The adjusted cost base of the Bell Aliant units received in exchange for your Bell Nordiq units will be equal to the adjusted cost base of your Bell Nordiq units immediately prior to the exchange (which will take into account the reduction resulting from the special $4.00 per unit distribution paid by Bell Nordiq Income Fund on January 29, 2007). 

For example, if you held 1,000 Bell Nordiq units which had a total adjusted cost base of $15,000 immediately before the special distribution, the adjusted cost base for the 411 Bell Aliant units received would be $11,000 or $26.76 per unit calculated as follows:

The adjusted cost of such Bell Aliant units acquired by you on the exchange will be averaged with the adjusted cost base of all other Bell Aliant units held as capital property by you immediately before the exchange.

Policy (effective until January 30, 2007)
Bell Nordiq Income Fund's (the "Fund") distribution policy was to make monthly cash distributions of approximately $0.095 per Fund unit to unitholders of record on the last business day of each month. The monthly cash distributions increased from $0.0892 to $0.095 ($1.14 annually) commencing with the distribution to unitholders of record at the close of business on February 28, 2006. The distributions were paid within 15 days following the end of each month. Holders of units who were non-residents of Canada were required to pay all withholding taxes payable in respect of any distributions of income by the Fund, whether those distributions were in the form of cash or additional units.

Distribution Mix

Tax Treatment
The general information provided here is intended to assist Bell Nordiq Income Fund Unitholders with the tax status of cash distributions for income tax purposes. Unitholders should consult their tax advisor for advice pertaining to their particular circumstances.

A Bell Nordiq Income Fund Unitholder who holds units outside a tax deferred plan (e.g. RRSP, RRIF or RESP) will generally be required to include in computing income for tax purposes for a particular taxation year the portion of the distributions received that is "Taxable Income". A T3 income tax slip will be issued to all Unitholders in the first quarter of each year confirming the taxable portion of the distributions. The portion of the distributions classified as Return of Capital for income tax purposes are tax-deferred and will generally not be included in the computation of taxable income of a Unitholder until the units are sold.