THIS LETTER OF TRANSMITTAL AND ELECTION FORM IS FOR USE ONLY IN CONNECTION WITH THE PLAN OF ARRANGEMENT INVOLVING TRANSALTA RENEWABLES INC., THE SHAREHOLDERS OF TRANSALTA RENEWABLES INC. AND TRANSALTA CORPORATION

IN ORDER TO BE EFFECTIVE, THIS LETTER OF TRANSMITTAL AND ELECTION FORM MUST BE VALIDLY COMPLETED, DULY EXECUTED AND RETURNED TO THE DEPOSITARY, COMPUTERSHARE INVESTOR SERVICES INC., BY THE ELECTION DEADLINE. IT IS IMPORTANT THAT YOU VALIDLY COMPLETE, DULY EXECUTE AND RETURN THIS LETTER OF TRANSMITTAL AND ELECTION FORM ON A TIMELY BASIS IN ACCORDANCE WITH THE INSTRUCTIONS CONTAINED HEREIN AND THE INFORMATION CIRCULAR OF TRANSALTA RENEWABLES INC. DATED AUGUST 25, 2023.

LETTER OF TRANSMITTAL AND ELECTION FORM

FOR USE BY HOLDERS OF COMMON SHARES OF

TRANSALTA RENEWABLES INC.

Please read carefully the Instructions set out below and the Information Circular of TransAlta Renewables Inc. dated August 25, 2023 (the "Information Circular") before completing this Letter of Transmittal and Election Form.

TO:

TRANSALTA RENEWABLES INC.

AND TO:

TRANSALTA CORPORATION

AND TO:

COMPUTERSHARE INVESTOR SERVICES INC. (THE "DEPOSITARY"), AS

DEPOSITARY

This Letter of Transmittal and Election Form (the "Letter of Transmittal") is for use by holders ("Renewables Shareholders") of common shares (the "Renewables Shares") of TransAlta Renewables Inc. ("Renewables") in connection with the proposed arrangement (the "Arrangement") involving, Renewables, the Renewables Shareholders and TransAlta Corporation ("TransAlta") pursuant to an arrangement agreement between TransAlta and Renewables dated July 10, 2023 (the "Arrangement Agreement"), the full text of which is attached as Appendix B to the Information Circular. Capitalized terms used but not defined in this Letter of Transmittal shall have the meanings given to them in the Information Circular.

The undersigned delivers to the Depositary the enclosed certificate(s) representing Renewables Shares to be exchanged for cash consideration of $13.00 cash per Renewables Share ("Cash Consideration") and/or certificate(s) representing common shares of TransAlta ("TransAlta Shares") equal to 1.0337 TransAlta Shares per Renewable Share ("Share Consideration") pursuant to and in accordance with the Arrangement described in the Information Circular and subject to pro-rationing based on a maximum aggregate issuance of 46,441,779 TransAlta Shares (excluding any TransAlta Shares issuable in connection with the settlement of deferred share units of Renewables) and maximum aggregate Cash Consideration of $800 million.

For the purposes of this Letter of Transmittal, any reference to a "certificate" shall include evidence of registered ownership of TransAlta Shares or Renewables Shares in a book-based system maintained by the registrar and transfer agent of the TransAlta Shares or the registrar and transfer agent of the Renewables Shares, as applicable, and the provisions of this Letter of Transmittal shall be read and construed (and where applicable, modified) to give effect to such interpretation.

DESCRIPTION OF CERTIFICATES DEPOSITED

Certificate

Name(s) in which Renewables Shares are

Number of Renewables

Number(s)

Registered

Shares Deposited

TOTAL

(If space is not sufficient, please attach a list in the above form).

Some or all of my Renewables Share certificates have been lost, stolen or destroyed. Please review Instruction 7 for the procedure to replace lost or destroyed certificates. (Check box if applicable).

In order to receive the consideration to which you are entitled pursuant to the Arrangement, you must complete the following Declaration:

The undersigned:

  1. acknowledges receipt of the Information Circular and represents and warrants that it has reviewed and understood the contents of the Information Circular;
  2. represents and warrants the information provided herein is true, accurate and complete as of the date hereof;
  3. represents and warrants that the undersigned is the registered legal owner of the above listed deposited Renewables Shares ("Deposited Shares") and has good title to the rights represented by the above mentioned certificates free and clear of all liens, charges, encumbrances, claims, adverse interests, security interests and equities together with all rights and benefits, and has full power and authority to execute and deliver this Letter of Transmittal and to deposit, sell, assign, transfer and deliver the certificates representing the Deposited Shares;
  4. represents and warrants that the Deposited Shares have not been sold, assigned or transferred, nor has any agreement been entered into to sell, assign or transfer any such Deposited Shares to any other person;
  5. represents and warrants that the surrender of the Deposited Shares complies with applicable laws;
  6. represents and warrants that the undersigned will not, prior to the Effective Date, transfer or permit to be transferred any of the Deposited Shares;
  7. represents and warrants that the undersigned is resident in the jurisdiction set out in "Address of Renewables Shareholder" below;
  8. directs the Depositary to issue or cause to be issued the Cash Consideration and/or Share Consideration to which the undersigned is entitled on completion of the Arrangement in the name indicated below and to send the Cash Consideration and certificates representing the Share Consideration to the address, or hold the same for pickup, or to wire the Cash Consideration, as indicated in this Letter of Transmittal, unless otherwise indicated under "Registration Instructions" or "Delivery Instructions" on page 6 of this Letter of Transmittal;
  9. except for any proxy deposited with respect to the vote on any matter to be acted upon at the Meeting, revokes any and all authority, other than as granted in this Letter of Transmittal, whether as agent, attorney-in-fact, attorney, proxy or otherwise, previously conferred or agreed to be conferred by the undersigned at any time with respect to the Deposited Shares. No subsequent

2

authority, other than as set forth herein, whether as agent, attorney-in-fact, attorney, proxy or otherwise, will be granted with respect to the Deposited Shares;

  1. by virtue of the execution of this Letter of Transmittal, shall be deemed to have agreed that all questions as to validity, form, eligibility (including timely receipt) and acceptance of any Deposited Shares pursuant to the Arrangement will be determined by TransAlta in its sole discretion and that such determination shall be final and binding. Further, the undersigned acknowledges that TransAlta reserves the absolute right to reject any and all deposits that it determines not to be in proper form or which may be unlawful for TransAlta to accept under the laws of any jurisdiction as well as the right to waive any defect or irregularity in the deposit of any Renewable Shares. In addition, the undersigned acknowledges that there is no duty or obligation on Renewables, TransAlta, the Depositary or any other person to give notice of any defect or irregularity in any deposit of Renewables Shares and no liability shall be incurred by any of them for failure to give such notice. The undersigned further acknowledges that TransAlta reserves the right to permit the procedure for the exchange of securities pursuant to the Arrangement to be completed other than as set forth in the Information Circular;
  2. covenants and agrees to execute, upon request, any additional documents, transfers and other assurances as may be necessary or desirable to complete the exchange of certificate(s) representing Renewables Shares for the Cash Consideration and/or Share Consideration;
  3. acknowledges that if the Arrangement is not completed or proceeded with and the undersigned has provided the Depositary with the Deposited Shares, the enclosed certificate(s) representing the Deposited Shares and all other ancillary documents will be returned as soon as possible to the undersigned at the address set forth below the undersigned's signature on page 4 of this Letter of Transmittal or, failing such address being specified, to the undersigned at the last address of the undersigned as it appears on the securities register of Renewables;
  4. acknowledges and understands that the undersigned will not receive the Cash Consideration or the certificate(s) representing the Share Consideration in respect of the Deposited Shares until the Arrangement is completed and until the certificate(s) representing the Deposited Shares owned by the undersigned are received by the Depositary at the address as set forth on the back of this Letter of Transmittal, together with this duly completed Letter of Transmittal and such additional documents as the Depositary may require, and until the same are processed with the Depositary;
  5. acknowledges that the covenants, representations and warranties of the undersigned contained herein shall survive the completion of the Arrangement;
  6. acknowledges that Renewables or TransAlta may be required to disclose certain personal information in respect of the undersigned and consents to disclosure of personal information in respect of the undersigned to: (i) stock exchanges or securities regulatory authorities; (ii) the Depositary, (iii) TransAlta; and (iv) legal counsel to either TransAlta or Renewables;
  7. acknowledges that it has consulted or has had the opportunity to consult its own tax advisor with respect to the potential tax consequences to them of the Arrangement, including any elections to be made in respect thereof;
  8. acknowledges that all authority conferred, or agreed to be conferred by the undersigned herein may be exercised during any subsequent legal incapacity of the undersigned and shall survive the death, incapacity, bankruptcy or insolvency of the undersigned and all obligations of the undersigned herein shall be binding upon any heirs, personal representatives, successors and assigns of the undersigned;
  9. by reason of the use by the undersigned of this English language Letter of Transmittal, shall be deemed to have required that any contract evidenced by the Arrangement as entered into through this Letter of Transmittal, as well as any documents related thereto, be drawn exclusively in the English language; en utilisant la version anglaise de la présente lettre d'envoi, le soussigné est repute avoir demandé que tout contrat attesté par l'arrangement, tel qu'il est accepté au moyen de

3

cette lettre d'envoi, de même que tous les documents qui s'y rapportant soient rédigés exclusivement en anglais;

  1. irrevocably constitutes and appoints each director and officer of Renewables and TransAlta and the Depositary and any other person designated by TransAlta in writing, the true and lawful agent and attorney of the undersigned to do such acts or take such actions in the name of or on behalf of the undersigned with respect to the exchange of the undersigned's cheque and/or certificate(s) representing the Cash Consideration and/or Share Consideration in accordance with the Arrangement (such power of attorney being deemed to be an irrevocable power coupled with an interest); and
  2. acknowledges that if the Arrangement is completed, the deposit of Renewables Shares pursuant to this Letter of Transmittal is irrevocable.

Non-registered holders of Renewables Shares should contact their nominees (i.e. broker, investment dealer, trust company, bank or other registered holder) who hold certificates representing Renewables Shares on their behalf to arrange for the exchange of such certificates.

This box must be signed by the undersigned exactly as the name(s) appear(s) on the certificate(s) representing the Renewables Shares or by transferee(s) of original registered holder(s) authorized to become new registered holder(s) by certificates and documents transmitted with this Letter of Transmittal. See Instructions 3 and 4 below. If the signature is by a trustee, executor, administrator, guardian, attorney- in-fact, agent, officer of a corporation or any other person acting in a fiduciary or representative capacity, please provide the information described in Instruction 5.

Signature guaranteed by (if required under Instruction 4):

Authorized Signature

Name of Guarantor (please print or type)

Address of Guarantor (please print or type)

Dated:

Signature of Renewables Shareholder or Authorized Representative (see Instruction 3 and 5)

Address of Renewables Shareholder

Daytime telephone number of Renewables

Shareholder

Email address of Renewables Shareholder

Social Insurance Number or U.S. Resident Taxpayer

Identification Number (must be provided)

Name of Renewables Shareholder

(please print or type)

Name of Authorized Representative, if applicable

(please print or type)

4

ELECTION FOR RENEWABLES SHAREHOLDERS

Please check either Option A, B or C - Renewables Shareholders may choose only ONEof the following:

OPTION A:Election to receive only Cash Consideration

The undersigned hereby elects, subject to proration in accordance with the Plan of Arrangement, to receive the Cash Consideration (being $13.00 cash for each Renewables Share delivered herewith).

OPTION B:Election to receive only Share Consideration

The undersigned hereby elects to receive, subject to proration in accordance with the Plan of Arrangement, Share Consideration (on the basis of 1.0337 TransAlta Shares for each Renewables Share delivered herewith).

OPTION C:Election to receive Cash Consideration and

Share Consideration

The undersigned hereby elects, subject to proration in accordance with the Plan of Arrangement, to receive Cash

Consideration and Share Consideration, such that

of the Renewables Shares delivered herewith will

be exchanged for Cash Consideration and

of the

Renewables Shares be exchanged for Share

Consideration.

The numbers inserted above must total the number of Renewables Shares submitted with this Letter of Transmittal, otherwise the numbers specified above will be pro-rated to total the number of Renewables Shares submitted with this Letter of Transmittal.

If no election is made, such Renewables Shareholder will be deemed to have elected to receive the consideration described under the heading "IF NO ELECTION IS MADE" set forth below.

Under the Arrangement, the maximum aggregate amount of Cash Consideration to be paid to Renewable Shareholders is $800 million (the "Maximum Cash Consideration") and the maximum aggregate number of TransAlta Shares that may be issued to Renewables Shareholders is 46,441,779 (excluding any TransAlta Shares issuable in connection with the settlement of deferred share units of Renewables) (the "Maximum Share Consideration"). In the event that the Renewables Shareholders elect to receive more than the Maximum Cash Consideration, an adjustment will be made so that each Renewables Shareholder who elected or was deemed to have elected to receive Cash Consideration will instead receive TransAlta Shares for a portion of such Renewables Shareholder's Renewables Shares on a pro rata basis. In the event that the Renewables Shareholders elect or are deemed to elect to receive more than the Maximum Share Consideration, an adjustment will be made so that each Renewables Shareholder who elected or was deemed to have elected to receive TransAlta Shares will instead receive Cash Consideration for a portion of such Renewables Shareholder's Renewables Shares on a pro rata basis. It is likely that elections made by many Renewables

Shareholders will be subject to adjustment on a pro-rated basis.

IF NO ELECTION IS MADE

If no election is selected, a holder of Renewables Shares will be deemed to have elected to receive the Share Consideration in respect of all of such holder's Renewables Shares.

The election made (or deemed to be made) by Renewables Shareholders as to the consideration to be received may have material income tax consequences and Renewables Shareholders are encouraged to consult with their own tax advisors as to their preferred election. For a general description of the Canadian federal income tax considerations (including the ability of certain Renewables Shareholders to make an election under section 85 of the Income Tax Act (Canada) jointly with TransAlta), and United States federal income tax considerations applicable to Renewables Shareholders who participate in the Arrangement, see the discussions under the headings "Certain Canadian Federal Income Tax Considerations" and "Certain United Stated Income Tax Considerations" in the Information Circular.

5

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

TransAlta Renewables Inc. published this content on 29 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 August 2023 16:55:09 UTC.