Dixie/VisionSky -- summary under Trust Acquisitions of Corporations

Overview

The Trust is to acquire all of the outstanding shares of VKY (a.k.a.,VisionSky) under an Alberta Plan of Arrangement, on the basis of 0.125 of a Trust unit for each share, so as to result in VKY shareholders holding approximately 12.3% of the Trust units. The newly-formed Trust completed a private placement of Trust units in November 2012 for proceeds of $7.4M in order to acquire U.S. oil exploration assets, utilizing the structure described below.

Structure of Trust

The Trust is a recently-formed Alberta unit trust which is not currently a reporting issuer for Canadian purposes and is a "foreign private issuer" for purposes of the U.S. Securities Act of 1933. Its asset is an Alberta holding company ("Dixie Canada"), which does not have a Canadian business, and holds as essentially its only asset an investment in a Delaware "C-Corp." (Dixie US") Dixie US carries on a U.S. oil and gas exploration business through LLC subsidiaries.

VKY

VKY, an Alberta company listed on the CNSX, sold its ATM servicing business on June 1, 2010, and currently holds the remaining net cash proceeds of that sale of $480,000 as its only significant asset.

Plan of Arrangement/Listing

The following transactions will occur under the Plan of Arrangement:

• VKY shares held by dissenting shareholders will be transferred to VKY for their fair value
• VKY options and warrants will be exchanged for options to purchase Trust units, with the number of covered units and the exercise price reflecting the exchange ratio
• each VKY voting common share held by VKY shareholders will be exchanged with VKY for a pro rata portion of all the cash (and cash equivalents) of VKY and for one VKY non-voting common share (a "VKY Class B share")
• each VKY Class B share will be transferred to the administrator of the Trust (treated for purposes of the diagram above as an agent for the Trust) in exchange for a share of a new-incorporated subsidiary of the Trust ("NewCo")
• the former VKY shareholders will transfer each NewCo share and a pro rata portion of the cash so received by them to the Trust in consideration for the issuance of 0.125 of a Trust unit
• the Trust will transfer its shares of NewCo to its wholly-owned Canadian subsidiary ("Dixie Canada") in consideration for Dixie Canada shares
• NewCo will be wound-up into Dixie Canada
• Application will be made to list the Trust units on the CNSX.

Canadian tax consequences

S. 86 reorganization. The exchange of the VKY common shares for the VKY cash and the VKY Class B shares (presumably having a nominal value) is considered as qualifying as a reorganization of the capital of VKY under s. 86. Accordingly, a resident holder will realize a capital gain only if the cash exceeds the adjusted cost base of its VKY common shares; and the VKY Class B shares will be acquired at a cost equal to the excess, if any, of such adjusted cost base over the cash.

No deemed dividend

The VKY common shares have a high paid-up capital so that no deemed dividend is anticipated.

Exchange of VKY Class B shares for NewCo shares

The VKY Class B shares will be deemed to have been disposed of for the fair market value of the NewCo shares received in exchange therefor; and a resident holder will acquire a NewCo share at a cost equal to the fair market value of the Class B share so exchanged. Neither the VKY Class B shares nor the NewCo shares are considered by management to be taxable Canadian property.

Exchange of NewCo shares and cash for Trust units

Will occur on a taxable basis.

The Trust

The existing structure is not considered to result in the Trust holding non-portfolio property.

Dixie Canada

Management of Dixie Canada anticipates that payments received by Dixie Canada from Dixie US will qualify as being paid out of either exempt surpou or pre-acquisition surplus.

US tax consequences of Trust structure

Dixie Canada expects to be treated as a resident of Canada for Treaty purpose which does not have a US trade or business. As the US oil and gas assets are generally treated as real property situated in the US, Dixie Canada is expected to be subject to withholding and income taxation under the Code upon any disposition of the stock of Dixie US. Standard disclosure re distributions from Dixie US.