Canadian Warrants

Additional information on the warrant offering may be found in the fund's short-form prospectus dated Aug. 18, 2009, which is available at SEDAR. Capitalized terms used but not otherwise defined are as defined in the prospectus.

The warrants will be evidenced by certificates and will be issued in registered form to those unitholders whose units are held in registered form. A warrant certificate evidencing the total number of warrants to which each registered unitholder is entitled will be delivered to each such unitholder together with a copy of the prospectus. Unitholders who hold their units through a participant of CDS Clearing and Depository Services Inc. will not receive warrant certificates evidencing their ownership of warrants, in which case, on the record date, a warrant certificate will be issued in registered form to CDS or its nominee. The fund expects that each beneficial unitholder will receive a confirmation of the number of warrants issued to it from its CDS participant in accordance with the practices and procedures of that CDS participant. CDS will be responsible for establishing and maintaining book-entry accounts for its participants' holding warrants.

A holder of warrants may subscribe for the resulting whole number of units or any lesser whole number of units by instructing the CDS participant holding the subscriber's warrants to exercise all or a specified number of such warrants and forwarding the warrant exercise price for each unit subscribed for in accordance with the terms of the warrant offering to the CDS participant which holds the subscriber's warrants. The warrant exercise price is payable in Canadian funds by certified cheque, bank draft or money order drawn to the order of a CDS participant, by direct debit from the subscriber's brokerage account or, by electronic funds transfer or other similar payment mechanism. All payments must be forwarded to the appropriate office of the CDS participant. The entire warrant exercise price for units subscribed for must be paid at the time of subscription and must be received by the warrant agent prior to the date of the exercise of the warrants.

Each holder of warrants that subscribes for units to which such holder is entitled pursuant to the basic warrant subscription privilege may, at any time prior to the warrant expiry time, subscribe for additional units pursuant to an additional warrant subscription privilege, if applicable, at a price equal to the warrant exercise price for each additional unit, subject to availability. Holders of warrants will not be required to fully exercise all of their warrants under the basic warrant subscription privilege in order to be eligible for the additional warrant subscription privilege. The number of additional units available for all additional subscriptions pursuant to the additional warrant subscription privilege will be the difference, if any, between the total number of units issuable upon exercise of warrants and the total number of units subscribed and paid for as of the warrant expiry time. To apply for additional units under the additional warrant subscription privilege, a beneficial holder of warrants must forward its request to a CDS participant or the warrant agent prior to the warrant expiry time. Payment for additional units, in the same manner as for units purchased pursuant to the basic warrant subscription price, must accompany the request when it is delivered to the CDS participant or warrant agent, as the case may be. Any excess funds will be returned by mail or credited to a subscriber's account with its CDS participant, without interest or deduction. Payment in full of the warrant exercise price must be received by the warrant agent prior to the warrant expiry time, failing which the subscriber's entitlement to such units will terminate. Accordingly, the subscriber must deliver payment and instructions sufficiently in advance of the warrant expiry time to allow the CDS participant to properly exercise warrants on such subscriber's behalf and apply for additional units under the additional warrant subscription privilege.

This offering is made in each of the provinces and territories of Canada only and not in the United States of America or any territory or possession thereof or other jurisdictions outside of Canada. This offering is not, and under no circumstances is to be construed as, an offering of any units for sale in the United States of America or any territory or possession thereof or an offering to or for the account or benefit of any U.S. person or a solicitation therein of an offer to buy any securities. Accordingly, subscriptions will not be accepted from any unitholder or from any transferee of warrants who is or appears to be, or who the fund has reason to believe is, a resident of the United States of America or any territory or possession thereof or of any jurisdiction outside of Canada. The warrant agent will hold the warrants of ineligible unitholders until Feb. 19, 2010, in order to give ineligible unitholders an opportunity to prove to the satisfaction of the warrant agent that they are residents of a province or territory of Canada or that the issue of units pursuant to the exercise of warrants will not be in violation of the laws of the applicable jurisdiction. Following such date, the warrant agent will endeavour to effect sales of such warrants on the open market and any proceeds received by the warrant agent with respect to the sale of such warrants, net of brokerage fees and costs incurred and, if applicable, of Canadian tax required to be withheld, will be delivered by mailing cheques (in Canadian funds and without payment of any interest) as soon as practicable to such ineligible unitholders whose warrants were sold, at their addresses recorded on the books of the warrant agent. Amounts of less than $1 will not be forwarded.

It is anticipated that the prospectus and warrant certificates will be mailed to unitholders on or about Sept. 4, 2009.

The warrants will be governed by the terms of a warrant agency agreement dated Aug. 18, 2009, between the fund, Middlefield Fund Management Ltd., as manager of the fund and MFL Management Ltd., as warrant agent. The warrant agency agreement provides for appropriate adjustments to the warrants in the event of certain stock dividends, subdivisions, consolidations and other forms of capital reorganization. A fee of 10 cents per warrant to will be payable by the fund to the dealer whose client has properly exercised the warrant.