TFIFF Thai Future Incorporation Public Company Ltd (CE)

RISK FACTORS

An investment in the Common Shares is subject to a number of risks that should be considered by prospective purchasers and their advisors.

Reference is made to the section entitled “Risks and Uncertainties” at pages 24 to 37 (inclusively) of the MD&A which is incorporated by reference herein, as supplemented by the risk factors set out below. Prospective investors should carefully consider the risks described below and in the documents incorporated by reference herein, including the MD&A, which are qualified in their entirety by reference to, and must be read in conjunction with, the detailed information appearing in this Prospectus Supplement, the accompanying Prospectus and the documents incorporated by reference herein and therein, before purchasing Common Shares. The risks and uncertainties described in this Prospectus Supplement and in the documents incorporated by reference herein, including the MD&A, are those the Corporation currently believes to be material, but they are not the only ones it faces. If any of the following risks, or any other risks and uncertainties that the Corporation has not yet identified or that the Corporation currently considers not to be material, actually occur or become material risks, the Corporation’s business, prospects, financial condition, results of operations and cash flows and consequently the price of the Common Shares could be materially and adversely affected. In all these cases, the trading price of the Common Shares could decline, and investors could lose all or part of their investment.

Risks Related to the Corporation’s Business

The Corporation’s future results may be affected by a number of factors over many of which the Corporation has little or no control. The following discussion of risk factors contains forward-looking statements. The following issues, uncertainties and risks, among others, should be considered in evaluating the Corporation’s business, prospects, financial condition, results of operations and cash flows.

The Corporation operates in a highly-competitive and fragmented industry, and numerous competitive factors could impair the Corporation’s ability to maintain or improve its profitability and could have a material adverse effect on the Corporation’s results of operations.

The Corporation faces growing competition from other transporters in Canada, the United States and Mexico. These factors, including the following, could impair the Corporation’s ability to maintain or improve its profitability and could have a material adverse effect on the Corporation’s results of operations:

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The Corporation operates in a highly-regulated industry, and changes in existing regulations or violations of existing or future regulations could have a material adverse effect on the Corporation’s operations and profitability.

In Canada, carriers must obtain licenses issued by provincial transport boards in order to carry goods inter-provincially or to transport goods within any province. Licensing from U.S. and Mexican regulatory authorities is also required for the transportation of goods in Canada, the United States, and Mexico. Any change in or violation of existing or future regulations could have an adverse impact on the scope of the Corporation’s activities. Future laws and regulations may be more stringent, require changes in the Corporation’s operating practices, influence the demand for transportation services or require the Corporation to incur significant additional costs. Higher costs incurred by the Corporation, or by the Corporation’s suppliers who pass the costs onto the Corporation through higher supplies and materials pricing, could adversely affect the Corporation’s results of operations.

In addition to the regulatory regime applicable to operations in Canada, the Corporation is increasing its operations in the United States, and is therefore increasingly subject to rules and regulations related to the U.S. transportation industry, including regulation from various federal, state and local agencies, including the Department of Transportation (“DOT”) (in part through the Federal Motor Carrier Safety Administration (“FMCSA”)), the Environmental Protection Agency (“EPA”) and the Department of Homeland Security. Drivers must, both in Canada and the United States, comply with safety and fitness regulations, including those relating to drug and alcohol testing, driver safety performance and hours of service. Weight and dimensions, exhaust emissions and fuel efficiency are also subject to government regulation. The Corporation may also become subject to new or more restrictive regulations relating to fuel efficiency, exhaust emissions, hours of service, drug and alcohol testing, ergonomics, on-board reporting of operations, collective bargaining, security at ports, speed limitations, driver training and other matters affecting safety or operating methods.

In the United States, there are currently two methods of evaluating the safety and fitness of carriers: the Compliance, Safety, Accountability (“CSA”) program, which evaluates and ranks fleets on certain safety-related standards by analyzing data from recent safety events and investigation results, and the DOT safety rating, which is based on an on-site investigation and affects a carrier’s ability to operate in interstate commerce. Additionally, the FMCSA has proposed rules in the past that would change the methodologies used to determine carrier safety and fitness.

Under the CSA program, carriers are evaluated and ranked against their peers based on seven categories of safety-related data. The seven categories of safety-related data currently include Unsafe Driving, Hours-of-Service

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Compliance, Driver Fitness, Controlled Substances/Alcohol, Vehicle Maintenance, Hazardous Materials Compliance and Crash Indicator (such categories known as “BASICs”). Carriers are grouped by category with other carriers that have a similar number of safety events (i.e. crashes, inspections, or violations) and carriers are ranked and assigned a rating percentile or score. If the Corporation were subject to any such interventions, this could have an adverse effect on the Corporation’s business, financial condition and results of operations. As a result, the Corporation’s fleet could be ranked poorly as compared to peer carriers. There is no guarantee that we will be able to maintain our current safety ratings or that we will not be subject to interventions in the future. The Corporation recruits first-time drivers to be part of its fleet, and these drivers may have a higher likelihood of creating adverse safety events under CSA. The occurrence of future deficiencies could affect driver recruitment in the United States by causing high-quality drivers to seek employment with other carriers or limit the pool of available drivers or could cause the Corporation’s customers to direct their business away from the Corporation and to carriers with higher fleet safety rankings, either of which would materially adversely affect the Corporation’s business, financial condition and results of operations. In addition, future deficiencies could increase the Corporation’s insurance expenses. Additionally, competition for drivers with favorable safety backgrounds may increase, which could necessitate increases in driver-related compensation costs. Further, the Corporation may incur greater than expected expenses in its attempts to improve unfavorable scores.

In December 2015, the U.S. Congress passed a new highway funding bill called Fixing America’s Surface Transportation Act (the “FAST Act”), which calls for significant CSA reform. The FAST Act directs the FMCSA to conduct studies of the scoring system used to generate CSA rankings to determine if it is effective in identifying high-risk carriers and predicting future crash risk. This study was conducted and delivered to the FMCSA in June 2017 with several recommendations to make the CSA program more fair, accurate and reliable. In June 2018, the FMCSA provided a report to the U.S. Congress outlining the changes it may make to the CSA program in response to the study. Such changes include the testing and possible adoption of a revised risk modeling theory, potential collection and dissemination of additional carrier data and revised measures for intervention thresholds. The adoption of such changes is contingent on the results of the new modeling theory and additional public feedback. Thus, it is unclear if, when and to what extent such changes to the CSA program will occur. The FAST Act is set to expire in September 2020, and the U.S. Congress has noted its intent to consider a multiyear highway measure that would update the FAST Act, which could lead to further changes to the CSA program. Any changes that increase the likelihood of the Corporation receiving unfavorable scores could materially adversely affect the Corporation’s results of operations and profitability.

In December 2016, the FMCSA issued a final rule establishing a national clearinghouse for drug and alcohol testing results and requiring motor carriers and medical review officers to provide records of violations by commercial drivers of FMCSA drug and alcohol testing requirements. Motor carriers in the United States will be required to query the clearinghouse to ensure drivers and driver applicants do not have violations of federal drug and alcohol testing regulations that prohibit them from operating commercial motor vehicles. The final rule became effective on January 4, 2017, with a compliance date of January 6, 2020. In December 2019, however, the FMCSA announced a final rule pursuant to which the compliance date for state driver’s licensing agencies for certain Drug and Alcohol Clearinghouse requirements were extended for three years. The December 2016 commercial driver’s license rule initially required states to request information from the clearinghouse about individuals prior to issuing, renewing, upgrading or transferring a commercial driver’s license. This new action will allow states to delay compliance with the requirement until January 2023.

In addition, other rules have been recently proposed or made final by the FMCSA, including (i) a rule requiring the use of speed-limiting devices on heavy-duty tractors to restrict maximum speeds, which was proposed in 2016, and (ii) a rule setting out minimum driver training standards for new drivers applying for commercial driver’s licenses for the first time and to experienced drivers upgrading their licenses or seeking a hazardous materials endorsement, which was made final in December 2016 with a compliance date in February 2020 (FMCSA officials recently delayed implementation of the final rule by two years). In July 2017, the DOT announced that it would no longer pursue a speed limiter rule, but left open the possibility that it could resume such a pursuit in the future. In 2019 U.S. Congressional representatives proposed a similar rule related to speed limiting devices. The effect of these rules, to the extent they become effective, could result in a decrease in fleet production and/or driver availability, either of which could materially adversely affect the Corporation’s business, financial condition and results of operations.

The Corporation currently has a satisfactory DOT rating for each of its U.S. operations, which is the highest available rating under the current safety rating scale. If the Corporation were to receive a conditional or unsatisfactory DOT safety rating, it could materially adversely affect the Corporation’s business, financial condition and results of

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operations as customer contracts may require a satisfactory DOT safety rating, and a conditional or unsatisfactory rating could materially adversely affect or restrict the Corporation’s operations and increase the Corporation’s insurance costs.

The FMCSA has proposed regulations that would modify the existing rating system and the safety labels assigned to motor carriers evaluated by the DOT. Under regulations that were proposed in 2016, the methodology for determining a carrier’s DOT safety rating would be expanded to include the on-road safety performance of the carrier’s drivers and equipment, as well as results obtained from investigations. Exceeding certain thresholds based on such performance or results would cause a carrier to receive an unfit safety rating. The proposed regulations were withdrawn in March 2017, but the FMCSA noted that a similar process may be initiated in the future. If similar regulations were enacted and the Corporation were to receive an unfit or other negative safety rating, the Corporation’s business would be materially adversely affected in the same manner as if it received a conditional or unsatisfactory safety rating under the current regulations. In addition, poor safety performance could lead to increased risk of liability, increased insurance, maintenance and equipment costs and potential loss of customers, which could materially adversely affect the Corporation’s business, financial condition and results of operations. The FMCSA also recently announced plans to conduct a new study on the causation of certain crashes. Although it remains unclear whether such a study will ultimately be undertaken and completed, the results of such a study could spur further proposed and/or final rules regarding safety and fitness in the United States.

From time to time, the FMCSA proposes and implements changes to regulations impacting hours-of-service. Such changes can negatively impact the Corporation’s productivity and affect its operations and profitability by reducing the number of hours per day or week the Corporation’s U.S. drivers and independent contractors may operate and/or disrupt the Corporation’s network. In August 2019, the FMCSA issued a proposal to make changes to its hours-of-service rules that would allow U.S. truck drivers more flexibility with their 30-minute rest break and with dividing their time in the sleeper berth. It would also extend by two hours the duty time for drivers encountering adverse weather, and extend the short haul exemption by lengthening the drivers’ maximum on-duty period from 12 hours to 14 hours. It is unclear how long the process of finalizing a final rule will take, if one does come to fruition. Any future changes to hours of service regulations could materially and adversely affect the Corporation’s operations and profitability.

The U.S. National Highway Traffic Safety Administration, the EPA and certain U.S. states, including California, have adopted regulations that are aimed at reducing tractor emissions and/or increasing fuel economy of the equipment the Corporation uses. Certain of these regulations are currently effective, with stricter emission and fuel economy standards becoming effective over the next several years. Other regulations have been proposed in the United States that would similarly increase these standards. U.S. federal and state lawmakers and regulators have also adopted or are considering a variety of other climate-change legal requirements related to carbon emissions and greenhouse gas emissions. These legal requirements could potentially limit carbon emissions within certain states and municipalities in the United States. Certain of these legal requirements restrict the location and amount of time that diesel-powered tractors (like the Corporation’s) may idle, which may force the Corporation to purchase on-board power units that do not require the engine to idle or to alter the Corporation’s drivers’ behavior, which might result in a decrease in productivity and/or an increase in driver turnover. All of these regulations have increased, and may continue to increase, the cost of new tractors and trailers and may require the Corporation to retrofit certain of its tractors and trailers, may increase its maintenance costs, and could impair equipment productivity and increase the Corporation’s operating costs, particularly if such costs are not offset by potential fuel savings. The occurrence of any of these adverse effects, combined with the uncertainty as to the reliability of the newly-designed diesel engines and the residual values of the Corporation’s equipment, could materially adversely affect the Corporation’s business, financial condition and results of operations. Furthermore, any future regulations that impose restrictions, caps, taxes or other controls on emissions of greenhouse gases could adversely affect the Corporation’s operations and financial results. The Corporation cannot predict the extent to which its operations and productivity will be impacted by any future regulations. The Corporation will continue monitoring its compliance with U.S. federal and state environmental regulations.

In March 2014, the U.S. Ninth Circuit Court of Appeals held that the application of California state wage and hour laws to interstate truck drivers is not pre-empted by U.S. federal law. The case was appealed to the U.S. Supreme Court, which denied certiorari in May 2015, and accordingly, the Ninth Circuit Court of Appeals decision stands. However, in December 2018, the FMCSA granted a petition filed by the American Trucking Associations determining

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that federal law pre-empts California’s wage and hour laws, and interstate truck drivers are not subject to such laws. The FMCSA’s decision has been appealed by labour groups and multiple lawsuits have been filed in U.S. federal courts seeking to overturn the decision, and thus it is uncertain whether it will stand. Current and future U.S. state and local wage and hour laws, including laws related to employee meal breaks and rest periods, may vary significantly from U.S. federal law. Further, driver piece rate compensation, which is an industry standard, has been attacked as non-compliant with state minimum wage laws. As a result, the Corporation, along with other companies in the industry, is subject to an uneven patchwork of wage and hour laws throughout the United States. In addition, the uncertainty with respect to the practical application of wage and hour laws are, in the future may be, resulting in additional costs for the Corporation and the industry as a whole, and a negative outcome with respect to any of the above-mentioned lawsuits could materially affect the Corporation. There is proposed federal legislation to solidify the pre-emption of state and local wage and hour laws applied to interstate truck drivers; however, passage of such legislation is uncertain. If U.S. federal legislation is not passed, the Corporation will either need to continue complying with the most restrictive state and local laws across its entire fleet in the United States, or revise its management systems to comply with varying state and local laws. Either solution could result in increased compliance and labour costs, driver turnover, decreased efficiency and increased risk of non-compliance.

In April 2016, the Food and Drug Administration (“FDA”) published a final rule establishing requirements for shippers, loaders, carriers by motor vehicle and rail vehicle, and receivers engaged in the transportation of food, to use sanitary transportation practices to ensure the safety of the food they transport as part of the FSMA. This rule sets forth requirements related to (i) the design and maintenance of equipment used to transport food, (ii) the measures taken during food transportation to ensure food safety, (iii) the training of carrier personnel in sanitary food transportation practices, and (iv) maintenance and retention of records of written procedures, agreements, and training related to the foregoing items. These requirements took effect for larger carriers in April 2017 and apply to the Corporation when it acts as a carrier or as a broker. If the Corporation is found to be in violation of applicable laws or regulations related to the FSMA or if the Corporation transports food or goods that are contaminated or are found to cause illness and/or death, the Corporation could be subject to substantial fines, lawsuits, penalties and/or criminal and civil liability, any of which could have a material adverse effect on the Corporation’s business, financial condition, and results of operations.

Changes in existing regulations and implementation of new regulations, such as those related to trailer size limits, emissions and fuel economy, hours of service, mandating ELDs and drug and alcohol testing in Canada, the United States and Mexico, could increase capacity in the industry or improve the position of certain competitors, either of which could negatively impact pricing and volumes or require additional investments by the Corporation. The short-term and long-term impacts of changes in legislation or regulations are difficult to predict and could materially adversely affect the Corporation’s results of operations.

The right to continue to hold applicable licenses and permits is generally subject to maintaining satisfactory compliance with regulatory and safety guidelines, policies and laws. Although the Corporation is committed to compliance with laws and safety, there is no assurance that it will be in full compliance with them at all times. Consequently, at some future time, the Corporation could be required to incur significant costs to maintain or improve its compliance record.

The Corporation is subject to risks arising from its operations in the United States and Mexico.

A growing portion of the Corporation’s revenue is derived from operations in the United States and transportation to and from Mexico. The Corporation’s international operations are subject to a variety of risks, including fluctuations in foreign currencies, changes in the economic strength or greater volatility in the economies of foreign countries in which the Corporation does business, difficulties in enforcing contractual rights and intellectual property rights, compliance burdens associated with export and import laws, theft or vandalism, and social, political and economic instability. The Corporation’s international operations could be adversely affected by restrictions on travel. Additional risks associated with the Corporation’s international operations include restrictive trade policies, imposition of duties, changes to trade agreements and other treaties, taxes or government royalties by foreign governments, adverse changes in the regulatory environments, including in tax laws and regulations, of the foreign countries in which the Corporation does business, compliance with anti-corruption and anti-bribery laws, restrictions on the withdrawal of foreign investments, the ability to identify and retain qualified local managers and the challenge of managing a culturally and geographically diverse operation. The Corporation cannot guarantee compliance with all applicable laws, and

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violations could result in substantial fines, sanctions, civil or criminal penalties, competitive or reputational harm, litigation or regulatory action and other consequences that might adversely affect the Corporation’s results of operations.

The United States has imposed tariffs on certain imported steel and aluminum. The implementation of these tariffs, as well as the imposition of additional tariffs or quotas or changes to certain trade agreements, including tariffs applied to goods traded between the United States and China, could, among other things, increase the costs of the materials used by the Corporation’s suppliers to produce new revenue equipment or increase the price of fuel. Such cost increases for the Corporation’s revenue equipment suppliers would likely be passed on to the Corporation, and to the extent fuel prices increase, the Corporation may not be able to fully recover such increases through rate increases or the Corporation’s fuel surcharge program, either of which could have a material adverse effect on the Corporation’s business.

The United States-Mexico-Canada Agreement (“USMCA”) has been ratified by the United States and Mexico but must be ratified by the Parliament of Canada before it enters into effect. The USMCA is designed to modernize food and agriculture trade, advance rules of origin for automobiles and trucks, and enhance intellectual property protections, among other matters, according to the Office of the U.S. Trade Representative. The USMCA is now in the process of being ratified by each country. It is difficult to predict at this stage what could be the impact of the USMCA on the economy, including the transportation industry. However, given the amount of North American trade that moves by truck, if the USMCA enters into effect, it could have a significant impact on supply and demand in the transportation industry, and could adversely impact the amount, movement and patterns of freight transported by the Corporation.

In December 2017, the United States enacted comprehensive tax legislation, commonly referred to as the 2017 Tax Cuts and Jobs Act. The new law requires complex computations not previously required by U.S. tax law. The Treasury has issued final regulations and interpretive guidance on specific areas since the 2017 Tax Cuts and Jobs Act was enacted, but there remain significant regulations that are still awaiting finalization. The finalization of these proposed regulations could have a material adverse effect on the Corporation’s results in future periods. Further, compliance with the new law and the accounting for such provisions require preparation and analysis of information not previously required or regularly produced. In addition, the U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how the Corporation will apply the law and impact the Corporation’s results of operations in future periods. The timing and scope of such regulations and interpretative guidance are uncertain. In addition, there is a risk that states within the United States or foreign jurisdictions may amend their tax laws in response to these tax reforms, which could have a material adverse effect on the Corporation’s results.

In addition, if the Corporation is unable to maintain its Free and Secure Trade (“FAST”) and U.S. Customs Trade Partnership Against Terrorism (“C-TPAT”) certification statuses, it may have significant border delays, which could cause its cross-border operations to be less efficient than those of competitor carriers that obtain or continue to maintain FAST and C-TPAT certifications.

The Corporation is subject to changes in its general operating environment and to seasonality.

The Corporation is exposed to the following factors, among others, affecting its operating environment:

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The Corporation’s tractor productivity decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments after the winter holiday season. Revenue may also be adversely affected by inclement weather and holidays, since revenue is directly related to available working days of shippers. At the same time, operating expenses increase and fuel efficiency declines because of engine idling and harsh weather creating higher accident frequency, increased claims and higher equipment repair expenditures. The Corporation may also suffer from weather-related or other unforeseen events such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes and explosions. These events may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, damage or destroy the Corporation’s assets or adversely affect the business or financial condition of the Corporation’s customers, any of which could materially adversely affect the Corporation’s results of operations or make the Corporation’s results of operations more volatile.

The Corporation’s business is subject to general economic, credit, business and regulatory factors that are largely beyond the Corporation’s control, and which could have a material adverse effect on the Corporation’s operating results.

The Corporation’s industry is subject to cyclical pressures, and the Corporation’s business is dependent on a number of factors that may have a material adverse effect on its results of operations, many of which are beyond the Corporation’s control. The Corporation believes that some of the most significant of these factors include (i) excess tractor and trailer capacity in the transportation industry in comparison with shipping demand; (ii) declines in the resale value of used equipment; (iii) recruiting and retaining qualified drivers; (iv) strikes, work stoppages or work slowdowns at the Corporation’s facilities or at customer, port, border crossing or other shipping-related facilities; (v) compliance with ongoing regulatory requirements; (vi) increases in interest rates, fuel taxes, tolls and license and registration fees; and (vii) rising healthcare costs in the United States.

The Corporation is also affected by (i) recessionary economic cycles, which tend to be characterized by weak demand and downward pressure on rates; (ii) changes in customers’ inventory levels and in the availability of funding for their working capital; (iii) changes in the way in which the Corporation’s customers choose to source or utilize the Corporation’s services; and (iv) downturns in customers’ business cycles, such as retail and manufacturing, where the Corporation has significant customer concentration. Economic conditions may adversely affect customers and their demand for and ability to pay for the Corporation’s services. Customers encountering adverse economic conditions represent a greater potential for loss and the Corporation may be required to increase its allowance for doubtful accounts.

Economic conditions that decrease shipping demand and increase the supply of available tractors and trailers can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. The risks associated with these factors are heightened when the economy is weakened. Some of the principal risks during such times include:

The Corporation is subject to cost increases that are outside the Corporation’s control that could materially reduce the Corporation’s profitability if it is unable to increase its rates sufficiently. Such cost increases include, but are not

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limited to, increases in fuel and energy prices, driver and office employee wages, purchased transportation costs, taxes, interest rates, tolls, license and registration fees, insurance premiums and claims, revenue equipment and related maintenance, and tires and other components. Strikes or other work stoppages at the Corporation’s service centres or at customer, port, border or other shipping locations, deterioration of Canadian, U.S. or Mexican transportation infrastructure and reduced investment in such infrastructure, or actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state or heightened security requirements could lead to wear, tear and damage to the Corporation’s equipment, driver dissatisfaction, reduced economic demand, reduced availability of credit, increased prices for fuel or temporary closing of the shipping locations or borders between Canada, the United States and Mexico. Further, the Corporation may not be able to appropriately adjust its costs and staffing levels to meet changing market demands. In periods of rapid change, it is more difficult to match the Corporation’s staffing level to its business needs.

The Corporation’s operations, with the exception of its brokerage operations, are capital intensive and asset heavy. If anticipated demand differs materially from actual usage, the Corporation may have too many or too few assets. During periods of decreased customer demand, the Corporation’s asset utilization may suffer, and it may be forced to sell equipment on the open market or turn in equipment under certain equipment leases in order to right size its fleet. This could cause the Corporation to incur losses on such sales or require payments in connection with equipment the Corporation turns in, particularly during times of a softer used equipment market, either of which could have a material adverse effect on the Corporation’s profitability.

Although the Corporation’s business volume is not highly concentrated, its customers’ financial failures or loss of customer business may materially adversely affect the Corporation. If the Corporation were unable to generate sufficient cash from operations, it would need to seek alternative sources of capital, including financing, to meet its capital requirements. In the event that the Corporation were unable to generate sufficient cash from operations or obtain financing on favorable terms in the future, it may have to limit its fleet size, enter into less favorable financing arrangements or operate its revenue equipment for longer periods, any of which could have a materially adverse effect on its profitability.

Changes in interest rates may result in fluctuations in the Corporation’s future cash flows related to variable-rate financial liabilities.

Future cash flows related to variable-rate financial liabilities could be impacted by changes in benchmark rates such as Bankers’ Acceptance or London Interbank Offered Rate (Libor). In addition, the Corporation is exposed to gains and losses arising from changes in interest rates through its derivative financial instruments carried at fair value.

Significant fluctuations in relative currency values against the Canadian dollar could have a significant impact on the Corporation’s future profitability.

The Corporation’s financial results are reported in Canadian dollars and a growing portion of the Corporation’s revenue and operating costs are realized in currencies other than the Canadian dollar, primarily the U.S. dollar. The exchange rates between these currencies and the Canadian dollar have fluctuated in recent years and will likely continue to do so in the future. It is not possible to mitigate all exposure to fluctuations in foreign currency exchange rates. The results of operations are therefore affected by movements of these currencies against the Canadian dollar.

Fluctuations in the price or availability of fuel or fuel surcharge collection may increase the Corporation’s costs of operation, which could materially adversely affect the Corporation’s profitability.

Fuel is one of the Corporation’s largest operating expenses. Diesel fuel prices fluctuate greatly due to factors beyond the Corporation’s control, such as political events, commodity futures trading, currency fluctuations, natural and man-made disasters, terrorist activities and armed conflicts, any of which may lead to an increase in the cost of fuel. Fuel prices are also affected by the rising demand for fuel in developing countries and could be materially adversely affected by the use of crude oil and oil reserves for purposes other than fuel production and by diminished drilling activity. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because the Corporation’s operations are dependent upon diesel fuel, significant diesel fuel cost increases, shortages or supply disruptions could have a material adverse effect on the Corporation’s business, financial condition and results of operations.

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While the Corporation has fuel surcharge programs in place with a majority of the Corporation’s customers, which historically have helped the Corporation offset the majority of the negative impact of rising fuel prices, the Corporation also incurs fuel costs that cannot be recovered even with respect to customers with which the Corporation maintains fuel surcharge programs, such as those associated with non-revenue generating miles or time when the Corporation’s engines are idling. Moreover, the terms of each customer’s fuel surcharge program vary from one division to another, and the recoverability for fuel price increases varies as well. In addition, because the Corporation’s fuel surcharge recovery lags behind changes in fuel prices, the Corporation’s fuel surcharge recovery may not capture the increased costs the Corporation pays for fuel, especially when prices are rising. This could lead to fluctuations in the Corporation’s levels of reimbursement, such as has occurred in the past. There can be no assurance that such fuel surcharges can be maintained indefinitely or that they will be fully effective.

The Corporation self-insures for a significant portion of its claims exposure, which could increase the volatility of, and decrease the amount of, its earnings.

The Corporation’s operations are subject to risks inherent in the transportation sector, including personal injury, property damage, workers’ compensation and employment and other issues. The Corporation’s future insurance and claims expenses may exceed historical levels, which could reduce the Corporation’s earnings. The Corporation subscribes for insurance in amounts it considers appropriate in the circumstances and having regard to industry norms. Like many in the industry, the Corporation self-insures a significant portion of the claims exposure related to cargo loss, bodily injury, workers’ compensation and property damages. Due to the Corporation’s significant self-insured amounts, the Corporation has exposure to fluctuations in the number or severity of claims and the risk of being required to accrue or pay additional amounts if the Corporation’s estimates are revised or claims ultimately prove to be in excess of the amounts originally assessed. Further, the Corporation’s self-insured retention levels could change and result in more volatility than in recent years.

The Corporation holds a fully-fronted policy of CAD $10 million limit per occurrence for automobile bodily injury, property damage and commercial general liability for its Canadian Insurance Program, subject to certain exceptions. The Corporation retains a deductible of US $2.25 million for certain U.S. subsidiaries on their primary US $5 million limit policies for automobile bodily injury and property damage, also subject to certain exceptions, and a 50% quota share deductible for the US $5 million limit in excess of US $5 million. The Corporation retains a deductible of US $1 million on its primary US $5 million limit policy for certain U.S. subsidiaries for commercial general liability. The Corporation retains deductibles of up to US $1 million per occurrence for workers’ compensation claims. The Corporation’s liability coverage has a total limit of US $100 million per occurrence for both its Canadian and U.S. divisions.

Although the Corporation believes its aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that the amount of one or more claims could exceed the Corporation’s aggregate coverage limits or that the Corporation will chose not to obtain insurance in respect of such claims. If any claim were to exceed the Corporation’s coverage, the Corporation would bear the excess, in addition to the Corporation’s other self-insured amounts. The Corporation’s results of operations and financial condition could be materially and adversely affected if (i) cost per claim or the number of claims significantly exceeds the Corporation’s coverage limits or retention amounts; (ii) the Corporation experiences a claim in excess of its coverage limits; (iii) the Corporation’s insurance carriers fail to pay on the Corporation’s insurance claims; (iv) the Corporation experiences a significant increase in premiums; or (v) the Corporation experiences a claim for which coverage is not provided, either because the Corporation chose not to obtain insurance as a result of high premiums or because the claim is not covered by insurance which the Corporation has in place.

The Corporation accrues the costs of the uninsured portion of pending claims based on estimates derived from the Corporation’s evaluation of the nature and severity of individual claims and an estimate of future claims development based upon historical claims development trends. Actual settlement of the Corporation’s retained claim liabilities could differ from its estimates due to a number of uncertainties, including evaluation of severity, legal costs and claims that have been incurred but not reported. Due to the Corporation’s high retained amounts, it has significant exposure to fluctuations in the number and severity of claims. If the Corporation were required to accrue or pay additional amounts because its estimates are revised or the claims ultimately prove to be more severe than originally assessed, its financial condition and results of operations may be materially adversely affected.

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Unionization efforts by the Corporation’s U.S. employees or changes in collective agreements with the Corporation’s Canadian employees could have a material adverse effect on the Corporation’s business, results of operations, financial condition and liquidity.

Most of the Corporation’s unionized employees are Canadian employees with a small number of unionized employees in the United States. Although the Corporation believes that its relations with its employees are satisfactory, no assurance can be given that the Corporation will be able to successfully extend or renegotiate the Corporation’s current collective agreements as they expire from time to time or that additional employees in the United States will not attempt to unionize. If the Corporation fails to extend or renegotiate the Corporation’s collective agreements, if disputes with the Corporation’s unions arise, or if the Corporation’s unionized or non-unionized workers engage in a strike or other work stoppage or interruption, the Corporation could experience a significant disruption of, or inefficiencies in, its operations or incur higher labour costs, which could have a material adverse effect on the Corporation’s business, results of operations, financial condition and liquidity.

At the date hereof, the collective agreements between the Corporation and the vast majority of its unionized employees have been renewed. The Corporation’s collective agreements have a variety of expiration dates, the last of which is in September 2024. In a small number of cases, the expiration date of the collective agreement has passed; in such cases, the Corporation is generally in the process of renegotiating the agreement. The Corporation cannot predict the effect which any new collective agreements or the failure to enter into such agreements upon the expiry of the current agreements may have on its operations.

Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a material adverse effect on the Corporation’s profitability and the ability to maintain or grow the Corporation’s fleet.

Like many in the transportation sector, the Corporation experiences substantial difficulty in attracting and retaining sufficient numbers of qualified drivers. The trucking industry periodically experiences a shortage of qualified drivers. The Corporation believes the shortage of qualified drivers and intense competition for drivers from other transportation companies will create difficulties in maintaining or increasing the number of drivers and may negatively impact the Corporation’s ability to engage a sufficient number of drivers, and the Corporation’s inability to do so may negatively impact its operations. Further, the compensation the Corporation offers its drivers and independent contractor expenses are subject to market conditions, and the Corporation may find it necessary to increase driver and independent contractor compensation in future periods.

In addition, the Corporation and many other trucking companies suffer from a high turnover rate of drivers in the U.S. TL market. This high turnover rate requires the Corporation to continually recruit a substantial number of new drivers in order to operate existing revenue equipment. Driver shortages are exacerbated during periods of economic expansion, in which alternative employment opportunities, including in the construction and manufacturing industries, which may offer better compensation and/or more time at home, are more plentiful and freight demand increases, or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment, or the scarcity or growth of loans for students who seek financial aid for driving school. The lack of adequate tractor parking along some U.S. highways and congestion caused by inadequate highway funding may make it more difficult for drivers to comply with hours of service regulations and cause added stress for drivers, further reducing the pool of eligible drivers. The Corporation’s use of team-driven tractors for expedited shipments requires two drivers per tractor, which further increases the number of drivers the Corporation must recruit and retain in comparison to operations that require one driver per tractor. The Corporation also employs driver hiring standards, which could further reduce the pool of available drivers from which the Corporation would hire. If the Corporation is unable to continue to attract and retain a sufficient number of drivers, the Corporation could be forced to, among other things, adjust the Corporation’s compensation packages, increase the number of the Corporation’s tractors without drivers or operate with fewer trucks and face difficulty meeting shipper demands, any of which could adversely affect the Corporation’s growth and profitability.

The Corporation’s engagement of independent contractors exposes the Corporation to different risks than it faces with tractors driven by the Corporation’s employees.

The Corporation’s contracts with U.S. independent contractors are governed by U.S. federal leasing regulations, which impose specific requirements on the Corporation and the independent contractors. If more stringent state or U.S.

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federal leasing regulations are adopted, U.S. independent contractors could be deterred from becoming independent contractor drivers, which could materially adversely affect the Corporation’s goal of maintaining its current fleet levels of independent contractors.

The Corporation provides financing to certain qualified Canadian independent contractors and financial guarantees to a small number of U.S. independent contractors. If the Corporation were unable to provide such financing or guarantees in the future, due to liquidity constraints or other restrictions, it may experience a decrease in the number of independent contractors it is able to engage. Further, if independent contractors the Corporation engages default under or otherwise terminate the financing arrangements and the Corporation is unable to find replacement independent contractors or seat the tractors with its drivers, the Corporation may incur losses on amounts owed to it with respect to such tractors.

Pursuant to the Corporation’s fuel surcharge program with independent contractors, the Corporation pays independent contractors with which it contracts a fuel surcharge that increases with the increase in fuel prices. A significant increase or rapid fluctuation in fuel prices could cause the Corporation’s costs under this program to be higher than the revenue the Corporation receives under its customer fuel surcharge programs.

U.S. tax and other regulatory authorities, as well as U.S. independent contractors themselves, have increasingly asserted that U.S. independent contractor drivers in the trucking industry are employees rather than independent contractors, and the Corporation’s classification of independent contractors has been the subject of audits by such authorities from time to time. U.S. federal and state legislation has been introduced in the past that would make it easier for tax and other authorities to reclassify independent contractors as employees, including legislation to increase the recordkeeping requirements for those that engage independent contractor drivers and to increase the penalties for companies who misclassify their employees and are found to have violated employees’ overtime and/or wage requirements. Additionally, U.S. federal legislators have sought to abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice, to extend the U.S. Fair Labor Standards Act to independent contractors and to impose notice requirements based on employment or independent contractor status and fines for failure to comply. Some U.S. states have put initiatives in place to increase their revenue from items such as unemployment, workers’ compensation and income taxes, and a reclassification of independent contractors as employees would help states with this initiative. Further, courts in certain U.S. states have recently issued decisions that could result in a greater likelihood that independent contractors would be judicially classified as employees in such states.

In September 2019, California enacted a new law, A.B. 5 (“AB5”), that made it more difficult for workers to be classified as independent contractors (as opposed to employees). AB5 provides that the three-pronged “ABC Test” must be used to determine worker classifications in wage order claims. Under the ABC Test, a worker is presumed to be an employee and the burden to demonstrate their independent contractor status is on the hiring company through satisfying all three of the following criteria: (a) the worker is free from control and direction in the performance of services; (b) the worker is performing work outside the usual course of the business of the hiring company; and (c) the worker is customarily engaged in an independently established trade, occupation, or business. How AB5 will be enforced is still to be determined. While it was set to enter into effect in January 2020, a federal judge in California issued a preliminary injunction barring the enforcement of AB5 on the trucking industry while the California Trucking Association (“CTA”) moves forward with its suit seeking to invalidate AB5. While this preliminary injunction provides temporary relief to the enforcement of AB5, it remains unclear how long such relief will last, whether the CTA will ultimately be successful in invalidating the law, and whether other U.S. States will enact laws similar to AB5.

U.S. class action lawsuits and other lawsuits have been filed against certain members of the Corporation’s industry seeking to reclassify independent contractors as employees for a variety of purposes, including workers’ compensation and health care coverage. In addition, companies that use lease purchase independent contractor programs, such as the Corporation, have been more susceptible to reclassification lawsuits, and several recent decisions have been made in favour of those seeking to classify independent contractor truck drivers as employees. U.S. taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If the independent contractors with whom the Corporation contracts are determined to be employees, the Corporation would incur additional exposure under U.S. federal and state tax, workers’ compensation, unemployment benefits, labour, employment and tort laws, including for prior periods, as well as potential liability for employee

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benefits and tax withholdings, and the Corporation’s business, financial condition and results of operations could be materially adversely affected. The Corporation has settled certain class action cases in Massachusetts and California in the past with independent contractors who alleged they were misclassified.

The Corporation may not make acquisitions in the future, which could impede growth, or if the Corporation does make acquisitions in the future, it may not be successful in integrating any acquired business, either of which could have a material adverse effect on the Corporation’s business.

Historically, acquisitions have been a part of the Corporation’s growth strategy. The Corporation may not be able to successfully integrate acquisitions into the Corporation’s business, or may incur significant unexpected costs in doing so. Further, the process of integrating acquired businesses may be disruptive to the Corporation’s existing business and may cause an interruption or reduction of the Corporation’s business as a result of the following factors, among others:

Anticipated cost savings, synergies, revenue enhancements or other benefits from any acquisitions that the Corporation undertakes may not materialize in the expected timeframe or at all. The Corporation’s estimated cost savings, synergies, revenue enhancements and other benefits from acquisitions are subject to a number of assumptions about the timing, execution and costs associated with realizing such synergies. Such assumptions are inherently uncertain and are subject to a wide variety of significant business, economic and competition risks. There can be no assurance that such assumptions will turn out to be correct and, as a result, the amount of cost savings, synergies, revenue enhancements and other benefits the Corporation actually realizes and/or the timing of such realization may differ significantly (and may be significantly lower) from the ones the Corporation estimated, and the Corporation may incur significant costs in reaching the estimated cost savings, synergies, revenue enhancements or other benefits. Further, management of acquired operations through a decentralized approach may create inefficiencies or inconsistencies.

Many of the Corporation’s recent acquisitions have involved the purchase of stock of existing companies. These acquisitions, as well as acquisitions of substantially all of the assets of a company, may expose the Corporation to liability for actions taken by an acquired business and its management before the Corporation’s acquisition. The due diligence the Corporation conducts in connection with an acquisition and any contractual guarantees or indemnities that the Corporation receives from the sellers of acquired companies may not be sufficient to protect the Corporation from, or compensate the Corporation for, actual liabilities. The representations made by the sellers expire at varying periods after the closing. A material liability associated with an acquisition, especially where there is no right to indemnification, could adversely affect the Corporation’s results of operations, financial condition and liquidity.

The Corporation continues to review acquisition and investment opportunities, some of which may be significant, in order to acquire companies and assets that meet the Corporation’s investment criteria. Depending on the number of acquisitions and investments and funding requirements, the Corporation may need to raise substantial additional capital and increase the Corporation’s indebtedness. Instability or disruptions in the capital markets, including credit markets, or the deterioration of the Corporation’s financial condition due to internal or external factors, could restrict or prohibit access to the capital markets and could also increase the Corporation’s cost of capital. To the extent the Corporation raises additional capital through the sale of equity, equity-linked or convertible debt securities, the issuance of such securities could result in dilution to the Corporation’s existing shareholders. If the Corporation raises additional funds

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through the issuance of debt securities, the terms of such debt could impose additional restrictions and costs on the Corporation’s operations. Additional capital, if required, may not be available on acceptable terms or at all. If the Corporation is unable to obtain additional capital at a reasonable cost, the Corporation may be required to forego potential acquisitions, which could impair the execution of the Corporation’s growth strategy. In addition, the Corporation routinely evaluates its operations and considers opportunities to divest certain of its assets.

In addition, the Corporation faces competition for acquisition opportunities. This external competition may hinder the Corporation’s ability to identify and/or consummate future acquisitions successfully. There is also a risk of impairment of acquired goodwill and intangible assets. This risk of impairment to goodwill and intangible assets exists because the assumptions used in the initial valuation, such as interest rates or forecasted cash flows, may change when testing for impairment is required.

There is no assurance that the Corporation will be successful in identifying, negotiating, consummating or integrating any future acquisitions. If the Corporation does not make any future acquisitions, or divests certain of its operations, the Corporation’s growth rate could be materially and adversely affected. Any future acquisitions the Corporation does undertake could involve the dilutive issuance of equity securities or the incurring of additional indebtedness.

The Corporation may not grow substantially in the future and it may not be successful in sustaining or improving the Corporation’s profitability.

There is no assurance that in the future, the Corporation’s business will grow substantially or without volatility, nor is there any assurance that the Corporation will be able to effectively adapt its management, administrative and operational systems to respond to any future growth. Furthermore, there is no assurance that the Corporation’s operating margins will not be adversely affected by future changes in and expansion of its business or by changes in economic conditions or that it will be able to sustain or improve its profitability in the future.

Compliance with various environmental laws and regulations to which the Corporation’s operations are subject may increase the Corporation’s costs of operations, and non-compliance with such laws and regulations could result in substantial fines or penalties.

The Corporation uses storage tanks at certain of its Canadian and U.S. transportation terminals. Canadian and U.S. laws and regulations generally impose potential liability on the present and former owners or occupants or custodians of properties on which contamination has occurred, as well as on parties who arranged for the disposal of waste at such properties. Although the Corporation is not aware of any contamination which, if remediation or clean-up were required, would have a material adverse effect on it, certain of the Corporation’s current or former facilities have been in operation for many years and over such time, the Corporation or the prior owners, operators or custodians of the properties may have generated and disposed of wastes which are or may be considered hazardous. Liability under certain of these laws and regulations may be imposed on a joint and several basis and without regard to whether the Corporation knew of, or was responsible for, the presence or disposal of these materials or whether the activities giving rise to the contamination was legal when it occurred. In addition, the presence of those substances, or the failure to properly dispose of or remove those substances, may adversely affect the Corporation’s ability to sell or rent that property. If the Corporation incurs liability under these laws and regulations and if it cannot identify other parties which it can compel to contribute to its expenses and who are financially able to do so, it could have a material adverse effect on the Corporation’s financial condition and results of operations. There can be no assurance that the Corporation will not be required at some future date to incur significant costs or liabilities pursuant to environmental laws, or that the Corporation’s operations, business or assets will not be material affected by current or future environmental laws.

The Corporation’s transportation operations and its properties are subject to extensive and frequently-changing federal, provincial, state, municipal and local environmental laws, regulations and requirements in Canada, the United States and Mexico relating to, among other things, air emissions, the management of contaminants, including hazardous substances and other materials (including the generation, handling, storage, transportation and disposal thereof), discharges and the remediation of environmental impacts (such as the contamination of soil and water, including ground water). A risk of environmental liabilities is inherent in transportation operations, historic activities associated with such operations and the ownership, management and control of real estate.

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Environmental laws may authorize, among other things, federal, provincial, state and local environmental regulatory agencies to issue orders, bring administrative or judicial actions for violations of environmental laws and regulations or to revoke or deny the renewal of a permit. Potential penalties for such violations may include, among other things, civil and criminal monetary penalties, imprisonment, permit suspension or revocation and injunctive relief. These agencies may also, among other things, revoke or deny renewal of the Corporation’s operating permits, franchises or licenses for violations or alleged violations of environmental laws or regulations and impose environmental assessment, removal of contamination, follow-up or control procedures.

The Corporation may have liability for environmental contamination associated with its current or formerly-owned or leased facilities as well as third-party facilities or its operations.

The Corporation could be subject to orders and other legal actions and procedures brought by governmental or private parties in connection with environmental contamination, emissions or discharges. If the Corporation is involved in a spill or other accident involving hazardous substances, if there are releases of hazardous substances the Corporation transports, if soil or groundwater contamination is found at the Corporation’s current or former facilities or results from the Corporation’s operations, or if the Corporation is found to be in violation of applicable laws or regulations, the Corporation could be subject to cleanup costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on the Corporation’s business and operating results.

Management and key personnel turnover or failure to attract and retain qualified management and other key personnel could have a negative effect on the Corporation.

The future success of the Corporation will be based in large part on the quality of the Corporation’s management and key personnel. The Corporation’s management and key personal possess valuable knowledge about the transportation and logistics industry and their knowledge of and relationships with the Corporation’s key customers and vendors would be difficult to replace. The loss of key personnel could have a negative effect on the Corporation. There can be no assurance that the Corporation will be able to retain its current key personnel or, in the event of their departure, to develop or attract new personnel of equal quality.

Certain portions of the Corporation’s business are dependent upon the services of third-party capacity providers, and service instability from these providers could increase the Corporation’s operating costs and reduce its ability to offer certain services.

Certain portions of the Corporation’s business are dependent upon the services of third-party capacity providers, including other transportation companies. For that portion of the Corporation’s business, the Corporation does not own or control the transportation assets that deliver the customers’ freight, and the Corporation does not employ the people directly involved in delivering the freight. This reliance could cause delays in reporting certain events, including recognizing revenue and claims. These third-party providers seek other freight opportunities and may require increased compensation in times of improved freight demand or tight trucking capacity. The Corporation’s inability to secure the services of these third parties could significantly limit the Corporation’s ability to serve its customers on competitive terms. Additionally, if the Corporation is unable to secure sufficient equipment or other transportation services to meet the Corporation’s commitments to its customers or provide the Corporation’s services on competitive terms, the Corporation’s operating results could be materially and adversely affected. The Corporation’s ability to secure sufficient equipment or other transportation services is affected by many risks beyond the Corporation’s control, including equipment shortages in the transportation industry, particularly among contracted carriers, interruptions in service due to labour disputes, changes in regulations impacting transportation and changes in transportation rates.

The Corporation’s existing and future indebtedness could limit its flexibility in operating its business or adversely affect its business and its liquidity position.

The agreements governing the Corporation’s indebtedness, including the Credit Facility and the Term Loan, contain certain restrictions and other covenants relating to, among other things, funded debt, distributions, liens, investments, acquisitions and dispositions outside the ordinary course of business and affiliate transactions. If the Corporation fails to comply with any of its financing arrangement covenants, restrictions and requirements, the Corporation could be in default under the relevant agreement, which could cause cross-defaults under other financing

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arrangements. In the event of any such default, if the Corporation failed to obtain replacement financing or amendments to or waivers under the applicable financing arrangement, the Corporation may be unable to pay dividends to its shareholders, and its lenders could cease making further advances, declare the Corporation’s debt to be immediately due and payable, fail to renew letters of credit, impose significant restrictions and requirements on the Corporation’s operations, institute foreclosure procedures against their collateral, or impose significant fees and transaction costs. If debt acceleration occurs, economic conditions may make it difficult or expensive to refinance the accelerated debt or the Corporation may have to issue equity securities, which would dilute share ownership. Even if new financing is made available to the Corporation, credit may not be available to the Corporation on acceptable terms. A default under the Corporation’s financing arrangements could result in a materially adverse effect on its liquidity, financial condition and results of operations. As at the date hereof, the Corporation is in compliance with all of its debt covenants and obligations.

The Corporation has significant ongoing capital requirements that could affect the Corporation’s profitability if it is unable to generate sufficient cash from operations and/or obtain financing on favourable terms.

The Corporation has significant ongoing capital requirements that could affect the Corporation’s profitability if the Corporation is unable to generate sufficient cash from operations and/or obtain financing on favourable terms. The trucking industry and the Corporation’s trucking operations are capital intensive, and require significant capital expenditures annually. The amount and timing of such capital expenditures depend on various factors, including anticipated freight demand and the price and availability of assets. If anticipated demand differs materially from actual usage, the Corporation’s trucking operations may have too many or too few assets. Moreover, resource requirements vary based on customer demand, which may be subject to seasonal or general economic conditions. During periods of decreased customer demand, the Corporation’s asset utilization may suffer, and it may be forced to sell equipment on the open market or turn in equipment under certain equipment leases in order to right size its fleet. This could cause the Corporation to incur losses on such sales or require payments in connection with such turn ins, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on the Corporation’s profitability.

The Corporation’s indebtedness may increase from time to time in the future for various reasons, including fluctuations in results of operations, capital expenditures and potential acquisitions. The agreements governing the Corporation’s indebtedness, including the Credit Facility and the Term Loan, mature on various dates, ranging from 2020 to 2026. There can be no assurance that such agreements governing the Corporation’s indebtedness will be renewed or refinanced, or if renewed or refinanced, that the renewal or refinancing will occur on equally favourable terms to the Corporation. The Corporation’s ability to pay dividends to shareholders and ability to purchase new revenue equipment may be adversely affected if the Corporation is not able to renew the Credit Facility or the Term Loan or arrange refinancing of any indebtedness, or if such renewal or refinancing, as the case may be, occurs on terms materially less favourable to the Corporation than at present. If the Corporation is unable to generate sufficient cash flow from operations and obtain financing on terms favourable to the Corporation in the future, the Corporation may have to limit the Corporation’s fleet size, enter into less favourable financing arrangements or operate the Corporation’s revenue equipment for longer periods, any of which may have a material adverse effect on the Corporation’s operations.

Increased prices for new revenue equipment, design changes of new engines, decreased availability of new revenue equipment and future use of autonomous tractors could have a material adverse effect on the Corporation’s business, financial condition, operations, and profitability.

The Corporation is subject to risk with respect to higher prices for new equipment for its trucking operations. The Corporation has experienced an increase in prices for new tractors in recent years, and the resale value of the tractors has not increased to the same extent. Prices have increased and may continue to increase, due to, among other reasons, (i) increases in commodity prices; (ii) U.S. government regulations applicable to newly-manufactured tractors, trailers and diesel engines; and (iii) the pricing discretion of equipment manufacturers. Increased regulation has increased the cost of the Corporation’s new tractors and could impair equipment productivity, in some cases, resulting in lower fuel mileage, and increasing the Corporation’s operating expenses. Further regulations with stricter emissions and efficiency requirements have been proposed that would further increase the Corporation’s costs and impair equipment productivity. These adverse effects, combined with the uncertainty as to the reliability of the vehicles equipped with the newly designed diesel engines and the residual values realized from the disposition of these vehicles could increase

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the Corporation’s costs or otherwise adversely affect the Corporation’s business or operations as the regulations become effective. Over the past several years, some manufacturers have significantly increased new equipment prices, in part to meet new engine design and operations requirements. Furthermore, future use of autonomous tractors could increase the price of new tractors and decrease the value of used non-autonomous tractors. The Corporation’s business could be harmed if it is unable to continue to obtain an adequate supply of new tractors and trailers for these or other reasons. As a result, the Corporation expects to continue to pay increased prices for equipment and incur additional expenses for the foreseeable future.

Tractor and trailer vendors may reduce their manufacturing output in response to lower demand for their products in economic downturns or shortages of component parts. A decrease in vendor output may have a materially adverse effect on the Corporation’s ability to purchase a quantity of new revenue equipment that is sufficient to sustain its desired growth rate and to maintain a late model fleet. Moreover, an inability to obtain an adequate supply of new tractors or trailers could have a material adverse effect on the Corporation’s business, financial condition, and results of operation.

The Corporation has certain revenue equipment leases and financing arrangements with balloon payments at the end of the lease term equal to the residual value the Corporation is contracted to receive from certain equipment manufacturers upon sale or trade back to the manufacturers. If the Corporation does not purchase new equipment that triggers the trade-back obligation, or the equipment manufacturers do not pay the contracted value at the end of the lease term, the Corporation could be exposed to losses equal to the excess of the balloon payment owed to the lease or finance company over the proceeds from selling the equipment on the open market.

The Corporation has trade-in and repurchase commitments that specify, among other things, what its primary equipment vendors will pay it for disposal of a certain portion of the Corporation’s revenue equipment. The prices the Corporation expects to receive under these arrangements may be higher than the prices it would receive in the open market. The Corporation may suffer a financial loss upon disposition of its equipment if these vendors refuse or are unable to meet their financial obligations under these agreements, it does not enter into definitive agreements that reflect favorable equipment replacement or trade-in terms, it fails to or is unable to enter into similar arrangements in the future, or it does not purchase the number of new replacement units from the vendors required for such trade-ins.

Used equipment prices are subject to substantial fluctuations based on freight demand, supply of used trucks, availability of financing, presence of buyers for export and commodity prices for scrap metal. These and any impacts of a depressed market for used equipment could require the Corporation to dispose of its revenue equipment below the carrying value. This leads to losses on disposal or impairments of revenue equipment, when not otherwise protected by residual value arrangements. Deteriorations of resale prices or trades at depressed values could cause losses on disposal or impairment charges in future periods.

Difficulty in obtaining goods and services from the Corporation’s vendors and suppliers could adversely affect its business.

The Corporation is dependent upon its vendors and suppliers for certain products and materials. The Corporation believes that it has positive vendor and supplier relationships and it is generally able to obtain acceptable pricing and other terms from such parties. If the Corporation fails to maintain positive relationships with its vendors and suppliers, or if its vendors and suppliers are unable to provide the products and materials it needs or undergo financial hardship, the Corporation could experience difficulty in obtaining needed goods and services because of production interruptions, limited material availability or other reasons. As a consequence, the Corporation’s business and operations could be adversely affected.

The Corporation’s customers may reduce or eliminate their use of the Corporation’s services and the Corporation may be negatively impacted by its customers’ financial difficulties.

The Corporation provides services to clients primarily in Canada, the United States and Mexico. The concentration of credit risk to which the Corporation is exposed is limited due to the significant number of customers that make up its client base and their distribution across different geographic areas. Furthermore, no client accounted for more than 5% of the Corporation’s total accounts receivable for the year ended December 31, 2019. Generally, the Corporation does not have long-term contracts with its major customers. Accordingly, in response to economic

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conditions, supply and demand factors in the industry, the Corporation’s performance, the Corporation’s customers’ internal initiatives or other factors, the Corporation’s customers may reduce or eliminate their use of the Corporation’s services, or may threaten to do so in order to gain pricing and other concessions from the Corporation.

Economic conditions and capital markets may adversely affect the Corporation’s customers and their ability to remain solvent. The customers’ financial difficulties can negatively impact the Corporation’s results of operations and financial condition, especially if those customers were to delay or default in payment to the Corporation. For certain customers, the Corporation has entered into multi-year contracts, and the rates the Corporation charges may not remain advantageous.

In the future, the Corporation may need additional financing that may not be available or, if it is available, may result in a reduction in the percentage ownership by the Corporation’s then-existing shareholders.

If the economic and/or the credit markets weaken, or the Corporation is unable to enter into acceptable financing arrangements to acquire revenue equipment, make investments and fund working capital on terms favourable to it, the Corporation’s business, financial results and results of operations could be materially and adversely affected. The Corporation may need to incur additional indebtedness, reduce dividends or sell additional shares in order to accommodate these items. A decline in the credit or equity markets and any increase in volatility could make it more difficult for the Corporation to obtain financing and may lead to an adverse impact on the Corporation’s profitability and operations.

The Corporation is dependent on systems, networks and other information technology (and the data contained therein) and a failure in any of the foregoing, including those caused by cybersecurity breaches, could cause a significant disruption in the Corporation’s business.

The Corporation depends heavily on the proper functioning, availability and security of the Corporation’s information and communication systems, including financial reporting and operating systems, in operating the Corporation’s business. The Corporation’s operating system is critical to understanding customer demands, accepting and planning loads, dispatching equipment and drivers and billing and collecting for the Corporation’s services. The Corporation’s financial reporting system is critical to producing accurate and timely financial statements and analyzing business information to help the Corporation manage its business effectively. The Corporation receives and transmits confidential data with and among its customers, drivers, vendors, employees and service providers in the normal course of business.

The Corporation’s operations and those of its technology and communications service providers are vulnerable to interruption by natural and man-made disasters and other events beyond the Corporation’s control, including cybersecurity breaches and threats, such as hackers, malware and viruses, fire, earthquake, power loss, telecommunications failure, terrorist attacks and Internet failures. The Corporation’s systems are also vulnerable to unauthorized access and viewing, misappropriation, altering or deleting of information, including customer, driver, vendor, employee and service provider information and its proprietary business information. If any of the Corporation’s critical information systems fail, are breached or become otherwise unavailable, the Corporation’s ability to manage its fleet efficiently, to respond to customers’ requests effectively, to maintain billing and other records reliably, to maintain the confidentiality of the Corporation’s data and to bill for services and prepare financial statements accurately or in a timely manner would be challenged. Any significant system failure, upgrade complication, cybersecurity breach or other system disruption could interrupt or delay the Corporation’s operations, damage its reputation, cause the Corporation to lose customers, cause the Corporation to incur costs to repair its systems, pay fines or in respect of litigation or impact the Corporation’s ability to manage its operations and report its financial performance, any of which could have a material adverse effect on the Corporation’s business.

The Corporation faces litigation risks that could have a material adverse effect on the operation of its business.

The Corporation’s business is subject to the risk of litigation by employees, customers, vendors, government agencies, shareholders and other parties. The outcome of litigation is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by the Corporation’s insurance, and there can be no assurance that the Corporation’s coverage limits will be adequate to cover all amounts in dispute. For example, during

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the year ended December 31, 2019, the Corporation recognized a net loss on an accident claim of CAD $14.2 million (CAD $16.6 million net of CAD $2.4 million of tax recovery). In the United States, where the Corporation has growing operations, many trucking companies have been subject to class-action lawsuits alleging violations of various federal and state wage laws regarding, among other things, employee classification, employee meal breaks, rest periods, overtime eligibility, and failure to pay for all hours worked. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. The Corporation may at some future date be subject to such a class-action lawsuit. In addition, the Corporation may be subject, and has been subject in the past, to litigation resulting from trucking accidents. The number and severity of litigation claims may be worsened by distracted driving by both truck drivers and other motorists. To the extent the Corporation experiences claims that are uninsured, exceed the Corporation’s coverage limits, involve significant aggregate use of the Corporation’s self-insured retention amounts or cause increases in future funded premiums, the resulting expenses could have a material adverse effect on the Corporation’s business, results of operations, financial condition and cash flows.

If the Corporation fails to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results or prevent fraud. As a result, shareholders could lose confidence in the Corporation’s financial and other public reporting, which would harm its business and the trading price of the Common Shares.

Effective internal controls over financial reporting are necessary for the Corporation to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause the Corporation to fail to meet its reporting obligations. In addition and when required, any testing by the Corporation conducted in connection with section 404 of the U.S. Sarbanes-Oxley Act, or the subsequent testing by the Corporation’s independent registered public accounting firm, may reveal deficiencies in the Corporation’s internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to the Corporation’s consolidated financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in the Corporation’s reported financial information, which could have a negative effect on the trading price of the Common Shares.

The Corporation has completed, and may in the future complete, material transactions, and cannot predict market reaction to the announcement of any potential material transactions.

The Corporation has acquired numerous companies pursuant to its acquisition strategy and, in addition, has sold business units, including the sale in February 2016 of its then-Waste Management segment for CAD $800 million. The Corporation buys and sells business units in the normal course of its business. Accordingly, at any given time, the Corporation may consider, or be in the process of negotiating, a number of potential acquisitions and dispositions, some of which may be material in size. In connection with such potential transactions, the Corporation regularly enters into non-disclosure or confidentiality agreements, indicative term sheets, non-binding letters of intent and other similar agreements with potential sellers and buyers, and conducts extensive due diligence as applicable. These potential transactions may relate to some or all of the Corporation’s four reportable segments, that is, TL, Logistics, LTL, and Package and Courier. The Corporation does not in every case proceed to the closing of a transaction. The Corporation’s active acquisition and disposition strategy requires a significant amount of management time and resources. Although the Corporation complies at all times with its disclosure obligations under applicable securities laws, the announcement of any material transaction by the Corporation (or rumours thereof, even if unfounded) could result in volatility in the market price and trading volume of the Common Shares. Further, the Corporation cannot predict the reaction of the market, or of the Corporation’s stakeholders, customers or competitors, to the announcement of any such material transaction or to rumours thereof.

Risks Related to the Corporation’s Common Shares and this Offering

The Common Shares of the Corporation do not currently trade on a stock exchange in the United States and the Corporation does not know whether a market for the Common Shares will develop to provide you with adequate liquidity. The market price of the Common Shares may be volatile after this Offering, and you could lose a significant part of your investment.

The Corporation’s Common Shares are currently listed only on the TSX and trade in the United States on the over-the-counter OTCQX marketplace under the trading symbol “TFIFF”. Prior to this Offering, the Common Shares

have not been listed on a stock exchange in the United States. If an active trading market does not develop in the

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United States, you may have difficulty selling any of the Common Shares that you buy. The Corporation cannot predict the extent to which investor interest in the Corporation will lead to the development of an active trading market on the NYSE or otherwise, or how liquid that market might become. The price of the Common Shares in this Offering may not be indicative of prices that will prevail in the United States trading market following the Offering. The market price of the Common Shares on the TSX has fluctuated in the past and the Corporation expects it to fluctuate in the future, and it may decline. For example, from January 1, 2019 to February 7, 2020, the Corporation’s share price on the TSX has ranged from CAD $33.36 to CAD $46.34. Consequently, you may not be able to sell the Common Shares at prices equal to or greater than the price paid by you in this Offering. In addition to the risks described above, the market price of the Common Shares may be influenced by many factors, some of which are beyond the Corporation’s control, including:

In addition, stock markets in general have experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of the Common Shares, regardless of the Corporation’s operating performance. Listing of the Common Shares on the NYSE in addition to the TSX may increase share price volatility on the TSX and also result in volatility of the trading price on the NYSE because trading will be in the two markets, which may result in less liquidity on both exchanges. In addition, different liquidity levels, volumes of trading, currencies and market conditions on the two exchanges may result in different prevailing trading prices. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has sometimes been instituted against these companies. This litigation, if instituted against the Corporation, could adversely affect the financial condition or results of operations of the Corporation.

Sales of substantial amounts of the Common Shares in the public market, or the perception that these sales may occur, could cause the market price of the Common Shares to decline.

Sales of substantial amounts of the Common Shares in the public market, or the perception that these sales may occur, could cause the market price of the Common Shares to decline. This could also impair the Corporation’s ability to raise additional capital through the sale of its equity securities. Under the Corporation’s Articles of Incorporation, as amended (the “Articles”), the Corporation is authorized to issue an unlimited number of Common Shares. Pursuant to the Underwriting Agreement, the Corporation has agreed that until the date that is 90 days following the Closing Date, it will not, without the consent of Morgan Stanley & Co. LLC, subject to certain exceptions, issue, offer, pledge, sell, grant any option to purchase, or otherwise dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Shares, or file any registration statement with the SEC or prospectus with any Canadian securities regulatory authority relating to the offering of any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, during the 90 days following the Closing Date without the prior consent of Morgan Stanley & Co. LLC. The Corporation may issue additional Common Shares, preferred shares or securities convertible into Common Shares,

which may dilute existing shareholders, including purchasers of the Common Shares offered hereby. The Corporation may also issue preferred shares or debt securities that have priority over holders of Common Shares with respect to dividend rights or rights of

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payment in the event of the Corporation’s insolvency or winding-up. Shareholders will have no pre-emptive rights in connection with any such further issuances. The Board of Directors of the Corporation has the discretion to determine the price, designation, rights, privileges, restrictions and conditions attached to any series of preferred shares or any debt securities and the price and terms for any further issuances of Common Shares. The Corporation cannot predict the size of future issuances of its shares or any preferred shares or debt securities, or the effect, if any, that future sales and issuances of securities would have on the market price of its Common Shares.

The Corporation will have broad discretion in the use of proceeds.

The Corporation will have broad discretion concerning the use of the net proceeds of the Offering as well as the timing of any expenditures. As a result, a purchaser of Common Shares offered hereby will be relying on the judgment of the Corporation’s management with respect to the application of the net proceeds of the Offering. Management may use the net proceeds of the Offering in ways that an investor may not consider desirable. The results and the effectiveness of the application of the net proceeds are uncertain. If the net proceeds are not applied effectively, the Corporation’s financial performance and financial condition may be adversely affected and the trading price of the Common Shares could be adversely affected.

TFI International Inc. is a holding company.

TFI International Inc. is a holding company and a substantial portion of its assets consists in the shares of its direct and indirect subsidiaries. As a result, TFI International Inc. is subject to the risks attributable to its subsidiaries. As a holding company, TFI International Inc. conducts substantially all of its business through its subsidiaries, which generate substantially all of its revenues. Consequently, TFI International Inc.’s cash flows and ability to complete current or desirable future enhancement opportunities are dependent on the earnings of its subsidiaries and the distribution of those earnings to TFI International Inc. The ability of these entities to pay dividends and other distributions will depend on their operating results and will be subject to applicable laws and regulations which require that solvency and capital standards be maintained by such companies and contractual restrictions contained in the instruments governing their debt, including the Credit Facility and the Term Loan. In the event of a bankruptcy, liquidation or reorganization of any of its subsidiaries, holders of indebtedness and trade creditors of those subsidiaries will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to TFI International Inc.

The Corporation will incur increased costs as a result of being a public company in the United States, and its management will be required to devote substantial time to United States public company compliance programs.

As a public company in the United States, the Corporation will incur additional legal, accounting, reporting and other expenses that it did not incur as a public company in Canada. The additional demands associated with being a U.S. public company may disrupt regular operations of the Corporation’s business by diverting the attention of some of its senior management team away from revenue-producing activities to additional management and administrative oversight, adversely affecting the Corporation’s ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing the Corporation’s business. Any of these effects could harm the Corporation’s business, financial condition and results of operations.

If the Corporation’s efforts to comply with new United States laws, regulations and standards differ from the activities intended by regulatory or governing bodies, such regulatory bodies or third parties may initiate legal proceedings against the Corporation and its business may be harmed. In the future, it may be more expensive for the Corporation to obtain director and officer liability insurance, and the Corporation may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for the Corporation to attract and retain qualified members of the Corporation’s Board of Directors and its committees.

The U.S. Sarbanes-Oxley Act requires that the Corporation maintain effective disclosure controls and procedures and internal control over financial reporting. Any failure to develop or maintain effective controls could adversely affect the results of periodic management evaluations. In the event that the Corporation is not able to demonstrate compliance with the Sarbanes-Oxley Act, that its internal control over financial reporting is perceived as inadequate, or that the Corporation is unable to produce timely or accurate financial statements, investors may lose confidence in the Corporation’s operating results and the price of the Common Shares could decline. In addition, if the Corporation is unable to continue to meet these requirements, the Corporation may not be able to become and/or remain listed on the NYSE.

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The Corporation’s independent registered public accounting firm will be required to attest to the effectiveness of the Corporation’s internal control over financial reporting only after a delay permitted for a newly-public company in the United States. Even if the Corporation’s management concludes that the Corporation’s internal controls over financial reporting are effective, its independent registered public accounting firm may issue a report that is qualified if it is not satisfied with the Corporation’s controls or the level at which the Corporation’s controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from the Corporation.

As a foreign private issuer, the Corporation is subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to the Corporation’s shareholders.

The Corporation is a “foreign private issuer” as such term is defined in Rule 405 under the U.S. Securities Act, and is permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare its disclosure documents filed under the U.S. Exchange Act in accordance with Canadian disclosure requirements. Under the U.S. Exchange Act, the Corporation is subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. As a result, the Corporation will not file the same reports that a U.S. domestic issuer would file with the SEC, although the Corporation will be required to file or furnish to the SEC the continuous disclosure documents that it is required to file in Canada under Canadian securities laws. In addition, the officers, directors, and principal shareholders of the Corporation are exempt from the reporting and “short swing” profit recovery provisions of Section 16 of the U.S. Exchange Act. Therefore, the Corporation’s shareholders may not know on as timely a basis when the officers, directors and principal shareholders of the Corporation purchase or sell shares, as the reporting deadlines under the corresponding Canadian insider reporting requirements are longer.

As a foreign private issuer, the Corporation is exempt from the rules and regulations under the U.S. Exchange Act related to the furnishing and content of proxy statements. The Corporation is also exempt from Regulation FD, which prohibits issuers from making selective disclosures of material non-public information. While the Corporation will comply with the corresponding requirements relating to proxy statements and disclosure of material non-public information under Canadian securities laws, these requirements differ from those under the U.S. Exchange Act and Regulation FD and shareholders should not expect to receive in every case the same information at the same time as such information is provided by U.S. domestic companies.

In addition, as a foreign private issuer, the Corporation has the option to follow certain Canadian corporate governance practices, except to the extent that such laws would be contrary to U.S. securities laws, and provided that the Corporation discloses the requirements it is not following and describes the Canadian practices it follows instead. The Corporation plans to rely on this exemption. As a result, the shareholders of the Corporation may not have the same protections afforded to shareholders of U.S. domestic companies that are subject to all U.S. corporate governance requirements.

The Corporation is governed by the corporate and securities laws of Canada which in some cases have a different effect on shareholders than the corporate laws of Delaware, U.S. and U.S. securities laws.

The Corporation is governed by the CBCA and other relevant laws, which may affect the rights of shareholders differently than those of a company governed by the laws of a U.S. jurisdiction, and may, together with the Corporation’s charter documents, have the effect of delaying, deferring or discouraging another party from acquiring control of the Corporation by means of a tender offer, a proxy contest or otherwise, or may affect the price an acquiring party would be willing to offer in such an instance. The material differences between the CBCA and Delaware General Corporation Law (“DGCL”) that may have the greatest such effect include, but are not limited to, the following: (i) for material corporate transactions (such as mergers and amalgamations, other extraordinary corporate transactions or amendments to our articles) the CBCA generally requires a two-thirds majority vote by shareholders, whereas DGCL generally requires only a majority vote; and (ii) under the CBCA, holders of 5% or more of our shares that carry the right to vote at a meeting of shareholders can requisition a special meeting of shareholders, whereas such right does not exist under the DGCL.

Provisions of Canadian law may delay, prevent or make undesirable an acquisition of all or a significant portion of the Corporation’s shares or assets.

A non-Canadian must file an application for review with the Minister responsible for the Investment Canada Act and obtain approval of the Minister prior to acquiring control of a “Canadian business” within the meaning of the

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Investment Canada Act, where prescribed financial thresholds are exceeded. Furthermore, limitations on the ability to acquire and hold the Common Shares may be imposed by the Competition Act (Canada). This law permits the Commissioner of Competition, or Commissioner, to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of a significant interest in the Corporation. Otherwise, there are no limitations either under the laws of Canada or in the Articles on the rights of non-Canadians to hold or vote the Common Shares. Any of these provisions may discourage a potential acquirer from proposing or completing a transaction that may have otherwise presented a premium to the Corporation’s shareholders.

Payment of dividends and share repurchases by the Corporation may vary.

The payment of future dividends and the amount thereof is uncertain and is at the sole discretion of the Board of Directors of the Corporation and is considered each quarter. The payment of dividends is dependent upon, among other things, operating cash flow generated by the Corporation, its financial requirements for operations, the execution of its growth strategy and the satisfaction of solvency tests imposed by the CBCA for the declaration and payment of dividends. Similarly, any future repurchase of shares by the Corporation is at the sole discretion of the Board of Directors and is dependent on the factors described above. Any future repurchase of shares by the Corporation is uncertain.

As the Corporation is a Canadian corporation and some of its directors and officers are resident in Canada, it may be difficult for United States shareholders to effect service on the Corporation or to realize on judgments obtained in the United States.

The Corporation is incorporated under the federal laws of Canada with its principal place of business in Canada, most of its directors and officers are residents of Canada, the experts named in this prospectus are residents of Canada, and many of the Corporation’s assets and the assets of such persons are located outside the United States. Consequently, it may be difficult for United States investors to effect service of process within the United States upon the Corporation or upon such persons who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under U.S. securities laws. A judgment of a U.S. court predicated solely upon such civil liabilities may be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. Investors should not assume that Canadian courts: (i) would enforce judgments of U.S. courts obtained in actions against the Corporation or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or blue sky laws of any state within the United States, or (ii) would enforce, in original actions, liabilities against the Corporation or such persons predicated upon the U.S. federal securities laws or any such state securities or blue sky laws. Similarly, some of the Corporation’s directors and officers are residents of countries other than Canada and all or a substantial portion of the assets of such persons are located outside Canada. As a result, it may be difficult for Canadian investors to initiate a lawsuit within Canada against these non-Canadian residents. In addition, it may not be possible for Canadian investors to collect from these non-Canadian residents judgments obtained in courts in Canada predicated on the civil liability provisions of securities legislation of certain of the provinces and territories of Canada. It may also be difficult for Canadian investors to succeed in a lawsuit in the United States based solely on violations of Canadian securities laws.

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