods</font></div>
                </td>
                <td valign="bottom" width="18%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$34</font></div>
                </td>
                <td valign="bottom" width="18%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$102</font></div>
                </td>
                <td valign="bottom" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$173</font></div>
                </td>
                <td valign="bottom" width="17%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$361</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          foregoing Fee Table and Example are intended to assist investors in
          understanding the costs and expenses that an investor will bear directly
          or
          indirectly. &#8220;Other Expenses&#8221; are based on estimated amounts for the current
          fiscal year. See &#8220;Management of the Fund&#8221; for additional
          information.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Example assumes the reinvestment of all dividends and distributions at
          NAV and
          an expense ratio of 3.35% . The tables above and the assumption in the
          Example
          of a 5% annual return are required by SEC regulations applicable to all
          investment companies. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
          Example should not be considered a representation of past or future expenses
          or
          annual rates of return and actual expenses or annual rates of return may
          be more
          or less than those assumed for purposes of the Example.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          In
          addition, while the Example assumes the reinvestment of all dividends and
          distributions at NAV, participants in the Dividend Reinvestment Plan may
          receive
          shares purchased or issued at a price or value different from NAV. See
          &#8220;Dividends and Distributions; Dividend Reinvestment Plan.&#8221;</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-8-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
          HIGHLIGHTS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          table
          below sets forth selected data for a share of Common Stock outstanding
          for each
          period presented. The information for the fiscal years ended June 30, 2007
          and
          June 30, 2006 contained in the table has been audited by Rothstein, Kass
&amp;
Company, LLP, the Fund&#8217;s independent registered public accounting firm. The
          information for the fiscal years ending prior to June 30, 2006 was audited
          by
          the Fund&#8217;s previous independent registered public accounting firm. Audited
          financial statements for the Fund for the fiscal year ended June 30, 2007,
          are
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          is available without charge on by calling (800) TJH-FUND.</font></div>
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                <tr>
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ffffff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                  <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
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                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ffffff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                  <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
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                  <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
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                  <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
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                  <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
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                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Per
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                      (For a share of capital stock outstanding for each time period
                      indicated)</font></div>
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                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right">&#160;</div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right">&#160;</div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right">&#160;</div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right">&#160;</div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="right">&#160;</div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                  <td width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$7.33</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.95</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
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                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operations:</font></div>
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                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.16)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.09)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.07)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.11)</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                  <td width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.83</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.08</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.99</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.55</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.22</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                      from operations</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.69</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.92</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.90</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.48</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.11</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Distributions:</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
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                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
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                  <td width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.00)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.17)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.08)</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                      distributions</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.00)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.17)</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.08)</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                  <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$9.77</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$8.08</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$7.33</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$5.43</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.95</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Per
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                  </td>
                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$13.59</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$7.57</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.30</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$4.87</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$3.49</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                      investment return (loss) based on market value per share</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94.61%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22.86%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29.36%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">39.54%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.70%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratios
                      And Supplemental Data</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$16,481</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$13,553</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$12,292</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$9,109</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6,626</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratio
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                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.28%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.37%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.55%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.67%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4.46%</font></div>
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                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratio
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                  </td>
                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.83)%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.95)%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.47)%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.39)%</font></div>
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                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3.15)%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Portfolio
                      turnover rate</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">40%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#ccffcc">
                  <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Average
                      commission rate</font></div>
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(per
                      share)*</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.0223</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.0424</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.0481</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.0473</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                  <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.05</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                </tr>

            </table>
          </div>
        </div>
        <div align="left">_________________________</div>
        <div align="left">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computed</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    by
                    dividing the respective period&#8217;s amounts from the Statement of Operations
                    by the average &#160; outstanding shares for each time period
                    presented.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unaudited.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-9-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_16">&#160;</a></div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="14" valign="bottom" width="63%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 8.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
                    Ended June 30,</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2002</strong></font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2001</strong></font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2000</strong></font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1999</strong></font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1998</strong></font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Per
                    Share Operating Performance</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    (For a share of capital stock outstanding for each time period
                    indicated)</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    asset value, beginning of period</font></div>
                </td>
                <td width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$5.15</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$5.02</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.12</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.43</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.34</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operations:</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.10)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.07)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.10)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.11)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.01)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    realized and unrealized gain (loss) on investment transactions
                    (1)</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.98)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.20</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.00)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.51</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.54</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.08)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.13</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.10)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.40</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.53</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Distributions:</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
                    net investment income</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.10)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
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                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="34%" style="border-bottom: white solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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                <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$5.02</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.12</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6.43</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Per
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                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$4.20</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$5.06</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(17.04)%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(15.63)%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11.83%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23.54%</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratios
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                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">

                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    assets, end of period (in 000&#8217;s)</font></div>
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                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$6,568</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$8,643</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$8,424</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$10,784</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratio
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                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.77%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.11%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.11%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.30%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.21%</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="34%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratio
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                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.33)%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.76)%</font></div>
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                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1.95)%</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.14)%</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="34%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Portfolio
                    turnover rate</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18%</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27%</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10%</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">59%</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="10%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">40%</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-10-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
          FUND</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Herzfeld Caribbean Basin Fund, Inc. is a non-diversified, closed-end management
          investment company incorporated under the laws of the State of Maryland
          on March
          10, 1992, and registered under the Investment Company Act of 1940 (the
&#8220;1940
          Act&#8221;). The Fund is designed for investors seeking long-term capital
          appreciation. The Fund seeks to achieve its objective primarily by investing
          in
          issuers that are likely, in the opinion of the Adviser, to benefit from
          political, legal and economic developments in Cuba and the Caribbean Basin.
          At
          such time as it becomes legally permissible for U.S. entities to invest
          directly
          in Cuba, the Fund will consider such investments. See &#8220;Investment Objective and
          Policies&#8221;. The Fund maintains its principal offices at The Herzfeld Building,
          P.O. Box 161465, Miami, Florida 33116. No assurance can be given that the
          Fund&#8217;s
          investment objective will be achieved.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s investment adviser is HERZFELD/CUBA, a division of Thomas J. Herzfeld
          Advisors, Inc., a Miami-based U.S. investment adviser.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          of the
          Record Date, the Fund had 1,687,556 shares of common stock outstanding.
          The
          Fund&#8217;s common stock is publicly held and is listed and traded on the NASDAQ
          Capital Market under the symbol &#8220;CUBA.&#8221; The average weekly trading volume of the
          common stock on the NASDAQ Capital Market during the fiscal year ended
          June 30,
          2007 was approximately 91,544 shares. As of September 21, 2007, the aggregate
          net assets of the Fund were approximately </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16,223,816
          , the NAV per share was $9.61 , the share price was </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.98
          ,
          and the premium was 55.9 %. Historically, the Fund&#8217;s common stock has traded at
          both premiums and discounts to its NAV.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table sets forth, for the periods indicated, the high and low
          closing
          sales prices for the shares on the NASDAQ Capital Market, the NAVs per
          share on
          the date of the high and low closing sales prices, and the discount or
          premium
          that each sales price represented as a percentage of the preceding
          NAV:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_17">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Share
          Price Data</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quarter</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ended</strong></font></div>
                </td>
                <td align="left" valign="middle" width="1%" style="border-bottom: #ffffff thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>High
                    Close</strong></font></div>
                </td>
                <td align="left" valign="middle" width="1%" style="border-bottom: #ffffff thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NAV</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(on
                    High</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Close
                    Date)</strong></font></div>
                </td>
                <td align="left" valign="middle" width="1%" style="border-bottom: #ffffff thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Premium/
                    Discount</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(on
                    High</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Close
                    Date)</strong></font></div>
                </td>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Low
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">113.50%</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$11.15</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.08</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">38.00%</font></div>
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                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12/31/2006</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$16.25</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.07</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">101.36%</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.75</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.17</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-5.14%</font></div>
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                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9/30/2006</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.81</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.61</font></div>
                </td>
                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.77%</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.05</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.55</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-6.62%</font></div>
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                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6/30/2006</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.36</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.83</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-5.32%</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.20</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.07</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-10.78%</font></div>
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                <td align="left" valign="top" width="10%">
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.25</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.91</font></div>
                </td>
                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-7.41%</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.41</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.13</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-8.86%</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12/31/2005</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.46</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$8.02</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.49%</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6.35</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$7.53</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-15.67%</font></div>
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                <td align="left" valign="top" width="10%">
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                <td align="left" valign="middle" width="1%">
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                <td valign="top" width="11%">
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                <td align="left" valign="middle" width="1%">
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                <td align="left" valign="middle" width="1%">
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-5.35%</font></div>
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                <td valign="top" width="12%">
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-16.55%</font></div>
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                <td align="left" valign="middle" width="1%">
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-12.59%</font></div>
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$5.47</font></div>
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
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                <td valign="top" width="12%">
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="9%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-17.25%</font></div>
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                <td align="left" valign="top" width="10%">
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                <td align="left" valign="middle" width="1%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="11%">
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                <td align="left" valign="middle" width="1%">
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                <td valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6.91</font></div>
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                <td align="left" valign="middle" width="1%">
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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
          OFFERING</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Terms
          of the</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          is issuing to its holders of common stock on the Record Date (&#8220;Record Date
          Stockholders&#8221;) Rights to subscribe for additional shares of the Fund&#8217;s common
          stock as of the close of business on September 26, 2007 (the &#8220;Record Date&#8221;).
          Each Record Date Stockholder will receive one non-transferable Right for
          each
          share of common stock owned on the Record Date. The Rights entitle the
          holder to
          acquire one share of common stock at the Subscription Price for every one
          Right
          held.</font><br></div>
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          <div id="FTR">
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          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-11-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
          may be exercised at any time during the period which commences on October
          1,
          2007, and ends at 5:00 p.m., Eastern Time, on October 26, 2007 (the
&#8220;Subscription Period&#8221;), unless extended by the Fund to a date not later than
          November 2, 2007, at 5:00 p.m., Eastern Time. See &#8220;Expiration of the Offer&#8221;
below. The right to acquire one additional share of Common Stock for every
          one
          Right held during the Subscription Period at the Subscription Price is
          herein
          after referred to as the &#8220;Primary Subscription.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><a name="eolPage18"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition, any Record Date Stockholder who fully exercises all Rights initially
          issued to him is entitled to subscribe for shares which were not otherwise
          subscribed for by others in the Primary Subscription (the &#8220;Over-Subscription
          Privilege&#8221;). If enough shares are available, all of these requests will be
          honored in full. If these requests for shares exceed the shares available,
          the
          Fund may determine after the expiration of the Offer, in the discretion
          of the
          Fund, to issue additional Common Stock up to an amount equal to 100% of
          the
          Shares available pursuant to the Offer (up to an additional 1,687,556 shares
          of
          Common Stock) in order to cover these requests, provided that the Fund&#8217;s per
          share NAV on the Expiration Date is equal to or less than the Subscription
          Price. Regardless of whether the Fund issues such additional Common Stock,
          to
          the extent shares are not available to honor all requests, the available
          shares
          will be allocated pro rata among those Record Date Stockholders who
          over-subscribe based on the number of Rights originally issued to them
          by the
          Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          the
          event that the Fund, in its sole discretion, issues additional Common Shares
          in
          an amount of up to 100% of the Primary Subscription Shares (the &#8220;Secondary
          Over-Subscription Shares&#8221;) for purposes of determining the maximum number of
          shares a Record Date Stockholder may acquire pursuant to the Offer,
          broker-dealers whose shares are held of record by Cede, as nominee for
          The
          Depository Trust Company, or by any other depository or nominee, will be
          deemed
          to be the holders of the Rights that are issued to Cede or such other depository
          or nominee on their behalf. Shares acquired pursuant to the Over-Subscription
          Privilege are subject to allotment, which is more fully discussed below
          under
&#8220;Over-Subscription Privilege.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Officers
          of the Adviser have indicated to the Fund that the Affiliated Parties,
          as Record
          Date Stockholders, have been authorized to purchase Common Stock through
          the
          Primary Subscription and the Over-Subscription Privilege to the extent
          the
          Common Stock becomes available to it in accordance with the Primary Subscription
          and the allotment provisions of the Over-Subscription Privilege. Such
          over-subscriptions by the Affiliated Parties may disproportionately increase
          their already existing ownership resulting in a higher percentage ownership
          of
          outstanding shares of the Fund. Any Common Stock acquired in the Offer
          by the
          Affiliated Parties as &#8220;affiliates&#8221; of the Fund, as that term is defined under
          the Securities Act of 1933 (the &#8220;Securities Act&#8221;), may only be sold in
          accordance with Rule 144 under the Securities Act or another applicable
          exemption or pursuant to an effective registration statement under the
          Securities Act. In general, under Rule 144, as currently in effect, an
          &#8220;affiliate&#8221; of the Fund is entitled to sell, within any three-month period, a
          number of shares that does not exceed the greater of 1% of the then outstanding
          shares of common stock or the average weekly reported trading volume of
          the
          common stock during the four calendar weeks preceding such sale. Sales
          under
          Rule 144 are also subject to certain restrictions on the manner of sale,
          to
          notice requirements and to the availability of current public information
          about
          the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
          will be evidenced by certificates (&#8220;Subscription Certificates&#8221;). The number of
          Rights issued to each Record Date Stockholder will be stated on the Subscription
          Certificate delivered to the holder. The method by which Rights may be
          exercised
          and shares paid for is set forth below in &#8220;Method of Exercising Rights&#8221; and
&#8220;Payment for Shares.&#8221; A Rights holder will have no right to rescind a purchase
          after the Subscription Agent has received payment. See &#8220;Payment for Shares&#8221;
below.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Rights are non-transferable and, therefore may not be purchased or sold.
          Rights
          not exercised will expire without residual value at the Expiration Date.
          The
          Rights will not be listed for trading on the NASDAQ Capital Market or any
          other
          securities exchange. Common Stock issued pursuant to an exercise of Rights
          will
          be listed and available for trading on the NASDAQ Capital Market.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
          is
          no minimum number of Rights which must be exercised in order for the Offer
          to
          close.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Purpose
          of the Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          has determined that it is in the best interests of the Fund and its existing
          stockholders to increase the assets of the Fund so that the Fund may be
          in a
          better position to take advantage of investment opportunities that may
          arise.
          Without additional capital, the Fund is limited in its ability to take
          advantage
          of new investment opportunities. The only practical means of increasing
          the
          Fund&#8217;s assets available for investment other than through the Offer would be
          through the sale of portfolio securities, which could subject the Fund
          to
          certain adverse tax consequences under the Code.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-12-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Offer
          affords the Fund a means of increasing its assets available for investment
          without requiring the sale of portfolio securities at a time when it would
          not
          be desirable to do so. The Offer will permit the Fund to take advantage
          of
          investment opportunities as they arise, without necessarily having to liquidate
          Fund holdings to raise cash. When the Adviser </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          identifies an investment opportunity, it wants to be able to take advantage
          of
          it quickly and make investments, without having to sell current holdings
          in the
          process. The Adviser believes that having the cash resources available
          to make
          new investments without liquidating current portfolio holdings will allow
          the
          investment adviser to more fully implement its investment strategy in pursuit
          of
          the Fund&#8217;s investment objective.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage19"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition, the Board believes that increasing the size of the Fund may lower
          the
          Fund&#8217;s expenses as a proportion of average net assets because the Fund&#8217;s fixed
          costs would be spread over a larger asset base. As a fund&#8217;s assets decrease, its
          expense ratio (i.e., the ratio of expenses to fund assets) will increase.
          This
          occurs because funds have certain fixed costs (e.g., fidelity bond insurance,
          D&amp;O liability insurance, legal fees, custodian fees, transfer agent fees,
          accounting fees, regulatory filing fees etc.) which are not charged in
          proportion to a fund&#8217;s size. As a fund gets smaller, these fixed costs are
          spread over fewer assets, thus resulting in a higher expense ratio. The
          opposite
          occurs as a fund&#8217;s assets increase, that is, the fixed costs are spread across a
          larger asset base thus resulting in a lower expense ratio. There can be
          no
          assurance, however, that an increase in the size of the Fund will lower
          the
          Fund&#8217;s expense ratio.</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Also
          the
          Fund has had significant gains in NAV and has realized gains. For the calendar
          year ended December 31, 2006, the Fund paid a large year-end distribution.
          In
          addition, the recent announcement that Florida East Coast Industries, currently
          the Fund&#8217;s largest holding, will be acquired by Fortress Investment Group LLC
          could result in significant realized gains for the current calendar year
          ending
          December 31, 2007. Net realized gains of the Fund are required to be distributed
          to stockholders in order to maintain the Fund&#8217;s status as a &#8220;regulated
          investment company&#8221; under Subchapter M of the Internal Revenue Code.
          Accordingly, the Fund may be required to make a large distribution to
          shareholders to maintain its status as a regulated investment company,
          thereby
          reducing the net assets of the Fund. If successful, the Offer will allow
          the
          Fund to make the required distributions without causing a reduction in
          the
          amount of cash available for additional investment opportunities. As of
          June 30,
          2007, the aggregate capital gains for calendar year 2007 were
          $1,670,170.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          also believes that a larger number of outstanding shares and a larger number
          of
          beneficial owners of shares could increase the level of market interest
          in and
          visibility of the Fund and improve the trading liquidity of the Fund&#8217;s common
          stock on the NASDAQ Capital Market. If the Offer is successful, the larger
          number of shares of common stock outstanding after the Offer should help
          create
          a more efficient and active market for the Fund&#8217;s shares and reduce the effect
          of individual transactions on market price, all of which are believed generally
          to increase liquidity.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Offer
          seeks to reward existing stockholders by giving them the right to purchase
          additional shares at a price below market without incurring any commission
          or
          other transaction charges that they would normally incur when buying shares
          in
          the market.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          considered, among other things, advice by the Investment Adviser, using
          fixed
          pricing versus variable pricing for the Offer, the benefits and drawbacks
          of
          conducting a non-transferable versus a transferable rights offering and
          the
          effect on the Fund if the Offer is undersubscribed. The Board also considered
          the extent to which the Adviser will benefit from the Offer because the
          Adviser&#8217;s fee is based on the average net assets of the Fund. It is not possible
          to state precisely the amount of additional compensation the Adviser will
          receive as a result of the Offer because the proceeds of the Offer will
          be
          invested in additional portfolio securities which will fluctuate in value.
          In
          addition, the Board determined to proceed with the offer of rights after
          having
          considered the dilutive effects of the offering on stockholders who are
          unwilling or unable to fully exercise their rights, as well as the alternatives
          of a secondary offering. The Board has voted unanimously to approve the
          terms of
          the Offer as set forth in this Prospectus.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
          should
          be further understood by investors that the Fund&#8217;s Adviser will benefit from the
          Offer because the Adviser&#8217;s fee is based on the average net assets of the Fund.
          See &#8220;Management of the Fund.&#8221; It is impossible to state precisely the amount of
          additional compensation the Adviser will receive as a result of the Offer
          because the proceeds of the Offer will be invested in additional portfolio
          securities which will fluctuate in value. However, assuming all Rights
          are
          exercised at the Estimated Subscription Price of $12.61, the annual compensation
          to be received by the Adviser would be increased by approximately
          $308,561.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-13-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may, in the future and at its discretion, choose to make additional rights
          offerings from time to time for a number of shares and on terms which may
          or may
          not be similar to the Offer. Any such future rights offering will be made
          in
          accordance with the 1940 Act. Under the laws of Maryland, the state in
          which the
          Fund is organized, the Board is authorized to approve rights offerings
          without
          obtaining stockholder approval. The staff of the SEC has interpreted the
          1940
          Act as not requiring stockholder approval of a rights offering at a price
          below
          the then current NAV so long as certain conditions are met, including a
          good
          faith determination by the Board that such offering would result in a net
          benefit to existing stockholders.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage20">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Subscription
          Price</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Subscription Price for the shares of Common Stock issued in the Offer will
          be a
          price equal to 85% of the volume-weighted average closing sales price of
          a share
          of common stock on the NASDAQ Capital Market on the Expiration Date and
          the four
          preceding trading days. Stockholders who exercise their Rights will have
          no
          right to rescind a purchase after receipt of their completed Subscription
          Certificates for Shares by the Subscription Agent. The Fund does not have
          the
          right to withdraw the Offer after the Rights have been distributed.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          announced its intention to make the Offer on July 24, 2007. The NAV per
          share of
          common stock at the close of business on </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          July 24,
          2007 (announcement of rights offering) and on September 21, 2007 was
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.65</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">and
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.61,
          respectively, and the last reported sale price of a share of Common Stock
          on the
          NASDAQ Capital Market on those dates was </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.24
          and
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.98,
          respectively.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Over-Subscription
          Privilege</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          some
          Record Date Stockholders do not exercise all of the Rights initially issued
          to
          them to purchase Common Stock of the Fund, those Record Date Stockholders
          who
          have exercised all of the Rights initially issued to them will be offered,
          by
          means of the Over-Subscription Privilege, the right to acquire more than
          the
          number of shares for which the Rights issued to them are exercisable. Record
          Date Stockholders who exercise all the Rights initially issued to them
          will have
          the opportunity to indicate on the Subscription Certificate how many shares
          of
          Common Stock they are willing to acquire pursuant to the Over-Subscription
          Privilege. In addition, if the Fund&#8217;s NAV per share on the Expiration Date is
          equal to or less than the Subscription Price, the Fund, in its sole discretion,
          can issue additional Common Shares in an amount of up to 100% of the Primary
          Subscription Shares (the &#8220;Secondary Over-Subscription Shares&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          sufficient Primary Subscription Shares remain after the Primary Subscriptions
          have been exercised, all over-subscriptions will be honored in full. If
          sufficient Primary Subscription Shares are not available to honor all
          subscription requests, the available Common Shares will be allocated among
          those
          Record Date Stockholders who over-subscribe based on the number of Rights
          originally issued to them by the Fund. Should the Fund determine to issue
          some
          or all of the Secondary Over-Subscription Shares, they will be allocated
          only
          among Record Date Stockholders that submitted over-subscription requests.
          Secondary Over-Subscription Shares will be allocated pro rata among those
          fully
          exercising Record Date Stockholders who over-subscribe based on the number
          of
          Rights originally issued to them by the Fund. Any Secondary Over-Subscription
          Shares issued by the Fund, collectively with any Primary Subscription Shares
          not
          subscribed through the Primary Subscription, will be referred to in this
          Prospectus as the &#8220;Excess Shares.&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          percentage of Excess Shares each over-subscribing Record Date Stockholder
          may
          acquire will be rounded down to result in delivery of whole Common Shares;
          provided, however, that if a pro rata allocation results in any holder
          being
          allocated a greater number of Excess Shares than the holder subscribed
          for
          pursuant to the exercise of such holder&#8217;s Over-Subscription Privilege, then such
          holder will be allocated only such number of Excess Shares as such holder
          subscribed for and the remaining Excess Shares will be allocated among
          all other
          holders then entitled to receive Excess Shares whose over-subscription
          requests
          have not been fully honored. The allocation process may be iterative in
          order to
          assure that the total number of Excess Shares is distributed in accordance
          with
          the method described above.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-14-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          formula to be used in allocating the Excess Shares is as follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="52%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholder&#8217;s
                    Record Date Position</font></div>
                </td>
                <td valign="middle" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">x</font></div>
                </td>
                <td align="left" valign="middle" width="33%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excess
                    Shares Remaining</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="52%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Record Date Position of All Over-Subscribers</font></div>
                </td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td align="left" valign="top" width="33%">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          will not offer or sell any shares which are not subscribed for under the
          Primary
          Subscription or the Over-Subscription Privilege.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Expiration
          of the Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Offer
          will expire at 5:00 p.m., Eastern Time, on the Expiration Date (October
          26,
          2007), unless extended by the Fund to a date not later than November 2,
          2007, at
          5:00 p.m., Eastern Time (the &#8220;Extended Expiration Date&#8221;). Rights will expire on
          the Expiration Date (or Extended Expiration Date as the case may be) and
          thereafter may not be exercised.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><a name="eolPage21"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Subscription
          Agent</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Subscription Agent is Colbent Corporation, 161 Bay State Drive, Braintree,
          MA
          02184.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
          may also contact the Fund for information about the Offer by writing to
          The
          Herzfeld Caribbean Basin Fund, P.O. Box 161465, Miami, FL 33116 or calling
          (800)
          TJH-FUND. Stockholders may also contact their brokers or nominees for
          information with respect to the Offer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Method
          of Exercising Rights</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rights
          may be exercised by filling in and signing the Subscription Certificate
          and
          mailing it in the envelope provided, or otherwise delivering the completed
          and
          signed Subscription Certificate to the Subscription Agent, together with
          payment
          of the Estimated Subscription Price for the Shares as described below under
          &#8220;Payment for Shares.&#8221; Rights holders may also exercise Rights by contacting a
          broker, bank or trust company who can arrange, on behalf of the Rights
          holder,
          to guarantee delivery of payment and of a properly completed and executed
          Subscription Certificate. A fee may be charged for this service. Completed
          Subscription Certificates and full payment for the Shares subscribed for
          must be
          received by the Subscription Agent prior to 5:00 p.m., Eastern Time, on
          the
          Expiration Date (unless payment is effected by means of a notice of guaranteed
          delivery as described below under &#8220;Payment for Shares&#8221;) at the office of the
          Subscription Agent at the addresses set forth above.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Qualified
          financial institutions that hold Shares as nominee for the account of others
          should notify the respective beneficial owners of such Shares as soon as
          possible to ascertain such beneficial owners&#8217; intentions and to obtain
          instructions with respect to the Rights. For purposes of this Prospectus,
          &#8220;Qualified Financial Institution&#8221; shall mean a registered broker-dealer,
          commercial bank or trust company, securities depository or participant
          therein,
          or nominee thereof. If the beneficial owner so instructs, the nominee should
          complete the Subscription Certificate and submit it to the Subscription
          Agent
          with the proper payment. In addition, beneficial owners of Common Stock
          or
          Rights held through such a nominee should contact the nominee and request
          the
          nominee to effect transactions in accordance with the beneficial owners&#8217;
instructions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
          who are registered holders can choose between either option set forth under
          &#8220;Payment for Shares&#8221; below.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Payment
          for Shares</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
          for shares shall be calculated by multiplying the Estimated Subscription
          Price
          of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.61
          per
          share times the sum of (i) the number of Rights held and intended to be
          exercised in the Primary Subscription, plus (ii) the number of additional
          shares
          for which a stockholder wishes to over-subscribe under the Over-Subscription
          Privilege. For example, if a stockholder receives 100 Rights and wishes
          to
          subscribe for 100 shares of Common Stock in the Primary Subscription, and
          also
          wishes to over-subscribe for 50 additional shares pursuant to the
          Over-Subscription Privilege, he, she or it would send in $12.61 x 100 plus
          $12.61 x 50. Rights holders who wish to acquire shares in the Primary
          Subscription or pursuant to the Over-Subscription Privilege may choose
          between
          the following methods of payment:</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-15-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="6%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a.</font></div>
                </td>
                <td align="left" valign="top" width="81%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em><u>Notice
                    of Guaranteed Delivery and Subscription Certificate (with payment)
                    sent
                    separately</u></em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    If, prior to 5:00 p.m., Eastern Time, on the Expiration Date,
                    the
                    Subscription Agent shall have received a notice of guaranteed
                    delivery by
                    telegram or otherwise, from a bank or trust company or a NYSE
                    member firm
                    guaranteeing delivery of (i) payment of the Estimated Subscription
                    Price
                    of $12.61 per share for the shares subscribed for in the Primary
                    Subscription and any additional shares subscribed for pursuant
                    to the
                    Over-Subscription Privilege and (ii) a properly completed and
                    executed
                    Subscription Certificate, the subscription will be accepted by
                    the
                    Subscription Agent. The Subscription Agent will not honor a notice
                    of
                    guaranteed delivery unless a properly completed and executed
                    Subscription
                    Certificate is received by the Subscription Agent prior to 5:00
                    p.m.,
                    Eastern Time, on the third Business Day after the Expiration
                    Date (the
                    &#8220;Protection Period&#8221;).</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="6%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b.</font></div>
                </td>
                <td align="left" valign="top" width="81%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em><u>Subscription
                    Certificate sent with Payment</u></em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                    Alternatively, a stockholder can, together with the properly
                    completed and
                    executed Subscription Certificate, send payment for the shares
                    acquired in
                    the Primary Subscription and any additional shares subscribed
                    for pursuant
                    to the Over-Subscription Privilege, to the Subscription Agent
                    based on the
                    Estimated Subscription Price of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.61
                    per share. To be accepted, such payment, together with the Subscription
                    Certificate, must be received by the Subscription Agent prior
                    to 5:00
                    p.m., Eastern Time, on the Expiration
                    Date.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage22">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
          excess payment will be refunded to the stockholder to the extent that additional
          shares are unavailable.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>A
          PAYMENT, PURSUANT TO THE SECOND METHOD DESCRIBED ABOVE, MUST ACCOMPANY
          ANY
          SUBSCRIPTION CERTIFICATE FOR SUCH SUBSCRIPTION CERTIFICATE TO BE
          ACCEPTED.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Within
          ten (10) Business Days following the completion of the Protection Period
          (the
&#8220;Confirmation Date&#8221;), a confirmation will be sent by the Subscription Agent to
          each stockholder (or, if the Fund&#8217;s shares on the Record Date are held by Cede
          or any other depository or nominee, to Cede or such other depository or
          nominee). The confirmation will show (i) the number of shares acquired
          pursuant
          to the Primary Subscription; (ii) the number of shares, if any, acquired
          pursuant to the Over-Subscription Privilege; (iii) the Subscription Price
          and
          total purchase price for the shares; and (iv) any additional amount payable
          by
          such stockholder to the Fund (e.g., if the Estimated Subscription Price
          was less
          than the Subscription Price on the Pricing Date) or any excess to be refunded
          by
          the Fund to such stockholder (e.g., if the Estimated Subscription Price
          was more
          than the Subscription Price on the Pricing Date). Any additional payment
          required from a stockholder must be received by the Subscription Agent
          prior to
          5:00 p.m., Eastern Time, on the tenth Business Day after the Confirmation
          Date,
          and any excess payment to be refunded by the Fund to such stockholder will
          be
          mailed by the Subscription Agent within ten (10) Business Days after the
          Confirmation Date. All payments by a stockholder must be made in United
          States
          Dollars by money order or by checks drawn on banks located in the Continental
          United States payable to &#8220; </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
          Herzfeld Caribbean Basin Fund, Inc.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Whichever
          of the above two methods is used, issuance and delivery of certificates
          for the
          shares of Common Stock subscribed for are subject to collection of funds
          and
          actual payment pursuant to any notice of guaranteed delivery.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Subscription Agent will deposit all checks received by it prior to the
          final due
          date into a segregated interest bearing account pending distribution of
          the
          shares from the Offer. All interest will inure to the benefit of the Fund
          and
          investors will not earn interest on payments submitted.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>YOU
          WILL HAVE NO RIGHT TO RESCIND YOUR SUBSCRIPTION AFTER THE SUBSCRIPTION
          AGENT HAS
          RECEIVED THE SUBSCRIPTION CERTIFICATE OR NOTICE OF GUARANTEED
          DELIVERY.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          a
          holder of Rights who acquires shares pursuant to the Primary Subscription
          or the
          Over-Subscription Privilege does not make payment of any amounts due, the
          Fund
          reserves the right to take any or all of the following actions: (i) find
          other
          stockholders or Rights holders to purchase such subscribed-for and unpaid-for
          shares; (ii) apply any payment actually received by it toward the purchase
          of
          the greatest whole number of shares which could be acquired by such holder
          upon
          exercise of the Primary Subscription or the Over-Subscription Privilege;
          (iii)
          sell all or a portion of the shares purchased by the holder in the open
          market,
          and apply the proceeds to the amounts owed; and (iv) exercise any and all
          other
          rights or remedies to which it may be entitled, including, without limitation,
          the right to set off against payments actually received by it with respect
          to
          such subscribed shares and to enforce the relevant guaranty of
          payment.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-16-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Holders
          who hold shares of common stock for the account of others, such as brokers,
          trustees or depositaries for securities, should notify the respective beneficial
          owners of the shares as soon as possible to ascertain the beneficial owners&#8217;
intentions and to obtain instructions with respect to the Rights. If the
          beneficial owners so instruct, the record holder of the Rights should complete
          Subscription Certificates and submit them to the Subscription Agent with
          the
          proper payment. In addition, beneficial owners of common stock or Rights
          held
          through such a holder should contact the holder and request the holder
          to effect
          transactions in accordance with the beneficial owner&#8217;s
          instructions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          instructions accompanying the Subscription Certificates should be read
          carefully
          and followed in detail. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DO
          NOT SEND SUBSCRIPTION CERTIFICATES TO THE FUND.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
          method of delivery of Subscription Certificates and payment of the Subscription
          Price to the Subscription Agent will be at the election and risk of the
          Rights
          holders, but if sent by mail it is recommended that the Subscription
          Certificates and payments be sent by registered mail, properly insured,
          with
          return receipt requested, and that a sufficient number of days be allowed
          to
          ensure delivery to the Subscription Agent and clearance of payment prior
          to 5:00
          p.m., Eastern Time, on the Expiration Date. Because uncertified personal
          checks
          may take at least five Business Days to clear, you are strongly urged to
          pay, or
          arrange for payment, by means of a certified or cashier&#8217;s check or money
          order.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><a name="eolPage23"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
          questions concerning the timeliness, validity, form and eligibility of
          any
          exercise of Rights will be determined by the Fund, whose determinations
          will be
          final and binding. The Fund in its sole discretion may waive any defect
          or
          irregularity, or permit a defect or irregularity to be corrected within
          such
          time as it may determine, or reject the purported exercise of any Right.
          Subscriptions will not be deemed to have been received or accepted until
          all
          irregularities have been waived or cured within such time as the Fund determines
          in its sole discretion. Neither the Fund nor the Subscription Agent will
          be
          under any duty to give notification of any defect or irregularity in connection
          with the submission of Subscription Certificates or incur any liability
          for
          failure to give such notification.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Delivery
          of Stock Certificates</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
          certificates representing shares purchased pursuant to the Primary Subscription
          will be delivered to subscribers as soon as practicable after the corresponding
          Rights have been validly exercised and full payment for the shares has
          been
          received and cleared. Stock certificates representing shares purchased
          pursuant
          to the Over-Subscription Privilege will be delivered to subscribers as
          soon as
          practicable after the Expiration Date and after all allocations have been
          effected.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Foreign
          Restrictions</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
          Certificates will only be mailed to Record Date Stockholders whose addresses
          are
          within the United States (other than an APO or FPO address). Record Date
          Stockholders whose addresses are outside the United States or who have
          an APO or
          FPO address and who wish to subscribe to the Offer either in part or in
          full
          should contact the Subscription Agent, Colbent Corporation, by written
          instruction or recorded telephone conversation no later than three Business
          Days
          prior to the Expiration Date. The Fund will determine whether the Offer
          may be
          made to any such stockholder.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Federal
          Income Tax Consequences Associated With the Offer</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following discussion describes certain United States Federal income tax
          consequences of the Offer generally applicable to citizens or residents
          of the
          United States and U.S. trusts, estates, corporations and any other person
          who is
          generally subject to U.S. Federal income tax (&#8220;U.S. Stockholders&#8221;). This summary
          is intended to be descriptive only and does not purport to be a complete
          analysis or listing of all potential tax effects relevant to the ownership
          of
          Rights or Common Stock. It assumes that each U.S. Stockholder holds Common
          Stock
          as a capital asset. Additionally, this summary does not specifically address
          the
          U.S. Federal income tax consequences that might be relevant to holders
          of Rights
          or Common Stock entitled to special treatment under the U.S. Federal income
          tax
          laws, such as individual retirement accounts and other tax deferred accounts,
          financial institutions, life insurance companies and tax-exempt organizations,
          and does not discuss the effect of state, local and other tax laws. Further,
          this summary is based on interpretations of existing law as of the date
          of this
          Prospectus as contained in the Code, applicable current and proposed Treasury
          Regulations, judicial decisions and published administrative positions
          of the
          Internal Revenue Service, all of which are subject to change either
          prospectively or retroactively.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-17-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">U.S.
                    Stockholders who receive Rights pursuant to the Offer should
                    not recognize
                    taxable income for U.S. Federal income tax purposes upon their
                    receipt of
                    the Rights. If Rights issued to a U.S. Stockholder expire without
                    being
                    exercised, no basis should be allocated to such Rights, and such
                    Stockholder should not recognize any gain or loss for U.S. Federal
                    income
                    tax purposes upon such expiration.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    tax basis of a U.S. Stockholder&#8217;s Common Stock should remain unchanged and
                    the stockholder&#8217;s basis in the Rights should be zero, unless such U.S.
                    Stockholder affirmatively and irrevocably elects (in a statement
                    attached
                    to such stockholder&#8217;s U.S. Federal income tax return for the year in which
                    the Rights are received) to allocate the basis in the Common
                    Stock between
                    such Common Stock and the Rights in proportion to their respective
                    fair
                    market values on the date of
                    distribution.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                    U.S. Stockholder who exercises Rights should not recognize any
                    gain or
                    loss for U.S. Federal income tax purposes upon the exercise.
                    The tax basis
                    of the newly acquired Common Stock should equal the Subscription
                    Price
                    paid for the Common Stock (plus the basis, if any, allocated
                    to the Rights
                    in the manner described in the immediately preceding paragraph).
                    The
                    holding period for Common Stock acquired upon the exercise of
                    Rights
                    should begin on the date of exercise of the
                    Rights.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage24">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                    U.S. Stockholder is urged to consult his or her own tax adviser
                    with
                    respect to the specific Federal, state and local tax consequences
                    to such
                    U.S. Stockholder of receiving Rights in this
                    offer.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Employee
          Plan Considerations</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
          that are employee benefit plans subject to the Employee Retirement Income
          Security Act of 1974, as amended (&#8220;ERISA&#8221;) (including corporate savings and
          401(k) plans), Keogh or H.R. 10 plans of self-employed individuals and
          Individual Retirement Accounts (&#8220;IRAs&#8221;) (collectively, &#8220;Plans&#8221;) should be aware
          of the complexity of the rules and regulations governing Plans and the
          penalties
          for noncompliance, and Plans should consult with their counsel regarding
          the
          consequences of their exercise of Rights under ERISA and the Internal Revenue
          Code of 1986, as amended (the &#8220;Code&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USE
          OF PROCEEDS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          net
          proceeds of the Offer, assuming the Offer is fully subscribed, are estimated
          to
          be approximately $21.12 million, based on an Estimated Subscription Price
          of
          $12.61 per share, and after deducting expenses related to the Offer estimated
          at
          approximately $155,979. The foregoing estimate of the net proceeds of the
          Offer
          is based on the closing price of the Fund&#8217;s shares on September 21, 2007.
          Accordingly, the assumptions and projections contained in this prospectus
          are
          subject to change significantly depending on changes in market conditions
          for
          the Fund&#8217;s shares and performance of the Fund&#8217;s portfolio. The Fund will invest
          the net proceeds of the Offer in accordance with its investment objective
          and
          policies. The Adviser anticipates that the proceeds will be invested promptly
          as
          investment opportunities are identified, depending on market conditions
          and the
          availability of appropriate securities, and it is anticipated to take not
          more
          than approximately three months. Pending investment, the proceeds will
          be
          invested in short-term cash-equivalent instruments. Although the Adviser
          anticipates that a substantial portion of the proceeds will be invested
          pursuant
          to its investment objective and policies, some of the proceeds may be used
          to
          make capital gain distributions required to maintain its tax status as
          a
          regulated investment company. As of June 30, 2007, the aggregate capital
          gains
          for calendar year 2007 were $1,670,170.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RISK
          FACTORS AND SPECIAL CONSIDERATIONS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investing
          in the Fund&#8217;s common stock provides an equity ownership interest in the Fund.
          Investing in any investment company security involves risk, including the
          risk
          that a Stockholder may receive little or no return on the Stockholder&#8217;s
          investment or that the Stockholder may lose part or all of the Stockholder&#8217;s
          investment. Therefore, before investing, Stockholders should consider carefully
          the following risks that are assumed when investing in the Fund through
          the
          Offer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-18-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dilution
          of Net Asset Value and Effect of Non-Participation in the
          Offer</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          a
          Stockholder does not exercise all of his Rights, the Stockholder will likely
          own
          a smaller proportional interest in the Fund when the Offer is over (i.e.,
          proportional dilution). In addition, whether or not a Stockholder exercises
          his
          Rights, because the Subscription Price (and net proceeds to the Fund) may
          be
          below the Fund&#8217;s NAV per share on the Expiration Date the per share net asset
          value of a Stockholder&#8217;s shares may be diluted (reduced) immediately as a result
          of the Offer (i.e., economic dilution).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          other
          words, a Stockholder may experience economic dilution in addition to
          proportional dilution because:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Subscription Price per share is 85% of the average volume-weighted
                    closing
                    sales price of a share of common stock on the NASDAQ Capital
                    Market on the
                    Pricing Date and the four immediately preceding trading days
                    (which may be
                    lower than the NAV);</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                    Stockholders will indirectly bear the expenses of the Offer;
                    and</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    number of shares outstanding after the Offer will have increased
                    proportionately more than the increase in the size of the Fund&#8217;s net
                    assets</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          cannot state precisely the amount of any dilution/accretion because it
          is not
          known at this time (i) what the average volume-weighted closing sale price
          of a
          share on the NASDAQ Capital Market will be on the Pricing Date and the
          four
          immediately preceding trading days, or (ii) what proportion of the Rights
          will
          be exercised.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          impact of the Offer on NAV per share is shown by the following example,
          assuming
          a Subscription Price of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.61,
          full primary and over-subscription privilege exercise and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">155,979
          in expenses related to the Offer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div align="center">
          <table cellpadding="0" cellspacing="0" width="65%">

              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72.8pt" align="left"><a name="FIS_UNIDENTIFIED_TABLE_18"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    Asset Value (&#8220;NAV&#8221;)</font></a></div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;$9.61</strong></font></div>
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              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subscription
                    Price</font></div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$12.61</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Increase
                    in NAV ($)</font></div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;$1.46</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="39%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Increase
                    in NAV (%)</font></div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>15.19</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Discount
          From Net Asset Value</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
          of
          closed-end funds frequently trade at a market price that is less than the
          value
          of the net assets attributable to those shares (a &#8220;discount&#8221;). The possibility
          that the Fund&#8217;s shares will trade at a discount from NAV is a risk separate and
          distinct from the risk that the Fund&#8217;s NAV will decrease. The risk of purchasing
          shares of a closed-end fund that might trade at a discount or unsustainable
          premium is more pronounced for investors who wish to sell their shares
          in a
          relatively short period of time after purchasing them because, for those
          investors, realization of a gain or loss on their investments is likely
          to be
          more dependent upon the existence of a premium or discount than upon portfolio
          performance. The Fund&#8217;s shares are not redeemable at the request of
          stockholders. The Fund may repurchase its shares in the open market or
          in
          private transactions, although it has no present intention to do so.
          Stockholders desiring liquidity may, subject to applicable securities laws,
          trade their shares in the Fund on the NASDAQ Capital Market or other markets
          on
          which such shares may trade at the then current market value, which may
          differ
          from the then current NAV.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risks
          of Investing in Caribbean Basin Countries</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          economies of Caribbean Basin Countries have in the past experienced considerable
          difficulties, including high inflation rates and high interest rates. The
          emergence of the economies and securities markets of the Caribbean Basin
          Countries will require continued economic and fiscal discipline that has
          been
          lacking at times in the past, as well as stable political and social conditions.
          International economic conditions, particularly those in the United States,
          as
          well as world prices for oil and other commodities may also influence the
          development of the economies of the Caribbean Basin Countries.</font></div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-19-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </div>
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          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          currencies of some Caribbean Basin Countries have experienced steady
          devaluations relative to the U.S. Dollar and certain Caribbean Basin Countries
          have had to make major adjustments in their currencies from time to time.
          Also
          many Caribbean Basin Countries have experienced substantial, and in some
          periods
          extremely high, rates of inflation for many years. For companies that keep
          accounting records in the local currency, inflation accounting rules in
          some
          Caribbean Basin Countries require, for both tax and accounting purposes,
          that
          certain assets and liabilities be restated on the company&#8217;s balance sheet in
          order to express items in terms of currency of constant purchasing power.
          Inflation accounting may indirectly generate losses or profits for certain
          Caribbean Basin Companies. Inflation and rapid fluctuations in inflation
          rates
          have had, and could, in the future, have very negative effects on the economies
          and securities markets of certain Caribbean Basin Countries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition, governments of many Caribbean Basin Countries have exercised
          and
          continue to exercise substantial influence over many aspects of the private
          sector. Governmental actions in the future could have a significant effect
          on
          economic conditions in Caribbean Basin Countries, which could affect the
          companies in which the Fund invests and, therefore, the value of Fund shares.
          Investments in foreign markets may be adversely affected by governmental
          actions
          such as the imposition of punitive taxes. In addition, the governments
          of
          certain countries may prohibit or impose substantial restrictions on foreign
          investing in their capital markets or in certain industries. Substantial
          limitations may exist in certain countries with respect to the Fund&#8217;s ability to
          repatriate investment income, capital or the proceeds of sales of securities.
          The Fund could be adversely affected by delays in, or a refusal to grant,
          any
          required governmental approval for repatriation of capital, as well as
          by the
          application to the Fund of any restrictions on investments. Any of these
          actions
          could severely affect security prices, impair the Fund&#8217;s ability to purchase or
          sell foreign securities or transfer the Fund&#8217;s assets or income back into the
          United States, or otherwise adversely affect the Fund&#8217;s operations.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><a name="eolPage26"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
          Caribbean Basin Countries have entered into regional trade agreements that
          are
          designed to, among other things, reduce barriers between countries, increase
          competition among companies and reduce government subsidies in certain
          industries. No assurance can be given that these changes will be successful
          in
          the long term, or that these changes will result in the economic stability
          intended. There is a possibility that these trade arrangements will not
          be fully
          implemented, or will be partially or completely unwound. It is also possible
          that a significant participant could choose to abandon a trade agreement,
          which
          could diminish its credibility and influence. Any of these occurrences
          could
          have adverse effects on the markets of both participating and non-participating
          countries, including sharp appreciation or depreciation of participants&#8217;
national currencies and a significant increase in exchange rate volatility,
          a
          resurgence in economic protectionism, an undermining of confidence in the
          Caribbean Basin markets, an undermining of Caribbean Basin economic stability,
          the collapse or slowdown of the drive towards economic unity, and/or reversion
          of the attempts to lower government debt and inflation rates that were
          introduced in anticipation of such trade agreements. Such developments
          could
          have an adverse impact on the Fund&#8217;s investments in the Caribbean Basin
          generally or in specific countries participating in such trade
          agreements.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Caribbean Basin has experienced natural disasters, including hurricanes,
          droughts and floods, which have caused substantial damage to parts of the
          Caribbean Basin and have harmed the region&#8217;s economies. The possibility exists
          that another natural disaster could materially disrupt and adversely affect
          the
          economies of Caribbean Basin Countries. In addition, companies and industries
          in
          which the Fund invests may experience substantial disruptions in operations
          as a
          result of any such natural disasters.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
          Caribbean Basin market risks include foreign exchange controls, difficulties
          in
          pricing securities, defaults on sovereign debt, difficulties in enforcing
          favorable legal judgments in local courts and political and social instability.
          Legal remedies available to investors in certain Caribbean Basin countries
          may
          be less extensive than those available to investors in the United States
          or
          other foreign countries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Geographic
          Concentration Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may invest from time to time a substantial amount of its assets in issuers
          located in a single country or a limited number of countries. If the Fund
          concentrates its investments in this manner, it assumes the risk that economic,
          political and social conditions in those countries will have a significant
          impact on its investment performance. The Fund&#8217;s investment performance may also
          be more volatile if it concentrates its investments in certain countries,
          especially emerging market countries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Foreign
          Securities Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
          traded in foreign markets have often (though not always) performed differently
          from securities traded in the United States. However, such investments
          often
          involve special risks not present in U.S. investments that can increase
          the
          chances that the Fund will lose money. In particular, the Fund is subject
          to the
          risk that because there may be fewer investors on foreign exchanges and
          a
          smaller number of securities traded each day, it may be more difficult
          for the
          Fund to buy and sell securities on those exchanges. In addition, prices
          of
          foreign securities may go up and down more than prices of securities traded
          in
          the United States.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-20-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
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            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Foreign
          Economy Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          economies of certain foreign markets may not compare favorably with the
          economy
          of the United States with respect to such issues as growth of gross national
          product, reinvestment of capital, resources and balance of payments position.
          Certain foreign economies may rely heavily on particular industries or
          foreign
          capital and are more vulnerable to diplomatic developments, the imposition
          of
          economic sanctions against a particular country or countries, changes in
          international trading patterns, trade barriers and other protectionist
          or
          retaliatory measures. Investments in foreign markets may also be adversely
          affected by governmental actions such as the imposition of capital controls,
          nationalization of companies or industries, expropriation of assets or
          the
          imposition of punitive taxes. In addition, the governments of certain countries
          may prohibit or impose substantial restrictions on foreign investments
          in their
          capital markets or in certain industries. Any of these actions could severely
          affect securities prices or impair the Fund&#8217;s ability to purchase or sell
          foreign securities or transfer the Fund&#8217;s assets or income back into the United
          States, or otherwise adversely affect the Fund&#8217;s operations.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage27">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
          potential foreign market risks include foreign exchange controls, difficulties
          in pricing securities, defaults on foreign government securities, difficulties
          in enforcing legal judgments in foreign courts and political and social
          instability. Legal remedies available to investors in certain foreign countries
          may be less extensive than those available to investors in the United
          States.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Currency
          Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
          and other instruments in which the Fund invests may be denominated or quoted
          in
          currencies other than the U.S. Dollar. Changes in foreign currency exchange
          rates may affect the value of the Fund&#8217;s portfolio. Because the Fund&#8217;s assets
          are primarily invested in securities of Caribbean Basin Companies, and
          because
          some portion of revenues and income may be received in foreign currencies
          while
          Fund distributions will be made in dollars, the dollar equivalent of the
          Fund&#8217;s
          net assets and distributions would be adversely affected by reductions
          in the
          value of the foreign currencies relative to the dollar. For this reason,
          changes
          in foreign currency exchange rates can affect the value of the Fund&#8217;s portfolio.
          Generally, when the U.S. Dollar rises in value against a foreign currency,
          a
          security denominated in that currency loses value because the currency
          is worth
          fewer U.S. Dollars. Conversely, when the U.S. Dollar decreases in value
          against
          a foreign currency, a security denominated in that currency gains value
          because
          the currency is worth more U.S. Dollars. This risk, generally known as
&#8220;currency
          risk,&#8221; means that a strong U.S. Dollar may reduce returns for U.S. investors
          while a weak U.S. Dollar may increase those returns. The Fund is managed
          with
          the assumption that most of its stockholders hold their assets in U.S.
          Dollars.
          As a result, and because distributions are made in U.S. Dollars, other
          non-U.S.
          investors will be adversely affected by reductions in the value of the
          U.S.
          Dollar relative to their home currency.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Governmental
          Supervision and Regulation/Accounting Standards</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign
          issuers are generally not bound by uniform accounting, auditing, and financial
          reporting requirements and standards of practice comparable to those applicable
          to U.S. issuers. Some of the securities held by the Fund may not be registered
          with the SEC nor may the issuers be subject to the SEC&#8217;s reporting requirements.
          Thus, there may be less available information concerning foreign issuers
          of
          securities held by the Fund than is available concerning U.S. issuers.
          Adequate
          public information on foreign issuers may not be available, and it may
          be
          difficult to secure dividends and information regarding corporate actions
          on a
          timely basis. In general, there is less overall governmental supervision
          and
          regulation of securities exchanges, brokers, and listed companies than
          in the
          United States. OTC markets tend to be less regulated than stock exchange
          markets
          and, in certain countries, may be totally unregulated. Regulatory enforcement
          may be influenced by economic or political concerns, and investors may
          have
          difficulty enforcing their legal rights in foreign countries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition, the U.S. Government has from time to time imposed restrictions,
          through penalties and otherwise, on foreign investments by U.S. investors,
          including current prohibitions on U.S. investment in Cuba. Investments
          in
          securities of Cuban companies, if permitted by U.S. law, may be subject
          to
          certain political and economic risks in addition to the risks associated
          with
          investment in the securities of issuers domiciled in other foreign countries.
          The risks include (i) less social, political and economic stability; (ii)
          the
          small current size of the markets for such securities and the currently
          low or
          nonexistent volume of trading, which result in a lack of liquidity and
          in
          greater price volatility; (iii) certain national policies which may restrict
          the
          Fund&#8217;s investment opportunities, including restrictions on investment in issuers
          or industries deemed sensitive to national interests; (iv) the absence
          of
          developed legal structures governing private or foreign investment or allowing
          for judicial redress for injury to private property; </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-21-</font></div>
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            </div>
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          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(V)
          the
          absence of a capital market structure or market-oriented economy; and (vi)
          the
          possibility that recent favorable economic developments may be slowed or
          reversed by unanticipated political or social events in such countries.
          Investments in securities of Cuban companies, if and when the Fund is permitted
          to invest in such securities, will be speculative and involve risks not
          usually
          associated with investments in securities of issuers in more developed
          market
          economies. See &#8220;Emerging Markets Risk&#8221; below.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Some
          foreign securities or nations impose restrictions on transfer within the
          United
          States or to U.S. persons. Although securities subject to such transfer
          restrictions may be marketable abroad, they may be less liquid than foreign
          securities of the same class that are not subject to such
          restrictions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounting
          standards in other countries are not necessarily the same as in the United
          States. If the accounting standards in another country do not require as
          much
          detail as U.S. accounting standards, it may be harder for the Adviser to
          completely and accurately determine a company&#8217;s financial condition. In
          instances where the financial statements of an issuer are not deemed to
          reflect
          accurately the financial situation of the issuer, the Adviser will take
          appropriate steps to evaluate the proposed investment, which may include
          on-site
          inspection of the issuer (including Cuba, if U.S. restrictions on travel
          to Cuba
          are lifted), interviews with its management and consultation with accountants,
          bankers and other specialists.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage28">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Certain
          Risks of Holding Fund Assets Outside the United States</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          generally holds its foreign securities and cash in foreign banks and securities
          depositories. Some foreign banks and securities depositories may be recently
          organized or new to the foreign custody business. In addition, there may
          be
          limited or no regulatory oversight of their operations. Also, the laws
          of
          certain countries limit the Fund&#8217;s ability to recover its assets if a foreign
          bank, depository or issuer of a security, or any of their agents, goes
          bankrupt.
          In addition, it is often more expensive for the Fund to buy, sell and hold
          securities in certain foreign markets than in the United States. The increased
          expense of investing in foreign markets reduces the amount the Fund can
          earn on
          its investments and typically results in a higher operating expense ratio
          for
          the Fund than for investment companies invested only in the United
          States.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Settlement
          Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Settlement
          and clearance procedures in certain foreign markets differ significantly
          from
          those in the United States. Foreign settlement and clearance procedures
          and
          trade regulations also may involve certain risks (such as delays in payment
          for
          or delivery of securities) not typically associated with the settlement
          of U.S.
          investments. Communications between the United States and emerging market
          countries may be unreliable, increasing the risk of delayed settlements
          or
          losses of security certificates in markets that still rely on physical
          settlement. At times, settlements in certain foreign countries have not
          kept
          pace with the number of securities transactions. These problems may make
          it
          difficult for the Fund to carry out transactions. If the Fund cannot settle
          or
          is delayed in settling a purchase of securities, it may miss attractive
          investment opportunities and certain of its assets may be uninvested with
          no
          return earned thereon for some period. If the Fund cannot settle or is
          delayed
          in settling a sale of securities, it may lose money if the value of the
          security
          then declines or, if it has contracted to sell the security to another
          party,
          the Fund could be liable for any losses incurred. Dividends or interest
          on, or
          proceeds from the sale of, foreign securities may be subject to foreign
          withholding taxes.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Emerging
          Markets Risk</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          risks
          of foreign investments are usually much greater for emerging markets.
          Investments in emerging markets, including many Caribbean Basin Countries,
          may
          be considered speculative. Emerging markets are riskier than more developed
          markets because they tend to develop unevenly and may never fully develop.
          Since
          these markets are often small, they may be more likely to suffer sharp
          and
          frequent price changes or long-term price depression because of adverse
          publicity, investor perceptions or the actions of a few large investors.
          Many
          emerging markets have histories of political instability and abrupt changes
          in
          policies. As a result, their governments are more likely to take actions
          that
          are hostile or detrimental to private enterprise or foreign investment
          than
          those of more developed countries. Certain emerging markets may also face
          other
          significant internal or external risks, including the risk of war, and
          civil
          unrest. In addition, governments in many emerging market countries participate
          to a significant degree in their economies and securities markets, which
          may
          impair investment and economic growth.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
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          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-22-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investments
          in the securities of issuers domiciled in countries with emerging capital
          markets involve certain additional risks that do not generally apply to
          investments in securities of issuers in more developed capital markets,
          such as
          (i) low or non-existent trading volume, resulting in a lack of liquidity
          and
          increased volatility in prices for such securities, as compared to securities
          of
          comparable issuers in more developed capital markets; (ii) uncertain national
          policies and social, political and economic instability, increasing the
          potential for expropriation of assets, confiscatory taxation, high rates
          of
          inflation or unfavorable diplomatic developments; (iii) possible fluctuations
          in
          exchange rates, differing legal systems and the existence or possible imposition
          of exchange controls, custodial restrictions or other foreign or U.S.
          governmental laws or restrictions applicable to such investments; (iv)
          national
          policies that may limit the Fund&#8217;s investment opportunities such as restrictions
          on investment in issuers or industries deemed sensitive to national interests;
          and (v) the lack or relatively early development of legal structures governing
          private and foreign investments and private property. In addition to withholding
          taxes on investment income, some countries with emerging markets may impose
          differential capital gains taxes on foreign investors.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Emerging
          capital markets are developing in a dynamic political and economic environment
          brought about by events over recent years that have reshaped political
          boundaries and traditional ideologies. In such a dynamic environment, there
          can
          be no assurance that any or all of these capital markets will continue
          to
          present viable investment opportunities for the Fund. In the past, governments
          of such nations have expropriated substantial amounts of private property,
          and
          most claims of the property owners have never been fully settled. There
          is no
          assurance that such expropriations will not reoccur. In such an event,
          it is
          possible that the Fund could lose the entire value of its investments in
          the
          affected market.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage29">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Also,
          there may be less publicly available information about issuers in emerging
          markets than would be available about issuers in more developed capital
          markets,
          and such issuers may not be subject to accounting, auditing and financial
          reporting standards and requirements comparable to those to which U.S.
          companies
          are subject. In certain countries with emerging capital markets, reporting
          standards vary widely. As a result, traditional investment measurements
          used in
          the United States, such as price/earnings ratios, may not be applicable.
          Emerging market securities may be substantially less liquid and more volatile
          than those of mature markets, and company shares may be held by a limited
          number
          of persons. This may adversely affect the timing and pricing of the Fund&#8217;s
          acquisition or disposal of securities. Communications between the United
          States
          and emerging market countries may be unreliable, increasing the risk of
          delayed
          settlements or losses of security certificates.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Practices
          in relation to settlement of securities transactions in emerging markets
          involve
          higher risks than those in developed markets, in part because the Fund
          may need
          to use brokers and counterparties that are less well capitalized, and custody
          and registration of assets in some countries may be unreliable. The possibility
          of fraud, negligence, undue influence being exerted by the issuer or refusal
          to
          recognize ownership exists in some emerging markets, and, along with other
          factors, could result in ownership registration being completely lost.
          The Fund
          would absorb any loss resulting from such registration problems and may
          have no
          successful claim for compensation.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INVESTMENT
          OBJECTIVE AND POLICIES</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investment
          Policies - General</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s investment objective is to obtain long-term capital appreciation. This
          objective may not be changed without the prior approval of the holders
          of a
          majority of the Fund&#8217;s outstanding voting securities. The Fund pursues its
          objective by investing primarily in equity and equity-linked securities
          of
          public and private companies, including U.S.-based companies, (i) whose
          securities are traded principally on a stock exchange in a Caribbean Basin
          country, (ii) that have at least 50% of the value of their assets in a
          Caribbean
          Basin Country or (iii) that derive at least 50% of their total revenue
          from
          operations in a Caribbean Basin country (collectively referred to herein
          as
&#8220;Caribbean Basin Companies&#8221;). Current income through receipt of interest or
          dividends from the Fund&#8217;s securities is incidental to the Fund&#8217;s efforts to
          attain its investment objective. The Fund invests in Caribbean Basin Companies
          that are likely, in the opinion of the Adviser, to benefit from political,
          legal
          and economic developments in the Caribbean Basin Countries. Under normal
          market
          conditions, the Fund invests at least 80% of its total assets in equity
          and
          equity-linked securities of Caribbean Basin Companies. The Fund may invest
          more
          than 25% of its total assets in the securities of U.S.-based companies.
          U.S. law
          currently prohibits the Fund from investing its assets in securities of
          companies that benefit from free trade with Cuba (&#8220;companies strategically
          linked to Cuba&#8221;). Companies strategically linked to Cuba may include a company
          that benefits from free trade with Cuba, but does not meet the definition
          of
          Caribbean Basin Company set forth above. If permitted to make such investments
          upon a lifting or easing of the U.S. trade embargo against Cuba or pursuant
          to
          regulations promulgated by a department or agency of the U.S. Government,
          the
          Fund may invest up to 20% of its assets in equity and equity-linked securities
          of non-Caribbean Basin Companies strategically linked to Cuba.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-23-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s investment objective is fundamental and may not be changed without the
          approval of the Fund&#8217;s outstanding voting securities. As used in this
          Prospectus, a majority of the Fund&#8217;s outstanding voting securities means the
          lesser of (i) 67% of the shares represented at a meeting at which more
          than 50%
          of the outstanding shares are present in person or represented by proxy
          or (ii)
          more than 50% of the outstanding shares. The Fund&#8217;s investment policies may be
          changed by its Board without stockholder approval, but the Fund will not
          change
          its investment policies without notice to its stockholders. The Fund is
          designed
          primarily for long-term investment, and investors should not consider it
          a
          trading vehicle. An investment in the Fund&#8217;s shares should not constitute a
          complete investment program. The Fund&#8217;s NAV can be expected to fluctuate, and no
          assurance can be given that the Fund will continue to achieve its investment
          objective.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
          securities of public and private companies that may be purchased by the
          Fund
          consist of common stock, convertible and non-convertible preferred stock
          (whether voting or non-voting), debt with equity warrants and unattached
          warrants. Debt issued with a warrant entitles the holder to purchase equity
          shares and differs from convertible debt because the conversion feature
          is in
          the form of a separately traded warrant. Equity-linked securities of public
          and
          private companies that may be purchased by the Fund consist of debt securities
          convertible into equity and securities such as warrants, options and futures,
          the prices of which are functions of the value of the equity securities
          receivable upon exercise or settlement thereof.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage30">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may also invest in the shares of other registered investment companies,
          some of
          which may be Caribbean Basin Companies. By investing in shares of investment
          companies, the Fund would indirectly pay a portion of the operating expenses,
          management expenses and brokerage costs of such companies as well as the
          expense
          of operating the Fund. Thus, the Fund&#8217;s investors may indirectly pay higher
          total operating expenses and other costs than they might pay by owning
          the
          underlying investment companies directly. The Adviser will continue to
          attempt
          to identify investment companies that have demonstrated superior management
          in
          the past, thus possibly offsetting these factors by producing better results
          and/or lower expenses than other investment companies. There can be no
          assurance
          that this result will continue to be achieved. In addition, Section 12(d)(1)(A)
          of the 1940 Act imposes limits on the amount of the investment of the Fund&#8217;s
          assets, and those of its affiliates, in any investment company and that
          provision may adversely affect the Fund&#8217;s ability to purchase or redeem shares
          issued by an investment company.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may invest in securities that lack an established secondary trading market
          or
          otherwise are considered illiquid. Liquidity of a security relates to the
          ability to dispose easily 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. Illiquid securities may trade at a discount
          from comparable, more liquid investments. Investment of the Fund&#8217;s assets in
          illiquid securities may restrict the ability of the Fund to dispose of
          its
          investments in a timely fashion and for a fair price as well as its ability
          to
          take advantage of market opportunities. The risks associated with illiquidity
          will be particularly acute where the Fund&#8217;s operations require cash, such as
          when the Fund redeems shares or pays a distribution, and could result in
          the
          Fund borrowing to meet short-term cash requirements or incurring capital
          losses
          on the sale of illiquid investments.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may invest in securities that are not registered under the Securities Act
          of
          1933, as amended (&#8220;restricted securities&#8221;). Restricted securities may be sold in
          private placement transactions between issuers and their purchasers and
          may be
          neither listed on an exchange nor traded in other established markets.
          In many
          cases, privately placed securities may not be freely transferable under
          the laws
          of the applicable jurisdiction or due to contractual restrictions on resale.
          As
          a result of the absence of a public trading market, privately placed securities
          may be less liquid and more difficult to value than publicly traded securities.
          To the extent that privately placed securities may be resold in privately
          negotiated transactions, the prices realized from the sales, due to illiquidity,
          could be less than those originally paid by the Fund or less than their
          fair
          market value. In addition, issuers whose securities are not publicly traded
          may
          not be subject to the disclosure and other investor protection requirements
          that
          may be applicable if their securities were publicly traded. If any privately
          placed securities held by the Fund are required to be registered under
          the
          securities laws of one or more jurisdictions before being resold, the Fund
          may
          be required to bear the expenses of registration. Certain of the Fund&#8217;s
          investments in private placements may consist of direct investments and
          may
          include investments in smaller, less seasoned issuers, which may involve
          greater
          risks. These issuers may have limited product lines, markets or financial
          resources, or they may be dependent on a limited management group. In making
          investments in such securities, the Fund may obtain access to material
          nonpublic
          information, which may restrict the Fund&#8217;s ability to conduct portfolio
          transactions in such securities.</font><br></div><br>
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          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-24-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may vary its investment policy for temporary defensive purposes when, in
          the
          opinion of the Adviser, such a change is warranted due to changes in the
          securities markets in which the Fund may invest or other economic or political
          conditions affecting such markets. For temporary defensive purposes, the
          Fund
          may reduce its position in equity and equity-linked securities and invest
          in
          U.S. Treasury bills and U.S. Dollar denominated bank time deposits and
          certificates of deposit rated high quality or better by any nationally
          recognized statistical rating service or, if unrated, of equivalent investment
          quality as determined by the Adviser. The banks whose obligations may be
          purchased by the Fund will include any member of the U.S. Federal Reserve
          System. The Fund does not seek to achieve its stated investment objective
          when
          it has assumed a temporary defensive position.</font><a name="eolPage31"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Special
          Leverage Considerations</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Hedging
          Transactions</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may employ one or more of the hedging techniques described below, primarily
          to
          protect against a decrease in the U.S. Dollar equivalent value of its portfolio
          securities denominated in foreign currencies or in the payments thereon
          that may
          result from an adverse change in foreign currency exchange rates. Conditions
          in
          the securities, futures, options and foreign currency markets will continue
          to
          determine whether and under what circumstances the Fund will employ any
          of the
          techniques or strategies described below. The Fund&#8217;s ability to pursue certain
          of these strategies may be limited by applicable regulations of the Commodity
          Futures Trading Commission (&#8220;CFTC&#8221;) and the Federal tax requirements applicable
          to regulated investment companies. See &#8220;Taxation-General&#8221;.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
          to applicable law and subject to certain restrictions, the Fund may effect
          hedging transactions on a variety of U.S. and foreign exchanges. The operations
          of U.S. exchanges are considered to be subject to more stringent regulation
          and
          supervision than those of certain non-U.S. exchanges.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          any
          percentage limitations applicable to the transactions described below are
          exceeded due to market fluctuations after an initial investment, the Fund
          may
          not enter into new transactions of the type to which the exceeded limitation
          applies until the total of the Fund&#8217;s commitments with respect to such
          transactions falls within the applicable limitation.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Forward
          Foreign Currency Exchange Contracts</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Adviser believes that in some circumstances the purchase and sale of forward
          foreign currency exchange contracts (&#8220;forward contracts&#8221;) may help offset
          declines in the U.S. Dollar equivalent value of the Fund&#8217;s assets denominated in
          foreign currencies and in the income available for distribution to the
          Fund&#8217;s
          stockholders that would result from adverse changes in the exchange rate
          between
          the U.S. Dollar and such foreign currencies. For example, the U.S. Dollar
          equivalent value of the principal of and rate of return on, the Fund&#8217;s foreign
          denominated securities will decline if the exchange rate fluctuates between
          the
          U.S. Dollar and such foreign currency whereby the U.S. Dollar increases
          in
          value. Such a decline could be partially or completely offset by an increase
          in
          the value of a foreign currency forward contract. The Fund may purchase
          forward
          contracts involving either the currencies in which certain of its portfolio
          securities are denominated or, in cross-hedging transactions, other currencies,
          changes in the value of which correlate closely with the changes in the
          value of
          the currencies in which its portfolio securities are denominated. The Fund
          will
          enter into such cross-hedging transactions (i) only with respect to currencies
          whose foreign exchange rate changes historically have shown a high degree
          of
          correlation to changes in the foreign exchange rate of the currency in
          which the
          hedged asset is denominated (a &#8220;correlated currency&#8221;) and (ii) only when the
          Adviser believes that the increase in correlation risk is offset by the
          lower
          transaction costs and increased liquidity available for financial instruments
          denominated in the correlated currency.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may enter into forward contracts or maintain a net exposure on such contracts
          only if (i) the consummation of the contracts would not obligate the Fund
          to
          deliver an amount of foreign currency in excess of the value of the Fund&#8217;s
          portfolio securities or other assets denominated in that currency or (ii)
          the
          Fund maintains cash, U.S. Government securities or other liquid, high-grade
          debt
          securities in a segregated account in an amount not less than the value
          of the
          Fund&#8217;s total assets committed to the consummation of the contract.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
          the use of forward contracts may protect the Fund against declines in the
          U.S.
          Dollar equivalent value of the Fund&#8217;s assets, such use may reduce the possible
          gain from advantageous changes in the value of the U.S. Dollar against
          particular currencies in which the Fund&#8217;s assets are denominated. Moreover, the
          use of forward contracts will not eliminate fluctuations in the underlying
          U.S.
          Dollar equivalent value of the prices of, or rates of return on, the assets
          held
          in the Fund&#8217;s portfolio.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-25-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          use
          of forward contracts subjects the Fund to certain risks. The matching of
          the
          increase in value of a forward contract and the decline in the U.S. Dollar
          equivalent value of the asset that is the subject of the hedge generally
          is not
          precise. The success of any of these techniques depends on the ability
          of the
          Adviser to predict correctly movements in foreign currency exchange rates.
          If
          the Adviser incorrectly predicts the direction of such movements or if
          unanticipated changes in foreign currency exchange rates occur, the Fund&#8217;s
          performance may be poorer than if it had not entered into such contracts.
          The
          cost to the Fund of engaging in forward contracts varies with such factors
          as
          the foreign currency involved, the length of the contract period and the
          prevailing market conditions, including general market expectations as
          to the
          direction of the movement of various foreign currencies against the U.S.
          Dollar.
          Consequently, because the Fund may not always be able to enter into forward
          contracts at attractive prices, it may be limited in its ability to use
          such
          contracts to hedge its assets or for other risk management purposes. In
          addition, there can be no assurance that historical correlations between
          the
          movements of certain foreign currencies relative to the U.S. Dollar will
          continue.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><a name="eolPage32"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Options
          on Foreign Currencies</u></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may purchase and write put and call options on foreign currencies to protect
          against a decline in the U.S. Dollar equivalent value of its portfolio
          securities or payments due thereon or a rise in the U.S. Dollar equivalent
          cost
          of securities that it intends to purchase. A foreign currency put option
          grants
          the holder the right, but not the obligation, at a future date to sell
          a
          specified amount of a foreign currency to its counterparty at a predetermined
          price. A foreign currency call option grants the holder the right, but
          not the
          obligation, to purchase at a future date a specified amount of a foreign
          currency at a predetermined price.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          in the
          case of other types of options, the benefit to the Fund from purchases
          of
          foreign currency options will be reduced by the amount of the premium and
          related transaction costs. In addition, if currency exchange rates do not
          move
          in the direction or to the extent anticipated, the Fund could sustain losses
          on
          transactions in foreign currency options which would require it to forego
          a
          portion or all of the benefits of advantageous changes in such
          rates.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
          options on foreign currencies written by the Fund will be covered. A call
          option
          is &#8220;covered&#8221; if the Fund owns the underlying foreign currency covered by the
          call or has an absolute and immediate right to acquire that foreign currency
          without additional cash consideration (or for additional cash consideration
          held
          in a segregated account by its custodian) upon conversion or exchange of
          other
          foreign currency held in its portfolio. A call option is also covered if
          the
          Fund has a call on the same foreign currency and in the same principal
          amount as
          the call written, so long as the exercise price of the call held (i) is
          equal to
          or less than the exercise price of the call written or (ii) is greater
          than the
          exercise price of the call written if the difference is maintained by the
          Fund
          in cash, U.S. government securities or other liquid, high-grade debt securities
          in a segregated account with its custodian. The Fund covers any put option
          it
          writes on foreign currencies by holding with its custodian, in a segregated
          account, cash, U.S. government securities or other liquid, high-grade debt
          securities in an amount equal to the option price.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may not purchase or write options on foreign currencies if, as a result,
          the
          Fund will have more than 20% of the value of its total assets invested
          in, or at
          risk with respect to, such options.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Futures
          Contracts</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may enter into contracts for the purchase or sale for future delivery (
&#8220;futures
          contracts&#8221;) of foreign stock or bond indices or other financial indices that the
          Adviser and the Manager determine are appropriate to hedge the risks associated
          with changes in interest rates or general fluctuations in the value of
          the
          Fund&#8217;s portfolio securities.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
          to the regulations of the CFTC, and subject to certain restrictions, the
          Fund
          may purchase or sell futures contracts that are traded on U.S. exchanges
          that
          have been designated as contract markets by the CFTC. The Fund may also
          generally purchase or sell futures contracts that are subject to the rules
          of
          any foreign board of trade (&#8220;foreign futures contracts&#8221;). The Fund may not,
          however, trade a foreign futures contract based on a foreign stock index
          unless
          the contract has been approved by the CFTC for trading by U.S.
          persons.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          is required to make a margin deposit in cash or government securities with
          a
          broker or custodian to initiate and maintain positions in futures contracts.
          Minimal initial margin requirements are established by the futures exchange
          and
          brokers may establish margin requirements which are higher than the exchange
          requirements. After a futures contract position is opened, the value of
          the
          contract is marked to market daily. If the futures contract price changes
          to the
          extent that the margin on deposit does not satisfy margin requirements,
          payment
          of additional &#8220;variation&#8221; margin is required. Conversely, reduction in the
          contract value may reduce the required margin resulting in a repayment
          of excess
          margin to the Fund. Variation margin payments are made to and from the
          futures
          broker for as long as the contract remains open.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-26-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          accordance with CFTC regulations, the Fund may not purchase or sell futures
          contracts if immediately thereafter the sum of the amounts of initial margin
          deposits and premiums on the Fund&#8217;s existing futures contracts would exceed 5%
          of the fair market value of the Fund&#8217;s total assets. The Adviser reserves the
          right to comply with such different standards as may be established by
          the CFTC
          with respect to the purchase or sale of futures contracts and foreign futures
          contracts.</font><a name="eolPage33"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Options
          on Securities and Options on Indices</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may purchase or sell exchange traded or over-the-counter put and call options
          on
          its portfolio securities.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may write covered put and call options on portfolio securities to generate
          additional revenue for the Fund and, in certain circumstances, as a partial
          hedge (to the extent of the premium received less transaction costs) against
          a
          decline in the value of portfolio securities and in circumstances in which
          the
          Adviser anticipates that the price of the underlying securities will not
          increase above or fall below (in the case of put options) the exercise
          price of
          the option by an amount greater than the premium received (less transaction
          costs incurred) by the Fund. Although writing put and call options may
          generate
          additional revenue for the Fund, such revenue is incidental to the Fund&#8217;s
          efforts to achieve its investment objective. The Fund&#8217;s strategy limits
          potential capital appreciation in the portfolio securities subject to the
          options.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may write only covered options. &#8220;Covered&#8221; means that, so long as the Fund is
          obligated as the writer of a call option, it will own either the underlying
          securities or an option to purchase the same underlying securities having
          an
          expiration date not earlier than the expiration date of the covered option
          and
          an exercise price equal to or less than the exercise price of the covered
          option, or establish or maintain with its custodian for the term of the
          option a
          segregated account consisting of cash, U.S. government securities or other
          liquid, high-grade debt obligations having a value equal to the fluctuating
          market value of the option securities. The Fund will continue to cover
          any put
          option it writes by maintaining a segregated account with its custodian
          as
          described above.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may not purchase or write options on securities or options on indices if,
          as a
          result, the Fund will have more than 5% of the value of its total assets
          invested in, or at risk with respect to, either such class of
          options.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s successful use of options and futures depends on the ability of the
          Adviser to predict the direction of the market, and is subject to various
          additional risks. The investment techniques and skills required to use
          options
          and futures successfully are different from those required to select equity
          and
          equity-linked securities for investment. The correlation between movements
          in
          the price of the option or future and the price of the securities being
          hedged
          is imperfect and the risk from imperfect correlation increases, with respect
          to
          stock index futures and options, as the composition of the Fund&#8217;s portfolio
          diverges from the composition of the index underlying such index futures
          and
          options. In addition, the ability of the Fund to close out a futures or
          options
          position depends on a liquid secondary market. There is no assurance that
          liquid
          secondary markets will exist for any particular option or futures contract
          at
          any particular time. The securities the Fund are required to maintain in
          segregated accounts in connection with its hedging transactions are not
          available for investment in accordance with the Fund&#8217;s investment objective of
          long-term capital appreciation.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          U.S.
          exchanges, once an option contract has been accepted for clearance, the
          exchange
          clearing organization is substituted as both buyer and seller of the contract,
          thereby guaranteeing the financial integrity of the option contract. Options
          on
          securities and on indices traded on certain non-U.S. exchanges may not
          be so
          guaranteed by a clearing organization. The absence of such a role for a
          clearing
          organization on such a non-U.S. exchange would expose the Fund to the credit
          risk of its counterparty. If its counterparty were to default on its
          obligations, the Fund could lose the expected benefit of the
          transaction.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Repurchase
          Agreements</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
          cash
          may be available to the Fund for only a few days, the Fund may invest such
          cash
          in repurchase agreements until such time as it otherwise may be invested
          or used
          for payments of obligations of the Fund. In these transactions, the Fund
          purchases a security and simultaneously commits to resell that security
          to the
          seller at an agreed-upon price and date. The resale price reflects the
          purchase
          price plus an agreed-upon market rate of interest, which is unrelated to
          the
          coupon rate or maturity of the security purchased. The obligation of the
          seller
          to pay the agreed-upon price is secured by the value of the underlying
          securities, which is maintained at the Fund&#8217;s custodian at a value at least
          equal to the resale price. The Adviser monitors the adequacy of the collateral
          on a daily basis to ensure that the collateral always equals or exceeds
          the
          repurchase price. Repurchase agreements could involve certain risks in
          the event
          of default or insolvency of the other party, including possible delays
          or
          restrictions upon the Fund&#8217;s ability to dispose of the underlying securities.
          The Fund could suffer a loss to the extent proceeds from the sale of collateral
          were less than the value of the contract. </font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-27-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may not invest its assets in repurchase agreements with a maturity of more
          than
          seven days, but the collateral securities may have maturities of more than
          one
          year. The Fund has not adopted an investment restriction limiting the value
          of
          its total assets not invested in accordance with its fundamental investment
          policy that may be invested in repurchase agreements. To minimize the risks
          of
          such investments, however, the Fund enters into repurchase agreements only
          with
          its custodian, other member banks of the Federal Reserve System having
          assets in
          excess of $1 billion, and recognized primary U.S. Government securities
          dealers
          determined by the Adviser, subject to review by the Board of the Fund,
          to be
          creditworthy. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Repurchase
          agreements do not constitute cash, cash items, receivables or government
          securities for purposes of the federal tax diversification test. Therefore,
          the
          Fund limits its investments in repurchase agreements with any one bank,
          dealer,
          broker or other entity in order to comply with the federal tax diversification
          test.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage34">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Debt
          Securities</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may invest up to 20% of its assets in non-equity linked debt securities
          including foreign denominated corporate debt and sovereign debt issued
          by
          foreign governments, their agencies or instrumentalities, or other
          government-related entities. Debt securities, such as bonds, involve credit
          risk. This is the risk that the issuer will not make timely payments of
          principal and interest. The degree of credit risk depends on the issuer&#8217;s
          financial condition and on the terms of the debt securities. Changes in
          an
          issuer&#8217;s credit rating or the market&#8217;s perception of an issuer&#8217;s
          creditworthiness may also affect the value of a Fund&#8217;s investment in that
          issuer. All debt securities are subject to interest rate risk. This is
          the risk
          that the value of the security may fall when interest rates rise. If interest
          rates move sharply in a manner not anticipated by the Adviser, a Fund&#8217;s
          investments in debt securities could be adversely affected and the Fund
          could
          lose money. In general, the market price of debt securities with longer
          maturities will go up or down more in response to changes in interest rates
          than
          will the market price of shorter-term debt securities. In addition, debt
          securities issued in foreign currency denominations will be subject to
          currency
          risk.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
          in sovereign debt can involve a high degree of risk. The governmental entity
          that controls the repayment of sovereign debt may not be able or willing
          to
          repay the principal and/or interest when due in accordance with the terms
          of
          such debt. A governmental entity&#8217;s willingness or ability to repay principal and
          interest due in a timely manner may be affected by, among other factors,
          its
          cash flow situation, the extent of its foreign reserves, the availability
          of
          sufficient foreign exchange on the date a payment is due, the relative
          size of
          the debt service burden to the economy as a whole, the governmental entity&#8217;s
          policy towards the International Monetary Fund and the political constraints
          to
          which a governmental entity may be subject. Governmental entities may also
          be
          dependent on expected disbursements from foreign governments, multilateral
          agencies and others abroad to reduce principal and interest arrearages
          on their
          debt. The commitment on the part of these governments, agencies and others
          to
          make such disbursements may be conditioned on the implementation of economic
          reforms and/or economic performance and the timely service of such debtor&#8217;s
          obligations. Failure to implement such reforms, achieve such levels of
          economic
          performance or repay principal or interest when due may result in the
          cancellation of such third parties&#8217; commitments to lend funds to the
          governmental entity, which may further impair such debtor&#8217;s ability or
          willingness to timely service its debts. Consequently, governmental entities
          may
          default on their sovereign debt. Holders of sovereign debt may be requested
          to
          participate in the rescheduling of such debt and to extend further loans
          to
          governmental entities. In the event of a default by a governmental entity,
          there
          may be few or no effective legal remedies for collecting on such
          debt.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Securities
          Lending</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may lend portfolio securities with a value not exceeding 33 1/3% of its
          total
          assets or the limit prescribed by applicable law to banks, brokers and
          other
          financial institutions. In return, the Fund receives collateral in cash
          or
          securities issued or guaranteed by the U.S. Government, which will be maintained
          at all times in an amount equal to at least 100% of the current market
          value of
          the loaned securities. The Fund maintains the ability to obtain the right
          to
          vote or consent on proxy proposals involving material events affecting
          securities loaned. The Fund receives the income on the loaned securities.
          Where
          the Fund receives securities as collateral, the Fund receives a fee for
          its
          loans from the borrower and does not receive the income on the collateral.
          Where
          the Fund receives cash collateral, it may invest such collateral and retain
          the
          amount earned, net of any amount rebated to the borrower. As a result,
          the
          Fund&#8217;s yield may increase. Loans of securities are terminable at any time and
          the borrower, after notice, is required to return borrowed securities within
          the
          standard time period for settlement of securities transactions. The Fund
          is
          obligated to return the collateral to the borrower at the termination of
          the
          loan. The Fund could suffer a loss in the event the Fund must return the
          cash
          collateral and there are losses on investments made with the cash collateral.
          In
          the event the borrower defaults on any of its obligations with respect
          to a
          securities loan, the Fund could suffer a loss where there are losses on
          investments made with the cash collateral or where the value of the securities
          collateral falls below the market value of the borrowed securities. The
          Fund
          could also experience delays and costs in gaining access to the collateral.
          The
          Fund may pay reasonable finder&#8217;s, lending agent, administrative and custodial
          fees in connection with its loans.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-28-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage35">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Portfolio
          Turnover</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
          is the
          Fund&#8217;s policy to sell any security whenever, in the opinion of the Adviser,
          the
          appreciation possibilities of the security have been substantially realized
          or
          the business or market prospects for the issuer of such security have
          deteriorated, irrespective of the length of time that such security has
          been
          held. In addition, the Fund from time to time may engage in short-term
          transactions in order to take advantage of what the Adviser believes to
          be
          market inefficiencies in the pricing of equity and equity-linked securities.
          The
          Adviser expects that the Fund&#8217;s annual rate of portfolio turnover may exceed
          100% at times when the Fund is taking advantage of short-term trading
          opportunities or if a complete reallocation of the Fund&#8217;s investment portfolio
          becomes advisable. A 100% annual turnover rate would occur if all of the
          securities in the Fund&#8217;s portfolio were replaced once within a period of one
          year. The turnover rate has a direct effect on the transaction costs borne
          by
          the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investment
          Restrictions</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          has adopted certain investment restrictions that may not be changed without
          the
          prior approval of a majority of the Board. For purposes of the non-fundamental
          restrictions listed below and other investment restrictions of the Fund
          described in this Prospectus, all percentage limitations apply immediately
          after
          a purchase or initial investment, and any subsequent change in any applicable
          percentage resulting from market fluctuations does not require elimination
          of
          any security from the Fund&#8217;s portfolio. Under its investment restrictions, the
          Fund may not:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    any securities (other than obligations of the U.S. government,
                    its
                    agencies or instrumentalities or securities of other regulated
                    investment
                    companies) if as a result more than 25% of the Fund&#8217;s total assets would
                    be invested in securities of any single
                    issuer.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Invest
                    25% or more of the value of its total assets in a particular
                    industry.
                    This restriction does not apply to securities issued or guaranteed
                    by the
                    U.S. government, its agencies or instrumentalities, but will
                    apply to
                    foreign government obligations until such time as the SEC permits
                    their
                    exclusion.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    more than 10% of the outstanding voting securities of any one
                    issuer.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issue
                    senior securities, pledge its assets or borrow money in excess
                    of 10% of
                    the total value of its assets (including the amount borrowed)
                    less its
                    liabilities (not including its borrowings) and other than for
                    temporary or
                    emergency purposes or for the clearance of transactions, except
                    that the
                    Fund may borrow from a bank or other entity in a privately arranged
                    transaction for repurchases and/or tenders for its shares, if
                    after such
                    borrowing there is asset coverage of at least 300% as defined
                    in the 1940
                    Act, and may pledge its assets to secure any permitted borrowing.
                    For the
                    purposes of this investment restriction, the Fund will not purchase
                    additional portfolio securities while borrowings exceed 5% of
                    the Fund&#8217;s
                    total assets; and collateral arrangements with respect to the
                    writing of
                    options or the purchase or sale of futures contracts are not
                    deemed a
                    pledge of assets or the issuance of a senior
                    security.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Make
                    loans, except through purchasing debt obligations, lending portfolio
                    securities and entering into repurchase agreements consistent
                    with the
                    Fund&#8217;s investment objective and
                    policies.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    or sell real estate or real estate mortgage loans, except that
                    the Fund
                    may purchase and sell securities secured by real estate or interests
                    therein.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
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                    short sales of securities or maintain a short position in any
                    security.</font></div>
                </td>
              </tr>

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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    securities on margin, except such short-term credits as may be
                    necessary
                    or routine for the clearance or settlement of transactions, and
                    except
                    that the Fund may engage in transactions as described under &#8220;Investment
                    Objective and Policies--Hedging Transactions&#8221; and post margin in
                    connection therewith consistent with its investment
                    policies.</font></div>
                </td>
              </tr>

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        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage36">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Underwrite
                    securities of other issuers, except insofar as the Fund may be
                    deemed an
                    underwriter under the Securities Act of 1933 in selling portfolio
                    securities.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-29-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.</font></div>
                </td>
                <td align="justify" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Buy
                    or sell commodities, commodity contracts or futures contracts
                    (other than
                    as described under &#8220;Investment Objective and Policies&#8212;Hedging
                    Transactions&#8221;).</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                </td>
                <td align="justify" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</font></div>
                </td>
                <td align="left" valign="top" width="82%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Buy,
                    sell or write put or call options (other than as described under
&#8220;Special
                    Leverage Considerations&#8212;Hedging
                    Transactions&#8221;).</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          is also subject to certain diversification requirements under the Internal
          Revenue Code of 1986, as amended, with respect to its qualification as
          a
&#8220;regulated investment company&#8221; under the Code. See &#8220;Taxation--U.S. Taxation
          General&#8221;.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          an
          additional non-fundamental investment restriction, the Fund will not guarantee
          the obligations of third parties. The Fund may invest in other investment
          companies, subject to limitations set forth in the 1940 Act.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MANAGEMENT
          OF THE FUND</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
          of Directors</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          is responsible for the overall management of the Fund, including oversight
          of
          the Adviser and other service providers. There are three directors of the
          Fund.
          One of the directors is an &#8220;interested person&#8221; (as defined in the 1940 Act).
          Information about both the Fund&#8217;s directors and officers is set forth in the
          tables below.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_19">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Information
          About Directors and Officers</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="bottom" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name,
                    Address, Age</strong></font></div>
                </td>
                <td valign="bottom" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Position(s)
                    Held With Fund</strong></font></div>
                </td>
                <td valign="bottom" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Length
                    of Term Served, and Term of Office</strong></font></div>
                </td>
                <td valign="bottom" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Principal
                    Occupation(s) During the Past Five Years</strong></font></div>
                </td>
                <td colspan="2" valign="bottom" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Portfolios in Fund Complex Overseen by
                    Director</strong></font></div>
                </td>
                <td valign="bottom" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
                    Directorships Held by Director</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="7" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 5.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Disinterested
                    Directors</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">&#160;</td>
                <td align="left" valign="top" width="12%">&#160;</td>
                <td align="left" valign="top" width="15%">&#160;</td>
                <td align="left" colspan="2" valign="top" width="21%">&#160;</td>
                <td valign="top" width="10%">&#160;</td>
                <td align="left" valign="top" width="10%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ann
                    S. Lieff</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c/o
                    The Herzfeld Caribbean Basin Fund, Inc.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
                    Box 161465</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miami,
                    Florida 33116</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age:
                    55</font></div>
                </td>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                </td>
                <td align="left" valign="top" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    since 1998. Three year term of office.</font></div>
                </td>
                <td align="left" colspan="2" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President
                    of the Lieff Company, a management consulting firm that offers
                    ongoing
                    advisory services as a corporate director to several leading
                    regional and
                    national retail operations, 1998 to present; former CEO Spec&#8217;s Music,
                    1980-1998, a retailer of recorded music.</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hastings
                    Entertainment, Inc; and Birks &amp; Mayors, Inc.</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">&#160;</td>
                <td align="left" valign="top" width="12%">&#160;</td>
                <td align="left" valign="top" width="15%">&#160;</td>
                <td align="left" colspan="2" valign="top" width="21%">&#160;</td>
                <td valign="top" width="10%">&#160;</td>
                <td align="left" valign="top" width="10%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                    A. Rubin</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c/o
                    The Herzfeld Caribbean Basin Fund, Inc.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
                    Box 161465</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miami,
                    Florida 33116</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age:
                    65</font></div>
                </td>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                </td>
                <td align="left" valign="top" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    since 2002. Three year term of office.</font></div>
                </td>
                <td align="left" colspan="2" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Partner
                    of Michael A. Rubin, P.A., attorney at law; Broker, Oaks Management
&amp;
                    Real Estate Corp., a real estate brokerage corporation</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Margo
                    Caribe, Inc.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-30-</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="FIS_UNIDENTIFIED_TABLE_20">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dr.
                    Kay W. Tatum, PhD, CPA</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c/o
                    The Herzfeld Caribbean </font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basin
                    Fund, Inc.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
                    Box 161465</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miami,
                    Florida 33116</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age:
                    55</font></div>
                </td>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    since 2007. Three year term of office.</font></div>
                </td>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chair
                    and Associate Professor of Accounting, University of Miami School
                    of
                    Business Administration, 2004 to present; Associate Professor
                    of
                    Accounting, University of Miami, 1992 to present; and Assistant
                    Professor
                    of Accounting, University of Miami, 1986 to 1992.</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" colspan="6" valign="top" width="88%">&#160;</td>
              </tr>
              <tr>
                <td align="left" colspan="6" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Interested
                    Director and Officers</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="6" valign="top" width="88%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thomas
                    J. Herzfeld *</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
                    Box 161465</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miami,
                    Florida 33116</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age:
                    62</font></div>
                </td>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">President,
                    Chairman of the Board, and Director</font></div>
                </td>
                <td align="left" valign="top" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    of Fund since 1993. Three year term of office.</font></div>
                </td>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
                    and President of Thomas J. Herzfeld &amp; Co., Inc., and Thomas J.
                    Herzfeld Advisors, Inc.</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1**</font></div>
                </td>
                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">&#160;</td>
                <td align="left" valign="top" width="12%">&#160;</td>
                <td align="left" valign="top" width="15%">&#160;</td>
                <td align="left" valign="top" width="21%">&#160;</td>
                <td valign="top" width="10%">&#160;</td>
                <td align="left" valign="top" width="10%">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cecilia
                    Gondor *</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
                    Box 161465</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miami,
                    Florida 33116</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Age:
                    45</font></div>
                </td>
                <td align="left" valign="top" width="12%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Secretary,
                    Treasurer and Chief Compliance Officer</font></div>
                </td>
                <td align="left" valign="top" width="15%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Officer
                    since 1993.</font></div>
                </td>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                    Vice President of Thomas J. Herzfeld &amp; Co., Inc., and Thomas J.
                    Herzfeld Advisors, Inc.</font></div>
                </td>
                <td valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</font></div>
                </td>
                <td align="left" valign="top" width="10%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 2.9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                    of Mr. Herzfeld and Ms. Gondor is an &#8220;interested person&#8221; of the Fund
                    because each is an officer of the Fund&#8217;s
                    Adviser.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">**</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
                    Herzfeld also serves as a director of The Cuba Fund, Inc., a
                    registered
                    closed-end investment company which has not yet commenced
                    operations.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Committees
          of the Board</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          has formed an Audit Committee and a Nominating Committee.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          has adopted a written charter for the Audit Committee, which became effective
          February 5, 2004. The Audit Committee of the Board currently consists of
          each
          Ms. Lieff, Mr. Rubin and Dr. Tatum, none of whom is an &#8220;interested person&#8221; of
          the Fund. Each member of the Audit Committee is considered independent
          under the
          applicable NASDAQ Capital Market listing standards. During the fiscal year
          ended
          June 30, 2007 the Audit Committee met twice. The Audit Committee reviews
          the
          scope of the audit by the Fund&#8217;s independent accountants, confers with the
          accountants with respect to the audit and the internal accounting controls
          of
          the Fund and with respect to such other matters as may be important to
          an
          evaluation of the audit and the financial statements of the Fund, and makes
          recommendations with respect to the selection of accountants for the
          Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Nominating Committee is comprised of Ms. Lieff, Mr. Rubin and Dr. Tatum,
          each of
          whom is an independent director under the 1940 Act and under NASDAQ Capital
          Market listing standards. During the fiscal year ended June 30, 2007, the
          Nominating Committee met once. The Nominating Committee is responsible
          for
          reviewing and recommending qualified candidates in the event that a directorship
          is vacated or created. The Nominating Committee will not consider nominees
          recommended by stockholders. The Nominating Committee believes that candidates
          for director should have certain minimum qualifications, including (i)
          the
          ability to apply good business judgment; (ii) the ability to properly exercise
          their duties of loyalty and care; (iii) proven leadership capabilities,
          high
          integrity and moral character, significant business experience and a high
          level
          of responsibility within their chosen fields; (iv) the ability to quickly
          grasp
          complex principles of business, finance, international transactions and
          the
          regulatory environment in which investment companies must operate; and
          (v) the
          ability to read and understand basic financial statements. The Committee
          retains
          the right to modify these minimum qualifications from time to time. In
          general,
          candidates will be preferred who hold an established senior or executive
          level
          position in business, finance, law, education, research or government.
          The
          Committee&#8217;s process for identifying and evaluating nominees is as
          follows:</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-31-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          the
          case of incumbent directors whose terms of office are set to expire, the
          Nominating Committee reviews such directors&#8217; overall service to the Fund during
          their term, including the number of meetings attended, level of participation,
          quality of performance, and transactions of such directors with the Fund,
          if
          any, during their term, and confirms their independence, if applicable.
          In the
          case of new director candidates, the committee first determines whether
          the
          nominee must be independent for purposes of The NASDAQ Capital Market and
          whether the candidate must be considered a disinterested director under
          the 1940
          Act. In either case, determinations are based upon the Fund&#8217;s charter and
          bylaws, applicable securities laws, the rules and regulations of the SEC,
          and
          the advice of counsel, if necessary. The Committee then uses its network
          of
          contacts to compile a list of potential candidates, but may also engage,
          if it
          deems appropriate, a professional search firm. The Committee then meets
          to
          discuss and consider such candidates&#8217; qualifications and recommend the
          nominee.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage38"/><a name="FIS_UNIDENTIFIED_TABLE_22">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Ownership
          of the Fund By Directors</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Set
          forth
          in the following table are the directors of the Fund, together with the
          dollar
          range of equity securities beneficially owned by each director as of June
          30,
          2007, as well as the aggregate dollar range of equity securities in all
          funds
          overseen or to be overseen in a family of investment companies (i.e., funds
          managed by the Adviser).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="bottom" width="29%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                    of Director</strong></font></div>
                </td>
                <td align="left" valign="top" width="3%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="28%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dollar
                    Range of Equity</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Securities
                    in the Fund</strong></font></div>
                </td>
                <td align="left" valign="top" width="4%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Aggregate
                    Dollar Range of</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Equity
                    Securities in All Funds in Family of Investment
                    Companies</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="5" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 4.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Disinterested
                    Directors</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="29%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ann
                    S. Lieff &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="28%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$10,001-
                    $50,000</font></div>
                </td>
                <td align="left" valign="bottom" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="23%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$10,001-
                    $50,000</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="29%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                    A. Rubin. &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="28%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$10,001-
                    $50,000</font></div>
                </td>
                <td align="left" valign="bottom" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="23%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$10,001-
                    $50,000</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="29%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dr.
                    Kay W. Tatum</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="28%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NONE</font></div>
                </td>
                <td align="left" valign="bottom" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="23%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NONE</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="5" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 4.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Interested
                    Director</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="29%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thomas
                    J. Herzfeld &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="28%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Over
                    $100,000</font></div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="23%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Over
                    $100,000</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="29%">&#160;</td>
                <td align="left" valign="top" width="3%">&#160;</td>
                <td valign="top" width="28%">&#160;</td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td valign="top" width="23%">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None
          of
          the disinterested directors, and no immediate family member of any disinterested
          director, own beneficially or of record any securities of the Fund&#8217;s Adviser, or
          any person directly or indirectly controlling, controlled by, or under
          common
          control with the Adviser.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          of
          June 30, 2007, directors and executive officers (5 persons) beneficially
          owned
          an aggregate of 1.06% of the Fund&#8217;s outstanding shares on that
          date.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage39"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIRECTOR
          COMPENSATION</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          pays the disinterested directors of the Fund $1,000 per year in addition
          to $400
          for each meeting of the board, plus reimbursement for expenses. Such fees
          totaled $7,800 for the fiscal year ended June 30, 2007. The aggregate
          compensation paid by the Fund to each of its directors serving during the
          fiscal
          year ended June 30, 2007 is set forth in the compensation table below.
          Mr.
          Herzfeld serves on the Fund&#8217;s Board. Mr. Herzfeld does not receive direct
          compensation for his services on either board. None of the other directors
          serves on the board of any other registered investment company to which
          the
          Fund&#8217;s investment adviser or an affiliated person of the Fund&#8217;s investment
          adviser provides investment advisory services. Directors and executive
          officers
          of the Fund do not receive pension or retirement benefits from the
          Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="FIS_UNIDENTIFIED_TABLE_23">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="bottom" width="21%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                    of Person and</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Position
                    with the Fund</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="3%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="19%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Aggregate
                    Compensation</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>from
                    the Fund</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="22%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pension
                    or Retirement Benefits Accrued As Part of Fund
                    Expenses</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="bottom" width="19%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                    Compensation from the Fund and Fund Complex Paid to
                    Directors</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="7" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Disinterested
                    Directors</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ann
                    S. Lieff &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                    A. Rubin &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="21%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Albert
                    L. Weintraub* &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$2,600</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" colspan="7" valign="top" width="88%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 6.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Interested
                    Director</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="21%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thomas
                    J. Herzfeld &#160;</font></div>
                </td>
                <td align="left" valign="top" width="3%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*
&#160;
          Mr. Weintraub resigned his position as a director of the Fund on July 23,
          2007.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-32-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investment
          Adviser and Portfolio Manager</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Investment
          Adviser</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          is advised by HERZFELD/CUBA (the &#8220;Adviser&#8221;), a division of Thomas J. Herzfeld
          Advisors, Inc., whose principal business address is The Herzfeld Building,
          P.O.
          Box 161465, Miami, Florida 33116. The Adviser has been providing advisory
          services to the Fund since September 1993. Thomas J. Herzfeld Advisors,
          Inc. has
          provided advisory services since 1984 and is beneficially owned by Thomas
          J.
          Herzfeld.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
          to an investment advisory agreement with the Fund (the &#8220;Investment Advisory
          Agreement&#8221;) and under the direction and control of the Board, the Adviser
          manages the Fund&#8217;s portfolio and makes investment decisions pursuant to the
          Fund&#8217;s stated investment objective, policies and restrictions. The Adviser is
          authorized to transmit purchase and sale orders and select brokers and
          dealers
          to execute portfolio transactions on behalf of the Fund. The Adviser determines
          the timing of portfolio transactions and other matters related to
          execution.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Portfolio
          Manager</u></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thomas
          J.
          Herzfeld is primarily responsible for the day-to-day management of the
          Fund. Mr.
          Herzfeld currently serves as the Chairman, President and Director of the
          Fund.
          Mr. Herzfeld has managed the Fund since its inception in 1993. In addition,
          Mr.
          Herzfeld also serves as the Chairman and President of Thomas J. Herzfeld
&amp;
Co., Inc. and Thomas J. Herzfeld Advisors, Inc. since 1981 and 1984,
          respectively. Prior to these positions he was Executive Vice President
          and
          Director of a New York Stock Exchange member firm. Mr. Herzfeld has authored
          or
          edited a number of books, including The Investors Guide to Closed-End Funds
          (McGraw Hill, 1980), Herzfeld&#8217;s Guide to Closed End Funds (McGraw Hill, 1993)
          and co-authored High Return, Low Risk Investment (1st edition, G.P. Putnam&#8217;s
          Sons, 1981 and 2nd edition, McGraw Hill, 1993). He is considered the first
          and a
          leading expert in the field of closed-end funds. Mr. Herzfeld has been
          quoted in
          thousands of articles and written hundreds of articles on the subject of
          closed
          end funds. He has written periodically for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Barron&#8217;s</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          and has
          made television appearances on </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Wall
          Street Week</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          ,
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>The
          Nightly Business Report</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          and
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>CNBC</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          .</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Other
          Accounts Managed.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          Thomas
          J. Herzfeld is primarily responsible for the day-to-day management of the
          Fund&#8217;s
          portfolio. As of June 30, 2007, Mr. Herzfeld was primarily responsible
          for the
          day-to-day management of the following other accounts in addition to the
          Fund:</font></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td valign="top" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Type
                    of Account</strong></font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="22%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Accounts</strong></font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="31%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                    Assets (in millions)</strong></font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="27%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registered
                    Investment Companies</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="27%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pooled
                    Investment Vehicles</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</font></div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="27%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    Accounts</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">44</font></div>
                </td>
                <td valign="top" width="2%">&#160;</td>
                <td valign="top" width="31%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$54.1</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage40"/><a name="FIS_UNIDENTIFIED_TABLE_24">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          advisory fee for these accounts is based on assets under management for
          these
          accounts and is not based on the performance of the accounts.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Material
          conflicts of interest that may arise in connection with Mr. Herzfeld&#8217;s
          management of the Fund&#8217;s investments and investments in other accounts include
          conflicts between the investment strategy of the Fund and the investment
          strategy of the other accounts managed by Mr. Herzfeld, and conflicts associated
          with the allocation of investment opportunities between the Fund and other
          accounts managed by Mr. Herzfeld. The Adviser has adopted policies and
          procedures to address conflicts of interest to ensure compliance with securities
          regulations and to ensure fair and equitable treatment of the Fund and
          other
          accounts should any conflict arise.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Compensation.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          Mr.
          Herzfeld receives a quarterly fixed salary from the Adviser&#8217;s affiliated
          broker/dealer firm, Thomas J. Herzfeld &amp; Co., Inc. Mr. Herzfeld is the sole
          beneficial owner of the Adviser and the affiliated broker/dealer. Mr. Herzfeld
          may also receive bonuses from the broker/dealer firm and/or the Adviser,
          as
          determined by the terms of his contract with the firm. Mr. Herzfeld does
          not
          receive compensation as portfolio manager from the Adviser. In addition
          Mr.
          Herzfeld&#8217;s compensation is not based on the value of assets held by the
          Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Ownership
          of Securities.</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          As of
          the June 30, 2007, Mr. Herzfeld beneficially owned between $100,000 and
          $500,000
          of equity securities of the Fund.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-33-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Investment</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Advisory
          Agreement</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Investment Advisory Agreement sets forth the services to be provided by
          the
          Adviser as described above. The Fund pays the Adviser an advisory fee at
          the
          annual rate of 1.45% of the Fund&#8217;s average monthly net assets and payable at the
          end of each quarter. That fee is higher than the advisory fee paid by most
          investment companies. For the fiscal years ended June 30, 2007, 2006 and
          2005,
          the Adviser received $208,505, $196,852 and $153,114, respectively, for
          investment advisory services provided to the Fund pursuant to the Investment
          Advisory Agreement.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Investment Advisory Agreement was last approved by the Board on August
          17, 2007.
          A discussion regarding the basis for the Board&#8217;s approval of the Investment
          Advisory Agreement is provided in the Fund&#8217;s semi-annual report to stockholders
          for the semi-annual period ended December 31.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Investment Advisory Agreement provides that the Adviser bears all expenses
          of
          its employees and overhead incurred by it in connection with its duties
          thereunder. The Fund reimburses approximately $13,000 per year for compliance
          services performed by the Chief Compliance Officer. The Adviser pays the
          salaries and expenses of such of the Fund&#8217;s officers and employees and any fees
          and expenses of such of the Fund&#8217;s directors as are interested persons (as such
          term is defined in the 1940 Act) of the Adviser. The Fund bears all of
          its own
          expenses (See &#8220;Expenses of the Fund&#8221; below).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          services of the Adviser under the Investment Advisory Agreement are not
          deemed
          to be exclusive, and nothing in the Investment Advisory Agreement prevent
          the
          Adviser or any affiliate thereof, from providing similar services to other
          investment companies and other clients (whether or not their investment
          objectives and policies are similar to those of the Fund) or from engaging
          in
          other activities. When other clients of the Adviser desire to purchase
          or sell a
          security at the same time the security is purchased for or sold by the
          Fund,
          such purchases and sales are to the extent feasible, allocated among such
          clients and the Fund in a manner believed by the Adviser to be equitable
          to the
          Fund. The allocation of securities may adversely affect the price and quality
          of
          purchases and sales of securities by the Fund. Purchase and sale orders
          for the
          Fund may be combined with those of other clients of the Adviser in the
          interest
          of the most favorable results for the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Investment Advisory Agreement was initially approved by the Board on June
          24,
          1993. The Agreement continued in effect for a period of two years from
          the
          effective date and thereafter it is required to be approved annually by
          the
          Board. The Investment Advisory Agreement continues in effect for successive
          periods of 12 months, provided that its continuance is specifically approved
          annually by (i) the vote of a majority of the Board who are not parties
          to such
          agreement or interested persons (as such term is defined in the 1940 Act)
          of the
          Adviser, cast in person at a meeting called for the purpose of voting on
          such
          approval and (ii) either (a) the vote of a majority of the outstanding
          voting
          securities of the Fund or (b) the vote of a majority of the Board. The
          Investment Advisory Agreement may be terminated by the Fund, without the
          payment
          of any penalty, upon vote of a majority of the Board or a majority of the
          outstanding voting securities of the Fund at any time upon net less than
          60
          days&#8217; prior written notice to the Adviser, or by the Adviser upon not less than
          60 days&#8217; prior written notice to the Fund. The Investment Advisory Agreement
          terminates automatically in the event of its assignment (as such term is
          defined
          in the 1940 Act) by either party or upon its termination.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage41">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Adviser is not liable for any act of omission, error of judgment, mistake
          of law
          or loss suffered by the Fund or its investors in connection with the matters
          to
          which the Investment Advisory Agreement relates, except for a loss resulting
          from willful misfeasance, bad faith or gross negligence in the performance
          of,
          or from reckless disregard of, its obligations and duties under the Investment
          Advisory Agreement, or a loss resulting from a breach of fiduciary duty
          with
          respect to receipt of compensation for services (in which case any award
          of
          damages shall be limited to the period and the amount set forth in Section
          36
          (b) (3) of the 1940 Act).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Adviser also performs and arranges for the performance of certain administrative
          and accounting functions for the Fund, including (i) providing persons
          satisfactory to the Directors of the Fund to serve as officers and, in
          that
          capacity, manage the daily operations of the Fund; (ii) processing the
          payment
          of expenses for the Fund; (iii) supervising the preparation of periodic
          reports
          to the Fund&#8217;s stockholders; (iv) preparing materials for Fund Board and
          Committee meetings; (v) supervising the pricing of the Fund&#8217;s investment
          portfolio and the publication of the NAV of the Fund&#8217;s shares, earnings reports
          and other financial data; (vi) monitoring relationships with organizations
          providing services to the Fund, including the custodian, transfer agent,
          auction
          agent and printers; (vii) supervising compliance by the Fund with record-keeping
          requirements under the 1940 Act and regulations thereunder, maintaining
          books
          and records for the Fund (other than those maintained by the Adviser, custodian
          and/or transfer agent) and preparing and filing of tax reports other than
          the
          Fund&#8217;s income tax returns; and (viii) providing executive, clerical and
          secretarial help needed to carry out these responsibilities.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-34-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Benefit
          to the Adviser</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s Adviser will benefit from the Offer because the Adviser&#8217;s fee is based on
          the average net assets of the Fund. It is not possible to state precisely
          the
          amount of additional compensation the Adviser will receive as a result
          of the
          Offer because the proceeds of the Offer will be invested in additional
          portfolio
          securities which will fluctuate in value. However, assuming all Rights
          are
          exercised and that the Fund receives the maximum proceeds of the Offer,
          the
          annual compensation to be received by the Adviser would be increased by
          approximately </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">308,561.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may, in the future and at its discretion, choose to make additional rights
          offerings from time to time for a number of shares and on terms which may
          or may
          not be similar to the Offer. Any such future rights offering will be made
          in
          accordance with the 1940 Act. Under the laws of Maryland, the state in
          which the
          Fund is organized, the Board is authorized to approve rights offerings
          without
          obtaining stockholder approval. The staff of the SEC has interpreted the
          1940
          Act as not requiring stockholder approval of a rights offering at a price
          below
          the then current NAV so long as certain conditions are met, including a
          good
          faith determination by a Board that such offering would result in a net
          benefit
          to existing stockholders.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Expenses
          of the Fund</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
          as
          indicated above, the Fund pays all of its expenses, including but not limited
          to
          the following: organizational and certain offering expenses (but not overhead
          or
          employee costs of the Adviser); advisory fees payable to the Adviser; fees
          and
          out-of-pocket travel expenses of the Fund&#8217;s directors who are not interested
          persons (as such term is defined in the 1940 Act) of any other party and
          other
          expenses incurred by the Fund in connection with directors&#8217; meetings; interest
          expense; charges and expenses of the Fund&#8217;s legal counsel and independent
          accountants; taxes and governmental fees; brokerage and other expenses
          connected
          with the execution, recording and settlement of portfolio security transactions;
          expenses of repurchasing shares; expenses of issuing any preferred shares
          or
          indebtedness; expenses connected with negotiating, effecting purchase or
          sale,
          or registering privately issued portfolio securities; membership dues to
          professional organizations; premiums allocable to fidelity bond and D&amp;O
          insurance coverage; expenses of preparing stock certificates; expenses
          of
          registering and qualifying the Fund&#8217;s shares for sale with the SEC and in
          various states and foreign jurisdictions; custodian, sub-custodian, dividend
          paying agent, transfer agency expenses; payment for portfolio pricing services
          to a pricing agent; expenses of printing and mailing share certificates,
          stockholder reports, notices, proxy statements and reports to governmental
          offices; expenses of stockholders&#8217; meetings and preparing and distributing
          proxies and reports to stockholders; any litigation expenses; expenses
          relating
          to investor and public relations; and NASDAQ Capital Market listing
          fees.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage42"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PORTFOLIO
          TRANSACTIONS AND BROKERAGE</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          portfolio transactions involving equity securities, the Adviser places
          orders on
          behalf of the Fund directly with brokers, which may include brokers affiliated
          with the Adviser, except that the purchase of shares in rights offerings
          is made
          directly from the issuer. The Adviser may manage other accounts and funds
          that
          invest in equity securities of Caribbean Basin Companies. Although investment
          decisions for the Fund are made independently from those of other accounts
          or
          funds managed by the Adviser, investments of the type the Fund may make
          may also
          be made by those other accounts and funds. When the Fund and one or more
          accounts or funds managed by the Adviser are prepared to invest in, or
          desire to
          dispose of, the same security, available investments or opportunities for
          each
          will be allocated in a manner believed by the Adviser to be equitable to
          each.
          In some cases, this procedure may affect adversely the price paid or received
          by
          the Fund or the size of the position obtained or disposed of by the
          Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          primary objective of the Adviser in placing orders for the purchase and
          sale of
          securities for the Fund&#8217;s portfolio is to obtain best execution taking into
          account such factors as price, commission, size of order, difficulty of
          execution and skill required of the broker or dealer. The capability and
          financial condition of the broker or dealer may also be criteria for the
          choice
          of that broker or dealer. Subject to obtaining the best execution, brokers,
          including affiliates of the Adviser, who provide investment research services
          to
          the Adviser, including market and statistical information and quotations
          for
          portfolio evaluation purposes, may receive orders for transaction of the
          Fund.
          The terms &#8220;investment research&#8221; and &#8220;market and statistical information and
          quotations&#8221; include advice as to the value of securities, the advisability of
          investing in, purchasing or selling securities, and the availability of
          securities and potential buyers or sellers of securities, as well as the
          furnishing of analyses and reports concerning issuers, industries, securities,
          economic factors and trends, and portfolio strategy. Neither the Fund nor
          the
          Adviser is obligated to deal with any broker or group of brokers for the
          execution of portfolio transactions, and there is no intention to place
          portfolio transactions with particular brokers or groups thereof.</font></div>
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          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-35-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Research
          provided to the Adviser in advising the Fund will be in addition to and
          not in
          lieu of the services required to be performed by the Adviser itself, and
          the
          Adviser&#8217;s fees will not be reduced as a result of the receipt of supplemental
          information. This information is regarded as only supplementary to the
          Adviser&#8217;s
          own research effort, since the information must be analyzed, weighed and
          reviewed by the Adviser&#8217;s staff. This information may be useful to the Adviser
          in providing services to clients other than the Fund, and not all such
          information will necessarily be used by the Adviser in connection with
          the Fund.
          Conversely, information provided to the Adviser by brokers and dealers
          through
          whom other clients of the Adviser effect securities transactions may prove
          useful to the Adviser in providing services to the Fund. The Board will
          review
          at least annually the commissions allocated by the Adviser on behalf of
          the Fund
          to determine if such allocations were reasonable in relation to the benefits
          inuring to the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Brokerage
          commissions paid by the Fund for the fiscal years ended June 30, 2007,
          2006 and
          2005 were: $13,518, $17,171, $12,867, respectively, of which $12,076, $15,800
          and $12,671, respectively, was paid to the Adviser, in connection with
          portfolio
          transactions. The percentage of the Fund&#8217;s aggregate brokerage commissions paid
          to the affiliated broker for the one-year period ending June 30, 2007 was
          89%.
          The percentage of the Fund&#8217;s aggregate dollar amount of transactions involving
          the payment of commissions effected through the affiliated broker for this
          period was 91%.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CODE
          OF ETHICS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          and the Adviser have adopted a joint Code of Ethics pursuant to Rule 17j-1
          under
          the 1940 Act. The code of ethics permits personnel subject to the code
          to invest
          in securities, including securities that may be purchased or held by the
          Fund,
          following certain black-out periods specified in the code, and subject
          to
          certain other conditions and restrictions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          code
          of ethics can be reviewed and copied at the SEC&#8217;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 or toll free at (800)
          732-0330
          and this code of ethics is available on the EDGAR database on the SEC&#8217;s internet
          site at: http://www.sec.gov. Copies of this code of ethics may be obtained,
          after paying a duplicating fee, by electronic request at the following
          e-mail
          address: publicinfo@sec.gov or by writing the SEC&#8217;s Public Reference Section,
          Washington, D.C. 20549-0102.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage43"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROXY
          VOTING POLICIES AND PROCEDURES</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s and the Adviser&#8217;s proxy voting policies and procedures are attached
          hereto as Appendices A and B, respectively. Information regarding how the
          Fund
          voted proxies relating to portfolio securities during the most recent 12-month
          period ended June 30 is available without charge, upon request, by calling
          800-TJH-FUND (800-854-3863); and on the SEC&#8217;s website at
          http://www.sec.gov.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
          OWNERSHIP OF CERTAIN BENEFICIAL OWNERS</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Persons
          or organizations beneficially owning 25% or more of the outstanding shares
          of
          the Fund could be presumed to &#8220;control&#8221; the Fund. As a result, those persons or
          organizations could have the ability to take action with respect to the
          Fund
          without the consent or approval of other stockholders. To the knowledge
          of the
          Fund, as of June 30, 2007, no persons were known to own, either beneficially
          or
          of record, 5% or more of the outstanding shares of the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
          OF COMMON STOCK</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          is authorized to issue up to 100,000,000 shares of capital stock, at $.001
          par
          value per share, all of which shares are classified as common stock. The
          Board
          is authorized, however, to classify and reclassify any unissued shares
          of
          capital stock by setting or changing in any one or more respects the designation
          and number of shares of any such class or series, and the nature, rates,
          amounts
          and times at which and the conditions under which dividends shall be payable
          on,
          and the voting, conversion, redemption and liquidation rights of, such
          class or
          series and any other preferences, rights, restrictions and qualifications
          applicable thereto.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-36-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s shares have no preemptive, conversion, exchange or redemption rights.
          Each share has equal voting, dividend, distribution and liquidation rights.
          The
          shares outstanding are fully paid and nonassessable. Stockholders are entitled
          to one vote per share. All voting rights for the election of directors
          are
          noncumulative, which means that the holders of more than 50% of the shares
          can
          elect 100% of the directors then nominated for election if they choose
          to do so.
          In such event, the holders of the remaining shares will not be able to
          elect any
          directors. The foregoing description and the description under &#8220;Certain
          Provisions of Articles of Incorporation and Bylaws&#8221; are subject to the
          provisions contained in the Fund&#8217;s Articles of Incorporation and
          Bylaws.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          will consider offering additional shares in the future based on, among
          other
          things, the lifting or easing of economic sanctions against Cuba. Other
          offerings of the Fund&#8217;s shares, if made, will require approval of the Board. Any
          additional offering will be subject to the requirement of the 1940 Act
          that
          shares may not be sold at a price below the then current NAV, exclusive
          of
          underwriting discounts and commissions, except in connection with an offering
          to
          existing stockholders or with the consent of the holders of a majority
          of the
          Fund&#8217;s outstanding voting securities.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Share
          Repurchases and Tender Offers</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          recognition of the possibility that the Fund&#8217;s shares might trade at a discount
          to NAV, the Board may determine that it would be in the best interest of
          stockholders of the Fund to take action to attempt to reduce or eliminate
          a
          market value discount from NAV. To that end, the Board may take action
          from time
          to time either to repurchase Fund shares in open market or private transactions
          or to make a tender offer for Fund shares at NAV. No assurance can be given
          that
          the directors will decide to undertake such repurchases or tender offers,
          or
          that any such repurchases or tender offers would reduce any market discount.
          The
          Board does not currently intend to undertake repurchase or tenders
          offers.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          anticipates that the market price of its shares generally will continue
          to vary
          from NAV. The market price of the Fund&#8217;s shares is determined by a number of
          factors, including the relative demand for and supply of such shares in
          the
          market, the Fund&#8217;s investment performance, the Fund&#8217;s distributions and investor
          perception of the Fund&#8217;s overall attractiveness as an investment as compared
          with other investment alternatives. The fact that the Fund&#8217;s shares may be the
          subject of share repurchases or tender offers at NAV from time to time
          may
          reduce the spread between market price and NAV that otherwise might exist.
          In
          the opinion of the Adviser, stockholders may be less inclined to accept
          a
          significant discount on sales of the Fund&#8217;s shares if they have a reasonable
          expectation of being able to recover NAV in conjunction with a possible
          share
          repurchase or tender offer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage44">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
          to the Fund&#8217;s investment restriction with respect to borrowing, the Fund may
          incur debt to finance repurchases and tenders. See &#8220;Investment Restrictions&#8221;. If
          the Fund incurs debt to finance such repurchases and tenders, interest
          on any
          such borrowings will reduce the Fund&#8217;s net income. In addition, although the
          Board believes that share repurchases and tenders generally would have
          a
          favorable effect on the market price of the Fund&#8217;s shares, the acquisition of
          shares by the Fund will decrease the total assets of the Fund and therefore
          would have the effect of increasing the Fund&#8217;s ratio of expenses to average net
          assets.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
          is the
          Directors&#8217; announced policy, which may be changed by the Directors, that the
          Fund cannot accept tenders or effect repurchases if (1) such transactions,
          if
          consummated, would (a) impair the Fund&#8217;s status as a regulated investment
          company under the Code (which would make the Fund a taxable entity, causing
          the
          Fund&#8217;s income to be taxed at the Fund level in addition to the taxation of
          stockholders who receive dividends from the Fund) or (b) result in a failure
          to
          comply with applicable asset coverage requirements; (2) the amount of securities
          tendered would require liquidation of such a substantial portion of the
          Fund&#8217;s
          securities that the Fund would not be able to liquidate portfolio securities
          in
          an orderly manner in light of the existing market conditions and such
          liquidation would have an adverse effect on the NAV of the Fund to the
          detriment
          of non-tendering stockholders; (3) there is any (a) in the Board&#8217;s judgment,
          material legal action or proceeding instituted or threatened challenging
          such
          transactions or otherwise materially adversely affecting the Fund, (b)
          declaration of a banking moratorium by federal or state authorities or
          any
          suspension of payment by banks in the United States, (c) limitation affecting
          the Fund or the issuers of its portfolio securities imposed by federal
          or state
          authorities on the extension of credit by lending institutions, (d) commencement
          of war, armed hostilities or other international or national calamity directly
          or indirectly involving the United States, or (e) in the Board&#8217;s judgment, other
          event or condition which would have a material adverse effect on the Fund
          or its
          holders of Common Stock if shares of Common Stock were repurchased; or
          (4) the
          Board determines that effecting any such transaction would constitute a
          breach
          of their fiduciary duty owed the Fund or its stockholders. The Directors
          may
          modify these conditions in light of experience.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
          tender offer made by the Fund for its shares will be at a price equal to
          at
          least 90% of the NAV of the shares as of the close of business on the date
          the
          offer ends. Each offer will be made and stockholders notified in accordance&#8217;
with the requirements of the Securities Exchange Act of 1934 and the 1940
          Act,
          either by publication or mailing or both. Each offering document will contain
          such information as is prescribed by such laws and the rules and regulations
          promulgated thereunder, including information stockholders should consider
          in
          deciding whether or not to tender their shares and detailed instructions
          on how
          to tender shares. When a tender offer is authorized to be made by the Board,
          a
          stockholder wishing to accept the offer will be required to tender all
          (but not
          less than all) of the shares owned by such stockholder (or attributed to
          the
          stockholder for Federal income tax purposes under Section 318 of the Code).
          The
          Fund will purchase all shares tendered by a holder of shares at any time
          during
          the period of the tender offer in accordance with the terms of the offer
          unless
          it determines to accept none of the shares tendered in the tender offer
          (based
          upon one of the conditions set forth above). Each person tendering shares
          will
          pay to the Fund a reasonable service charge currently anticipated to be
          $25.00,
          subject to change, to help defray the costs associated with affecting the
          tender
          offer. It is the position of the staff of the SEC that such service charge
          may
          not be deducted from the proceeds of the purchase. The Fund&#8217;s transfer agent
          will receive the fee as an offset to these costs. The Fund expects that
          the cost
          to the Fund of affecting a tender offer will exceed the aggregate amount
          of all
          service charges received from those who tender their shares. Such excess
          costs
          associated with the tender offer will be charged against capital. During
          the
          period of a tender offer, the Fund&#8217;s stockholders will be able to determine the
          Fund&#8217;s current NAV by use of a toll-free telephone number.</font></div>
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            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
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            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-37-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
          that have been accepted and purchased by the Fund pursuant to a tender
          offer or
          share repurchase will be held in the treasury until retired by direction
          of the
          Board. Treasury shares will be recorded and reported as an offset to
          stockholder&#8217; equity and, accordingly, will reduce the Fund&#8217;s total assets. If
          treasury shares are retired, Common Stock issued and outstanding and capital
          in
          excess of par will be reduced.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Because
          of the nature of the Fund&#8217;s investment objective and policies, if the Adviser
          anticipates that a share repurchase or tender offer might have an adverse
          effect
          on the Fund&#8217;s investment performance and anticipate any material difficulty
          disposing of portfolio securities in order to consummate such share repurchase
          or tender offer, the Board would consider deferring the share repurchase
          or
          tender offer. If the Fund must liquidate portfolio securities in order
          to effect
          a share repurchase or tender offer, the Fund&#8217;s ability to achieve its investment
          objective may be adversely affected.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          the
          Fund must liquidate portfolio securities in order to purchase shares tendered,
          the Fund may realize gains and losses. Such gains may be realized on securities
          held for less than three months. Because of the limitation of 30% on the
          portion
          of the Fund&#8217;s gross income that may be derived from the sale or disposition of
          stocks and securities held less than three months (in order to retain the
          Fund&#8217;s
          tax status as a regulated investment company under the Code), such gains
          would
          reduce the ability of the Fund to sell other securities held for less than
          three
          months that the Fund may wish to sell in the ordinary course of its portfolio
          management, which may adversely affect the Fund&#8217;s yield. The portfolio turnover
          rate of the Fund may or may not be affected by the Fund&#8217;s repurchases of shares
          pursuant to a tender offer.</font><a name="eolPage45"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          the
          event that the Fund engages in financial leveraging, the asset coverage
          requirements of the 1940 Act may restrict the Fund&#8217;s ability to engage in
          repurchases of its shares. With respect to senior securities consisting
          of debt,
          such requirements provide that no purchases of shares may be made by the
          Fund
          unless, at the time of the purchase, the senior securities consisting of
          debt
          have an asset coverage of at least 300% after deducting the amount of the
          purchase price.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Certain
          Provisions of Articles of Incorporation and Bylaws</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          presently has provisions in its Articles of Incorporation and Bylaws (together,
          the &#8220;Charter Documents&#8221;) that could have the effect of limiting (i) the ability
          of other entities or persons to acquire control of the Fund, (ii) the Fund&#8217;s
          freedom to engage in certain transactions or (iii) the ability of the Fund&#8217;s
          directors or stockholders to amend the Charter Documents or effect changes
          in
          the Fund&#8217;s management. The Charter Documents also contain provisions which would
          inhibit any conversion to an open-end investment company. The provisions
          of the
          Charter Documents may be regarded as &#8220;anti-takeover&#8221; provisions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          is divided into three classes. The term of office of the first class expired
          on
          the date of the second annual meeting of stockholders, the term of office
          of the
          second class expired on the date of the third annual meeting of stockholders
          and
          the term of office of the third class expired on the date of the fourth
          annual
          meeting of stockholders, etc. Upon the expiration of the term of office
          of each
          class as set forth above, the Directors in such class will be elected for
          a term
          of three years to succeed the Directors whose terms of office expired.
          Accordingly, only those Directors in one class may be changed in any one
          year,
          and such classification may prevent replacement of a majority of the Board
          for
          up to a two-year period (although under Maryland law procedures are available
          for the removal of Directors even if they are not then standing for re-election,
          and under SEC regulations, procedures are available for including stockholder
          proposals in the annual proxy statement). Such system of electing Directors
          is
          intended to have the effect of maintaining the continuity of management
          and,
          thus, make it more difficult for the Fund&#8217;s stockholders to change the majority
          of the Directors. A director may be removed from office only by a vote
          of at
          least 75% of the outstanding shares of the Fund entitled to vote for the
          election of Directors.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-38-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
          the
          Fund&#8217;s Articles of Incorporation, a vote of 75% (which is higher than that
          required under Maryland law or the 1940 Act) of the outstanding shares
          of Common
          Stock of the Fund is required to authorize (i) any merger or consolidation
          of
          the Fund with or into any other corporation; (ii) any sale, lease, exchange,
          mortgage, pledge, transfer or other disposition of assets of the Fund having
          an
          aggregate fair market value of $1,000,000 or more (other than in the regular
          course of its investment activities); and (iii) any amendment to the Articles
          of
          Incorporation of the Fund which converts the Fund to an open-end investment
          company. Any amendment to the Articles of Incorporation of the Fund which
          reduces the 75% vote required to authorize the enumerated actions also
          must be
          approved by vote of the holders of 75% of the outstanding shares of Common
          Stock. If any of the foregoing actions is approved by a vote of two-thirds
          of
          the directors who have served on the Board for a period of at least 12
          months,
          however, the affirmative vote of the holders of a majority of the Fund&#8217;s
          outstanding common stock will be sufficient to approve such
          actions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          provisions of the Charter Documents described above could have the effect
          of
          depriving the owners of shares of opportunities to sell their shares at
          a
          premium over prevailing market prices by discouraging a third party from
          seeking
          to obtain control of the Fund in a tender offer or similar transaction.
          The
          overall effect of these provisions is to render more difficult the
          accomplishment of a merger or the assumption of control by a principal
          stockholder. However, they provide the advantage of potentially requiring
          persons seeking control of the Fund to negotiate with its management regarding
          the price to be paid and facilitating continuity of the Fund&#8217;s management,
          objective and policies. The Board of the Fund has considered the forgoing
          provisions and concluded that they are in the best interests of the Fund
          and its
          stockholders.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage46"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIVIDENDS
          AND DISTRIBUTIONS;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIVIDEND
          REINVESTMENT PLAN</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dividends
          and Distributions</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          . The
          Fund currently intends to distribute to stockholders, at least annually
          at such
          time so as to avoid imposition of excise taxes, substantially all of its
          investment company taxable income (i.e. net investment income and any net
          short-term capital gains less expenses). Net investment income for this
          purpose
          is income other than realized net capital gain (i.e. the extent of net
          long-term
          capital gains over net short-term capital losses).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s current policy is to comply with the provisions of the Internal Revenue
          Code that are applicable to regulated investment companies and to distribute
          all
          its taxable income to its stockholders. Under these provisions, the Fund
          is not
          subject to federal income tax on its taxable income and no federal tax
          provision
          is required.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dividend
          Reinvestment Plan</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          .
          Registered stockholders of shares of Common Stock of the Fund will automatically
          be enrolled (&#8220;Participants&#8221;) in the Fund&#8217;s Dividend Reinvestment Plan (the
&#8220;Plan&#8221;). The terms and conditions of the Plan are as follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
                    Street Bank and Trust (the &#8220;Agent&#8221;) will act as agent for each
                    Participant. The Agent will open an account for each registered
                    stockholder as a Participant under the Plan in the same name
                    in which such
                    Participant&#8217;s shares of Common Stock are
                    registered.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                    OPTION. Pursuant to the Fund&#8217;s Plan, unless a holder of Common Stock
                    otherwise elects, all dividend and capital gains distributions
                    (&#8220;Distributions&#8221;) will be automatically reinvested by the Agent in
                    additional Common Stock of the Fund. Stockholders who elect not
                    to
                    participate in the Plan will receive all distributions in cash
                    paid by
                    check mailed directly to the stockholder of record (or, if the
                    shares are
                    held in street or other nominee name then to such nominee) by
                    the Agent,
                    as dividend paying agent. Stockholders and Participants may elect
                    not to
                    participate in the Plan and to receive all distributions of dividends
                    and
                    capital gains in cash by sending written instructions to the
                    Agent, as
                    dividend paying agent, at the address set forth
                    below.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MARKET
                    PREMIUM ISSUANCES. If on the payment date for a Distribution,
                    the NAV per
                    share of Common Stock is equal to or less than the market price
                    per Common
                    Stock plus estimated brokerage commissions, the Agent shall receive
                    newly
                    issued Common Stock (&#8220;Additional Common Stock&#8221;) from the Fund for each
                    Participant&#8217;s account. The number of Additional Common Stock to be
                    credited shall be determined by dividing the dollar amount of
                    the
                    Distribution by the greater of (i) the NAV per share of Common
                    Stock on
                    the payment date, or (ii) 95% of the market price per share of
                    Common
                    Stock on the payment date.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-39-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MARKET
                    DISCOUNT PURCHASES. If the NAV per share of Common Stock exceeds
                    the
                    market price plus estimated brokerage commissions on the payment
                    date for
                    a Distribution, the Agent (or a broker-dealer selected by the
                    Agent) shall
                    endeavor to apply the amount of such Distribution on each Participant&#8217;s
                    Common Stock to purchase Common Stock on the open market. In
                    the event of
                    a market discount on the payment date, the Agent will have 30
                    days after
                    the dividend payment date (the &#8220;last purchase date&#8221;) to invest the
                    dividend amount in shares acquired in open-market purchases.
                    The weighted
                    average price (including brokerage commissions) of all Common
                    Stock
                    purchased by the Agent as Agent shall be the price per Common
                    Stock
                    allocable to each Participant. If, before the Agent has completed
                    its
                    purchases, the market price plus estimated brokerage commissions
                    exceeds
                    the NAV of the Common Stock as of the payment date, the purchase
                    price
                    paid by Agent may exceed the NAV of the Common Stock, resulting
                    in the
                    acquisition of fewer Common Stock than if such Distribution had
                    been paid
                    in Common Stock issued by the Fund. 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 may
                    cease making
                    open-market purchases and may invest the uninvested portion of
                    the
                    dividend amount in newly issued Common Stock at the NAV per share
                    of
                    Common Stock at the close of business on the last purchase date.
                    Participants should note that they will not be able to instruct
                    the Agent
                    to purchase Common Stock at a specific time or at a specific
                    price.
                    Open-market purchases may be made on any securities exchange
                    where Common
                    Stock are traded, in the over-the-counter market or in negotiated
                    transactions, and may be on such terms as to price, delivery
                    and otherwise
                    as the Agent shall determine. Each Participant&#8217;s uninvested funds held by
                    the Agent will not bear interest. The Agent shall have no liability
                    in
                    connection with any inability to purchase Common Stock within
                    the time
                    provided, or with the timing of any purchases effected. The Agent
                    shall
                    have no responsibility for the value of Common Stock acquired.
                    The Agent
                    may commingle Participants&#8217; funds to be used for open-market purchases of
                    the Fund&#8217;s shares and the price per share allocable to each Participant
                    in
                    connection with such purchases shall be the average price (including
                    brokerage commissions and other related costs) of all Fund shares
                    purchased by Agent. The rules and regulations of the SEC may
                    require the
                    Agent to limit the Agent&#8217;s market purchases or temporarily cease making
                    market purchases for Participants.</font></div>
                </td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="6%">&#160;</td>
                <td align="justify" valign="top" width="81%">&#160;</td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    market price of Common Stock on a particular date shall be the
                    last sales
                    price on the securities exchange where the Common Stock are listed
                    on that
                    date (currently the NASDAQ Capital Market)(the &#8220;Exchange&#8221;), or, if there
                    is no sale on the Exchange on that date, then the average between
                    the
                    closing bid and asked quotations on the Exchange on such date
                    will be
                    used. The NAV per share of Common Stock on, a particular date
                    shall be the
                    amount calculated on that date (or if not calculated on such
                    date, the
                    amount most recently calculated) by or on behalf of the
                    Fund.</font></div>
                </td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="6%">&#160;</td>
                <td align="justify" valign="top" width="81%">&#160;</td>
              </tr>
              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><a name="eolPage47"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></a></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Whenever
                    the Agent receives or purchases shares or fractional interests
                    for a
                    Participant&#8217;s account, the Agent will send such Participant a notification
                    of the transaction as soon as practicable. The Agent will hold
                    such shares
                    and fractional interests as such Participant&#8217;s agent and may hold them in
                    the Agent&#8217;s name or the name of the Agent&#8217;s nominee. The Agent will not
                    send a Participant stock certificates for shares unless a Participants
                    so
                    requests in writing or unless a Participant&#8217;s account is terminated as
                    stated below. The Agent will vote any shares so held for a Participant
                    in
                    accordance with any proxy returned to the Fund by such Participant
                    in
                    respect of the shares of which such Participant is the record
                    holder.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
                    is presently no service charge for the Agent serving as Participants&#8217;
                    agent and maintaining Participants&#8217; accounts. The Agent may, however,
                    charge Participants for extra services performed at their request.
                    The
                    Plan may be amended in the future to impose a service charge.
                    In acting as
                    Participants&#8217; agent under the Plan, the Agent shall be liable only for
                    acts, omissions, losses, damages or expenses caused by the Agent&#8217;s willful
                    misconduct or gross negligence. In addition, the Agent shall
                    not be liable
                    for any taxes, assessments or governmental charges which may
                    be levied or
                    assessed on any basis whatsoever in connection with the administration
                    of
                    the Plan.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-40-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div>&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    Agent may hold each Participant&#8217;s Common Stock acquired pursuant to the
                    Plan together with the Common Stock of other Stockholders of
                    the Fund
                    acquired pursuant to the Plan in non-certificated form in the
                    Agent&#8217;s name
                    or that of the Agent&#8217;s nominee. Each Participant will be sent a
                    confirmation by the Agent of each acquisition made for his or
                    her account
                    as soon as practicable, but in no event later than 60 days, after
                    the date
                    thereof. Upon a Participant&#8217;s request, the Agent will deliver to the
                    Participant, without charge, a certificate or certificates for
                    the full
                    Common Stock. Although each Participant may from time to time
                    have an
                    undivided fractional interest in a Common Share of the Fund,
                    no
                    certificates for a fractional share will be issued. Similarly,
                    Participants may request to sell a portion of the Common Stock
                    held by the
                    Agent in their Plan accounts by calling the Agent, writing to
                    the Agent,
                    or completing and returning the transaction form attached to
                    each Plan
                    statement. The Agent will sell such Common Stock through a broker-dealer
                    selected by the Agent within 5 business days of receipt of the
                    request.
                    The sale price will equal the weighted average price of all Common
                    Stock
                    sold through the Plan on the day of the sale, less brokerage
                    commissions.
                    Participants should note that the Agent is unable to accept instructions
                    to sell on a specific date or at a specific price. Any share
                    dividends or
                    split shares distributed by the Fund on Common Stock held by
                    the Agent for
                    Participants will be credited to their accounts. In the event
                    that the
                    Fund makes available to its Stockholders rights to purchase additional
                    Common Stock, the Common Stock held for each Participant under
                    the Plan
                    will be added to other Common Stock held by the Participant in
                    calculating
                    the number of rights to be issued to each Participant.</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                    a Participant holds more than one Common Stock Certificate registered
                    in
                    similar but not identical names or if more than one address is
                    shown for a
                    Participant on the Fund&#8217;s records, all of such Participant&#8217;s shares of
                    Common Stock must be put into the same name and address if all
                    of them are
                    to be covered by one account. Additional shares subsequently
                    acquired by a
                    Participant otherwise than through the Plan will be covered by
                    the
                    Plan.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                    reinvestment of Distributions does not relieve Participants of
                    any
                    federal, state or local taxes which may be payable (or required
                    to be
                    withheld on Distributions.) Participants will receive tax information
                    annually for their personal records and to help them prepare
                    their federal
                    income tax return. For further information as to tax consequences
                    of
                    participation in the Plan, Participants should consult with their
                    own tax
                    advisors.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage48">&#160;</a></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
                    registered Participant may terminate his or her account under
                    the Plan by
                    notifying the Agent in writing at State Street Bank and Trust,
                    P.O. Box
                    642, Mail Code: OPS22, Boston, MA 02117, or by calling the Agent
                    at (617)
                    937-6870. Such termination will be effective with respect to
                    a particular
                    Distribution if the Participant&#8217;s notice is received by the Agent prior to
                    such Distribution Record Date. The Plan may be terminated by
                    the Agent or
                    the Fund upon notice in writing mailed to each Participant at
                    least 60
                    days prior to the effective date of the termination. Upon any
                    termination,
                    the Agent will cause a certificate or certificates to be issued
                    for the
                    full shares held for 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. If preferred, a Participant
                    may
                    request the sale of all of the Common Shares held by the Agent
                    in his or
                    her Plan account in order to terminate participation in the Plan.
                    If any
                    Participant elects in advance of such termination to have Agent
                    sell part
                    or all of his shares, Agent is authorized to deduct from the
                    proceeds 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 Agent in writing at the
                    address
                    above.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="justify" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</font></div>
                </td>
                <td align="justify" valign="top" width="81%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
                    terms and conditions may be amended by the 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 SEC or any other regulatory authority,
                    only
                    by mailing to each Participant appropriate written notice at
                    least 30 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 Agent receives notice of the termination of the Participant&#8217;s account
                    under the Plan. Any such amendment may include an appointment
                    by the Agent
                    of a successor Agent, subject to the prior written approval of
                    the
                    successor Agent by the Fund.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TAXATION</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following summary reflects the existing provisions of the Internal Revenue
          Code
          (the &#8220;Code&#8221;) and other relevant federal income tax authorities as of the date of
          this prospectus and is subject to any subsequent changes therein. The federal
          income tax consequences described below are merely statements of general
          tax
          principles. The discussion does not deal with the federal income tax
          consequences applicable to all categories of investors, some of whom may
          be
          subject to special rules.</font></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-41-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
          VIEW
          OF THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH STOCKHOLDER IS ADVISED
          TO
          CONSULT THE STOCKHOLDER&#8217;S OWN TAX ADVISER WITH RESPECT TO THE SPECIFIC TAX
          CONSEQUENCES OF BEING A STOCKHOLDER OF THE FUND, INCLUDING THE EFFECT AND
          APPLICABILITY OF FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND
          THE
          POSSIBLE EFFECTS OF CHANGES THEREIN.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Federal
          Taxation of the Fund and its Distributions</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          has elected to be treated and intends to qualify annually as a regulated
          investment company under the U.S. Internal Revenue Code of 1986, as amended
          (the
&#8220;Code&#8221;). To qualify as a regulated investment company, the Fund must, among
          other things, (A)&#160;derive in each taxable year at least 90% of its gross
          income from dividends, interest, payments with respect to securities loans,
          net
          income from certain publicly traded partnerships and gains from the sale
          or
          other disposition of stock, securities or foreign currencies, or other
          income
          derived with respect to its business of investing in stocks, securities
          or
          currencies; (B)&#160;diversify its holdings so that, at the end of each quarter
          of the taxable year, (i)&#160;at least 50% of the market value of the Fund&#8217;s
          assets is represented by cash, U.S. Government securities, securities of
          other
          regulated investment companies and investments in other securities which,
          with
          respect to any one issuer do not represent more than 5% of the value of
          the
          Fund&#8217;s total assets nor more than 10% of the outstanding voting securities of
          such issuer and (ii)&#160;not more than 25% of the value of its total assets is
          invested in (a)&#160;the securities of any one issuer (other than U.S.
          Government securities and securities of other regulated investment companies);
          (b)&#160;two or more controlled issuers in the same or similar trade or business
          or (c)&#160;certain publicly traded partnerships; and (C)&#160;distribute at
          least 90% of its investment company taxable income (which includes, among
          other
          items for this purpose, dividends, interest and net short-term capital
          gains in
          excess of net long-term capital losses) each taxable year.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage49">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          a
          regulated investment company, the Fund generally will not be subject to
          U.S.
          federal income tax on its investment company taxable income and net capital
          gains (net long-term capital gains in excess of the sum of net short-term
          capital losses and capital loss carryovers from prior years, if any) that
          it
          distributes to Stockholders. The Fund currently intends to distribute to
          its
          Stockholders, at least annually, substantially all of its investment company
          taxable income, as computed for U.S. federal income tax purposes. To the
          extent
          the Fund retains its net capital gains for investment, it will be subject
          under
          current tax rates to a federal income tax at a maximum effective rate of
          35% on
          the amount retained. See &#8220;Dividend and Distributions&#8221; above.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amounts
          not distributed on a timely basis in accordance with a calendar-year
          distribution requirement are subject to a nondeductible 4% federal excise
          tax
          payable by the Fund. To avoid the tax, the Fund must distribute, or be
          deemed to
          have distributed, during each calendar-year at least an amount equal to
          the sum
          of (1)&#160;98% of its ordinary income (not taking into account any capital
          gains or losses) for the calendar year, (2)&#160;98% of its capital gains in
          excess of its capital losses (adjusted for certain ordinary losses) for
          the
          twelve-month period ending on October&#160;31 of the calendar year, and
          (3)&#160;all ordinary income and capital gains for previous years that were not
          distributed or taxed during such years. To prevent application of the
          non-deductible excise tax, the Fund currently intends to make its distributions
          in accordance with the calendar-year distribution requirement. Compliance
          with
          the calendar year distribution requirement may limit the extent to which
          the
          Fund will be able to retain its net capital gains for investment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
          distribution will be treated as paid on December&#160;31 of a calendar year if
          it is declared by the Fund in October, November or December of that year
          to
          Stockholders of record on a date in such a month and paid by the Fund during
          January of the following calendar year. Such distributions will be taxable
          to
          Stockholders in the calendar year in which the distributions are declared,
          rather than the calendar year in which the distributions are
          received.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          in any
          taxable year the Fund fails to qualify as a regulated investment company
          under
          the Code, the Fund will be taxed in the same manner as an ordinary corporation
          and distributions to its Stockholders will not be deductible by the Fund
          in
          computing its taxable income. In addition, in the event of a failure to
          qualify,
          the Fund&#8217;s distributions, to the extent derived from the Fund&#8217;s current or
          accumulated earnings and profits, will constitute dividends (eligible for
          the
          corporate dividends-received deduction in the case of corporate stockholders
          and
          eligible for treatment as qualified dividend income in the case of individual
          stockholders) which are taxable to Stockholders as ordinary income, even
          though
          those distributions might otherwise (at least in part) have been treated
          in the
          Stockholders&#8217; hands as long-term capital gains. If the Fund fails to qualify as
          a regulated investment company in any year, it will be required to pay
          out its
          earnings and profits accumulated in that year in order to qualify again
          as a
          regulated investment company and may in certain circumstances be required
          to pay
          tax on unrealized gains.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-42-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          the
          Fund utilizes leverage through borrowings, it may be restricted by loan
          covenants with respect to the declaration and payment of dividends in certain
          circumstances. Limits on the Fund&#8217;s payment of dividends may prevent the Fund
          from distributing at least 90% of its net income and may therefore jeopardize
          the Fund&#8217;s qualification for taxation as a regulated investment company and/or
          may subject the Fund to the nondeductible 4% federal excise tax. The Fund
          will
          endeavor to avoid restrictions on its ability to make dividend
          payments.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gain
          or
          loss on the sales of securities by the Fund will generally be long-term
          capital
          gain or loss if the securities have been held by the Fund for more than
          one
          year. Gain or loss on the sale of securities held for one year or less
          will be
          short-term capital gain or&#160;loss.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s investment in so-called &#8220;section&#160;1256 contracts,&#8221; such as regulated
          futures contracts, certain foreign currency contracts, options on most
          stock
          indices and any listed non-equity options, are subject to special tax rules.
          Any
          such section&#160;1256 contracts held by the Fund at the end of its taxable year
          are required to be marked to their market value, and any unrealized gain
          or loss
          on those positions will be included in the Fund&#8217;s income as if each position had
          been sold for its fair market value at the end of the taxable year. The
          resulting gain or loss will be combined with any gain or loss realized
          by the
          Fund from positions in section&#160;1256 contracts closed during the taxable
          year. Provided such positions are held as capital assets and are not part
          of a
&#8220;hedging transaction&#8221; nor part of a &#8220;straddle,&#8221; 60% of the resulting net gain or
          loss will be treated as long-term capital gain or loss, and 40% of such
          net gain
          or loss will be treated as short-term capital gain or loss, regardless
          of the
          period of time the positions were actually held by the&#160;Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
          of the Fund&#8217;s investment practices are subject to special and complex
          U.S.&#160;federal income tax provisions that may, among other things,
          (i)&#160;disallow, suspend or otherwise limit the allowance of certain losses or
          deductions, including the dividends received deduction, (ii)&#160;convert lower
          taxed long-term capital gains and qualified dividend income into higher
          taxed
          short-term capital gains or ordinary income, (iii)&#160;convert ordinary loss or
          a deduction into capital loss (the&#160;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 time as to when a purchase or
          sale of stock or securities is deemed to occur, (vi)&#160;adversely alter the
          characterization of certain complex financial transactions and
          (vii)&#160;produce income that will not qualify as good income for purposes of
          the 90% annual gross income requirement described above. The Fund monitors
          its
          transactions and may make certain tax elections and may be required to
          borrow
          money or dispose of securities to mitigate the effect of these rules and
          prevent
          disqualification of the Fund as a regulated investment company.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage50">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Because
          the Fund may invest in foreign securities, its income from such securities
          may
          be subject to non-U.S.&#160;taxes. Tax conventions may reduce or eliminate such
          taxes. If the Fund invests more than 50% of its total assets in
          non-U.S.&#160;securities as of year-end, the Fund may elect to have its foreign
          tax deduction or credit for foreign taxes paid with respect to qualifying
          taxes
          to be taken by its shareholders instead of on its own tax return. If the
          Fund so
          elects, each shareholder would be required to include in gross income,
          even
          though not actually received, his pro rata share of the foreign taxes paid
          by
          the Fund, but would be treated as having paid his pro rata share of such
          foreign
          taxes and would therefore be allowed to either deduct such amount in computing
          taxable income or use such amount (subject to various Code limitations)
          as a
          foreign tax credit against federal income tax (but not both). For purposes
          of
          the foreign tax credit limitation rules of the Code, each shareholder would
          treat as foreign source income his pro rata share of such foreign taxes
          plus the
          portion of dividends received from the Fund representing income derived
          from
          foreign sources. Each shareholder should consult his own tax adviser regarding
          the potential application of foreign tax credits.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may invest in securities of non-U.S. corporations that could be classified
          as
&#8220;passive foreign investment companies&#8221; as defined for U.S. federal income tax
          purposes. A passive foreign investment company is, very generally, a non-U.S.
          corporation if (i)&#160;75% or more of the gross income of such corporation for
          the taxable year is passive income (ii)&#160;the average percentage of assets
          held by such corporation during the taxable year that produce passive income
          or
          that are held for the production of passive income at least 50%. For U.S.
          federal income tax purposes, the Fund&#8217;s investment in a passive foreign
          investment company may, among other things, cause the Fund to recognize
          taxable
          income without a corresponding receipt of cash, to incur an interest charge
          on
          taxable income that is deemed to have been deferred and/or to recognize
          ordinary
          income that would have otherwise been treated as capital gains. The Fund
          will
          monitor any investments in passive foreign investment companies in order
          to
          comply with the U.S. federal income tax rules applicable to regulated investment
          companies.</font></div><br>
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          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-43-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
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          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gains
          or
          losses attributable to fluctuations in exchange rates between the time
          the Fund
          accrues income or receivables or expenses or other liabilities denominated
          in a
          foreign currency and the time the Fund actually collects such income or
          receivables or pays such liabilities are generally treated as ordinary
          income or
          loss. Similarly, gains or losses on foreign currency forward contracts
          and the
          disposition of debt securities denominated in a foreign currency, to the
          extent
          attributable to fluctuations in exchange rates between the acquisition
          and
          disposition dates, are also treated as ordinary income or loss.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
          paid out of the Fund&#8217;s investment company taxable income (which includes any net
          short-term capital gains) will be taxable to a U.S. Stockholder as ordinary
          income. Distributions of net capital gains (net long-term capital gains
          in
          excess of the sum of net short-term capital losses and any capital loss
          carryovers from prior years), if any, designated by the Fund as capital
          gain
          dividends, are taxable as long-term capital gains, regardless of how long
          the
          Stockholder has held the Fund&#8217;s Shares.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ordinarily,
          dividends paid by the Fund will not qualify for the deduction for dividends
          received by corporations because the Fund&#8217;s income will not consist of dividends
          paid by U.S. corporations. A portion of the Fund&#8217;s dividends may qualify for the
          15% rate on &#8220;qualified dividend income&#8221; applicable to individual shareholders to
          the extent that the Fund&#8217;s income is derived from qualified dividends and to the
          extent that both the Fund and the individual Stockholder satisfy, among
          other
          requirements, a more than 60 day holding period requirement. There can
          be no
          assurance as to what portion of the Fund&#8217;s distributions will qualify for
          favorable treatment as qualified dividend income. These special rates that
          apply
          to ordinary income dividends paid to individuals are set to expire for
          taxable
          years beginning in 2011.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may retain for investment its net capital gain. However, if the Fund retains
          any
          net capital gain or any investment company taxable income, it will be subject
          to
          a tax of 35% of such amount. If the Fund retains any net capital gain,
          it
          expects to designate the retained amount as undistributed capital gains
          in a
          notice to its shareholders, each of whom, if subject to U.S.&#160;federal income
          tax on long-term capital gains, (i)&#160;will be required to include in income
          for U.S.&#160;federal income tax purposes its share of such undistributed
          long-term capital gain, (ii)&#160;will be entitled to credit its proportionate
          share of the tax paid by the Fund against their U.S.&#160;federal income tax
          liability, if any, and to claim refunds to the extent that the credit exceeds
          such liability and (iii)&#160;will increase its tax basis in its common shares
          for the Fund by an amount equal to 65% of the amount of undistributed capital
          gain included in such shareholder&#8217;s gross&#160;income.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage51">&#160;</a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
          company taxable income will be increased or decreased by the amount of
          foreign
          currency gains or losses realized by the Fund in connection with the disposition
          of foreign currency-denominated debt securities as well as changes in foreign
          exchange rates between the time the Fund accrues a receivable (typically,
          dividends, interest and payments for securities sold) or payable (typically,
          expenses and payments for securities purchased) and the time such receivable
          or
          payable is satisfied. The Fund cannot predict the impact of such transactions
          on
          company taxable investment income.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
&#8220;The
          Offering - Federal Income Tax Consequences Associated With the Offer&#8221; above for
          a discussion regarding certain United States Federal income tax consequences
          of
          the Offer generally applicable to citizens or residents of the United States
          and
          U.S. trusts, estates, corporations and any other person who is generally
          subject
          to U.S. Federal income tax (&#8220;U.S. Stockholders&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Sales
          of Shares</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
          the
          sale or other disposition of Shares of the Fund, a Stockholder generally
          will
          realize a taxable gain or loss in an amount equal to the difference between
          the
          proceeds of the sale or other dispositions and the Stockholder&#8217;s adjusted tax
          basis in the Shares. Such gain or loss will be a capital gain or loss if
          the
          Shares are capital assets in the Stockholder&#8217;s hands and generally will be
          long-term or short-term depending upon the Stockholder&#8217;s holding period for the
          Shares. Any loss realized on a sale or exchange will be disallowed to the
          extent
          the Shares disposed of are replaced (including replacement through the
          Dividend
          Reinvestment Plan) within a period of 61 days, beginning 30 days before
          and
          ending 30 days after the Shares are disposed of. In such a case, the basis
          of
          the Shares acquired will be adjusted to reflect the disallowed loss. Any
          loss
          realized by a Stockholder on a disposition of Fund Shares held by the
          Stockholder for six months or less will be treated as a long-term capital
          loss
          to the extent of any distributions of capital gain dividends received or
          treated
          as having received by the Stockholder with respect to such
          shares.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-44-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Backup
          Withholding</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund
          may be required to withhold for U.S. federal income taxes 28% of all taxable
          distributions payable to Stockholders who fail to provide the Fund with
          their
          certified U.S. taxpayer identification number (or certificate regarding
          foreign
          status) or to Stockholders otherwise subject to U.S. backup withholding.
          Similarly, proceeds from the sale or other disposition of Shares of the
          Fund in
          the United States may be subject to backup withholding if the Stockholder
          fails
          to provide a certified U.S. taxpayer identification number (or certificate
          regarding foreign status) and make other certifications in connection with
          the
          transaction, or if the Stockholder is otherwise subject to U.S. backup
          withholding. Corporate Stockholders and other Stockholders specified in
          the Code
          are exempt from such backup withholding. Backup withholding is not an additional
          tax. Any amounts withheld may be refunded or credited against the Stockholder&#8217;s
          U.S. federal income tax liability, provided that the required information
          is
          furnished to the Internal Revenue Service.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
          Tax Considerations</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Distributions
          from the Fund and sales or other dispositions of Shares of the Fund may
          be
          subject to additional state, local and foreign taxes depending on each
          Stockholder&#8217;s particular situation. Stockholders are advised to consult their
          own tax advisers with respect to the particular tax consequences to them
          of an
          investment in the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DETERMINATION
          OF NET ASSET VALUE</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Fund&#8217;s NAV per share will be calculated by the Adviser (i) no less frequently
          than monthly, (ii) on the last business day of each month and (iii) at
          any other
          times determined by the Board. NAV per share is calculated by dividing
          the value
          of the Fund&#8217;s net assets (the value of its assets less its liabilities) by the
          total number of shares of Common Stock outstanding.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
          unaudited NAV per share is posted daily on the Fund&#8217;s website at
          www.herzfeld.com.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          calculating the NAV per share at any time:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><a name="eolPage52">&#160;</a></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of any cash on hand or on deposit, bills and demand notes
                    and
                    accounts receivable, prepaid expenses, cash dividends and interest
                    declared or accrued and not yet received, will be its face amount,
                    unless
                    the Adviser has determined that its value is less, in which case
                    its value
                    will be deemed to be such amount as the Adviser determines to
                    be
                    reasonable;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of any security which is traded on a stock exchange (except
                    as
                    specified in (iii) below) will be determined by taking the latest
                    available sales price on the primary exchange on which the security
                    is
                    traded or, if no such price is available, by taking the last
                    quoted bid
                    price;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of any security traded in the unregulated market will be
                    determined,
                    by taking the last quoted bid
                    price;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">investments
                    (if any) in securities of the U.S. government, its agencies and
                    instrumentalities having a maturity of 60 days or less are valued
                    at
                    amortized cost;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of a forward contract is calculated by reference to the
                    price quoted
                    at the date of valuation of the contract by the customary banking
                    sources
                    of the Fund;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vi)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of commodity futures or option contracts entered into by
                    the Fund
                    are the margin deposit plus or minus the difference between the
                    value of
                    the contract on the date NAV is calculated and the value on the
                    date the
                    contract originated, value being that established on a recognized
                    commodity or options exchange, or by reference to other customary
                    sources,
                    with a gain or loss being
                    recognized;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vii)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    value of any security or property for which no price quotation
                    is
                    available as provided above is the fair value determined in such
                    manner as
                    the Board, acting in good faith, deems appropriate, although
                    the actual
                         calculation may be done by others;
                    and</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(viii)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                    liabilities of the Fund are deemed to include, without limitation,
                    all
                    bills and accounts payable, all other contractual obligations
                    for the
                    payment of money, including the amount of distributions declared
                    and
                    unpaid, all accrued and unpaid management fees, advisory fees
                    and other
                    expenses, all reserves for taxes or contingencies and all other
                    liabilities of the Fund determined in accordance with generally
                    accepted
                    accounting principles.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-45-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          valuing securities or property for which no price quotation is available,
          the
          Board considers various factors, including the fundamental analytical data
          relating to the investment, the nature and duration of any restriction
          on
          disposition of the investment, and the forces that influence the market
          in which
          such investment is purchased and sold.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
          assets or liabilities initially expressed in terms of foreign currencies
          are
          translated into dollars at a quoted exchange rate or at such other appropriate
          rate as may be determined by the Adviser.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CUSTODIAN,
          TRANSFER AGENT, DIVIDEND DISBURSING AGENT, AND REGISTRAR</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
          Street Bank and Trust Company acts as custodian for the Fund&#8217;s assets. The
          principal address of the Custodian is 200 Clarendon Street, P.O. Box 9130,
          Mail
          Code DPG-112, Boston, Massachusetts 02117. The Custodian employs sub-custodians
          in each of the jurisdictions in which the Fund invests. The custodian&#8217;s services
          include, in addition to the custody of all cash and securities owned by
          the
          Fund, the maintenance of a custody account in the custodian&#8217;s Fund department,
          the segregation of all certificated securities owned by the Fund, the
          appointment of authorized agents as sub-custodians, disbursement of funds
          from
          the custody account of the Fund, releasing and delivering securities from
          the
          custody account of the Fund, maintain records with respect to such custody
          account, delivering to the Fund a daily and monthly statement with respect
          to
          such custody account, and causing proxies to be executed. The custodian&#8217;s fee is
          paid by the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
          Street Bank and Trust Company also serves as the Fund&#8217;s transfer agent,
          dividend/distribution disbursing agent, dividend reinvestment plan agent
          and as
          registrar for the Fund&#8217;s common stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage53"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
          MATTERS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pepper
          Hamilton LLP, 3000 Two Logan Square, 18 </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          and Arch
          Streets, Philadelphia, PA 19103 serves as counsel to the Fund.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEPENDENT
          REGISTERED PUBLIC ACCOUNTING FIRM</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          independent registered accounting firm of the Fund is Rothstein, Kass &amp;
Company LLP located at 101 Montgomery Street, 22nd Floor, San Francisco,
          CA
          94104 .</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
          STATEMENTS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          financial statements of the Fund as of June 30, 2007 (which have been
          incorporated into this Prospectus and the registration statement, of which
          this
          Prospectus forms a part, by reference to the Fund&#8217;s 2007 Annual Report to
          Stockholders), and the financial highlights for each of the five years
          in the
          period ended June 30, 2007, included in this Prospectus, have been so
          incorporated and included in reliance on the reports of Rothstein, Kass
&amp;
Company, LLP, independent accountants, for the one year periods ended June
          30,
          2007 and 2006, and of the Fund's previous independent registered public
          accounting firm&#160;for the one year periods ended June 30, 2005, 2004, and
          2003, given on the authority of said firms as experts in auditing and
          accounting.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">-46-</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
            A</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
            HERZFELD CARIBBEAN BASIN FUND, INC.</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Proxy
            Voting Policy and Procedures</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Board
            of Directors of The Herzfeld Caribbean Basin Fund, Inc. (the &#8220;Fund&#8221;) hereby
            adopts the following policy and procedures with respect to voting proxies
            relating to portfolio securities held by the Fund:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Policy</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
            is the
            policy of the Board of Directors of the Fund (the &#8220;Board&#8221;) to delegate the
            responsibility for voting proxies relating to portfolio securities held
            by the
            Fund to the Fund&#8217;s investment adviser (the &#8220;Adviser&#8221;) as a part of the Adviser&#8217;s
            general management of the Fund, subject to the Board&#8217;s continuing oversight.
</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>3</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            The
            voting of proxies is an integral part of the investment management services
            that
            the Adviser provides pursuant to the advisory contract.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Adviser may, but is not required to, delegate the responsibility for
            voting
            proxies relating to portfolio securities held by the Fund to a sub-adviser
            (&#8220;Sub-Adviser&#8221;) retained to provide investment advisory services, if applicable.
            If such responsibility is delegated to a Sub-Adviser, then the Sub-Adviser
            shall
            assume the fiduciary duty and reporting responsibilities of the Adviser
            under
            these policy guidelines.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Fiduciary
            Duty</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            right
            to vote a proxy with respect to portfolio securities held by the Fund
            is an
            asset of the Fund. The Adviser, to which authority to vote on behalf
            of the Fund
            is delegated, acts as a fiduciary of the Fund and must vote proxies in
            a manner
            consistent with the best interest of the Fund and its shareholders.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Procedures</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            following are the procedures adopted by the Board for the administration
            of this
            policy:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.
&#160;
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Review
            of Adviser Proxy Voting Procedures</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            . The
            Adviser with authority to vote proxies on behalf of the Fund shall present
            to
            the Board its policies, procedures and other guidelines for voting proxies
            at
            least annually, and must notify the Board promptly of material changes
            to any of
            these documents.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.
&#160;
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Voting
            Record Reporting</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            . No
            less than annually, the Adviser shall report to the Board a record of
            each proxy
            voted with respect to portfolio securities of the Fund during the year.
            With
            respect to those proxies that the Adviser has identified as involving
            a conflict
            of interest </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>4</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            , the
            Adviser shall submit a separate report indicating the nature of the conflict
            of
            interest and how that conflict was resolved with respect to the voting
            of the
            proxy.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Revocation</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            delegation by the Board of the authority to vote proxies relating to
            portfolio
            securities of the Fund is entirely voluntary and may be revoked by the
            Board, in
            whole or in part, at any time.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>3</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;This
            policy is adopted for the purpose of the disclosure requirements
            adopted by the Securities and Exchange Commission, Release Nos. 33-8188,
            34-47304, IC-25922.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>4</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;As
            it is used in this document, the term &#8220;conflict of interest&#8221; refers to a
            situation in which the Adviser or Sub-Adviser or affiliated persons of
            the
            Adviser or Sub-Adviser have a financial interest in a matter presented
            by a
            proxy other than the obligation it incurs as investment adviser to the
            Fund
            which compromises the Adviser&#8217;s or Sub-Adviser&#8217;s independence of judgment and
            action with respect to the voting of the proxy.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">A-1</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Annual
            Filing</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Fund
            shall file an annual report of each proxy voted with respect to its portfolio
            securities during the twelve-month period ended June 30 on Form N-PX
            not later
            than August 31 of each year.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Disclosures</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Fund
            shall include in its annual report to stockholders:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
            description of this policy and of the policies and procedures used by
            the
            Adviser to determine how to vote proxies relating to portfolio securities
            </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>5</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            ;
            and</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
            statement disclosing that information regarding how the Fund voted proxies
            relating to portfolio securities during the most recent 12-month period
            ended
            June 30 is available without charge, upon request, by calling the Fund&#8217;s
            toll-free telephone number and on the SEC website. </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>6</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Fund
            shall also include in its annual and semi-annual reports to
            stockholders:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
            statement disclosing that a description of the policies and procedures
            used by
            or on behalf of the Fund to determine how to vote proxies relating to
            portfolio
            securities of the Funds is available without charge, upon request, by
            calling
            the Fund&#8217;s toll-free telephone number and on the SEC website. </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>7</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
            &#160;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
            statement disclosing that information regarding how the Fund voted proxies
            relating to portfolio securities during the most recent 12-month period
            ended
            June 30 is available without charge, upon request, by calling the Fund&#8217;s
            toll-free telephone number and on the SEC website. </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>8</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
            &#160;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Review
            of Policy</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
            least
            annually, the Board shall review this Policy to determine its sufficiency
            and
            shall make and approve any changes that it deems necessary from time
            to
            time.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>5</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;This
            disclosure shall be included in the annual report next filed by the
            Fund, on Form N-CSR on or after July 1, 2003.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>6</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Id</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            .</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>7</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;This
            disclosure shall be included in the report next filed by the Fund on
            or after July 1, 2003.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>8</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Id.</em></font></div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">A-2</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
            </div>
          </div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>APPENDIX
        B</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THOMAS
        J. HERZFELD ADVISORS, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROXY
        VOTING</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>POLICIES
        AND PROCEDURES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>I.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>POLICY</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thomas
        J.
        Herzfeld Advisors, Inc. (the &#8220;Adviser&#8221;) acts as discretionary investment adviser
        for various clients, including The Herzfeld Caribbean Basin Fund, Inc., an
        investment company registered under the Investment Company Act of 1940, as
        amended, and clients governed by the Employee Retirement Income Security
        Act of
        1974 (&#8220;ERISA&#8221;). Selected clients, including the Caribbean Basin Fund, Inc. have
        elected to have the Adviser vote proxies or act on the other shareholder
        actions
        on their behalf, while other clients vote proxies themselves.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
        voting proxies or acting on corporate actions for clients, the Adviser&#8217;s utmost
        concern is that all decisions be made in the best interest of its clients
        (for
        ERISA accounts, plan beneficiaries and participants, in accordance with the
        letter and spirit of ERISA). The Adviser will act in a manner deemed prudent
        and
        diligent and which is intended to enhance the economic value of the assets
        of
        its clients&#8217; accounts.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>II.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PURPOSE</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        purpose of these Policies and Procedures is to memorialize the procedures
        and
        policies adopted by the Adviser to enable it to comply with its responsibilities
        and the requirements of Rule 206(4)-6 under the Investment Advisers Act of
        1940,
        as amended (&#8220;Advisers Act&#8221;). These Policies and Procedures also reflect the
        fiduciary standards and responsibilities set forth by the Department of Labor
        for ERISA accounts.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>III.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROCEDURES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cecilia
        Gondor, Executive Vice President of the Adviser, is ultimately responsible
        for
        ensuring that all proxies received by the Adviser are voted in a timely manner
        and voted consistently across all portfolios. Although many proxy proposals
        can
        be voted in accordance with the Adviser&#8217;s established guidelines (see Section V.
        below) (the &#8220;Guidelines&#8221;), the Adviser recognizes that some proposals require
        special consideration, which may dictate that the Adviser makes an exception
        to
        the Guidelines.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cecilia
        Gondor is also responsible for ensuring that all corporate actions received
        by
        the Adviser are addressed in a timely manner and consistent action is taken
        across all portfolios.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Conflicts
        of Interest</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        . Where
        a proxy proposal raises a material conflict of interest between the Adviser&#8217;s
        interests and that of one or more its clients, the Adviser shall resolve
        such
        conflict in the manner described below.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Vote
        in Accordance with the Guidelines</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        . To the
        extent that the Adviser has little or no discretion to deviate from the
        Guidelines with respect to the proposal in question, the Adviser shall vote
        in
        accordance with such pre-determined voting policy.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Obtain
        Consent of Clients</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        . To the
        extent that the Adviser has discretion to deviate from the Guidelines with
        respect to the proposal in question, the Adviser shall disclose the conflict
        to
        the relevant clients and obtain their consent to the proposed vote prior
        to
        voting the securities. The disclosure to the clients will include sufficient
        detail regarding the matter to be voted on and the nature of our conflict
        that
        the clients would be able to make an informed decision regarding the vote.
        When
        a client does not respond to such a conflict disclosure request or denies
        the
        request, the Adviser will abstain from voting the securities held by that
        client&#8217;s account.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">B-1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="eolPage57"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Limitations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        . In
        certain circumstances, in accordance with a client&#8217;s investment advisory
        contract (or other written directive) or where the Adviser has determined
        that
        it is in the client&#8217;s best interest, the Adviser will not vote proxies received.
        The following are some circumstances where the Adviser will limit its role
        in
        voting proxies received on client securities:</font></a></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Client
        Maintains Proxy Voting Authority</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        : Where
        a client has not specifically delegated the authority to vote proxies to
        the
        Adviser or that it has delegated the right to vote proxies to a third party,
        the
        Adviser will not vote the securities and will direct the relevant custodian
        to
        send the proxy material directly to the client. If any proxy material is
        received by the Adviser, it will promptly be forwarded to the
        client.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Terminated
        Account</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        : Once a
        client account has been terminated with the Adviser in accordance with its
        investment advisory agreement, the Adviser will not vote any proxies received
        after the termination. However, the client may specify in writing that proxies
        should be directed to the client for action.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Limited
        Value</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        : If the
        Adviser concludes that the client&#8217;s economic interest or the value of the
        portfolio holding is indeterminable or insignificant, the Adviser will abstain
        from voting a client&#8217;s proxies. The Adviser does not vote proxies received for
        securities which are no longer held by the client&#8217;s account. In addition, the
        Adviser generally does not vote securities where the economic value of the
        securities in the client&#8217;s account is less than $500.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Securities
        Lending Programs</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        : When
        securities are out on loan, they are transferred into the borrower&#8217;s name and
        are voted by the borrower, in its discretion. However, where the Adviser
        determines that a proxy vote (or shareholder action) is materially important
        to
        the client&#8217;s account, the Adviser may recall the security.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.
&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Unjustifiable
        Costs</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        : In
        certain circumstances, after doing a cost-benefit analysis, the Adviser may
        abstain from voting where the cost of voting a client&#8217;s proxy would exceed any
        anticipated benefits of the proxy proposal.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>IV.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECORD
        KEEPING</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        accordance with Rule 204-2 under the Advisers Act, the Adviser will maintain
        for
        the time periods set forth in the Rule (i) these proxy voting procedures
        and
        policies, and amendments thereto; (ii) all proxy statements received regarding
        client securities (provided however, that the Adviser may rely on the proxy
        statement filed on EDGAR as its records) </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>9</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        ; (iii)
        a record of votes cast on behalf of clients; (iv) records of client requests
        for
        proxy voting information; (v) any documents prepared by the adviser that
        were
        material to making a decision how to vote or that memorialized the basis
        for the
        decision; and (vi) records relating to requests made to clients regarding
        conflicts of interest in voting the proxy.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Adviser will describe in its Part II of Form ADV (or other brochure fulfilling
        the requirement of Rule 204-3) its proxy voting policies and procedures and
        advising clients how they may obtain information on how the Adviser voted
        their
        securities. Clients may obtain information on how their securities were voted
        or
        a copy of our Policies and Procedures by written request addressed to the
        Adviser.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>9</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        Because the Adviser primarily invests its clients&#8217; assets in securities of
        foreign issuers, the Adviser generally has not been receiving proxy statements
        from such issuers because the laws of the countries in which these issuers
        are
        domiciled respecting delivery of proxy statements to shareholders are different
        than those of the U.S.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">&#160;</div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">B-2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">&#160;</div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>V.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>GUIDELINES</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
        proxy issue will be considered individually. The following guidelines are
        a
        partial list to be used in voting proposals contained in the proxy statements,
        but will not be used as rigid rules.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
                  &#160; Issues regarding the issuer&#8217;s Board entrenchment and anti-takeover
                  measures such as the following:</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b.
                  &#160; Proposals to limit the ability of shareholders to call special
                  meetings;</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c.
                  &#160; Proposals to require super majority votes;</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">d.
                  &#160; Proposals requesting excessive increases in authorized common or
                  preferred shares where management provides no explanation for the
                  use or
                  need for these additional shares;</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">e.
                  &#160; Proposals regarding &#8220;poison pill&#8221; provisions; and</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">f.
                  &#160; Permitting &#8220;green mail&#8221;. &#160;</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oppose</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
                  &#160; Providing cumulative voting rights.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oppose</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.
                  &#160; &#8220;Social issues,&#8221; unless specific client guidelines supersede, e.g.,
                  restrictions regarding South Africa.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oppose</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.
                  &#160; Election of directors recommended by management, except if there
                  is
                  a proxy fight.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.
                  &#160; Election of auditors recommended by management, unless seeking
                  to
                  replace if there exists a dispute over policies.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.
                  &#160; Date and place of annual meeting.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.
                  &#160; Limitation on charitable contributions or fees paid to
                  lawyers.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.
                  &#160; Ratification of directors&#8217; actions on routine matters since
                  previous annual meeting.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.
                  &#160; Confidential voting</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Confidential
                  voting is most often proposed by shareholders as a means of eliminating
                  undue management pressure on shareholders regarding their vote
                  on proxy
                  issues.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  Adviser will generally approve these proposals as shareholders
                  can later
                  divulge their votes to management on a selective basis if a legitimate
                  reason arises.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.
                  &#160; Limiting directors&#8217; liability</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.
                  &#160; Eliminate preemptive right</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preemptive
                  rights give current shareholders the opportunity to maintain their
                  current
                  percentage ownership through any subsequent equity offerings. These
                  provisions are no longer common in the U.S., and can restrict management&#8217;s
                  ability to raise new capital.</font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  Adviser approves the elimination of preemptive rights, but will
                  oppose the
                  elimination of limited preemptive rights, e.g., on proposed issues
                  representing more than an acceptable level of total
                  dilution.</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.
                  &#160; Employee Stock Purchase Plan</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><a name="eolPage59"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.
                  &#160; Establish 401(k) Plan</font></a></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.
                  &#160; Rotate annual meeting location/date</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.
                  &#160; Establish a staggered Board</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td valign="top" width="18%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approve</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="76%">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.8pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.
                  &#160; Eliminate director mandatory retirement policy</font></div>
              </td>
              <td width="2%">&#160;</td>
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                  &#160; Option and stock grants to management and directors</font></div>
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                  &#160; Allowing indemnification of directors and/or officers after
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