Tax Instruction Letter To: From: Subject: Eligible Holders who hold Units of Canso Select Opportunities Fund ( the Fund ) Canso Select Opportunities Corporation ( NewCo ) Tax Instruction Letter for Eligible Holders who wish to file a Joint Tax Election concerning the exchange of Eligible Holders Units in the Fund for NewCo Securities Dear Eligible Holder 1, This letter and accompanying documents and information (the Tax Instruction Letter ) is being made available to all Eligible Holders who exchange Units 2 for NewCo Securities 3 pursuant to the Plan of Arrangement (the Arrangement ) as described in the March 16, 2018 Notice of Special Meeting of Unitholders and Management Information Circular with respect to an arrangement involving the Fund and NewCo (the Circular ). This Tax Instruction Letter is relevant to any Eligible Holder who wishes to file a Joint Tax Election 4 allowing such Eligible Holder the opportunity to defer all or a portion of the tax otherwise arising in Canada on the exchange of Units for NewCo Securities pursuant to the Arrangement, as described in the Circular. As more fully described in the Circular, a Joint Tax Election may be made by an Eligible Holder, subject to the limitations set out in subsections 85(1) and 85(2) of the Tax Act, as well as, where applicable, a corresponding election under applicable provincial law. 1 Eligible Holder means a beneficial holder of Units that is (i) a resident of Canada for purposes of the Income Tax Act (Canada) (the Tax Act ) and not exempt from tax under Part I of the Tax Act; or (ii) a partnership, any member of which is a resident of Canada for purposes of the Tax Act and not exempt from tax under Part I of the Tax Act. 2 Units means, collectively, the Class A Units and/or Class F Units of the Fund. 3 NewCo Securities means, collectively, the Class A Multiple Voting Shares and/or the Class B Subordinate Voting Shares in NewCo, a corporation incorporated under the laws of the Province of Ontario. 4 Joint Tax Election means a joint tax election under section 85 of the Tax Act and described under the heading Part I The Arrangement Certain Canadian Federal Income Tax Considerations of the Circular with respect to the Arrangement.
This Tax Instruction Letter sets out the time, form and manner in which an Eligible Holder must provide relevant information to NewCo in order that NewCo will sign and return a Joint Tax Election to the Eligible Holder for filing by the Eligible Holder. Such relevant information is referred to herein as the Joint Tax Election Information. Unless otherwise noted, all defined terms in this Tax Instruction Letter have the meaning as set out in the Circular. Please review this Tax Instruction Letter very carefully and consult your tax advisor as to the manner and form in which you are required to deliver the Joint Tax Election Information to NewCo and the applicable deadlines. The information provided herein and in the Circular with respect to any Joint Tax Election is provided for general assistance only, may not be exhaustive and is not intended to be, nor should it be construed as, legal or tax advice to any particular Eligible Holder. The law in this area is complex and contains numerous technical requirements not addressed in this Tax Instruction Letter. Furthermore, apart from providing this Tax Instruction Letter and enclosure(s) to an Eligible Holder for their convenience, none of NewCo, Lysander Funds Limited ( Lysander ), the Fund, or any appointed agents or representatives, any of the other members of NewCo, nor any affiliate or successor of any such entity will provide an Eligible Holder with any advice or particular assistance on making a Joint Tax Election. Accordingly, Eligible Holders should consult with their own tax advisors for specific advice in respect of whether or not to make a Joint Tax Election, and how to comply with the requirements for making such Joint Tax Election having regard to their own particular circumstances. KEY INFORMATION No fractional shares of NewCo were issued under the Arrangement. The total number of NewCo Class A Multiple Voting Shares or Class B Subordinate Voting Shares issued to any Unitholder was rounded up to the nearest whole share in the event that such Unitholder would otherwise be entitled to a fractional share representing 0.5 or more of a NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share, and was, without additional compensation, rounded down to the nearest whole NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share in the event that such Unitholder would otherwise be entitled to a fractional share representing less than 0.5 of a NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share. 2
DEADLINES 1. Deadline to submit Joint Tax Election Information to NewCo: December 3, 2018. The Effective Date was September 4, 2018. The deadline to submit the Joint Tax Election Information to Newco is no later than 90 days following the Effective Date, or December 3, 2018 (the Tax Election Date ). 2. Deadline for filing a Joint Tax Election form and any applicable similar joint election under provincial legislation with the tax authorities is the earlier of: i. June 30, 2019, being NewCo s expected Canadian income tax filing deadline, or ii. the Eligible Holder s deadline for filing their own Canadian income tax return for the taxation year that includes the Effective Time. 5 3. Individuals will generally have to file the Joint Tax Election on or before their regular income tax filing deadline of April 30, 2019 as this is the earlier of (i) June 30, 2019 and (ii) April 30, 2019. 4. Trusts will generally have to file the Joint Tax Election on or before their regular income tax filing deadline which is no later than 90 days after the trust's tax year-end. 5. Corporations may be required to file the Joint Tax Election earlier than NewCo s income tax corporate filing deadline of June 30, 2019 depending on their taxation year end. 5 Effective Time means 12:01 a.m. (Toronto time) on the Effective Date or such other time on the Effective Date as may be specified in writing by NewCo. 3
OPTION OF FILING A JOINT TAX ELECTION As described in the Circular, the exchange of Units for NewCo Securities pursuant to the Arrangement will be treated as a disposition (or sale) at fair market value of the Units held by each Eligible Holder for Canadian income tax purposes. Because of this sale treatment, an Eligible Holders may realize a gain (or loss) and be subject to income tax as a result of the disposition. It is possible for an Eligible Holder to defer some or all of the Canadian income tax on any gain realized on the exchange of Units for NewCo Securities by making a Joint Tax Election and any applicable similar joint election under provincial legislation with NewCo and filing such tax election(s) with the Canada Revenue Agency and any applicable provincial taxation authority in the prescribed form and within the prescribed time. Each Eligible Holder is encouraged to review their own situation and make a determination with respect to the filing of a Joint Tax Election and any applicable similar joint election under provincial legislation with NewCo in a timely manner. In order to make a Joint Tax Election, an Eligible Holder must submit the Joint Tax Election Information to NewCo by the Tax Election Date (December 3, 2018) and in the form and manner described in this Tax Instruction Letter. The Joint Tax Election is optional. However, an Eligible Holder who would otherwise realize a gain on the exchange and who does not make the Joint Tax Election(s) with NewCo will NOT obtain a tax-deferred rollover in Canada may be subject to tax on any gain otherwise realized. Eligible Holders residing within Canada should refer to the summary of Certain Canadian Federal Income Tax Considerations (pages 34-38) in the Circular that explains the income tax results of an exchange of Units for NewCo Securities. Only Eligible Holders may make a Joint Tax Election. An Eligible Holder is defined within the Circular to mean a beneficial holder of Units that is (i) a resident of Canada for purposes of the Tax Act and not exempt from tax under Part I of the Tax Act; or (ii) a partnership, any member of which is a resident of Canada for purposes of the Tax Act and not exempt from tax under Part I of the Tax Act. Provided NewCo receives the Joint Tax Election Information by the Tax Election Date (December 3, 2018) and in the form and manner described in this Tax Instruction Letter, NewCo will sign and return a Joint Tax Election to the Eligible Holder so that the Eligible Holder may file the Joint Tax Election with the relevant taxation authority(ies) by the applicable deadline. The Eligible Holder would need to provide the Joint Tax Election Information to NewCo no later than December 3, 2018, and NewCo anticipates that it will sign and return such Joint Tax Election to the Eligible Holder no later than March 3, 2018. This Tax Instruction Letter does not contain forms or instructions in respect of any forms that any particular Eligible Holder may be required to file in compliance with provincial tax legislation to achieve a deferral of taxes. Eligible Holders are solely responsible for obtaining and completing such provincial forms and must submit any such forms to NewCo for signature no later than the Tax Election Date. 4
Once a Joint Tax Election (including any provincial form(s) submitted by an Eligible Holder to NewCo) is signed by NewCo and returned to the Eligible Holder, the Eligible Holder must sign and file the signed election forms with the applicable Canadian federal and provincial tax authorities. Eligible Holders that do not provide the Joint Tax Election Information to NewCo in the form and manner stipulated in this Tax Instruction Letter (including the submission of any applicable completed joint election form under provincial legislation on or before the Tax Election Date) cannot benefit from the rollover provisions of Canadian income tax legislation. NewCo will have no obligation to sign and return to the Eligible Holder for filing by the Eligible Holder any Joint Tax Election if the Joint Tax Election Information (or applicable provincial form) is received by it AFTER the Tax Election Date. Once a Joint Tax Election and any applicable similar joint election form under provincial legislation has been signed and returned by NewCo to the Eligible Holder, the ELIGIBLE HOLDER IS SOLELY RESPONSIBLE for ensuring that the Joint Tax Election and any applicable similar joint election under provincial legislation is signed by the Eligible Holder, completed correctly (including confirming and validating the completeness and accuracy of the forms, including all numbers appearing on the forms) and filed with the Canada Revenue Agency and any applicable provincial taxation authorities by the applicable deadline. Neither NewCo, Lysander nor the Fund assumes any responsibility or liability to any Eligible Holder in assisting any Eligible Holder in preparing a Joint Tax Election form or any applicable similar joint election under provincial legislation. Each Eligible Holder has the sole responsibility to submit the Joint Tax Election Information to NewCo within the time and in the form and manner described in this Tax Instruction Letter. Each Eligible Holder is also solely responsible and liable for any taxes, interest, penalties, damages or expenses resulting from the failure by the Eligible Holder to properly complete and file a valid Joint Tax Election form (or any applicable similar joint election under provincial legislation) in the form and manner and within the time prescribed by Canadian tax legislation. The deadline to submit the Joint Tax Election Information to NewCo in the form and manner described in this Tax Instruction Letter is the Tax Election Date. NewCo will have no obligation to execute and return to the Eligible Holder for filing by the Eligible Holder any Joint Tax Election that is received by it after the Tax Election Date. Details pertaining to the filing deadline and where and how to file the Joint Tax Election form and any applicable similar joint election under provincial legislation with the Canada Revenue Agency ( CRA ) and any applicable provincial tax authority is described within the tax election form, and should be read by each Eligible Holder. To file a Joint Tax Election with the CRA without incurring a late filing penalty, the Joint Tax Election, duly completed and executed by both the Eligible Holder and NewCo, must be received by the CRA on or before the day that is the earliest of the days on or before which either NewCo or the Eligible Holder is required to file an income tax return for the taxation year in which the exchange occurs. NewCo will be required to file an income tax 5
return for the taxation year in which the disposition occurs on or before the day that is six months following the end of its current taxation year. NewCo s taxation year is scheduled to end on December 31, 2018, but could end earlier in specified circumstances. Eligible Holders are urged to consult their own tax advisors as soon as possible respecting the deadlines applicable to their own particular circumstances. However, regardless of such deadline, the Joint Tax Election Information of an Eligible Holder must be received by NewCo in the form and manner set out in this Tax Instruction Letter no later than the Tax Election Date (December 3, 2018). Eligible Holders are referred to Information Circular 76-19R3 and Interpretation Bulletin IT-291R3 issued by the CRA for further information respecting the Joint Tax Election. Eligible Holders who make a Joint Tax Election should consult their own tax advisors. The Joint Tax Election and any applicable similar joint election under provincial legislation can only be used to defer a gain on the exchange, and cannot be used if the exchange creates a loss. 6
HOW TO SUBMIT THE JOINT TAX ELECTION INFORMATION This Tax Instruction Letter contains one copy of CRA Form T2057, Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation (the Form ). NewCo has already completed the fields in the enclosed Form to the extent that such fields deal specifically with information pertaining to NewCo or to details pertaining to the Arrangement generally. An Eligible Holder must submit its Joint Tax Election Information to NewCo by completing the remaining fields of the Form as stipulated in this Tax Instruction Letter. This Tax Instruction Letter provides Eligible Holders with additional general guidance on how to complete such fields so that the Eligible Holder properly provides its Joint Tax Election Information to NewCo. An Eligible Holder that is a partnership will need to provide its Joint Tax Election Information to NewCo utilizing CRA Form T2058, Election on Disposition of Property by a Partnership to a Taxable Canadian Corporation. For the most part, such an Eligible Holder will be able to complete the fields in the Form T2058 and provide its Joint Tax Election Information to NewCo using the guidance in this Tax Instruction Letter. CRA Form T2058, Election on Disposition of Property by a Partnership to a Taxable Canadian Corporation can be found online at the following address: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2058.html This Tax Instruction Letter does not contain forms that any particular Eligible Holder may be required to file in compliance with provincial tax legislation. Eligible Holders are solely responsible for obtaining and completing such provincial forms and must submit any such forms to NewCo for signature no later than the Tax Election Date (December 3, 2018). The following fields in the attached Form (or Form T2058, as applicable) must be completed by each Eligible Holder that wishes to file a Joint Tax Election and such Forms, comprising the Joint Tax Election Information, must then be provided to NewCo prior to the Tax Election Date. You are asked to complete the fields by either printing or typing the relevant information. Page 1 1. Taxpayer s Name (transferor) Name of taxpayer (full name of the individual, corporation, or trust that was the beneficial owner of Units exchanged for NewCo Securities under the Arrangement (e.g. the Eligible Holder)) (in the case of Form T2058, the name of the partnership). 2. Social Insurance, trust account or business number Social insurance number (if an individual), Business Number (if a corporation) or Trust Account Number (if a Trust) of the taxpayer described in 1 (in the case of Form T2058, the partnership account number). 3. Address mailing address of the taxpayer described in 1. 7
4. Postal Code postal code for the address described in 3. 5. Tax year of taxpayer provide the first day of the taxation year of the taxpayer that includes the Effective Date and the last day of that taxation year. The taxation year of an Eligible Holder is the year that includes the Effective Date of the Arrangement for Canadian income tax purposes. We note that, generally: a) Individuals are taxed on a calendar year basis. b) Inter vivos trusts are taxed on a calendar year basis. c) Testamentary trusts may have a taxation year that ends at any time of the year. d) Corporations and partnerships may have a taxation year that ends at any time of the year. 6. Tax Services Office Identify the particular tax services office of the taxpayer. There are numerous Tax Services Offices ( TSO ) across Canada. The TSO applicable to an Eligible Holder can be obtained from the Notice of Assessment issued by the CRA to the Eligible Holder after filing their most recent tax return. If an Eligible Holder has since relocated, or is unsure of their TSO, call CRA at 1-800-959-8281 (individuals) or 1-800-959-5525 (corporations and trusts) to confirm the TSO applicable to that Eligible Holder. A complete TSO listing can also be found on CRA s website at www.cra-arc.gc.ca. 7. Name of Co-Owner(s) If you owned the Units together with another owner (such as spouse) or owners (a co-owner or co-owners, as the case may be), there would be a single Agreed Amount 6 applicable to you and any co-owner(s). Where there are multiple co-owners, you must identify each co-owner and provide the same information as requested for the initial owner under the fields Name of coowner(s), Social Insurance Number, Address, Postal Code and Tax Services Office. NewCo will not require any further information in respect of Page 1. Page 2 Questions 1 through 5 and 7 and 8 in the section Information Required are already answered. 1. Information Required Section Question 6 Are Any of the Properties Transferred Capital Properties? Eligible Holders holding their Units as capital property should answer this question as Yes. 6 For a description of the Agreed Amount see further below under the heading B Agreed Amount (cannot be zero). 8
Eligible Holders holding their Units in a business of buying and selling stock might be holding their shares as inventory and should answer this question as No. Whether the Units were held by particular Eligible Holders as capital property or inventory will determine how any gain or loss is treated for Canadian income tax purposes. Gains on Units held as capital property will be taxed as a capital gain, only one-half of which will be taxable. Gains on Units held as inventory will be fully taxable as income. Eligible Holders that are unsure of the nature of their Units should discuss this matter with their own tax advisors. An Eligible Holder who answers this question 6 with a Yes should answer questions 6.a) and 6.c). An Eligible Holder who answers this question 6 with a Yes would answer question 6.b) with a Yes only if the Eligible Holder acquired the Units from a person with whom the Eligible Holder was not dealing at arm s length; otherwise, question 6.b) should be answered with a No. An Eligible Holder who answers this question 6 with a No should not answer questions 6.a), 6.b) or 6.c) (e.g. leave them blank). 2. Description of Shares Received Table This table contains 6 columns. An Eligible Holder is required to populate 4 of those columns. If you received only Class A Multiple Voting Shares on the exchange, then identify the total number of Class A Multiple Voting Shares you received in the first row under the column Number of shares transferor received, insert Cl A Multi Voting in the first row under the column Class of Shares, insert Voting in the first row under the column Voting or non-voting and tick off No in the first row under the column Are shares redeemable at the holder s option?. If you received both Class A Multiple Voting Shares and Class B Subordinate Voting Shares on the exchange, then: (A) identify the total number of Class A Multiple Voting Shares you received in the first row under the column Number of shares transferor received, insert Cl A Multi Voting in the first row under the column Class of Shares, insert Voting in the first row under the column Voting or non-voting and tick off No in the first row under the column Are shares redeemable at the holder s option?, and (B) identify the total number of Class B Subordinate Voting Shares you received in the second row under the column Number of shares transferor received, insert Cl B Sub Voting in the second row under the column Class of Shares, insert Voting in the second row under the column Voting or non-voting and tick off No in the second row under the column Are shares redeemable at the holder s option?. If you received only Class B Subordinate Voting Shares on the exchange, then identify the total number of Class B Subordinate Voting Shares you received in the first row under the column Number of shares transferor received, insert Cl B Sub Voting in the first row under the column Class of Shares, insert Voting in the first row under the column Voting or non-voting and tick off No in the first row under the column Are shares redeemable at the holder s option?. 9
In all cases the column Redemption value per share and Paid-up capital should be left blank by an Eligible Holder. NewCo will populate the relevant fields under the column Paid-up capital and the column Redemption value per share will remain blank. Page 3 Information on the eligible property disposed of and consideration received table This table contains 8 columns. An Eligible Holder will be required to populate seven (7) of these columns. The number of rows an Eligible Holder is required to populate depends on whether the Eligible Holder owns only Class A Units (one row), only Class F Units (one row) or both Class A and Class F Units (two rows). An Eligible Holder that answers Question 6 on Page 2 on the basis that the Units are capital property to it will utilize the row(s) titled Capital Property excluding depreciable property. An Eligible Holder that answers Question 6 on Page 2 on the basis that the Units are not capital property to it will utilize the row(s) titled Inventory excluding real property. In each case, an Eligible Holder will populate the following columns for each row: Description, Fair Market Value, A, B Agreed Amount (cannot be zero), Amount to be reported B A (if greater than 0, see note 5), Share Number and class, and Fair Market Value of Total Consideration. Description This column will be used to describe the Units exchanged by an Eligible Holder for NewCo Securities on the exchange under the Arrangement. If an Eligible Holder disposed of (exchanged) any Class A Units (regardless of what the Eligible Holder received for them), then the Eligible Holder should insert the number of Class A Units such Eligible Holder disposed of (exchanged) and describe them in this column. For example, if an Eligible Holder exchanged 500 Class A Units, the Eligible Holder would insert 500 Class A Units CSOF in this column. If an Eligible Holder disposed of (exchanged) any Class F Units (regardless of what the Eligible Holder received for them), then the Eligible Holder should insert the number of Class F Units such Eligible Holder disposed of (exchanged) and describe them in this column. For example, if an Eligible Holder exchanged 500 Class F Units, the Eligible Holder would insert 500 Class F Units CSOF in this column. Fair Market Value An Eligible Holder must identify the fair market value of any Class A Units and Class F Units, as applicable, disposed of (exchanged) by such Eligible Holder immediately prior to the exchange. 10
To do this, the Eligible Holder would multiply the relevant Unit value by the total number of each class of Unit disposed of (exchanged) by such Eligible Holder and insert the applicable dollar value in this column and in the row for that particular class of Unit. The fair market value of each Unit is a question of fact. While the following values are not binding on an Eligible Holder or the Canada Revenue Agency, it is Newco s view that the fair market value of each Class A Unit and each Class F Unit immediately prior to the exchange was as follows: Class A Unit - $10.70 Class F Unit - $11.14 For example, if an Eligible Holder disposed of 500 Class A Units on the exchange and each had a fair market value of $10.70 immediately before the time of the exchange, the Eligible Holder would insert $5,350 in this column and in the row for the Class A Units. A Column A represents the adjusted cost base or cost amount of all Units of each class disposed of (exchanged) by an Eligible Holder on the exchange under the Arrangement (in the case of an Eligible Holder that holds its Units as a capital property, the relevant attribute is adjusted cost base and in the case of an Eligible Holder that does not hold its Units as a capital property (e.g. an inventory) the relevant attribute is cost amount. Eligible Holders should consult their own advisers regarding the adjusted cost base or cost amount, as the case may be, of such Eligible Holders Class A Units and Class F Units, as applicable. Such amount(s) should then be inserted in this column using the appropriate row (e.g. Class A Units or Class F Units). The amount determined and inserted for the adjusted cost base or cost amount is the total cost to the Eligible Holder of each class of Unit (e.g. such amounts are not to be reported on a per Unit basis, but rather on an aggregate basis by class). For example, an Eligible Holder who acquired and currently holds 500 Class A Units for $5,000 (including any costs of acquisition) (e.g. $10 per Class A Unit) would (subject to any adjustments as may be applicable as noted below) insert $5,000 under this column A in the relevant row for the Class A Units (not $10 ). In general, the starting point for determining the adjusted cost base or cost amount of the Units for Canadian income tax purposes will generally be what each Eligible Holder paid for the Units when acquired, plus any appropriate costs of acquisition. The adjusted cost base may be different due to certain events (e.g., receiving units from an estate, or where an Eligible Holder received their Units due to a previous tax deferred transaction, any return of capital distributions during the period of ownership). The rules on determining the adjusted cost base and cost amount, as applicable, for Canadian income tax purposes are complex. Neither NewCo nor the Fund has access to information that can assist Eligible Holders in determining their particular adjusted cost base or cost amount, as applicable. Eligible Holders should consult their tax advisors to obtain assistance in determining the correct adjusted cost base or cost amount, as applicable, of their Units. 11
B Agreed Amount (cannot be zero) The Agreed Amount inserted by each Eligible Holder will become the deemed proceeds of disposition that Eligible Holders are required to report on their Canadian income tax returns. The Agreed Amount in respect of each class of Unit (as applicable) cannot be lower than the Eligible Holder s adjusted cost base or cost amount (as applicable) in respect of such class of Unit and cannot be higher than the fair market value of such class of Units disposed of (exchanged) by the Eligible Holder. Eligible Holders that wish to eliminate any gain on the disposition of the Units should insert an amount equal to the amount inserted in column A (e.g. an agreed amount that is equal to such Eligible Holder s adjusted cost base or cost amount (as applicable) in the particular class of Units). In some instances, an Eligible Holder may wish to trigger and report a portion of the gain that may be inherent in such Eligible Holder s Units. In that case, the Eligible Holder would insert an amount in this column B Agreed Amount (cannot be zero) that is in excess of the amount inserted in column A and up to the fair market value of such class of Units. Eligible Holders should consult their own tax advisers to obtain assistance in determining the most appropriate amount to insert in this column having regard to such Eligible Holder s circumstances. Upon filing of the Joint Tax Election form and any applicable similar joint elections under provincial legislation this Agreed Amount should be deemed to be the proceeds of disposition of the Units of the Eligible Holder and must be reported in the Canadian income tax return of the Eligible Holder to calculate any gain or loss on the disposition of the Units. If the fair market value of the Units is less than the adjusted cost base for a particular Eligible Holder resulting in a loss on the exchange, then the particular Eligible Holder cannot file a Joint Tax Election form or any similar joint election under provincial legislation. The Joint Tax Election form and similar joint elections under provincial legislation are only to be used to defer a gain on the transaction and are not applicable in cases where a loss results from the disposition. Amount to be reported B A (if greater than 0, see note 5 For each row (e.g. Class A Units and Class F Units, as applicable) an Eligible Holder should insert the difference between B Agreed amount (cannot be zero) and A in this column. An Eligible Holder that inserted an amount equal to its adjusted cost base or cost amount (column A ) as its Agreed amount (column B Agreed amount (cannot be zero) ) in respect of a class of Units would insert NIL or 0 in this column. An Eligible Holder that inserted an amount greater to its adjusted cost base or cost amount (column A ) as its Agreed amount (column B Agreed amount (cannot be zero) ) in respect of a class of Units would insert the amount by which column B Agreed amount (cannot be zero) exceeds column A in this column. 12
Share Number and class An Eligible Holder will need to describe the number and type of securities in NewCo it received in respect of each class of Units disposed of (exchanged) by such Eligible Holder for securities in NewCo on the exchange under the Arrangement. For example, if an Eligible Holder exchanged 500 Class A Units under the Arrangement for 500 NewCo Class A Multiple Voting Shares and 500 NewCo Class B Subordinate Voting Shares, then the Eligible Holder would insert 500 Cl A & 500 Cl B in this column. Regarding the number and type of securities in NewCo an Eligible Holder will receive on the exchange: Class A Unit Holders Unitholders of Class A Units received, for each Class A Unit held one NewCo Class A Multiple Voting Share and one NewCo Class B Subordinate Voting Share, unless a Class A Election or Class B Election (as described below) from the Unitholder was received by CDS prior to 5:00 p.m. (Toronto time) on May 15, 2018 (the Election Deadline ). Class A Unitholders that submitted a Class A Election to CDS prior to the Election Deadline received two NewCo Class A Multiple Voting Shares (and nil NewCo Class B Subordinate Voting Shares) for each Class A Unit transferred. Class A Unitholders that submitted a Class B Election to CDS prior to the Election Deadline received two NewCo Class B Subordinate Voting Shares (and nil NewCo Class A Multiple Voting Shares) for each Class A Unit transferred. Class F Unit Holders Unitholders of Class F Units received, for each Class F Unit held as of the close of business on the trading day immediately preceding the Effective Date, that number of NewCo Class A Multiple Voting Shares and NewCo Class B Subordinate Voting Shares that is the quotient of the Net Asset Value per Unit of the Class F Units divided by the Net Asset Value per Unit of Class A Units, in each case determined as of the Determination Time (which quotient is referred to herein as the Class F Class A NAV Ratio ), unless a Class A Election or Class B Election from the Unitholder was received by CDS prior to the Election Deadline. The Class F Class A NAV Ratio was determined to be 1.041254193. Class F Unitholders that submitted a Class A Election prior to the Election Deadline received that number of NewCo Class A Multiple Voting Shares that is equal to two times the Class F Class A NAV Ratio (and nil NewCo Class B Subordinate Voting Shares) for each Class F Unit. Class F Unitholders that submitted a Class B Election prior to the Election Deadline received that number of NewCo Class B Subordinate Voting Shares that is equal to two times the Class F Class A NAV Ratio (and nil NewCo Class A Multiple Voting Shares) for each Class F Unit. 13
No fractional shares of NewCo were issued under the Arrangement. The total number of NewCo Class A Multiple Voting Shares or Class B Subordinate Voting Shares issued to any Unitholder was rounded up to the nearest whole share in the event that such Unitholder would otherwise be entitled to a fractional share representing 0.5 or more of a NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share, and was without additional compensation, rounded down to the nearest whole NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share in the event that such Unitholder would otherwise be entitled to a fractional share representing less than 0.5 of a NewCo Class A Multiple Voting Share or Class B Subordinate Voting Share. Fair Market Value of Total Consideration An Eligible Holder must identify the fair market value of any Class A Units and Class F Units, as applicable, disposed of (exchanged) by such Eligible Holder. This will generally be the same as the amount inserted under the column Fair Market Value (described above), but may differ very slightly depending on whether the NewCo Securities issued to such Eligible Holder were rounded up or down on account of a fractional share of NewCo otherwise having to be issued on the exchange. Page 4 Form T2058 Only (for an Eligible Holder that is a Partnership) Follow the instruction in the table and provide the relevant information for each partner. Space may not be sufficient in which case separate schedules will need to be created. Note: NewCo may, at its discretion, sign and return a Joint Tax Election with an Eligible Holder that is a partnership if the information in this table is incomplete. It is the sole responsibility of the Eligible Holder to duly complete such table before filing a Joint Tax Election. OTHER FORMS (PROVINCIAL) Are You Required to File a Quebec Income Tax Return? Eligible Holders that are required to file a Quebec income tax return are also required to file an additional Quebec Tax Election Form that is the provincial equivalent of the federal Joint Tax Election form in order to obtain a tax deferral for Quebec income tax purposes. Eligible Holders are required to submit a completed Quebec Tax Election Form to NewCo for execution by the Tax Election Date. Are You Required to File an Alberta Income Tax Return? Eligible Holders that are required to file an Alberta income tax return may be required to file a separate Alberta Tax Election Form that is the provincial equivalent of the federal Joint Tax Election form in order to obtain a tax deferral for Alberta income tax purposes. In general, this requirement to file only applies if the Eligible Holder wants to elect a different Agreed Amount than the amount elected for federal tax purposes. Such Eligible Holders should consult their own tax advisors. Such Eligible Holders who wish to elect a different agreed amount for Alberta provincial tax purposes than the agreed amount for Canadian federal income tax 14
purposes are required to submit a completed Alberta Tax Election Form to NewCo for execution by the Tax Election Date. 32081123.7 15
Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation Protected B when completed This form is used by a taxpayer and a taxable Canadian corporation to jointly elect under subsection 85(1) where Do not use this area the taxpayer has disposed of eligible property under subsection 85(1.1) to the corporation and the taxpayer receives as consideration shares of capital stock of the corporation. Unless otherwise indicated, all legislative references are to the Income Tax Act. Mail one copy of this election and related schedules (as specified), completed by the transferor, as follows: to the tax centre of the transferor; on or before the earliest date on which any party to the election has to file an income tax return for the tax year in which the transaction occurred (due date). This due date must consider any election under subsection 25(1) or 99(2); and separately from any other return. When many transferors elect to transfer the same property (co-ownership) or many members of the same partnership elect to transfer their partnership interests, the elections will be processed together and should be filed: at the tax centre of the transferee; on or before the due date; and by a designated transferor to file all of the completed forms for each transferor, together with a list of all of the electing transferors. This list should contain the name, address and social insurance number, trust account number or business number of each transferor. Find the address of the transferor's and transferee's tax centre at cra.gc.ca/tso. Taxpayer s name (transferor) Social insurance, trust account or business number Address Postal code Tax year of the taxpayer Start Year Month Day End Year Month Day Tax services office Name of co-owner(s), if any (if more than one, attach schedule giving similar details) Social insurance number Address Postal code Tax services office Corporation's name (transferee) Business number CANSO SELECT OPPORTUNITIES CORPORATION 769831686 RC 0001 Address Postal code 100 York Boulevard, Suite 550, Richmond Hill, Ontario, Canada L4B 1J8 Tax year of the corporation Year Month Day Year Month Day Tax services office Start 2 0 1 8 0 2 1 6 End 2 0 1 8 1 2 3 1 Toronto North Name of the contact person Telephone number Shirley Sumsion 905-881-8853 Penalty for late-filed and amended elections An election that is filed after its due date is subject to a late-filing penalty. You can file Form T2057 within three years after its due date if you pay an estimate of the penalty at the time of filing. You can also amend or file Form T2057 after the three-year period, but, in addition to the payment of an estimated penalty amount, you must attach a written explanation justifying the changes or reasons for the delay for consideration by the minister. Calculation of late-filing penalty: Fair market value (FMV) of property transferred... Agreed amount... Subtotal (FMV minus agreed amount)... Amount A ¼ 1% N * =... $100 N * =... Amount C cannot exceed $8,000. Late-filing penalty (amount B or amount C, whichever is less)... Amount enclosed A B C Do not use this area Make your cheque or money order payable to the Receiver General. On the back, write T2057, the transferor's name, and their social insurance, trust account or business number. Unpaid amounts including late-filing penalties are subject to daily compound interest at a prescribed rate. * N is the sum of each month or each part of a month in the period from the filing due date to the actual date filed. T2057 E (17) (Ce formulaire est disponible en français.) Page 1 of 3
Protected B when completed Information required On the following page, list, describe, and state the fair market value (FMV) of transferred properties. The description and FMV of the consideration received has to be shown opposite of the related property transferred. Where the transferred property is a partnership interest, attach a schedule of the calculation of the adjusted cost base. If there is not enough space on the form, attach schedules giving similar details. You have to designate the order of disposition of each depreciable property. The following material may be prepared in order to complete the form: a summary of the method of evaluating the FMV of each property transferred; schedules supporting this election; and documentation relating to the responses to the questions below. This material does not need to be filed with the election but must be kept in case we ask to see them at a later date. 1. Is there a written agreement relating to this transfer?.... Yes No 2. Does a price adjustment clause apply to any of the properties? (See Income Tax Folio S4-F3-C1 for details.)... Yes No 3. Do any persons other than the taxpayer own or control directly or indirectly any shares of any class of the transferee?... Yes No 4. Does a non-arm's length rollover exist between 2 or more corporations?... Yes No If yes to question 4, have all or substantially all (90% or more) of all the properties of the corporation(s) been transferred to the transferee corporation?... Yes No 5. Is the taxpayer a non-resident of Canada?.... Yes No 6. Are any of the properties transferred capital properties?... Yes No If yes, a) have they been owned continuously since Valuation Day (V-Day is defined in section 24 of the Income Tax Applications Rules)?... Yes No b) have they been acquired after V-Day in a transaction considered not to be at arm's length?... Yes No c) since V-Day, has the taxpayer or any person from whom shares were acquired in a non-arm's length transaction received any subsection 83(1) dividends for transferred shares? (If yes, attach a schedule, provide details of amounts and dates received.)... Yes No 7. Is the agreed amount of any of the transferred properties based on an estimate of FVM on V-Day?.... Yes No If yes to question 7, does a formal documented V-Day value report exist?... Yes No 8. Has an election under subsection 26(7) of the Income Tax Application Rules (Form T2076) been filed by or on behalf of the taxpayer?... Yes No Where shares of the capital stock of a private corporation are included in the property disposed of, provide the following: Corporation's name Business number R C Paid-up capital of shares transferred Description of shares received Number of shares transferor received Class of shares Redemption value per share Paid-up capital Voting or non-voting Are shares redeemable at the holder's option? Yes Yes Yes Yes Yes No No No No No Informative notes The rules for section 85 elections are complex. Essential information is contained in Information Circular IC76-19, Interpretation Bulletins IT-291 and IT-378 and Income Tax Folio S4-F3-C1. Complete all the information areas and answer all questions. If this form is incomplete, we may consider the election invalid and a late-filing penalty may apply to future submissions. If the agreed amount is more than the adjusted cost base of the property in the election, you must report the difference as a capital gain, as income or a combination of both, whichever applies. Election and certification The taxpayer and the corporation jointly elect under subsection 85(1) in respect of the property specified, and certify that the information given in this election and in any attached documents is correct and complete. Signature of Transferor, Authorized Officer or Authorized Person* and Signature of Authorized Officer of Transferee * Attach a copy of the authorizing agreement. Date (yyyy-mm-dd) Page 2
Information on the eligible property disposed of and consideration received Protected B when completed Date of sale or transfer of all properties listed below: Property disposed of Year Month Day 2 0 1 8 0 9 0 4 Description Elected amount limits (see note 1) Fair market value A Note: For properties sold or transferred on different dates, use a separate Form T2057. B Agreed amount (cannot be zero) Amount to be reported B A (if greater than 0, see note 5) Non-share Description Consideration received Share Number and class Fair market value of total consideration Capital property excluding depreciable property (brief legal) Text (see note 2) Depreciable property (description and prescribed class) (see note 3) Eligible capital property (kind) (see note 4) Inventory excluding real property (kind) (cost amount) Resource property Security or debt obligation property (brief legal) nil (description) (cost amount) nil nil Specified Debt Obligation (for financial institutions only) (cost amount) Capital property that is real property owned by a nonresident person (description) AgriInvest fund no. 2 (see note 6) (cost amount) Note 1: Read Interpretation Bulletin IT-291 for more information on eligible property and an explanation of the limits. Note 2: Adjusted cost base (subject to adjustment under section 53). Note 3: The lesser of undepreciated capital cost of all property of the class and the cost of the property. Note 4: The lesser of 4/3 of the cumulative eligible capital and the cost of the property. Note 5: This amount is to be reported either as a capital gain or as income, whichever applies. Also, in the case of depreciable property and eligible capital property, a portion of the amount may have to be reported as a capital gain while another portion of the amount may have to be reported as income. Note 6: Contributions made in a tax year ending after 2007, and amounts earned on those contributions, are only eligible if that property is owned by an individual. Privacy statement Personal information is collected under the Income Tax Act to administer tax, benefits, and related programs. It may also be used for any purpose related to the administration or enforcement of the Act such as audit, compliance and the payment of debts owed to the Crown. It may be shared or verified with other federal, provincial/territorial government institutions to the extent authorized by law. Failure to provide this information may result in interest payable, penalties or other actions. Under the Privacy Act, individuals have the right to access their personal information and request correction if there are errors or omissions. Refer to Info Source at cra.gc.ca/gncy/tp/nfsrc/nfsrc-eng.html, Personal Information Bank CRA PPU 047. Page 3