Rockwater Capital Corporation announced today that it has entered into an agreement to acquire the private client business of Yorkton Securities Inc. for approximately $23 million.

Upon closing, Rockwater’s investment dealer, First Associates
Investments Inc., will have more than $3.4 billion in assets under administration, over 500 employees including 228 investment professionals located in 11 centres from coast to coast.

One of Canada’s largest independent, full service investment dealers,
Yorkton focuses on small and medium sized Canadian companies. After the transaction is completed, Yorkton will be fully focused on continuing its leadership in institutional equities and investment banking.

“This is a substantial step forward in our continued effort to build
Canada’s leading independent investment management alternative,” said Robert Schultz, chairman of Rockwater and First Associates in a news release. “The purchase of Yorkton’s private client business is the fourth acquisition we have announced since changing the firm’s strategic direction in May of 2002,” added Schultz. “In very short order, we have emerged as the leading independent firm in Canada,” said Bill Packham, President and CEO of Rockwater and First Associates. “The transaction increases our client asset base to $3.4 billion, provides First Associates with a national footprint and greatly enhances our ability to serve our individual wealth management clients. In addition, clients of our growing Capital Markets business will benefit from the firm’s enhanced distribution platform and relationship network.”

Bill Fulton, President and COO of Yorkton said, “We are all
extremely pleased to be joining forces with Bob Schultz and Bill Packham and their excellent executive team. When the proven capabilities of both Rockwater and First Associates are combined with Yorkton’s resources, the result will be a very powerful firm which will excel at serving clients across the country.”

As Yorkton’s Private Client business begins operating under the First
Associates banner, clients’ current advisory relationships will remain intact and over time.

Mr. Fulton will become Deputy Chairman and COO of First Associates as well as COO of Rockwater. Bill Sacre will join Colman O’Brien as co-head of First Associates’ Wealth Management division. It is not expected that there will be any significant disruption to employees of either company.

Rockwater has the option to satisfy up to $11 million of the purchase
price through the issuance of Rockwater common shares but intends to complete the acquisition for cash.