Holders of Preferred Shares are entitled to receive quarterly fixed cumulative preferential tax efficient distributions equal to $0.23625 per Preferred Share. The Company?s Capital Yield Share distribution policy is to pay a quarterly distribution on the Capital Yield Shares equal to the dividends received on the royalty trust portfolio minus the distribution payable on the Preferred Shares and all administrative and operating expenses provided the net asset value per Unit at the time of declaration, after giving effect to the distribution, would be greater than the issue price of the Preferred Shares. For historical distribution amounts, please see distribution information.

The following provides a summary of the retraction rights available to shareholders. Please refer to the prospectus for complete details.

Unlike most mutual funds the Capital Shares and Preferred Shares are listed allowing holders to exit by selling their Shares on the market. In addition, they are also retractable at any time. Because of the manner in which the retraction prices are calculated, investors are almost always better off selling their Shares on the market rather than retracting them. It should be noted that all the retractions listed below constitute a taxable disposition of the Company’s Shares at the time of the retraction whether the retraction is received in the form of cash or portfolio shares.

Capital Shares and Preferred Shares may be surrendered for retraction at any time for payment on the sixteenth day of each month or the preceding business day. A Capital Shareholder who surrenders a Capital Share is entitled to receive 95% of the unit value less the cost of purchasing a Preferred Share, less $1.00. Preferred Shareholders who elect to retract are entitled to a payment equal to 95% of the unit value less the cost of purchasing a Capital Share in the market, less $1.00.

A holder who concurrently retracts one Capital Share and one Preferred Share will be entitled to receive 95% of the unit value, less $1.00.

The special annual retraction date occurs on September 16th of each year. On that date Capital Shareholders who surrender a Capital Share are entitled to receive the amount, if any, by which the unit value exceeds $21.00. If the holder tenders one Capital Share and one Preferred Share, then the holder is entitled to receive an amount equal to the unit value.

The Company may redeem Preferred Shares on any annual retraction date at a price per share equal to $21.00 to the extent that unmatched Capital Shares have been tendered for retraction under a special annual retraction.

All return of capital distributions paid to a holder of ROC Preferred Shares or Capital Yield Shares will not be included in computing the income of the holder but will reduce the holder’s adjusted cost base of the shares. To the extent that the adjusted cost base of a share would otherwise be less than zero, the negative amount will be deemed to be a capital gain realized by the holder from a disposition of the shares and the holder’s adjusted cost base will be increased by the amount of such deemed capital gain.

The amount of any capital gains dividend received by a holder of Preferred Shares or Capital Shares will be considered to be a capital gain of the holder in the taxation year in which the capital gains dividend is received.

The Company qualifies as a “mutual fund corporation” and a “financial intermediary corporation” as defined in the Income Tax Act (Canada). As a result thereof and after deduction of expenses in computing its income, the Company does not anticipate that it will be subject to any material non-refundable income tax liability.

The following are the names, office(s) held and principal occupations of the directors and officers of the Company: