2014-0536001R3 Supplemental to Ruling 2013-051455

Principal Issues: Request for a confirmation that amendments subsequent to the issuance of advance income tax ruling 2013-051455 would not affect the validity of the rulings given.

Position: The subsequent amendments do not affect the validity of the previous rulings given.

Reasons: The supplemental amendments to the original request involve the same issue. The revised facts indicate that now the "Make-Whole Amount" can be paid in cash or common shares instead of just exclusively in common shares. This amendment does not affect the validity of the rulings given since any amount paid as a "Make-Whole Amount" whether paid in cash or in shares would be treated as interest.

Author: XXXXXXXXXX
Section: 20(1)(c), 212(1)(b), 212(3), 215(1), 214(7), 214(8)(c)

XXXXXXXXXX
                                                                                                                                                 2014-053600

XXXXXXXXXX, 2014

Dear XXXXXXXXXX:

Re: Supplemental Advance Income Tax Ruling
       XXXXXXXXXX

We are writing in response to your email request of XXXXXXXXXX, wherein you requested amendments to advance income tax ruling 2013-051455 (the “Ruling”), issued on XXXXXXXXXX, 2014.

As a result of your request, the following amendments are made to the Ruling:

FACTS:

1.    Paragraph 9 is amended to remove the word “exclusively” and to add the words “or in cash” at the end of the sentence. The paragraph is reworded as follows:

The Make-Whole Amount is payable in common shares in the share capital of Aco or in cash.

2.    Paragraph 11 is amended to add the following phrase “subject to any restriction imposed by the XXXXXXXXXX” and is reworded as follows:

      Aco will pay any accrued and unpaid interest that it elected to pay in common shares by issuing and delivering to the holder, subject to any restriction imposed by the XXXXXXXXXX, that number of common shares obtained by dividing the amount of any accrued and unpaid interest that it elected to pay in common shares by the current market price on the date falling XXXXXXXXXX days prior to the date of conversion. 

3.    Paragraph 12 is amended by adding the following sentence to the end of the paragraph:

To the extent Aco is prevented by limits, conditions or rules of the XXXXXXXXXX from issuing the number of common shares of its capital, as determined pursuant to the above described formula, Aco shall pay the Make-Whole Amount in cash, or a combination of common shares and cash.

4.    Paragraph 29 is amended to add the following phrase “except that in respect of the Private Indenture, the Make-Whole Amount may be paid in common shares or in cash” into the first sentence. The paragraph is reworded as follows:

The terms of the Private Indenture shall be substantially similar to the Public Indenture (including the inclusion of a Make-Whole Amount on conversion of the Private Debentures for common shares, except that in respect of the Private Indenture, the Make-Whole Amount may be paid in common shares or in cash) and the warrant indenture shall be substantially similar to the one governing the public warrants, except, in each case, with appropriate adjustments to reflect the applicable conversion price and the term of the Private Debentures and exercise price and expiry of the warrants.

Considering the above, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling, as amended by this letter, the rulings given in the Ruling will continue to be binding on the Canada Revenue Agency.

Yours truly,

XXXXXXXXXX
For Director
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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