Suncor/COS -- summary under Shares

Overview. Suncor, a CBCA corporaton which acquired 73% of the common shares of Canadian Oil Sands on the basis of 0.28 of a Suncor common share for each COS common share, also holds one common share of Holdco, whose only asset is one common share of Newco (which has nominal assets). Newco will amalgamate with Canadian Oil Sands under the ABCA. On the amalgamation, the minority COS shareholders will receive 0.28 of a Suncor share for each COS share, and the 1 common share of Newco will be converted into the same number of common shares of Amalco as the number of COS shares formerly held by the minority shareholders. Holdco will likely then amalgamate under the ABCA with Newco.

Canadian Oil Sands. A TSX-listed Alberta Business Corporatons Act ("ABCA") corporation that has an ownership interest in Syncrude, a large oil sands mining project.

Suncor. A CBCA corporation which is focused on exploiting the Athabasca oil sands. Its common shares are listed on the TSX and the NYSE.

Holdco. An ABCA corporation whose only issued and outstanding common share is held by Suncor and whose only asset is one common share of Newco.

Newco. An ABCA corporation whose only issued and outstanding common share is held by Holdco and whose only asset is $100 of cash.

Previous Suncor offer. On October 5, 2015, Suncor made an offer to purchase all of the COS Shares (and associated rights issued under any shareholder rights plan) on the basis of 0.25 of a Suncor Share for each COS Share. On January 17, 2016, following negotiations, Suncor and the Corporation entered into a Support Agreement in which Suncor agreed to increase the consideration to 0.28 of a Suncor Share. As at February 18, 2016, Suncor had taken up and paid for 352,902,151 Shares of the Corporation (representing approximately 73% of the total).

Amalgamation. On the Effective Date (expected to be March 21, 2016):

1. the Corporation and Newco will amalgamate and continue as Amalco;
2. each Dissenting Shareholder shall cease to have any rights as a Shareholder other than the right to be paid by Canadian Oil Sands (or its successor) in accordance with the provisions of the ABCA the fair value in respect of COS Shares held by such Dissenting Shareholder;
3. each issued and outstanding COS Share (other than those COS Shares held by Dissenting Shareholders and those COS Shares held by Suncor) shall be automatically converted into 0.28 of a Suncor Share;
4. each issued and outstanding COS Share held by Suncor shall be automatically converted into one Amalco Common Share; and
5. the one issued and outstanding Newco Common Share shall be automatically converted into that number of Amalco Common Shares that is equal to the number of COS Shares held by all Shareholders, other than Suncor, immediately prior to the completion of the Amalgamation.

Second amalgamation. It is anticipated that Amalco and Holdco will undertake an amalgamation pursuant to the ABCA, with the amalgamated corporation operating under the name of "Suncor Energy Ventures Corporation" and being a direct wholly-owned subsidiary of Suncor.

Canadian tax consequences. A resident holder who receives Suncor Shares in exchange for COS Shares on the Amalgamation will not realize any capital gain or capital loss as a result of the exchange, and will be considered to have disposed of its COS Shares for proceeds of disposition equal to their aggregate adjusted cost base.

U.S. tax considerations. Suncor intends for the previous offer, the Amalgamation and the subsequent amalgamation between Amalco and Holdco, taken together (the "exchange transaction"), to be treated as a reorganization within the meaning of Code s. 368(a). If the exchange transaction is so treated, a U.S. holder generally will not recognize gain or loss for Code purposes.