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GrowthWorks Canadian Fund Disappointed That RMP Not Approved

Fund to process redemption requests when sufficient liquidity is available

TORONTO, ONTARIO -- (Marketwire) -- 12/03/12 -- As previously announced, on November 10, 2011, GrowthWorks Canadian Fund Ltd. ("Canadian Fund") obtained an initial regulatory order in connection with the Board of Directors' decision to close Class A Share redemptions. The initial order was extended to July 31, 2012 and then to November 30, 2012 (the "Order"). Canadian Fund had applied to extend the effect of the previously granted Order to July 31, 2013. Securities regulators elected not to grant the extension, as they were unable to conclude that granting the extension on the terms requested by Canadian Fund would not be prejudicial to the public interest. Securities regulators proposed a six-week extension of the Order with a condition that no management fees or other compensation be paid or accrue to the manager of Canadian Fund. The proposed extension was not acceptable to Canadian Fund as complying with the terms of the extension would have forced Canadian Fund to breach the management contract with its manager and caused a default under financing arrangements put in place to support Canadian Fund's liquidity. Securities regulators also advised Canadian Fund that they are not willing to issue an order that would allow Canadian Fund, when cash is available, to periodically process redemptions under the Redemption Management Plan or "RMP" adopted by the Board of Directors and approved by shareholders of Canadian Fund.

Canadian Fund closed redemptions of Class A Shares just over one year ago on November 10, 2011. While other retail venture capital funds have applied for and been granted orders allowing for the closure of redemptions for more than two years, securities regulators have advised Canadian Fund that they consider Canadian Fund's situation to be novel because of the financing arrangements put in place to support Canadian Fund's liquidity.

Ian Ross, Chairman of the Board responded, "While we are disappointed by the decision of the securities regulators to not extend the order, the Board of Directors will continue to pursue options aimed at serving the best interests of shareholders."

As a result of this decision by securities regulators, Canadian Fund must, under applicable securities laws, allow shareholders to request redemptions of their Class A Shares. However, under applicable corporate laws, Canadian Fund can process Class A Share redemption requests only if after doing so Canadian Fund would remain in a position to pay its liabilities as they become due. At present, the Board of Directors cannot conclude that Canadian Fund would meet this statutory test if Canadian Fund were to process anticipated redemption requests as received. As a result, Canadian Fund will not process redemption requests that are submitted until such time as the Board of Directors of Canadian Fund determines that Canadian Fund would meet this test. There can be no assurance as to when Canadian Fund will have sufficient cash available to process Class A Share redemptions.

Accordingly, Canadian Fund cannot process Class A Share redemption requests at this time and therefore redemption requests cannot be submitted electronically through FundServ. Redemption requests must be submitted manually using a Redemption Request Form provided by Canadian Fund's Manager. The Redemption Request Form will be available during the week of Monday, December 3, 2012 on GrowthWorks' website at www.growthworks.ca. Canadian Fund will issue a further announcement outlining the procedures for submitting redemption requests and the terms and conditions on which redemption requests will be processed. Further announcements will also be made at such time as the Board of Directors determines that Canadian Fund meets the statutory test for processing Class A Share redemptions. These announcements will be made in advance of any redemption dates that may be designated by the Board of Directors.

Canadian Fund's assets consist primarily of venture investments in private Canadian corporations in the technology, biotechnology and advanced manufacturing sectors. Canadian Fund's ability to generate cash is entirely dependent on levels of divestment activity in the venture portfolio, activity that is highly sensitive to market conditions. Canadian Fund continues to actively pursue divestments of portfolio assets which are determined to be in the best interests of Canadian Fund, as well as make selected follow-on investments. There can be no assurance as to the timing or value of these divestments or as to Canadian Fund's ability to discharge its payment obligations under the debt financing arrangements put in place to support Canadian Fund's liquidity. Details of the financing arrangements are set out in Canadian Fund's press releases of May 28, 2010 ("GrowthWorks Canadian Fund enters into a Participation Agreement with Roseway Capital") and May 23, 2012 ("GrowthWorks Canadian Fund Provides Update on Financing Arrangements"). A total of $33.5 million was advanced to Canadian Fund under the financing arrangements and approximately $11.7 million (including interest) is due to be paid on account of the financing arrangements on December 20, 2012, and a further $27.2 million (including interest and participation amounts) is due to be paid by May 28, 2013. Canadian Fund's payment obligations under these financing arrangements are secured by charges over Canadian Fund's portfolio assets and/or proceeds from the sale of those assets. If Canadian Fund were to default on its obligations under the financing arrangements, the security over Canadian Fund's assets may be enforced, which could result in forced divestments at values well below carrying values and a significant decline in Class A Share values.

The Board of Directors of Canadian Fund continues to review strategic options aimed at realizing the value potential that is believed to exist in Canadian Fund's venture investment portfolio and at providing liquidity for shareholders of Canadian Fund. These options are considered in light of a range of factors, including Canadian Fund's cash position, actual and projected levels of divestment activity, payment obligations under financing arrangements, other operating commitments and the prospects for generating divestment values in excess of carrying values.

Forward-Looking Statements: This press release contains forward-looking statements about Canadian Fund Class A Share redemptions, Canadian Fund's ability to make follow-on investments, to complete divestments from its venture investment portfolio and to make payments under financing arrangements. These statements are based on beliefs and assumptions of management of Canadian Fund at the time the statements are made, including beliefs and assumptions about Canadian Fund's ability to generate sufficient cash to satisfy its payment obligations under financing arrangements and to process Class A Share redemptions, future market conditions and future levels of divestment activity and Class A Share redemption requests. These beliefs and assumptions are subject to known and unknown risks and uncertainties, including risks and uncertainties associated with volatility of market conditions and, in turn, the climate for divestment activity, performance of portfolio companies, valuations of portfolio companies, the risk that Canadian Fund may not be able to generate sufficient net proceeds from the divestment of portfolio assets to satisfy its obligations under its outstanding secured indebtedness, financing needs of portfolio companies and the availability of capital to satisfy such financing needs and other risks and uncertainties disclosed in Canadian Fund's most recently filed prospectus and other regulatory filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, neither Canadian Fund nor its manager assumes any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.

GrowthWorks Canadian Fund Ltd.
David Levi
President and Chief Executive Officer
(416) 934-7700
Suite 2200, Exchange Tower
130 King Street West, Toronto, Ontario M5X 1E3

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