Zazove Associates, LLC Proxy Voting Policies and Procedures Adopted July 1, 2003 Amended April 13, 2005 Investment Advisers Act of 1940 Rule 206(4)-6 imposes a number of requirements on investment advisors that have voting authority with respect to securities held in their clients' accounts. The Rule requires an advisor with proxy voting authority to (i) adopt and implement written policies and procedures that are reasonably designed to ensure that the advisor votes client securities in a manner that is consistent with the best interests of its clients and does not put the advisor's own interests above those of its clients, (ii) disclose to its clients how they may obtain information about how their securities were voted and (iii) describe to its clients the advisor's proxy voting policies and procedures. The following policies and procedures are designed to comply with the requirements of Rule 206(4)-6 including the requirement to describe how the advisor addresses material conflicts of interest between its interests and those of its clients with respect to proxy voting. The Securities and Exchange Commission states that an investment advisor's the duty of care requires an advisor with voting authority to monitor corporate actions and vote client proxies. To this end, the portfolio management area of the firm is responsible for monitoring corporate actions and ensuring that all proxies are voted in a timely manner. The firm's Senior Portfolio Manager (Gene T. Pretti) will be responsible for determining how proxies are to be voted. Proxies are to be voted in the best interests of the firm's clients. Following is a summary of positions that will be adopted by the firm in voting proxies, unless exceptional circumstances exist: Routine Election of Directors For Issuance of Authorized Common Stock For Stock Repurchase Plans For Stock Splits For Director Indemnification For Require Shareholder Approval to Issue Preferred Stock For Require Shareholder Approval of Golden Parachutes For Shareholders' Rights to Call Special Meeting For Shareholders' Rights to Act by Written Consent For Routine approval of the selection of independent accountants For Supermajority Vote Requirement Against Stagger the Board Against Cumulative Voting Against Payment of Greenmail Against Blank Check Preferred Stock Against Dual Classes of Stock Against Supermajority Provisions Against Classified Boards Against Fair Price Requirements Against Require Majority of Independent Directors Against Limited Terms for Directors Against Require Director Stock Ownership Against Authorize Issuance of Additional Common Stock Case-by-Case Adopt/Amend Stock Option Plans Case-by-Case Adopt/Amend Employee Stock Purchase Plans Case-by-Case Approve Merger/Acquisition Case-by-Case Spin-Offs Case-by-Case Adopt Poison Pill Case-by-Case Golden Parachutes Case-by-Case Limitation of Executive/Director Compensation Case-by-Case Social Issues Case-by-Case Failure to Vote The firm may refrain from voting a proxy if it is determined to be in the client's best interest, such as when the cost of voting the proxy exceeds the expected benefit to the client (e.g., casting a vote on a foreign security may involve additional costs). Proxy Voting Process With regard to accounts over which Zazove Associates, LLC has proxy voting authority,the portfolio management area will be responsible for monitoring corporate actions to ensure that proxy materials are received on a timely basis. Proxy materials will be promptly forwarded to the firm's Compliance Officer (Steven M. Kleiman) who is responsible for: maintaining the proxy policies and procedures;obtaining the appropriate guidance from the firm's Senior Portfolio Manager (Gene T. Pretti) on how to vote; determining whether a potential conflict of interest exists (see below); ensuring that proxies are voted on a timely basis; maintaining documents that were material to the voting decision; maintaining proxy voting records; maintaining records of all communications to and from clients that had requested information on how proxies were voted and notifying clients how they can obtain the firm's voting records and the firm's Proxy Voting Policies and Procedures. Resolving Conflicts of Interest Due to the nature of the firm's advisory business, it is unlikely that conflicts of interest will arise in voting proxies of public companies. The Compliance Officer (Steven M. Kleiman) will be responsible for making a good faith effort to identify any conflicts of interest in regard to proxy voting. Examples of potential conflicts of interest include: * Advisor manages a pension plan or other assets for a company that is soliciting proxies; * Advisor has a material business relationship with a proponent of a proxy proposal; * Advisor or any of its principals or employees have a personal relationship with participants in a proxy contest. In instances where a conflict does arise, it will be confirmed in discussions between the firm's Compliance Officer and its Senior Portfolio Manager. In such case, the proxy will either (i) be voted strictly according to the guidelines set forth above, or (ii) be voted only after receiving consent from the client. If client consent is solicited, the Compliance Officer will provide the client with sufficient information regarding the proxy vote and the advisor's potential conflict so that the client can make an informed decision whether or not to consent.