Brompton Oil Split : Annual Information Form – 2022

ANNUAL INFORMATION FORM

Preferred Shares

Class A Shares

Class J Shares

March 23, 2023

FORWARD-LOOKING STATEMENTS

Certain statements contained in this annual information form constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this annual information form should not be unduly relied upon. These statements speak only as of the date of this annual information form.

In particular, this annual information form may contain forward-looking statements pertaining to distributable cash and distributions per Class A Share, Preferred Share or Unit. The actual results could differ materially from those anticipated in these forward-looking statements as a result of, among other things, the risk factors set out in this annual information form. The Company does not undertake any obligation to publicly update or revise any forward-looking statements.

	TABLE OF CONTENTS
GLOSSARY OF TERMS	4
1.0	NAME, FORMATION AND HISTORY	8
1.1	Status of the Company	8
1.2	Investment Objectives	8
1.3	Investment Guidelines	9
1.4	Rebalancing Criteria	9
2.0	INVESTMENT RESTRICTIONS	10
3.0	DESCRIPTION OF SECURITIES	10
3.1	Principal Shareholder	10
3.2	Purchase for Cancelation	11
3.3	Distributions	11
3.3.1	Preferred Shares	11
3.3.2	Class A Shares	11
3.3.3	Distribution Reinvestment Plan	12
3.4	Priority	12
3.4.1	Preferred Shares	12
3.4.2	Class A Shares	12
3.4.3	Class J Shares	12
3.5	Acts Requiring Shareholder Approval	12
4.0	VALUATION OF PORTFOLIO SECURITIES	13
5.0	CALCULATION OF NET ASSET VALUE	15
6.0	PURCHASES OF SHARES	15
7.0	REDEMPTIONS AND RETRACTIONS	15
7.1	Redemptions	15
7.1.1	Preferred Shares	15
7.1.2	Class A Shares	15
7.2	Retraction Privileges	16
7.2.1	Preferred Shares	16
7.2.2	Class A Shares	17
7.3	Book-Entry Only System	19
7.4	Suspension of Redemptions and Retractions	19
8.0	RESPONSIBILITY FOR OPERATIONS	20
8.1	Management of the Company and the Manager	20
8.2	Manager	21
8.2.1	Directors and Officers of the Manager	21
8.2.2	Independent Review Committee	21
8.2.3	Management Fee	22
8.2.4	Termination of the Management Agreement	22
8.3	Portfolio Management	23
8.4	Custodian	23
8.4.1	Custodian Fees	23
8.4.2	Termination of the Custodial Services Agreement	23
8.5	Valuation Services	23
8.6	Auditors, Registrar and Transfer Agent	24
8.7	Securities Lending	24
9.0	CONFLICTS OF INTEREST	24
9.1	Principal Holders of Securities	24
9.2	Securities Held by Members of the Independent Review Committee	25
10.0	CORPORATE GOVERNANCE	25
10.1	Composition of the Independent Review Committee	26
10.2	Proxy Voting Policy	26
10.3	Covered Call Option Writing	27
10.4	Call Option Pricing	27
10.5	Utilization of Cash Equivalents	28
10.6	Use of Other Derivative Instruments	28
10.7	Securities Lending	29
10.8	Use of Derivative Instruments - General	30
10.9	Short-Term Trading	30
11.0	INCOME TAX CONSIDERATIONS	31
11.1	Tax Treatment of the Company	31
11.2	Distributions	32
11.3	Tax Treatment of Shareholders	33
11.4	Disposition of Shares	34
11.5	Exchange of Tax Information	34
12.0	REMUNERATION OF DIRECTORS, OFFICERS AND IRC	35
13.0	MATERIAL CONTRACTS	35
14.0	OTHER MATERIAL INFORMATION	35
14.1	Risk Factors	35

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GLOSSARY OF TERMS

In this annual information form, the following terms shall have the meanings set forth below, unless otherwise indicated:

"Annual Retraction Date" means the second last business day of the month of March, other than in a year in which the Maturity Date occurs.

"Basic Payout Ratio" means the ratio of dividends paid to cash flow available to pay dividends.

"Black-ScholesModel" means a widely used option pricing model developed by Fischer Black and Myron Scholes in 1973. The model can be used to calculate the theoretical value of an option based on the current price of the underlying security, the strike price and term of the option, prevailing interest rates and the volatility of the price of the underlying security.

"Brompton" means the Brompton group of companies.

"Brompton Funds" means Brompton Corp. and its wholly owned subsidiary Brompton Funds Limited, which acts as manager of the Company. Brompton Corp. is in the business of managing investment funds.

"business day" means any day on which the TSX is open for business.

"call option" means the right, but not the obligation, of the option holder to buy a security from the seller of the option at a specified price at any time during a specified time period or at expiry.

"cash covered put option" means a put option entered into in circumstances where the seller of the put option holds cash equivalents or other acceptable cash cover (as defined in NI 81-102) sufficient to acquire the securities underlying the option at the strike price throughout the term of the option.

"cash equivalents" means, and for the purposes of "cash cover" and "cash covered put option", "cash" as used therein means:

1. cash on deposit at the Custodian;
2. an evidence of indebtedness that has a remaining term to maturity of 365 days or less and that is issued, or fully and unconditionally guaranteed as to principal and interest, by:
3. 1. any of the federal or provincial governments of Canada; or
   2. the Government of the United States; or
   3. a Canadian financial institution;

provided that, in the case of (ii) and (iii), such evidence of indebtedness has a rating of at least R-1 (mid) by DBRS or the equivalent rating from another designated rating organization; or

1. other cash cover as defined in NI 81-102.

"CDS" means CDS Clearing and Depository Services Inc.

"CDS Participant" means a participant in CDS.

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"Class A Shareholder" means a holder of a Class A Share.

"Class A Shares" means the class A shares of the Company.

"Class J Shares" means the class J shares of the Company.

"Company" means Brompton Oil Split Corp.

"covered call option" means a call option entered into in circumstances where the seller of the call option holds the underlying security through the term of the option.

"CRA" means the Canada Revenue Agency.

"Custodial Services Agreement" means the custodian agreement entered into by the Company and the Custodian dated as of September 15, 2016, as it may be amended from time to time.

"Custodian" means CIBC Mellon Trust Company, in its capacity as custodian under the Custodial Services Agreement, as appointed from time to time by the Company.

"DBRS" means DBRS Limited.

"EBITDA" means earnings before interest, taxes, depreciation and amortization.

"Extraordinary Resolution" means a resolution passed by the affirmative vote of at least 66⅔% of the votes cast, either in person or by proxy, at a meeting of shareholders called for the purpose of approving such resolution.

"FHSA Amendments" means the tax legislation applicable to first home savings accounts, which will come into force on April 1, 2023.

"in-the-money" means in relation to a call option, a call option with a strike price less than the current market price of the underlying security and, in relation to a put option, a put option with a strike price greater than the current market price of the underlying security.

"Income Tax Act" means the Income Tax Act (Canada) and the regulations thereunder, as the same may be amended from time to time.

"Investment Guidelines" means the investment guidelines of the Company described in section 1.3 of this Annual Information Form.

"Investment Objectives" means the investment objectives of the Company described in section 1.2 of this Annual Information Form.

"Investment Restrictions" means the investment restrictions of the Company including without limitation those described in section 2.0 of this Annual Information Form.

"IRC" means the independent review committee established by the Manager for the Company pursuant to NI 81-107.

"Management Agreement" means the management agreement dated as of January 29, 2015 between the Company and the Manager, as it may be amended from time to time.

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