2020-0848061R3 Sequential Butterfly

Principal Issues: Did the proposed sequential butterfly qualify for the exemption in paragraph 55(3)(b)?

Position: Yes.

Reasons: Meets the statutory requirements and our prior positions and rulings on butterfly reorganizations.

Author: XXXXXXXXXX
Section: -

XXXXXXXXXX                                                                 2020-084806

XXXXXXXXXX, 2021

Dear XXXXXXXXXX,

XXXXXXXXXX
Advance Income Tax Ruling

This is in reply to your letter of XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above-noted taxpayer. We also acknowledge the additional information provided to us XXXXXXXXXX but only the information expressly included herein was relied on by us in preparing this letter.

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

(i) in a previously filed tax return of the taxpayers or a person 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 a person related to the taxpayers;

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

(iv) the subject of a current or completed court process involving the taxpayers or a person related to the taxpayers; or

(v) the subject of an advance income ruling previously issued by the Income Tax Rulings Directorate.

DEFINITIONS

In this letter, unless otherwise expressly stated, the following terms have the meaning specified (and the singular shall be read as plural and vice versa, and words importing any gender or the neuter include all genders and the neuter, all as the circumstances require) and unless otherwise noted, all references to monetary amounts are in Canadian dollars.

“A” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“A Estate Freeze” means collectively the transactions described in Paragraphs 185 to 189;

“A Family Trust” means the XXXXXXXXXX with A as trustee, as described in Paragraph 187;

“A Joint Spousal Trust” means the XXXXXXXXXX with A as trustee, as described in Paragraph 189;

“ACB” means “adjusted cost base” and has the meaning assigned by section 54;

“Aco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 12;

“Aco Amalco” means the corporation resulting from the Fifth Amalgamation, as described in Paragraph 306;

“Aco SPA” means the share purchase agreement for the acquisition of Tco Shares by Jco, as described in Paragraph 72(b);

“Aco SPA Grid” has the meaning assigned in Paragraph 72(b);

“Aco SPA Grid Note” has the meaning assigned in Paragraph 72(b);

“Act” means the Income Tax Act (Canada), R.S.C. 1985, c. 1 (5th Supp.), as amended, and, unless otherwise indicated, all statutory references in this letter are to the Act;

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

“arm’s length” has the meaning assigned by section 251;

“Articles” means the Articles of Incorporation or Articles of Amalgamation of a corporation, as may be applicable in the context;

“B” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“B Child 1” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“B Child 2” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“B Estate Freeze” means collectively the transactions described in Paragraphs 190 to 192;

“B Family Trust” means the XXXXXXXXXX with B as trustee, as described in Paragraph 191;

“B Spouse” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“BCA1” means the Business Corporations Act, R.S.A. 2000, c B-9, as amended;

“BCA2” means the Business Corporations Act, S.B.C. 2002, c.57, as amended;

“BCA3” means the Canada Business Corporations Act, C.R.C., c.427, as amended;

“BCA” means BCA1, BCA2 or BCA3, as applicable;

“Bco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 18;

“Bco Amalco” means the corporation resulting from the Sixth Amalgamation, as described in Paragraph 309;

“Broker 1” means XXXXXXXXXX;

“Brokerage Accounts” means the brokerage accounts of Ico with Broker 1;

“Buyer” means XXXXXXXXXX, which acquired the assets of the Oco Subsidiaries, as described in Paragraph 115;

“Butterfly” means either individually or collectively the First, Second and Third Butterfly described in this letter, as applicable;

“C” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“C Family Trust” means the XXXXXXXXXX with C as trustee;

“Canadian partnership” has the meaning assigned by section 102;

“capital dividend” has the meaning assigned by subsection 83(2);

“capital gain” has the meaning assigned by section 54;

“capital property” has the meaning assigned by section 54;

“Cco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 23;

“Cco Amalco” means the corporation resulting from the Seventh Amalgamation, as described in Paragraph 312;

“CCPC” means “Canadian-controlled private corporation” and has the meaning assigned by subsection 125(7);

“CDA” means “capital dividend account” and has the meaning assigned by subsection 89(1);

“connected” has the meaning assigned by subsection 186(4);

“CRA” means the Canada Revenue Agency;

“D” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“D Family Trust” means the XXXXXXXXXX, with D and D Spouse as trustees;

“D Spouse” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“DC” refers to either DC1 Amalco, DC2 Amalco or DC3 Amalco, as may be required in the context;

“Dco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 28;

“Dco Amalco” means the corporation resulting from the Eighth Amalgamation, as described in Paragraph 315;

“DC1 Amalco” means the corporation resulting from the First Amalgamation, as described in Paragraph 203;

“DC1 Amalco Class A Common Shares” means the class of shares of DC1 Amalco described in Paragraph 205(a);

“DC1 Amalco Class C Preferred Shares” means a class of shares of DC1 Amalco described in Paragraph 205(c);

“DC1 Amalco Class D Preferred Shares” means a class of shares of DC1 Amalco described in Paragraph 205(c);

“DC1 Amalco Class E Preferred Shares” means a class of shares of DC1 Amalco described in Paragraph 205(c);

“DC1 Amalco Class F Preferred Shares” means a class of shares of DC1 Amalco described in Paragraph 205(c);

“DC1 Amalco Notes 1” has the meaning assigned in Paragraph 232;

“DC1 Amalco Notes 2” has the meaning assigned in Paragraph 242;

“DC2” means XXXXXXXXXX, continued under the BCA3, as described in Paragraph 89;

“DC2 Advances Grid Notes” has the meaning assigned in Paragraph 96(b);

“DC2 Amalco” means the corporation resulting from the Third Amalgamation, as described in Paragraph 244;

“DC2 Amalco Common Shares” has the meaning assigned in Paragraph 247;

“DC2 Amalco Note 1” has the meaning assigned in Paragraph 270;

“DC2 Amalco Note 2” has the meaning assigned in Paragraph 280;

“DC2 Cash Calls” has the meaning assigned in Paragraph 98;

“DC2 Cash Calls Grid Notes” means the promissory notes issued by DC2 to Aco, Bco and Cco, as described in Paragraph 98;

“DC3 Amalco” means the corporation resulting from the Fourth Amalgamation, as described in Paragraph 282;

“DC3 Amalco Common Shares” has the meaning assigned in Paragraph 285;

“DC3 Amalco Note” has the meaning assigned in Paragraph 304;

“designated person” has the meaning provided under subsection 74.5(5);

“Director” has the meaning assigned by section 2(1) of the BCA3;

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

“distribution” has the meaning assigned by subsection 55(1);

“dividend refund” has the meaning assigned by subsection 129(1);

“E” means XXXXXXXXXX, an individual who is resident in Canada for the purpose of the Act;

“E Spouse” means XXXXXXXXXX, an individual who is resident in Canada for purposes of the Act;

“Eco” means XXXXXXXXXX, a corporation formed by amalgamation under the BCA2, as described in Paragraph 34;

“Eco Amalco” means the corporation resulting from the Last Amalgamation, as described in Paragraph 318;

“E Family Trust” means the XXXXXXXXXX, with E and E Spouse as trustees;

“Eighth Amalgamation” means the amalgamation of Dco and DC3 Amalco, as described in Paragraph 315;

“eligible dividend” has the meaning assigned by subsection 89(1);

“eligible property” has the meaning assigned by subsection 85(1.1);

“ERDTOH” means “eligible refundable dividend tax on hand” which has the meaning assigned by subsection 129(4);

“F” means XXXXXXXXXX, a shareholder of Qco, as described in Paragraph 127;

“Fco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 40;

“Fifth Amalgamation” means the amalgamation of Aco, DC1 Amalco and DC2 Amalco, as described in Paragraph 306;

“financial intermediary corporation” has the meaning assigned by subsection 191(1);

“First Amalgamation” is the amalgamation of Fco, Gco, Hco, Ico and Jco, as described in Paragraph 203;

“First Butterfly” refers to the transactions described in Paragraphs 211 to 243;

“FMV” or “fair market value” means the amount, expressed in money terms, that is the highest price available in an open and unrestricted market between informed and prudent parties dealing at arm’s length and under no compulsion to act, and contracting for a taxable purchase and sale, expressed in terms of cash;

“forgiven amount” has the meaning assigned by subsection 80(1) or 80.01(1);

“Fourth Amalgamation” means the amalgamation of KL Amalco and TC2 as described in Paragraph 282;

“guarantee agreement” has the meaning assigned by subsection 112(2.2);

“Gco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 47;

“GRIP” means “General Rate Income Pool” and has the meaning assigned by subsection 89(1);

“Hco” means XXXXXXXXXX, incorporated and revived under the BCA2, as described in Paragraph 53;

“Ico” means XXXXXXXXXX, amalgamated under the BCA2, as described in Paragraph 59;

XXXXXXXXXX;

“Ico Predecessors” are XXXXXXXXXX, all previously incorporated or formed by amalgamation under the BCA2.

XXXXXXXXXX;

“Jco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 67;

“Kco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 73;

“KL Amalco” means the corporation resulting from the Second Amalgamation, described in Paragraph 207;

“KL Amalco Common Shares” means the class of shares of KL Amalco described in Paragraph 209;

“Last Amalgamation” means the amalgamation of Eco and TC5, as described in Paragraph 318;

“Lco” means XXXXXXXXXX incorporated under the BCA2, as described in Paragraph 82;

“Mco” means XXXXXXXXXX, incorporated and restored under the BCA2, as described in Paragraph 99;

“Nco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 105;

“net capital losses” has the meaning assigned by subsection 111(8);

“non-capital losses” has the meaning assigned by subsection 111(8);

“NERDTOH” means “non-eligible refundable dividend tax on hand” and has the meaning assigned by subsection 129(4);

“Oco” means XXXXXXXXXX, incorporated under the BCA3 and a predecessor corporation of Oco Amalco, as described in Paragraph 111;

“Oco Amalco” means the corporation resulting from the amalgamation under the BCA3 of Oco and the Oco Subsidiaries, as described in Paragraph 111;

“Oco Amalco Wind-Up” refers to the transactions described in Paragraphs 194 to 196;

“Oco Subsidiaries” means Oco Subsidiary 1, Oco Sub-Subsidiary 1, Oco Subsidiary 2 and Oco Sub-Subsidiary 2;

“Oco Subsidiary 1” means XXXXXXXXXX, continued under the BCA3 and a predecessor corporation of Oco Amalco. It was formerly XXXXXXXXXX and changed its name to XXXXXXXXXX, all under the BCA2. It then continued as XXXXXXXXXX under the BCA3;

“Oco Subsidiaries-Buyer Asset Sale” refers to the sale of assets by the Oco Subsidiaries described in Paragraphs 115 to 118;

“Oco Sub-Subsidiary 1” means XXXXXXXXXX, incorporated under the BCA1 and a predecessor corporation of Oco Amalco;

“Oco Subsidiary 2” means XXXXXXXXXX, formerly XXXXXXXXXX, continued under the BCA1 and a predecessor corporation of Oco Amalco;

“Oco Sub-Subsidiary 2” XXXXXXXXXX, incorporated under the BCA3 and a predecessor corporation of Oco Amalco;

XXXXXXXXXX;

“Paragraph” means a numbered or lettered paragraph of this letter;

“Pco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 119;

“Pre-Butterfly Dissolutions” means, collectively, the dissolution and winding-up of Mco, Nco, Pco, Qco and Rco described in Paragraphs 197 to 200;

“principal amount” has the meaning assigned by subsection 248(1);

“proceeds of disposition” has the meaning assigned by section 54;

“Proposed Transactions” means the transactions described in Paragraphs 185 to 320.1;

“PUC” means “paid-up capital” as that term is defined in subsection 89(1);

“Qco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 125;

“Rco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 130;

“RDTOH” means “refundable dividend tax on hand”, with the meaning assigned by subsection 129(3) of the Act, prior to its repeal;

“Registrar of Companies” means the Registrar of Companies under the BCA2;

“related” has the meaning assigned by subsection 251(2);

“resident of Canada” means resident of Canada for purposes of the Act;

“restricted financial institution” has the meaning assigned by subsection 248(1);

“Sco” means XXXXXXXXXX, a corporation incorporated under the BCA3;

“Second Amalgamation” is the amalgamation described starting at Paragraph 207;

“Second Butterfly” refers to the transactions described in Paragraph 249 to 281;

“series of transactions or events” includes the transactions or events referred to in subsection 248(10);

“Seventh Amalgamation” means the amalgamation of Cco and TC4, as described in Paragraph 312;

“short term preferred share” has the meaning assigned by subsection 248(1);

“Sixth Amalgamation” means the amalgamation of Bco and TC3, as described in Paragraph 309;

“specified financial institution” has the meaning assigned by subsection 248(1);

“specified investment business” has the meaning assigned by subsection 125(7);

“stated capital” has the meaning assigned by the applicable BCA;

“Stock Exchange” means the XXXXXXXXXX;

“Subject Transaction” means the transactions described in Paragraph 183.2;

“substantial interest” has the meaning assigned by subsection 191(2);

“taxable dividend” has the meaning assigned by subsection 89(1);

“taxable preferred share” has the meaning assigned by subsection 248(1);

“taxation year” has the meaning assigned by subsection 249(1);

“TC” means a transferee corporation and has the meaning assigned in the definition of “distribution” in subsection 55(1);

“TC1” means the new corporation to be incorporated under the BCA2, as described in Paragraph 211;

“TC1 Common Shares” means the class of shares of TC1 described in Paragraph 213(a);

“TC1 Distribution Property” means the property distributed to TC1 described in Paragraph 224;

“TC1 Preferred Shares” means the class of shares of TC1 described in Paragraph 213(b);

“TC1 Note” has the meaning assigned in Paragraph 231;

“TC2” means the new corporation to be incorporated under the BCA2, as described in Paragraph 211;

“TC2 Common Shares” means the class of shares of TC2 described in Paragraph 214(a);

“TC2 Distribution Property” means the distribution of property to TC2 described in Paragraph 234;

“TC2 Preferred Shares” means the class of shares of TC2 described in Paragraph 214(b);

“TC2 Note” has the meaning assigned in Paragraph 241;

“TC3” means the new corporation to be incorporated under the BCA2, as described in Paragraph 249;

“TC3 Common Shares” means the class of shares of TC3 described in Paragraph 251(a);

“TC3 Distribution Property” means the distribution of property to TC3 described in Paragraph 262;

“TC3 Preferred Shares” means the class of shares of TC3 described in Paragraph 251(b);

“TC3 Note” has the meaning assigned in Paragraph 269;

“TC4” means the new corporation to be incorporated under the BCA2, as described in Paragraph 249;

“TC4 Common Shares” means the class of shares of TC4 described in Paragraph 252(a);

“TC4 Distribution Property” means the distribution of property to TC4 described in Paragraph 272;

“TC4 Preferred Shares” has the meaning assigned in Paragraph 252(b);

“TC4 Note” has the meaning assigned in Paragraph 279;

“TC5” means the new corporation to be incorporated under the BCA2, as described in Paragraph 287;

“TC5 Common Shares” means the class of shares of TC5 described in Paragraph 289(a);

‘TC5 Distribution Property” means the property distributed to TC5 described in Paragraph 296;

“TC5 Preferred Shares” means the class of shares of TC5 described in Paragraph 289(b);

“TC5 Note” has the meaning assigned in Paragraph 303;

“TCC” means “taxable Canadian corporation” and has the meaning assigned in subsection 89(1);

“Tco” means XXXXXXXXXX, a public corporation created under the BCA3, the shares of which are traded on the Stock Exchange;

“term preferred share” has the meaning assigned by subsection 248(1);

“Third Amalgamation” means the amalgamation of DC2 and TC1 to form DC2 Amalco, as described in Paragraph 244;

“Third Butterfly” refers to the transactions described in Paragraphs 287 to 305;

“T2” refers to a Canadian Corporate Income Tax Return;

“Uco” means XXXXXXXXXX, incorporated under the BCA2, as described in Paragraph 136;

“UCC” means “undepreciated capital cost” as that term is defined in subsection 13(21);

“Vco” means XXXXXXXXXX, incorporated under the BCA2. It is wholly-owned by Kco and is a shareholder of Qco, in its capacity as general partner of UV LP;

“UV LP” means XXXXXXXXXX, a limited partnership formed under the XXXXXXXXXX, as described in Paragraph 149;

“Wco” means XXXXXXXXXX, a corporation formed by amalgamation under the BCA2, as described in Paragraph 156;

“Xco” means XXXXXXXXXX, incorporated under the BCA1, as described in Paragraph 163;

“Yco” means XXXXXXXXXX, incorporated under the BCA1, as described in Paragraph 170;

“Yco Management Employees” means collectively Yco Management Employee 1, Yco Management Employee 2, Yco Management Employee 3, Yco Management Employee 4 and Yco Management Employee 5;

“Yco Management Employee 1” is an individual resident in Canada who is not related to Yco and who owns shares of Yco directly and indirectly through a holding corporation;

“Yco Management Employee 2” means an employee of Yco who is individual resident in Canada and who is not related to Yco;

“Yco Management Employee 3” means an employee of Yco who is individual resident in Canada and who is not related to Yco;

“Yco Management Employee 4” means an employee of Yco who is individual resident in Canada and who is not related to Yco;

“Yco Management Employee 5” means an employee of Yco who is individual resident in Canada and who is not related to Yco; and

“Zco” means XXXXXXXXXX, incorporated under the BCA2 as described in Paragraph 177.

FACTS

Individuals

1. A, B, C, D and E are each an individual resident in Canada.

2. A, B, C, D and E are not related.

3. A and B are contemplating the implementation of estate plans. Each of A and B’s estate planning has been independently contemplated for personal and family reasons and is not in contemplation of the Butterfly.

Corporations

Overview

4. Aco, Bco, Cco, Dco and Eco are XXXXXXXXXX, generally acting at arm’s length with one another and investing in various entities, including corporations described herein. Aco also manages numerous businesses. Aco, Bco, Cco, Dco and Eco indirectly and collectively own less than XXXXXXXXXX% of the shares in Tco, a public corporation, the shares of which are traded on the Stock Exchange. The overall purpose of the Proposed Transactions is to divide the Tco shares among Aco, Bco, Cco, Dco and Eco.

5. Each of Fco, Gco, Hco, Ico and Jco is controlled by an unrelated group composed of DC2, which is controlled by Aco, and Kco or Lco, which are controlled by Dco. Each of Fco, Gco and Hco is inactive. Ico is a holding corporation, it has over time acquired shares of Tco and transferred them to other companies in the group, including Jco. Fco, Gco, Hco, Ico and Jco will amalgamate to form DC1 Amalco, the distributing corporation of the First Butterfly.

6. DC2 is a XXXXXXXXXX, investing in various entities, including corporations described herein. It also owns XXXXXXXXXX. DC2 will amalgamate with TC1 to form DC2 Amalco, the distributing corporation of the Second Butterfly.

7. Kco and Lco are corporations owned XXXXXXXXXX% by Dco and XXXXXXXXXX% by Eco. They are each a XXXXXXXXXX, investing in various entities, including corporations described herein. Kco and Lco will amalgamate to form KL Amalco, and then KL Amalco will amalgamate with TC2, to form DC3 Amalco, the distributing corporation in the Third Butterfly. Immediately before the Third Butterfly, DC3 Amalco will own inter alia shares in Uco, Vco, Wco, Xco, Yco and Zco as well as property received by TC2 from the First Butterfly. Uco and Vco are the limited and general partner of UV LP, respectively. UV LP and Yco carry on an active business.

8. Nco owns XXXXXXXXXX% of the shares of the capital stock of Oco Amalco. The Oco Subsidiaries (which are the predecessors to Oco Amalco) sold all of their assets to the Buyer (an arm’s length third party) in XXXXXXXXXX. Nco and Oco Amalco are now inactive and in the process of being wound-up.

9. Mco, Pco, Qco and Rco are inactive and will be wound-up prior to the First Butterfly.

10. [Reserved]

11. [Reserved]

Holding corporations

Aco

12. Aco was incorporated on XXXXXXXXXX.

13. Aco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraphs 16 and 17). It also provides XXXXXXXXXX. Aco holds registered title to shares of the capital stock of Tco on behalf of Jco as beneficial owner.

14. Aco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC

14.1 The authorized share capital of Aco consists of XXXXXXXXXX Common Shares without par value, XXXXXXXXXX Redeemable Preferred Shares with a par value of $XXXXXXXXXX each, XXXXXXXXXX Class B Preferred shares with a par value of $XXXXXXXXXX each and XXXXXXXXXX Class C Preferred shares with a par value of $XXXXXXXXXX each.

Only the Common Shares are issued and outstanding.

The Common Shares are voting, entitled to receive dividends at the discretion of the directors subject to dividend rights of shares having priority over the Common Shares, upon winding-up/liquidation entitled to receive, subject to the rights of the holders of shares having priority over the Common Shares, the pro rata amount of the remaining assets of the company.

15. The issued and outstanding shares of the capital stock of Aco are owned as follows:

Shareholder	Number	Class
A	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares in is $XXXXXXXXXX. A holds his Common Shares as capital property.

16. Aco owns XXXXXXXXXX Class A Shares of the capital stock of DC2, representing XXXXXXXXXX% of the voting shares of DC2 issued and outstanding.

17. Aco owns XXXXXXXXXX Class A Shares of the capital stock of Jco, representing XXXXXXXXXX% of the voting shares of Jco issued and outstanding.

17.1 As of XXXXXXXXXX, Aco had a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; ERDTOH balance of $XXXXXXXXXX; and net capital loss carry-over balance of $XXXXXXXXXX.

Bco

18. Bco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX By Articles of Amendment, the corporation changed its name to Bco on XXXXXXXXXX.

19. Bco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 22).

20. Bco has a XXXXXXXXXX1 taxation year end. It is a TCC and a CCPC.

20.1 The authorized share capital of Bco consists of XXXXXXXXXX Common Shares without par value, XXXXXXXXXX Preferred Shares with a par value of $XXXXXXXXXX each, XXXXXXXXXX Class A Common Shares with a par value of $XXXXXXXXXX each, XXXXXXXXXX Class B Common Shares without par value, XXXXXXXXXX Class C Common Shares without par value, an unlimited number of Class D Common Shares without par value, an unlimited number of Class E Common Shares without par value, an unlimited number of Class F Common Shares without par value and XXXXXXXXXX Class A Preferred Shares with a par value of $XXXXXXXXXX each.

Only the Preferred Shares, the Class A Common Shares, the Class B Common Shares, the Class D Common Shares, the Class E Common Shares, the Class F Common Shares and the Class A Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Preferred Shares: non-voting; entitled to receive, at the discretion of the directors, a non-cumulative annual dividend equal to a fixed percentage of the redemption amount in preference to dividends on the Common Shares and no other dividends; redeemable and retractable at the redemption amount plus declared and unpaid dividends; price adjustment clause; entitled to participate on winding-up/liquidation up to the redemption amount together with declared and unpaid dividends.

b) Class A Common Shares: voting, not entitled to dividends, upon winding-up/liquidation and after the preferred shares are paid only entitled to receive a return of the paid-up capital for each share.

c) Class B Common Shares and Class D Common Shares: non-voting, entitled to receive dividends in the discretion of the directors as long as it does not impair the ability to redeem the Class A Preferred Shares, entitled to participate upon winding-up/liquidation after the preferred shares and Class A Common Shares.

d) Class E Common Shares and Class F Common Shares: non-voting, redeemed upon death of the holder at the redemption amount with a price adjustment clause, entitled to receive dividends in the discretion of the directors as long as it does not impair the ability to redeem the Class A Preferred Shares; entitled to participate upon winding-up/liquidation after the Preferred Shares and Class C Common Shares.

e) Class A Preferred Shares: non-voting, entitled to receive, at the discretion of the directors, a non-cumulative annual dividend determined based on a formula and which does not have priority over other dividends, redeemable, retractable, and upon winding-up/liquidation entitled to receive the redemption amount together with unpaid dividends before distribution to any classes of the Common Shares. There is a price adjustment clause that will adjust the redemption amount of the shares if such amount is different from the FMV of the property for which such shares were issued.

21. The issued and outstanding shares of the capital stock of Bco are owned as follows:

Shareholder	Number	Class
B	XXXXXXXXXX	Preferred Shares
B	XXXXXXXXXX	Class A Common Shares
B	XXXXXXXXXX	Class B Common Shares
B	XXXXXXXXXX	Class A Preferred Shares
B Spouse	XXXXXXXXXX	Class D Common Shares
B Child 1	XXXXXXXXXX	Class E Common Shares
B Child 2	XXXXXXXXXX	Class F Common Shares

The aggregate PUC and ACB of the Class A Common Shares is $XXXXXXXXXX; of the Class B Common Shares is $XXXXXXXXXX; of the Class A Preferred Shares is $XXXXXXXXXX; and a nominal amount for the Class D Common Shares; the Class E Common Shares; and the Class F Common Shares. B, B Spouse, B Child 1 and B Child 2 hold their shares of Bco as capital property.

22. Bco owns XXXXXXXXXX Class B Shares of the capital stock of DC2, representing XXXXXXXXXX% of the voting shares of DC2 issued and outstanding.

22.1 As at XXXXXXXXXX, Bco has a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; NERDTOH balance of $XXXXXXXXXX; ERDTOH balance of $XXXXXXXXXX; and net capital loss carry-over balance of $XXXXXXXXXX.

Cco

23. Cco was incorporated on XXXXXXXXXX under the BCA2.

24. Cco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 27).

25. Cco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

25.1 The authorized share capital of Cco consists of XXXXXXXXXX Class A Common Shares without par value, XXXXXXXXXX Class B Common Shares without par value, XXXXXXXXXX Class C Common Shares without par value, XXXXXXXXXX Class D Common Shares without par value, XXXXXXXXXX Class E Preferred Shares without par value, and XXXXXXXXXX Class F Preferred Shares with a par value of $XXXXXXXXXX each.

Only the Class B Common Shares and Class E Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class B Common Shares: voting, entitled to dividends at the discretion of the directors, subject to the prior rights of the Class E Preferred Shares and Class F Preferred Shares and upon winding-up/liquidation entitled, subject to the prior rights of the Class E Preferred Shares and Class F Preferred Shares and the Class A Common Shares, to share pro-rata in the remaining assets of the company with the holders of the Class C Common Shares and Class D Common Shares.

b) Class E Preferred Shares: non-voting, entitled to dividends at the discretion of the directors, redeemable, retractable, redemption amount determined by the directors and upon winding-up/liquidation entitled to receive, in priority to any other class of shares, the redemption amount together with any unpaid dividends. The Class E Preferred Shares shall only be issued as consideration for the purchase of property pursuant to section 85 of the Act. There is a price adjustment clause that will adjust the redemption amount of the shares if such amount is different from the FMV of the property for which such shares were issued.

26. The issued and outstanding shares of the capital stock of Cco are owned as follows:

Shareholder	Number	Class
C Family Trust	XXXXXXXXXX	Class B Common Shares
C	XXXXXXXXXX	Class E Preferred Shares

The aggregate PUC and ACB of the Class B Common Shares is $XXXXXXXXXX. The PUC and ACB of the Class E Preferred Shares is respectively $XXXXXXXXXX and $XXXXXXXXXX. C Family Trust and C hold their shares of Cco as capital property.

Cco is controlled by the trustees of the C Family Trust.

27. Cco owns 1 Class A Share and XXXXXXXXXX Class C Shares of the capital stock of DC2, representing XXXXXXXXXX% of the voting shares of the capital stock of DC2 issued and outstanding.

27.1 As of XXXXXXXXXX, Cco has a GRIP balance of $XXXXXXXXXX; NERDTOH of $XXXXXXXXXX, ERDTOH of $XXXXXXXXXX and net capital loss carry-over balance of $XXXXXXXXXX.

Dco

28. Dco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX By Articles of Amendment, it changed its name to Dco on XXXXXXXXXX.

29. Dco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 32 and 33).

30. Dco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

30.1 The authorized share capital of Dco consists of XXXXXXXXXX Class A Common Shares with a par value of $XXXXXXXXXX per share, XXXXXXXXXX Class B Common Shares with a par value of $XXXXXXXXXX per share, XXXXXXXXXX Class C Common Shares with a par value of $XXXXXXXXXX per share, XXXXXXXXXX Class D Preferred Shares with a par value of $XXXXXXXXXX per share, XXXXXXXXXX Class E Preferred Shares with a par value of $XXXXXXXXXX per share, XXXXXXXXXX Class F Preferred Shares with a par value of $XXXXXXXXXX per share, an unlimited number of Class G Preferred Shares with a par value of $XXXXXXXXXX per share and an unlimited number of Class H Preferred Shares with a par value of $XXXXXXXXXX per share.

Only the Class A Common Shares, the Class D Preferred Shares and the Class G Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class A Common Shares: voting, entitled to dividends at the discretion of the directors and subject to the prior rights of the Class G Preferred Shares and the Class H Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class D Preferred Shares, the Class Preferred shares, the Class F Preferred Shares, the Class G Preferred Shares and the Class H Preferred Shares, the remaining assets shared equally with the Class B Common Shares and Class C Common Shares.

b) Class D Preferred Shares: non-voting, not entitled to dividends and upon winding-up/liquidation entitled to receive the redemption amount.

c) Class G Preferred Shares: non-voting, entitled to receive a non-cumulative dividend of XXXXXXXXXX% of the redemption amount per annum at the discretion of the directors, the redemption amount is a formula set out in the Articles of the company, redeemable, retractable, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class D Preferred Shares, the Class E Preferred Shares and the Class F Preferred Shares, the redemption price. There is a price adjustment clause.

31. The issued and outstanding shares of the capital stock of Dco are owned as follows:

Shareholder	Number	Class
D Family Trust	XXXXXXXXXX	Class A Common Shares
D	XXXXXXXXXX	Class D Preferred Shares
D	XXXXXXXXXX	Class G Preferred Shares

The aggregate PUC and ACB of the Class A Shares is $XXXXXXXXXX; of the Class D Preferred Shares is $XXXXXXXXXX; and of the Class G Preferred Shares is $XXXXXXXXXX. D Family Trust and D hold their shares of Dco as capital property.

D is controlled by the trustees of the D Family Trust.

32. Dco owns XXXXXXXXXX Common Shares of the capital stock of Kco, representing XXXXXXXXXX% of the voting shares of Kco issued and outstanding.

33. Dco owns XXXXXXXXXX Class A Shares of the capital stock of Lco, representing XXXXXXXXXX% of the voting shares of Lco issued and outstanding.

33.1 As of XXXXXXXXXX, Dco has a GRIP balance of $XXXXXXXXXX; ERDTOH of $XXXXXXXXXX; and net capital loss carry-over balance of $XXXXXXXXXX.

Eco

34. Eco was formed by the amalgamation of XXXXXXXXXX predecessor corporations on XXXXXXXXXX.

35. Eco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 38 and 39).

36. Eco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

36.1 The authorized share capital of Eco consists of XXXXXXXXXX Common Shares without par value and an unlimited number of Class A Preferred Shares with a par value of $XXXXXXXXXX each.

Only the Common shares are issued and outstanding.

The Common Shares are voting, entitled to receive dividends at the discretion of the directors subject to the prior rights of the Class A Preferred Shares, and upon winding-up/liquidation entitled, subject to the prior rights of the Class A Preferred Shares, to share equally in any profits or surplus available for distribution.

37. The issued and outstanding shares of the capital stock of Eco are owned as follows:

Shareholder	Number	Class
E Family Trust	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares is $XXXXXXXXXX. E Family Trust holds its Common Shares as capital property.

38. Eco owns XXXXXXXXXX Common Shares of the capital stock of Kco, representing XXXXXXXXXX% of the voting shares of Kco issued and outstanding.

39. Eco owns XXXXXXXXXX Class C Shares of the capital stock of Lco, representing XXXXXXXXXX% of the voting shares of Lco issued and outstanding.

39.1 As of XXXXXXXXXX, Eco has a GRIP balance of $XXXXXXXXXX; and ERDTOH of $XXXXXXXXXX.  

Predecessors of DC1 Amalco

Fco

40. Fco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX By Articles of Amendment, it changed its name to Fco on XXXXXXXXXX.

41. Fco is a holding corporation.

42. Fco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

42.1 The authorized share capital of Fco consists of XXXXXXXXXX Common Shares without par value. The Common Shares are voting, entitled to dividends at the discretion of the directors and upon winding-up/liquidation entitled to receive the pro-rata the remaining assets of the company.

43. The issued and outstanding shares of the capital stock of Fco are owned as follows:

Shareholder	Number	Class
Lco	XXXXXXXXXX	Common Shares
DC2	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Lco is $XXXXXXXXXX; and the aggregate PUC and ACB of the Common Shares held by DC2 is $XXXXXXXXXX.

44. Lco and DC2 own their respective Common Shares of the capital stock of Fco as capital property.

45. As of XXXXXXXXXX, Fco’s assets were comprised of XXXXXXXXXX Class E Preferred Shares in the capital stock of Ico, representing XXXXXXXXXX% of the voting shares of Ico issued and outstanding.

46. As of XXXXXXXXXX, Fco’s liabilities were comprised of $XXXXXXXXXX of amounts payable to various entities in the group.

46.1 As of XXXXXXXXXX, Fco has a non-capital loss carry-over balance of $XXXXXXXXXX.

Gco

47. Gco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX. By Articles of Amendment, it changed its name to Gco on XXXXXXXXXX.

48. Gco is currently inactive and does not carry on business operations. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

48.1 The authorized share capital of Gco consists of XXXXXXXXXX Common Shares without par value. The Common Shares are voting, entitled to dividends at the discretion of the directors and upon winding-up/liquidation are entitled receive pro rata the remaining assets of the company.

49. The issued and outstanding shares of the capital stock of Gco are owned as follows:

Shareholder	Number	Class
Kco	XXXXXXXXXX	Common Shares
DC2	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Kco is $XXXXXXXXXX and the aggregate PUC and ACB of the Common Shares held by DC2 is $XXXXXXXXXX.

50. Kco and DC2 own their respective Common Shares of the capital stock of Gco as capital property.

51. As of XXXXXXXXXX, Gco’s assets were comprised of $XXXXXXXXXX of cash and $XXXXXXXXXX of amounts receivable from various entities in the group.

52. As of XXXXXXXXXX, Gco’s liabilities were comprised of $XXXXXXXXXX of amounts payable and accrued liabilities and $XXXXXXXXXX of accounts payable to various entities in the group.

52.1 As of XXXXXXXXXX, Gco has a GRIP balance of $XXXXXXXXXX and a non-capital loss carry-over balance of $XXXXXXXXXX.

Hco

53. Hco was incorporated as XXXXXXXXXX under the BCA2. On XXXXXXXXXX, Hco was dissolved by the XXXXXXXXXX and it was then revived under the name XXXXXXXXXX.

54. Hco is currently inactive and does not carry on business operations. Hco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

54. The authorized share capital of Hco consists of XXXXXXXXXX Common Shares without par value. The Common Shares are voting, entitled to receive dividends at the discretion of the directors and upon winding-up/liquidation are entitled to receive pro rata the remaining assets of the company.

55. The issued and outstanding shares of the capital stock of Hco are owned as follows:

Shareholder	Number	Class
Kco	XXXXXXXXXX	Common Shares
DC2	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Kco is $XXXXXXXXXX and of the Common Shares held by DC2 is $XXXXXXXXXX.

56. Kco and DC2 own their respective Common Shares in the capital stock of Hco as capital property.

57. As of XXXXXXXXXX, Hco’s assets were comprised of $XXXXXXXXXX receivable from Mco.

58. As of XXXXXXXXXX, Hco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities and $XXXXXXXXXX of amounts payable to Ico.

58.1 As of XXXXXXXXXX, Hco had a non-capital loss carry-over balance of $XXXXXXXXXX.

Ico

59. Ico is a corporation formed by the amalgamation of the Ico Predecessors to form XXXXXXXXXX, on XXXXXXXXXX under the BCA2. By Articles of Amendment it changed its name to XXXXXXXXXX on XXXXXXXXXX and to XXXXXXXXXX on XXXXXXXXXX

60. Ico is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter. Ico holds shares in Tco as the registered owner on behalf of Jco as beneficial owner.

61. Ico has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

61.1 The authorized share capital of Ico consists of XXXXXXXXXXCommon Shares without par value, XXXXXXXXXX Class A Preferred Shares without par value, XXXXXXXXXXClass B Preferred Shares with a par value of $XXXXXXXXXXper share, XXXXXXXXXX Class C Preferred Shares with a par value of $XXXXXXXXXX per share, an unlimited number of Class D Shares without par value and an unlimited number of Class E Voting Preferred Shares without par value.

Only the Class D Shares and the Class E Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class D Shares: non-voting, entitled to receive dividends at the discretion of the directors and upon winding-up/liquidation entitled, subject to the prior rights of the Class A Preferred Shares, the Class B Preferred Shares, the Class C Preferred Shares and the Class E Preferred Shares, to share equally in distributions of the property or assets of the company.

b) Class E Preferred Shares: voting, not entitled to dividends, redeemable, retractable, the redemption price is the FMV of all of the outstanding Common Shares on the day before the Class E shares are first issued divided by the number of Class E Preferred Shares issued, there is a price adjustment clause that will adjust the redemption amount of the shares if such amount is different from the FMV of the property for which such shares were issued and upon winding-up/liquidation entitled to receive, in priority to any other share other than the Class B Preferred Shares, the redemption price.

62. The issued and outstanding shares of the capital stock of Ico are owned as follows:

Shareholder	Number	Class
Fco	XXXXXXXXXX	Class E Preferred Shares
Kco	XXXXXXXXXX	Class D Shares
DC2	XXXXXXXXXX	Class D Shares

The aggregate PUC and ACB of the Class E Preferred Shares held by Fco is $XXXXXXXXXX; of the Class D Preferred Shares held by Kco is $XXXXXXXXXX and XXXXXXXXXX; and of the Class D Preferred Shares held by DC2 is $XXXXXXXXXX and $XXXXXXXXXX. Fco, Kco and DC2 hold their shares in the capital of Ico as capital property.

63. As of XXXXXXXXXX, Ico’s assets were comprised of XXXXXXXXXX Class A Common Shares in the capital stock of Qco, representing XXXXXXXXXX% of the voting shares of Qco issued and outstanding, XXXXXXXXXX Class A Common Shares in the capital stock of Jco, representing XXXXXXXXXX% of the voting shares of Jco issued and outstanding, $XXXXXXXXXX of cash, $XXXXXXXXXX of accounts receivable and $XXXXXXXXXX of amounts receivable from various entities in the group.

64. XXXXXXXXXX.

65. As of XXXXXXXXXX, Ico’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities, $XXXXXXXXXX payable on its Brokerage Account and $XXXXXXXXXX of amounts payable to various entities in the group.

66. XXXXXXXXXX.

Jco

67. Jco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX. By Articles of Amendment, it changed its name to Jco on XXXXXXXXXX.

68. Jco is a XXXXXXXXXX in shares of Tco.

69. Jco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

69.1 The authorized share capital of Jco consists of an unlimited number of Class A Common Shares without par value and an unlimited number of Class B Preferred Shares without par value.

Only the Class A Common Shares are issued and outstanding.

The Class A Common Shares are voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Class B Preferred Shares, and upon winding-up/liquidation entitled to receive, in priority to any other share other than the Class B Preferred Shares, the paid-up capital together with any unpaid dividends and any remaining assets available for distribution.

70. The issued and outstanding shares of the capital stock of Jco are owned as follows:

Shareholder	Number	Class
Ico	XXXXXXXXXX	Class A Common Shares
Aco	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares held by Ico is $XXXXXXXXXX; and of the Class A Common Shares held by Aco is $XXXXXXXXXX.

71. As of XXXXXXXXXX, Jco’s assets were comprised of shares of Tco, representing less than XXXXXXXXXX% of the issued and outstanding shares of Tco.

72. As of XXXXXXXXXX, Jco’s liabilities were comprised of the following amounts:

a) $XXXXXXXXXX, payable by Jco to Ico, as described in Paragraph 64(b) above.

b) $XXXXXXXXXX, payable by Jco to Aco pursuant to the terms of a grid promissory note attached to the Share Purchase Agreement dated XXXXXXXXXX (the “Aco SPA” and the “Aco SPA Grid Note”). Pursuant to the Aco SPA, Aco agrees to sell to Jco, from time to time, a number of shares of Tco, for a price set out in a grid, (the “Aco SPA Grid”). In consideration for the acquisition, Jco issued the Aco SPA Grid Note, payable on demand without interest.

72.1 As of XXXXXXXXXX, Jco had a GRIP balance of $XXXXXXXXXX.

Predecessors of DC3 Amalco

Kco

73. Kco was incorporated on XXXXXXXXXX as XXXXXXXXXX under the BCA2. By Articles of Amendment, it changed its name to Kco on XXXXXXXXXX.

74. Kco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 78).

75. Kco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

75.1 The authorized share capital of Kco consists of an unlimited number of Common Shares without par value and an unlimited number of Preferred Shares without par value.

Only the Common shares are issued and outstanding.

The Common shares are voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Preferred Shares, and upon winding-up/liquidation entitled, subject to the prior rights of the Preferred Shares, to share equally in any profits or surplus available for distribution.

76. The issued and outstanding shares of the capital stock of Kco are owned as follows:

Shareholder	Number	Class
Dco	XXXXXXXXXX	Common Shares
Eco	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Dco is $XXXXXXXXXX; and of the Common Shares held by Eco is $XXXXXXXXXX.

77. Dco and Eco own their respective Common Shares of the capital stock of Kco as capital property.

78. As of XXXXXXXXXX, Kco’s assets were comprised of XXXXXXXXXX Class A Common Shares in the capital stock of Uco, representing XXXXXXXXXX% of the voting shares of Uco issued and outstanding, XXXXXXXXXX Class A Common Shares of the capital stock of Vco, representing XXXXXXXXXX% of the voting shares of Vco issued and outstanding, XXXXXXXXXX Class A Common Shares of the capital stock of Wco, representing XXXXXXXXXX% of the shares of Wco issued and outstanding, XXXXXXXXXX Class A Common Shares of the capital stock of Xco representing XXXXXXXXXX% of the voting shares of Xco issued and outstanding, XXXXXXXXXX Class B Common Shares of the capital stock of Nco, representing XXXXXXXXXX% of the voting shares of Nco issued and outstanding, $XXXXXXXXXX of cash, $XXXXXXXXXX of accounts receivable, and $XXXXXXXXXX of amounts receivable from other entities in the group.

79. [Reserved]

80. [Reserved]

81. As of XXXXXXXXXX, Kco’s liabilities were comprised of $XXXXXXXXXX of amounts payable and accrued liabilities to third parties and $XXXXXXXXXX of amounts payable to various entities in the group.

81.1 As of XXXXXXXXXX, Kco had a GRIP balance of $XXXXXXXXXX and ERDTOH balance of $XXXXXXXXXX.

Lco

82. Lco was incorporated on XXXXXXXXXX under the BCA1 as XXXXXXXXXX By Articles of Amendment, it changed its name to XXXXXXXXXX. on XXXXXXXXXX.

83. Lco is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 87).

84. Lco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

84.1 The authorized share capital of Lco consists of XXXXXXXXXX Common Shares without par value, XXXXXXXXXX Class A Shares without par value, XXXXXXXXXX Class B Shares without par value, XXXXXXXXXX Class C Shares without par value and XXXXXXXXXX Class D Shares with a par value of $XXXXXXXXXX per share.

Only the Class A Shares and the Class C Shares are issued and outstanding.

The Class A Shares and Class C Shares are voting, entitled to dividends at the discretion of the directors and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class D Preferred Shares, unpaid dividends and then share equally in any profits or surplus available for distribution, in priority to the Common Shares.

85. The issued and outstanding shares of the capital stock of Lco are owned as follows:

Shareholder	Number	Class
Dco	XXXXXXXXXX	Class A Shares
Eco	XXXXXXXXXX	Class C Shares

The aggregate PUC and ACB of the Class A Shares held by Dco is $XXXXXXXXXX; and of the Class A Shares held by Eco is $XXXXXXXXXX.

86. Dco and Eco own their respective shares of the capital stock of Lco as capital property.

87. As of XXXXXXXXXX, Lco’s assets were comprised of XXXXXXXXXX Common Shares in the capital stock of Fco, representing XXXXXXXXXX% of the voting shares of Fco issued and outstanding, XXXXXXXXXX Common Shares in the capital stock of Zco, representing XXXXXXXXXX% of the shares of Zco issued and outstanding, $XXXXXXXXXX of income taxes recoverable, and $XXXXXXXXXX of amounts receivable from other entities in the group.

88. As of XXXXXXXXXX, Lco’s liabilities were comprised of $XXXXXXXXXX of amounts payable and accrued liabilities and $XXXXXXXXXX of amounts payable to various entities in the group.

88.1 As of XXXXXXXXXX, Lco had a non-capital loss carry-over balance of $XXXXXXXXXX and a net capital loss carry-over balance of $XXXXXXXXXX.

DC2

89. DC2 was incorporated on XXXXXXXXXX under BCA2 as XXXXXXXXXX   It continued under BCA3 as DC2 on XXXXXXXXXX.

90. DC2 is a XXXXXXXXXX, with investments including shares in and debts owing from entities referred to in this letter (including the shares described in Paragraph 94. DC2 also XXXXXXXXXX. DC2 carries on a specified investment business with respect to such real property.

91. DC2 has a XXXXXXXXXX1 taxation year end. It is a TCC and a CCPC.

91.1 The authorized capital of DC2 consists of an unlimited number of Class A Shares, an unlimited number of Class B Shares, an unlimited number of Class C Shares, an unlimited number of Class D Shares, an unlimited number of Class E Shares, an unlimited number of Class F Shares, an unlimited number of Class G Preferred Shares and an unlimited number of Class H Preferred Shares.

Only the Class A Shares, the Class B Shares and the Class C Shares are issued and outstanding.

The Class A Shares, Class B Shares and Class C Shares are voting, entitled to equal dividends at the discretion of the directors and upon winding-up/liquidation entitled to, subject to the prior rights of the Class G Preferred Shares or the Class H Preferred Shares, share equally in any remaining property available for distribution.

92. The issued and outstanding shares of the capital stock of DC2 are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	Class A Shares
Bco	XXXXXXXXXX	Class B Shares
Cco	XXXXXXXXXX	Class A Shares
Cco	XXXXXXXXXX	Class C Shares

The aggregate PUC and ACB of the Class A Shares held by Aco is $XXXXXXXXXX; of the Class B Shares held by Bco is $XXXXXXXXXX; of the Class A Shares held by Cco is $XXXXXXXXXX; and of the Class C Shares held by Cco is $XXXXXXXXXX.

93. Aco, Bco and Cco own their respective shares of DC2 as capital property.

94. As of XXXXXXXXXX, DC2’s assets were comprised of XXXXXXXXXX Common Shares of the capital stock of Fco, representing XXXXXXXXXX% of the voting shares of Fco issued and outstanding, XXXXXXXXXX Common Shares of the capital stock of Gco, representing XXXXXXXXXX% of the voting shares of Gco issued and outstanding, XXXXXXXXXX Common Shares of the capital stock of Hco, representing XXXXXXXXXX% of the voting shares in Hco issued and outstanding, XXXXXXXXXX Class D Shares of the capital stock of Ico, XXXXXXXXXX Common Shares of the capital stock of Mco, representing XXXXXXXXXX% of the voting shares of Mco issued and outstanding, XXXXXXXXXX Class B Common Shares of the capital stock of Nco, representing XXXXXXXXXX% of the voting shares of Nco issued and outstanding, XXXXXXXXXX Class A Common Shares of the capital stock of Pco, representing XXXXXXXXXX% of the voting shares of Pco issued and outstanding, XXXXXXXXXX Class A Common Shares of the capital stock of Qco, representing XXXXXXXXXX% of the voting shares of Qco issued and outstanding, $XXXXXXXXXX of cash, $XXXXXXXXXX of accounts receivable, $XXXXXXXXXX income tax receivable, $XXXXXXXXXX of amounts receivable from various entities in the group and XXXXXXXXXX, the FMV of which is estimated to be $XXXXXXXXXX, which is used to XXXXXXXXXX from a specified investment business.

95. [Reserved]

96. As of XXXXXXXXXX, DC2’s amounts receivable referred to in Paragraph 94 above included:

a) $XXXXXXXXXX receivable from Ico, as further described in Paragraph 66(a) above; and

b) $XXXXXXXXXX, representing indebtedness receivable from Aco, Bco and Cco pursuant to promissory notes issued by Aco, Bco and Cco to DC2 as of XXXXXXXXXX (the “DC2 Advances Grid Notes”). Pursuant to the promissory notes, Aco, Bco and Cco have the right, at any time, to pay all or any portion of the unpaid principal amount outstanding, without notice, penalty or bonus. The amounts payable by each shareholder are as follows:

(i) Aco - $XXXXXXXXXX

(ii) Bco - $XXXXXXXXXX

(iii) Cco - $XXXXXXXXXX

97. As of XXXXXXXXXX, DC2’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities and $XXXXXXXXXX of amounts payable to various entities in the group.

98. DC2’s liabilities referred to in Paragraph 97 above included:

a) $XXXXXXXXXX, representing amounts payable by DC2 to Aco, Bco and Cco, pursuant to the terms of promissory notes and the attached grids (the “DC2 Cash Calls Grid Notes”). Pursuant to the DC2 Cash Calls Grid Notes, DC2 has the right, at any time, to pay all or any portion of the unpaid principal amount balance, without notice, penalty or bonus. The amounts listed on the DC2 Cash Calls Grid Notes are adjusted quarterly (the “DC2 Cash Calls”). The current balances of the Grid Notes are as follows:

(i) Aco - $XXXXXXXXXX

(ii) Bco - $XXXXXXXXXX

(iii) Cco - $XXXXXXXXXX

98.1 As of XXXXXXXXXX, DC2 had a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; ERDTOH balance of $XXXXXXXXXX; non-capital loss carry-over balance of $XXXXXXXXXX; and a net capital loss carry-over balance of $XXXXXXXXXX.

Others

Mco

99. Mco was incorporated on XXXXXXXXXX under the BCA2 under the name XXXXXXXXXX. It was dissolved on XXXXXXXXXX, then revived under the name XXXXXXXXXX on XXXXXXXXXX.

100. Mco is currently inactive. It has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

100.1 The authorized share capital of Mco consists of XXXXXXXXXX Common Shares without par value. The Common Shares are voting, entitled to dividends at the discretion of the directors and upon winding-up/liquidation entitled to receive the pro-rata the assets of the company.

101. The issued and outstanding shares of the capital stock of Mco are owned as follows:

Shareholder	Number	Class
Kco	XXXXXXXXXX	Common Shares
DC2	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Kco is $XXXXXXXXXX; and the Common Shares held by DC2 is $XXXXXXXXXX.

102. Kco and DC2 own their respective common shares of Mco as capital property.

103. As of XXXXXXXXXX, Mco’s assets were comprised of $XXXXXXXXXX of amounts receivable from other entities in the group.

104. As of XXXXXXXXXX, Mco’s liabilities were comprised of $XXXXXXXXXX of amounts payable to various entities in the group.

104.1 As of XXXXXXXXXX, Mco had a non-capital loss carry-over balance of $XXXXXXXXXX.

Nco

105. Nco was incorporated on XXXXXXXXXX under BCA2 as XXXXXXXXXX. By Articles of Amendment, it changed its name to XXXXXXXXXX on

XXXXXXXXXX.

106. Nco is currently inactive. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

106.1 The authorized share capital of Nco consists of an unlimited number of Class A Common Shares without par value, an unlimited number of Preferred Shares without par value and an unlimited number of Class B Common Shares with a par value of $XXXXXXXXXX per share.

Only the Class B Common Shares are issued and outstanding.

The Class B Common Shares are voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Preferred Shares and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Preferred Shares, the paid-up capital thereon, unpaid dividends and then share equally in any profits or surplus available for distribution.

107. The issued and outstanding shares of the capital stock of Nco are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	Class B Common Shares
Kco	XXXXXXXXXX	Class B Common Shares
DC2	XXXXXXXXXX	Class B Common Shares

The aggregate PUC and ACB of the Class B Common Shares held by Aco is nominal; of the Class B Common Shares held by Kco is nominal; and of the Class B Common Shares held by DC2 is nominal.

108. Aco, Kco and DC2 own their respective common shares of Nco as capital property.

109. As of XXXXXXXXXX, Nco’s assets were comprised of XXXXXXXXXX Class F Shares of the capital stock of Oco Amalco, representing XXXXXXXXXX% of the voting shares of Oco Amalco issued and outstanding, $XXXXXXXXXX of cash, XXXXXXXXXX of accounts receivable and $XXXXXXXXXX of amounts receivable from various entities in the group.

110. As of XXXXXXXXXX, Nco’s liabilities were comprised of $XXXXXXXXXX trade accounts payable, and $XXXXXXXXXX of loan payable.

110.1 As of XXXXXXXXXX, Nco has a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; and non-capital loss carry-over balance of $XXXXXXXXXX.

Oco Amalco

111. Oco Amalco is a corporation formed by amalgamation under BCA3 of Oco and the Oco Subsidiaries, on XXXXXXXXXX.

112. Oco Amalco is currently inactive. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

112.1 The authorized share capital of Oco Amalco consists of an unlimited number of Class A Common Shares, an unlimited number of Class B Common Shares, an unlimited number of Class C Common Shares, an unlimited number of Class D Common Shares, an unlimited number of Class E Common Shares and an unlimited number of Class F Preferred Shares.

Only the Class C Common Shares, the Class E Common Shares and the Class F Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class C Common Shares and Class E Common Shares: voting, entitled to dividends at the discretion of the directors except that dividends on the Class C Common Shares shall first be paid as a return of legal stated capital and no dividends or other payment or distribution of assets or property of the company shall be made to the shareholders of the company that would impair the ability to pay the redemption price on the Class F Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class F Redeemable Preferred Shares, declared and unpaid dividends and then share equally in any profits or surplus available for distribution.

b) Class F Preferred Shares: voting, not entitled to dividends unless unanimously approved by the directors, retractable, the redemption amount is $XXXXXXXXXX per share, and upon winding-up/liquidation entitled to receive the redemption price and unpaid dividends.

113. The issued and outstanding shares of the capital stock of Oco Amalco are owned as follows:

Shareholder	Number	Class
Nco	XXXXXXX	Class F Shares
Sco	XXXXXXX	Class C Shares
Sco	XXXXXXX	Class E Shares

The aggregate PUC and ACB of the Class F Shares held by Nco is $XXXXXXXXXX; of the Class C Shares held by Sco is $XXXXXXXXXX; and of the Class E Shares held by Sco is $XXXXXXXXXX.

114. Nco and Sco are not related and hold their shares in Oco Amalco as capital property.

115. Prior to the amalgamation referred to in Paragraph 111, on XXXXXXXXXX, Oco and the Oco Subsidiaries entered into an asset purchase agreement pursuant to which Buyer, a third party, acquired all of the assets owned by the Oco Subsidiaries in consideration for $XXXXXXXXXX, plus working capital adjustments. $XXXXXXXXXX was paid in cash and $XXXXXXXXXX by a vendors’ take back note bearing interest at XXXXXXXXXX% per annum, payable in quarterly installments. The first offer from the Buyer to purchase the assets was received in XXXXXXXXXX.

116. The vendors’ take back note was repaid to Oco Amalco in XXXXXXXXXX, in full, plus accrued interest, in cash. The repayment was in accordance with the asset purchase agreement referred to in Paragraph 115.

117. Between XXXXXXXXXX, the cash received by the Oco Subsidiaries or Oco Amalco was distributed as dividends to the indirect shareholders of the Oco Subsidiaries or Oco Amalco. Cash was retained in Oco Amalco to cover expenses to be paid prior to its projected wind-up.

118. Oco Amalco estimates to have less than $XXXXXXXXXX of undistributed cash and amounts payable to certain indirect shareholders. The undistributed cash should be sufficient to settle such amounts payable.

118.1 As of XXXXXXXXXX, Oco Amalco had a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; NERDTOH balance of $XXXXXXXXXX; and ERDTOH balance of $XXXXXXXXXX.

Pco

119. Pco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX. It changed its name to Pco on XXXXXXXXXX.

120. Pco is currently inactive. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

120.1 The authorized share capital of Pco consists of an unlimited number of Class A Common Shares without par value, an unlimited number of Class B Preferred Shares without par value and an unlimited number of Class C Preferred Shares without par value.

Only the Class A Common Shares and the Class B Preferred Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class A Common Shares: voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Class B Preferred Shares and the Class C Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class B Preferred Shares and the Class C Preferred Shares, the paid-up capital thereon, unpaid dividends and then share equally in any profits or surplus available for distribution.

b) Class B Preferred Shares: may be issued in a series, non-voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Class C Preferred Shares, redeemable, retractable and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class C Preferred Shares, the paid-up capital thereon, unpaid dividends and any premium payable on redemption of such series

121. The issued and outstanding shares of the capital stock of Pco are owned as follows:

Shareholder	Number	Class
Kco	XXXXXXXXXX	Class A Common Shares
Non-related Shareholders	XXXXXXXXXX	Class A Common Shares
DC2	XXXXXXXXXX	Class A Common Shares
Kco	XXXXXXXXXX	Class B Preferred Shares
Aco	XXXXXXXXXX	Class B Preferred Shares

The aggregate PUC and ACB of the Class A Common Shares held by Kco is $XXXXXXXXXX; of the Class A Common Shares held by DC2 is $XXXXXXXXXX; of the Class B Preferred Shares held by Aco is $XXXXXXXXXX; and of the Class B Preferred Shares held by Kco is $XXXXXXXXXX.

122. Aco, Kco, DC2 and the other non-related shareholders hold their shares in Pco as capital property.

123. As of XXXXXXXXXX, Pco’s assets were comprised of XXXXXXXXXX Class A Common Shares of the capital stock of Rco, representing XXXXXXXXXX% of the voting shares of Rco issued and outstanding, $XXXXXXXXXX of cash and $XXXXXXXXXX of amounts receivable from various entities in the group

124. As of XXXXXXXXXX, Pco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities to third parties, and $XXXXXXXXXX of amounts payable to various entities in the group.

124.1As of XXXXXXXXXX, Pco had a GRIP balance of $XXXXXXXXXX; and non-capital loss carry-over balance of $XXXXXXXXXX.

Qco

125. Qco was incorporated on XXXXXXXXXX under the BCA2.

126. Qco is currently inactive. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

126.1 The authorized share capital of Qco consists of an unlimited number of Class A Common shares without par value, an unlimited number of Class B Preferred Shares without par value and an unlimited number of Class C Common Shares without par value.

Only the Class A Voting Common shares and the Class C Voting Common shares are issued and outstanding.

The Class A Common Shares and Class C Common Shares are voting, entitled to dividends at the discretion of the directors subject to the prior rights of the Class B Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class B Preferred Shares, the paid-up capital thereon, unpaid dividends and then share equally in any profits or surplus available for distribution.

127. The issued and outstanding shares of the capital stock of Qco are owned as follows:

Shareholder	Number	Class
Vco, in its capacity as general partner for UV LP	XXXXXXXXXX	Class A Common Shares
Kco	XXXXXXXXXX	Class A Common Shares
F	XXXXXXXXXX	Class C Common Shares
Ico	XXXXXXXXXX	Class A Common Shares
Aco	XXXXXXXXXX	Class A Common Shares
DC2	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares held by Vco is $XXXXXXXXXX; of the Class A Common Shares held by Kco is $XXXXXXXXXX; of the Class C Common Shares held by F is nominal; of the Class A Common Shares held by Ico is $XXXXXXXXXX; of the Class A Common Shares held by Aco is $XXXXXXXXXX; and of the Class A Common Shares held by DC2 is $XXXXXXXXXX. Each of the holders of Class A Common Shares hold such shares as capital property.

128. As of XXXXXXXXXX, Qco’s assets were comprised of XXXXXXXXXXClass B Common Shares of the capital stock of Rco and XXXXXXXXXX Class C Common Shares of the capital stock of Rco, representing XXXXXXXXXX% of the voting shares of Rco issued and outstanding; and $XXXXXXXXXX of cash.

129. As of XXXXXXXXXX, Qco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities to third parties and $XXXXXXXXXX of amounts payable to various entities in the group.

129.1 As of XXXXXXXXXX, Qco had a GRIP balance of $XXXXXXXXXX; non-capital loss carry-over balance of $XXXXXXXXXX and net capital loss carry-over balance of $XXXXXXXXXX.

Rco

130. Rco was incorporated under the BCA2 on XXXXXXXXXX as XXXXXXXXXX. By Articles of Amendment, it changed its name to Rco on XXXXXXXXXX.

131. Rco is currently inactive. It has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

131.1 The authorized share capital of Rco consists of an unlimited number of Class A Common Shares without par value, an unlimited number of Class B Common Shares without par value, an unlimited number of Class C Common Shares without par value, an unlimited number of Class D Preferred Shares without par value and an unlimited number of Class D Preferred, Series 1 shares.

Only the Class A Common Shares, the Class B Common Shares and the Class C Common Shares are issued and outstanding and the special rights and restrictions of these issued shares are as follows:

a) Class A Common Shares: voting, entitled to receive a preferential dividend up to the aggregate amount of $XXXXXXXXXX at the discretion of the directors subject to the prior rights of the Class B Common Shares to their preferential dividend up to the aggregate amount of $XXXXXXXXXX and the Class D Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to the prior rights of the Class B Common Shares to the outstanding amount of their preferential dividend and the Class D Preferred Shares, the outstanding amount of their preferential dividend and then share equally with the Class B Common Shares in any profits or surplus available for distribution subject to the prior rights of the Class C Common Shares.

b) Class B Common Shares: voting, entitled to receive a preferential dividend up to the aggregate amount of $XXXXXXXXXX at the discretion of the directors and subject to the prior rights of the Class D Preferred Shares, and upon winding-up/liquidation entitled to receive, subject to any prior rights of the Class D Preferred Shares, the outstanding amount of their preferential dividend and, once the outstanding amount of the Class A preferential dividend is paid to the Class A Common Shares, to share equally with the Class A Common Shares in any profits or surplus available for distribution subject to the prior rights of the Class C Common Shares) .

c) Class C Common Shares: voting, entitled to dividends at the discretion of the directors and to be paid equally and proportionately with the aggregate amount paid to the holders of the Class A Common Shares and the Class B Common Shares and upon winding-up/liquidation entitled, subject to the prior rights of the Class D Preferred Shares, to share equally in any profits or surplus available for distribution equally and proportionately with the aggregate amount paid to the holders of the Class A Common Shares and Class B Common Shares.

132. The issued and outstanding shares of the capital stock of Rco are owned as follows:

Shareholder	Number	Class
Qco	XXXXXXXXXX	Class B Common Shares
Qco	XXXXXXXXXX	Class C Common Shares
Pco	XXXXXXXXXX	Class A Common Shares
Non-related shareholders	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class B Common Shares held by Qco is $XXXXXXXXXX; of the Class C Common Shares held by Qco is $XXXXXXXXXX; and of the Class A Common Shares held by Pco is $XXXXXXXXXX.

133. Qco, Pco and the other non-related shareholders hold their shares in Rco as capital property.

134. As of XXXXXXXXXX, Rco’s assets were comprised of $XXXXXXXXXX in cash and accounts receivable, and $XXXXXXXXXX of amounts receivable from its shareholders.

135. As of XXXXXXXXXX, Rco’s liabilities were comprised of $XXXXXXXXXX in accounts payable and accrued liabilities.

135.1 As of XXXXXXXXXX, Rco had a GRIP balance of $XXXXXXXXXX and a non-capital loss carry-over balance of $XXXXXXXXXX.

Uco

136. Uco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX. By Articles of Amendment, it changed its name to Uco on XXXXXXXXXX.

137. Uco is a holding company that invested in and is the sole limited partner of UV LP. Uco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

138. The issued and outstanding shares of the capital stock of Uco are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	Class A Common Shares
Kco	XXXXXXXXXX	Class A Common Shares
Non-related shareholders	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Share held by Aco is $XXXXXXXXXX; of the Class A Common Shares held by Kco is $XXXXXXXXXX.

139. Aco, Kco and the other non-related shareholders hold their shares in Uco as capital property.

140. As of XXXXXXXXXX, Uco’s assets were comprised of XXXXXXXXXX limited partner units in UV LP, representing a XXXXXXXXXX% partnership interest in UV LP, $XXXXXXXXXX of cash and accounts receivable and $XXXXXXXXXX of amounts receivable from UVLP.

141. As of XXXXXXXXXX, Uco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities and $XXXXXXXXXX of amounts payable to its shareholders.

141.1 As of XXXXXXXXXX, Uco had a GRIP balance of $XXXXXXXXXX; and a non-capital loss carry-over balance of $XXXXXXXXXX.

Vco

142. Vco was incorporated on XXXXXXXXXX under the BCA2.

143. Vco is the general partner of UV LP.

144. Vco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

145. The issued and outstanding shares of the capital stock of Vco are owned as follows:

Shareholder	Number	Class
Kco	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares is $XXXXXXXXXX.

146. Kco holds its shares of Vco as capital property.

147. As of XXXXXXXXXX, Vco’s assets were comprised of a XXXXXXXXXX% partnership interest in UV LP

148. As of XXXXXXXXXX, Vco’s liabilities were comprised of $XXXXXXXXXX of amounts payable to Kco.

148.1 As of XXXXXXXXXX, Vco had a non-capital loss carry-over balance of $XXXXXXXXXX.

UV LP

149. UV LP is a limited partnership formed on XXXXXXXXXX.

150. UV LP has a XXXXXXXXXX taxation year end and it is a Canadian partnership.

151. UV LP XXXXXXXXXX.

152. The partners of UV LP are as follows:

Partner	Units	Partnership interest
Uco	XXXXXXXXXX	Limited Partner Units
Vco	XXXXXXXXXX	General partner (XXXXXXXXXX% interest)

153. Uco and Vco hold their partnership interests in UV LP as capital property.

154. As of XXXXXXXXXX, UV LP’s assets were comprised of $XXXXXXXXXX of cash, accounts receivable and prepaid expenses, $XXXXXXXXXX of inventory, $XXXXXXXXXX of deferred financing fees, $XXXXXXXXXX of unamortized equipment, $XXXXXXXXXX of intangibles and $XXXXXXXXXX of goodwill.

155. As of XXXXXXXXXX, UV LP’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities, $XXXXXXXXXX of bank indebtedness, and $XXXXXXXXXX of amounts payable to Uco.

Wco

156. Wco is a corporation formed by amalgamation under BCA2 on XXXXXXXXXX as XXXXXXXXXX. By Articles of Amendment, it changed its name to XXXXXXXXXX on XXXXXXXXXX and to Wco XXXXXXXXXX.

157. Wco is a holding company that owns XXXXXXXXXX in which UV LP operates.

158. Wco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

159. The issued and outstanding shares of the capital stock of Wco are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXX	Class A Common Shares
Kco	XXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares held by Aco is $XXXXXXXXXX; and of the Class A Common Shares held by Kco is XXXXXXXXXX.

160. Aco and Kco hold their shares in Wco as capital property.

161. As of XXXXXXXXXX, Wco’s assets were comprised of $XXXXXXXXXX of cash and accounts receivable and $XXXXXXXXXX of amounts receivable from its shareholders. Wco also owns real property, the FMV of which is estimated to be $XXXXXXXXXX, which is leased to UV LP for use in its business operations.

162. As of XXXXXXXXXX, Wco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities and $XXXXXXXXXX of bank indebtedness.

162.1 As of XXXXXXXXXX, Wco had a GRIP balance of $XXXXXXXXXX.

Xco

163. Xco was incorporated on XXXXXXXXXX under the BCA1.

164. Xco is a holding company.

165. Xco has a XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

166. The issued and outstanding shares of the capital stock of Xco are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	Class A Common Shares
Kco	XXXXXXXXXX	Class A Common Shares
Non-related shareholders	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares held by Aco is $XXXXXXXXXX; and of the Class A Common Shares held by Kco is $XXXXXXXXXX.

167. Aco, Kco and the other non-related shareholders hold their shares in Xco as capital property.

168. As of XXXXXXXXXX, Xco’s assets were comprised of $XXXXXXXXXX of cash and XXXXXXXXXX Class A Common Shares of the capital stock of Yco, representing XXXXXXXXXX% of the voting shares of Yco issued and outstanding.

169. Xco’s liabilities are comprised of $XXXXXXXXXX of amounts payable to its shareholders.

169.1 As of XXXXXXXXXX, Xco has a GRIP balance of $XXXXXXXXXX, ERDTOH balance of $XXXXXXXXXX and non-capital loss carry-over balance of $XXXXXXXXXX.

Yco

170. Yco was incorporated on XXXXXXXXXX under the BCA1 as XXXXXXXXXX. By Articles of Amendment, it changed its name to Yco on XXXXXXXXXX.

171. Yco is an XXXXXXXXXX.

172. Yco has a taxation year end that is the last day of XXXXXXXXXX. It is a TCC and a CCPC.

173. The issued and outstanding shares of the capital stock of Yco are owned as follows:

Shareholder	Number	Class
Xco	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 1’s holding company	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 1	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 2	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 3	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 4	XXXXXXXXXX	Class A Common Shares
Yco Management Employee 5	XXXXXXXXXX	Class A Common Shares

The aggregate PUC and ACB of the Class A Common Shares held by Xco is $XXXXXXXXXX; by Yco Management Employee1’s holding company is $XXXXXXXXXX; by Yco Management Employee 1 is $XXXXXXXXXX; by Yco Management Employee 2 is $XXXXXXXXXX; by Yco Management Employee 3 is $XXXXXXXXXX; by Yco Management Employee 4 is $XXXXXXXXXX; and Yco Management Employee 5 is $XXXXXXXXXX.  

174. Xco and the Management Employees hold their shares in Yco as capital property.

175. As of XXXXXXXXXX, Yco’s assets were comprised of XXXXXXXXXX.

176. As of XXXXXXXXXX, Yco’s liabilities were comprised of $XXXXXXXXXXof accounts payable and accrued liabilities, and $XXXXXXXXXX of bank indebtedness.

176.1As of XXXXXXXXXX, Yco had a CDA balance of $XXXXXXXXXX; GRIP balance of $XXXXXXXXXX; and ERDTOH balance of $XXXXXXXXXX.

Zco

177. Zco was incorporated on XXXXXXXXXX under the BCA2 as XXXXXXXXXX. By Articles of Amendment, it changed to its name to Zco on XXXXXXXXXX.

178. Zco is a holding company that formerly held shares of XXXXXXXXXX, which was a publicly traded XXXXXXXXXX.

179. Zco has an XXXXXXXXXX taxation year end. It is a TCC and a CCPC.

180. The issued and outstanding shares of the capital stock of Zco are owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	Common Shares
Dco	XXXXXXXXXX	Common Shares
Eco	XXXXXXXXXX	Common Shares
Lco	XXXXXXXXXX	Common Shares
Non-related shareholder	XXXXXXXXXX	Common Shares

The aggregate PUC and ACB of the Common Shares held by Aco is $XXXXXXXXXX; of the Common Shares held by Dco is $XXXXXXXXXX; of the Common Shares held by Eco is $XXXXXXXXXX; and of the Common Shares held by Lco is $XXXXXXXXXX.

181. Aco, Dco, Eco, Lco and the other non-related shareholder hold their shares in Zco as capital property.

182. As of XXXXXXXXXX, Zco’s assets were comprised of $XXXXXXXXXX of cash and $XXXXXXXXXX of amounts receivable from Gco.

183. As of XXXXXXXXXX, Zco’s liabilities were comprised of $XXXXXXXXXX of accounts payable and accrued liabilities and $XXXXXXXXXX of amounts payable to its shareholders.

183.1 As of XXXXXXXXXX, Zco had a non-capital loss carry-over of $XXXXXXXXXX.

SUBJECT TRANSACTION

Following the submission of the request for the rulings provided herein but prior to the date of this letter, the following Subject Transaction was completed.

183.2 On XXXXXXXXXX, additional Class A Common Shares in the capital stock were issued to the YCo Management Employees. Prior to the issuance of Yco Shares to Yco Management Employees in XXXXXXXXXX, Xco held XXXXXXXXXX% of the shares of Yco and the Yco Management Employees (and the holding company of one of them) held the remaining XXXXXXXXXX%. As a result of the additional share issuances, the current issued and outstanding shares of Yco are described in Paragraph 173. The subscription price paid for each additional Yco Class A Common Share by the Yco Management Employees was nominal. The share issuances were made in accordance with the provisions of an understanding to issue shares in consideration for employment services provided in XXXXXXXXXX.

PROPOSED TRANSACTIONS

The Proposed Transactions will occur in the order presented unless otherwise indicated, with the exception of the Pre-Butterfly Transactions included in Paragraphs 185 to 210.3 (which will be done before to the First Butterfly but not necessarily in the order presented below), the filing of the Incorporation Applications of TC1, TC2, TC3, TC4 and TC5 (which will be filed and the companies incorporated before the First Butterfly), the filing of the Amalgamation Applications for the Fifth Amalgamation to the Last Amalgamation (which will be filed after the Third Butterfly and on or before the day after the end of the taxation year of Aco, Bco, Cco, Dco or Eco, as the case may be), the filing of the Articles of Dissolution with respect to the Oco Amalco Wind-up and the Applications for Dissolution under BCA2 for the other Pre-Butterfly Dissolutions (which will be filed after the notice of assessment for the latest tax return is received) (for clarity, each company in the Pre-Butterfly Dissolutions will have transferred its assets and had its liabilities provided for before the First Butterfly), and the filing of the applicable election forms (which will be filed within the applicable due dates following the completion of the Proposed Transactions).

184. [Reserved]

Pre-Butterfly Transactions

A Estate Freeze

185. Prior to the First Butterfly, Aco will amend its share capital to add the following classes of shares:

a) Class A Shares: voting, not entitled to dividends and upon winding-up/liquidation are entitled to receive, subject to the prior rights of the Preferred shares, the amount paid up on their shares and nothing further.

b) Class B Shares: non-voting, entitled to dividends at the discretion of the directors, and upon winding-up/liquidation are entitled to receive, subject to the prior rights of the Preferred shares and the Class A shares, equally with the Common shares the balance of any property and assets of the company.

c) Preferred Shares: non-voting, entitled to dividends at the discretion of the directors, redeemable/retractable at an amount determined by the directors of the company at or within XXXXXXXXXX months after issuance as the FMV of exchanged property, (subject to a price adjustment clause) together with declared and unpaid dividends and dividends accrued after a default in redemption when required even if not declared, and upon winding-up/liquidation are entitled to receive in priority to any other class of shares, the redemption amount for such shares together with declared and unpaid dividends and dividends accrued after a default in redemption when required even if not declared and nothing further.

186. A will exchange his XXXXXXXXXX Common Shares of the capital of Aco for XXXXXXXXXX Class A Shares and XXXXXXXXXX Preferred Shares in the capital stock of Aco. The aggregate issue price and FMV of the Class A Shares and the Preferred Shares in the capital of Aco will be equal to the aggregate FMV of the Common Shares of the capital of Aco for which they were exchanged. The aggregate amount added to the stated capital of the Class A Shares and the Preferred Shares of Aco will be equal to the aggregate PUC of the Common Shares of the capital stock of Aco for which they were exchanged. A will control Aco through his XXXXXXXXXX Class A Shares. After such exchange, the classes of unissued shares in the authorized share capital in Aco will be deleted.

187. XXXXXXXXXX, a relative of A Spouse, who is a resident of Canada, will settle A Family Trust, with $XXXXXXXXXX or less. The trust will be governed by the laws of the XXXXXXXXXX. The original trustee of A Family Trust will be A, who is a resident of Canada for purposes of the Act. Under no circumstances will any property of A Family Trust revert to the settlor. The terms of A Family Trust will include the following:

a) No further property may be contributed to A Family Trust or otherwise given to the trustees for the purpose of the trust;

b) Central management and control of the trust will occur in Canada only;

c) The capital and income beneficiaries will be A, A Spouse, A’s children, A’s grandchildren and companies of which one of A’s children is the sole shareholder. The settlor may not be included as a beneficiary of the trust or receive any property from the trust;

d) Subject to any limitations imposed by law or by the trust indenture, the trustees shall have the exclusive and absolute power, control and authority over the trust income, the trust property and the management and administration of the trust and the entitlement of any beneficiary to any income or capital of the Trust will be subject to the exercise of the discretion of the trustees; and

e) A beneficiary of the A Family Trust that is a designated person in respect of A will not receive or otherwise obtain the use of any income or capital of the trust while being a designated person in respect of such individual.

188. A Family Trust will subscribe for XXXXXXXXXX Class B shares in the capital stock of Aco using some of the cash settled on A Family Trust by the settlor.

189. A will settle A Joint Spousal Trust, with the XXXXXXXXXX Preferred Shares in the capital of Aco and other property, including nominal cash, loans receivable from Aco and possibly shares in and loans receivable from corporations related to A. The original trustee of A Joint Spousal Trust will be A, who resides in Canada. The terms of A Joint Spousal Trust will include the following:

a) No further property may be contributed to A Joint Spousal Trust or otherwise given to the trustees for the purpose of the trust except by A;

b) Subject to Paragraph 189(c), A or A Spouse will be, in combination with the other, entitled to receive all of the income of the A Joint Spousal Trust that arises before the later of the death of A and A Spouse and no other person may, before the later of those deaths, receive or otherwise obtain the use of any income or capital of the trust;

c) A beneficiary of the A Joint Spousal Trust that is a designated person in respect of A will not receive or otherwise obtain the use of any income or capital of the trust while being a designated person in respect of A; and

d) Central management and control of the trust occurs in Canada only.

B Estate Freeze

190. Prior to the First Butterfly, Bco will amend its share capital to add the following classes of shares:

a) Class 1 Common Shares: unlimited number of shares authorized, with the following characteristics: non-voting, without par value, entitled to dividends at the discretion of the directors and, upon winding-up/liquidation, entitled to receive, subject to the rights of the holders of shares having priority over the Class 1 Common Shares, the remaining assets of the company.

b) Class B Preferred Shares, Class C Preferred Shares, Class D Preferred Shares and Class E Preferred Shares, each class of which will have the following characteristics:

i) unlimited number of shares authorized;

ii) non-voting,

iii) without par value;

iv) redeemable and retractable at an amount determined by the directors of Bco at or within XXXXXXXXXX days after the time of issuance (subject to a price adjustment clause) or within XXXXXXXXXX days after issuance (plus any declared but unpaid dividends);

v) non-cumulative, non-preferential dividend entitlement at a rate up to XXXXXXXXXX% per annum multiplied by the redemption price, to be determined at the discretion of the directors of Bco; and

vi) Preference upon liquidation or wind up over all Common Shares and Class F Preferred Shares, but pari passu with other classes of preferred shares as to the redemption price plus any declared but unpaid dividends.

(b) Class F Preferred Shares with the following attributes:

i) unlimited number of shares authorized;

ii) voting, non-participating.

iii) par value of $XXXXXXXXXX per share.

iv) redeemable and retractable at $XXXXXXXXXX per share.

v) preference upon liquidation or windup to receive redemption amount of $XXXXXXXXXX per share over all Common Shares.

190.1 Prior to the First Butterfly, each of B, B Spouse, B Child 1 and B Child 2 will exchange his or her shares in the capital of Bco for a separate class of preferred shares. Concurrent with the exchanges, B will also subscribe for Class F Preferred Shares of the capital of Bco for a subscription price of $XXXXXXXXXX per share. After such transfers and subscriptions, the shareholders of Bco will be as follows:

Shareholder	Number	Class
B	XXXXXXXXXX	Class B Preferred Shares Class F Preferred Shares
B Spouse	XXXXXXXXXX	Class C Preferred Shares
B Child 1	XXXXXXXXXX	Class D Preferred Shares
B Child 2	XXXXXXXXXX	Class E Preferred Shares

B will control Bco through the Class F Preferred Shares of the capital of Bco.

After such exchange, the classes of unissued shares in the authorized share capital in Bco will be deleted.

190.2 The aggregate FMV and redemption amount of the Class B Preferred Shares acquired by B on the share exchange described in Paragraph 190.1 will be equal to the aggregate FMV of the Class A Common Shares, Class B Common Shares, Preferred Shares and Class A Preferred Shares of the capital of Bco for which such Class B Preferred Shares were exchanged.

The aggregate PUC of the Class B Preferred Shares of the capital of Bco will be equal to the aggregate PUC of the Class A Common Shares, the Class B Common Shares, Preferred Shares and Class A Preferred Shares in the capital of Bco for which such Class B Preferred Shares were exchanged.

190.3 The aggregate FMV and redemption amount of the Class C Preferred Shares in the capital stock acquired by B Spouse in the exchange described in Paragraph 190.1 will be equal to the aggregate FMV of the Class D Common Shares of the capital of Bco for which such Class C Preferred Shares were exchanged.

The aggregate PUC of the Class C Preferred Shares of the capital stock of Bco will be equal to the aggregate PUC of the Class D Common Shares of the capital stock of Bco for which such Class C Preferred Shares were exchanged.

190.4 The aggregate FMV and redemption amount of the Class D Preferred Shares of the capital stock of Bco acquired by B Child 1 in the exchange described in Paragraph 190.1 will be equal to the aggregate FMV of the Class E Common Shares of the capital stock of Bco for which such Class D Preferred Shares were exchanged.              

The aggregate PUC of the Class D Preferred Shares of the capital stock of Bco will be equal to the aggregate PUC of the Class E Common Shares of the capital stock of Bco for which such Class D Preferred Shares were exchanged.

190.5 The aggregate FMV and redemption amount of the Class E Preferred Shares of the capital stock of Bco acquired by B Child 2 in the exchange described in Paragraph 190.1 will be equal to the aggregate FMV of the Class F Common Shares of the capital stock of Bco for which such Class E Preferred Shares were exchanged.              

The aggregate PUC of the Class E Preferred Shares of the capital stock of Bco will be equal to the aggregate PUC of the Class F Common Shares of the capital stock of Bco for which such Class E Preferred Shares were exchanged.

190.6 The FMV of the Class F Preferred Shares of the capital stock of Bco issued to B described in Paragraph 190.1 will be equal to the subscription price paid.

191. XXXXXXXXXX, a friend of B, a resident of Canada, will settle B Family Trust, with XXXXXXXXXX. The trust will be governed by the laws of the XXXXXXXXXX. The original trustee of B Family Trust will be B, who is a resident of Canada for purposes of the Act. Under no circumstances can the settlor become either a trustee or beneficiary of the trust or income or property of the trust be allocated to anyone determined by the settlor. The relevant terms of B Family Trust will be the same terms as the terms of the A Family Trust described in Paragraph 187. For greater certainty, the terms of the B Family Trust will include the term described in paragraph 74.4(4)(b) restricting any designated person in respect of any of the individuals who transferred property to the Bco described in Paragraph 190.1 from receiving or obtaining the use of any of the income or capital of the trust while being a designated person in respect of such individual.  

192. B Family Trust will subscribe for XXXXXXXXXX Class 1 Common Shares in the capital of Bco for a subscription price of $XXXXXXXXXX per share. Payment of the subscription price should be made by cash.

Continuation of DC2 to BC

193. DC2 will continue under the BCA2. Prior to the continuance, DC2 will delete all of the classes of unissued shares from its authorized capital.

Oco Amalco Windup

194. Oco Amalco will settle its outstanding liabilities (such as tax and consulting fees payable) and make partial repayment of amounts payable to its indirect shareholders.

195. The indirect shareholders will then forgive the remaining amounts receivable from Oco Amalco. Section 80 will apply to Oco Amalco as a result of such debt forgiveness and its application will be reported on Oco Amalco’s final tax return.

196. By way of special resolution, the shareholders of Oco Amalco will resolve to wind up and dissolve Oco Amalco pursuant to the BCA3. Articles of dissolution will be filed by Oco Amalco with the Director. The winding-up of Oco Amalco will be governed by subsection 88(2).

Wind-up of Mco

197. By way of special resolution, DC2 and Kco will resolve to windup and dissolve Mco pursuant to the BCA2. An application for dissolution will be filed by Mco with the Registrar of Companies. The winding-up of Mco will be governed by subsection 88(2).

Wind-up of Nco

198. By way of special resolution, the shareholders of Nco will resolve to wind up and dissolve Nco pursuant to the BCA2. An application for dissolution will be filed by Nco with the Registrar of Companies. The winding-up of Nco will be governed by subsection 88(2).

Wind-up of Pco, Qco and Rco

199. By way of special resolution, the shareholders of Rco will resolve to wind up and dissolve Rco pursuant to the BCA2. An application for dissolution will be filed by Rco with the Registrar of Companies. The winding-up of Rco will be governed by subsection 88(2).

200. By way of special resolution, the shareholders of Pco and Qco will resolve to wind up and dissolve Pco and Qco pursuant to the BCA2. An application for dissolution will be filed by Pco and Qco with the Registrar of Companies. The winding-up of Pco and Qco will be governed by subsection 88(2).

201. [Reserved]

202. [Reserved]

First Amalgamation

203. Fco, Gco, Hco, Ico and Jco (each of which will be a “DC1 Amalco Predecessor Corporation”) will amalgamate to form DC1 Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another DC1 Amalco Predecessor Corporation or shares of the capital stock of another DC1 Amalco Predecessor Corporation) of the DC1 Amalco Predecessor Corporations immediately before the amalgamation will become property of DC1 Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another DC1 Amalco Predecessor Corporation) of the DC1 Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of DC1 Amalco by virtue of the amalgamation; and

c) all of the shareholders (except any DC1 Amalco Predecessor Corporation) who owned shares of the capital stock of any DC1 Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of DC1 Amalco because of the amalgamation.

204. DC1 Amalco will be a CCPC and a TCC.

205. The authorized share capital of DC1 Amalco will consist of an unlimited number of the following classes of shares:

a) Class A common shares (the “DC1 Amalco Class A Common Shares”) which are voting and non-participating;

b) Class C preferred shares (the “DC1 Amalco Class C Preferred Shares”), Class D preferred shares (the “DC1 Amalco Class D Preferred Shares”), Class E preferred shares (the “DC1 Amalco Class E Preferred Shares”) and Class F preferred shares (the “DC1 Amalco Class F Preferred Shares”) which will have the following attributes: non-voting, redeemable and retractable at an amount equal to the FMV of consideration received for the shares, plus any declared and unpaid dividends thereon. Each class of DC1 Amalco Preferred Shares has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued and for purposes of subsection 191(4), the terms and conditions of a share of such classes of DC1 Amalco Preferred Shares will specify an amount in the Articles in respect of the share which amount will be a specific dollar amount and not determined by formula.

206. The issued and outstanding shares of the capital stock of DC1 Amalco immediately after the First Amalgamation will be owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	DC1 Amalco Class A Common Shares
Aco	XXXXXXXXXX	DC1 Amalco Class C Preferred Shares
DC2	XXXXXXXXXX	DC1 Amalco Class A Common Shares
DC2	XXXXXXXXXX	DC1 Amalco Class D Preferred Shares
Kco	XXXXXXXXXX	DC1 Amalco Class A Common Shares
Kco	XXXXXXXXXX	DC1 Amalco Class E Preferred Shares
Lco	XXXXXXXXXX	DC1 Amalco Class F Preferred Shares

The number of DC1 Amalco Class C Preferred Shares, DC1 Amalco Class D Preferred Shares and DC1 Amalco Class E Preferred Shares to be issued will be based on the FMV of the shares of the predecessor corporations from which they were converted.

206.1 The aggregate FMV of the DC1 Amalco Class A Common Shares and the DC1 Amalco Class C Preferred Shares received by Aco on the First Amalgamation will be equal to the aggregate FMV of shares of the capital stock of the DC1 Amalco Predecessors held by Aco immediately before the First Amalgamation.

206.2 The aggregate FMV of the DC1 Amalco Class A Common Shares and the DC1 Amalco Class D Preferred Shares received by DC2 on the First Amalgamation will be equal to the aggregate FMV of shares of the capital stock of the DC1 Amalco Predecessors held by DC2 immediately before the First Amalgamation.

206.3 The aggregate FMV of the DC1 Amalco Class A Common Shares and the DC1 Amalco Class E Preferred Shares received by Kco on the First Amalgamation will be equal to the aggregate FMV of shares of the capital stock of the DC1 Amalco Predecessors held by Kco immediately before the First Amalgamation.

206.4 The aggregate FMV of the DC1 Amalco Class E Common Shares and the DC1 Amalco Class F Preferred Shares received by Lco on the First Amalgamation will be equal to the aggregate FMV of shares of the capital stock of the DC1 Amalco Predecessors held by Lco immediately before the First Amalgamation.

206.5 The aggregate PUC of all the DC1 Amalco shares to be issued upon the First Amalgamation will not exceed the total of all amounts each of which is the PUC in respect of a share (except a share held by any other DC1 Amalco Predecessor Corporation) of the capital stock of a DC1 Amalco Predecessor Corporation immediately before the First Amalgamation. The aggregate PUC of the shares of the capital stock of DC1 Amalco held by each of Aco, DC2, Kco and Lco will be equal to the aggregate PUC of the shares of the capital stock of the DC1 Amalco Predecessors held by it immediately before the First Amalgamation.  

Second Amalgamation

207. Kco and Lco (each of which will be a KL Amalco Predecessor Corporation) will amalgamate to form KL Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another KL Amalco Predecessor Corporation) of the KL Amalco Predecessor Corporations immediately before the amalgamation will become property of KL Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another KL Amalco Predecessor Corporation) of the KL Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of KL Amalco by virtue of the amalgamation; and

c) all of the shareholders who owned shares of the capital stock of any KL Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of KL Amalco because of the amalgamation.

208. KL Amalco will be a TCC and a CCPC.

209. The authorized share capital of KL Amalco immediately after the Second Amalgamation will consist of an unlimited number of Common Shares which are voting and entitled to discretionary dividends (the “KL Amalco Common Shares”).

210. The shares of the capital stock of KL Amalco issued and outstanding immediately after the Second Amalgamation will be owned as follows:

Shareholder	Number	Class
Dco	XXXXXXXXXX	KL Amalco Common Shares
Eco	XXXXXXXXXX	KL Amalco Common Shares

210.1 The aggregate FMV of the KL Amalco Common Shares received by Dco on the Second Amalgamation will be equal to the aggregate FMV of shares of the capital stock of the KL Amalco Predecessors held by Dco immediately before the Second Amalgamation.

210.2 The aggregate FMV of the KL Amalco Common Shares received by Eo on the Second Amalgamation will be equal to the aggregate FMV of shares of the capital stock of KL Amalco Predecessors held by Eco immediately before the Second Amalgamation.

210.3 The aggregate PUC of all the KL Amalco shares to be issued upon the Second Amalgamation will not exceed the total of all amounts each of which is the PUC in respect of a share of the capital stock of a KL Amalco Predecessor Corporation immediately before the Second Amalgamation. The aggregate PUC of the KL Amalco shares held by each of Dco and Eco will be equal to the aggregate PUC of the shares of the capital stock of the KL Amalco Predecessor Corporations held by it immediately before the Second Amalgamation.

First Butterfly

Incorporation of TC1 and TC2

211. DC2 will incorporate TC1 under the BCA2, issuing 1 TC1 Common Share for $XXXXXXXXXX and Kco will incorporate TC2 under the BCA2, issuing 1 TC2 Common Share for $XXXXXXXXXX.

212. TC1 and TC2 will each be a TCC and a CCPC.

213. The authorized capital of TC1 will consist of an unlimited number of the following shares:

a) common shares (the “TC1 Common Shares”) which are voting and entitled to discretionary dividends; and

b) preferred shares (the “TC1 Preferred Shares”) which have the following attributes: voting, redeemable and retractable for a redemption amount equal to the FMV of the property transferred to TC1 in consideration for the issuance of these shares. Each TC1 Preferred Share has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued. For purposes of subsection 191(4), the terms and conditions of a TC1 Preferred Share will specify in the Articles an amount in respect of such share which amount will be a specific dollar amount and not determined by formula.

214. The authorized capital of TC2 will consist of an unlimited number of the following shares:

a) common shares (the “TC2 Common Shares”) which are voting and entitled to discretionary dividends.

b) preferred shares (the “TC2 Preferred Shares”) which have the following attributes: voting, redeemable and retractable for a redemption amount equal to the FMV of the property transferred to TC2 in consideration for the issuance of these shares. Each TC2 Preferred Share has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued. For purposes of subsection 191(4), the terms and conditions of a TC2 Preferred Share will specify in the Articles an amount in respect of such share which amount will be a specific dollar amount and not be determined by formula.

Transfer of DC1 Amalco Shares to TC1 and TC2

215. DC2 will transfer its DC1 Amalco Class A Common Shares and its DC1 Amalco Class D Preferred Shares to TC1 in consideration for TC1 Common Shares having an aggregate FMV equal to the aggregate FMV of the DC1 Amalco shares transferred.

216. [Reserved]

217. DC2 and TC1 will jointly elect in prescribed form and within the time referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of the DC1 Amalco shares by DC2 to TC1 described in Paragraph 215. The agreed amount in respect of the DC1 Amalco Shares transferred will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such shares.

218. TC1 will add to the stated capital account maintained for the TC1 Common Shares an amount equal to the aggregate PUC of the DC1 Amalco Class A Common Shares and the DC1 Amalco Class D Preferred Shares transferred.

218.1 KL Amalco will transfer its DC1 Amalco Class A Common Shares, DC1 Amalco Class E Preferred Shares and DC1 Amalco Class F Preferred Shares to TC2 in consideration for TC2 Common Shares having an aggregate FMV equal to the aggregate FMV of the DC1 Amalco shares transferred.

219. KL Amalco and TC2 will jointly elect in prescribed form and within the time referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of the DC1 Amalco shares to TC2 described in Paragraph 218.1. The agreed amount in respect of the DC1 Amalco shares transferred will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such shares.

220. TC2 will add to the stated capital account maintained for the TC2 Common Shares an amount equal to the aggregate PUC of the DC1 Amalco shares transferred by KL Amalco to TC2.

DC1 Amalco Type of Properties Analysis

221. [Reserved]

221.1 Immediately before the distributions of property by DC1 Amalco to TC1 and TC2 described in Paragraphs 224 and 234, the net FMV of each type of property of DC1 Amalco will be determined in accordance with the principles described in Paragraphs 221.2 to 221.4.

221.2 A DC 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 or partnership that has significant influence over that corporation or that partnership, or if the DC in combination with corporations or partnerships over which it has significant influence have significant influence over that corporation or that partnership.

221.3 Immediately before the distributions, the property of the DC will be determined on a consolidated look-through basis by including the appropriate pro rata share of the assets of any corporation or partnership over which DC has the ability to exercise significant influence. The assets of DC, determined on a consolidated look-through basis as described herein, will be classified into the following three types of property for purposes of the definition of “distribution” in subsection 55(1):

(a) cash or near-cash property, comprising all of the current assets of the DC, including cash, short-term deposits and similar amounts receivable within one year, marketable securities (except portfolio investments), accounts receivable, inventory and prepaid expenses;

(b) business property, comprising all of the assets of the DC 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, 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 these determinations:

(d) for the purposes of determining the aggregate FMV of each type of property of DC, the aggregate FMV of the shares of the capital stock of any corporation, or the FMV of any partnership interest, over which any corporation or partnership has the ability to exercise significant influence and of any indebtedness receivable by any such corporation or partnership from a corporation or partnership over which it has significant influence will be allocated among the types of property described in Paragraphs 221.3(a), (b) and (c) by multiplying the aggregate FMV of the shares of the capital stock, the partnership interest, or the indebtedness receivable from the particular corporation or partnership, as the case may be, by the proportion that the aggregate net FMV of each type of property owned by the corporation or partnership (as determined in accordance with the methodologies described herein) is of the aggregate net FMV of all property owned by such corporation or partnership (as determined in accordance with the methodologies described herein);

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

(f) the amount of any deferred or future income tax asset will not be considered property;

(g) advances and loans receivable, including those owing from non-arm’s length persons, or portions thereof, that are (i) due within the next XXXXXXXXXX months, (ii) have no fixed term of repayment, or (iii) are payable or callable on demand will be considered cash or near-cash property;

(h) advances and loans receivable, including those owing from non-arm’s length persons, or portions thereof, that are not due within the next XXXXXXXXXX months and that are not payable or callable on demand, or will remain outstanding for XXXXXXXXXX months or more, will be considered business property; and

(i) accounts receivable will be classified as cash or near-cash property even if they are not expected to be paid within XXXXXXXXXX months.

221.4 In determining, on a consolidated look-through basis, the net FMV of each type of property of the DC immediately before the distributions, the liabilities of DC and any corporation or partnership over which DC 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 and such corporation or partnership, in the following manner:

(a) in determining the net FMV of each type of property of a corporation or partnership over which DC exercises significant influence immediately before the transfers, the liabilities of that corporation or partnership (other than an amount owing by such corporation or partnership to another corporation or partnership that has the ability to exercise significant influence over the debtor corporation) will be allocated to, and deducted in the calculation of, the net FMV of each type of property of that particular corporation or partnership as follows:

(i) current liabilities of such corporation or 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 of the corporation. 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, such corporation or partnership will be considered to have a negative amount of cash or near-cash property;

(ii) liabilities, other than current liabilities, of such corporation or partnership that relate to a particular property will be allocated to the 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. To the extent that the total amount of liabilities that are to be allocated to a particular type of property as described in Paragraph 221.4(a)(ii) exceeds the total FMV of that type of property, such corporation or partnership will be considered to have a negative amount of that type of property; and

(iii) if any liabilities remain after the allocations described in Paragraphs 221.4(a)(i) and (ii) are made, such excess unallocated liabilities will then be allocated to each type of property of such corporation or partnership, based on the relative net FMV of each type of property prior to the allocation of such excess unallocated liabilities. However, where a corporation or partnership is considered to have a negative amount of a type of property because of Paragraphs 221.4(a)(i) or (ii), for 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.

(b) In determining, on a consolidated look-through basis, the net FMV of each type of property of DC immediately before the distribution, DC will include the appropriate pro rata share of the net FMV of each type of property of any corporation or partnership over which DC exercises significant influence and, for greater certainty, the appropriate negative amount of such type of property of any such corporation or partnership, as determined in accordance with Paragraph 221.4(a), and any liabilities of DC will be allocated to, and be deducted in the calculation of, the net FMV of each type of property of DC in the following manner:

(i) current liabilities of DC will be allocated to the cash or near-cash property of DC in the proportion that the FMV of each such property is of the FMV of all cash or near-cash property of DC. The allocation of current liabilities as described in this Paragraph 221.4(b)(i) will not exceed the aggregate FMV of all the cash or near-cash property of DC;

(ii) liabilities of DC, other than current liabilities, that relate to a particular property will be allocated to the 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 this Paragraph 221.4(b)(ii); and

(iii) if any liabilities remain after the allocations described in Paragraphs 221.4(b)(i) and (b)(ii) are made, such excess unallocated liabilities will then be allocated to each type of property of DC, on the basis of the relative net FMV of each type of property prior to the allocation of such excess unallocated liabilities, but after the allocation of the liabilities described in Paragraphs 221.4(b)(i) and (b)(ii).

For greater certainty, for the purposes of these determinations:

(c) no amount will be considered to be a liability unless it represents a legal liability which is capable of quantification. For greater certainty, an obligation that is contingent at the time of the Distributions will not be considered to be a liability as the amount does not represent a legal liability that is capable of quantification at that time;

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

(e) current liabilities will include amounts with no fixed term of repayment and amounts normally classified as current liabilities, including the portion of any long-term debt or advance due within XXXXXXXXXX, owing to both arm’s length and non-arm’s length parties;

(f) income or other taxes due and payable within XXXXXXXXXX (excluding HST/GST/PST/QST), as well as any corresponding interest and penalties, which relate to either an assessment, additional assessment, reassessment or variance thereof received prior to the distribution or a return filed for a taxation year for which no assessment, additional assessment, reassessment or variance thereof has been received prior to the distribution, will be classified as current liabilities. Income and other taxes payable (excluding HST/GST/PST/QST) that relate to taxation years for which a return has not been filed will be classified as contingent liabilities unless they represent non-resident withholding tax or similar non-income taxes which are payable pursuant to the applicable legislation; and

(g) HST/GST/PST/QST payable which relate to reporting periods ending prior to the distribution for which a return has been filed, will be classified as current liabilities. HST/GST/PST/QST payables that relate to reporting periods ending after the distribution or to reporting periods for which a return has not been filed will not be considered a liability.

221.5 Based on the application of the principles described in Paragraphs 221.1 and 221.4, DC1 Amalco is expected to have only investment property immediately before the distributions to TC1 and TC2 described in Paragraph 224.

222. [Reserved]

223. [Reserved]

Distribution of DC1 Amalco’s net assets to TC1 (concurrent with the transfer to TC2)

224. Concurrent with the transfer of the TC2 Distribution Property described in Paragraph 234, DC1 Amalco will transfer to TC1, TC1’s pro rata share of the net FMV of each type of property owned by DC1 Amalco at that time determined as described in Paragraph 221.1 (collectively referred to as the “TC1 Distribution Property”), such that immediately following the transfer of the properties and the assumption by TC1 of the amount of DC1 Amalco’s liabilities described in Paragraph 226(a), the aggregate net FMV of each type of property transferred by DC1 Amalco to TC1 will be equal to, or approximate that proportion, of each type of property determined by the formula:

    A × B/C

    where:

A is the net FMV, immediately before the distribution, of all property of that type owned at that time by DC1 Amalco;

B is the FMV, immediately before the distribution, of all the DC1 Amalco’s shares owned at that time, by TC1; and

C is the FMV, immediately before the distribution, of all the issued and outstanding DC1 Amalco shares.

225. The expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed XXXXXXXXXX, determined as a percentage of the net FMV of each type of property that TC1 will receive as compared to what it would have received had it received its appropriate pro rata share of the net FMV of that type of property of DC1 Amalco.

226. As consideration for the transfer of the TC1 Distribution Property by DC1 Amalco described in Paragraph 224 TC1 will:

a) assume such liabilities of DC1 Amalco, as appropriate, so that TC1 will receive a pro rata share of the net FMV of each type of property owned by DC1 Amalco; and

b) issue TC1 Preferred Shares to DC1 Amalco which will have an aggregate redemption amount and aggregate FMV equal to the amount by which the aggregate FMV, at the time of the distribution, of the TC1 Distribution Property received by TC1, exceeds the aggregate amount of the liabilities of DC1 Amalco assumed by TC1, as described in Paragraph 226(a). The number of TC1 Preferred Shares issued to DC1 Amalco will represent more than XXXXXXXXXX % but less than XXXXXXXXXX % of the issued share capital (having full voting rights under all circumstances) of TC1.

227. DC1 Amalco will hold the TC1 Preferred Shares as capital property.

228. In respect of the transfer of the TC1 Distribution Property described in Paragraph 224, DC1 Amalco and TC1 will jointly elect in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property from DC1 Amalco to TC1. The agreed amount in respect of each eligible property will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such eligible property.

229. The amount of the liabilities of DC1 Amalco assumed by TC1, which are allocated to a particular eligible property that is subject to an election under subsection 85(1), will not exceed the agreed amount for that particular property. The amount of liabilities assumed by TC1, which are allocated to a particular property that is not subject to an election under subsection 85(1), will not exceed the FMV of any such property.

230. The amount added to the stated capital of the TC1 Preferred Shares received by DC1 Amalco, will be an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC1, and (b) the aggregate FMV, in the case of each property transferred to TC1 that is not an eligible property, less (c) the aggregate amount of the liabilities of DC1 Amalco assumed by TC1. For greater certainty, the amount added to the stated capital account for the TC1 Preferred Shares to be issued by TC1 as partial consideration for the TC1 Distribution Property, will not exceed the maximum amount that could be added to the aggregate PUC of the TC1 Preferred Shares without a reduction taking place pursuant to subsection 85(2.1).

Cross-redemptions / purchase for cancellation of TC1 and DC1 Amalco Shares

231. Immediately after the transfer of the TC1 Distribution Property described in Paragraph 224, TC1 will redeem all of the TC1 Preferred Shares held by DC1 Amalco for an amount equal to the aggregate redemption amount and FMV of such shares. As consideration therefor, TC1 will issue the TC1 Note to DC1 Amalco, which will have a principal amount and FMV equal to the aggregate redemption amount and FMV of the TC1 Preferred Shares redeemed. DC1 Amalco will accept the TC1 Note as payment in full for the redemption of the TC1 Preferred Shares.  

232. DC1 Amalco will purchase for cancellation all of the DC1 Amalco Class A Common Shares and redeem all of the DC1 Amalco Class D Preferred Shares owned by TC1 for an amount equal to the total of the FMV of the DC1 Amalco Class A Common Shares and the aggregate redemption amount and FMV of the DC1 Class D Preferred Shares. As consideration therefor, DC1 Amalco will issue the DC1 Amalco Notes 1 to TC1, which will have an aggregate principal amount and FMV equal to the aggregate FMV of the DC1 Amalco Class A Common Shares purchased and the aggregate FMV and redemption amount of the DC1 Amalco Class D Preferred Shares redeemed. TC1 will accept the DC1 Amalco Notes 1 as payment in full for the purchase for cancellation of the DC1 Amalco Class A Common Shares and the redemption of the DC1 Amalco Class D Preferred Shares.

233. The amount owing by TC1 to DC1 Amalco under the TC1 Note will be set-off against the aggregate amount owing by DC1 Amalco to TC1 under the DC1 Amalco Notes 1, such that each such note will be cancelled in full satisfaction of its respective underlying obligations.

Distribution of DC1 Amalco’s net assets to TC2 (concurrent with the transfer to TC1)

234. Concurrent with the transfer of the TC1 Distribution Property described in Paragraph 224, DC1 Amalco will transfer to TC2, TC2’s pro rata share of the net FMV of each type of property owned by DC1 Amalco at that time determined as described in Paragraph 221.1 (collectively referred to as the “TC2 Distribution Property”), such that immediately following the transfer of the properties and the assumption by TC2 of the amount of DC1 Amalco’s liabilities described in Paragraph 234(a), the aggregate net FMV of each type of property transferred by DC1 Amalco to TC2 will be equal to, or approximate, that proportion of each type of property determined by the formula:

A × B/C

    where

A is the net FMV, immediately before the distribution, of all property of that type owned at that time by DC1 Amalco;

B is the FMV, immediately before the distribution, of all the DC1 Amalco shares owned, at that time, by TC2; and

C is the FMV, immediately before the distribution, of all the issued and outstanding DC1 Amalco shares.

235. The expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed XXXXXXXXXX, determined as a percentage of the net FMV of each type of property that TC2 will receive as compared to what it would have received had it received its appropriate pro rata share of the net FMV of that type of property of DC1 Amalco.

236. As consideration for the transfer of the TC2 Distribution Property by DC1 Amalco to TC2 described in Paragraph 234 above, TC2 will:

a) assume such liabilities of DC1 Amalco, as appropriate, so that TC2 will receive a pro rata share of the net FMV of each type of property owned by DC1 Amalco; and

b) issue TC2 Preferred Shares to DC1 Amalco which will have an aggregate redemption amount and aggregate FMV equal to the amount by which the aggregate FMV, at the time of the distribution, of the TC2 Distribution Property received by TC2, exceeds the aggregate amount of the liabilities of DC1 Amalco assumed by TC2, as described in Paragraph 236(a). The number of TC2 Preferred Shares issued to DC1 Amalco will represent more than XXXXXXXXXX% but less than XXXXXXXXXX% of the issued share capital (having full voting rights under all circumstances) of TC2.

237. DC1 Amalco will hold the TC2 Preferred Shares as capital property.

238. In respect of the transfer of the TC2 Distribution Property described in Paragraph 234, DC1 Amalco and TC2 will jointly elect in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property from DC1 Amalco to TC2. The agreed amount in respect of each eligible property will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such eligible property.

239. The amount of the liabilities assumed by TC2, which are allocated to a particular eligible property that is subject to an election under subsection 85(1), will not exceed the agreed amount for that particular property. The amount of liabilities assumed by TC2, which are allocated to a particular property that is not subject to an election under subsection 85(1), will not exceed the FMV of any such property.

240. The amount added to the stated capital of the TC2 Preferred Shares received by DC1 Amalco, will be an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC2, and (b) the aggregate FMV, in the case of each property transferred to TC2 that is not an eligible property, less (c) the aggregate amount of the liabilities of DC1 Amalco assumed by TC2. For greater certainty, the amount added to the stated capital account for the TC2 Preferred Shares to be issued by TC2 as partial consideration for the TC2 Distribution Property, will not exceed the maximum amount that could be added to the aggregate PUC of the TC2 Preferred Shares without a reduction taking place pursuant to subsection 85(2.1).

Cross-redemptions / purchase for cancellation of TC2 and DC1 Amalco Shares

241. Immediately after the transfer of the TC2 Distribution Property described in Paragraph 234, TC2 will redeem all of the TC2 Preferred Shares held by DC1 Amalco for an amount equal to the aggregate redemption amount of such shares. As consideration therefor, TC2 will issue the TC2 Note to DC1 Amalco, which will have a principal amount and FMV equal to the aggregate FMV and redemption amount of the TC2 Preferred Shares redeemed. DC1 Amalco will accept the TC2 Note as payment in full for the TC2 Preferred Shares redeemed.

242. DC1 Amalco will purchase for cancellation all of the DC1 Amalco Class A Common Shares and redeem all of the DC1 Amalco Class E Preferred Shares and DC1 Amalco Class F Preferred Shares owned by TC2 for an amount equal to the aggregate redemption amount and/or FMV of such shares. As consideration therefor, DC1 Amalco will issue the DC1 Amalco Notes 2 to TC2, which will have an aggregate principal amount and FMV equal to the aggregate FMV of the DC1 Amalco Class A Common Shares purchased for cancellation and the aggregate FMV and redemption amount of the DC1 Amalco Class E and F Preferred Shares redeemed. TC2 will accept the DC1 Amalco Notes 2 as payment in full for the purchase for cancellation of the DC1 Amalco Class A Common Shares and the redemption of the DC1 Amalco Class E Preferred Shares and DC1 Amalco Class F Preferred Shares.

243. The amount owing by TC2 to DC1 Amalco under the TC2 Note will be offset against the amount owing by DC1 Amalco to TC2 under the DC1 Amalco Notes 2 such that each such note will be cancelled in full satisfaction of its respective underlying obligations.

Third Amalgamation

244. DC2 and TC1, each of which will be a predecessor corporation (the “DC2 Amalco Predecessor Corporation”), will amalgamate to form DC2 Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another DC2 Amalco Predecessor Corporation or shares of the capital stock of another DC2 Amalco Predecessor Corporation) of the DC2 Amalco Predecessor Corporations immediately before the amalgamation will become property of DC2 Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another DC2 Amalco Predecessor Corporation) of the DC2 Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of DC2 Amalco by virtue of the amalgamation; and

c) all of the shareholders (except a DC2 Amalco Predecessor Corporation) who owned shares of the capital stock of any DC2 Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of DC2 Amalco because of the amalgamation.

245. [Reserved]

246. DC2 Amalco will be a TCC and a CCPC.

247. The authorized share capital of DC2 Amalco immediately after the Third Amalgamation will consist of an unlimited number of Class A Shares (the “DC2 Amalco Class A Shares, an unlimited number of Class B Shares (the “DC2 Amalco Class B Shares) and an unlimited number of Class C Shares (the “DC2 Amalco Class C Shares”) (collectively, the DC2 Amalco Shares”).   The DC2 Amalco Shares will be voting and entitled to discretionary dividends..

248. The shares of the capital stock of DC2 Amalco issued and outstanding immediately after the Third Amalgamation will be owned as follows:

Shareholder	Number	Class
Aco	XXXXXXXXXX	DC2 Amalco Class A Shares
Bco	XXXXXXXXXX	DC2 Amalco Class B Shares
Cco	XXXXXXXXXX	DC2 Amalco Class A Shares
Cco	XXXXXXXXXX	DC2 Amalco Class C Shares

248.1 The share capital of DC2 Amalco will be the same as the share capital of DC2 and the same shares will be held by each shareholder with no change in stated capital and PUC.

Second Butterfly

Incorporation of TC3 and TC4

249. Bco will incorporate TC3 and Cco will incorporate TC4 under the BCA2, each issuing XXXXXXXXXX common share for $XXXXXXXXXX.

250. TC3 and TC4 will each be a TCC and a CCPC.

251. The authorized capital of TC3 will consist of an unlimited number of the following shares:

a) common shares (the “TC3 Common Shares”) which are voting and entitled to discretionary dividends.

b) preferred shares (the “TC3 Preferred Shares”) with the following rights and entitlements: voting, redeemable and retractable for a redemption amount equal to the FMV of the property transferred to TC3 in consideration for the issuance of these shares. Each TC3 Preferred Share has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued. For purposes of subsection 191(4), the terms and conditions of a TC3 Preferred Share will specify in the Articles an amount in respect of the shares which amount will be a specific dollar amount and not determined by formula. \

252. The authorized capital of TC4 will consist of an unlimited number of the following shares:

a) common shares (the “TC4 Common Shares”) which are voting and entitled to discretionary dividends.

b) preferred shares (the “TC4 Preferred Shares”) with the following rights and entitlements: voting, redeemable and retractable for a redemption amount equal to the FMV of the property transferred to TC4 in consideration for the issuance of these shares. Each TC4 Preferred Share has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued. For purposes of subsection 191(4), the terms and conditions of a TC4 Preferred Share will specify in the Articles an amount in respect of the share which amount will be a specific dollar amount and not determined by formula.

Transfer of DC2 Amalco Shares to TC3 and TC4

253. Bco will transfer its DC2 Amalco Common Shares to TC3 in consideration for TC3 Common Shares, having an aggregate FMV equal to the aggregate FMV of the DC2 Amalco Common Shares at the time of the transfer.

254. [Reserved]

255. Bco and TC3 will jointly elect in prescribed form and within the time referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of the DC2 Amalco Common Shares to TC3. The agreed amount in respect of the DC2 Amalco Common Shares transferred will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such shares.

256. TC3 will add to the stated capital account maintained for the TC3 Common Shares an amount not to exceed the paid-up capital of the DC2 Amalco Common Shares transferred.

256.1 Cco will transfer its DC2 Amalco Common Shares to TC4 in consideration for TC4 Common Shares, having an aggregate FMV equal to the aggregate FMV of the DC2 Amalco Common Shares at the time of the transfer.

257. Cco and TC4 will jointly elect in prescribed form and within the time referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of the DC2 Amalco Common Shares to TC4. The agreed amount in respect of such DC2 Amalco Common Shares will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such shares.

258. TC4 will add to the stated capital account maintained for the TC4 Common Shares an amount not to exceed the paid-up capital of the DC2 Amalco Common Shares transferred.

DC 2 Amalco Type of Properties Analysis

259. Immediately before the transfers of property by DC2 Amalco to TC3 and TC4 described in Paragraphs 262 and 272, the net FMV of each type of property of DC2 Amalco will be determined in accordance with the principles described in Paragraphs 221.2 to 221.4.

259.1Based on the principles described in Paragraphs 221.1 and 221.4, DC2 Amalco is expected to have only investment property.

260. [Reserved]

261. [Reserved]

Distribution of DC2 Amalco’s net assets to TC3 (concurrent with the transfer to TC4)

262. Concurrent with the transfer of the TC4 Distribution Property described in Paragraph 272, DC2 Amalco will transfer to TC3, TC3’s pro rata share of the net FMV of each type of property owned by DC2 Amalco at that time determined as described in Paragraph 259 (collectively referred to as the “TC3 Distribution Property”), such that immediately following the transfer of the properties and the assumption by TC3 of the amount of DC2 Amalco’s liabilities described in Paragraph 264(a), the aggregate net FMV of each type of property transferred by DC2 Amalco to TC3 will be equal to, or approximate that proportion, of each type of property determined by the formula

A × B/C

      where

A is the net FMV, immediately before the distribution, of all property of that type owned at that time by DC2 Amalco;

B is the FMV, immediately before the distribution, of all the DC2 Amalco shares owned at that time, by TC3; and

C is the FMV, immediately before the distribution, of all the issued and outstanding DC2 Amalco shares.

263. The expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed XXXXXXXXXX, determined as a percentage of the net FMV of each type of property that TC3 will receive as compared to what it would have received had it received its appropriate pro rata share of the net FMV of that type of property of DC2 Amalco.

264. As consideration for the DC2 Amalco transfer described in Paragraph 262 above, TC3 will:

a) assume such liabilities of DC2 Amalco, as appropriate, so that TC3 will receive a pro rata share of the net FMV of each type of property owned by DC2 Amalco; and

b) issue TC3 Preferred Shares to DC2 Amalco which will have an aggregate redemption amount and aggregate FMV equal to the amount by which the aggregate FMV, at the time of the distribution, of the TC3 Distribution Property exceeds the aggregate amount of the liabilities of DC2 Amalco assumed by TC3, as described in Paragraph 264(a). The number of TC3 Preferred Shares issued to DC2 Amalco will represent more than XXXXXXXXXX% but less than XXXXXXXXXX% of the issued share capital (having full voting rights under all circumstances) of TC3.

265. DC2 Amalco will hold the TC3 Preferred Shares as capital property.

266. In respect of the transfer of the TC3 Distribution Property described in Paragraph 262, DC2 Amalco and TC3 will jointly elect in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property from DC2 Amalco to TC3. In the case of eligible property that is capital property, the agreed amount in respect of each such property will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such property. In the case of eligible property that is a depreciable property of a prescribed class, the agreed amount in respect of each such property will be equal to the least of the amounts described in subparagraphs 85(1)(e)(i), (ii) and (iii).

267. The amount of the liabilities assumed by TC3 which are allocated to a particular eligible property that is subject to an election under subsection 85(1), will not exceed the agreed amount for that particular property. The amount of liabilities assumed by TC3, which are allocated to a particular property that is not subject to an election under subsection 85(1), will not exceed the FMV of any such property.

268. The amount added to the stated capital of the TC3 Preferred Shares received by DC2 Amalco will be an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC3, and (b) the aggregate FMV, in the case of each property transferred to TC3 that is not an eligible property, less (c) the aggregate principal amounts of the liabilities of DC2 Amalco assumed by TC3. For greater certainty, the amount added to the stated capital account for the TC3 Preferred Shares to be issued by TC3 as partial consideration for the distribution of property, will not exceed the maximum amount that could be added to the aggregate PUC of the TC3 Preferred Shares without a reduction taking place pursuant to subsection 85(2.1).

Cross-redemptions / purchase for cancellation of TC3 and DC2 Amalco Shares

269. Immediately after the transfer of the TC3 Distribution Property described in Paragraph 262, TC3 will redeem all of the TC3 Preferred Shares held by DC2 Amalco for an amount equal to the aggregate redemption amount of such shares. The redemption will occur on the last day of TC3’s taxation year. As consideration therefor, TC3 will issue the TC3 Note to DC2 Amalco, which will have a principal amount and FMV equal to the aggregate FMV and redemption amount of the TC3 Preferred Shares redeemed. DC2 Amalco will accept the TC3 Note as payment in full for the TC3 Preferred Shares redeemed.

270. On the day following the redemption of TC3 Preferred Shares described in Paragraph 269, DC2 Amalco will purchase for cancellation all of the DC2 Amalco Common Shares held by TC3 for an amount equal to the FMV of such shares. As consideration therefor, DC2 Amalco will issue the DC2 Amalco Note 1 to TC3, which will have a principal amount and FMV equal to the aggregate FMV of the DC2 Amalco Common Shares purchased. TC3 will accept the DC2 Amalco Note 1 as payment in full for the DC2 Amalco Common Shares.

271. The principal amount owing by TC3 to DC2 Amalco under the TC3 Note will be offset against the principal amount owing by DC2 Amalco to TC3 under the DC2 Amalco Note 1, such that each such note will be cancelled in full satisfaction of its respective underlying obligations.

Distribution of DC2 Amalco’s net assets to TC4 (concurrent with the transfer to TC3)

272. Concurrent with the transfer of the TC3 Distribution Property described in Paragraph 262, DC2 Amalco will transfer to TC4, TC4’s pro rata share of the net FMV of each type of property owned by DC2 Amalco at that time determined as described in Paragraph 259 (collectively referred to as the “ TC4 Distribution Property”), such that immediately following the transfer of the properties and the assumption by TC4 of the amount of DC2 Amalco’s liabilities described in Paragraph 274(a), the aggregate net FMV of each type of property transferred by DC2 Amalco to TC4 will be equal to, or approximate, that proportion of each type of property determined by the formula:

A × B/C

where

A is the net FMV, immediately before the distribution, of all property of that type owned at that time by DC2 Amalco;

B is the FMV, immediately before the distribution, of all the DC2 Amalco shares owned, at that time, by TC4; and

C is the FMV, immediately before the distribution, of all the issued and outstanding DC2 Amalco shares.

273. The expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed XXXXXXXXXX, determined as a percentage of the net FMV of each type of property that TC4 will receive as compared to what it would have received had it received its appropriate pro rata share of the net FMV of that type of property of DC2 Amalco.

274. As consideration for the DC2 Amalco transfer described in Paragraph 272 above, TC4 will:

a) assume such liabilities of DC2 Amalco, as appropriate, so that TC4 will receive a pro rata share of the net FMV of each type of property owned by DC2 Amalco; and

b) issue TC4 Preferred Shares to DC2 Amalco which will have an aggregate redemption amount and aggregate FMV equal to the amount by which the aggregate FMV, at the time of the distribution, of the TC4 Distribution Property, exceeds the aggregate amount of the liabilities of DC2 Amalco assumed by TC4, as described in Paragraph 274(a). The number of TC4 Preferred Shares issued to DC2 Amalco will represent more than XXXXXXXXXX% but less than XXXXXXXXXX% of the issued share capital (having full voting rights under all circumstances) of TC4.

275. DC2 Amalco will hold the TC4 Preferred Shares as capital property.

276. In respect of the transfer of the TC4 Distribution Property described in Paragraph 272, DC2 Amalco and TC4 will jointly elect in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property of DC2 Amalco to TC4. In the case of eligible property that is a capital property, the agreed amount in respect of each such property will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such eligible property. In the case of eligible property that is a depreciable property of a prescribed class, the agreed amount in respect of each such property will be equal to the least of the amounts described in subparagraphs 85(1)(e)(i), (ii) and (iii).

277. The amount of the liabilities assumed by TC4, which are allocated to a particular eligible property that is subject to an election under subsection 85(1), will not exceed the agreed amount for that particular property. The amount of liabilities assumed by TC4, which are allocated to a particular property that is not subject to an election under subsection 85(1), will not exceed the FMV of any such property.

278. The amount added to the stated capital of the TC4 Preferred Shares received by DC2 Amalco, will be an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC4, and (b) the aggregate FMV, in the case of each property transferred to TC4 that is not an eligible property, less (c) the aggregate principal amounts of the liabilities of DC2 Amalco assumed by TC4. For greater certainty, the amount added to the stated capital account for the TC4 Preferred Shares to be issued by TC4 as partial consideration for the distribution of property, will not exceed the maximum amount that could be added to the aggregate PUC of the TC4 Preferred Shares without a reduction taking place pursuant to subsection 85(2.1).

Cross-redemptions / purchase for cancellation of TC4 and DC2 Amalco Shares

279. Immediately after the transfers of the TC4 Distribution Property described in Paragraph 272, TC4 will redeem all of the TC4 Preferred Shares of its capital stock held by DC2 Amalco for an amount equal to the aggregate redemption amount and FMV of such shares. The redemption will occur on the last day of TC4’s taxation year. As consideration therefor, TC4 will issue the TC4 Note to DC2 Amalco, which will have a principal amount and FMV equal to the aggregate FMV and redemption amount of the TC4 Preferred Shares. DC2 Amalco will accept the TC4 Note as payment in full for the TC4 Preferred Shares redeemed.

280. On the day following the redemption of TC4 Preferred Share described in Paragraph 279, DC2 Amalco will purchase for cancellation all of the DC2 Amalco Common Shares held by TC4 for an amount equal to the FMV of such shares. As consideration therefor, DC2 Amalco will issue the DC2 Amalco Note 2 to TC4, which will have a principal amount and FMV equal to the aggregate FMV of the DC2 Amalco Common Shares purchased. TC4 will accept the DC2 Amalco Note 2 as payment in full for the DC2 Amalco Common Shares.

281. The principal amount owing by TC4 to DC2 Amalco under the TC4 Note will be offset against the principal amount owing by DC2 Amalco to TC4 under the DC2 Amalco Note 2, such that each such note will be cancelled in full satisfaction of its respective underlying obligations.

Fourth Amalgamation

282. KL Amalco and TC2, each of which will be a predecessor corporation (the “DC3 Amalco Predecessor Corporations”), will amalgamate to form DC3 Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another DC3 Amalco Predecessor Corporation or shares of the capital stock of any DC3 Amalco Predecessor Corporation) of the DC3 Amalco Predecessor Corporations immediately before the amalgamation will become property of DC3 Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to any DC3 Amalco Predecessor Corporation) of the DC3 Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of DC3 Amalco by virtue of the amalgamation; and

c) all of the shareholders (except any DC3 Amalco Predecessor Corporation) who owned shares of the capital stock of any DC3 Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of DC3 Amalco because of the amalgamation.

283. [Reserved]

284. DC3 Amalco will be a TCC and a CCPC.

285. The authorized share capital of DC3 Amalco immediately after the Fifth Amalgamation will consist of an unlimited number of Common Shares, entitled to discretionary dividends (the “DC3 Amalco Common Shares”).

286. The issued and outstanding shares of the capital stock of DC3 Amalco immediately after the Fourth Amalgamation will be owned as follows:

Shareholder	Number	Class
Dco	XXXXXXXXXX	DC3 Amalco Common Shares
Eco	XXXXXXXXXX	DC3 Amalco Common Shares

286.1 The share capital of DC3 Amalco will be the same as the share capital of KL Amalco and the same shares will be held by each shareholder with no change in stated capital and PUC.

Third Butterfly

Incorporation of TC5

287. Eco will incorporate TC5 under the BCA2, issuing XXXXXXXXXX common share to Eco for $XXXXXXXXXX.

288. TC5 will be a TCC and a CCPC.

289. The authorized capital of TC5 will consist of an unlimited number of the following shares:

a) Common shares (the “TC5 Common Shares”) which are voting and entitled to discretionary dividends; and

b) Preferred shares (“TC5 Preferred Shares”) with the following attributes: voting, redeemable and retractable for a redemption amount equal to the FMV of the property transferred to TC5 in consideration for the issuance of these shares. Each TC5 Preferred Share has a non-cumulative dividend entitlement computed based on a fixed percentage of the FMV of the consideration received for the shares when first issued. For purposes of subsection 191(4), the terms and conditions of a TC5 Preferred Share will specify in the Articles an amount in respect of the share which amount will be a specific dollar amount and not be determined by formula.

Transfer of DC3 Amalco Shares to TC5

290. Eco will transfer its DC3 Amalco Common Shares to TC5 in consideration for TC5 Common Shares, having an aggregate FMV equal to the aggregate FMV of the DC3 Amalco Common Shares at the time of the transfer.

291. Eco and TC5 will jointly elect in prescribed form and within the time referred to in subsection 85(6) to have the provisions of subsection 85(1) apply to the transfer of the DC3 Amalco Common Shares to TC5. The agreed amount in respect of the DC3 Amalco Common Shares transferred will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such shares.

292. TC5 will add to the stated capital account maintained for the TC5 Common Shares an amount equal to the PUC of the DC3 Amalco Common Shares transferred.

DC3 Amalco Type of Properties Analysis

293. Immediately before the transfer of property by DC3 Amalco to TC5 described in Paragraph 296, the net FMV of each type of property of DC3 Amalco will be determined in accordance with the principles described in Paragraphs 221.2 to 221.4.

293.1Based on the principles described in Paragraphs 221.2 to 221.4, DC3 Amalco is expected to have business property and investment property.

Distribution of DC3 Amalco’s net assets to TC5

296. DC3 Amalco will transfer to TC5, TC5’s pro rata share of the net FMV of each type of property owned by DC3 Amalco at that time determined as described in Paragraph 293 (collectively referred to as the “TC5 Distribution Property”), such that immediately following the transfer of the properties and the assumption by TC5 of the amount of DC3 Amalco’s liabilities described in Paragraph 298(a), the aggregate net FMV of each type of property transferred by DC3 Amalco to TC5 will be equal to, or approximate that proportion, of each type of property determined by the formula:

A × B/C

    where

A is the net FMV, immediately before the distribution, of all property of that type owned at that time by DC3 Amalco;

B is the FMV, immediately before the distribution, of all the DC3 Amalco shares owned at that time, by TC5; and

C is the FMV, immediately before the distribution, of all the issued and outstanding DC3 Amalco shares.

297. The expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed XXXXXXXXXX, determined as a percentage of the net FMV of each type of property that TC5 will receive as compared to what it would have received had it received its appropriate pro rata share of the net FMV of that type of property of DC3 Amalco.

298. As consideration for the DC3 Amalco transfer described in Paragraph 296 above, TC5 will:

a) assume such liabilities of DC3 Amalco, as appropriate, so that TC5 will receive a pro rata share of the net FMV of each type of property owned by DC3 Amalco; and

b) issue TC5 Preferred Shares to DC3 Amalco which will have an aggregate redemption amount and aggregate FMV equal to the amount by which the aggregate FMV, at the time of the distribution, of the TC5 Distribution Property received by TC5, exceeds the aggregate amount of the liabilities of DC3 Amalco assumed by TC5, as described in Paragraph 298(a). The number of TC5 Preferred Shares issued to DC3 Amalco will represent more than XXXXXXXXXX% but less than XXXXXXXXXX% of the issued share capital (having full voting rights under all circumstances) of TC5

299. DC3 Amalco will hold the TC5 Preferred Shares as capital property.

300. In respect of the transfer of the TC5 Distribution Property described in Paragraph 296, DC3 Amalco and TC5 will jointly elect in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property to TC5. The agreed amount in respect of each eligible property will not be less than the lesser of the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV of such property.

301. The amount of the liabilities assumed by TC5 which are allocated to a particular eligible property that is subject to an election under subsection 85(1), will not exceed the agreed amount for that particular property. The amount of liabilities assumed by TC5, which are allocated to a particular property that is not subject to an election under subsection 85(1), will not exceed the FMV of any such property.

302. The amount added to the stated capital of the TC5 Preferred Shares received by DC3 Amalco will be an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to TC5, and (b) the aggregate FMV, in the case of each property transferred to TC5 that is not an eligible property, less (c) the aggregate amount of the liabilities of DC3 Amalco assumed by TC5. For greater certainty, the amount added to the stated capital account for the TC5 Preferred Shares to be issued by TC5 as partial consideration for the TC5 Distribution Property will not exceed the maximum amount that could be added to the aggregate PUC of the TC5 Preferred Shares without a reduction taking place pursuant to subsection 85(2.1).

Cross-redemptions / purchase for cancellation of TC5 and DC3 Amalco Shares

303. Immediately after the transfer of the TC5 Distribution Property described in Paragraph 296, TC5 will redeem all of the TC5 Preferred Shares held by DC3 Amalco for an amount equal to the aggregate redemption amount and FMV of such shares. The redemption will occur on the last day of TC5’s taxation year. As consideration therefor, TC5 will issue the TC5 Note to DC3 Amalco, which will have a principal amount and FMV equal to the aggregate redemption amount and FMV of the TC5 Preferred Shares redeemed. DC3 Amalco will accept the TC5 Note as payment in full for the redemption of the TC5 Preferred Shares.

304. On the day following the redemption of the TC5 Preferred Shares described in Paragraph 303, DC3 Amalco will purchase for cancellation all of the DC3 Amalco Common Shares held by TC5 for an amount equal to the FMV of such shares. As consideration therefor, DC3 Amalco will issue the DC3 Amalco Note to TC5, which will have a principal amount and FMV equal to the aggregate FMV of the DC3 Amalco Common Shares purchased. TC5 will accept the DC3 Amalco Note as payment in full for the purchase for cancellation of the DC3 Amalco Common Shares.

305. The amount owing by TC5 to DC3 Amalco under the TC5 Note will be offset against the amount owing by DC3 Amalco to TC5 under the DC3 Amalco Note, such that each such note will be cancelled in full satisfaction of its respective underlying obligations.

Additional Amalgamations

Fifth Amalgamation

306. During the series of transactions, Aco and DC1 Amalco, each of which will be a predecessor corporation (the “Aco Amalco Predecessor Corporation”), will amalgamate to form Aco Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another Aco Amalco Predecessor Corporation or shares of the capital stock of another Aco Amalco Predecessor Corporation) of the Aco Amalco Predecessor Corporations immediately before the amalgamation will become property of Aco Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another Aco Amalco Predecessor Corporation) of the Aco Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of Aco Amalco by virtue of the amalgamation; and

c) all of the shareholders (except an Aco Amalco Predecessor Corporation) who owned shares of the capital stock of any Aco Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of Aco Amalco because of the amalgamation.

307. Aco Amalco will be a TCC and a CCPC.

308. The issued and outstanding shares of the capital stock of Aco Amalco immediately after the Fifth Amalgamation will be owned as follows:

Shareholder	Number	Class
A	XXXXXXXXXX	Class A Shares
A Family Trust	XXXXXXXXXX	Class B Shares
A Joint Spousal Trust	XXXXXXXXXX	Class B Preferred Shares

308.1 The share capital of Aco Amalco will be the same as the share capital of Aco and the same shares will be held by each shareholder with no change in stated capital and PUC.

Sixth Amalgamation

309. Bco and TC3, each of which will be a predecessor corporation (the “Bco Amalco Predecessor Corporation”), will amalgamate to form Bco Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another Bco Amalco Predecessor Corporation or shares of the capital stock of another Bco Amalco Predecessor Corporation) of the Bco Amalco Predecessor Corporations immediately before the amalgamation will become property of Bco Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another Bco Amalco Predecessor Corporation) of the Bco Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of Bco Amalco by virtue of the amalgamation; and

c) all of the shareholders (except an Bco Amalco Predecessor Corporation) who owned shares of the capital stock of any Bco Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of Bco Amalco because of the amalgamation.

310. Bco Amalco will be a TCC and a CCPC.

311. The issued and outstanding shares of the capital stock of Bco Amalco immediately after the Sixth Amalgamation will be owned as follows:

Shareholder	Number	Class
B	XXXXXXXXXX	Class B Preferred Shares Class F Preferred Shares
B Spouse	XXXXXXXXXX	Class C Preferred Shares
B Child 1	XXXXXXXXXX	Class D Preferred Shares
B Child 2	XXXXXXXXXX	Class E Preferred Shares
B Family Trust	XXXXXXXXXX	Class 1 Common Shares

311.1 The share capital of Bco Amalco will be the same as the share capital of Bco and the same shares will be held by each shareholder with no change in stated capital and paid-up capital.

Seventh Amalgamation

312. Cco and TC4, each of which will be a predecessor corporation (the “Cco Amalco Predecessor Corporation”), will amalgamate to form Cco Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another Cco Amalco Predecessor Corporation or shares of the capital stock of another Cco Amalco Predecessor Corporation) of the Cco Amalco Predecessor Corporations immediately before the amalgamation will become property of Cco Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another Cco Amalco Predecessor Corporation) of the Cco Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of Cco Amalco by virtue of the amalgamation; and

c) all of the shareholders (except an Cco Amalco Predecessor Corporation) who owned shares of the capital stock of any Cco Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of Cco Amalco because of the amalgamation.

313. Cco Amalco will be a TCC and a CCPC.

314. The issued and outstanding shares of the capital stock of Cco Amalco immediately after the Seventh Amalgamation will be owned as follows:

Shareholder	Number	Class
C Family Trust	XXXXXXXXXX	Class B voting common shares without par value
C	XXXXXXXXXX	Class E non-voting preferred shares without par value

314.1 The share capital of Cco Amalco will be the same as the share capital of Cco and the same shares will be held by each shareholder with no change in stated capital and PUC.

Eighth Amalgamation

315. Dco and DC3 Amalco, each of which will be a predecessor corporation (the “Dco Amalco Predecessor Corporation”), will amalgamate to form Dco Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another Dco Amalco Predecessor Corporation or shares of the capital stock of another Dco Amalco Predecessor Corporation) of the Dco Amalco Predecessor Corporations immediately before the amalgamation will become property of Dco Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another Dco Amalco Predecessor Corporation) of the Dco Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of Dco Amalco by virtue of the amalgamation; and

c) all of the shareholders (except an Dco Amalco Predecessor Corporation) who owned shares of the capital stock of any Dco Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of Dco Amalco because of the amalgamation.

316. Dco Amalco will be a TCC and a CCPC.

317. The issued and outstanding shares of the capital stock of Dco Amalco immediately after the Eighth Amalgamation will be owned as follows:

Shareholder	Number	Class
D Family Trust	XXXXXXXXXX	Class A voting common shares
D	XXXXXXXXXX	Class D non-voting preferred shares with a par value of $ XXXX /share
D	XXXXXXXXXX	Class G non-voting preferred shares with a par value of $ XXXX /share

317.1 The share capital of Dco Amalco will be the same as the share capital of Dco and the same shares will be held by each shareholder with no change in stated capital and paid-up capital.

Last Amalgamation

318. Eco and TC5, each of which will be a predecessor corporation (the “Eco Amalco Predecessor Corporation”), will amalgamate to form Eco Amalco under the provisions of the BCA2, whereby:

a) all of the property (except any amounts receivable from another Eco Amalco Predecessor Corporation or shares of the capital stock of another Eco Amalco Predecessor Corporation) of the Eco Amalco Predecessor Corporations immediately before the amalgamation will become property of Eco Amalco by virtue of the amalgamation;

b) all of the liabilities (except any amounts payable to another Eco Amalco Predecessor Corporation) of the Eco Amalco Predecessor Corporations immediately before the amalgamation will become liabilities of Eco Amalco by virtue of the amalgamation; and

c) all of the shareholders (except an Eco Amalco Predecessor Corporation) who owned shares of the capital stock of any Eco Amalco Predecessor Corporation immediately before the amalgamation will receive shares of the capital stock of Eco Amalco because of the amalgamation.

319. Eco Amalco will be a TCC and a CCPC.

320. The issued and outstanding shares of the capital stock of Eco Amalco immediately after the Last Amalgamation will be owned as follows:

Shareholder	Number	Class
E Family Trust	XXXXXXXXXX	common shares

320.1 The share capital of Eco Amalco will be the same as the share capital of Eco and the same shares will be held by each shareholder with no change in stated capital and paid-up capital.

321. [Reserved]

ADDITIONAL INFORMATION

321.1 Each of the Oco Subsidiaries-Buyer Asset Sale, the A Estate Freeze, the B Estate Freeze, the Oco Amalco Wind-Up, the Pre-Butterfly Dissolutions, and the Subject Transaction (the issue of shares in the capital stock of Yco o the Yco Management Employees described in Paragraphs 173 and 183.1) were not completed in contemplation of, or part of the series of transactions or events that includes, the distributions forming part of the First Butterfly, the Second Butterfly or the Third Butterfly. Each of the Oco Subsidiaries-Buyer Asset Sale, the A Estate Freeze, the B Estate Freeze, the Oco Amalco Wind-Up, the Pre-Butterfly Dissolutions and the Subject Transaction would have occurred regardless of whether such distributions were completed and the distributions would have been completed regardless of whether any of the Oco Subsidiaries-Buyer Asset Sale, the A Estate Freeze, the B Estate Freeze, the Oco Amalco Wind-Up, the Pre-Butterfly Dissolutions and the Subject Transactions occured.

322. Aco and Dco are an unrelated group that exercise de jure control of Fco, Gco, Hco, Ico, Jco, Uco and Wco.

323. [Reserved]

324. [Reserved]

325. [Reserved]

326. [Reserved]

327. [Reserved]

328. [Reserved]

329. [Reserved]

330. [Reserved]

331. Aco and Dco have had an historical relationship and have always acted jointly and in concert with respect of all important business and financial decisions regarding Fco, Gco, Hco, Ico, Jco, Uco and Wco.

331.1 Hco and Gco are inactive and are included in the First Amalgamation to simplify the corporate structure. The shares of Hco and Gco have nominal FMV. Their inclusion in the First Amalgamation will have no affect on any distribution received by TC1 or TC2 or the net FMV of each type of property retained by DC1 Amalco on the First Butterfly.

332 [Reserved]

333. Except as described in this letter:

a) no property has been or will be acquired, and no liabilities have been or will be incurred or paid by DC1 Amalco, DC2 Amalco, DC3 Amalco or a predecessor of any such corporation, in contemplation of and before the First Butterfly, the Second Butterfly or the Third Butterfly, as the case may be, other than in a transaction described in subparagraphs 55(3.1)(a)(i) to (iv);

b) other than the transfers which form part of the Proposed Transactions none of DC1 Amalco, DC2 Amalco, DC3 Amalco, TC1, TC2, TC3, TC4 nor T5 expects or intends to dispose of any property owned by them as part of the series of transactions or events that includes the Proposed Transactions to a person unrelated to it, or as part of the series of transactions or events, ceased to be related to it, or to a partnership as described in paragraphs 55(3.1)(c) or (d); and

c) there has not been and will not be, as part of the series of transactions or events that include the Proposed Transactions, any disposition or acquisition of property in circumstances described in subparagraph 55(3.1)(b)(i) or (iii), or an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii).

334. [Reserved]

335. None of DC1 Amalco, DC2 Amalco, DC3 Amalco, TC1, TC2, TC3, TC4 or TC5 is or will be, at any time during the series of transactions or events that includes the Proposed Transactions, a specified financial institution, a restricted financial institution or a corporation described in any of paragraphs (a) to (f) of the definition of financial intermediary corporation.

336. [Reserved]

337. None of the shares of DC1 Amalco, DC2 Amalco, DC3 Amalco, TC1, TC2, TC3, TC4 or TC5 has been or will be, at any time during the implementation of the Proposed Transactions:

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

b) The subject of a dividend rental arrangement referred to in subsection 112(2.3), as that term is defined in subsection 248(1);

c) 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);

d) The subject of any secured undertaking of the type described in paragraph 112(2.4)(a); or

e) Issued for consideration that is or includes:

i) an obligation of the type described in subparagraph 112(2.4)(b)(i), or

ii) any right of the type described in subparagraph 112(2.4)(b)(ii).

337.1 The DC1 Amalco Class A Common Shares, DC2 Amalco Common Shares and DC3 Amalco Common Shares that will be purchased for cancellation as described in Paragraphs 232, 242, 270, 280 and 304 will not be taxable preferred shares, term preferred shares or short term preferred shares.

337.2 The Class A common shares in the capital of Uco, the Class A common shares in the capital of Vco, the Class A common shares in the capital of Wco, the Class A common shares in the capital of Xco, the Class A common shares in the capital of Yco and the common shares in the capital of Zco are not taxable preferred shares.

337.3 The shares in the capital of Tco that are owned by Jco are not taxable preferred shares.

337.4 The amount specified under the terms and conditions of each DC1 Amalco Class D Preferred Share, DC1 Amalco Class E Preferred Share, DC1 Class F Preferred Share, TC1 Preferred Share, TC2 Preferred Share, TC3 Preferred Share, TC4 Preferred Share and TC5 Preferred Share for purposes of subsection 191(4) will not exceed the FMV of the consideration for which such share is issued.

337.5 The DC1 Amalco Class C Preferred Shares, DC1 Amalco D Preferred Shares, Class DC1 Amalco Class E Preferred Shares, DC1 Amalco Class F Preferred Shares, TC1 Preferred Shares, TC2 Preferred Shares, TC3 Preferred Shares, TC4 Preferred Shares and TC5 Preferred Shares will not be issued for consideration that includes taxable preferred shares.

337.6 TC1 will have a substantial interest in DC1 Amalco immediately before the redemption of the DC1 Amalco Class D Preferred Shares described in Paragraph 232.

338. [Reserved]

339. [Reserved]

340. [Reserved]

341. [Reserved].

342. [Reserved]

343. Each of DC1 Amalco, DC2 Amalco, DC3 Amalco, TC1, TC2, TC3, TC4 and TC5 will have the financial capacity to honor, upon presentation for payment, the amount payable under their respective promissory notes issued as part of the Proposed Transactions.

344. The Proposed Transactions will not result in any of the taxpayers referred to herein being unable to pay its existing tax liabilities.

345. [Reserved].

PURPOSES OF PROPOSED TRANSACTIONS

346. The purpose of the A Estate Freeze and the B Estate Freeze is to permit A, B and their respective families to organize their family affairs in contemplation of their future but not immediately contemplated death.

347. The purpose of the Oco Amalco Wind-Up is to allocate Oco Amalco’s undistributed funds to its indirect shareholders and to wind up the affairs of Oco Amalco and Nco as they are no longer carrying activities. These transactions were contemplated outside of the series of transactions or events that include the First, Second and Third Butterfly transactions and would have taken pace even if those Butterfly transactions had not been completed.

348. The purpose of winding-up Mco, Pco, Qco and Rco is to simplify the steps of the Proposed Transactions by winding-up inactive corporations.

349. [Reserved]

349.1 The purpose of the issue of the Yco shares to the Yco Management Employees under the Subject Transaction is to compensate key employees pursuant to existing arrangements made in XXXXXXXXXX.  

350. The purpose of the First and Second Amalgamations is to simplify the complex corporate structure by eliminating the interests that DC2, Kco and Lco have in corporations that are no longer required.

351. The purpose of the Third and Fourth Amalgamations is to simplify the transactions required to achieve the purpose of the Proposed Transactions and reduce the number of sequential butterflies needed.

352. The purpose of the other amalgamations is to simplify the final holding structure.

353. The purpose of the Proposed Transactions is also to allow Aco, Bco, Cco, Dco and Eco to separate their economic interest in the shares of Tco.

RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all relevant facts, proposed transactions and purposes of the Proposed Transactions, and provided that the Proposed Transactions are completed in the manner described above, we confirm the following:

A. Subject to the application of subsection 69(11), provided the appropriate joint elections are filed in the prescribed form and manner within the time limit specified in subsection 85(6), subsection 85(1) will apply to:

a) the transfer of the DC1 Amalco Class A Common Shares and DC1 Amalco Class D Preferred Shares by DC2 to TC1 described in Paragraph 215;

b) the transfer of the DC1 Amalco Class A Common SharesDC1 Amalco Class E Preferred Shares and DC1 Class F Preferred Shares by KL Amalco to TC2 described in Paragraph 218.1;

c) the transfer of the DC2 Amalco Common Shares by Bco to TC3 described in Paragraph 253;

d) the transfer of the DC2 Amalco Common Shares by Cco to TC4 described in Paragraph 256.1; and

e) the transfer of the DC3 Amalco Common Shares by Eco to TC5 described in Paragraph 290;

such that the agreed amount in respect of each such transfer of eligible property will be deemed to be the transferor’s proceeds of disposition and the transferee’s cost of the particular eligible property, pursuant to paragraph 85(1)(a).

For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers.

A.1 Subject to the application of subsection 69(11), provided the appropriate joint elections are filed in the prescribed form and manner within the time limit specified in subsection 85(6), subsection 85(1) will apply to the transfer of eligible property on:

a) the transfer of the TC1 Distribution Property by DC1 Amalco to TC1 described in Paragraph 224;

b) the transfer of the TC2 Distribution Property by DC1 Amalco to TC2 described in Paragraph 234;

c) the transfer of the TC3 Distribution Property by DC2 Amalco to TC3 described in Paragraph 262;

d) the transfer of the TC4 Distribution Property by DC2 Amalco to TC4 described in Paragraph 272; and

e) the transfer of the TC5 Distribution Property by DC3 Amalco to TC5 described in Paragraph 296;

such that the agreed amount in respect of each such transfer of eligible property will be deemed to be the transferor’s proceeds of disposition and the transferee’s cost of the particular eligible property, pursuant to paragraph 85(1)(a).

For purposes of this Ruling A.1, when determining the agreed amount of depreciable property on any transfer, the reference to the UCC to the taxpayer of all of the property of that class immediately before the disposition in subparagraph 85(1)(e)(i) shall mean that portion of the undepreciated capital cost to the taxpayer of all the property of that class that the FMV of the assets of that class transferred to TC is of the FMV of all assets of that class owned by the DC immediately before the transfer.

For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers.

B. Subsection 84(3) will apply to:

a) the redemption by TC1 of the TC1 Preferred Shares held by DC1 Amalco described in Paragraph 231 to deem TC1 to have paid and DC1 Amalco to have received;

b) the purchase for cancellation by DC1 Amalco of the DC1 Amalco Class A Common Shares held by TC1 described in Paragraph 232 to deem DC1 Amalco to have paid and TC1 to have received;

c) the redemption by DC1 Amalco of the DC1 Amalco Class D Preferred Shares held by TC1 described in Paragraph 232 to deem DC1 Amalco to have paid and TC1 to have received;

d) the redemption by TC2 of the TC2 Preferred Shares held by DC1 Amalco described in Paragraph 241 to deem TC2 to have paid and DC1 Amalco to have received;

e) the purchase for cancellation of the DC1 Amalco Class A Common Shares held by TC2 described in Paragraph 242 to deem DC1 Amalco to have paid and TC2 to have received;

f) the redemption by DC1 Amalco of the DC1 Amalco Class E Preferred Shares and the DC1 Amalco Class F Preferred Shares held by TC2 described in Paragraph 242 to deem DC1 Amalco to have paid and TC2 to have received;

g) the redemption by TC3 of the TC3 Preferred Shares held by DC2 Amalco described in Paragraph 269 to deem TC3 to have paid and DC2 Amalco to have received;

h) the purchase for cancellation by DC2 Amalco of the DC2 Amalco Common Shares held by TC3 described in Paragraph 270 to deem DC2 Amalco to have paid and TC3 to have received;

i) the redemption by TC4 of the TC4 Preferred Shares held by DC2 Amalco described in Paragraph 279 to deem TC4 to have paid and DC2 Amalco to have received;

i) the purchase for cancellation by DC2 Amalco of the DC2 Amalco Common Shares held by TC4 described in Paragraph 280 to deem DC2 Amalco to have paid and TC4 to have received;

j) the redemption by TC5 of the TC5 Preferred Shares held by DC3 Amalco described in Paragraph 303 to deem TC5 to have paid and DC3 Amalco to have received; and

k) the purchase for cancellation by DC3 Amalco of the DC3 Amalco Common Shares held by TC5 described in Paragraph 304 to deem DC3 Amalco to have paid and TC5 to have received;

a taxable dividend at that time on those shares redeemed or purchased for cancellation, as the case may be, equal to the amount, if any, by which the amount paid in respect of the redemption or purchase for cancellation, as the case may be, exceeds the aggregate PUC in respect of those shares immediately before the redemption or purchase for cancellation.

C. The taxable dividends described in Ruling B:

(a) will be included in computing the income, pursuant to subsection 82(1) and paragraph 12(1)(j), of the person deemed to have received such dividend;

(b) will be deductible by the recipient pursuant to subsection 112(1) in computing its taxable income for the year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);

(c) will be excluded in determining the proceeds of disposition to the recipient corporation of the shares which are redeemed pursuant to paragraph (j) of the definition of “proceeds of disposition” in section 54;

(d) will, by virtue of the provisions of subsection 112(3), reduce any loss arising from any redemption or purchase for cancellation described in Ruling B which would otherwise be determined; and

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

D.1 Tax under Part IV.1 and VI.1 will not apply to the taxable dividends described in Ruling B that are deemed to be paid on the DC1 Amalco Class D Preferred Shares, DC1 Amalco Class E Preferred Shares, DC1 Amalco Class F Preferred Shares, TC1 Preferred Shares, TC2 Preferred Shares, TC3 Preferred Shares, TC4 Preferred Shares and TC5 Preferred Shares except to the extent that the amount paid on the redemption, acquisition or cancellation of such a share exceeds the amount specified in the terms and conditions of the share for purposes of subsection 191(4).

E. Provided that, as part of a series of transactions or events that includes the Proposed Transactions, there is not:

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

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

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

d) an acquisition of a share in the circumstances described in subparagraph 55(3.1)(b)(iii); or

e) an acquisition of property in circumstances described in paragraphs 55(3.1)(c) or (d);

which has not been described in this letter, then by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in Ruling B, and, for greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b) in respect of those dividends.

F. The set-off and cancellation of:

a) the DC1 Amalco Note 1 and the TC1 Note described in Paragraph 233;

b) the DC1 Amalco Note 2 and the TC2 Note described in Paragraph 243;

c) the DC2 Amalco Note 1 and the TC3 Note described in Paragraph 271;

e) the DC2 Amalco Note 2 and the TC4 Note described in Paragraph 281; and

f) the DC3 Amalco Note and the TC5 Note described in Paragraph 305;

will not, in and of itself, give rise to a forgiven amount. In addition, none of DC1 Amalco, DC2 Amalco, DC3 Amalco, TC1, TC2, TC3, TC4 and TC5 will otherwise realize a gain or incur any loss as a result of such set-off and cancellation.

G. The provisions of subsection 87(1) will apply to the First Amalgamation, the Second Amalgamation, the Third Amalgamation, the Fourth Amalgamation, the Fifth Amalgamation, the Sixth Amalgamation, the Seventh Amalgamation, the Eight Amalgamation and the Last Amalgamation.

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

I. The provisions of subsection 245(2) will not be applied to the Proposed Transactions, in and by itself, to redetermine the tax consequences confirmed in the rulings given above.

These rulings are given subject to the limitations and qualifications set forth in Information Circular 70-6R11 issued on April 1, 2021, and are binding on the CRA, provided that the Proposed Transactions are completed 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

Unless otherwise confirmed, nothing in the Rulings 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 stated capital or 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;

c) the characterization of any property described herein to the holder thereof (including the type of property);

d) the safe income on hand attributable to any shares of any corporation referred to herein;

e) whether Aco and Dco act as an unrelated group that controls Fco, Gco, Hco, Ico and Jco;

f) any other tax consequence relating to the facts, 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, 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, including but not limited to the following:

(i) the Oco Subsidiaries-Buyer Asset Sale transactions and the distribution of the proceeds therefrom described in Paragraphs 115 to 118;

(ii) the Subject Transactions;

(iii) the A Estate Freeze and the B Estate Freeze;

(iv) the Pre-Butterfly Dissolutions;

(v) the Oco Amalco Wind-Up; and

(vi) the transfers and acquisitions of Tco shares (and the loans and borrowing of money to finance such acquisitions) described in Paragraphs 64, 65, 66 and 72.

Nothing in this letter should be construed as confirmation, express or implied, that, for the purpose of any of the rulings given above, any adjustment to the FMV of the properties transferred and the redemption amount of the shares issued as consideration, whether pursuant to a price adjustment clause or otherwise, will be effective retroactively to the time of the transfer and issuance of shares. In addition, any such adjustment could affect the ruling given in Ruling F above. Furthermore, none of the rulings given in this letter are intended to apply to, or in the event of, the operation of a price adjustment clause, since such adjustment will be due to circumstances that do not constitute proposed transactions that are seriously contemplated. The general position of the CRA with respect to price adjustment clauses is stated in Income Tax Folio S4-F3-C1, dated March 28, 2013.

Yours truly,

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

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