Frequently Asked Questions

1. Who is qualified to invest in the Fund?
The Fund is open only to accredited investors. To qualify as an accredited investor one must satisfy any one of the requirements of the applicable securities legislation “Form Schedule A ”, or make an investment of $150,000.

2. When can I invest in the Fund?
The Fund is a closed fund meaning that one can invest only when the “Romspen Mortgage Fund Trustees” declare a new offering or a private placement. An “opening of the Fund” will be announced on the Romspen Investment Corporation website: www.romspen.com and/or by a mailed investor letter.

3. Can I hold units in my RRSP or RRIF?
Yes.

4. Will the fund pay a fixed interest rate?
No, but the Fund must distribute all of its income to unitholders annually. It is presently the intention of the trustees to do so by estimating the annual income and making regular monthly distributions of approximately 1/12th of such estimated annual income with periodic adjustments to correct for the actual results of the Fund.

5. Does the Fund have a target for its rate of return?
Neither Romspen, nor the trustees, intend to change their underwriting or other methods of assessing potential investments for the Fund. The trustees' objective is to achieve the same returns for investors as in the past. As detailed in a historical PricewaterhouseCoopers report, the performance of Romspen's mortgage portfolio over the last 10 years has been highly predictable year-to-year and has averaged about 10%.

6. Will the interest rate fluctuate as new mortgages are added to or deleted from the Fund?
The Fund will earn the average rate of interest of all mortgages it holds, less expenses. As the average changes, so will the Fund's rate of return. In the past performance of Romspen's overall mortgage portfolio, these fluctuations have been relatively small.

7. How will interest be paid?
Income distributions will be paid monthly.

8. How will the units be priced? Will the unit price fluctuate?
Initially, the units are priced at $10 each, so for example, $100,000 of mortgages are exchanged for 10,000 units of the Fund. In the future, the trustees will determine the fair market value per unit on a monthly basis by dividing the net assets of the Fund by the total number of units outstanding. In any given month, this fair market value will fluctuate depending on the amount of interest accrued less expenses incurred and distributions to unitholders.

9. What is the minimum number of units that an investor may purchase?
Subject to compliance with applicable securities legislation, the minimum subscription is 1,000 units or $10,000.

10. Can I withdraw money from the Fund?
Subject to the limitations described in the Offering Memorandum, units may be redeemed on a monthly basis for their fair market value.

11. Who will manage the assets of the Fund?
Romspen Investment Corporation has a contract to source investments and manage all of the Fund's assets.

12. What costs are charged to the Fund?
The Fund will pay Romspen Investment Corporation a management fee equal to 1% of assets, as well as legal and audit expenses.

13. How will investing in the Fund affect my income taxes?
Distributions will be taxed the same as interest income.

14. What is the purpose of the limited partnership in the Fund's structure?
Our lawyers suggested this structure for tax reasons and to lower the risk of potential liability to investors.

15. How will I know what the Fund is investing in and how it is performing?
The trustees intend to report to investors on a quarterly basis and this report will summarize the activities of the Fund. There will also be an annual report which will include audited financial statements.

16. Who will answer investor questions on an ongoing basis?
Arthur Resnick, Sheldon Esbin and the rest of the investor relations department at Romspen Investment Corporation.

17. How does the new tax on income trusts announced by the government affect the Fund?
On March 27, 2007, The Minister of Finance (Canada) released revised draft legislation (the "Proposals") relating to the federal income taxation of publicly traded income trusts and certain other publicly traded flow-through entities.

The Fund is not subject to the SIFT tax regime as its units are not listed on a stock exchange or other public market.

These frequently asked questions and answers are provided for explanatory purposes only. They are not intended to be a complete description of the Fund. For a complete description of the Fund, Please refer to the Offering Memorandum .