Sagen MI Canada Inc. — Capital/Financing Update 2021

Mar 16, 2021

March 16, 2021

Sagen MI Canada Inc.

● % Fixed-to-Fixed Rate Subordinated Notes Series 2021-1 due March ●, 2081

INDICATIVE TERM SHEET

A final base shelf prospectus containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the final base shelf prospectus, any amendment to the final base shelf prospectus and any applicable shelf prospectus supplement that has been filed, is required to be delivered with this document. The final base shelf prospectus of Sagen MI Canada Inc. in connection with the securities described in this document is available at www.sedar.com. This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the final base shelf prospectus, any amendment and any applicable shelf prospectus supplement for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

Issuer: Sagen MI Canada Inc. (“Sagen” or the “Company”)

Issue: Fixed-to-Fixed Rate Subordinated Notes Series 2021-1 due March ●, 2081 (the “Notes”), via a Prospectus Supplement to be dated March ●, 2021 to the Short Form Base Shelf Prospectus dated January 12, 2021 (collectively, the “Prospectus”) to be issued under the trust indenture between the Company and BNY Trust Company of Canada, as trustee, dated June 29, 2010 (the “Trust Indenture”), as supplemented by a sixth supplemental indenture to be dated as of the Settlement Date (the “Sixth Series Supplement”) Principal Amount: C$ million Initial Coupon: ●% Price Date: March ●, 2021 Settlement Date: March ●, 2021 (T+[3]) Maturity: March ●, 2081 Issue Yield: ●% Issue Price: $1,000.00 Expected Credit Ratings[1] : DBRS: A(Low) (Negative) S&P: BBB- (Negative) Interest Payment Dates: Payable semi-annually in arrears on March ● and September ● of each year, commencing on September ●, 2021. Interest Rate: (i) From the settlement date to, but excluding, March ●, 2031 at the fixed rate of ●% per annum and (ii) from, and including, March ●, 2031, and on every fifth anniversary thereafter (being March ● of the applicable year) during which the Notes are outstanding (each such date an “Interest Reset Date”), at a fixed rate per annum equal to the 5-Year Government of Canada Yield (as herein defined) on the business day prior to such Interest Reset Date plus, (a) for the period from, and including, March ●, 2031 to, but excluding, March ●, 2051, ●% and (b) for the period from, and including, March ●, 2051 to, but excluding, the Maturity Date, ●%, in each case, to be reset on each Interest Reset Date.

“5-Year Government of Canada Yield” on any date means the bid-side yield to maturity on such date (assuming semi-annual compounding) of a Canadian dollar denominated non-callable Government of Canada bond with a term to maturity of five years as quoted as of 10:00 a.m. (Toronto time) on such date and which

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appears on the Bloomberg Screen GCAN5YR Page (as defined below) on such date; provided that, if such rate does not appear on the Bloomberg Screen GCAN5YR Page on such date, the 5-Year Government of Canada Yield will mean the average (rounded to the nearest 1/1000[th] of 1%) of the bid-side yields determined by two registered Canadian investment dealers, selected by the Company, as being the bid-side yield to maturity on such date (assuming semiannual compounding) which a Canadian dollar denominated non-callable Government of Canada bond would carry if issued in Canadian dollars at 100% of its principal amount on such date with a term to maturity of five years.

“Bloomberg Screen GCAN5YR Page” means the display designated on page “GCAN5YR” on the Bloomberg Financial L.P. service (or such other page as may replace the GCAN5YR page on that service for purposes of displaying Government of Canada bond yields).

Deferral Right:

So long as no event of default has occurred and is continuing, the Company may elect, in its sole option, at any date other than an Interest Payment Date, to defer the interest payable on the Notes on one or more occasions for a period of up to five consecutive years (a "Deferral Period"). There is no limit on the number of Deferral Periods that may occur. Such deferral will not constitute an event of default or any other breach under the Trust Indenture, the Sixth Series Supplement or the Notes. Deferred interest will accrue, compounding on each subsequent Interest Payment Date, until paid. A Deferral Period terminates on any Interest Payment Date where the Company pays all accrued and unpaid interest (including deferred interest) on such date. No Deferral Period may extend beyond the Maturity Date and, for greater certainty, all accrued and unpaid interest (including deferred interest) shall be due and payable at maturity.

Dividend Stopper Unless the Company has paid all accrued and payable interest on the Notes, the Undertaking: Company will not (i) declare any dividends on its preferred shares and common shares (the “Dividend Restricted Shares”) (other than share dividends or dividends in kind on Dividend Restricted Shares) or pay any interest on any class or series of its indebtedness currently outstanding or hereafter created which ranks on a parity with the Notes (prior to any Automatic Conversion) as to distributions upon liquidation, dissolution or winding-up (the “Parity Notes”), (ii) redeem, purchase or otherwise retire any Dividend Restricted Shares or Parity Notes, or (iii) make any payment to holders of any of the Dividend Restricted Shares or any of the Parity Notes in respect of dividends not declared or paid on such Dividend Restricted Shares or interest not paid on such Parity Notes, respectively.

Optional Redemption:

The Notes are not redeemable at the option of the Company prior to March ●, 2026. On or after March ●, 2026, the Company may, at its option, redeem the Notes on not less than 10 and not more than 60 days’ prior notice to the registered holder(s) of the Notes, and upon such conditions as may be specified in the applicable notice of redemption, in whole or in part on any Interest Reset Date or any Interest Payment Date at a redemption price of (i) 104% of the principal amount thereof if redeemed on or after March ●, 2026 but prior to March ●, 2027, (ii) 103% of the principal amount thereof if redeemed on or after March ●, 2027 but prior to March ●, 2028, (iii) 102% of the principal amount thereof if redeemed on or after March ●, 2028 but prior to March ●, 2029, (iv) 101% of the principal amount thereof if redeemed on or after March ●, 2029 but prior to March ●, 2030, and (v) 100% of the principal amount thereof if redeemed on or after March ●, 2030, in each case, together with accrued and unpaid interest (including deferred interest, as applicable) to, but excluding, the date fixed for redemption. In cases of partial redemption, the Notes to be redeemed will be selected by the Trustee pro rata or in such other manner as it shall deem appropriate. Any Notes that are redeemed by the Company will be cancelled and will not be re-issued.

In the event that the Company redeems or purchases any of the Notes, the Company intends (without thereby assuming a legal obligation) to do so only to the extent the aggregate redemption or purchase price is equal to or less than the net proceeds, if any, received by the Company from new issuances during the period commencing on the 365th or 366th calendar day, depending upon the actual

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number of days in the applicable year, prior to the date of such redemption or purchase of securities which are assigned by S&P at the time of sale or issuance, an aggregate equity credit that is equal to or greater than the equity credit assigned to the Notes to be redeemed or repurchased (but taking into account any changes in hybrid capital methodology or another relevant methodology or the interpretation thereof since the issuance of the Notes).

Redemption on Tax Event or Rating Event:

Within 90 days following the occurrence of a Tax Event[2 ] (as defined below), the Company may, at its option, on not less than 10 and not more than 60 days' prior notice to the registered holder(s) of the Notes, redeem all (but not less than all) of the Notes at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest (including deferred interest, as applicable) to, but excluding the date fixed for redemption.

Within 90 days following the occurrence of a Rating Event[3 ] (as defined below), the Company may, at its option, on not less than 10 and not more than 60 days’ prior notice to the registered holder(s) of the Notes, redeem all (but not less than all) of the Notes at a redemption price equal to 102% of the principal amount thereof, together with accrued and unpaid interest (including deferred interest, as applicable) to, but excluding, the date fixed for redemption.

For greater clarity, if there is a Tax Event or Rating Event during a period when the Notes can be optionally redeemed, the Company may, but is not obligated to, optionally redeem the Notes in accordance with its optional redemption right described above instead of in accordance with its Tax Event or Rating Event redemption right, as applicable.

Mandatory Redemption:

Sagen shall be required to redeem the Notes in full in accordance with Section 3.1 of the Trust Indenture, as modified by the Sixth Series Supplement, at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, up to, but excluding, the Mandatory Redemption Date (as defined below), if either:

• a) the Outside Date (as defined below) occurs and the closing of the previously announced plan of arrangement pursuant to which Brookfield Business Partners L.P., together with certain of its affiliates and institutional partners (“Brookfield”), will acquire all of the outstanding common shares of Sagen not already owned by Brookfield (the “Arrangement”) has not occurred on or prior to the Outside Date; or

• b) the Arrangement Agreement (as defined below) is terminated at any time prior to the Outside Date in accordance with its terms without closing of the Arrangement (each, a “Triggering Event”).

The Company shall, no later than the fourth business day following the date on which a Triggering Event occurs, give notice of the mandatory redemption to the Trustee, the registrar and the paying agent stating, among other matters prescribed in the Trust Indenture, that a Triggering Event has occurred and that all of the Notes will be redeemed on the date of redemption set forth in such notice (which shall be not less than one business day and not more than 15 business days after such notice is given) (the “Mandatory Redemption Date”).

The “Outside Date” means July 30, 2021, as such date may be postponed pursuant to the terms of the Arrangement Agreement, or such later date as may be agreed to in writing by the parties to the Arrangement Agreement.

The “Arrangement Agreement” means the definitive arrangement agreement pursuant to which Brookfield agreed to purchase in cash all of the outstanding common shares in the capital of the Company not already owned by Brookfield at a price of $43.50 per Common Share pursuant to the Arrangement.

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Automatic Conversion:

Subordination:

The Notes, including accrued and unpaid interest (including deferred interest, as applicable) thereon, will be converted automatically without the consent of the holders thereof, into shares of a newly issued series of the Company’s preferred shares, designated as Preferred Shares, Series 2021-A (“Conversion Preferred Shares”) upon the occurrence of: (i) the making by the Company of a general assignment for the benefit of its creditors or a proposal (or the filing of a notice of its intention to do so) under the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada) , (ii) any proceeding instituted by the Company seeking to adjudicate it a bankrupt or insolvent or, where the Company is insolvent, seeking liquidation, winding-up, dissolution, reorganization, adjustment, protection, relief or compromise of its debts under any law relating to bankruptcy, insolvency or corporate arrangements in Canada, or seeking the entry of an order for the appointment of a receiver, interim receiver, trustee, monitor or other similar official for the property and assets of the Company or any substantial part of its property and assets in circumstances where the Company is adjudged a bankrupt or insolvent, (iii) a receiver, interim receiver, trustee, monitor or other similar official is appointed over the property and assets of the Company or for any substantial part of its property and assets by a court of competent jurisdiction in circumstances where the Company is adjudged a bankrupt or insolvent under any law relating to bankruptcy or insolvency in Canada; or (iv) any proceeding is instituted against the Company seeking to adjudicate it a bankrupt or insolvent or, where the Company is insolvent, seeking liquidation, winding-up, dissolution, reorganization, adjustment, protection, relief or compromise of its debts under any law relating to bankruptcy insolvency or corporate arrangements in Canada, or seeking the entry of an order for the appointment of a receiver, interim receiver, trustee, monitor or other similar official for the property and assets of the Company or any substantial part of its property and assets in circumstances where the Company is adjudged a bankrupt or insolvent under any law relating to bankruptcy or insolvency in Canada, and either such proceeding has not been stayed or dismissed within 60 days of the institution of any such proceeding or the actions sought in such proceedings occur, including the entry of an order for relief against the Company or the appointment of a receiver, interim receiver, trustee, monitor or other similar official for it or for any substantial part of its property and assets.

The Notes will be direct, unsecured and subordinated obligations of the Company. The payment of principal and interest on the Notes, to the extent provided in the Trust Indenture and Sixth Series Supplement, will be subordinated in right of payment to the prior payment in full of all present and future Senior Indebtedness, and will be effectively subordinated to all indebtedness and obligations of the Company’s subsidiaries.

In the event (i) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Company or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding-up of the Company, subject to an Automatic Conversion, (ii) subject to the subordination provisions in the Trust Indenture and Sixth Series Supplement, that a default shall have occurred with respect to payments due on any Senior Indebtedness, or there shall have occurred an event of default (other than a default in payment) in respect of any Senior Indebtedness permitting the holder or holders thereof to accelerate the maturity thereof and such default or event of default shall not have been cured or waived or shall not have ceased to exist, or (iii) that the principal of and accrued interest on the Notes shall have been declared due and payable pursuant to the Trust Indenture and Sixth Series Supplement and such declaration shall not have been rescinded and annulled as provided therein, then the holders of Senior Indebtedness shall first be entitled to receive payment of the full amount due thereon before the Noteholders are entitled to receive a payment on account of the principal or interest on the Notes, including, without limitation, any payments made pursuant to any redemption or purchase for cancellation.

Events of Default:

The Trust Indenture and Sixth Series Supplement will provide that an “Event of Default” in respect of the Notes will occur upon the Company’s failure to pay any (i) principal of or premium on the Notes when due and payable, or (ii) interest on the Notes when due and payable and such default continues for a period of 30 days

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(subject to the Company’s right, at its sole option, to defer interest payments, as described under "Description of the Notes – Deferral Right"); provided that no such default shall be considered to occur as a result of amounts that may be required to be deducted or withheld under the Income Tax Act (Canada) or any other applicable taxation statute by the Company, the Trustee or the registrar or paying agent, if any, from any payment to be made to any Noteholder having been so deducted or withheld and such amounts having been remitted to the appropriate governmental authority on behalf of such Noteholder.

There will be no right of acceleration in the case of a default in the performance of any other covenant of the Company in the Trust Indenture and Sixth Series Supplement, although a legal action could be brought to enforce any such covenant. For the avoidance of doubt, the events of default stated in this section shall be the only events of default applicable to the Notes.

If an Event of Default has occurred and is continuing, the Trustee has received notice of such Event of Default and the Notes have not already been automatically converted into Conversion Preferred Shares, the Trustee shall, upon request of holders of not less than 25% of the unpaid principal amount of the Notes, by written notice to the Company, declare the Notes to be immediately due and payable, and upon such declaration, the aggregate unpaid principal amount of the Notes (together with all accrued and unpaid interest thereon and any other amounts owing with respect thereto) shall become immediately due and payable.

CUSIP / ISIN:

786688AC5 / CA786688AC50

Form and Denomination: Book entry through participation in CDS

Specified Denominations: Minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.

Use of Proceeds:

Sagen intends to use the net proceeds from the sale of the Notes to strengthen Sagen’s capital base, for distributions to shareholders (subject to the completion of the Arrangement) and/or for general corporate purposes.

Syndicate: RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., National Bank Financial Inc., Scotia Capital Inc., and TD Securities Inc.

Summary:

Notwithstanding the above summary of the Notes, a summary of all the material terms and conditions of the Notes will be outlined in the Prospectus and full details will be set out in the Trust Indenture and Sixth Series Supplement, each as supplemented and amended. Definitions for all capitalized terms not defined in this term sheet are outlined in the Trust Indenture.

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• 1 A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

• 2 A "Tax Event" means the Company has received an opinion of independent counsel of a nationally recognized law firm in Canada or the U.S. experienced in such matters (who may be counsel to the Company) to the effect that, as a result of, (i) any amendment to, clarification of, or change (including any announced prospective change) in, the laws, or any regulations thereunder, or any application or interpretation thereof, of Canada or the U.S. or any political subdivision or taxing authority thereof or therein, affecting taxation, (ii) any judicial decision, administrative pronouncement, published or private ruling, regulatory procedure, rule, notice, announcement, assessment or reassessment (including any notice or announcement of intent to adopt or issue such decision, pronouncement, ruling, procedure, rule, notice, announcement, assessment or reassessment) (collectively, an "Administrative Action"), or (iii) any amendment to, clarification of, or change in, the official position with respect to or the interpretation of any Administrative Action or any interpretation or pronouncement that provides for a position with respect to such Administrative Action that differs from the theretofore generally accepted position, in each of case (i), (ii) or (iii), by any legislative body, court, governmental authority or agency, regulatory body or taxing authority, irrespective of the manner in which such amendment, clarification, change, Administrative Action, interpretation or pronouncement is made known, which amendment, clarification, change or Administrative Action is effective or which interpretation, pronouncement or Administrative Action is announced on or after the date of issue of the Notes, there is more than an insubstantial risk (assuming any proposed or announced amendment, clarification, change, interpretation, pronouncement or Administrative Action is effective and applicable) that the Company is, or may be, subject to more than a de minimis amount of additional taxes, duties or other governmental charges or civil liabilities because the treatment of any of its items of income, taxable income, expense, taxable capital or taxable paid-up capital with respect to the Notes (including the treatment by the Company of interest on the Notes), as or as would be reflected in any tax return or form filed, to be filed, or that otherwise could have been filed, will not be respected by a taxing authority.

• 3 A "Rating Event" means the amount of equity credit assigned to the Notes by DBRS or S&P has been reduced due to an amendment to, clarification of or change in, the methodology or criteria employed by S&P or DBRS for purposes of assigning equity credit to securities such as the Notes that was effective on the date of the original issuance of the Notes.