2016-0626681R3 Cross-border Butterfly

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether the Canadian “spin-off butterfly” transactions, in the context of a cross-border butterfly, as described below, meet legislative and administrative requirements.

Position: Transactions meet requirements.

Reasons: Consistent with law and administrative requirements.

Author: XXXXXXXXXX
Section: 55(2), 55(3)(b), 55(3.1), 55(3.2)(h), 86.1, 212.1,15(2.11)

XXXXXXXXXX 2016-062668

XXXXXXXXXX, 2016

Dear XXXXXXXXXX:

Re:   XXXXXXXXXX
   XXXXXXXXXX
   Advance Income Tax Ruling Request

This is in reply to your letter of XXXXXXXXXX, in which you requested an advance income tax ruling on behalf of the above-noted taxpayers. We also acknowledge the additional information provided to us in subsequent letters and emails, and during our various telephone conversations.

To the best of your knowledge, and that of the taxpayer involved, none of the issues involved in this ruling request is

(i) in an earlier return of the taxpayers or persons related to the taxpayers;

(ii) being considered by a tax services office or taxation centre in connection with a previously filed tax return of the taxpayers or persons related to the taxpayers;

(iii) under objection by the taxpayers or persons related to the taxpayers;

(iv) before the courts or, if a judgment has been issued, the time limit for appeal to a higher court has expired; or

(v) the subject of a ruling previously issued by the Income Tax Rulings Directorate.

I. ENTITIES INVOLVED

1. Throughout this letter, the entities below will be referred to as follows:

“Canco 1” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Canco 2” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Canco 3” means XXXXXXXXXX, a corporation governed by Act 4 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“CanGP 1” means XXXXXXXXXX, a general partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanGP 2” means XXXXXXXXXX, a general partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanGP 3” means XXXXXXXXXX, a general partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanGP 4” means XXXXXXXXXX, a general partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 1” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 2” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 3” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 4” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 5” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 6” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 7” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 8” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 9” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 10” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 11” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is not a Canadian Partnership for the purposes of the Act;

“CanLP 12” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 13” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 14” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 15” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 16” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 17” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 18” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 19” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 20” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 21” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 22” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 23” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanLP 24” means XXXXXXXXXX, a limited partnership governed by the laws of Province 3 that is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“CanParent ULC” means XXXXXXXXXX, an unlimited liability corporation governed by the laws of Province 1 that was at all times prior to the Amalgamation and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 1” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 2” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 3” means XXXXXXXXXX, a corporation governed by Act 1 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 4” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 5” means XXXXXXXXXX, a corporation governed by Act 4 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 6” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“Cansub 7” means XXXXXXXXXX, a corporation governed by Act 5 that is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“DC ULC” means XXXXXXXXXX, the unlimited liability corporation formed under Act 2 on the Amalgamation. DC ULC is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation. DC ULC’s business number is XXXXXXXXXX. DC ULC will file its annual corporate income tax return at the XXXXXXXXXX Taxation Centre and will be serviced by the XXXXXXXXXX Tax Services Office;

“Forco 1” means XXXXXXXXXX, a corporation governed by the laws of State 1;

“Forco 2” means XXXXXXXXXX, a LLC governed by the laws of State 1;

“Forco 3” means XXXXXXXXXX, a LLC governed by the laws of State 1;

“Forco 4” means a LLC to be incorporated by Forco 2 under the laws of State 1 as more particularly described in Paragraph 230(b);

“Forco 19” means XXXXXXXXXX, a corporation governed by the laws of State 2;

“Forco 20” means XXXXXXXXXX, a corporation governed by the laws of State 1;

“Forco 21” means XXXXXXXXXX, a corporation governed by the laws of Country 2;

“Forco 22” means XXXXXXXXXX, a corporation governed by the laws of State 1;

“Foreign Pubco” means XXXXXXXXXX, a corporation governed by the laws of State 1;

“Foreign Pubco Spinco” means XXXXXXXXXX, a corporation incorporated under, and governed by, the laws of State 1, as more particularly described in Paragraph 150;

“Foreign Spinco” means XXXXXXXXXX, a LLC incorporated under, and governed by, the laws of State 1 as more particularly described in Paragraph 158.6;

“Forsub 1” means XXXXXXXXXX, a corporation governed by the laws of Country 4;

“Forsub 2” means XXXXXXXXXX, a corporation governed by the laws of Country 4;

“Forsub 7” means XXXXXXXXXX, a corporation governed by the laws of Country 7;

“Forsub 8” means XXXXXXXXXX, a corporation governed by the laws of Country 8;

“Forsub 9” means XXXXXXXXXX, a corporation governed by the laws of Country 2;

“Forsub 10” means XXXXXXXXXX, a corporation governed by the laws of Country 2;

“New CanLP 1” means the limited partnership to be formed under, and governed by, the laws of Province 2 as more particularly described in Paragraph 159.22. New CanLP 1 is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“New CanLP 2” means the limited partnership to be formed under, and governed by, the laws of Province 2 as more particularly described in Paragraph 159.22. New CanLP 2 is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“New CanLP 3” means the limited partnership to be formed under, and governed by, the laws of Province 2 as more particularly described in Paragraph 159.22. New CanLP 3 is and will be, at any relevant time and for all purposes of the Act, a Canadian Partnership;

“Newco ULC” means XXXXXXXXXX, the unlimited liability corporation incorporated under, and governed by, the laws of Province 2 as more particularly described in Paragraph 159. Newco ULC was, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“TC ULC” means XXXXXXXXXX, the unlimited liability corporation formed under the laws of Province 2 as more particularly described in Paragraph 159.20(b). TC ULC is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation;

“TC ULC GP” means XXXXXXXXXX, the corporation formed under the laws of Province 2 as more particularly described in Paragraph 159.20(a). TC ULC GP is and will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation; and

“TC ULC Sub” means the corporation to be formed under the laws of Province 2 as more particularly described in Paragraph 192. TC ULC Sub will be, at any relevant time and for all purposes of the Act, a Taxable Canadian Corporation and a Private Corporation.

II. DEFINITIONS

Unless otherwise expressly stated, every reference herein to the “Act” or to a part, section or subsection, paragraph or subparagraph and clause or subclause is a reference to the relevant provision of the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.) c.1, as amended from time to time and consolidated to the date of this letter and the Income Tax Regulations thereunder are referred to as the “Regulations.”

Unless otherwise noted, all references herein to a currency are a reference to Canadian dollars.

2. In this letter, the following terms have the meanings specified and, where the circumstances so require, the singular should be read as plural and vice versa:

“Act 1” means the XXXXXXXXXX;

“Act 2” means the XXXXXXXXXX;

“Act 3” means the XXXXXXXXXX;

“Act 4” means the XXXXXXXXXX;

“Act 5” means the XXXXXXXXXX;

“ACB” means adjusted cost base, as defined in section 54;

“Additional Cash Transfer” has the meaning described in Paragraph 209;

“Agreed Amount” means the amount agreed on by the transferor and transferee in respect of the transfer of an Eligible Property in a joint election filed pursuant to subsection 85(1);

“Amalgamation” means the amalgamation of CanParent ULC and Newco ULC to form DC ULC, as more particularly described in Paragraph 159.7;

“Arm’s Length” has the meaning assigned by subsection 251(1);

“XXXXXXXXXX Agreement” has the meaning set out in Paragraph 144;

“XXXXXXXXXX Transactions” means the transactions described in Paragraphs 159.23 to 159.27;

“Business Segment 1” means the business segment described in Paragraph 5(a);

“Business Segment 2” means the business segment described in Paragraph 5(b);

“Business Segment 3” means the business segment described in Paragraph 5(c);

“Business Segment 4” means the business segment described in Paragraph 5(d);

“Business Segment 5” means the business segment described in Paragraph 5(e);

“Butterfly Percentage” means the proportion, expressed as a percentage, that the aggregate net FMV of the business property owned by the DC ULC Group that relates to the Canadian Spin Business is of the aggregate net FMV of all the business property of the DC ULC Group, determined (a) immediately before the DC ULC Transfer, and (b) using the principles set out in Paragraphs 204 and 206;

“Canadian Partnership” has the meaning assigned by subsection 102(1);

“Canadian Spin Business” has the meaning set out in Paragraph 16;

“Cansub 2 PUC Reduction” has the meaning set out in Paragraph 188(b);

“Cansub 2 PUC Reduction 2” has the meaning set out in Paragraph 188(c);

“CanParent ULC Common Shares” means the common shares which CanParent ULC was authorized to issue;

“CanParent ULC Interest Note” has the meaning set out in Paragraph 159.3;

“Capital Property” has the meaning assigned by section 54;

“Capital Reorganization” has the meaning set out in Paragraph 195;

“Cansub 2 Loans” has the meaning set out in Paragraph 24;

“Cansub 2 Retained Loans” has the meaning set out in Paragraph 24.1;

“Cansub 2 Spin Loans” has the meaning set out in Paragraph 24.1;

“Cansub 2 Spin Loan Purchase Note” has the meaning set out in Paragraph 188(a);

“Cansub 6 Loans” has the meaning set out in Paragraph 35;

“CRA” means the Canada Revenue Agency;

XXXXXXXXXX;

“Code” means the Internal Revenue Code of 1986 (United States of America);

“Controlled Foreign Affiliate” has the meaning assigned by subsection 95(1);

“Cost Amount” has the meaning assigned by subsection 248(1);

“Country 1” means XXXXXXXXXX;

“Country 2” means XXXXXXXXXX;

“Country 4” means XXXXXXXXXX;

“Country 7” means XXXXXXXXXX;

“Country 8” means XXXXXXXXXX;

“Country 34” means XXXXXXXXXX;

“Court” means the XXXXXXXXXX;

“DC ULC Common Shares” means the common shares which DC ULC is authorized to issue, as described in Paragraph 159.7(a);

“DC ULC Dividend” means the dividend, deemed by subsection 84(3), to have been paid by DC ULC and received by TC ULC, arising on the redemption of the DC ULC Special Shares, as described in Ruling D;

“DC ULC Group” means, collectively, DC ULC and all corporations and partnerships over which DC ULC exercises Significant Influence consisting of Cansub 1, Cansub 2, Cansub 3, Cansub 4, Cansub 5, Cansub 6, Cansub 7, CanLP 1, CanLP 2, CanLP 3, CanLP 4, CanLP 5, CanLP 6, CanLP 7, CanLP 8, CanLP 9, CanLP 10, CanLP 11, CanLP 12, CanLP 13, CanLP 14, CanLP 15, CanLP 16, CanLP 17, CanLP 18, CanLP 19, CanLP 20, CanLP 21, CanLP 22, CanLP 23, CanLP 24, CanGP 1, CanGP 2, CanGP 3, CanGP 4, Forsub 1, Forsub 2, Forsub 7, Forsub 8, Forsub 9 and Forsub 10;

“DC ULC New Common Shares” means the common shares which DC ULC will be authorized to issue, as described in Paragraph 195(a);

“DC ULC PUC Reduction” has the meaning set out in Paragraph 159.27;

“DC ULC Redemption” has the meaning set out in Paragraph 213(b);

“DC ULC Redemption Amount” has the meaning set out in Paragraph 195(b)(i);

“DC ULC Redemption Note” means the demand promissory note issued by DC ULC in favour of TC ULC, as described in Paragraph 213(b), having a Principal Amount equal to the aggregate DC ULC Redemption Amount;

“DC ULC Shares” means, collectively, the DC ULC New Common Shares and the DC ULC Special Shares, as described in Paragraph 195;

“DC ULC Special Shares” means the special shares which DC ULC will be authorized to issue, as described in Paragraph 195(b);

“DC ULC Transfer” has the meaning set out in Paragraph 208;

“Designated Stock Exchange” has the meaning assigned by subsection 248(1);

“Distributed Cansub 2 Spin Loans” has the meaning set out in Paragraph 208;

“Distribution Property” has the meaning described in Paragraph 208;

“Eligible Distribution” has the meaning assigned by subsection 86.1(2);

“Eligible Dividend” has the meaning assigned by subsection 89(1);

“Eligible Property” has the meaning assigned by subsection 85(1.1);

“FMV” means fair market value, being the highest price available in an open and unrestricted market between informed prudent parties acting at Arm's Length and without compulsion to act, expressed in terms of cash;

“Financial Intermediary Corporation” has the meaning assigned by subsection 191(1);

XXXXXXXXXX;

“Forco 2 Loan” has the meaning assigned by Paragraph 18;

“Forco 2 – Forco 3 FSA” has the meaning assigned by Paragraph 19;

“Forco 3 – CanParent ULC FSA” has the meaning assigned by Paragraph 20;

“Forco 3 Exchange 1” has the meaning assigned by Paragraph 196;

“Forco 4 Interests” has the meaning assigned by Paragraph 230(b);

“Foreign Affiliate” has the meaning assigned by subsection 95(1);

“Foreign Keep Business” has the meaning assigned by Paragraph 150(b);

“Foreign Pubco Group” means Foreign Pubco and the direct and indirect subsidiaries that are directly or indirectly controlled by Foreign Pubco;

“Foreign Pubco Spinco Group” means Foreign Pubco Spinco and the direct and indirect subsidiaries that are directly or indirectly controlled by Foreign Pubco Spinco;

“Foreign Spin Business” has the meaning assigned by Paragraph 150(a);

“Foreign Spinco Interests” has the meaning assigned by Paragraph 158.6(a);

“Forgiven Amount” has the meaning assigned by subsections 80(1) and 80.01(1);

“LLC” means a limited liability company;

“Pertinent Loan or Indebtedness” has the meaning assigned by subsection 15(2.11);

“Post-Butterfly Transactions” means the transactions described in Paragraphs 215 to 230, inclusive;

“Principal Amount” has the meaning assigned by subsection 248(1);

“Private Corporation” has the meaning assigned by subsection 89(1);

“Proposed Transactions” means the transactions described in Paragraphs 188 to 230;

“Province 1” means the Province of XXXXXXXXXX;

“Province 2” means the Province of XXXXXXXXXX;

“Province 3” means the Province of XXXXXXXXXX;

“PUC” means paid-up capital which has the meaning assigned by subsection 89(1);

“RDTOH” means refundable dividend tax on hand, within the meaning of subsection 129(3);

“Securities Exchange” means the XXXXXXXXXX;

“Series of Transactions or Events” has the meaning assigned by subsection 248(10);

“Short-Term Preferred Share” has the meaning assigned by subsection 248(1);

“Significant Influence” has the meaning assigned by section 3051.04 of the Accounting Standards for Private Enterprises or by IAS 28 of the International Financial Reporting Standards;

“Specified Financial Institution” has the meaning assigned by subsection 248(1);

“Specified Investment Business” has the meaning assigned by subsection 125(7);

“Spin-Out” means the distribution of the common shares of Foreign Pubco Spinco to the shareholders of Foreign Pubco as described in Paragraphs 150 and 230(i);

“State 1” means XXXXXXXXXX;

“State 2” means XXXXXXXXXX;

“Stated Capital” in respect of the share capital of a corporation, has the meaning assigned by the statute by which the corporation is governed;

“Subject Transactions” means the transactions described in Paragraphs 158.6 to 159.22, inclusive;

“Taxable Canadian Corporation” has the meaning assigned by subsection 89(1);

“Taxable Canadian Property” has the meaning assigned by subsection 248(1);

“Taxable Dividend” has the meaning assigned by subsection 89(1);

“Taxable Preferred Share” has the meaning assigned by subsection 248(1);

“Taxable RFI Share” has the meaning assigned by subsection 248(1);

“Taxation Year” has the meaning assigned by subsection 249(1);

“TC ULC Common Shares” means the common shares which TC ULC is authorized to issue, as described in Paragraph 159.20(b);

“TC ULC Contribution” has the meaning set out in Paragraph 219;

“TC ULC Dividend” means the dividend, deemed by subsection 84(3), to have been paid by TC ULC and received by DC ULC, arising on the redemption of the TC ULC Preferred Shares, as described in Ruling D;

“TC ULC GP Common Shares” means the common shares which TC ULC GP is authorized to issue, as described in Paragraph 159.20(a);

“TC ULC Preferred Shares” means the preferred shares which TC ULC is authorized to issue, as described in Paragraph 159.20(b);

“TC ULC Redemption” has the meaning set out in Paragraph 213(a);

“TC ULC Redemption Amount” has the meaning set out in Paragraph 159.20(b)(i);

“TC ULC Redemption Note” means the demand promissory note in the Principal Amount of the aggregate TC ULC Redemption Amount issued by TC ULC in favour of DC ULC, as described in Paragraph 213(a);

“TC ULC Sub Common Shares” means the common shares which TC ULC Sub will be authorized to issue, as described in Paragraph 192;

“Term Preferred Share” has the meaning assigned by subsection 248(1);

“Three-Party Share Exchange” has the meaning assigned by Paragraph 201; and

“Treaty” means the XXXXXXXXXX.

III. FACTS

Foreign Pubco

3. Foreign Pubco is a corporation formed under the laws of State 1. The outstanding common shares of Foreign Pubco are publicly traded and listed on the Securities Exchange. The Securities Exchange is a Designated Stock Exchange.

Currently, there are in excess of XXXXXXXXXX Foreign Pubco common shares issued and outstanding. As of the close of business on XXXXXXXXXX, the market capitalization of Foreign Pubco was approximately USD$XXXXXXXXXX.

Foreign Pubco is widely held, and, to the best of Foreign Pubco’s knowledge, the only shareholders owning more than XXXXXXXXXX% of the common shares of the capital stock of Foreign Pubco are:

XXXXXXXXXX

4. Foreign Pubco’s Taxation Year ends on XXXXXXXXXX.

Business of the Foreign Pubco Group

5. Foreign Pubco, through its subsidiaries, has more than XXXXXXXXXX employees worldwide and carries on business in more than XXXXXXXXXX countries. Foreign Pubco has organized its businesses into the following business segments:

(a) Business Segment 1—XXXXXXXXXX

XXXXXXXXXX

For the fiscal year ended XXXXXXXXXX, the net sales for this business segment amounted to USD$XXXXXXXXXX and represented XXXXXXXXXX% of Foreign Pubco’s consolidated annual revenues.

Prior to XXXXXXXXXX, Foreign Pubco Group carried on a XXXXXXXXXX business in Business Segment 1. On XXXXXXXXXX, Foreign Pubco and XXXXXXXXXX agreed to enter into a transaction pursuant to which the Foreign Pubco Group transferred its XXXXXXXXXX business XXXXXXXXXX to XXXXXXXXXX, as described in Paragraph 146;

(b) Business Segment 2—XXXXXXXXXX

XXXXXXXXXX

For the fiscal year ended XXXXXXXXXX, the net sales for this business segment amounted to USD$XXXXXXXXXX and represented XXXXXXXXXX% of Foreign Pubco’s consolidated annual revenues;

(d) Business Segment 4— XXXXXXXXXX

XXXXXXXXXX

For the fiscal year ended XXXXXXXXXX, the net sales for this business segment amounted to USD$XXXXXXXXXX and represented XXXXXXXXXX% of Foreign Pubco’s consolidated annual revenues; and

(e) Business Segment 5— XXXXXXXXXX

XXXXXXXXXX

For the fiscal year ended XXXXXXXXXX, the net sales for this business segment amounted to USD$XXXXXXXXXX and represented XXXXXXXXXX% of Foreign Pubco’s consolidated annual revenues.

5.1 Foreign Pubco’s liabilities include senior notes described in Paragraph 149.

Foreign Pubco Group

Global Structure

6. Foreign Pubco conducts its business operations globally through subsidiary corporations and partnerships.

6.1 Foreign Pubco directly owns all of the issued and outstanding shares of:

(a) Forco 1; and

(b) Foreign Pubco Spinco.

Foreign Pubco Spinco was incorporated on XXXXXXXXXX, under the laws of State 1, as described in Paragraph 150.

7. [Reserved]

Forco 1

8. [Reserved]

9. Forco 1 is treated as a corporation for the purposes of the Code.

Forco1 directly owns:

(a) all of the issued and outstanding membership interests of Forco 2;

(b) [Reserved]

(d) [Reserved]

(e) [Reserved]

(f) [Reserved]

(g) [Reserved]

(h) [Reserved]

(i) [Reserved]

(j) all of the issued and outstanding shares of XXXXXXXXXX.

Forco 1 acquired shares of XXXXXXXXXX on XXXXXXXXXX, as described in Paragraph 148.

10. Forco 1 indirectly owns a number of subsidiaries, which include:

(a) [Reserved]

(b) [Reserved]

(d) [Reserved]

(e) [Reserved]

(f) all of the issued and outstanding shares of Forco 19;

(g) all of the issued and outstanding shares of Forco 20;

(h) all of the issued and outstanding shares of Forco 21;

(i) all of the issued and outstanding shares of Forco 22;

(j) [Reserved]

(k) [Reserved]

(l) [Reserved]

Forco 2, Forco 3, Canco 1, Canco 2 and Canco 3

11. Forco 2 is a LLC under the laws of State 1 XXXXXXXXXX.

Forco 2 directly owns a number of subsidiaries, which include:

(a) all of the issued and outstanding common shares of Canco 1;

(b) all of the issued and outstanding common shares of Canco 2;

(d) all of the issued and outstanding membership interests in Forco 3;

(e) [Reserved]

(f) [Reserved]

11.1 Canco 1 directly owns a general partner interest in each of CanLP 1, CanLP 2, CanLP 3, CanLP 4, CanLP 6, CanLP 7, CanLP 8, CanLP 9, CanLP 10, CanLP 11, CanLP 13, CanLP 14, CanLP 15, CanLP 16, CanLP 17, CanLP 18, Can LP 19, CanLP 20, CanLP 21, CanLP 22, CanLP 23, CanLP 24, CanGP 1 and CanGP 3 and carries on business in Canada as the general partner of such partnerships.

11.2 Canco 2 directly owns a general partner interest in CanLP 5, CanGP 2 and CanGP 4 and carries on business in Canada as the general partner of such partnerships.

11.3 Canco 3 directly owns a general partner interest in CanLP 12 and carries on business in Canada as the general partner of such partnership.

12. XXXXXXXXXX

Forco 3 directly owns all of the issued and outstanding:

(a) DC ULC Common Shares; and

(b) Foreign Spinco Interests.

Forco 3 acquired all of the issued and outstanding DC ULC Common Shares on the Amalgamation of DC ULC and its wholly-owned subsidiary, Newco ULC, on XXXXXXXXXX, as described in Paragraph 159.7(b).

Prior to the Amalgamation, Forco 3 owned all of the issued and outstanding common shares of CanParent ULC (“CanParent ULC Common Shares”). Forco 3 acquired all of the issued and outstanding CanParent ULC Common Shares from Forco 2 by way of a contribution to Forco 3’s capital made by Forco 2 in XXXXXXXXXX. Forco 3 did not issue membership interests to Forco 2 in consideration for the contribution. The CanParent ULC Common Shares were not Taxable Canadian Property at the time of the contribution and therefore no gain or loss was reported in Canada.

Forco 3 acquired one Foreign Spinco Interest from Forco 22 on XXXXXXXXXX, as described in Paragraph 158.6(b).

CanParent ULC

13. Prior to the Amalgamation, CanParent ULC’s business number was XXXXXXXXXX. CanParent ULC filed its annual corporate income tax return at the XXXXXXXXXX Taxation Centre and was serviced by the XXXXXXXXXX Tax Services Office. CanParent ULC’s Taxation Year ended on XXXXXXXXXX. CanParent ULC was treated as a corporation for the purposes of the Code.

14. The authorized share capital of CanParent ULC consisted of an unlimited number of CanParent ULC Common Shares. Prior to the Amalgamation, there were XXXXXXXXXX CanParent ULC Common Shares issued and outstanding, each of which was entitled to one vote per share. All of the issued and outstanding CanParent ULC Common Shares were owned by Forco 3. The CanParent ULC Common Shares were not Taxable Canadian Property.

DC ULC

15. DC ULC is an unlimited liability corporation formed on the Amalgamation under Act 2. XXXXXXXXXX.

The authorized share capital of DC ULC consists of an unlimited number of DC ULC Common Shares.

DC ULC (successor to CanParent ULC), through its subsidiary corporations and partnerships, carries on business activities in Canada that involve each of Business Segment 1, Business Segment 2, Business Segment 3, Business Segment 4 and Business Segment 5.

16. The DC ULC Group’s businesses that are carried on in Canada by CanLP 7, CanLP 8, CanLP 10, CanLP 12 and Can LP 13 (having an aggregate FMV of approximately $XXXXXXXXXX) (the “Canadian Spin Business”) will be transferred to TC ULC on the DC ULC Transfer.

17. In its XXXXXXXXXX Taxation Year, DC ULC’s predecessor’s (CanParent ULC) revenues totalled approximately $XXXXXXXXXX, with approximately XXXXXXXXXX% of the revenue attributable to the Canadian Spin Business and the DC ULC Group’s businesses carried on by CanLP 17, CanLP 23 and CanLP 24.

17.1 On the Amalgamation, all of the property, and all of the liabilities, of CanParent ULC became property and liabilities of DC ULC.

18. DC ULC owes (and before the Amalgamation, CanParent ULC owed) approximately $XXXXXXXXXX to Forco 2 pursuant to interest bearing promissory notes issued by CanParent ULC (the “Forco 2 Loan”).

18.1 The Forco 2 Loan is made up of a series of XXXXXXXXXX interest-bearing (generally, a XXXXXXXXXX% rate) loans. The Forco 2 Loan was not financed by way of third party financing. The proceeds from the Forco 2 Loan were used by CanParent ULC to finance the acquisition of the subsidiary corporations and partnerships held by CanParent ULC.

19. Forco 2 and Forco 3 are parties to a forward subscription agreement (the “Forco 2 – Forco 3 FSA”). At any time DC ULC (CanParent ULC, before the Amalgamation) makes a payment of interest or principal on the Forco 2 Loan, the Forco 2 – Forco 3 FSA requires Forco 2 to make a capital contribution to Forco 3 in an amount equal to the payment made by DC ULC (CanParent ULC, before the Amalgamation).

20. Forco 3 and DC ULC (CanParent ULC before the Amalgamation) are parties to a forward subscription agreement (the “Forco 3 – CanParent ULC FSA”). At any time DC ULC (CanParent ULC before the Amalgamation) makes a payment of interest or principal on the Forco 2 Loan, the Forco 3 – CanParent ULC FSA requires Forco 3 to subscribe for shares of DC ULC (CanParent ULC before the Amalgamation) in an amount equal to the payment made by DC ULC (CanParent ULC before the Amalgamation).

21. XXXXXXXXXX

DC ULC Group

21.1 As described in Paragraphs 22 to 142.1, DC ULC:

(a) maintains voting control over Cansub 1, Cansub 2 and Cansub 4; and

(b) exercises Significant Influence over corporations and partnerships which consist of: Cansub 1, Cansub 2, Cansub 3, Cansub 4, Cansub 5, Cansub 6, Cansub 7, CanLP 1, CanLP 2, CanLP 3, CanLP 4, CanLP 5, CanLP 6, CanLP 7, CanLP 8, CanLP 9, CanLP 10, CanLP 11, CanLP 12, CanLP 13, CanLP 14, CanLP 15, CanLP 16, CanLP 17, CanLP 18, CanLP 19, CanLP 20, CanLP 21, CanLP 22, CanLP 23, CanLP 24, CanGP 1, CanGP 2, CanGP 3, CanGP 4, Forsub 1, Forsub 2, Forsub 7, Forsub 8, Forsub 9 and Forsub 10.

DC ULC and corporations and partnerships over which DC ULC exercises Significant Influence as described in Paragraphs 21.1(a) and (b) are, collectively, referred to as the “DC ULC Group.”

DC ULC Direct Ownership

22. DC ULC directly owns:

(a) all of the issued and outstanding common shares of Cansub 1;

(b) all of the issued and outstanding common shares of Cansub 2;

(d) all of the issued and outstanding common shares of Cansub 4;

(e) a XXXXXXXXXX% limited partner interest in CanLP 1;

(f) a XXXXXXXXXX% limited partner interest in CanLP 2;

(g) a XXXXXXXXXX% limited partner interest in CanLP 3;

(h) a XXXXXXXXXX% limited partner interest in CanLP 4;

(i) a XXXXXXXXXX% limited partner interest in CanLP 5;

(j) a XXXXXXXXXX% limited partner interest in CanLP 6;

(k) a XXXXXXXXXX% limited partner interest in CanLP 7;

(l) a XXXXXXXXXX% limited partner interest in CanLP 8;

(m) a XXXXXXXXXX% limited partner interest in CanLP 9;

(n) a XXXXXXXXXX% limited partner interest in CanLP 10;

(o) a XXXXXXXXXX% limited partner interest in CanLP 11;

(p) a XXXXXXXXXX% limited partner interest in CanLP 12;

(q) a XXXXXXXXXX% limited partner interest in CanLP 13;

(r) a XXXXXXXXXX% limited partner interest in CanLP 14;

(s) a XXXXXXXXXX% limited partner interest in CanLP 15;

(t) a XXXXXXXXXX% limited partner interest in CanLP 16; and

(u) a XXXXXXXXXX% general partner interest in CanGP 2.

Direct and Indirect Entities in the DC ULC Group

Cansub 1

23. Cansub 1 directly owns a XXXXXXXXXX% general partner interest in CanLP 1 and carries on business in Canada as the general partner of CanLP 1.

Cansub 2

24. Cansub 2 carries on a XXXXXXXXXX business in Canada which provides XXXXXXXXXX to members of the Foreign Pubco Group that are not directly or indirectly owned by DC ULC (CanParent ULC before the Amalgamation) (the “Cansub 2 Loans”).

All Cansub 2 Loans were made to members of the Foreign Pubco Group that are not directly or indirectly owned by DC ULC (CanParent ULC before the Amalgamation) after XXXXXXXXXX.

Cansub 2’s only source of funding has been equity subscriptions made by DC ULC (CanParent ULC before the Amalgamation). DC ULC (CanParent ULC before the Amalgamation) has not advanced funding to Cansub 2 by way of debt.

24.1 Of the Cansub 2 Loans, two were made to members of the Foreign Pubco Group that will be included in the Foreign Spin Business (the “Cansub 2 Spin Loans”).

All Cansub 2 Loans other than the Cansub 2 Spin Loans will be referred to as the “Cansub 2 Retained Loans”.

The debtors under the Cansub 2 Spin Loans are Forco 19 (the principal amount of such loan being USD$XXXXXXXXXX) and Forco 20 (the principal amount of such loan being USD$XXXXXXXXXX). The aggregate Canadian dollar equivalent of the Cansub 2 Spin Loans is approximately $XXXXXXXXXX.

All of the issued and outstanding shares of Forco 19 and Forco 20 will be transferred to the Foreign Pubco Spinco Group as part of the global spin-off transactions.

25. Cansub 2 and Forco 3 have filed an election in the manner provided by subsection 15(2.11) to treat each Cansub 2 Loan as a Pertinent Loan or Indebtedness.

25.1 [Reserved]

25.2 XXXXXXXXXX

25.3 [Reserved]

Cansub 3

26. Cansub 3 carries on a business in Canada that is included in Business Segment 4.

27. The issued share capital of Cansub 3 consists of:

(a) common shares; and

(b) class A, B, C, D, E and F preferred shares.

27.1 XXXXXXXXXX

28. The holders of Cansub 3 common shares consist of:

(a) DC ULC as to XXXXXXXXXX%;

(b) CanLP 11 as to XXXXXXXXXX%; and

The aggregate FMV of all of the issued and outstanding Cansub 3 common shares represents approximately XXXXXXXXXX% of the aggregate FMV of all issued and outstanding Cansub 3 shares.

29. Some of the preferred shares of Cansub 3 are owned directly or indirectly by DC ULC.

30. Cansub 3’s asseets include:

(a) XXXXXXXXXX% of the issued and outstanding shares of Cansub 6;

(b) all of the issued and outstanding shares of Cansub 7;

(c) XXXXXXXXXX% of the issued and outstanding shares of Forsub 1, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of Cansub 3; and

(d) XXXXXXXXXX% of the issued and outstanding shares of Forsub 10, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of Cansub 3.

Cansub 4

31. Cansub 4 directly owns a XXXXXXXXXX% general partner interest in CanGP 1 and carries on business in Canada as a general partner of CanGP 1.

32. DC ULC is the sole shareholder of Cansub 4.

Cansub 5

33. Cansub 5 directly owns a XXXXXXXXXX% general partner interest in CanLP 10 and carries on business in Canada as a general partner of CanLP 10.

34. CanLP 7 is the sole shareholder of Cansub 5.

Cansub 6

35. Cansub 6 carries on a XXXXXXXXXX business in Canada which provides XXXXXXXXXX (the “Cansub 6 Loans”) to members of the Foreign Pubco Group that are not directly or indirectly owned by DC ULC.

36. Cansub 6 and Forco 2 have filed an election in the manner provided by subsection 15(2.11) to treat each loan made by Cansub 6 as a Pertinent Loan or Indebtedness.

37. [Reserved]

38. The shareholders of Cansub 6 consist of:

(a) Cansub 3 as to XXXXXXXXXX% of the issued and outstanding shares;

(b) CanLP 10 as to XXXXXXXXXX% of the issued and outstanding shares; and

Cansub 7

39. Cansub 7 carries on a business in Canada that is included in Business Segment 3.

40. Cansub 3 is the sole shareholder of Cansub 7.

CanLP 1

41. CanLP 1 carries on a business in Canada that is included in Business Segment 3.

42. The partners of CanLP 1 consist of:

(a) Cansub 1 as to a XXXXXXXXXX% general partner interest;

(b) DC ULC as to a XXXXXXXXXX% limited partner interest; and

CanLP 2

43. CanLP 2 carries on a business in Canada that is included in Business Segment 3.

44. The partners of CanLP 2 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 3

45. CanLP 3 carries on a business in Canada that is included in Business Segment 3.

46. The partners of CanLP 3 consist of

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 4

47. CanLP 4 is in the business of XXXXXXXXXX, including a preferred partnership interest in CanLP 5.

48. The partners of CanLP 4 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 5

48.1 CanLP 5 is in the business of XXXXXXXXXX.

49. The partners of CanLP 5 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest;

(b) Canco 2 as to a XXXXXXXXXX% general partner interest; and

49.1 CanLP 5 has two classes of partnership units - common units and preferred units.

(a) The common units carry the right to vote and, subject to the prior rights of the holders of preferred units, the right to allocations of profit and loss and to share in distributable cash.

(b) The preferred units carry a preferential return equal to XXXXXXXXXX of the subscription price. The preferred units have no other right to share in distributable cash and do not have a right to vote, unless required by applicable law.

50. CanLP 5 directly owns:

(a) a XXXXXXXXXX% limited partner interest in CanLP 17;

(b) a XXXXXXXXXX% limited partner interest in CanLP 18;

(d) a XXXXXXXXXX% limited partner interest in CanLP 20;

(e) a XXXXXXXXXX% limited partner interest in CanLP 21;

(f) a XXXXXXXXXX% limited partner interest in CanLP 22;

(g) a XXXXXXXXXX% limited partner interest in CanLP 24; and

(h) a XXXXXXXXXX% general partner interest in CanGP 3.

CanLP 6

50.1 CanLP 6 is in the business of XXXXXXXXXX.

51. [Reserved]

52. The partners of CanLP 6 consist of:

(a) CanLP 18 as to a XXXXXXXXXX% limited partner interest;

(b) CanLP 23 as to a XXXXXXXXXX% limited partner interest;

(d) CanLP 24 as to a XXXXXXXXXX% limited partner interest;

(e) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(f) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 7

52.1 CanLP 7 is in the business of XXXXXXXXXX.

53. The partners of CanLP 7 consist of:

(a) DC ULC as to a XXXXXXXXXX% interest. DC ULC is the sole limited partner of CanLP 7; and

(b) Canco 1 as to a XXXXXXXXXX% interest. Canco 1 is the sole general partner of CanLP 7.

54. CanLP 7 directly owns all of the issued and outstanding shares of Cansub 5.

CanLP 8

55. CanLP 8 carries on a business in Canada that is included in the XXXXXXXXXX component of Business Segment 2.

56. The partners of CanLP 8 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 9

57. CanLP 9 carries on a business in Canada that is included in Business Segment 2.

58. The partners of CanLP 9 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 10

59. CanLP 10 carries on a business in Canada that is included in, XXXXXXXXXX, Business Segment 5.

60. [Reserved]

61. The partners of CanLP 10 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Cansub 5 as to a XXXXXXXXXX% general partner interest.

62. CanLP 10 directly owns:

(a) XXXXXXXXXX% of the issued and outstanding shares of Cansub 6; and

(b) XXXXXXXXXX% of the issued and outstanding class D preferred shares of Cansub 3.

CanLP 11

63. CanLP 11 carries on a business in Canada that is included in Business Segment 3.

64. The partners of CanLP 11 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest;

(b) Forco 2 as to a XXXXXXXXXX% limited partner interest; and

65. CanLP 11’s assets include XXXXXXXXXX% of all the issued and outstanding common shares of Cansub 3.

CanLP 12

66. CanLP 12 carries on a business in Canada that is included in Business Segment 1.

67. The partners of CanLP 12 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 3 as to a XXXXXXXXXX% general partner interest.

CanLP 13

68. CanLP 13 carries on a business in Canada that is included in Business Segment 1.

69. The partners of CanLP 13 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 14

70. CanLP 14 carries on a business in Canada that is included in Business Segment 1.

71. The partners of CanLP 14 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 15

72. CanLP 15 carries on a business in Canada that is included in Business Segment 4.

73. The partners of CanLP 15 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest;

(b) CanLP 22 as to a XXXXXXXXXX% limited partner interest;

(d) CanGP 3 as to a XXXXXXXXXX% limited partner interest.

74. CanLP 15’s assets include:

(a) XXXXXXXXXX% of the issued and outstanding shares of Forsub 1, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanLP 15; and

(b) all of the issued and outstanding shares of Forsub 2, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanLP 15.

CanLP 16

74.1 CanLP 16 is in the business of XXXXXXXXXX.

75. The partners of CanLP 16 consist of:

(a) DC ULC as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

76. CanLP 16 directly owns a XXXXXXXXXX% general partnership interest in CanGP 1.

CanLP 17

77. CanLP 17 carries on a business in Canada that is included in, XXXXXXXXXX, Business Segment 5.

78. The partners of CanLP 17 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 18

78.1 CanLP 18 is in the business of XXXXXXXXXX.

79. The partners of CanLP 18 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

80. CanLP 18’s assets include:

(a) a XXXXXXXXXX% limited partner interest in CanLP 6; and

(b) a XXXXXXXXXX% limited partner interest in CanLP 23.

CanLP 19

81. CanLP 19 carries on a business in Canada that is included in Business Segment 4.

82. The partners of CanLP 19 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

83. [Reserved]

CanLP 20

83.1 CanLP 20 is in the business of XXXXXXXXXX.

84. The partners of CanLP 20 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

85. CanLP 20’s assets include:

(a) a XXXXXXXXXX% limited partner interest in CanLP 23;

(b) XXXXXXXXXX% of the issued and outstanding shares of Cansub 6; and

(c) XXXXXXXXXX% of the issued and outstanding shares of Forsub 10, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanLP 20.

CanLP 21

86. CanLP 21 carries on a business in Canada that is included in Business Segment 3.

87. The partners of CanLP 21 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

CanLP 22

88. CanLP 22 carries on a business in Canada that is included in Business Segment 5.

89. The partners of CanLP 22 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

90. CanLP 22 directly owns XXXXXXXXXX% limited partner interest in CanLP 15.

CanLP 23

91. CanLP 23 carries on a business in Canada that is included in, XXXXXXXXXX, Business Segment 5.

92. The partners of CanLP 23 consist of:

(a) CanLP 20 as to a XXXXXXXXXX% limited partner interest;

(b) CanLP 18 as to a XXXXXXXXXX% limited partner interest; and

93. CanLP 23’s assets include a XXXXXXXXXX% limited partner interest in CanLP 6.

CanLP 24

94. CanLP 24 carries on a business in Canada that is included in Business Segment 1.

95. The partners of CanLP 24 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% limited partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

96. CanLP 24’s assets include a XXXXXXXXXX% limited partner interest in CanLP 6.

CanGP 1

97. CanGP 1 carries on a business in Canada that is included in Business Segment 2.

98. The partners of CanGP 1 consist of:

(a) CanLP 16 as to a XXXXXXXXXX% general partner interest. XXXXXXXXXX;

(b) Canco 1 as to a XXXXXXXXXX% general partner interest; and

98.1 The managing partners of CanGP 1 are Canco 1 and Cansub 4.

99. CanGP 1’s assets include:

(a) a XXXXXXXXXX% limited partner interest in CanLP 6;

(b) all of the issued and outstanding shares of Forsub 7, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanGP 1;

(c) all of the issued and outstanding shares of Forsub 8, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanGP 1; and

(d) all of the issued and outstanding shares of Forsub 9, a corporation that is and will be, at any relevant time and for all purposes of the Act, a Foreign Affiliate and a Controlled Foreign Affiliate of CanGP 1.

CanGP 2

100. CanGP 2 is in the business of XXXXXXXXXX.

100.1 The partners of CanGP 2 consist of:

(a) DC ULC as to a XXXXXXXXXX% general partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

100.2 The managing partner of CanGP 2 is Canco 1.

101. CanGP 2 directly owns a XXXXXXXXXX% general partner interest in CanGP 4.

CanGP 3

102. CanGP 3 is in the business of XXXXXXXXXX.

102.1 The partners of CanGP 3 consist of:

(a) CanLP 5 as to a XXXXXXXXXX% general partner interest; and

(b) Canco 1 as to a XXXXXXXXXX% general partner interest.

102.2 The managing partner of CanGP 3 is Canco 1.

103. CanGP 3 directly owns a XXXXXXXXXX% limited partner interest in CanLP 15.

CanGP 4

104. CanGP 4 carries on a business in Canada that is included in Business Segment 2.

105. The partners of CanGP 4 consist of:

(a) CanGP 2 as to a XXXXXXXXXX% general partner interest; and

(b) Canco 2 as to a XXXXXXXXXX% general partner interest.

105.1 The managing partner of CanGP 4 is CanGP 2.

106. [Reserved]

Forsub 1

107. Forsub 1 carries on a business in Country 4 that is included in Business Segment 3.

108. The shareholders of Forsub 1 consist of:

(a) Cansub 3 as to XXXXXXXXXX% of the issued and outstanding shares;

(b) CanLP 15 as to XXXXXXXXXX% of the issued and outstanding shares;

(d) a member of the Foreign Pubco Group that is not directly or indirectly owned by DC ULC, as to XXXXXXXXXX% of the issued and outstanding shares.

Forsub 2

109. Forsub 2 carries on a business in Country 4 that is included in Business Segment 3.

110. CanLP 15 is the sole shareholder of Forsub 2.

111. Forsub 2 directly owns XXXXXXXXXX% of the issued and outstanding shares of Forsub 1.

112. [Reserved]

113. [Reserved]

114. [Reserved]

115. [Reserved]

116. [Reserved]

117. [Reserved]

118. [Reserved]

119. [Reserved]

120. [Reserved]

120.1 [Reserved]

121. [Reserved]

122. [Reserved]

122.1 [Reserved]

Forsub 7

123. Forsub 7 carries on a business in Country 7 that is included in Business Segment 2.

124. CanGP 1 is the sole shareholder of Forsub 7.

Forsub 8

125. Forsub 8 carries on a business in Country 8 that is included in Business Segment 2.

126. CanGP 1 is the sole shareholder of Forsub 8.

Forsub 9

127. Forsub 9 carries on a business in Country 2 that is included in Business Segment 2.

128. CanGP 1 is the sole shareholder of Forsub 9.

Forsub 10

129. Forsub 10 carries on a business in Country 2 that is included in Business Segment 4.

130. Cansub 3 owns XXXXXXXXXX%, and CanLP 20 owns XXXXXXXXXX%, of the issued and outstanding Forsub 10 shares. All other Forsub 10 shares are held by members of the Foreign Pubco Group that are not directly or indirectly owned by DC ULC.

131. [Reserved]

132. [Reserved]

132.1. [Reserved]

133. [Reserved]

134. [Reserved]

134.1 [Reserved]

135. [Reserved]

136. [Reserved]

137. [Reserved]

138. [Reserved]

138.1 [Reserved]

139. [Reserved]

140. [Reserved]

140.1 [Reserved]

141. [Reserved]

142. [Reserved]

142.1 [Reserved]

XXXXXXXXXX

143. XXXXXXXXXX

144. XXXXXXXXXX

145. XXXXXXXXXX

Other Transactions of Note

146. XXXXXXXXXX Transaction: On XXXXXXXXXX, Foreign Pubco and XXXXXXXXXX agreed to enter into a transaction pursuant to which the Foreign Pubco Group would transfer its XXXXXXXXXX business XXXXXXXXXX to XXXXXXXXXX.

The value of the transaction was approximately USD$XXXXXXXXXX. Of this total transaction value the value of the Canadian “assets” was approximately USD$XXXXXXXXXX.

CanLP 24 (that CanParent ULC owned indirectly before the Amalgamation) was involved in the XXXXXXXXXX transaction. CanLP 24 disposed of part of its assets in the XXXXXXXXXX transaction for FMV cash consideration.

147. XXXXXXXXXX Acquisition: On XXXXXXXXXX, Forco 21 acquired substantially all of the issued and outstanding shares of XXXXXXXXXX, a publicly-traded company, for approximately $XXXXXXXXXX.

The acquisition of XXXXXXXXXX is part of the ongoing growth and strategic acquisitions made by Foreign Pubco. XXXXXXXXXX.

The XXXXXXXXXX owns XXXXXXXXXX operating companies; XXXXXXXXXX. The value of the XXXXXXXXXX operating companies was XXXXXXXXXX. The XXXXXXXXXX operating companies are not owned, directly or indirectly, by DC ULC (and were not owned, directly or indirectly, by CanParent ULC before the Amalgamation).

148. XXXXXXXXXX Acquisition: On XXXXXXXXXX Forco 1 acquired all of the issued and outstanding shares of XXXXXXXXXX, a publicly-traded company, for over USD$XXXXXXXXXX.

The acquisition of XXXXXXXXXX is part of the ongoing growth and strategic acquisitions made by Foreign Pubco. XXXXXXXXXX.

At the time of the acquisition, XXXXXXXXXX owned all of the issued and outstanding shares of a XXXXXXXXXX corporation. The value of the XXXXXXXXXX subsidiary was XXXXXXXXXX. The XXXXXXXXXX subsidiary is not owned, directly or indirectly, by DC ULC (and was not not owned directly or indirectly by CanParent ULC before the Amalgamation).

149. Senior Notes Offering: On XXXXXXXXXX, Foreign Pubco announced that it had priced a public offering of: XXXXXXXXXX.

The net proceeds from the offering were used to XXXXXXXXXX. None of the proceeds from the offering were transferred to CanParent ULC (DC ULC after the Amalgamation) or a subsidiary or partnership in which CanParent ULC had (or DC ULC has after the Amalgamation) an interest.

Overview of the Spin-Out

150. On XXXXXXXXXX, Foreign Pubco announced its intention to separate the existing company into two independent, publicly-traded companies (the “Spin-Out”) as follows:

(a) Business Segment 1, the XXXXXXXXXX component of Business Segment 2 and Business Segment 5 (XXXXXXXXXX) (the “Foreign Spin Business”) will be transferred to a new corporation incorporated by Foreign Pubco under the laws of State 1 (“Foreign Pubco Spinco”); and

(b) the XXXXXXXXXX component of Business Segment 2, Business Segment 3, Business Segment 4 XXXXXXXXXX of Business Segment 5 will be retained by Foreign Pubco (the “Foreign Keep Business”).

Foreign Pubco incorporated Foreign Pubco Spinco on XXXXXXXXXX, under the laws of State 1.

151. Foreign Pubco plans to accomplish the Spin-Out by paying a dividend-in-kind of Foreign Pubco Spinco common shares to Foreign Pubco shareholders, immediately after which, Foreign Pubco shareholders will own 100% of the equity in each of the two publicly traded companies. The enterprise value of Foreign Pubco Spinco could be estimated to be USD$XXXXXXXXXX to USD$XXXXXXXXXX.

IV. SUBJECT TRANSACTIONS

The following transactions were completed prior to the Proposed Transactions (the “Subject Transactions”):

152. [Reserved]

153. [Reserved]

154. [Reserved]

155. [Reserved]

156. [Reserved]

157. [Reserved]

158. [Reserved]

158.1 [Reserved]

158.2 [Reserved]

158.3 [Reserved]

158.4 [Reserved]

158.5 [Reserved]

Incorporation of Foreign Spinco

158.6 On XXXXXXXXXX:

(a) Forco 22 incorporated Foreign Spinco having a capital consisting of membership interests (referred to as the “Foreign Spinco Interests”). The initial Foreign Spinco Interest was issued to Forco 22 in consideration for USD$XXXXXXXXXX.

XXXXXXXXXX; and

(b) Forco 3 acquired the Foreign Spinco Interest from Forco 22 in consideration for a cash payment of USD$XXXXXXXXXX.

158.7 XXXXXXXXXX

XXXXXXXXXX

Packaging Foreign Spinco

158.71 The packaging of Foreign Spinco with all property (other than the Distribution Property) occurred before:

(a) the incorporation of TC ULC described in Paragraph 159.20(b); and

(b) the transfer of the Distribution Property to TC ULC on the DC ULC Transfer.

158.8 On XXXXXXXXXX, Forco 2 converted to a LLC under the laws of State 1 XXXXXXXXXX. By operation of law all Forco 2 common shares owned by Forco 1 were converted into membership interests.

XXXXXXXXXX

159. On XXXXXXXXXX, CanParent ULC incorporated Newco ULC and subscribed for XXXXXXXXXX common shares for an aggregate consideration of $XXXXXXXXXX.

159.1 On XXXXXXXXXX, CanParent ULC continued from Province 1 to Province 2. After the continuation, CanParent ULC remained an unlimited liability corporation XXXXXXXXXX.

159.2 XXXXXXXXXX

159.3 On XXXXXXXXXX, CanParent ULC paid all accrued interest owing on the Forco 2 Loan by issuing to Forco 2 a Canadian-dollar denominated, demand, non-interest bearing promissory note having a Principal Amount equal to the amount of interest owing (the “CanParent ULC Interest Note”). Forco 2 accepted the receipt of the CanParent ULC Interest Note as payment in full of the interest owing under the Forco 2 Loan.

159.4 On XXXXXXXXXX, pursuant to the terms of the Forco 2 – Forco 3 FSA, Forco 2 made a capital contribution to Forco 3 in an aggregate amount equal to the Principal Amount of the CanParent ULC Interest Note. Forco 2 made the capital contribution by delivering to Forco 3 the CanParent ULC Interest Note. Forco 3 accepted the receipt of the CanParent ULC Interest Note as payment in full of the capital contribution.

159.5 On XXXXXXXXXX, pursuant to the terms of the Forco 3 – CanParent ULC FSA, Forco 3 subscribed for CanParent ULC Common Shares having an aggregate subscription amount (and aggregate FMV) equal to the Principal Amount of the CanParent ULC Interest Note. Forco 3 paid the subscription amount using the CanParent ULC Interest Note which CanParent ULC cancelled as payment in full of the subscription amount.

159.6 [Reserved]

159.7 On XXXXXXXXXX, CanParent ULC and its wholly-owned subsidiary, Newco ULC, amalgamated (the “Amalgamation”) under Act 2 pursuant to a court-approved plan of arrangement to form “DC ULC”. The Amalgamation is governed by subsection 87(1).

DC ULC is an unlimited liability corporation XXXXXXXXXX.

(a) The authorized share capital of DC ULC consists of an unlimited number of common shares (“DC ULC Common Shares”).

(b) On the Amalgamation:

(i) all of the property (except amounts receivable from any predecessor corporation or shares of the capital stock of any predecessor corporation) of the predecessor corporations immediately before the Amalgamation became property of DC ULC by virtue of the Amalgamation;

(ii) all of the liabilities (except amounts payable to any predecessor corporation) of the predecessor corporations immediately before the Amalgamation became liabilities of DC ULC by virtue of the Amalgamation; and

(iii) all of the shareholders (except any predecessor corporation), who owned shares of the capital stock of any predecessor corporation immediately before the Amalgamation, received shares of the capital stock of DC ULC because of the Amalgamation.

In particular, each CanParent ULC Common Share owned by Forco 3 immediately before the Amalgamation, was exchanged for one DC ULC Common Share.

(c) On the Amalgamation, CanParent ULC and Newco ULC continued as one company to form DC ULC pursuant to the provisions of Act 2.

XXXXXXXXXX

(d) The aggregate PUC of the DC ULC Common Shares issued on the Amalgamation was equal to the aggregate PUC of the CanParent ULC Common Shares owned by Forco 3 immediately before the Amalgamation.

159.8 [Reserved]

159.9 [Reserved]

159.10 [Reserved]

159.11 [Reserved]

159.12 [Reserved]

159.13 [Reserved]

159.14 [Reserved]

159.15 [Reserved]

159.16 [Reserved]

159.17 [Reserved]

159.18 [Reserved]

159.19 [Reserved]

Incorporation of Foreign Spinco Canadian Holding Structure

159.20 On XXXXXXXXXX, Foreign Spinco incorporated:

(a) TC ULC GP, XXXXXXXXXX. TC ULC’s business number is XXXXXXXXXX. TC ULC GP will file its annual corporate income tax return at the XXXXXXXXXX Tax Centre and will be serviced by the XXXXXXXXXX Tax Services Office.

The authorized share capital of TC ULC GP consists of common shares (the “TC ULC GP Common Shares”); and

(b) TC ULC, XXXXXXXXXX.

TC ULC’s business number is XXXXXXXXXX. TC ULC will file its annual corporate income tax return at the XXXXXXXXXX Tax Centre and will be serviced by the XXXXXXXXXX Tax Services Office.

The authorized share capital of TC ULC consists of an unlimited number of common shares having one vote per share (the “TC ULC Common Shares”) and an unlimited number of preferred shares (the “TC ULC Preferred Shares”).

The TC ULC Preferred Shares have the following attributes:

(i) each TC ULC Preferred Share is redeemable, subject to applicable law, at any time at the option of TC ULC at an amount (such amount being the “TC ULC Redemption Amount”) equal to the aggregate net FMV of the Distribution Property transferred by DC ULC to TC ULC on the DC ULC Transfer and then dividing such amount by the number of TC ULC Preferred Shares issued in consideration for the DC ULC Transfer, plus the amount of all declared but unpaid dividends thereon;

(ii) each TC ULC Preferred Share is retractable, subject to applicable law, at any time at the option of the holder thereof for an amount equal to the TC ULC Redemption Amount;

(iii) the holder of each TC ULC Preferred Share is entitled to a non-cumulative cash dividend as and when declared by the directors of TC ULC from time to time, which dividend need not also be declared on any other class of shares of TC ULC;

(iv) there is a provision restricting the payment of dividends on other classes of shares so that no such dividends may be paid on any other class of shares of TC ULC if the resulting realizable value of the net assets of TC ULC after payment of the dividends would be less than the aggregate TC ULC Redemption Amount of all of the TC ULC Preferred Shares then outstanding;

(v) the holder of each TC ULC Preferred Share is entitled, upon the liquidation, dissolution or winding-up of TC ULC, to a payment in priority to all other classes of shares of TC ULC of an amount equal to the TC ULC Redemption Amount plus any declared but unpaid dividends thereon to the extent of the amount of value of property available under applicable law for the payments to the shareholders of TC ULC upon liquidation, dissolution or winding-up, but will be entitled to no more that the amount of that payment; and

(vi) the holder of each TC ULC Preferred Share is not entitled to vote at any meeting of the shareholders of TC ULC, other than as provided under the statute by which TC ULC is governed.

The TC ULC Preferred Shares are Term Preferred Shares, Taxable Preferred Shares and Short-Term Preferred Shares.

159.21 On XXXXXXXXXX, Foreign Spinco subscribed for XXXXXXXXXX TC ULC Common Shares for an aggregate consideration of $XXXXXXXXXX and XXXXXXXXXX TC ULC GP Common Shares for an aggregate consideration of $XXXXXXXXXX.

159.22 On XXXXXXXXXX, TC ULC and TC ULC GP formed New CanLP 1, New CanLP 2 and New CanLP 3 under the laws of Province 2 by contributing cash to the respective partnerships.

TC ULC contributed $XXXXXXXXXX to each of New CanLP 1, New CanLP 2 and New CanLP 3 in consideration for a XXXXXXXXXX% limited partner interest in each partnership.

TC ULC GP contributed $XXXXXXXXXX to each of New CanLP 1, New CanLP 2 and New CanLP 3 in consideration for a XXXXXXXXXX% general partner interest in each partnership.

159.221[Reserved]

159.222[Reserved]

V. XXXXXXXXXX TRANSACTIONS

159.23 Pursuant to the terms of the XXXXXXXXXX Agreement:

(a) Forco 2 will deliver $XXXXXXXXXX in cash to DC ULC;

(b) DC ULC will reduce the principal amount of the Forco 2 Loan by $XXXXXXXXXX;

(d) Forco 3 will reduce its aggregate ACB in the DC ULC Common Shares by $XXXXXXXXXX.

159.24 DC ULC will repay $XXXXXXXXXX of the principal amount of the Forco 2 Loan by delivering $XXXXXXXXXX in cash to Forco 2.

159.25 Pursuant to the terms of the Forco 2 – Forco 3 FSA, Forco 2 will make a capital contribution to Forco 3 by delivering to Forco 3 cash in the amount of $XXXXXXXXXX.

159.26 Pursuant to the terms of the Forco 3 – CanParent ULC FSA, Forco 3 will subscribe for DC ULC Common Shares by delivering to DC ULC cash in the amount of $XXXXXXXXXX.

159.27 DC ULC will reduce its PUC by $XXXXXXXXXX and deliver to Forco 3 an equivalent amount of cash in respect thereof (the “DC ULC PUC Reduction”). The amount of the DC ULC PUC Reduction will not exceed the aggregate ACB to Forco 3 of the DC ULC Common Shares owned by it.

159.28 XXXXXXXXXX

VI. PROPOSED TRANSACTIONS

160. [Reserved]

161. [Reserved]

162. [Reserved]

163. [Reserved]

164. [Reserved]

165. [Reserved]

166. [Reserved]

167. [Reserved]

168. [Reserved]

169. [Reserved]

170. [Reserved]

171. [Reserved]

171.1 [Reserved]

172. [Reserved]

173. [Reserved]

174. [Reserved]

175. [Reserved]

176. [Reserved]

177. [Reserved]

178. [Reserved]

179. [Reserved]

180. [Reserved]

181. [Reserved]

182. [Reserved]

183. [Reserved]

184. [Reserved]

185. [Reserved]

185.1 [Reserved]

Removing Cross-Chain Debt

186. [Reserved]

187. [Reserved]

188. Cansub 2 will:

(a) sell the Cansub 2 Spin Loans to DC ULC in consideration for a purchase price in an amount equal to the aggregate FMV of the loans immediately before the sale.

The transfer of the Cansub 2 Spin Loans to DC ULC will constitute an assignment of the Cansub 2 Spin Loans by Cansub 2 to DC ULC such that the Cansub 2 Spin Loans will remain in existence and not be considered to be a new debt.

As consideration for the purchase of the Cansub 2 Spin Loans, DC ULC will issue a promissory note, payable to Cansub 2 on demand without interest having a Principal Amount and FMV equal to the aggregate FMV of the loans immediately before the sale (the “Cansub 2 Spin Loan Purchase Note”). Cansub 2 will accept the Cansub 2 Spin Loan Purchase Note in full payment of the sale price.

All accrued interest owing on the Cansub 2 Spin Loans will be paid in full prior to the sale of the loans to DC ULC such that Cansub 2 will only sell the Principal Amount of the Cansub 2 Spin Loans to DC ULC;

(b) reduce the aggregate PUC of its shares owned by DC ULC in an amount equal to the Principal Amount of the Cansub 2 Spin Loan Purchase Note (the “Cansub 2 PUC Reduction”).

Cansub 2 will pay the amount of the Cansub 2 PUC Reduction in full by transferring the Cansub 2 Spin Loan Purchase Note to DC ULC for cancellation. DC ULC will cancel the Cansub 2 Spin Loan Purchase Note and will accept the cancellation in full satisfaction of the Cansub 2 PUC Reduction.

The amount of the Cansub 2 PUC Reduction will not exceed the aggregate ACB, determined immediately before the Cansub 2 PUC Reduction, to DC ULC of the Cansub 2 shares owned by it; and

(c) reduce the aggregate PUC of its shares owned by DC ULC in an amount equal to the amount of cash required to satisfy the Additional Cash Transfer (the “Cansub 2 PUC Reduction 2”).

Cansub 2 will pay the amount of the Cansub 2 PUC Reduction 2 in full by transferring cash to DC ULC.

The amount of the Cansub 2 PUC Reduction 2 will not exceed the aggregate ACB, determined immediately before the Cansub 2 PUC Reduction 2, to DC ULC of the Cansub 2 shares owned by it.

188.1 Forco 3 and DC ULC will file an election in the manner and within the time limit set out in subparagraph 15(2.11)(d)(i) to treat each of the Cansub 2 Spin Loans as a Pertinent Loan or Indebtedness.

Forco 19 and Forco 20 will be the subject corporations, and DC ULC will be the corporation resident in Canada, for the purposes of subsection 15(2.11). Forco 3 will control DC ULC at the time DC ULC acquires the Cansub 2 Spin Loans and will not deal at Arm’s Length with Forco 19 and Forco 20 at that time.

188.2 [Reserved]

188.3 [Reserved]

Incorporation of Foreign Spinco Canadian Holding Structure

189. [Reserved]

190. [Reserved]

191. [Reserved]

192. TC ULC will incorporate TC ULC Sub, XXXXXXXXXX. The share capital of TC ULC Sub will consist of an unlimited number of common shares having one vote per share (the “TC ULC Sub Common Shares”).

192.1 [Reserved]

Sale of General Partnership Interests

193. Canco 1 will sell to TC ULC GP its general partner interest in each of CanLP 7, CanLP 8, CanLP 10 and CanLP 13. TC ULC GP will pay cash consideration to Canco 1 in an amount equal to the aggregate FMV of the partnership interests transferred. It is expected that Canco 1 will realize an aggregate $XXXXXXXXXX capital gain on the sale of the partnership interests.

194. Canco 3 will sell to TC ULC GP its general partner interest in Can LP 12. TC ULC GP will pay cash consideration to Canco 3 in an amount equal to the aggregate FMV of the partnership interest transferred. It is expected that Canco 3 will realize a $XXXXXXXXXX capital gain on the sale of the partnership interest.

194.01 [Reserved]

Asset Sales

194.1 CanLP 10 will purchase all of the assets owned by CanLP 17 (other than cash) in consideration for a cash payment and the assumption of liabilities of CanLP 17 having an aggregate FMV equal to the aggregate FMV of the assets purchased (estimated to be less than $XXXXXXXXXX).

It is not expected that CanLP 17 will realize a material gain or loss on the sale.

194.2 CanLP 10 will purchase all of the assets owned by CanLP 23 (other than cash) in consideration for a cash payment and the assumption of liabilities of CanLP 23 having an aggregate FMV equal to the aggregate FMV of the assets purchased (estimated to be approximately $XXXXXXXXXX).

It is expected that CanLP 23 will realize a $XXXXXXXXXX capital gain on the sale.

194.3 CanLP 10 will purchase all of the assets owned by CanLP 24 (other than cash) in consideration for a cash payment and the assumption of liabilities of CanLP 24 having an aggregate FMV equal to the aggregate FMV of the assets purchased (estimated to be approximately $XXXXXXXXXX).

It is expected that CanLP 24 will realize a $XXXXXXXXXX capital gain on the sale.

194.4 [Reserved]

Reorganization of DC ULC Share Capital

195. DC ULC will reorganize its capital (the “Capital Reorganization”) by amending its articles of incorporation to create a new class of an unlimited number of common shares having one vote per share (the “DC ULC New Common Shares”) and a new class of an unlimited number of special shares (the “DC ULC Special Shares”) (the DC ULC New Common Shares and the DC ULC Special Shares are collectively referred to as the “DC ULC Shares”). The new shares will have the rights and conditions as described below:

(a) the DC ULC New Common Shares will have all attributes currently attached to the CanParent ULC Common Shares and, in addition, will provide any holder owning more than XXXXXXXXXX% of the issued and outstanding DC ULC New Common Shares with the right to requisition the directors of DC ULC to call a meeting of the holders of DC ULC New Common Shares for any of the purposes stated in the requisition and should the directors of DC ULC not call such meeting within XXXXXXXXXX days after receiving such requisition a shareholder who made such requisition may call a meeting in the manner in which such meeting may be called under the governing legislation and the articles of DC ULC; and

(b) the DC ULC Special Shares will have the following attributes:

(i) each DC ULC Special Share will be redeemable, subject to applicable law, at any time at the option to DC ULC at an amount equal to the amount (such amount being the “DC ULC Redemption Amount”) obtained by multiplying the aggregate FMV of the issued and outstanding DC ULC Common Shares immediately prior to the Capital Reorganization by the Butterfly Percentage and then dividing such product by the number of DC ULC Special Shares issued on the Capital Reorganization, plus the amount of all declared but unpaid dividends thereon;

(ii) each DC ULC Special Share will be retractable, subject to applicable law, at any time at the option of the holder thereof for an amount equal to the DC ULC Redemption Amount;

(iii) the holder of each DC ULC Special Share will be entitled to a non-cumulative cash dividend as and when declared by the directors of DC ULC from time to time, which dividend need not also be declared on any other class of shares of DC ULC;

(iv) there will be a provision restricting the payment of dividends on other classes of shares so that no such dividends may be paid on any other class of shares of DC ULC if the resulting realizable value of the net assets of DC ULC after payment of the dividends would be less than the aggregate DC ULC Redemption Amount of all of the DC ULC Special Shares then outstanding;

(v) the holder of each DC ULC Special Share will be entitled, upon the liquidation, dissolution or winding-up of DC ULC, to a payment in priority to all other classes of shares of DC ULC of an amount equal to the DC ULC Redemption Amount plus any declared but unpaid dividends thereon to the extent of the amount of value of property available under applicable law for the payments to the shareholders of DC ULC upon liquidation, dissolution or winding-up, but will be entitled to no more than the amount of that payment; and

(vi) the holder of each DC ULC Special Share will not be entitled to vote at any meeting of the shareholders of DC ULC, other than as provided under the statute by which DC ULC is governed.

The DC ULC Special Shares will be Term Preferred Shares, Taxable Preferred Shares and Short-Term Preferred Shares.

195.1 Forco 3 will hold the DC ULC Common Shares, immediately before the Forco 3 Exchange 1, as Capital Property.

196. Forco 3 will exchange each issued and outstanding DC ULC Common Share for one DC ULC New Common Share and one DC ULC Special Share (the “Forco 3 Exchange 1”).

197. The aggregate FMV of the DC ULC Shares owned by Forco 3 immediately following the Forco 3 Exchange 1 will be equal to the aggregate FMV of the DC ULC Common Shares owned by Forco 3 immediately before the Forco 3 Exchange 1.

198. No election under subsection 85(1) will be filed in respect of the Forco 3 Exchange 1.

199. The aggregate addition to the Stated Capital in respect of the DC ULC Shares issued by DC ULC on the Forco 3 Exchange 1 will not exceed the aggregate PUC of the DC ULC Common Shares at the time of the Forco 3 Exchange 1. Such aggregate Stated Capital will be apportioned between the DC ULC New Common Shares and the DC ULC Special Shares in proportion to the relative aggregate FMV of such shares.

Three-Party Share Exchange

200. [Reserved]

201. In the context of a three-party share exchange (the “Three-Party Share Exchange”), pursuant to an agreement among Forco 3, TC ULC and Foreign Spinco:

(a) TC ULC will agree to pay the purchase price for the DC ULC Special Shares transferred by Forco 3 to it on the Three-Party Share Exchange, by issuing TC ULC Common Shares to Foreign Spinco having an aggregate FMV at the time of their issuance equal to the aggregate FMV at the time of the transfer, of the DC ULC Special Shares so transferred to TC ULC, as described in Paragraph 201(b).

TC ULC, Forco 3 and Foreign Spinco will agree that TC ULC Common Shares will be issued to Foreign Spinco in respect of, and by virtue of, the disposition by Forco 3 of the DC ULC Special Shares to TC ULC;

(b) Forco 3 will agree to pay the purchase price for the Foreign Spinco Interests issued to it by Foreign Spinco, as described in Paragraph 201(c), by transferring all of the DC ULC Special Shares to TC ULC, as described in Paragraph 201(a); and

(c) Foreign Spinco will agree to pay the purchase price for the TC ULC Common Shares by issuing Foreign Spinco Interests to Forco 3 having an aggregate FMV at that time equal to the aggregate FMV at that time of the TC ULC Common Shares so issued by TC ULC to Foreign Spinco, as described in Paragraph 201(a).

For greater certainty, the purchase price paid by TC ULC for the DC ULC Special Shares, as described in Paragraph 201(a), will be an amount equal to the aggregate FMV of those shares at the time of their transfer to TC ULC, which will be the amount that an Arm’s-Length purchaser would pay for those shares.

An amount equal to the aggregate PUC of the DC ULC Special Shares, immediately before the time they are transferred to TC ULC, as described in Paragraph 201(b), will be added to the Stated Capital of the TC ULC Common Shares issued to Foreign Spinco, as described in Paragraph 201(a).

201.1 TC ULC will hold the DC Special Shares as Capital Property.

201.2 Immediately following the Three-Party Share Exchange, Foreign Spinco will own all of the issued and outstanding shares in the capital of TC ULC.

No person other than Foreign Spinco will acquire shares in the capital of TC ULC, as part of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D (except for the TC ULC Preferred shares that will be issued to DC ULC, as described in Paragraph 210(b) and the TC ULC Preferred Shares that will be redeemed by TC ULC, as described in Paragraph 213(a)).

202. The DC ULC Special Shares and the DC ULC Common Shares will not constitute Taxable Canadian Property.

Consequently, in respect of the Three-Party Share Exchange, Forco 3 will not: (a) apply for a clearance certificate under section 116; or (b) file a Canadian corporate income tax return to report the disposition of those shares.

203. The aggregate FMV, immediately before the DC ULC Transfer, of the Foreign Spinco Interests owned by Forco 3 will be equal to or approximate the amount determined by the following formula, on the assumption that Forco 3 is the participant, DC ULC is the distributing corporation and Foreign Spinco is the acquiror,

(A × B/C) + D

as found in subparagraph (b)(iii) of the definition of “permitted exchange” in subsection 55(1). In particular, Forco 3 will own all of the Foreign Spinco Interests at that time.

Classification of DC ULC Property

204. Immediately before the DC ULC Transfer, the property of DC ULC will be determined on a consolidated look-through basis by including the appropriate pro rata share of the assets of any corporation and partnership over which DC ULC has the ability to exercise Significant Influence (being each member of the DC ULC Group other than DC ULC). This look-through approach will be applied to every tier of corporation and partnership in the DC ULC Group. The assets of DC ULC, determined on a consolidated basis as described herein, will be classified into the following three types of property for the purposes of the definition of “distribution” in subsection 55(1), as follows:

(a) cash or near-cash property, comprising all of the current assets of the DC ULC Group, including cash, marketable securities (except for portfolio investments), accounts receivable, trade receivables, inventory and prepaid expenses;

(b) business property, comprising all of the assets of the DC ULC Group, other than cash or near-cash property, any income from which would, for purposes of the Act, be income from an active business (other than a Specified Investment Business) including goodwill; and

(c) investment property, comprising all of the assets of the DC ULC Group, other than cash or near-cash property, any income from which would, for purposes of the Act, be income from property or from a Specified Investment Business.

For greater certainty, for purposes of the determination described in this Paragraph and Paragraph 206:

(d) any tax accounts such as the balance of any non-capital losses of the DC ULC Group or the balance of any RDTOH or CDA of the DC ULC Group, if any, will not be considered property;

(e) advances or receivables that are due within the next 12 months or those with no fixed terms of repayment that the creditor can require the debtor to pay at any time (other than as described in Paragraph 204(i)) will be considered cash or near-cash property;

(f) [Reserved]

(g) [Reserved]

(h) DC ULC will be considered to have Significant Influence over a corporation or a partnership if it has Significant Influence over that corporation or that partnership or over any other corporation that has Significant Influence over that corporation or that partnership, or if DC ULC in combination with corporations over which it has Significant Influence have Significant Influence over that corporation or that partnership, and for greater certainty DC ULC will be considered to have Significant Influence over each of member of the DC ULC Group (other than DC ULC); and

(i) for the purposes of determining the FMV of each type of property of DC ULC, the FMV of the shares of any corporation or the partnership interest of any partnership over which any of the above mentioned corporations or partnerships has the ability to exercise Significant Influence and of any indebtedness receivable by any such corporation or such partnership from a corporation or a partnership over which it has Significant Influence, will be allocated among the three types of property described above, by multiplying the aggregate FMV of the shares of the particular corporation or the partnership interest of the particular partnership or amount receivable from the particular corporation or the particular partnership, as the case may be, by the proportion that the net FMV of each type of property owned by the particular corporation or by the particular partnership (as determined in accordance with the principles described in this Paragraph and Paragraph 206) is of the aggregate net FMV of all the property owned by such corporation or partnership (as determined in accordance with the principles described in this Paragraph and Paragraph 206).

205. [Reserved]

206. In determining, on a consolidated basis, the net FMV of each of the three types of property of the DC ULC Group immediately before the DC ULC Transfer, the liabilities of DC ULC and any corporation or any partnership over which DC ULC exercises Significant Influence will be allocated to, and will be deducted in the calculation of the net FMV of, each type of property of DC ULC or such corporation or such partnership, as the case may be, in the manner described in paragraphs (a) and (b) below:

(a) in determining the net FMV of each type of property of a corporation or of a partnership over which DC ULC exercises Significant Influence immediately before the DC ULC transfer, the liabilities of that corporation or that partnership (other than any amount owing by that corporation or that partnership to another corporation that has Significant Influence over the debtor corporation or debtor partnership) will be allocated to, and deducted in the calculation of, the net FMV of each type of property of that particular corporation or that partnership as follows:

(i) current liabilities of that corporation or that partnership will be allocated to each cash or near-cash property of the corporation or partnership in the proportion that the FMV of each such property is of the FMV of all cash or near-cash property owned by such corporation or such partnership. To the extent that the total amount of current liabilities to be allocated to the cash or near-cash property exceeds the total FMV of all the cash or near-cash property, that corporation or that partnership will be considered to have a negative amount of cash or near-cash property;

(ii) following the allocation of current liabilities to the cash or near-cash property as described in Paragraph 206(a)(i), provided that the net FMV of the cash or near-cash property of that corporation or that partnership is positive, any remaining net FMV of any accounts receivable, trade receivables, inventories and prepaid expenses of that corporation or that partnership will be reclassified as business property of that corporation or that partnership and excluded from the net FMV of the cash or near-cash property, to the extent that such property will be collected, sold, used or consumed in the ordinary course of business to which such property relates;

(iii) liabilities, other than current liabilities, of that corporation or of that partnership that relate to a particular property will be allocated to that particular property (and effectively to the type of property to which that particular property belongs) to the extent of its FMV. Any excess of such liabilities over the FMV of a particular property and liabilities that pertain to a particular type of property, but not to a particular property, will then be allocated to that particular type of property. To the extent that the total amount of liabilities that are to be allocated to a particular type of property as described in Paragraph 206(a)(iii), exceeds the total FMV of that type of property, that corporation or that partnership will be considered to have a negative amount of that type of property;

(iv) if any liabilities remain after the allocations described in Paragraphs 206(a)(i) and (iii) are made, such excess unallocated liabilities will then be allocated to the cash or near-cash property, investment property and business property of that corporation or of that partnership, based on the relative net FMV of each type of property immediately prior to the allocation of such excess unallocated liabilities. However, where a corporation or a partnership is considered to have a negative amount of a type of property because of Paragraph 206(a)(i) or (iii), for the purposes of allocating those remaining liabilities, the net FMV of that type of property will be deemed to be nil resulting in none of those remaining liabilities being allocated to that type of property; and

(b) in determining, on a consolidated basis, the net FMV of each type of property of DC ULC immediately before the DC ULC Transfer, DC ULC will include the appropriate pro rata share of the net FMV of each type of property of any corporation or partnership over which DC ULC exercises Significant Influence and, for greater certainty, the appropriate negative amount of such type of property of any such entity, as determined in accordance with Paragraph 206(a), and any liabilities of DC ULC will be allocated to, and be deducted in the calculation of, the net FMV of each type of property of DC ULC in the following manner:

(i) current liabilities of DC ULC will be allocated to the cash or near-cash property of DC ULC in the proportion that the FMV of each such property is of the aggregate FMV of all cash or near-cash property of DC ULC. The allocation of current liabilities as described in Paragraph 206(b)(i) will not exceed the aggregate FMV of all the cash or near-cash property of DC ULC;

(ii) following the allocation of current liabilities to each cash or near-cash property in Paragraph 206(b)(i), any remaining net FMV of any accounts receivable, trade receivables, inventories and prepaid expenses of DC ULC will be reclassified as business property and excluded from the cash or near-cash property, to the extent that such property will be collected, sold, used or consumed in the ordinary course of the business to which such property relates;

(iii) liabilities of DC ULC, other than current liabilities, that relate to a particular property will be allocated to that particular property (and effectively to the type of property to which the particular property belongs) to the extent of its FMV. Any excess of such liabilities over the FMV of a particular property and liabilities that pertain to a particular type of property, but not to a particular property, will then be allocated to that particular type of property, but not in excess of the net FMV of that type of property after the allocation of liabilities to a particular property as described in Paragraph 206(b)(iii); and

(iv) if any liabilities remain after the allocations described in Paragraph 206(b)(i) and (iii) are made, such excess unallocated liabilities will then be allocated to the cash or near-cash property, investment property and business property of DC ULC, on the basis of the relative net FMV of each type of property immediately prior to the allocation of such excess unallocated liabilities, but after the allocation of the liabilities described in Paragraphs 206(b)(i) and (iii).

(i) the amount of any deferred income tax will not be considered a liability because such amount does not represent a legal obligation;

(ii) income taxes and other taxes due and payable within a year will be classified as current liabilities;

(iii) current liabilities will include amounts normally classified as current liabilities, including accounts payable, bonuses payable, and the current portion of any long term debt;

(iv) any current pension plan liability (as determined by the method prescribed by the applicable pension legislation), current post retirement benefit liability, and current liability insurance liabilities will be allocated to cash or near-cash property, and any non-current pension plan liability (as determined by the method prescribed by the applicable pension legislation), non-current post retirement benefit liability, and non-current liability insurance liabilities will be allocated to business property;

(v) any amounts collected from customers and set up as deferred revenue will be considered a liability if there is a legal obligation to repay the amount or provide further services;

(vi) no amount will be considered to be a liability unless it represents a true legal liability which is capable of quantification; and

(vii) a contingent obligation will not be considered a liability.

207. Based on the principles described in Paragraphs 204 and 206, it is anticipated that DC ULC will have cash or near-cash property, business property and investment property at the time of the DC ULC Transfer. Immediately before the DC ULC Transfer, it is anticipated that the investment property held by the DC ULC Group will include the Cansub 2 Retained Loans, the Cansub 2 Spin Loans and the Cansub 6 Loans.

Distribution of Property to TC ULC

208. Immediately after the determination of the types of property and the aggregate net FMV of each type of property described in Paragraphs 204 and 206, DC ULC will transfer (the “DC ULC Transfer”), and will become legally obligated to transfer as described in Paragraph 209, a proportionate share of each type of its property to TC ULC (the “Distribution Property”) such that, immediately following such transfer, the Additional Cash Transfer and the liability assumption described in Paragraph 210(a), the aggregate net FMV of each type of property so transferred to TC ULC (determined in each case on the basis of the principles described in Paragraphs 204 and 206) will be equal to or approximate that proportion of the aggregate net FMV of all property of DC ULC of that type, determined immediately before the DC ULC Transfer that:

(a) the aggregate FMV, immediately before the DC ULC Transfer, of all the DC ULC Special Shares owned by TC ULC at that time,

is of

(b) the aggregate FMV, immediately before the DC ULC Transfer, of all the issued and outstanding DC ULC Shares at that time.

The Distribution Property will include the interest in CanLP 7, CanLP 8, CanLP 10, CanLP 12 and CanLP 13 and all or a portion of the Cansub 2 Spin Loans (the “Distributed Cansub 2 Spin Loans”) owned by DC ULC immediately before the DC ULC Transfer.

The transfer of the Distributed Cansub 2 Spin Loans to TC ULC will constitute an assignment of the Distributed Cansub 2 Spin Loans by DC ULC to TC ULC such that the Distributed Cansub 2 Spin Loans will remain in existence and not be considered to be a new debt.

The aggregate FMV of the Distribution Property is approximately $XXXXXXXXXX.

208.1 The expression “approximate that proportion” described in Paragraphs 208 and 212.1 means that the discrepancy from that proportion, if any, would not exceed XXXXXXXXXX%, determined as a percentage of the aggregate net FMV of each type of property of DC ULC which TC ULC has received (or DC ULC has retained) as compared to what TC ULC would have received (or DC ULC would have retained) had it received (or retained) its appropriate pro rata share of the aggregate net FMV of that type of property of DC ULC.

208.2 Foreign Spinco and TC ULC will file an election in the manner and within the time limit set out in subparagraph 15(2.11)(d)(i) to treat each of the Distributed Cansub 2 Spin Loans as a Pertinent Loan or Indebtedness.

Forco 19 and Forco 20 will be the subject corporations, and TC ULC will be the corporation resident in Canada, for the purposes of subsection 15(2.11). Foreign Spinco will control TC ULC at the time TC ULC acquires the Distributed Cansub 2 Spin Loans and will not deal at Arm’s Length with Forco 19 and Forco 20 at that time.

209. No later than XXXXXXXXXX days after the date of the DC ULC Transfer, DC ULC will transfer to TC ULC any required additional cash (the “Additional Cash Transfer”) necessary to ensure that the aggregate net FMV of that Additional Cash Transfer and of the cash or near-cash property of DC ULC transferred to TC ULC, as described in Paragraph 208, will be equal to or approximate that proportion, as described in paragraphs (a) and (b) of Paragraph 208, of the aggregate net FMV of all cash or near-cash property of DC ULC, determined immediately before the DC ULC Transfer and applying the principles described in Paragraphs 204 and 206.

210. As consideration for the Distribution Property, TC ULC will:

(a) assume certain liabilities of DC ULC including a portion of the Forco 2 Loan; and

(b) issue TC ULC Preferred Shares to DC ULC having an aggregate FMV at that time equal to the amount by which the aggregate FMV of the Distribution Property transferred to TC ULC at that time (for greater certainty, including any Additional Cash Transfer), exceeds the amount of the liabilities assumed by TC ULC, as described in Paragraph 210(a).

210.1 DC ULC will hold the TC Preferred Shares as Capital Property.

211. TC ULC will jointly elect with DC ULC, in prescribed form and within the time limit referred to in subsection 85(6), to have the rules in subsection 85(1) apply to the transfer of each Eligible Property to TC ULC as part of the DC ULC Transfer. Since all properties transferred by DC ULC will be Capital Property (other than depreciable property), the Agreed Amount in each election will be an amount equal to the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii).

212. The amount that will be added to the Stated Capital of the TC ULC Preferred Shares issued by TC ULC, as consideration for the Distribution Property, will not exceed the aggregate cost, determined pursuant to subsection 85(1), to TC ULC of the Distribution Property acquired from DC ULC, less the amount of the liabilities assumed by TC ULC, as described in Paragraph 210(a).

For greater certainty, the increase to the aggregate PUC of the TC ULC Preferred Shares issued to DC ULC, will not exceed the maximum amount that could be added to the aggregate PUC of such shares, having regard to subsection 85(2.1).

212.1 Immediately following the DC ULC Transfer, the Additional Cash Transfer and the liability assumption described in Paragraph 210(a), the aggregate net FMV of each type of property retained by DC ULC (determined in each case on the basis of the principles described in Paragraphs 204 and 206) will be equal to or approximate that proportion of the aggregate net FMV of all property of DC ULC of that type, determined applying those principles, immediately before such transfer that:

(a) the aggregate FMV, immediately before the DC ULC Transfer, of all the DC ULC New Common Shares owned by Forco 3 at that time,

is of

(b) the aggregate FMV, immediately before the DC ULC Transfer, of all the issued and outstanding DC ULC Shares at that time.

Share Redemptions

213. Immediately following the DC ULC Transfer, the following transactions will occur simultaneously:

(a) TC ULC will redeem all of the TC ULC Preferred Shares owned by DC ULC (the “TC ULC Redemption”) for an amount equal to their aggregate TC ULC Redemption Amount.

In satisfaction of the aggregate TC ULC Redemption Amount for such shares, TC ULC will issue a promissory note, payable to DC ULC on demand without interest, having a Principal Amount and FMV equal to the aggregate TC ULC Redemption Amount of the TC ULC Preferred Shares so redeemed (the “TC ULC Redemption Note”).

DC ULC will accept the TC ULC Redemption Note in full payment of the redemption price of the TC ULC Preferred Shares.

TC ULC will not designate the TC ULC Dividend to be an Eligible Dividend under subsection 89(14).

(b) DC ULC will redeem all of the DC ULC Special Shares owned by TC ULC (the “DC ULC Redemption”) for an amount equal to their aggregate DC ULC Redemption Amount.

In satisfaction of the aggregate DC ULC Redemption Amount for such shares, DC ULC will issue a promissory note, payable to TC ULC on demand without interest, having a Principal Amount and FMV equal to the aggregate DC ULC Redemption Amount of the DC ULC Special Shares so redeemed (the “DC ULC Redemption Note”).

TC ULC will accept the DC ULC Redemption Note in full payment of the redemption price of the DC ULC Special Shares.

DC ULC will not designate the DC ULC Dividend to be an Eligible Dividend under subsection 89(14).

Promissory Note Set-Off

214. Immediately following the TC ULC Redemption and the DC ULC Redemption, the Principal Amount owing by TC ULC under the TC ULC Redemption Note and the Principal Amount owing by DC ULC under the DC ULC Redemption Note will be set-off in full against each other and each such note will be marked paid in full and extinguished.

VII. POST-BUTTERFLY TRANSACTIONS

Asset Drop-Down

215. [Reserved]

216. [Reserved]

217. [Reserved]

218. [Reserved]

218.1 [Reserved]

218.2 New CanLP 1 will purchase all of the assets owned by CanLP 10 that were purchased from CanLP 17, as described in Paragraph 194.1, at a purchase price equal to the aggregate FMV, at the time of the purchase, of the assets purchased (estimated to be less than $XXXXXXXXXX).

The purchase price may be satisfied by payment in cash and the assumption of liabilities of CanLP 10 that were formerly owing by CanLP 17.

TC ULC will subscribe for units of New CanLP 1 by delivering to New CanLP 1 the amount of cash required by New CanLP 1 to effect the purchase, as described in this Paragraph.

218.3 New CanLP 2 will purchase all of the assets owned by CanLP 10 that were purchased from CanLP 23, as described in Paragraph 194.2, at a purchase price equal to the aggregate FMV, at the time of the purchase, of the assets purchased (estimated to be less than $XXXXXXXXXX).

The purchase price may be satisfied by payment in cash and the assumption of liabilities of CanLP 10 that were formerly owing by CanLP 23.

TC ULC will subscribe for units of New CanLP 2 by delivering to New CanLP 2 the amount of cash required by New CanLP 2 to effect the purchase, as described in this Paragraph.

218.4 New CanLP 3 will purchase all of the assets owned by CanLP 10 that were purchased from CanLP 24, as described in Paragraph 194.3, at a purchase price equal to the aggregate FMV, at the time of the purchase, of the assets purchased (estimated to be less than $XXXXXXXXXX).

The purchase price may be satisfied by payment in cash and the assumption of liabilities of CanLP 10 that were formerly owing by CanLP 24.

TC ULC will subscribe for units of New CanLP 3 by delivering to New CanLP 3 the amount of cash required by New CanLP 3 to effect the purchase, as described in this Paragraph.

218.5 [Reserved]

Distributed Cansub 2 Spin Loans

219. TC ULC will transfer the Distributed Cansub 2 Spin Loans to TC ULC Sub in consideration for TC ULC Sub Common Shares having an aggregate FMV equal to the aggregate FMV of the Distributed Cansub 2 Spin Loans immediately before the transfer (the “TC ULC Contribution”).

The TC ULC Contribution will constitute an assignment of the Distributed Cansub 2 Spin Loans by TC ULC to TC ULC Sub such that the Distributed Cansub 2 Spin Loans will remain in existence and not be considered to be a new debt.

220. Foreign Spinco and TC ULC Sub will file an election in the manner and within the time limit set out in subparagraph 15(2.11)(d)(i) to treat each of the Distributed Cansub 2 Spin Loans as a Pertinent Loan or Indebtedness.

Forco 19 and Forco 20 will be the subject corporations, and TC ULC Sub will be the corporation resident in Canada, for the purposes of subsection 15(2.11). Foreign Spinco will control TC ULC Sub at the time TC ULC Sub acquires the Distributed Cansub 2 Spin Loans and will not deal at Arm’s Length with Forco 19 and Forco 20 at that time.

Remaining Cansub 2 Spin Loans

220.1 Any remaining Cansub 2 Spin Loans owing by Forco 19 and Forco 20, and retained by DC ULC, will be repaid in cash by Forco 19 and Forco 20, as the case may be.

220.2 [Reserved]

221. [Reserved]

222. [Reserved]

223. [Reserved]

224. [Reserved]

225. [Reserved]

226. [Reserved]

XXXXXXXXXX

227. XXXXXXXXXX

228. [Reserved]

229. [Reserved]

Spin-Out to Foreign Pubco Shareholders

230. After the transactions described in Paragraphs 188 to 227 are completed, the following transactions will be effected to complete the distribution of Foreign Pubco Spinco to the Foreign Pubco shareholders:

(a) Forco 3 will distribute all of the Foreign Spinco Interests to Forco 2 by way of dividend-in-kind;

(b) Forco 2 will incorporate Forco 4 having a capital consisting of membership interests (referred to as the “Forco 4 Interests”). The initial Forco 4 Interest will be issued to Forco 2 in consideration for USD$XXXXXXXXXX. XXXXXXXXXX;

(c) Forco 2 will contribute all of the Foreign Spinco Interests to Forco 4 by way of a contribution to capital. No interests in Forco 4 will be issued;

(d) Forco 2 will distribute the Forco 4 Interest to Forco 1 by way of dividend-in-kind;

(e) XXXXXXXXXX;

(f) Forco 1 will distribute the Forco 4 Interest to Foreign Pubco by way of dividend-in-kind;

(g) Foreign Pubco will contribute the Forco 4 Interest (and any other relevant companies resulting from the world-wide packaging of the Foreign Spin Business) to Foreign Pubco Spinco by way of a contribution to capital. No Foreign Pubco Spinco shares will be issued;

(h) pursuant to an amended and restated Foreign Pubco Spinco certificate of incorporation (which becomes effective at XXXXXXXXXX on XXXXXXXXXX), all of the issued and outstanding Foreign Pubco Spinco common shares that Foreign Pubco owns will be reclassified into that number of common shares that is equal to the number of shares that will be distributed to the Foreign Pubco shareholders in the Spin-Out; and

(i) following the transaction described in Paragraph 230(h), Foreign Pubco will distribute all of its issued and outstanding Foreign Pubco Spinco common shares pro rata to its shareholders as a dividend-in-kind. Each holder will receive one Foreign Pubco Spinco common share for every XXXXXXXXXX Foreign Pubco common shares owned by that holder.

VIII. ADDITIONAL INFORMATION

231. The Proposed Transactions will occur in the order described above unless otherwise indicated, with the exception of the filing of any applicable election forms, which will be filed by the applicable due date following the completion of the Proposed Transactions.

232. No property of any kind whatever has or will become property of DC ULC or of a corporation controlled by DC ULC, and no liabilities have been or will be incurred by DC ULC or a corporation controlled by DC ULC, in contemplation of and before the DC ULC Transfer, otherwise than in a transaction described in subparagraphs 55(3.1)(a)(i) to (iv).

233. As part of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D, there was not and there will not be:

(a) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);

(b) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii); and

(c) an acquisition of shares in the capital stock of DC ULC in the circumstances described in subparagraph 55(3.1)(b)(iii).

234. None of the shares of the capital stock of DC ULC or TC ULC has been or will be, at any time prior to the completion of the Proposed Transactions:

(a) the subject of any undertaking that is referred to in subsection 112(2.2) as a “guarantee agreement”;

(b) a share that is issued or acquired as part of a transaction, event or Series of Transactions or Events of the type described in subsection 112(2.5); or

(c) the subject of a “dividend rental arrangement” referred to in subsection 112(2.3), as that term is defined in subsection 248(1).

235. Each of DC ULC and TC ULC is a Specified Financial Institution. Neither of these corporations is a Financial Intermediary Corporation.

236. The acquisition by DC ULC of the TC ULC Preferred Shares will occur outside the ordinary course of DC ULC’s businesses.

237. The acquisition by TC ULC of the DC ULC Special Shares will occur outside the ordinary course of TC ULC’s businesses.

238. The DC ULC Special Shares and the TC ULC Preferred Shares are not Taxable RFI Shares.

239. Each of DC ULC and TC ULC will have the financial capacity to honour, upon presentation for payment, the amount payable under the promissory note issued or assumed by it as part of the Proposed Transactions.

240. At no time, during the course of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D, will:

(a) XXXXXXXXXX% or more of the aggregate FMV of the Foreign Spinco Interests be derived, directly or indirectly, from the DC ULC Special Shares owned by TC ULC, or the TC ULC Common Shares issued to Foreign Spinco;

(b) XXXXXXXXXX% or more of the aggregate FMV of the Forco 4 Interest be derived, directly or indirectly, from the TC ULC Common Shares issued to Foreign Spinco; or

(c) XXXXXXXXXX% or more of the aggregate FMV of the Foreign Pubco Spinco common shares be derived, directly or indirectly, from the TC ULC Common Shares issued to Foreign Spinco.

For greater certainty, the Proposed Transactions constitute a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D.

241. No disposition of shares or membership interests described in the Subject Transactions, Proposed Transactions or Post-Butterfly Transactions constitutes a disposition of Taxable Canadian Property.

242. TC ULC will not have a RDTOH balance at the end of the Taxation Year in which the TC ULC Dividend is deemed to have been paid.

243. DC ULC will not have a RDTOH balance at the end of the Taxation Year in which the DC ULC Dividend is deemed to have been paid.

244. [Reserved]

244.1 Foreign Pubco management is not aware of an anticipated or expected acquisition of control or takeover of Foreign Pubco Spinco, Foreign Pubco, DC ULC or TC ULC.

244.2 Pursuant to the governing partnership agreements, the general partner of each limited partnership in which DC ULC has a direct or indirect membership interest has the right (subject to limited restrictions relating to disposition of assets and using partnership property outside the course of the partnership business) to manage all activities of the limited partnership and to deal with all limited partnership assets. This right includes the right to exercise voting rights attached to shares of corporations owned by the limited partnership.

244.3 Pursuant to the governing partnership agreements, the partners of each general partnership in which DC ULC has a direct or indirect membership appointed a managing partner. The managing partner of each such general partnership has the right (subject to limited restrictions relating to disposition of assets and using partnership property outside the course of the partnership business) to manage all activities of the general partnership and to deal with all general partnership assets. This right includes the right to exercise voting rights attached to shares of corporations owned by the general partnership.

244.4 At the time of the Spin-Out:

(a) Foreign Pubco and Foreign Pubco Spinco will be corporations resident in Country 1 and will not have ever been resident in Country 34; and

(b) the Foreign Pubco common shares will be widely held and actively traded on the Securities Exchange which is a Designated Stock Exchange in Country 1.

244.5 Under the provisions of the Code that apply to the Spin-Out, the Foreign Pubco shareholders who are resident in Country 1 will not be taxable in respect of the Spin-Out.

244.6 Foreign Pubco will comply with the requirements in paragraph 86.1(2)(e).

244.7 None of the XXXXXXXXXX Transactions will be undertaken in contemplation of the Proposed Transactions and each would have been undertaken irrespective of whether any of the Proposed Transactions will be implemented.

None of the Proposed Transactions will be undertaken in contemplation of the XXXXXXXXXX Transactions and each would have been undertaken irrespective of whether any of the XXXXXXXXXX Transactions will be implemented.

244.8 In the absence of subsection 15(2.11), subsection 15(2) could apply to any of:

(a) the Cansub 2 Spin Loans owing by Forco 19 and Forco 20 to DC ULC, as described in Paragraph 188.1;

(b) the Distributed Cansub 2 Spin Loans owing by Forco 19 and Forco 20 to TC ULC, as described in Paragraph 208.2; and

IX. PURPOSES OF SUBJECT TRANSACTIONS, XXXXXXXXXX TRANSACTIONS AND PROPOSED TRANSACTIONS

245. Management of Foreign Pubco has made the strategic decision to separate its two distinct business segments. The Foreign Pubco Group concluded that creating two independent, public companies will provide, among other things, financial, operational and managerial benefits to each of the companies and its shareholders, including but not limited to the following expected benefits:

(a) The new standalone companies will have greater flexibility to pursue their own focused strategies for growth, both organic and through acquisitions, than they would under the Foreign Pubco Group’s current corporate structure. Each business also will be able to further sharpen its focus on serving its own distinctive customer base. This flexibility and focus is expected to increase investor understanding of each company and its respective position in the industry it serves.

(b) The separation will enable management of each company to devote its time and attention to the development and implementation of corporate strategies and policies that are based solely on the specific business characteristics of such company, and to design more tailored performance measures that better reflect these strategies, policies, and business characteristics.

(c) The separation will enable each company to adopt an appropriate capital structure based on the company’s profile and cash flow generation.

245.1 XXXXXXXXXX

245.2 XXXXXXXXXX

XXXXXXXXXX

245.3 XXXXXXXXXX

245.4 XXXXXXXXXX

245.5 XXXXXXXXXX

245.6 XXXXXXXXXX

245.7 XXXXXXXXXX

245.8 XXXXXXXXXX

245.9 XXXXXXXXXX

XXXXXXXXXX

245.10 XXXXXXXXXX

XXXXXXXXXX

245.11 XXXXXXXXXX

245.12 XXXXXXXXXX

245.13 XXXXXXXXXX

X. RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, transactions, Additional Information and the purposes of the Subject Transactions, the XXXXXXXXXX Transactions and the Proposed Transactions, and provided that the Proposed Transactions are completed in the manner described above, our rulings are set forth below:

A. On the exchange of DC ULC Common Shares by Forco 3 on the Forco 3 Exchange 1, the provisions of subsection 86(1) will apply, and the provisions of subsections 86(2) and (2.1) will not apply, to the disposition, by Forco 3, of the DC ULC Common Shares for the DC ULC Shares.

B. As a result of the Three-Party Share Exchange:

(a) the provisions of paragraph 212.1(1)(a) will not apply to deem a dividend to be paid by TC ULC or to be received by Forco 3;

(b) the provisions of paragraph 212.1(1)(b) will not apply to reduce the aggregate PUC of the TC ULC Common Shares that TC ULC issued to Foreign Spinco, as described in Paragraph 201; and

(c) the aggregate ACB to TC ULC of the DC ULC Special Shares that TC ULC acquired from Forco 3 will be equal to the aggregate FMV of those shares at the time of their acquisition.

C. Subject to the application of subsection 69(11), the provisions of subsection 85(1) will apply to the DC ULC Transfer such that the Agreed Amount in respect of each transfer of each Eligible Property will be deemed to be the transferor’s Proceeds of Disposition and the transferee’s cost thereof by virtue of paragraph 85(1)(a).

For greater certainty, the provisions of paragraph 85(1)(e.2) will not apply to the DC ULC Transfer.

D. Subsection 84(3) will apply to:

(a) the TC ULC Redemption, to deem TC ULC to have paid, and DC ULC to have received; and

(b) the DC ULC Redemption, to deem DC ULC to have paid, and TC ULC to have received,

a dividend that is a Taxable Dividend, on the TC ULC Preferred Shares and the DC ULC Special Shares, respectively, equal to the amount, if any, by which the aggregate amount paid upon such redemption exceeds the aggregate PUC in respect of such shares immediately before such redemption and such dividend:

(c) will be included, pursuant to subsection 82(1) and paragraph 12(1)(j), in computing the income of the recipient corporation;

(d) will be deductible, pursuant to subsection 112(1), by the recipient corporation;

(e) will not be a dividend to which any of subsections 112(2.1), (2.2), (2.3) and (2.4) apply;

(f) will be excluded, pursuant to paragraph (j) of the definition of Proceeds of Disposition, in determining the Proceeds of Disposition to the recipient corporation of the shares which are redeemed;

(g) will not be subject to tax under Part IV, except as provided in paragraph 186(1)(b);

(h) will not be subject to tax under Part IV.1 or Part VI.1; and

(i) will, by virtue of subsection 112(3), reduce any loss that would otherwise be determined for the particular recipient corporation as a result of the TC ULC Redemption or the DC ULC Redemption, as the case may be.

E. By virtue of the provisions of paragraph 55(3)(b), subsection 55(2) will not apply to the Taxable Dividends referred to in Ruling D, provided that:

(a) XXXXXXXXXX% or more of the aggregate FMV of the Foreign Spinco Interests is not, at any time during the course of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D, derived, directly or indirectly, from the DC ULC Special Shares owned by TC ULC, or the TC ULC Common Shares issued to Foreign Spinco;

(b) XXXXXXXXXX% or more of the aggregate FMV of the Forco 4 Interest is not, at any time during the course of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D, derived, directly or indirectly, from the TC ULC Common Shares issued to Foreign Spinco;

(c) XXXXXXXXXX% or more of the aggregate FMV of the Foreign Pubco Spinco common shares is not, at any time during the course of a Series of Transactions or Events that includes the Taxable Dividends described in Ruling D, derived, directly or indirectly, from the TC ULC Common Shares issued to Foreign Spinco; and

(d) as part of a Series of Transactions or Events that includes the Taxable Dividends referred to in Ruling D, there is not:

(i) an acquisition of property in the circumstances described in paragraph 55(3.1)(a);

(ii) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);

(iii) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii); or

(iv) an acquisition of shares in the capital stock of DC ULC in the circumstances described in subparagraph 55(3.1)(b)(iii),

which has not been described herein and, for greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b).

F. The set-off and cancellation of the TC ULC Redemption Note held by DC ULC and the DC ULC Redemption Note held by TC ULC, as described in Paragraph 214, will not give rise to a Forgiven Amount, and neither TC ULC nor DC ULC will realize any gain or incur any loss therefrom.

G. Provided that Foreign Spinco and TC ULC Sub file an election in the manner and within the time limit set out in subparagraph 15(2.11)(d)(i) in respect of the Distributed Cansub 2 Spin Loans, each of the Distributed Cansub 2 Spin Loans will be a Pertinent Loan or Indebtedness owing to TC ULC Sub.

H. Provided that:

(a) all of the conditions of paragraphs 86.1(2)(e) are met by Foreign Pubco; and

(b) all of the conditions of paragraph 86.1(2)(f) are met by a particular shareholder of Foreign Pubco receiving the Foreign Pubco Spinco common shares, as described in Paragraph 230(i),

pursuant to subsection 86.1(2), the Spin-Out will be an Eligible Distribution for the particular shareholder of Foreign Pubco for the purposes of section 86.1.

I. The provisions of subsections 15(1), 56(2), 69(4) and 246(1) will not apply to any of the Proposed Transactions.

J. The provisions of subsection 245(2) will not be applied as a result of the Proposed Transactions, in and of themselves, to redetermine the tax consequences confirmed in the rulings given above.

These rulings are given subject to the limitations and qualifications set out in Information Circular 70-6R7 issued by the CRA on April 22, 2016, and are binding on the CRA provided that the Proposed Transactions are completed on or before XXXXXXXXXX.

The above rulings are based on the Act in its present form and do not take into account any proposed amendments to the Act which, if enacted, could have an effect on the rulings provided herein.

COMMENTS

1. We make no comment as to whether any of the shares described in this letter including the DC ULC Common Shares or the DC ULC Special Shares would or would not constitute Taxable Canadian Property.

2. Unless otherwise confirmed, nothing in this ruling should be construed as implying that the CRA has confirmed, reviewed, made any determination, or accepted any method for the determination in respect of:

(a) the PUC of any share or the ACB or FMV of any property referred to herein;

(b) any other tax account of any corporation referred to herein;

(d) any other tax consequence relating to the facts, transactions, Proposed Transactions or any transaction or event taking place either prior to the Proposed Transactions or subsequent to the Proposed Transactions, whether described in this letter or not, other than those specifically described in the rulings given above, including whether any of the Proposed Transactions would also be included in a Series of Transactions or Events that includes other transactions or events that are not described in this letter.

Yours truly,

XXXXXXXXXX
Section Manager
for Division Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without the prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5.

Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistribuer de l'information, sous quelque forme ou par quelque moyen que ce soit, de façon électronique, mécanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.

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