Automotive Finco Corp. — Proxy Solicitation & Information Statement 2021

Jan 5, 2021

LETTER TO SHAREHOLDERS

December 30, 2020

Dear shareholder,

It is my pleasure to invite you to join our board of directors (the “ Board ”) and the management (“ Managemen t”) of Automotive Finco Corp. (“ AFCC ” or the “ Corporation ”) for a special meeting of the holders (the “ Shareholders ”) of common shares of the Corporation (the “ Common Shares ”), which is scheduled to convene at 10:00 a.m. (Toronto time) on January 29, 2021 online at https://web.lumiagm.com/240846349 (case sensitive password: “autofinco2021”) (the “ Meeting ”).

At the Meeting, Shareholders will be asked to consider and, if thought advisable, to pass, with or without variation, a special resolution to approve a reduction of stated capital of the Common Shares to $32,245,925, or such other amount as shall be determined by the Board. The special resolution, if approved, will result in a decrease in the stated capital of the Common Shares. The Corporation intends to account for the reduction of stated capital as follows: (i) first, by eliminating the Corporation’s consolidated accounting deficit; and (ii) second, by adding any remaining balance to the Corporation’s contributed surplus account maintained in respect of the Common Shares on the Corporation’s financial statements. The reduction of stated capital will not result in a reduction in the number of Common Shares outstanding or any immediate Canadian income tax consequences to Shareholders. The Board believes that the reduction of stated capital will benefit the Corporation on a go-forward basis by providing more flexibility in managing the Corporation’s capital structure, including its ability to pay dividends and repurchase Common Shares. The reduction in stated capital will not result in any change to the total shareholders’ equity as presented in the Corporation’s financial statements and therefore will not affect the Corporation’s book value. The reduction of stated capital will also have no impact on the day-to-day operations of the Corporation and will not, on its own, alter the financial condition of the Corporation.

The Corporation is conducting the Meeting as an online only shareholders’ meeting. There will be no inperson component to the Meeting. Registered Shareholders (as defined in the attached management information circular) and duly appointed proxyholders can attend the Meeting online at https://web.lumiagm.com/240846349 where they can participate, vote, or submit questions during the Meeting’s live audiocast.

I thank you for your interest in AFCC and I urge you to exercise your right to vote.

Sincerely,

“Farhad Abasov” Chairman of the Board

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF AUTOMOTIVE FINCO CORP.

You are invited to a special meeting of shareholders (the “ Meeting ”) of Automotive Finco Corp. (“ AFCC ” or the “ Corporation ”). The Meeting will be held on January 29, 2021 at 10:00 a.m. (Toronto time) online at: https://web.lumiagm.com/240846349 (case sensitive password: “autofinco2021”).

The purposes of the Meeting are:

1. to consider and, if thought advisable, to pass, with or without variation, a special resolution (the “ Stated Capital Resolution ”), the full text of which is included as Schedule A to the management proxy circular of the Corporation dated December 30, 2020 (the “ Management Proxy Circular ”) that accompanies and forms part of this notice of special meeting of shareholders (the “ Notice of Meeting ”), to approve the reduction of the stated capital of the Corporation’s common shares to $32,245,925, or such other amount as shall be determined by the board of directors of the Corporation, as more particularly described in the Management Proxy Circular; and

2. to transact such other business as may properly be brought before the Meeting or any adjournment or postponement thereof.

Online Meeting

The Corporation is holding the Meeting as an online only shareholders’ meeting. There will be no in-person component to the Meeting. Registered Shareholders and duly appointed proxyholders can attend the Meeting online at https://web.lumiagm.com/240846349 where they can participate, vote, or submit questions during the Meeting’s live audiocast. As always, shareholders are encouraged to vote their common shares prior to the Meeting using one of the methods described in the Management Proxy Circular. Please date, sign and return the enclosed form of proxy. Proxies to be used at the Meeting must be deposited with Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1. In order to be valid, proxies must be submitted to Computershare Investor Services Inc. before 10:00 a.m. (Toronto time) on January 27, 2021 or, in the event that the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for any adjournment or postponement of the Meeting. The chair of the Meeting may waive or extend this cut-off at his discretion without notice. The proxies may also be submitted directly to the Secretary of the Corporation before the commencement of the Meeting or at any adjournment or postponement thereof.

If you are a Non-Registered Shareholder of the Corporation and receive these materials through your broker or through another intermediary, please complete and return the materials in accordance with the instructions provided to you by your broker or such other intermediary. If you fail to follow these instructions, your shares may not be eligible to be voted at the Meeting.

No In-Person Attendance

• In light of ongoing concerns related to the spread of COVID 19 and in order to mitigate potential risks to the health and safety of its shareholders and other stakeholders, the Corporation is conducting the Meeting entirely online in a format whereby Registered Shareholders and duly appointed proxyholders may attend and participate in the Meeting virtually via live audiocast. As such, there will be no in-person component to the Meeting and shareholders who wish to attend the Meeting must do so in accordance with the directions set out in the Management Proxy Circular under the heading “ How to Attend the Meeting ”.

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The board of directors of the Corporation has fixed the close of business on December 29, 2020 as the record date for the determination of the shareholders entitled to receive notice of and vote at the Meeting or any adjournment or postponement thereof. Unless specified otherwise, all information contained herein is as of December 30, 2020.

DATED at Toronto, Ontario December 30, 2020

By order of the Board of Directors

“Farhad Abasov” Chairman of the Board

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MANAGEMENT PROXY CIRCULAR OF AUTOMOTIVE FINCO CORP.

General Information

Information Contained in this Management Proxy Circular

No person is authorized to give any information or to make any representation other than those contained in this Management Proxy Circular and, if given or made, such information or representation should not be relied upon as having been authorized by the Corporation. Except as otherwise indicated, the information contained herein is given as of the date of this Management Proxy Circular. The delivery of this Management Proxy Circular shall not, under any circumstances, create an implication that there has not been any change in the information set forth herein since the date of this Management Proxy Circular. Unless otherwise indicated, all references to “dollars” and the symbol “$” in this Management Proxy Circular are to Canadian dollars. Unless the context otherwise requires, all references to the “ Meeting ” in this Management Proxy Circular are references to the special meeting of shareholders of the Corporation to be held on January 29, 2021 and includes all adjournments and postponements thereof.

Solicitation of Proxies by Management

This Management Proxy Circular is provided in connection with the solicitation by the management of the Corporation of proxies to be used at the Meeting . The solicitation will be made primarily by mail. - However, officers of the Corporation may also solicit proxies by telephone, telecopier, e mail or in person. The total cost of solicitation of proxies will be borne by the Corporation.

Appointment of Proxies

The persons named in the enclosed form of proxy are officers of the Corporation. Each shareholder is entitled to appoint a person or company, who need not be a shareholder, to represent him, her or it at the Meeting (other than those whose names are printed on the accompanying form of proxy) by inserting such other person’s or company’s name in the blank space provided in the form of proxy and signing the form of proxy or by completing and signing another proper form of proxy . To be valid, the duly completed form of proxy must be deposited at the offices of Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 prior to 10:00 a.m. (Toronto time) on January 27, 2021 or, in the event that the Meeting is adjourned or postponed, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time fixed for any adjournment or postponement of the Meeting. The chair of the Meeting may waive this cut-off at his or her discretion without notice. The proxies may also be submitted directly to the Secretary of the Corporation before the commencement of the Meeting or at any adjournment or postponement thereof. The instrument appointing a proxyholder must be executed by the shareholder or by his attorney authorized in writing or, if the shareholder is a corporate body, by its authorized officer or officers.

Shareholders who wish to appoint a third party proxyholder to represent them at the Meeting must submit their proxy or voting instruction form (if applicable) prior to registering their proxyholder. Registering your proxyholder is an additional step once you have submitted your proxy or voting instruction form. Failure to register the proxyholder will result in the proxyholder not receiving a username to participate in the Meeting. Without a username, proxyholders will not be able to vote at the Meeting. To register a proxyholder, Shareholders MUST visit http://www.computershare.com/AutoFinco by 10:00 a.m. (Toronto time) on January 27, 2021 and provide Computershare with their proxyholder’s contact information so that Computershare may provide the proxyholder with a username via email.

If a shareholder who has submitted a proxy attends the Meeting online and has accepted the terms and conditions when entering the Meeting, any votes cast by such shareholder on a ballot will be counted and the submitted proxy will be disregarded. Without a username, proxyholders will not be able to participate online at the Meeting.

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Shareholders who hold their shares through an intermediary are not entitled to vote at the Meeting through a proxy. Applicable securities laws and regulations require intermediaries to seek voting instructions from Non-Registered Shareholders in advance of the Meeting. If you are a NonRegistered Shareholder, you should carefully follow the instructions of your intermediary, including on how and when voting instructions are to be provided, in order to have your shares voted at the - Meeting. See “Registered Shareholders and Non Registered Shareholders”.

Manner of Voting by Proxies

The common shares of the Corporation (“ Common Shares ”) represented by an appropriate form of proxy will be voted on any ballot that may be conducted at the Meeting, or at any adjournment or postponement thereof, in accordance with the instructions contained on the form of proxy and, if the shareholder specifies a choice with respect to any matter to be acted on, the Common Shares will be voted accordingly. In the absence of instructions, such Common Shares will be voted FOR the matter described in the notice of Meeting.

How to Attend the Meeting

Registered Shareholders and duly appointed proxyholders can attend the Meeting online by going to https://web.lumiagm.com/240846349 and using the password: “autofinco2021” which is case sensitive.

• Registered Shareholders and duly appointed proxyholders can participate in the Meeting by clicking “ I have a login ” and entering their username and the password before the start of the Meeting.

• Registered Shareholders – The 15-digit control number located on the form of proxy is the control number and the case sensitive password is “autofinco2021”.

• Duly appointed proxyholders – Computershare will provide the proxyholder with a username after the voting deadline has passed. The case sensitive password for the Meeting is “autofinco2021”.

• Voting at the Meeting will only be available for Registered Shareholders and duly appointed proxyholders. Non-Registered Shareholders who have not appointed themselves as proxyholder may attend the Meeting by clicking “ I am a guest ” and completing the online form.

Participating and Voting at the Meeting

The Meeting will be hosted online by way of a live audiocast. A summary of the information shareholders will need to attend the online Meeting is provided below. The Meeting will begin at 10:00 am (Toronto time) on January 29, 2021.

• Registered Shareholders that have a 15-digit control number, along with duly appointed proxyholders who were assigned a control number by Computershare, will be able to vote and submit questions during the Meeting.

• Non-Registered Shareholders who have not appointed themselves as proxyholders, or those who are not shareholders, will only be able attend as a guest which allows them to listen to the Meeting, however they will not be able to vote or submit questions. Please see the information below under -

• the heading “ Registered Shareholders and Non Registered Shareholders ” for an explanation of why certain shareholders may not have received a form of proxy.

• United States Non-Registered Shareholders: To attend and vote at the Meeting, you must first obtain a valid legal proxy from your Intermediary and then register in advance to attend the Meeting. Follow the instructions from your Intermediary included with these proxy materials, or contact your

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Intermediary to request a legal proxy form. After first obtaining a valid legal proxy from your Intermediary, to then register to attend the Meeting, you must submit a copy of your legal proxy to Computershare. Requests for registration should be directed to:

Computershare 100 University Avenue 8[th] Floor Toronto, Ontario M5J 2Y1

OR

Email at uslegalproxy@computershare.com

Requests for registration must be labeled as “Legal Proxy” and be received no later than January 27, 2021 by 10:00 am (Toronto time). You will receive a confirmation of your registration by email after Computershare receives your registration materials. You may attend the Meeting and vote your Common Shares at https://web.lumiagm.com/240846349 during the Meeting. Please note that you are required to register your appointment at https://www.computershare.com/AutoFinco.

• If you are eligible to vote at the Meeting, it is important that you are connected to the internet at all times during the Meeting in order to vote when balloting commences. It is your responsibility to ensure internet connectivity for the duration of the Meeting.

Voting at the Meeting

A Registered Shareholder, or a Non-Registered Shareholder who has appointed themselves or a third party proxyholder to represent them at the Meeting, will appear on a list of shareholders prepared by Computershare, the transfer agent and registrar for the Meeting. To have their Common Shares voted at the Meeting, each Registered Shareholder or proxyholder will be required to enter their control number or username provided by Computershare at http://www.computershare.com/AutoFinco prior to the start of the Meeting. In order to vote, Non-Registered Shareholders who appoint themselves as a proxyholder MUST register with Computershare at https://www.computershare.com/AutoFinco after submitting their voting instruction form in order to receive a username.

Revocation of Proxies

A shareholder who has given a proxy may revoke it, as to any motion on which a vote has not already been cast pursuant to the authority conferred by it, by an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing or, if the shareholder is a corporation, under its corporate seal or by an officer or attorney thereof duly authorized. The revocation of a proxy, in order to be acted upon, must be deposited with Computershare Investor Services Inc. (Attention: Proxy Department), 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 prior to 10:00 a.m. (Toronto time) on January 27, 2021 or with the Secretary of the Corporation before the commencement of the Meeting or at any adjournment or postponement thereof.

If you are using a 15-digit control number or a username assigned by Computershare to login to the Meeting and you accept the terms and conditions, you will be revoking any and all previously submitted proxies. However, in such a case, you will be provided the opportunity to vote by ballot on the matters put forth at the Meeting. If you DO NOT wish to revoke all previously submitted proxies, do not accept the terms and conditions, in which case you can only enter the Meeting as a guest.

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Exercise of Discretion by Proxies

The persons named in the enclosed proxy will have discretionary authority with respect to any amendments or variations of the matters of business to be acted on at the meeting or any other matters properly brought before the meeting or any adjournment or postponement thereof, in each instance, to the extent permitted by law, whether or not the amendment, variation or other matter that comes before the meeting is routine and whether or not the amendment, variation or other matter that comes before the meeting is contested.

In the absence of any direction to the contrary, shares represented by properly executed proxies in favour of the persons designated in the enclosed form of proxy will be voted FOR the matter referred to in the accompanying notice of Meeting . Instructions with respect to voting will be respected by the persons designated in the enclosed form of proxy. With respect to amendments or variations to matters identified in the notice of Meeting and with respect to other matters that may properly come before the Meeting, such shares will be voted by the persons so designated in their discretion. At the time of printing this Management Proxy Circular, management of the Corporation knows of no such amendments, variations or other matters.

- Registered Shareholders and Non Registered Shareholders

Shareholders whose Common Shares are held in their own name are known as Registered Shareholders (a “ Registered Shareholder ”) and will have received a form of proxy in their own name.

Only Registered Shareholders or the persons they appoint as their proxies are permitted to be present - and/or vote at the Meeting. However, in many cases, shares beneficially owned by a Non Registered Shareholder (a “ Non - Registered Shareholder ”) are registered either: (i) in the name of an intermediary - (an “ Intermediary ”) that the Non Registered Shareholder deals with in respect of the Common Shares - (such as securities dealers or brokers, banks, trust companies, and trustees or administrators of self administered RRSPs, RRIFs, RESPs, TFSAs and similar plans), or (ii) in the name of a depository, such as CDS Clearing and Depository Services Inc. in Canada and The Depository Trust Corporation in the United States. In accordance with National Instrument 54 - 101 of the Canadian Securities Administrators, entitled “Communication with Beneficial Owners of Securities of a Reporting Issuer”, the Corporation has distributed copies of the notice of Meeting and this Management Proxy Circular (collectively, the “ Meeting Materials ”) to the clearing agencies and Intermediaries for distribution to Non - Registered Shareholder and therefore the Corporation is not sending the Meeting Materials directly to Non-Registered Shareholders. - - Intermediaries are required to forward the Meeting Materials to Non Registered Shareholders unless a Non Registered Shareholder has waived its right to receive it. Intermediaries often use service companies to - - forward Meeting Materials to Non Registered Shareholder. Generally, Non Registered Shareholder who have not waived their right to receive this Management Proxy Circular will either:

• (a) typically, be provided with a computerized form (often called a “ voting instruction form ”) which is not signed by the Intermediary and which, when properly completed and signed -

• by the Non Registered Shareholder and returned to the Intermediary or its service company, will constitute voting instructions which the Intermediary must follow. In order for -

• the applicable computerized form to validly constitute a voting instruction form, the Non Registered Shareholder must properly complete and sign the form and submit it to the Intermediary or its service company in accordance with the instructions of the Intermediary -

• or service company. In certain cases, the Non Registered Shareholder may provide such voting instructions to the Intermediary or its service company through the Internet or -

• through a toll free telephone number; or

• (b) less commonly, be given a proxy form which has already been signed by the Intermediary (typically by a facsimile, stamped signature), which is restricted to the number of shares -

• beneficially owned by the Non Registered Shareholder but which is otherwise not -

• completed. In this case, the Non Registered Shareholder who wishes to submit a proxy should properly complete the proxy form and submit it to Computershare Investor Services

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Inc. (Attention: Proxy Department), 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1.

• In either case, the purpose of these procedures is to permit Non Registered Shareholder to direct the voting of the Common Shares which they beneficially own.

Should a Non - Registered Shareholder wish to attend and vote at the Meeting (or to have another person - appointed as proxyholder to attend and vote on their behalf), the Non Registered Shareholder should strike - out the names of the persons named in the form of proxy and insert the Non Registered Shareholder’s or - such other person’s name in the blank space provided. In any case, a Non Registered Shareholder should carefully follow the instructions of their Intermediary, including those regarding when and where the form of proxy (or any proxy authorization form) is to be delivered.

Non - Registered Shareholders should carefully follow the instructions of their Intermediary, including those regarding when, where and by what means the voting instruction form must be delivered. A Non - Registered Shareholder may revoke voting instructions which have been given to an Intermediary at any time by written notice to the Intermediary.

Under applicable Canadian securities laws, Non-Registered Shareholders are either: (i) “objecting beneficial owners” or “OBOs”, who object to the disclosure of information about their ownership in the Corporation by Intermediaries; or (ii) “non-objecting beneficial owners” or “NOBOs”, who do not object to such disclosure.

The Corporation will not rely on the notice-and-access delivery procedures outlined in NI 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer (“ NI 54-101 ”) to distribute copies of Meeting Materials. The Corporation will pay for an Intermediary to deliver the Meeting Materials to NonRegistered Shareholders who are “OBOs” (as such term is defined in NI 54-101), including a voting information form.

Record Date and Quorum

The Corporation’s board of directors (the “ Board ”) has fixed Tuesday, December 29, 2020 as the record date (the “ Record Date ”) for the purpose of determining which shareholders will be entitled to receive notice of and to vote at the Meeting. Only shareholders of record as of the close of business on the Record Date are entitled to receive notice of and to vote at the Meeting. Shareholders who acquire Common Shares after the Record Date will not be entitled to vote such Common Shares at the Meeting. As at the Record Date, there were 23,123,773 Common Shares of the Corporation issued and outstanding.

Pursuant to the by-laws of the Corporation, a quorum for the Meeting is one or more persons present and representing, either in their own right or by proxy, not less than 10% of the Common Shares then outstanding. If you submit a properly executed form of proxy or vote by telephone or the Internet, you will be considered part of the quorum for the Meeting.

Subject to the Canada Business Corporations Act (the “ CBCA ”), any question at the Meeting shall be decided by a show of hands, unless a ballot thereon is required or demanded in accordance with the bylaws of the Corporation.

Voting Shares

The authorized capital of the Corporation consists of an unlimited number of Common Shares of which, as of the Record Date, 23,123,773 Common Shares were issued and outstanding. Each shareholder is entitled to one vote for each Common Share shown as registered in his or her name on the list of shareholders.

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Board Recommendation and Approval Requirement

The Board recommends that shareholders vote FOR the special resolution to approve the reduction of the stated capital of the Common Shares to $32,245,925, or such other amount as shall be determined by the Board (the “Stated Capital Resolution”) . To be effective, the Stated Capital Resolution must be approved by not less than two-thirds of the votes cast by the holders of Common Shares present in person, or represented by proxy, at the Meeting.

PROXIES RECEIVED IN FAVOUR OF MANAGEMENT WILL BE VOTED FOR THE APPROVAL OF THE STATED CAPITAL RESOLUTION UNLESS A SHAREHOLDER HAS SPECIFIED IN THE PROXY THAT THE COMMON SHARES ARE TO BE VOTED AGAINST THE STATED CAPITAL RESOLUTION.

Principal Holders of Voting Securities

As at the Record Date, to the knowledge of the directors and executive officers of the Corporation, the following are the only persons who beneficially owned, directly or indirectly, or exercised control or direction over, more than 10% of the issued and outstanding Common Shares:

		Percentage of
	Number of Common Shares	Common Shares
Name and place of residence	held	Outstanding
AA Capital LP(1)	4,333,333	18.74%
Eastwood Capital Corp.	3,879,799	17.2%

(1) The general partner of AA Capital LP is controlled by Mr. Billan. In addition to the Common Shares held through AA Capital LP, Mr. Billan beneficially owns, controls or directs 909,157 Common Shares.

Interest of Certain Persons or Companies in Matters to be Acted Upon and in Material Transactions

For the purposes of this Management Proxy Circular, “informed person” means: (i) a director or executive officer of the Corporation; (ii) a director or executive officer of a person or corporation that is itself an informed person or subsidiary of the Corporation; (iii) any person or corporation who beneficially owns, directly or indirectly, voting securities of the Corporation or who exercises control or direction over voting securities of the Corporation or a combination of both, carrying more than 10% of the voting rights attached to all outstanding voting securities of the Corporation, other than voting securities held by the person or corporation as underwriter in the course of a distribution; and (iv) the Corporation if it has purchased, redeemed or otherwise acquired any of its own securities, for so long as it holds any of its securities.

To the Corporation’s knowledge, no informed person of the Corporation, and no associate or affiliate of the foregoing person, at any time since the beginning of the fiscal year ended December 31, 2019, has or had any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any transaction that has materially affected the Corporation, or in any proposed transaction that could materially affect the Corporation, or in any matter to be acted upon at this Meeting.

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PARTICULARS OF THE MATTER TO BE ACTED UPON

Reduction of Stated Capital

Pursuant to Section 38(1) of the CBCA, the Corporation may by special resolution reduce its stated capital for any purpose. Accordingly, at the Meeting, shareholders will be asked to consider and, if thought advisable, to pass, with or without variation, the Stated Capital Resolution, the full text of which is included as Schedule A to this Management Proxy Circular, to approve the reduction of the stated capital of the Common Shares to $32,245,925, or such other amount as shall be determined by the Board (the “ Stated Capital Reduction ”). If approved, the Stated Capital Reduction will be effective as of January 29, 2021.

As set out in the Corporation’s press release dated December 18, 2020, in connection with and subject to shareholder approval of the Stated Capital Resolution and the fulfillment of other conditions, the Board has authorized management to finalize the terms and conditions for a proposed substantial issuer bid (the “ SIB ”) following the Meeting whereby the Corporation would return a portion of its excess cash to shareholders. The SIB, including its terms and conditions, remains subject to final approval by the Board. It is anticipated that the SIB will be initiated shortly after the Meeting to the extent the Stated Capital Resolution is approved by shareholders.

Reasons for the Stated Capital Reduction

A corporation is required to maintain a stated capital account for each class of shares that it issues and to add to that account the full amount of consideration that it receives for the shares that it issues, subject to certain limited exemptions under the CBCA. In addition, under the CBCA, a corporation is restricted from declaring and paying dividends on its shares and repurchasing its shares unless it can meet certain financial tests, including that there are reasonable grounds for believing that, after giving effect to the payment of the dividend or repurchase of shares, the corporation would be able to pay its liabilities as they become due and the realizable value of the corporation’s assets would be more than the aggregate of its liabilities and stated capital of all classes of shares.

The reduction in stated capital will not result in any change to the total shareholders’ equity as presented in the Corporation’s financial statements and therefore will not affect the Corporation’s book value. The reduction of stated capital will also have no impact on the day-to-day operations of the Corporation and will not, on its own, alter the financial condition of the Corporation. The Corporation intends to account for the Stated Capital Reduction as follows: (i) first, by eliminating the Corporation’s consolidated accounting deficit; and (ii) second, by adding any remaining balance to the Corporation’s contributed surplus account maintained in respect of the Common Shares on the Corporation’s financial statements.

The Board believes that the Stated Capital Reduction will benefit the Corporation on a go-forward basis by providing more flexibility in managing the Corporation’s capital structure, including its ability to pay dividends and repurchase Common Shares.

Certain Canadian Federal Income Tax Considerations with Respect to the Stated Capital Reduction

The following is a summary of the principal Canadian federal income tax considerations applicable to shareholders from the proposed Stated Capital Reduction. This summary is based on the current provisions of the Income Tax Act (Canada) (the “ Tax Act ”), the regulations to the Tax Act, and the current published administrative practices and assessing policies of the Canada Revenue Agency (publicly available prior to the date hereof). This summary also takes into account all proposed amendments to the Tax Act and regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “ Proposed Amendments ”), and assumes that the Proposed Amendments will be enacted in the form proposed, although no assurances can be given in this regard. Except for the Proposed Amendments, this summary does not take into account or anticipate any changes in law, whether by legislative, governmental, regulatory, or judicial action or decision, or changes in the administrative practices and assessing policies

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of the Canada Revenue Agency, nor does it take into account provincial, territorial or foreign income tax considerations, which may differ from the Canadian federal income tax considerations discussed below.

This summary is of a general nature only and is not intended to constitute nor should it be construed as legal or tax advice to any particular shareholder. This summary does not consider any provincial, territorial or foreign tax or other consequences which could arise as a result of the Stated Capital Reduction. Shareholders are advised to consult their own tax advisors regarding the consequences of the Stated Capital Reduction to them having regard to their own particular circumstances.

The proposed Stated Capital Reduction should not result in any immediate Canadian federal income tax consequences to a shareholder. In particular, as no amount will be paid by the Corporation to shareholders on the Stated Capital Reduction, shareholders should not be deemed to have received a dividend and there should not be any reduction in the adjusted cost base to a shareholder of their Common Shares. However, the Stated Capital Reduction will reduce the paid-up capital of the Common Shares (“ PUC ”) by an amount equal to the reduction in stated capital. Such reduction in the PUC of the Common Shares may have future Canadian federal income tax consequences to a shareholder in certain circumstances, including, but not limited to, if the Corporation repurchases or redeems any Common Shares, on a distribution of assets from the Corporation to its shareholders, or if the Corporation is wound-up.

Limitation on Reduction of Stated Capital under the CBCA

Section 38(3) of the CBCA provides that a corporation shall not reduce its stated capital if there are reasonable grounds for believing that: (i) the corporation is, or would after the reduction be, unable to pay its liabilities as they become due; or (ii) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.

In recommending the Stated Capital Resolution for approval, the Board has reasonable grounds for believing that: (i) the Corporation is, or would, after the Stated Capital Reduction, be able to pay its liabilities as they become due; and (ii) the realizable value of the Corporation’s assets would thereby be equal to or greater than the aggregate of the Corporation’s liabilities.

Management Contracts

On January 9, 2017, the Corporation announced its intention to transition from a “Mining Issuer” to an “Investment Issuer” (as such terms are defined in the policies of the TSXV), with a specific focus on providing debt financing and making other investments, which are expected to include, in some instances, royalty like features, in connection with the financing of automotive dealerships, automotive dealer groups and/or other related businesses and assets on a global basis, with an initial focus in Canada (the “ Change of Business ”).

In connection with the implementation of the Change of Business, the Corporation entered into an amended and restated limited partnership agreement dated March 3, 2017 between Automotive Finance GP Inc. (the “ General Partner ”), creating Automotive Finance Limited Partnership (the “ Partnership ”). The General Partner is the general partner of the Partnership. The Corporation is the sole limited partner of the Partnership.

The Partnership manages the general and administrative affairs of the Corporation pursuant to an administration agreement dated March 3, 2017 between the Partnership and the Corporation (the “ Administration Agreement ”). Kuldeep Billan, the Chief Executive Officer of the Corporation, and Shannon Penney, the Chief Financial Officer of the Corporation (collectively, the “ Officers ”) are consultants of the Partnership. As consultants of the Partnership, the Officers are compensated by the Partnership and any amounts paid to them are subject to an expense cap for various operating and out-of-pocket expenses of the General Partner, as further described in the Administration Agreement. The Corporation has no employment agreements with the Officers and does not pay any cash compensation to the Officers, directly or indirectly. Rather, the Officers are compensated by the General Partner. The Corporation has no

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responsibility for determining the compensation of the Officers, other than the granting of any options, restricted share units or deferred share units.

Other Matters

Management of the Corporation knows of no other amendment or variation matter to come before the Meeting other than those referred to in the notice of Meeting accompanying this Management Proxy Circular. However, if any other matters should properly come before the Meeting, the accompanying form of proxy confers discretionary authority upon the persons named therein to vote on such matters in accordance with their best judgement.

Auditor And Transfer Agent

Raymond Chabot Grant Thornton LLP are the auditors of the Corporation and Computershare Investor Services Inc. is the registrar and transfer agent for the Common Shares of the Corporation.

Additional Information

Financial information for the Corporation’s most recently completed financial year is provided in the Annual Financial Statements and the related management’s discussion and analysis. Copies of the Annual Financial Statements and the related management’s discussion and analysis may be obtained on request from Attention: Shannon Penney, 8 King Street East, Suite 1800, Toronto, Ontario M5C 1B5, telephone: (905) 619-4996. Additional information relating to the Corporation is available on SEDAR at www.sedar.com and on AFCC’s website at www.autofincocorp.com.

Authorization

The contents and the mailing of this Management Proxy Circular have been approved by the Board of Directors of the Corporation.

“Farhad Abasov”

Chairman of the Board

Toronto, Ontario December 30, 2020

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Schedule A STATED CAPITAL RESOLUTION

“ BE IT RESOLVED AS A SPECIAL RESOLUTION THAT:

1. The stated capital of the common shares of Automotive Finco Corp. (the “ Corporation ”) be reduced to $32,245,925 or such other amount as shall be determined by the board of directors of the Corporation pursuant to Section 38(1) of the Canada Business Corporation Act and the reduction of stated capital be accounted for by: (i) eliminating the Corporation’s consolidated accounting deficit; and (ii) adding any remaining balance to the Corporation’s contributed surplus account.

2. Notwithstanding that this special resolution has been duly adopted by the shareholders of the Corporation, the board of directors of the Corporation be and it is hereby authorized, in its sole discretion, to revoke this special resolution in whole or in part at any time prior to its being given effect without further notice to, or approval of, the shareholders of the Corporation.

3. Any director or officer of the Corporation is hereby authorized and directed, acting for, in the name of and on behalf of the Corporation, to execute or cause to be executed, under the seal of the Corporation or otherwise, and to deliver or to cause to be delivered, all such documents, agreements and instruments, and to do or to cause to be done all such other acts and things, as such person determines to be necessary or desirable in order to carry out the intent of this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.”

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