2013 Ruling 2011-0397081R3 - Bump Transaction

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

Principal Issues: Whether the 88(1)(d) bump will be available in respect of the proposed transactions. Whether the 'benefit' rules in subsections 15(1), 56(2) and 246(1) will apply to the proposed transactions. Whether the GAAR will apply to the proposed transactions.

Position: The bump will be available, provided certain conditions are met. The benefit rules will not apply. The GAAR will not apply.

Reasons: The proposed transactions technically comply with the bump rules and do not run afoul of the bump denial rules. No "benefits" will be conferred or otherwise transferred within the meaning of the relevant provisions.

XXXXXXXXXX
2011-039708

XXXXXXXXXX, 2013

Dear XXXXXXXXXX:

Re: XXXXXXXXXX
Advance Income Tax Ruling

We are writing in response to your letter of XXXXXXXXXX in which you requested an advance income tax ruling on behalf of the above-noted taxpayers. We also acknowledge the information provided in subsequent correspondence and various telephone conversations. You have advised us that to the best of your knowledge and that of the taxpayers involved, none of the issues involved in this ruling request are:

(i) in an earlier return of the taxpayers or related persons;
(ii) under objection by the taxpayers or related persons;
(iii) before the Courts; or
(iv) the subject of a ruling previously issued by the Income Tax Rulings Directorate.

Except where specifically otherwise indicated, all statutory references in this ruling are references to the provisions of the Act. Unless otherwise indicated in this letter, all dollar amounts referred to herein are in Canadian dollars.

I. DEFINITIONS

In this ruling, unless otherwise expressly stated:

"Act" means the Income Tax Act, R.S.C. 1985 c.1, as amended, and the regulations in force thereunder;

"adjusted cost base" has the meaning assigned by section 54;

"arm's length" has the meaning assigned by section 251;

"Arrangement Agreement" means the arrangement agreement dated XXXXXXXXXX among Buyer, Target and Spinco2, to be effective on the date specified therein;

"Bidco" means an unlimited liability company formed under the laws of XXXXXXXXXX;

"BidAmalco" means the unlimited liability company formed on the amalgamation of Bidco and Buyer Cashco as described in Paragraph 53;

"BidAmalco Acquisition Note" means the non-interest-bearing demand promissory note issued by BidAmalco to Buyer XXXXXXXXXX in Paragraph 55, having a principal amount of $XXXXXXXXXX;

"BidAmalco Downstream Note" means the interest-bearing demand promissory note issued by Target to BidAmalco in Paragraph 73, having a principal amount of approximately $XXXXXXXXXX;

"Bumped Property" means capital property (other than Ineligible Property) held by Target at the time of its acquisition of control by BidAmalco and owned by Target without interruption until it was distributed to BidAmalco on the wind-up described in Paragraph 84, including shares in the capital of XXXXXXXXXXSub1, XXXXXXXXXXSub2, XXXXXXXXXXSub1, CanSub3, Yco, Spinco1, Spinco2 and XXXXXXXXXXSub, the XXXXXXXXXXSub Debt, the XXXXXXXXXXSub1 Debt and the XXXXXXXXXXSub2 Debt;

"Buyer" means XXXXXXXXXX, a corporation that resides in XXXXXXXXXX and is incorporated under the laws of XXXXXXXXXX;

"Buyer XXXXXXXXXX" means a XXXXXXXXXX formed under the laws of XXXXXXXXXX;

"Buyer XXXXXXXXXX Debt" means a note issued by Buyer XXXXXXXXXX to Buyer as described in Paragraph 48, having a principal amount of $XXXXXXXXXX;

"Buyer XXXXXXXXXX Note" means the non-interest-bearing demand promissory note issued by Buyer XXXXXXXXXX in Paragraph 100;

"Buyer Cansub" means XXXXXXXXXX, a Canadian corporation formed under the laws of XXXXXXXXXX as an indirect wholly-owned subsidiary of BuyerSub;

"Buyer Cashco" means XXXXXXXXXX, a corporation continued under the laws of XXXXXXXXXX;

"Buyer Shares" means shares in the common stock of Buyer listed on the Exchange under the symbol "XXXXXXXXXX";

"Buyer ULC" means XXXXXXXXXX, an unlimited liability company formed under the laws of XXXXXXXXXX, whose authorized capital consists of XXXXXXXXXX common shares and XXXXXXXXXX Class A shares, all without nominal or par value;

"Buyer XXXXXXXXXX Holdco" means XXXXXXXXXX, a corporation incorporated under the laws of XXXXXXXXXX, which is more particularly described in Paragraph 4;

"Buyer XXXXXXXXXX Opco" means XXXXXXXXXX, a corporation incorporated under the laws of XXXXXXXXXX;

"BuyerSub" means XXXXXXXXXX, a corporation formed under the laws of Canada and having an authorized capital consisting of an unlimited number of common shares, an unlimited number of Class 1 special shares and an unlimited number of Exchangeable Shares;

"BuyerSub Note" means the non-interest-bearing demand promissory note issued by BuyerSub to BidAmalco as described in Paragraph 96, having a principal amount equal to the FMV of the CanSub3 Shares;

XXXXXXXXXX;

"CAD Target Note" means the non-interest-bearing demand promissory note issued by Target to XXXXXXXXXXSub1 as described in Paragraph 72, having a principal amount equal to the Canadian dollar equivalent of XXXXXXXXXX$XXXXXXXXXX on the Effective Date;

"CanSub1" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX and having its head office at XXXXXXXXXX;

"CanSub1 Shares" means the common shares in the capital of CanSub1, which were previously listed on the XXXXXXXXXX under the symbol XXXXXXXXXX, but were delisted on XXXXXXXXXX following their acquisition by Target;

"CanSub2" means XXXXXXXXXX, formed under the laws of XXXXXXXXXX and having its head office at XXXXXXXXXX;

"CanSub2 Debt" means the XXXXXXXXXX dollar non-interest-bearing indebtedness owing by CanSub2 to Target, having an aggregate principal amount as at XXXXXXXXXX of XXXXXXXXXX$XXXXXXXXXX;

"CanSub2 Plan of Arrangement" means the plan of arrangement under XXXXXXXXXX effective on XXXXXXXXXX pursuant to which Target acquired all of the issued and outstanding shares of CanSub2;

"CanSub2 Shares" means the common shares in the capital of CanSub2 which were issued and outstanding prior to the effective date of the CanSub2 Plan of Arrangement and which were previously listed on the XXXXXXXXXX under the symbol "XXXXXXXXXX" but were delisted on XXXXXXXXXX following the acquisition of CanSub2 by Target;

"CanSub3" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX, having its head office at XXXXXXXXXX;

"CanSub3 Debt" means the non-interest-bearing indebtedness owing by CanSub3 to Target (i) in the aggregate principal amount as at XXXXXXXXXX of $XXXXXXXXXX, and (ii) intercompany invoices in the aggregate amount as at XXXXXXXXXX of $XXXXXXXXXX;

"CanSub3 Shares" means the common shares in the capital of CanSub3 which were previously listed on the XXXXXXXXXX under the symbol XXXXXXXXXX, but were delisted on XXXXXXXXXX following the acquisition of CanSub3 by Target;

"Cash Call Payments" means the amount of any payments, up to a maximum of $XXXXXXXXXX in the aggregate, made by Target or any of its subsidiaries prior to the Effective Date in response to a cash call relating to the Transferred Properties pursuant to an existing contract;

"XXXXXXXXXXSub1" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub2" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub2 Purchase Price" means the estimated FMV of all issued and outstanding common shares of XXXXXXXXXXSub2 on the Spinco2 Effective Date;

"CRA" means the Canada Revenue Agency;

"Directorate" means the Income Tax Rulings Directorate of the CRA;

"Effective Date" means the date set out in the Arrangement Agreement;

"Effective Time" means XXXXXXXXXX on the Effective Date or such other time on the Effective Date as may be specified in writing by Bidco (it is currently anticipated that Bidco will designate XXXXXXXXXX as the Effective Time);

"Exchange" means the XXXXXXXXXX;

"Exchangeable Shares" means the shares of BuyerSub listed on the XXXXXXXXXX under the symbol "XXXXXXXXXX" and are exchangeable, at the option of the holder, into Buyer Shares on a XXXXXXXXXX basis;

"exempt surplus" has the meaning assigned by subsection 5907(1.01) of the Regulations to the Act;

"Exercised Option" means a Target Option which a Target Optionholder has elected to exercise in accordance with the Plan of Arrangement and upon payment of the exercise price and any source withholdings required to be made under the Act or other applicable statute;

"FMV" means fair market value, being the highest price available in an open and unrestricted market between informed prudent parties acting at arm's length;

"foreign affiliate" has the meaning assigned by subsection 95(1);

"GAAR" means the general anti-avoidance rule set out in section 245;

"XXXXXXXXXX" means the XXXXXXXXXX located in XXXXXXXXXX that was owned by BuyerSub and Buyer Canco pursuant to a joint venture agreement, which included the real property located at the XXXXXXXXXX;

"Ineligible Property" has the meaning assigned by paragraph 88(1)(c);

"Joint Venture" means the joint venture XXXXXXXXXX project between XXXXXXXXXXSub1 and XXXXXXXXXXSub3 located in XXXXXXXXXX;

"Mergeco" means the corporation formed by the merger of XXXXXXXXXXSub1 and XXXXXXXXXXSub2;

"Mergeco Debt" means merged of XXXXXXXXXXSub1 Debt and XXXXXXXXXXSub2 Debt resulting from the merger of XXXXXXXXXXSub1 and XXXXXXXXXXSub2;

"XXXXXXXXXXSub" means XXXXXXXXXX, a corporation incorporated under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub Debt" means the XXXXXXXXXX dollar non-interest-bearing indebtedness owing by XXXXXXXXXXSub to Target, having an aggregate principal amount as at XXXXXXXXXX of XXXXXXXXXX$XXXXXXXXXX;

"Paragraph" refers to a numbered paragraph in this Ruling;

"Plan of Arrangement" means the plan of arrangement under XXXXXXXXXX to be effective on the Effective Date, as set out in the Arrangement Agreement;

"Post-Closing Transactions" means the transactions described in Paragraphs 83 to 103;

"Property 1" means XXXXXXXXXX, which are held by XXXXXXXXXXSub1 LLC before being transferred to SpincoXXXXXXXXXX;

"Property 1 Purchase Price" means the amount by which the estimated FMV of Property 1 on the Spinco2 Effective Date exceeds the estimated FMV of Property 2 on the Spinco2 Effective Date;

"Property 2" means XXXXXXXXXX held by SpincoXXXXXXXXXX in respect of the XXXXXXXXXX project located in XXXXXXXXXX;

"Property 3" means XXXXXXXXXX, which are held by XXXXXXXXXXSub1 LLC before being transferred to SpincoXXXXXXXXXX;

"Property 3 Purchase Price" means the estimated FMV of Property 3 on the Spinco2 Effective Date;

"Proposed Transactions" means the transactions described in the Proposed Transactions section of this letter;

"public corporation" has the meaning assigned by subsection 89(1);

"Reorganization" means the transactions described in Paragraphs 47 to 93 of this letter;

"XXXXXXXXXX Note" means the non-interest-bearing demand promissory note having a principal amount of $XXXXXXXXXX issued by CanSub3 to Buyer;

"Spinco1" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"Spinco1 Shares" means the common shares of Spinco1 listed on the XXXXXXXXXX under the symbol "XXXXXXXXXX";

"Spinco2" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX and having its head office at XXXXXXXXXX;

"Spinco2 Cash Amount" means $XXXXXXXXXX in cash less any Cash Call Payment made on or prior to the Effective Date;

"Spinco2 Effective Date" means the day which is XXXXXXXXXX business days immediately prior to the Effective Date;

"Spinco2 Funding Amount" means an amount equal to the aggregate of the Spinco2 Cash Amount, the XXXXXXXXXXSub2 Purchase Price and the SpincoXXXXXXXXXX Funding Amount;

"Spinco2 Shares" means the common shares in the capital of Spinco2;

"SpincoXXXXXXXXXX" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"SpincoXXXXXXXXXX Funding Amount" means an amount equal to the aggregate of the Property 1 Purchase Price and the Property 3 Purchase Price;

"SpinForco" means a wholly-owned subsidiary of Spinco2 formed in XXXXXXXXXX;

"Subparagraph" refers to a subparagraph in this Ruling;

"Target" means XXXXXXXXXX, a Canadian corporation formed under the laws of XXXXXXXXXX and which has its head office at XXXXXXXXXX;

"Target Cash on Hand" means the amount by which the estimated cash in Target on the Spinco2 Effective Date exceeds transaction costs and reasonable working capital requirements of Target;

"Target Cashed-Out Option" means a Target Option which a Target Optionholder has elected to surrender pursuant to the Plan of Arrangement for the consideration described in Subparagraph 76(i);

"Target Class A Shares" means the Class A voting shares in the capital of Target which are created pursuant to the Plan of Arrangement and which are redeemable and retractable for $XXXXXXXXXX per share, and if any Target Shares are acquired by Bidco under Paragraphs 75 or 77 below, will have a liquidation preference equal to $XXXXXXXXXX per share;

"Target Grid Note" means the Canadian dollar non-interest-bearing demand promissory grid note issued by Target to XXXXXXXXXXSub1;

"Target Option" means an option to acquire Target Shares granted under or otherwise subject to the Target Stock Option Plans;

"Target Optionholder" means a holder of Target Options;

"Target Purchase Assets" means certain assets of Target specified in the Arrangement Agreement which are transferred to Spinco2, including certain contractual rights in respect of the XXXXXXXXXX property located in XXXXXXXXXX, common shares and warrants in the capital of XXXXXXXXXX held by Target, Target's office lease and other ancillary assets;

"Target Share" means a common share in the capital of Target listed on the XXXXXXXXXX and the Exchange under the symbol "XXXXXXXXXX";

"Target Stock Option Plans" means, collectively, (i) the Amended and Restated Stock Option Plan (XXXXXXXXXX) of Target dated XXXXXXXXXX and approved by the Target shareholders on XXXXXXXXXX, as amended, (ii) the acquisition stock option plan approved by the Target board in XXXXXXXXXX in connection with Target's acquisition of CanSub1 and (iii) the stock option plan of CanSub3 assumed by Target in connection with Target's acquisition of CanSub3;

"taxable Canadian corporation" has the meaning assigned by subsection 89(1);

"tax-free surplus balance" has the meaning assigned by subsection 5905(5.5) of the Regulations to the Act;

"Transferred Properties" means the properties transferred to Spinco2 and its subsidiaries by Target and its subsidiaries, including Property 1, Property 3, the shares of XXXXXXXXXXSub2 and the Target Purchase Assets;

"XXXXXXXXXX" means the XXXXXXXXXX;

"XXXXXXXXXX Target Note" means the XXXXXXXXXX dollar non-interest-bearing demand promissory note evidencing Target's indebtedness to XXXXXXXXXXSub2 in the principal amount of XXXXXXXXXX$XXXXXXXXXX;

"XXXXXXXXXXSub1" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub1 Debt" means (i) the XXXXXXXXXX dollar interest-bearing indebtedness owing by XXXXXXXXXXSub1 to Target, having an aggregate principal amount as at XXXXXXXXXX of XXXXXXXXXX$XXXXXXXXXX; and ii) the non-interest-bearing indebtedness (respecting intercompany charges and invoices) owing by XXXXXXXXXXSub1 to Target in the aggregate amount as at XXXXXXXXXX of $XXXXXXXXXX;

"XXXXXXXXXXSub1 LLC" means XXXXXXXXXX, a XXXXXXXXXX limited liability company formed under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub2" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"XXXXXXXXXXSub2 Debt" means (i) the XXXXXXXXXX dollar non-interest-bearing indebtedness owing by XXXXXXXXXXSub2 to Target, having an aggregate principal amount as at XXXXXXXXXX of XXXXXXXXXX$XXXXXXXXXX; and (ii) the XXXXXXXXXX dollar non-interest-bearing indebtedness of XXXXXXXXXXSub2 owing to Cansub2 in the amount of XXXXXXXXXX$XXXXXXXXXX as at XXXXXXXXXX (and to Target after Paragraph 67);

"XXXXXXXXXXSub3" means XXXXXXXXXX, a corporation formed under the laws of XXXXXXXXXX;

"X" means XXXXXXXXXX, a non-resident of Canada who controls X1 and deals at arm's length with Buyer and Target and their respective subsidiaries;

"X1" means XXXXXXXXXX, a XXXXXXXXXX corporation that is owned and controlled by X;

"X2" means XXXXXXXXXX;

"Yco" means XXXXXXXXXX, a publicly traded limited liability corporation formed under the laws of XXXXXXXXXX;

"Yco Shares" means the common shares in the capital of Yco held by Target; and

"Yco Note" means the non-interest-bearing demand promissory note issued by Target to CanSub3 having a principal amount equal to $XXXXXXXXXX.

II. FACTS

Facts relating to Buyer:

1. Buyer does not reside in Canada for purposes of the Act. The Buyer Shares are currently listed.

2. Buyer ULC is a taxable Canadian corporation. All of Buyer ULC's issued shares are owned by Buyer.

3. BuyerSub is a public corporation and a taxable Canadian corporation. As of XXXXXXXXXX, Buyer and Buyer ULC owned all of the issued shares of BuyerSub, other than XXXXXXXXXX Exchangeable Shares (representing approximately XXXXXXXXXX% of the outstanding Exchangeable Shares).

4. Buyer XXXXXXXXXX Holdco is owned by Buyer (as to approximately XXXXXXXXXX%) and indirectly by BuyerSub (as to approximately XXXXXXXXXX%). Buyer XXXXXXXXXX Holdco owns all the issued and outstanding shares of Buyer XXXXXXXXXX Opco.

5. Buyer Cashco is a taxable Canadian corporation. Buyer Cashco's authorized capital consists of common shares. All of the issued shares of Buyer Cashco are owned by Buyer. Since XXXXXXXXXX, Buyer has subscribed for common shares of Buyer Cashco for subscription proceeds in excess of $XXXXXXXXXX.

Facts relating to Target:

6. Target is a public corporation and a taxable Canadian corporation.

7. Target's authorized capital consists of an unlimited number of common shares. As of XXXXXXXXXX, there were XXXXXXXXXX Target Shares issued and outstanding. As of XXXXXXXXXX, under the Target Stock Option Plans, there were Target Options to acquire XXXXXXXXXX Target Shares outstanding.

8. Target's fiscal year-end is XXXXXXXXXX.

9. The directors and officers of Target are not aware of any person or group of persons who, on XXXXXXXXXX, beneficially owned, directly or indirectly, or exercised control or direction over, XXXXXXXXXX% or more of the Target Shares.

10. Neither Buyer nor, to the best of Buyer's knowledge, any person not dealing at arm's length with Buyer, beneficially owns any Target Shares.

10.1. Target owns all the issued and outstanding shares of:

(i) CanSub1

(ii) CanSub2

(iii) CanSub3;

(iv) Spinco 2;

(v) XXXXXXXXXXSub1, which in turn owns all the issued and outstanding shares of XXXXXXXXXXSub2;

(vi) XXXXXXXXXXSub.

Facts relating to CanSub1:

11. CanSub1 is a taxable Canadian corporation.

12. CanSub1's authorized capital consists of an unlimited number of common shares and an unlimited number of preference shares. Only common shares are issued and outstanding.

13. [Reserved].

14. CanSub1 is a public corporation, as its shares were previously listed on a designated stock exchange and it has not elected pursuant to Regulation 4800(2) not to be a public corporation.

15. CanSub1 owns all the issued and outstanding shares of XXXXXXXXXXSub1 which in turn owns all the issued and outstanding shares of XXXXXXXXXXSub1 LLC. XXXXXXXXXXSub1 owes the XXXXXXXXXXSub1 Debt to Target.

Facts relating to CanSub2:

15.1. CanSub2 is a public corporation and a taxable Canadian corporation.

16. CanSub2's authorized capital consists of an unlimited number of common shares, XXXXXXXXXX preference shares, one special voting common share, an unlimited number of CanSub2 Class A Shares and an unlimited number of CanSub2 Class B Shares.

17. [Reserved].

18. [Reserved].

19. [Reserved].

19.1. CanSub2 owns all the issued and outstanding shares of XXXXXXXXXXSub2 which in turn owns all the issued and outstanding shares of XXXXXXXXXXSub3. XXXXXXXXXXSub2 owes the XXXXXXXXXXSub2 Debt.

Facts relating to CanSub3:

20. CanSub3 is a taxable Canadian corporation.

21. CanSub3's authorized capital consists of an unlimited number of common shares.

22. [Reserved].

Facts relating to Spinco1:

23. Spinco1 is a public corporation and a taxable Canadian corporation.

24. Spinco1's authorized capital consists of an unlimited number of common shares. On XXXXXXXXXX, the Spinco1 Shares became publicly held (see Paragraphs 31 to 36 below). CanSub2 currently owns approximately XXXXXXXXXX Spincol Shares.

Facts relating to Spinco2:

25. Spinco2 is a taxable Canadian corporation.

26. Spinco2's authorized capital consists of an unlimited number of common shares.

27. [Reserved].

27.1. Spinco2 owns all the issued and outstanding shares of SpincoXXXXXXXXXX.

Background Facts:

28. Prior to the implementation of the CanSub2 Plan of Arrangement, Target and CanSub2 were independent publicly-traded corporations that separately carried on XXXXXXXXXX businesses directly or through their subsidiaries. Target (through its indirect, wholly-owned subsidiary, XXXXXXXXXXSub1) owned a XXXXXXXXXX% interest in the Joint Venture whereas CanSub2 (through its indirect, wholly-owned subsidiary, XXXXXXXXXXSub3) owned a XXXXXXXXXX% interest in the Joint Venture.

Buyer's Early Discussions with Target and CanSub2:

29. Buyer began discussing a transaction with Target as early as XXXXXXXXXX. These discussions were far-reaching but high level: XXXXXXXXXX. On XXXXXXXXXX, Buyer and Target executed a confidentiality agreement under which Target provided Buyer with proprietary information that Buyer requested in order to evaluate a potential transaction. Discussions continued through the XXXXXXXXXX. Ultimately, however, XXXXXXXXXX.

30. In XXXXXXXXXX, Buyer entered into discussions with CanSub2. The purpose of these discussions was to XXXXXXXXXX. No confidentiality agreement was signed and accordingly, Buyer did not acquire any proprietary information respecting CanSub2. XXXXXXXXXX.

Acquisition of CanSub2 by Target:

31. In XXXXXXXXXX, Target, CanSub2 and Spinco1 entered into an arrangement agreement setting out the terms of the CanSub2 Plan of Arrangement.

32. Prior to XXXXXXXXXX, XXXXXXXXXXSub2's issued share capital included shares that were exchangeable into CanSub2 Shares at the holders' option. All such exchangeable shares were exchanged into CanSub2 Shares prior to the effective time of the CanSub2 Plan of Arrangement.

33. Prior to XXXXXXXXXX, but in contemplation of the CanSub2 Plan of Arrangement, CanSub2 directly or indirectly transferred certain assets to Spinco1 in consideration for shares of Spinco1.

34. On XXXXXXXXXX, pursuant to the CanSub2 Plan of Arrangement, the following steps occurred in sequential order:

(i) CanSub2 Shares held by dissenting shareholders were acquired by Target;

(ii) Target loaned cash to CanSub2 in consideration for a Canadian dollar non-interest-bearing demand promissory note;

(iii) CanSub2 subscribed for Spinco1 Shares (in a number such that, upon completion of the CanSub2 Plan of Arrangement, CanSub2 held XXXXXXXXXX% of the outstanding Spinco1 Shares) in consideration for payment to Spinco1 of cash subscription proceeds;

(iv) the authorized share structure of CanSub2 was reorganized to create XXXXXXXXXX new classes of shares consisting of an unlimited number of CanSub2 Class A Shares and an unlimited number of CanSub2 Class B Shares;

(v) each CanSub2 Share held by Target was exchanged with CanSub2 for one CanSub2 Class B Share. Each such CanSub2 Share was then cancelled;

(vi) each CanSub2 Share, other than those exchanged by Target pursuant to Subparagraph 34(v), was exchanged with CanSub2 for one CanSub2 Class A Share and XXXXXXXXXX of a Spinco1 Share. Each such CanSub2 Share was then cancelled;

(vii) each CanSub2 Class A Share was transferred to Target in exchange for:

(a) $XXXXXXXXXX in cash; and

(b) XXXXXXXXXX of a Target Share.

CanSub2 shareholders were given the option of electing under subsection 85(1) in respect of this transaction.

35. All of the outstanding options and warrants of CanSub2 that were not exercised prior to commencement of the steps in Paragraph 34 were terminated.

36. Upon completion of the CanSub2 Plan of Arrangement:

(i) there were XXXXXXXXXX Target Shares outstanding;

(ii) Target owned all of the issued and outstanding shares of CanSub2;

(iii) the former CanSub2 shareholders owned XXXXXXXXXX Target Shares (representing approximately XXXXXXXXXX% of the outstanding Target Shares);

(iv) the former CanSub2 shareholders owned approximately XXXXXXXXXX Spinco1 Shares (representing approximately XXXXXXXXXX% of the outstanding Spinco1 Shares); and

(v) CanSub2 owned approximately XXXXXXXXXX Spinco1 Shares (representing approximately XXXXXXXXXX% of the outstanding Spinco1 Shares).

Yco Transaction:

37. On XXXXXXXXXX, Target and CanSub3 completed an asset purchase transaction with Yco, in which CanSub3 sold substantially all of its XXXXXXXXXX assets and XXXXXXXXXX business to a wholly-owned Canadian subsidiary of Yco for consideration of approximately $XXXXXXXXXX, paid by the issuance of XXXXXXXXXX Yco Shares to CanSub3. Also on XXXXXXXXXX, CanSub3 transferred the Yco Shares to Target in consideration for the Yco Note. As of XXXXXXXXXX, Target held approximately XXXXXXXXXX% of the outstanding Yco Shares.

XXXXXXXXXX% Shareholders:

38. At the time of the Reorganization there were no shareholders of Target who owned XXXXXXXXXX% or more of the Target Shares. However, XXXXXXXXXX current shareholders have held significant shares of Target and CanSub2 in the past, as described in Paragraphs 39 and 40.

39. In XXXXXXXXXX, X1 held XXXXXXXXXX Target Shares representing approximately XXXXXXXXXX% of the outstanding Target Shares at that time. Commencing on XXXXXXXXXX, X1 began to sell small blocks of its Target Shares daily on the open market. By XXXXXXXXXX, X1 held only XXXXXXXXXX Target Shares and ceased to be a XXXXXXXXXX% shareholder of Target. We understand that additional sales have occurred since that time, including a sale of approximately XXXXXXXXXX Target Shares on XXXXXXXXXX. We understand that at the time of the Reorganization X1 owns approximately XXXXXXXXXX Target Shares, representing approximately XXXXXXXXXX% of the issued Target Shares.

40. On XXXXXXXXXX, X2 held, directly or indirectly, XXXXXXXXXX CanSub2 Shares (representing approximately XXXXXXXXXX% of the outstanding CanSub2 Shares on that date). Pursuant to the CanSub2 Plan of Arrangement, X2 exchanged each of his CanSub2 Shares for $XXXXXXXXXX of cash, XXXXXXXXXX of a Spinco1 Share and XXXXXXXXXX of a Target Share. Upon completion of the CanSub2 Plan of Arrangement, X2 ceased to be a shareholder of CanSub2, and held, directly or indirectly, XXXXXXXXXX Spinco1 Shares (representing approximately XXXXXXXXXX% of the outstanding Spinco1 Shares on that date) and XXXXXXXXXX Target Shares (representing approximately XXXXXXXXXX% of the outstanding Target Shares on that date).

41. Target entered into lock-up agreements with the directors and officers of Target and X2, pursuant to which such persons cannot, among other things, purchase, directly or indirectly, for a period of XXXXXXXXXX years after the Effective Date, Buyer Shares, exchangeable shares of BuyerSub, debt of Buyer or any other securities convertible or exchangeable into such securities or that derive their value, directly or indirectly, from such securities.

42. To the best of your knowledge, X1 and X had no knowledge of the negotiations between Buyer and Target and CanSub2, nor the Reorganization, until XXXXXXXXXX when Target's management approached X requesting that he sign a lock-up agreement.

X1 XXXXXXXXXX:

43. Prior to XXXXXXXXXX, CanSub1 was a publicly-traded corporation controlled by X1 and X. Pursuant to a plan of arrangement that closed on XXXXXXXXXX, Target acquired all of the shares of CanSub1. XXXXXXXXXX.

44. XXXXXXXXXX.

45. XXXXXXXXXX.

Arrangement Agreement:

46. On XXXXXXXXXX Buyer, Target and Spinco entered into the Arrangement Agreement setting out the steps in the Plan of Arrangement for the purposes of the Reorganization.

III. REORGANIZATION

Buyer Acquisition Structure:

Prior to the Effective Date:

47. Buyer formed Buyer XXXXXXXXXX.

48. Buyer transferred all the shares of Buyer Cashco to Buyer XXXXXXXXXX in consideration of the issuance of the Buyer XXXXXXXXXX Debt and one share of Buyer XXXXXXXXXX.

49. Buyer formed Bidco. Buyer transferred the shares of Bidco to Buyer XXXXXXXXXX in consideration of Buyer XXXXXXXXXX issuing one additional share to Buyer.

50. Buyer Cashco amended its constating documents to become an unlimited liability company in XXXXXXXXXX.

51. Buyer Cashco amended its constating documents to create XXXXXXXXXX new classes of shares: Class A common shares and Class A preferred shares. The Class A preferred shares:

(i) are voting;

(ii) are redeemable and retractable for $XXXXXXXXXX per share;

(iii) entitle the holder thereof to $XXXXXXXXXX per share on dissolution;

(iv) entitle the holder thereof to non-cumulative dividends not exceeding XXXXXXXXXX% of the redemption/retraction/liquidation price in a year; and

(v) have a par value of $XXXXXXXXXX per share.

52. In connection with amending Buyer Cashco's articles, Buyer XXXXXXXXXX exchanged all of its common shares of Buyer Cashco for XXXXXXXXXX Class A preferred shares and XXXXXXXXXX Class A common shares of Buyer Cashco.

53. Buyer Cashco and Bidco amalgamated to form BidAmalco. On the amalgamation Buyer XXXXXXXXXX was issued XXXXXXXXXX Class A preferred shares and XXXXXXXXXX Class A common shares of BidAmalco.

54. BidAmalco redeemed the XXXXXXXXXX Class A preferred shares for a cash payment to Buyer XXXXXXXXXX of $XXXXXXXXXX.

55. Buyer XXXXXXXXXX loaned $XXXXXXXXXX to BidAmalco in consideration of the BidAmalco Acquisition Note.

Spinco2 Preliminary Transaction:

56. Prior to the Spinco2 Effective Date, Spinco2 formed SpinForco.

On the Spinco2 Effective Date:

57. XXXXXXXXXXSub2 declared a dividend in an amount equal to XXXXXXXXXX$XXXXXXXXXX, payable by the transfer of the XXXXXXXXXX Target Note to XXXXXXXXXXSub1.

58. Target transferred to Spinco2:

(i) cash in an amount equal to the Spinco2 Funding Amount, and

(ii) the Target Purchase Assets,

in consideration for which Spinco2 issued Spinco2 Shares to Target and assumed all of the liabilities of Target and any of its subsidiaries which pertain to the Transferred Properties. A section 85 election will be filed in respect of the transfer of the Target Purchase Assets to Spinco2.

59. Spinco2 subscribed for (i) common shares in the capital of SpinForco in consideration for cash in an amount equal to the XXXXXXXXXXSub2 Purchase Price; and (ii) common shares in the capital of SpincoXXXXXXXXXX in consideration for cash in an amount equal to the SpincoXXXXXXXXXX Funding Amount.

60. XXXXXXXXXXSub1 transferred all of the issued and outstanding shares of XXXXXXXXXXSub2 to SpinForco for cash in the amount of the XXXXXXXXXXSub2 Purchase Price.

61. XXXXXXXXXXSub1 LLC transferred Property 1 to SpincoXXXXXXXXXX in consideration for (i) cash in an amount equal to the Property 1 Purchase Price and (ii) the transfer of Property 2 to XXXXXXXXXXSub1 LLC.

62. XXXXXXXXXXSub1 transferred Property 3 to SpincoXXXXXXXXXX in consideration for cash in an amount equal to the Property 3 Purchase Price.

One day prior to the Effective Date:

63. XXXXXXXXXXSub1 declared and paid a dividend to Target in cash in an amount equal to the exempt surplus of XXXXXXXXXXSub1 in respect of Target.

64. XXXXXXXXXXSub1 loaned Target an amount equal to the amount by which the XXXXXXXXXXSub2 Purchase Price exceeded the dividend paid to Target described in Paragraph 63, in consideration for the Target Grid Note. The initial principal amount of the Target Grid Note was equal to the amount by which the XXXXXXXXXXSub2 Purchase Price exceeded the dividend paid to Target in Paragraph 63.

65. XXXXXXXXXXSub2 elected to be treated as a disregarded entity for XXXXXXXXXX tax purposes effective at the end of the Spinco2 Effective Date. XXXXXXXXXXSub1 elected to be treated as a disregarded entity for XXXXXXXXXX tax purposes effective at the end of the day that precedes the Effective Date.

66. Target passed a shareholder's resolution in respect of each of CanSub1 and CanSub2, reducing the stated capital of the CanSub1 Shares and CanSub2 Shares, respectively, to $XXXXXXXXXX, without any distribution of property.

67. Target passed a shareholder's resolution in respect of each of CanSub1 and CanSub2 authorizing their wind-up and dissolution. CanSub1 and CanSub2 each dissolved into Target pursuant to subsection 88(1) and Target acquired their assets and assumed their liabilities on the same day as the dissolution proceedings were commenced. Articles of Dissolution were filed in respect of both corporations as soon as possible following the dissolutions. On the dissolution of CanSub2, the amount owing by CanSub2 to Target under the CanSub2 Debt was cancelled. An election pursuant to subsection 80.01(4) was filed in this regard. The XXXXXXXXXXSub2 Debt owing to CanSub2 became owing to Target on the dissolution of CanSub2.

68. CanSub3 was continued into XXXXXXXXXX as an unlimited liability company.

69. The amount owing by CanSub3 to Target under the CanSub3 Debt was satisfied and settled through a set-off against the amount owing by Target to CanSub3 under the Yco Note, and the principal amount of the Yco Note was reduced accordingly.

70. [Reserved].

71. BidAmalco loaned approximately $XXXXXXXXXX to CanSub3 in return for the XXXXXXXXXX Note. CanSub3 used these funds to purchase a XXXXXXXXXX in respect of the XXXXXXXXXX. The proceeds for this XXXXXXXXXX were paid to BuyerSub and Buyer Cansub, the joint venture owners of the XXXXXXXXXX, in proportion to their respective interests in the XXXXXXXXXX.

On the Effective Date, but before the Effective Time:

72. Target transferred cash to XXXXXXXXXXSub1 in full repayment of the XXXXXXXXXX Target Note. XXXXXXXXXXSub1 then loaned this cash to Target in consideration of the issuance of the CAD Target Note.

73. BidAmalco loaned cash to Target in consideration of the BidAmalco Downstream Note.

74. Any cash in Target (in excess of the amount required in connection with costs of closing the transaction, severance payments and the Cashed-Out Options (including all applicable source withholdings)) were applied to repay a portion of the BidAmalco Downstream Note. Following this repayment, Target had a net cash balance of XXXXXXXXXX.

Pursuant to the Plan of Arrangement, at the Effective Time:

75. Each Target Share held by a dissenting shareholder was deemed to be transferred to BidAmalco in consideration for a right to be paid fair value. It was a condition to the Plan of Arrangement that holders of not more than XXXXXXXXXX% of the Target Shares shall have exercised dissent rights.

76. Each Target Option was deemed to be fully vested and:

(i) each Cashed-Out Option was deemed to be transferred to Target in consideration for (a) $XXXXXXXXXX of cash less the exercise price in respect of the Target Option less all applicable source withholdings; and (b) one Spinco2 Share; and

(ii) each Exercised Option was deemed to be exercised, the holder paid an amount to Target equal to the total of the exercise price of the Target Options, and Target issued one Target Share to the holder.

77. Each Target Share acquired on the exercise of a Target Option in Subparagraph 76(ii) was automatically transferred to BidAmalco in consideration for (i) $XXXXXXXXXX of cash; and (ii) an undertaking of BidAmalco to deliver one Spinco2 Share (subject to the consolidation described in Paragraph 80 below).

78. The authorized share capital of Target was amended to authorize the Target Class A Shares.

79. Each Target Share not held by BidAmalco was exchanged, pursuant to section 86, for one Target Class A Share and one Spinco2 Share. Provided that the FMV of the Spinco2 shares at the time of this exchange does not exceed the aggregate PUC of all exchanged Target shares immediately before the exchange, a Canadian resident shareholder whose Target shares are exchanged for Target Class A Shares and Spinco2 Shares will dispose of its Target Shares for proceeds of disposition equal to the greater of the ACB to the shareholder of its Target Shares immediately before the exchange and the FMV at the time of the exchange of the Spinco2 Shares received by such Target shareholder.

80. The Spinco2 Shares were consolidated on a XXXXXXXXXX basis.

81. Each Target Class A Share was transferred to BidAmalco in consideration for $XXXXXXXXXX of cash.

82. At this stage, Target's former shareholders owned XXXXXXXXXX% of the Spinco2 Shares and Target owned XXXXXXXXXX% of the Spinco2 Shares.

On or after the Effective Date:

83. BidAmalco passed a shareholder's resolution to reduce the stated capital in respect of the Target Shares to $XXXXXXXXXX, without any distribution of property.

84. BidAmalco passed a shareholder's resolution authorizing the wind-up and dissolution of Target. Target was wound-up into BidAmalco and BidAmalco acquired the assets and assumed the liabilities of Target (including the CAD Target Note, the Target Grid Note and the Yco Note) on the same day as the wind-up was commenced. Articles of Dissolution were filed in respect of Target as soon as possible following the wind-up. On the day of the wind-up, the BidAmalco Downstream Note was cancelled. BidAmalco designated an amount in respect of Bumped Property owned by Target immediately before the wind-up. That amount was within the limits described in paragraph 88(1)(d) and was designated in BidAmalco's return of income for its taxation year that includes the day of Target's wind-up. An election pursuant to subsection 80.01(4) was filed in respect of the cancellation of the BidAmalco Downstream Note.

85. BidAmalco fulfilled its undertaking to deliver Spinco2 Shares to any former holders of Target Shares who acquired Target Shares on the exercise of Exercised Options, as described in Subparagraph 76(ii) and Paragraph 77.

86. XXXXXXXXXXSub1 and XXXXXXXXXXSub2 merged to form Mergeco, with XXXXXXXXXXSub1 being the surviving entity. The XXXXXXXXXXSub1 Debt and XXXXXXXXXXSub2 Debt became the Mergeco Debt on this merger.

87. Buyer XXXXXXXXXX Holdco transferred the shares of Buyer XXXXXXXXXX Opco to Mergeco in consideration of common shares in the capital of Mergeco such that Buyer XXXXXXXXXX Holdco owned XXXXXXXXXX% of the common shares of Mergeco and BidAmalco owned XXXXXXXXXX% of the common shares of Mergeco. Buyer XXXXXXXXXX Holdco and Mergeco had determined on a preliminary basis that, immediately following this transfer, the FMV of XXXXXXXXXX% of the common shares of Mergeco will be approximately equal to the FMV of the shares of Buyer XXXXXXXXXX Opco. The agreement governing this transfer contained a price adjustment clause providing that:

(i) as soon as practicable following the Effective Date, the parties will obtain a valuation to determine the FMV of the shares of Buyer XXXXXXXXXX Opco at the time of the transfer;

(ii) if the valuation determines that the FMV of the shares of the Buyer XXXXXXXXXX Opco was:

(a) less than the FMV of XXXXXXXXXX% of Mergeco's common shares (post-transfer), Buyer XXXXXXXXXX Holdco will be required to contribute additional cash (or other assets) to Mergeco such that its aggregate contribution to Mergeco has an FMV equal to the FMV of XXXXXXXXXX% of the common shares of Mergeco (post-transfer); or

(b) greater than the FMV of XXXXXXXXXX% of Mergeco's common shares (post-transfer), Mergeco will issue additional common shares to Buyer XXXXXXXXXX Holdco such that the aggregate FMV of all the common shares of Mergeco issued to Buyer XXXXXXXXXX Holdco is equal to the FMV of the shares of Buyer XXXXXXXXXX Opco. BidAmalco will not dispose of any share in Mergeco before this exercise is completed.

88. BidAmalco transferred:

(i) the Yco shares;

(ii) the XXXXXXXXXXSub shares;

(iii) the XXXXXXXXXXSub Debt;

(iv) the Mergeco Debt;

(v) the Spinco1 Shares that it owned;

(vi) the Spinco2 shares that it owned; and

(vii) any excess cash

to Buyer XXXXXXXXXX as partial repayment of the BidAmalco Acquisition Note and the principal amount of the BidAmalco Acquisition Note was reduced accordingly.

89. Buyer XXXXXXXXXX transferred the Yco shares, the XXXXXXXXXXSub Debt, the Mergeco Debt and the excess cash to Buyer as partial repayment of the Buyer XXXXXXXXXX Debt.

90. Buyer XXXXXXXXXX transferred the Spinco1 Shares and Spinco2 Shares that it owned to Buyer ULC in consideration for shares in the capital of Buyer ULC.

91. BidAmalco set-off the XXXXXXXXXX Note against the Yco Note, and the principal amount of the Yco Note was reduced accordingly.

92. Buyer contributed the remaining Buyer XXXXXXXXXX Debt to Buyer XXXXXXXXXX as a contribution to share premium.

93. Buyer XXXXXXXXXX transferred the BidAmalco Acquisition Note to BidAmalco in consideration of the issuance of additional Class A common shares of BidAmalco

94. [Reserved].

95. [Reserved]

96. [Reserved].

97. [Reserved].

98. [Reserved].

99. [Reserved].

100. [Reserved].

101. [Reserved].

102. [Reserved].

103. [Reserved].

IV. PROPOSED TRANSACTIONS

104. When filing their tax returns for the taxation year ending immediately prior to the acquisition of control described in Paragraph 81, Target and CanSub3 will elect under subsection 256(9) such that the acquisition of control is deemed to occur at the moment of the acquisition and not at the beginning of the Effective Date.

105. When filing its tax return for the taxation year ending immediately prior to the acquisition of control described in Paragraph 81, Target will file a designation pursuant to paragraph 111(4)(e) in respect of certain capital property owned by Target at that time.

V. ADDITIONAL INFORMATION

106. BidAmalco is not a financial institution in its taxation year that starts at the step described in Paragraph 84. The designation to be filed under paragraph 88(1)(d), as described in Paragraph 84, will be made by BidAmalco in its return of income for its taxation year in which Target was wound-up. The amount designated by BidAmalco in respect of a Bumped Property will not exceed the amount permitted under subparagraph 88(1)(d)(ii) and the total amounts so designated will not exceed the amount permitted under subparagraph 88(1)(d)(iii).

107. Spinco2 has entered into an agreement with Buyer providing that it will not purchase, directly or indirectly, for a period of two years following the Effective Date, Buyer Shares, exchangeable shares of BuyerSub, debt of Buyer or any other security convertible or exchangeable into such securities or that derive their value, directly or indirectly, from such securities.

108. Target will elect pursuant to subsection 110(1.1) such that neither Target nor any person not dealing at arm's length with Target will deduct any amount paid in respect of the Cashed-Out Options in calculating its income for the purposes of the Act.

109. Other than as described herein, no material transactions have been completed prior to the date of this letter nor are there any other material transactions currently being contemplated that would form part of the series of transactions or events that includes the Reorganization.

V. PURPOSES OF THE REORGANIZATION

110. The main purpose of the Reorganization is to effect the acquisition of Target indirectly by Buyer through BidAmalco in consideration for cash and Spinco2 Shares.

111. The purpose of the steps in paragraphs 47 to 55 is to establish and capitalize the acquisition structure so that BidAmalco can effect the acquisition of Target. More specifically, the formation of Buyer XXXXXXXXXX in paragraph 47, and the specific funding steps set out in paragraphs 48 to 53, were implemented for XXXXXXXXXX tax planning purposes and do not result in a tax benefit as defined in subsection 245(1). The transactions described in paragraphs 54 and 55 were implemented in order to create the BidAmalco Acquisition Note which is used at paragraph 88 as a mechanism for transferring assets from BidAmalco to Buyer XXXXXXXXXX.

112. The purpose of the steps in paragraphs 56 to 64 is to separate the properties to be acquired by BidAmalco from those to be retained by the selling shareholders of Target under Spinco2.

113. [Reserved].

114. The purpose of the step in paragraphs 65 is to allow the relevant entities to be treated as disregarded entities for XXXXXXXXXX tax purposes.

115. The purpose of the steps in paragraphs 66 and 83 is to avoid triggering a capital gain on the winding up of the relevant subsidiary.

116. The purpose of the steps in paragraph 67 is to allow Target to hold a direct interest in its foreign affiliates prior to the winding up and ‘bump' in paragraph 86.

117. The purpose of the steps in paragraphs 69 is to clean up intercompany receivables.

118. The transaction described in paragraph 71 is unrelated to the transactions intended to facilitate the application of the paragraph 88(1)(d) bump and is described in the Reorganization for the sake of completeness.

119. The purpose of the steps in paragraph 72 is to manage currency risk.

120. The purpose of the steps in paragraphs 73 and 74 is to provide the exact amount of funding that Target needed to facilitate the transaction prior to the Effective Date, while removing any excess cash prior to the Effective Time.

121. The purpose of the steps in paragraphs 75 to 82 and 85 is to effect the takeover of Target.

122. The purpose of the wind up and dissolution of Target in paragraph 84 is to obtain an increase in the adjusted cost base of the non-depreciable capital property owned by Target at the time of the acquisition of control to the extent permitted by paragraphs 88(1)(c) and 88(1)(d) , in order to facilitate the tax consolidation of the Target's XXXXXXXXXX subsidiaries with the Buyer for XXXXXXXXXX tax purposes.

123. [Reserved]

124. [Reserved]

125. The purposes of the steps in paragraphs 86 to 93 are to integrate the acquired companies with Buyer's business structure and eliminate intercorporate receivables.

VI. RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all the relevant Facts, the Reorganization, the Proposed Transactions, the Additional Information and the Purposes of the Reorganization, and provided that the Reorganization and Proposed Transactions are completed in the manner contemplated above, we confirm the following:

A. The provisions of subsection 88(1) will apply to the winding-up of Target described in Paragraph 84 such that, for purposes of the Act, and provided that no property acquired by BidAmalco on the winding-up or "any property acquired by any person in substitution therefor" (within the meaning of that phrase for purposes of clause 88(1)(c)(vi)(B) is acquired by any person described in any of subclauses 88(1)(c)(vi)(B)(I), (II) or (III) (on the assumption that the "subsidiary" referred to in those subclauses is Target and the "parent" is BidAmalco) as part of the series of transactions or events that includes the Reorganization and Proposed Transactions described herein, the cost to BidAmalco of each property owned by Target at the time BidAmalco acquired control of Target and that will be distributed to BidAmalco on the winding-up, will be deemed by paragraph 88(1)(c) to be the cost amount of such property to Target plus, provided that such property is capital property, but not depreciable property, the amount designated by BidAmalco under paragraph 88(1)(d) in respect of the property as described in Paragraph 84.

For greater certainty, property that will be distributed to BidAmalco on the winding-up will not be ineligible property for purposes of paragraph 88(1)(c) solely as a result of any of the Facts or Reorganization described herein.

B. The general anti-avoidance rule under subsection 245(2) will not be applied as a result of the transactions described in Paragraphs 47 to 93, in and by themselves, to redetermine the tax consequences confirmed in the ruling above.

These rulings are subject to the limitations and qualifications set out in Information Circular 70-6R5 dated May 17, 2002 and are binding on the CRA provided that the Reorganization and Proposed Transactions are completed no later than six months of the date of this letter. The rulings are based on the law as it presently reads 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

Nothing in this letter should be construed as implying that the CRA has confirmed, reviewed or made any determination in respect of:

(a) The FMV or the ACB of any particular asset, or the PUC of any share;

(b) the amount of the designation under paragraph 88(1)(d) that BidAmalco intends to make; and

(c) any other tax consequences relating to the facts, and Reorganization, other than those specifically described in the rulings above, including whether any transactions or events occurring after the date of this letter (including an event that is described in Paragraph 44) are part of a series of transactions or events described in this letter.

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. Furthermore, none of the rulings given in this letter are intended to apply to 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 Folio S4-F3-C1.

An invoice for our fees in connection with this Ruling will be forwarded to you under separate cover.

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