Distribution Policy

Shareholders are not expected to be paid distributions by the Company as all net distributions paid on the Portfolio will be reinvested.

Retraction Rights

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 Class A Shares are listed allowing holders to exit by selling their Shares. 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.

Regular Retraction

Class A Shares may be surrendered for retraction at any time for payment on the 15th day of each month or the preceding business day. Class A Shareholders are entitled to receive an amount, if any, equal to the lesser of: (a) 95% of the weighted average trading price of the Shares on the TSX during the 15 trading days preceding the applicable Monthly Retraction Date; and (b) the closing market price of the Shares on the principal market on which the Shares are quoted for trading on the applicable Monthly Retraction Date.

Special Annual Retraction

The special annual retraction date occurs on March 15th of each year. Shares may be surrendered for retraction on or before the close of business on the 15th business day prior to the Valuation Date which occurs on March 1 of each year. On that date Class A Shareholders are entitled to receive a cash retraction price per Share equal to the net asset value per Class A Share, determined as of the Valuation Date.

Redemption

The Company is scheduled to wind up on March 15, 2012, and at that time, the Class A Shares will be redeemed by the Company. The redemption values of these shares will be calculated in the same manner as in the Special Annual Retractions.

Taxation

Dividends received by individual Class A Shareholders will be subject to the normal gross-up and dividend tax credit rules applicable to dividends received on shares of a taxable Canadian corporation.

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

Amounts received as a return of capital are not taxable but must be used to reduce the adjusted cost base of an investor’s Shares.

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.

Directors and Officers

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

Name	Office(s) Held	Principal Occupation
Brian D. McChesney	President, Chief Executive Officer and Director	Managing Director, Scotia Capital Inc.
Stephen D. Pearce	Chief Financial Officer, Secretary and Director	Director, Scotia Capital Inc.
Douglas Derry	Director	Corporate Director
Louise Morwick	Director	President, Silver Creek Management Inc.
Thomas Pippy	Director	Professor, Conestoga College