Canadian High Income Equity Fund : Annual Information Form – 2022

ANNUAL INFORMATION FORM

Units

March 23, 2023

FORWARD-LOOKING STATEMENTS

Certain statements contained in this annual information form constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Manager believes the expectations reflected in forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this annual information form should not be unduly relied upon. These statements speak only as of the date of this annual information form.

In particular, this annual information form may contain forward-looking statements pertaining to distributable cash and Distributions. The actual results could differ materially from those anticipated in these forward-looking statements as a result of, among other things, the risk factors set out in this annual information form. The Manager does not undertake any obligation to publicly update or revise any forward- looking statements.

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TABLE OF CONTENTS
GLOSSARY OF TERMS	4
1.0	NAME, FORMATION AND HISTORY	8
1.1	Declaration of Trust	8
1.1.1	Investment Objectives	8
1.1.2	Investment Strategy	8
1.1.3	General	8
2.0	INVESTMENT RESTRICTIONS	8
3.0	DESCRIPTION OF SECURITIES	9
3.1	The Units	9
3.2	Distributions	10
3.3	Amendment of the Declaration of Trust	11
3.3.1	Amending of the Declaration of Trust by the Trustee	11
3.3.2	Amending of the Declaration of Trust by Unitholders	11
3.4	Termination of the Fund	12
4.0	VALUATION OF PORTFOLIO SECURITIES	13
5.0	CALCULATION OF NET ASSET VALUE	14
6.0	PURCHASES OF FUND UNITS	14
6.1	General	14
6.2	Issuer Bid	14
7.0	REDEMPTION OF SECURITIES	15
7.1	Annual	15
7.2	General	15
7.3	Suspension of Redemptions	15
8.0	RESPONSIBILITY FOR OPERATIONS	16
8.1	Manager	16
8.1.1	Management Fee	16
8.1.2	Termination of the Management Agreement	16
8.1.3	Directors and Officers of the Manager	17
8.1.4	Independent Review Committee	18
8.2	Investment Manager	19
8.2.1	Principal Investment Advisors	19
8.2.2	Investment Manager Fee	19
8.2.3	Brokerage Arrangements	20
8.2.4	Termination of the Investment Management Agreement	20
8.3	Trustee	21
8.4	Custodian	21
8.4.1	Custodian Fees	21
8.4.2	Termination of the Custodian Agreement	21
8.5	Valuation Services	21
8.6	Auditor, Registrar, Transfer Agent and Distribution Agent	21
8.7	Securities Lending Agents	21
9.0	CONFLICTS OF INTEREST	22
9.1	Principal Holders of Securities	22
9.2	Securities Held by Members of the Independent Review Committee	22
10.0	FUND GOVERNANCE	23
10.1	Composition of the Independent Review Committee	23
10.2	Proxy Voting Policy	24
10.3	Use of Derivatives	24
10.4	Securities Lending	24
10.5	Short-Term Trades	26
11.0	INCOME TAX CONSIDERATIONS	26
11.1	Taxation of the Fund	27
11.2	Taxation of Unitholders	29
12.0	REMUNERATION OF DIRECTORS, OFFICERS, IRC AND TRUSTEES	31
13.0	MATERIAL CONTRACTS	31
14.0	OTHER MATERIAL INFORMATION	31
14.1	Risk Factors	31

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GLOSSARY OF TERMS

In this Annual Information Form, the following terms shall have the meanings set forth below, unless otherwise indicated.

"Additional Distribution" means, with respect to any taxation year of the Fund, the amount, if any, by which the aggregate of the Net Income and Net Realized Capital Gains, less any Net Realized Capital Gains the tax on which would be refundable to the Fund in the current year under Part I of the Income Tax Act for such taxation year exceeds the aggregate of the Distributions paid or payable by the Fund to Unitholders for such taxation year.

"Annual Redemption Amount" means a redemption price per Unit surrendered for redemption on the Annual Redemption Date that is equal to 100% of the Net Asset Value per Unit less any costs and expenses associated with the redemption.

"Annual Redemption Date" means the second last Business Day of September of each year.

"Annual Redemption Payment Date" means the tenth Business Day of the month immediately following an Annual Redemption Date.

"Brompton" means the Brompton Group of companies.

"Brompton Funds" means Brompton Corp., and its wholly owned subsidiary Brompton Funds Limited, which acts as manager of the Fund. Brompton Corp. is in the business of managing investment funds.

"Business Day" means any day except Saturday, Sunday, a statutory holiday in Toronto, Ontario or any other day on which the TSX is not open for trading.

"CDS" means CDS Clearing and Depository Services Inc.

"CDS Participant" means a participant in CDS.

"Closing Market Price" means the closing price of the Units on the TSX (or such other stock exchange on which the Units are listed, if the Units are no longer listed on the TSX) on a calculation date or, if there was no trade on the relevant calculation date, the average of the last bid and the last asking prices of the Units on the TSX (or such other stock exchange on which the Units are listed, if the Units are no longer listed on the TSX).

"CRA" means the Canada Revenue Agency.

"Custodian" means CIBC Mellon Trust Company in its capacity as custodian under the Custodian Agreement as appointed from time to time by the Manager.

"Custodian Agreement" means the custodian agreement entered into by the Manager, on behalf of the Fund, the Custodian and certain of its affiliates dated as of February 18, 2010, as it may be amended from time to time.

"Declaration of Trust" means the declaration of trust governing the Fund as it may be amended, restated or modified from time to time, as described in section 1.1 of this Annual Information Form.

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"Distributions" means the distributions of the Fund declared in accordance with the Declaration of Trust.

"Extraordinary Resolution" means a resolution passed by the affirmative vote of at least 662/3% of the votes cast, either in person or by proxy, at a meeting of Unitholders called for the purpose of approving such resolution.

"Fund" means Canadian High Income Equity Fund.

"Fund Investment" means an investment acquired and managed by the Investment Manager on behalf of the Fund and "Fund Investments" means more than one Fund Investment taken collectively.

"Fund Property" means the property and assets of the Fund.

"Income Tax Act" means the Income Tax Act (Canada) and the regulations thereunder, as the same may be amended from time to time.

"Investment Management Agreement" means the investment management agreement dated as of February 18, 2010 among the Fund, the Manager and the Investment Manager, as it may be amended from time to time.

"Investment Manager" means Bloom Investment Counsel, Inc. or such other investment manager as may be appointed from time to time by the Manager on behalf of the Fund to provide investment management services to the Fund in respect of the Fund Property, including the Portfolio.

"Investment Objectives" means the investment objectives of the Fund as set forth in the Declaration of Trust, as described in section 1.1.1 of this Annual Information Form.

"Investment Restrictions" means the investment restrictions of the Fund as set forth in the Declaration of Trust including, without limitation, those described in section 2.0 of this Annual Information Form.

"Investment Strategy" means the investment strategy of the Fund as set forth in the Declaration of Trust, as described in section 1.1.2 of this Annual Information Form.

"IRC" means the independent review committee established by the Manager for the Fund pursuant to NI 81-107.

"Management Agreement" means the management agreement dated as of January 27, 2010 between the Manager and the Fund, as it may be amended from time to time.

"Management Fee" means the management fee payable to the Manager pursuant to the Management Agreement and the Declaration of Trust, as described in section 8.1.1 of this Annual Information Form.

"Manager" means the manager and administrator of the Fund, namely Brompton Funds Limited, or if applicable its successor.

"Net Asset Value" means, at any time, the net asset value of the Fund, as determined in accordance with the Declaration of Trust, as described in section 5.0 of this Annual Information Form.

"Net Asset Value per Unit" means the Net Asset Value divided by the total number of Units outstanding on any Valuation Date.

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