<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 13, 1995
SUN COMPANY, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 1-6841 23-1743282
------------ ------ ----------
(State or other (Commission (IRS employer
jurisdiction of file number) identification
incorporation) number)
Ten Penn Center, 1801 Market Street, Philadelphia, PA 19103-1699
-----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(215) 977-3000
----------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
<PAGE> 2
Item 2. Acquisition or Disposition of Assets.
- ------- -------------------------------------
On June 8, 1995, Sun Company, Inc. ("Sun" or the "Company") completed
the sale of its remaining 55 percent interest in Suncor Inc. ("Suncor"), to
a group of Canadian underwriters led by Nesbitt Burns. The underwriting
group will offer the shares publicly in Canada, and by way of private
placement in the United States.
Under terms of the agreement with Nesbitt Burns, Sun was to receive
gross proceeds of approximately C$1,167 million (US$855 million), payable
in three equal installments. In a separate transaction, Sun subsequently
sold all but one-half of the third installment receivable. As a result,
Sun will ultimately receive cash proceeds of US$770 million, after
commissions, discount and U.S. dollar exchange, of which US$635 million
will be received in June 1995, with the remainder expected to be received
in June 1996.
Suncor is a vertically integrated Canadian petroleum company whose
operations consist of the exploration, production and marketing of
conventional crude oil and natural gas, the production and marketing of
synthetic crude oil from oil sands, and petroleum refining and marketing.
Item 5. Other Events.
- ------- -------------
(a) Recent Developments
-------------------
SUN COMPANY TO IMPLEMENT
BROAD OPERATIONAL AND FINANCIAL CHANGES;
DECLARES DIVIDEND ON COMMON STOCK
AND NEW DEPOSITARY SHARES
PHILADELPHIA, June 13, 1995 -- Sun Company, Inc. (NYSE: SUN) today
announced details of an extensive operational and financial restructuring
that Sun Chairman/CEO Robert H. Campbell said "will significantly improve
our competitive position and establish a solid foundation for improved
financial performance."
Sun is the largest independent U.S. refiner-marketer, with five
domestic refineries and more than 4,000 Sunoco retail outlets in 17 states
from Maine to Indiana and the District of Columbia.
"The changes we are making will enable us to focus on our core
businesses and significantly strengthen our financial position so we can
invest in growth projects," Campbell said. "We believe this will enhance
the value of Sun Company to our shareholders and the many other groups who
have a stake in the company, including our customers, suppliers, employees
and the communities where we operate."
He said there are seven elements in the operational and financial
restructuring. They are:
<PAGE>
<PAGE 3>
OPERATIONAL ELEMENTS
* cost reductions of $110 million a year, principally by a reduction of
800 primarily staff and support positions;
* the restructuring of Sun Company into eight "separate and discrete,
but not autonomous, business units" plus a holding company and a service
company;
FINANCIAL ELEMENTS
* the already-completed sale of the company's 55-percent interest in
Suncor, its former Canadian subsidiary, for net cash proceeds of U.S.$770
million, of which $635 million will be received in mid-June, with the
remainder due in 1996;
* the reduction of Sun's debt by more than $500 million through the use
of at least $335 million of Suncor proceeds to repay company debt and the
elimination of approximately $180 million of debt as part of the Suncor
sale;
* the reduction of Sun's quarterly common stock dividend from 45 cents
a share ($1.80 per year) to 25 cents a share ($1.00 per year);
* the use of some Suncor proceeds to make a cash tender offer for up to
6.4 million shares of Sun common stock via a "Dutch auction" at a price
between $30 and $33 per share, followed by a possible open market purchase
program of up to $100 million in Sun common stock after the conclusion of
the tender offer. (Sun stock closed yesterday at $31.25 per share. The
tender offer to shareholders will be made on June 13 and will remain open
until July 24.)
* an offer to shareholders to exchange their common shares tax free for
an equal number of "depositary shares" that will pay an annual dividend of
$1.80 per share for three years. The company will exchange up to 25
million shares in total. (Each depositary share represents one-half of a
preference share -- a new series of cumulative preferred stock -- and will
have half the voting rights of a common share. Their value will be capped
at $40 per share plus any remaining "excess" dividend, and they are subject
to redemption for common stock.)
The exchange offer will be made at the same time as the cash tender
offer and will also expire on July 24, 1995. If more than 6.4 million
shares are tendered in the Dutch auction or more than 25 million shares in
the exchange offer, submissions will be subject to proration.
Campbell said that Sun's board of directors declared dividends payable
on both common stock and the new depositary shares for the third quarter of
1995. The common stock dividend will be $.25 per share, and the dividend
on depositary shares will be $.45 per share. Payment date for the common
stock dividend is September 8, 1995, payable to shareholders of record on
August 10. The dividend on depositary shares is payable September 13,
1995, to shareholders of record on August 10.
Campbell said the multi-faceted plan was the result of a competitive
assessment of all aspects of the refining and marketing business.
"Refining margins for gasoline and distillate fuel, the principal products
made from crude oil, have narrowed significantly in the past four years,
requiring us to continually reduce our cost structure," he said.
<PAGE>
<PAGE 4>
He pointed out that the financial aspects of the restructuring are
directly linked with the operational changes. "The proceeds of the Suncor
sale enable us to repay a large portion of our debt and buy back some of
our stock, while the reduced dividend and annual cost reductions provide
ongoing cash for growth projects that will increase shareholder value over
time," he stated.
Commenting on the operational changes, Campbell said that organizing
into eight business units would "increase accountability for bottom line
performance, allow each unit to focus on different ways of operating in
different business environments, better integrate oil flow decision-making,
and provide tighter cost controls." The eight units are:
* Northeast Sunoco Branded Fuels -- primarily sales of Sunoco gasoline
through service stations in New England and the Mid-Atlantic states, but
also including branded sales of other fuels;
* Northeast Refining and Wholesale, composed of the Philadelphia and
Marcus Hook, Pa., refineries, and the wholesale marketing of fuels made
there;
* Toledo Refining & Marketing, including the Toledo (Ohio) Refinery,
sales of products made there, and the retail marketing of Sunoco gasoline
in the areas supplied from the refinery;
* Chemicals, consisting of the manufacture and sale of chemicals;
* Lubricants Refining & Marketing, consisting of the manufacture and
sale of lubricants and related fuels produced at Sun's Tulsa (Okla.) and
Puerto Rico refineries, including blending, packaging and customer service;
* Logistics, composed of Sun's crude oil and products pipelines,
domestic crude oil lease acquisition, marketing terminals, and the
company's rail, tank car, transport and marine operations;
* International Production, principally crude oil and natural gas
produced in the U.K. North Sea; and
* Coal, consisting of several Eastern coal mines and a coke producing
facility;
Campbell said a service company would be created from existing support
groups to provide services to these eight units. "This service company
will be compared with external providers to determine the most cost
effective way of providing needed services," Campbell noted.
Commenting on the dividend reduction, Campbell said that, based on
Monday's share price of $31.25, Sun's previous $1.80 per share dividend
represented a yield of 5.8 percent, more than double that of its
competitors. "We maintained that dividend level in anticipation that
market conditions would right themselves shortly and financial performance
would improve, but we can no longer wait for that to happen," he said. "It
is tempting to speculate that the downward pressure on our refining margins
has peaked and will soon subside, but at Sun we think that to count on that
would be a risky strategy indeed."
"The new annual dividend on common stock of $1.00 per share is still an
attractive yield compared to our competition and the average S&P 500
company," Campbell said. "By having a dividend level comparable to our
competitors, we will have sufficient funds to make sound investments in our
value-added businesses and to improve our basic refining capability." The
new dividend will take effect with the third quarter payment scheduled for
September 1995, Campbell noted.
<PAGE>
<PAGE 5>
He added that Sun will record an estimated after-tax charge in the 1995
second quarter of $100 million related to employee terminations and the
write-down to net realizable value of certain refining-marketing and coal
assets. He said the Suncor sale will result in a second quarter after-tax
gain of approximately $150 million.
Sun Company, Inc. (NYSE: SUN), headquartered in Philadelphia, operates
five domestic refineries and markets gasoline under the Sunoco brand
through more than 4,000 service stations in 17 states from Maine to Indiana
and the District of Columbia. These outlets include more than 600 Sunoco
A-Plus convenience stores and 350 Sunoco Ultra Service Centers. Sun sells
lubricants and petrochemicals worldwide, operates domestic pipelines and
terminals, and produces crude oil and natural gas internationally. Sun
recently sold its 55 percent interest in Suncor, a fully-integrated
Canadian oil company.
<PAGE>
<PAGE> 6
<TABLE>
<CAPTION>
Item 7. Financial Statements and Exhibits.
- ------- ----------------------------------
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
Sun Company, Inc. and Subsidiaries
(Millions of Dollars)
- --------------------------------------------------------------------------
At March 31, 1995
-----------------
Pro Forma
Adjustments
Increase (Decrease)
------------------
Repayment
Sale of Debt/
of Stock Pro
Historical Suncor(1) Repurchase Forma
---------- ------ ---------- -----
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 26 $ 635 $(635) $ 24
(2)
Accounts and notes receivable,
net of allowances 655 (141) -- 514
Inventories 682 (125) -- 557
Deferred income taxes 119 -- -- 119
------ ------ ----- ------
Total Current Assets 1,482 367 (635) 1,214
Investment in Coal Operations
Held for Sale 54 -- -- 54
Investment in Real Estate Operations
Held for Sale 130 -- -- 130
Receivable from Sale of Suncor stock -- 124 -- 124
Long-Term Receivables and Investments 85 (4) -- 81
Properties, Plants and Equipment, net 4,416 (1,281) -- 3,135
Deferred Charges and Other Assets 308 (38) -- 270
------ ------ ----- ------
Total Assets $6,475 $ (832) $(635) $5,008
====== ====== ===== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 774 $ (108) $ -- $ 666
Accrued liabilities 559 (90) -- 469
Short-term borrowings 324 -- (207) 117
Current portion of long-term debt 100 (4) (82) 14
Taxes payable 226 15 -- 183
(58)
------ ------ ----- ------
Total Current Liabilities 1,983 (245) (289) 1,449
Long-Term Debt 1,099 (175) (46) 878
Retirement Benefit Liabilities 512 (45) -- 467
Deferred Income Taxes 301 72 -- 165
(208)
Other Deferred Credits and Liabilities 394 (105) -- 289
Minority Interest 376 (376) -- --
Stockholders' Equity
Common stock 130 -- -- 130
Capital in excess of par value 1,309 -- -- 1,309
Cumulative foreign currency
translation adjustment (87) 87 -- --
Earnings employed in the business 1,479 163 -- 1,642
------ ------ ----- ------
2,831 250 -- 3,081
Less common stock held in
treasury, at cost 1,021 -- 300 1,321
------ ------ ----- ------
Total Stockholders' Equity 1,810 250 (300) 1,760
------ ------ ----- ------
Total Liabilities and Stockholders'
Equity $6,475 $ (832) $(635) $5,008
====== ====== ===== ======
- ----------------
(1) To reflect the removal of account balances and to record the net
proceeds and after-tax gain resulting from the sale of Suncor
(Note 2).
The accompanying notes are an integral part of these pro forma
statements.
</TABLE>
<PAGE>
<PAGE> 7
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Sun Company, Inc. and Subsidiaries
(Millions of Dollars Except Per Share Amounts)
- --------------------------------------------------------------------------
For the Year
Ended December 31, 1994
-----------------------
Pro Forma
Adjustments
Increase (Decrease)
------------------
Repayment
Sale of Debt/
of Stock Pro
Historical Suncor(1) Repurchase Forma
---------- ------ ---------- -----
<S> <C> <C> <C> <C>
REVENUES
Sales and other operating revenue
(including consumer excise taxes) $9,818 $(1,397) $ -- $8,421
Gain on divestments 51 -- -- 51
Interest income 16 (2) -- 14
Income (loss) from investments in
operations held for sale (1) -- -- (1)
Other income 24 (3) -- 21
------ ------ ---- ------
9,908 (1,402) -- 8,506
------ ------ ---- ------
COSTS AND EXPENSES
Cost of products sold and operating
expenses 6,276 (508) -- 5,768
Selling, general and administrative
expenses 703 (119) -- 584
Taxes, other than income taxes 2,253 (527) -- 1,726
Depreciation, depletion and
amortization 359 (90) -- 269
Exploratory costs and leasehold
impairment 24 (24) -- --
Provision for write-down of assets
and other matters 54 -- -- 54
Minority interest 35 (35) -- --
Interest cost and debt expense 97 (14) (22) 61
Interest capitalized (13) 2 -- (11)
------ ------ ---- ------
9,788 (1,315) (22) 8,451
------ ------ ---- ------
Income before provision
(credit) for income taxes and
cumulative effect of change in
accounting principle 120 (87) 22 55
Provision (credit) for income taxes 23 (50) 8 (19)
------ ------ ---- ------
Income before cumulative
effect of change in accounting
principle 97 (37) 14 74
Cumulative effect of change in
accounting principle (7) -- -- (7)
------ ------ ---- ------
NET INCOME $ 90 $ (37) $ 14 $ 67
====== ====== ==== ======
Earnings (loss) per share of
common stock:
Income before cumulative
effect of change in accounting
principle $ .91 $ .76
Cumulative effect of change in
accounting principle (.07) (.07)
----- -----
Net income $ .84 $ .69
===== =====
- ----------------
(1) To reflect the removal of Suncor's results of operations (Note 3).
The accompanying notes are an integral part of these pro forma
statements.
</TABLE>
<PAGE>
<PAGE> 8
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Sun Company, Inc. and Subsidiaries
(Millions of Dollars Except Per Share Amounts)
- --------------------------------------------------------------------------
For the Three Months
Ended March 31, 1995
--------------------
Pro Forma
Adjustments
Increase (Decrease)
------------------
Repayment
Sale of Debt/
of Stock Pro
Historical Suncor(1) Repurchase Forma
---------- ------ ---------- -----
<S> <C> <C> <C> <C>
REVENUES
Sales and other operating revenue
(including consumer excise taxes) $2,578 $(361) $ -- $2,217
Interest income 2 (1) -- 1
Income (loss) from investments in
operations held for sale 1 -- -- 1
Other income 7 (1) -- 6
------ ----- ---- ------
2,588 (363) -- 2,225
------ ----- ---- ------
COSTS AND EXPENSES
Cost of products sold and operating
expenses 1,752 (129) -- 1,623
Selling, general and administrative
expenses 178 (36) -- 142
Taxes, other than income taxes 520 (125) -- 395
Depreciation, depletion and
amortization 97 (24) -- 73
Exploratory costs and leasehold
impairment 10 (10) -- --
Minority interest 10 (10) -- --
Interest cost and debt expense 31 (4) (5) 22
Interest capitalized (2) 1 -- (1)
------ ----- ---- ------
2,596 (337) (5) 2,254
------ ----- ---- ------
Income (loss) before provision
(credit) for income taxes (8) (26) 5 (29)
Provision (credit) for income taxes (1) (15) 2 (14)
------ ----- ---- ------
NET INCOME (LOSS) $ (7) $ (11) $ 3 $ (15)
====== ===== ==== ======
Net income (loss) per share of
common stock $(.07) $(.15)
===== =====
- ----------------
(1) To reflect the removal of Suncor's results of operations (Note 3).
The accompanying notes are an integral part of these pro forma
statements.
</TABLE>
<PAGE>
<PAGE> 9
Sun Company, Inc.
-----------------
Notes to Unaudited Pro Forma Consolidated Financial Statements
- --------------------------------------------------------------
1. As described in Item 2 of this Form 8-K, on June 8, 1995, Sun
completed the sale of its remaining interest in Suncor. On June 13,
the Company announced its intention to use the net cash proceeds from
this sale to repay debt and repurchase Sun common shares. The
historical consolidated balance sheet and income statements of Sun
have been adjusted to give effect to these transactions as discussed
below. The pro forma consolidated balance sheet and income statements
do not include an estimated after-tax charge of $100 million to be
recognized in the second quarter of 1995 related to employee
terminations and the write-down to net realizable value of certain
refining and marketing and coal assets.
2. The balance sheet pro forma adjustments assume the transactions giving
rise to the adjustments were consummated on March 31, 1995. The pro
forma balance sheet gives effect to the disposition of all assets and
liabilities of Suncor and the aforementioned debt repayment and share
repurchase transactions. Included in earnings employed in the
business in the pro forma balance sheet is a pro forma gain of $163
million (after current income taxes payable of $15 million and
deferred income taxes of $72 million) resulting from the sale of
Suncor. The actual gain of approximately $150 million to be recorded
in the second quarter of 1995 will be based on the book value of Sun's
investment in Suncor on the June 8, 1995 sale date. In addition, the
net cash proceeds of $635 million to be received in June 1995 from the
sale were assumed to be used to (i) repay $335 million of Company
indebtedness; and (ii) repurchase 10 million shares of Company common
stock at an assumed weighted average price of $30 per share via a
Dutch Auction tender offer (6.4 million shares) and open market
purchases (3.6 million shares). The remaining net proceeds from the
sale, which total $124 million after discount, are reflected as
"Receivable from Sale of Suncor Stock" in the pro forma balance sheet.
Such proceeds are expected to be received in June 1996.
3. The statement of income pro forma adjustments assume the transactions
giving rise to the adjustments were consummated January 1, 1994. The
pro forma consolidated statements of income give effect to the removal
of Suncor's results of operations and a reduction in interest expense
due to the assumed repayment of debt. In addition, the increase in
the pro forma tax provisions resulting from the reduction in interest
expense were computed using the statutory rates for the periods
presented. In accordance with pro forma reporting rules, no gain from
the Suncor divestment is reflected in the consolidated pro forma
statements of income for the periods presented.
4. Earnings per share included in the pro forma consolidated statements
of income are based on the average number of common shares outstanding
for the periods presented. On a historical basis, the weighted
average number of common shares outstanding (in thousands) totalled
107,043 and 107,053 for the year ended December 31, 1994 and three-
months ended March 31, 1995, respectively. For calculation of the pro
<PAGE>
<PAGE> 10
Notes to Unaudited Pro Forma Consolidated Financial Statements (continued)
- --------------------------------------------------------------------------
forma earnings per share, the average number of shares was adjusted to
reflect the assumed repurchase of 10 million shares on January 1,
1994.
5. The pro forma consolidated financial statements should be read in
conjunction with the historical consolidated financial statements and
notes thereto of Sun Company, Inc. The pro forma consolidated
financial statements are not necessarily indicative of the actual
results that would have been achieved had the transactions been in
effect on the dates or for the periods indicated, nor are they
necessarily indicative of future results.
<PAGE>
<PAGE> 11
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SUN COMPANY, INC.
BY s/ RICHARD L. CARTLIDGE
-----------------------
Richard L. Cartlidge
Comptroller
(Principal Accounting Officer)
DATE June 13, 1995
<PAGE>
<PAGE> 1
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit
- ------- -----------------------------------------------------
2 Suncor Inc. Prospectus dated June 1, 1995.
4.1 Articles of Incorporation of Sun Company, Inc., as
amended May 4, 1995.
4.2 Sun Company, Inc. By-Laws, as amended May 4, 1995.
4.3 Statement of Designation.
99.1 Underwriting Agreement re: sale of common shares of Suncor Inc.
99.2 Installment Receipt and Pledge Agreement re: sale of Suncor Inc.
<PAGE>
EXHIBIT 2
This short form prospectus constitutes a public offering of these
securities only in those jurisdictions where they may be lawfully
offered for sale and therein only by persons permitted to sell such
securities. No securities commission or any similar authority in
Canada has in any way passed upon the merits of the securities
offered hereby and any representation to the contrary is an offence.
The securities offered under this short form prospectus have not
and will not be registered under the United States Securities Act of
1933 and, except in limited circumstances, may not be offered or
sold within the United States or to U.S. persons. This short form
prospectus does not constitute an offer to sell or solicitation of an
offer to buy any of the securities offered hereby within the United
States or to U.S. persons. See "Plan of Distribution".
Information has been incorporated by reference in this short form
prospectus from documents filed with securities commissions or
similar authorities in Canada. Copies of the documents
incorporated by reference may be obtained on request without
charge from the Vice President and General Counsel of Suncor
Inc., 36 York Mills Road, North York, Ontario, M2P 2C5
(telephone (416) 733-7300). For the purposes of the Province of
Quebec, this simplified prospectus contains information to be
completed by consulting the permanent information record. A copy
of the permanent information record may be obtained from the
Vice President and General Counsel of Suncor Inc. at the above-
mentioned address and telephone number.
Secondary Offering by Sun Canada, Inc.
[ARTWORK]
$1,167,481,068
29,935,412 Common Shares
(Represented by Instalment Receipts)
The common shares of Suncor Inc. ("Suncor") offered hereby (the
"Common Shares") will be sold by Sun Canada, Inc. (the "Selling
Shareholder"), a wholly-owned subsidiary of Sun Company, Inc.
("Sun"), at a price of $39.00 per Common Share, which will be
payable on an instalment basis. The first instalment of $13.00 per
Common Share is payable on the closing of this offering, the
second instalment of $13.00 per Common Share is payable on or
before June 10, 1996, and the final instalment of $13.00 per
Common Share is payable on or before December 30, 1996. The
Common Shares will be pledged to the Selling Shareholder to
secure the obligation to pay the second and final instalments of the
purchase price for the Common Shares. Prior to full payment,
beneficial ownership of the Common Shares will be represented by
instalment receipts (the "Instalment Receipts"). If a registered
holder of an Instalment Receipt does not pay the second instalment
or the final instalment on or before the due dates, the Common
<PAGE>
Shares represented by such registered holder's Instalment Receipt
may, at the Selling Shareholder's option, upon compliance with
applicable law, be reacquired by the Selling Shareholder in full
satisfaction of the obligations to pay the outstanding instalments, or
such Common Shares may be sold and the registered holder shall
remain liable for any deficiency in the proceeds of such sale. See
"Details of the Offering".
The outstanding common shares of Suncor are listed on the
Toronto, Montreal, Alberta and Vancouver stock exchanges in
Canada and on the American Stock Exchange in the United States.
The Toronto and Montreal stock exchanges have conditionally
approved the listing of the Instalment Receipts subject to the
fulfillment of the requirements of the exchanges on or before
August 28, 1995, including the distribution of the Instalment
Receipts to a minimum number of public holders. On May 31,
1995, the closing sale price of the common shares of Suncor on
The Toronto Stock Exchange was $39.00. The offering price for
the Common Shares has been determined by negotiation between
the Selling Shareholder and the Underwriters. Suncor has been
advised that, upon completion of the offering, neither the Selling
Shareholder nor Sun will own beneficially, directly or indirectly,
any shares or other securities of Suncor. No portion of the
proceeds of this offering by the Selling Shareholder will be
received by Suncor.
In the opinion of counsel, the Common Shares, represented by
Instalment Receipts will, at the date of closing, be eligible for
investment under certain statutes as set out under "Eligibility for
Investment".
Price: $39.00 per Common Share, of which $13.00 is payable on
closing
Net Proceeds
Price to Underwriters'to the Selling
Public Fee Shareholder (1)
Per Common Share
First Instalment $13.00 $1.56 $11.44
Second Instalment 13.00 -- 13.00
Final Instalment 13.00 -- 13.00
Total per Common
Share $39.00 $1.56 $37.44
Total Offering (1) (2) (3)
(1) $1,167,481,068.00
(2) $46,699,242.72
(3) $1,120,781,825.28
(1) Before deduction of the expenses of the offering estimated at
$1.5 million which, together with the Underwriters' fee are
payable by the Selling Shareholder.
<PAGE>
The Underwriters, as principals, conditionally offer the Common
Shares, subject to prior sale, if, as and when sold by the Selling
Shareholder and accepted by the Underwriters in accordance with
the conditions contained in the Underwriting Agreement referred to
under "Plan of Distribution" and subject to the approval of certain
legal matters on behalf of Suncor by Osler, Hoskin & Harcourt, on
behalf of the Selling Shareholder and Sun by Fasken Campbell
Godfrey and on behalf of the Underwriters by Davies, Ward &
Beck. Subscriptions for the Common Shares will be received
subject to rejection or allotment in whole or in part and the right is
reserved to close the subscription books at any time without notice.
It is expected that the closing of the offering will take place on
June 8, 1995, or such other date as may be agreed upon, but not
later than July 6, 1995, and that Instalment Receipts representing
the Common Shares will be available for delivery at closing.
Registered holders of Instalment Receipts will receive share
certificates evidencing the Common Shares as soon as practicable
after payment of the final instalment.
June 1, 1995
<PAGE>
Table of Contents
Documents Incorporated by Reference 2
Summary of the Offering 3
Suncor Inc. 4
Selling Shareholder 4
Recent Developments 4
Details of the Offering 4
Plan of Distribution 8
Canadian Federal Income Tax Considerations 9
Eligibility for Investment 10
Legal Matters 11
Auditors, Transfer Agent and Registrar 11
Statutory Rights of Withdrawal and Rescission11
Certificate of Suncor 12
Certificate of the Underwriters 13
DOCUMENTS INCORPORATED BY REFERENCE
The following documents of Suncor which have been filed
with securities commissions or similar regulatory authorities in
each of the provinces of Canada, are incorporated by reference into
and form an integral part of this short form prospectus:
(a) the Annual Information Form dated March 16, 1995;
(b) the Management Proxy Circular dated March 1, 1995
relating to the Annual and Special Meeting of
Shareholders held on April 27, 1995;
(c) the audited consolidated financial statements as at and for
the fiscal years ended December 31, 1994, December 31,
1993 and December 31, 1992 together with the auditors'
report thereon dated January 20, 1995 and Management's
Discussion and Analysis as contained in Suncor's Annual
Report for the year ended December 31, 1994;
(d) the unaudited consolidated financial statements as
contained in Suncor's First Quarter 1995 Report to
Shareholders dated April 19, 1995;
(e) the unaudited consolidated financial statements and
Management's Discussion and Analysis of Financial
Condition and Results of Operations as contained in
Suncor's Form 10-Q for the quarter ended March 31,
1995; and
(f) the Material Change Report of Suncor dated May 30,
1995, which reported the offering contemplated herein.
Any annual information form, material change report (other
than confidential reports), comparative interim financial statements
or management proxy circular filed by Suncor with securities
commissions or similar authorities in the provinces of Canada
subsequent to the date of this short form prospectus and prior to
termination of this offering shall be deemed to be incorporated by
<PAGE>
reference into this short form prospectus.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified
or superseded for the purposes of this short form prospectus to the
extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or replaces such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this short form prospectus.
<PAGE>
SUMMARY OF THE OFFERING
Offering: 29,935,412 Common Shares to
be sold by the Selling
Shareholder, to be represented
by Instalment Receipts.
Amount: $1,167,481,068.00
Price: $39.00 per Common Share,
payable in instalments of which
$13.00 is payable on the closing
of this offering, $13.00 is
payable on or before June 10,
1996 and $13.00 is payable on
or before December 30, 1996.
Instalment Payment
Arrangements: The purchase price for the
Common Shares is payable on
an instalment basis. Prior to full
payment, beneficial ownership
of the Common Shares will be
represented by Instalment
Receipts. The first instalment of
$13.00 per Common Share is
payable on the closing of this
offering, the second instalment
of $13.00 per Common Share is
payable on or before June 10,
1996 and the final instalment of
$13.00 per Common Share is
payable on or before December
30, 1996 (in each case not later
than 1:00 p.m. local time on the
relevant date) by the registered
holder of the Instalment Receipt
representing Common Shares.
The Common Shares will be
pledged to the Selling
Shareholder and held by a
security agent on its behalf to
secure the obligations to pay the
second and final instalments of
the purchase price for the
Common Shares. As soon as
practicable after payment of the
final instalment, the registered
holder of an Instalment Receipt
will receive a certificate
representing the underlying
Common Shares, which
Common Shares will no longer
be subject to the pledge in
favour of the Selling
Shareholder. If a registered
<PAGE>
holder of an Instalment Receipt
does not pay the second or final
instalments on or before the due
dates, the Common Shares as
represented by such Instalment
Receipt may, at the Selling
Shareholder's option, upon
compliance with applicable law,
be reacquired by the Selling
Shareholder in full satisfaction
of the registered holder's
obligation. Alternatively, such
Common Shares may be sold
and the registered holder shall
remain liable for any deficiency
if the proceeds of such sale are
insufficient to cover the amount
of the second instalment, if
applicable, and the final
instalment and the costs of sale
(such costs of sale not to exceed
$1.00 per Common Share).
Rights of Instalment
Receipt Holders: Registered holders of Instalment
Receipts will be entitled, in the
manner set forth in the
Instalment Receipt Agreement
described herein, unless they
have defaulted on their
obligations thereunder, to fully
participate in all dividends and
other distributions, to exercise
the votes attached to the
Common Shares represented by
such Instalment Receipts and to
receive periodic reports and
other materials in like manner as
if they were registered holders
of the Common Shares.
Ownership of Suncor by
the Selling Shareholder: The Selling Shareholder's
29,935,412 Common Shares,
representing approximately
54.80 per cent of the common
shares of Suncor will be
distributed to the public pursuant
to this offering. Suncor has been
advised that following the
closing of this offering, neither
the Selling Shareholder nor Sun
will own beneficially, directly or
indirectly, any shares or other
securities of Suncor.
<PAGE>
Eligibility for Investment: In the opinion of counsel, the
Common Shares represented by
Instalment Receipts will, at the
date of closing, be eligible for
investment under certain statutes
as set forth under "Eligibility for
Investment".
The above information is a summary only and is qualified by the
detailed information appearing elsewhere in this short form
prospectus or incorporated by reference herein.
<PAGE>
SUNCOR INC.
Suncor, a Canadian integrated oil and gas company, is
engaged in the exploration for and acquisition, production and
marketing of, crude oil and natural gas and in the refining and
marketing of petroleum products. Suncor has three principal
operating groups: Oil Sands Group, based near Fort McMurray,
Alberta, which mines and upgrades oil sands and markets high
quality light sweet crude oil and custom blends; Resources Group,
based in Calgary, Alberta, which explores for, acquires, produces
and markets natural gas and conventional crude oil; and Sunoco
Group, with headquarters in North York, Ontario, which refines
and markets transportation fuels, petrochemicals and heating oils.
Suncor's registered and principal office is currently
located at 36 York Mills Road, North York, Ontario, M2P 2C5.
Suncor has announced publicly its intention to move its registered
and principal office to Calgary, Alberta by the end of 1995. In this
short form prospectus, references to Suncor include Suncor Inc.
and its subsidiaries unless the context otherwise requires.
SELLING SHAREHOLDER
As of May 24, 1995, the Selling Shareholder owned
29,935,412 common shares of Suncor, which represented
approximately 54.80 per cent of the issued common shares of
Suncor. Suncor has been advised that following the closing of the
offering, neither the Selling Shareholder nor Sun will own
beneficially, directly or indirectly, any shares or other securities of
Suncor.
RECENT DEVELOPMENTS
Suncor has declared a cash dividend of $0.27 per common
share payable on June 26, 1995 to shareholders of record at the
close of business on June 15, 1995. Holders of Common Shares
represented by Instalment Receipts on June 15, 1995 will be
entitled to such dividend.
DETAILS OF THE OFFERING
The offering consists of 29,935,412 Common Shares
which are being sold by the Selling Shareholder on an instalment
basis. Prior to receipt by the Custodian (as defined below) of both
the second instalment and the final instalment, beneficial ownership
of the Common Shares will be represented by Instalment Receipts
and the Common Shares will be pledged by the Underwriters to the
Selling Shareholder pursuant to the terms of the Instalment Receipt
Agreement (described below). Upon due payment of the second
instalment and the final instalment pursuant to the Instalment
Receipt Agreement, registered holders of Instalment Receipts will
become registered holders of the Common Shares.
<PAGE>
Common Shares and Instalment Receipts
The following is a summary of the material attributes and
characteristics of the Instalment Receipts and the rights and
obligations of registered holders thereof. Reference is made to the
instalment receipt and pledge agreement (the "Instalment Receipt
Agreement") among the Selling Shareholder, Sun, Suncor, the
Underwriters, Montreal Trust Company of Canada (the
"Custodian") and The R-M Trust Company (the "Security Agent"),
which will hold the Common Shares pledged to the Selling
Shareholder, to be dated as of the date of closing of this offering.
For the purposes of this description of the material attributes and
characteristics of the Instalment Receipts, a "Holder" means a
person who is shown on the register of holders of Instalment
Receipts maintained under the Instalment Receipt Agreement.
Copies of the Instalment Receipt Agreement will be available for
inspection (in draft form prior to closing) at the principal Stock and
Bond Transfer offices of the Custodian in Toronto, Montreal,
Calgary, Edmonton and Vancouver. This description does not
purport to be complete and reference is made to the Instalment
Receipt Agreement for a complete statement of the attributes and
characteristics of the Instalment Receipts and the rights and
obligations of the Holders thereof.
The first instalment of $13.00 per Common Share is
payable on the closing of this offering which is expected to occur
on or about June 8, 1995 (but not later than July 6, 1995); the
second instalment of $13.00 per Common Share is payable on or
before June 10, 1996 (the "Second Instalment Date"); and the final
instalment of $13.00 per Common Share is payable on or before
December 30, 1996 (the "Final Instalment Date"). The second and
final instalment payments must be received by the Custodian no
later than 1:00 p.m. (local time) on the relevant date.
Holders of Instalment Receipts will be bound by the terms
of the Instalment Receipt Agreement. The Instalment Receipt
Agreement will provide that legal title to the Common Shares
offered hereby will be held by the Custodian following payment of
the first instalment pursuant to the Underwriting Agreement
(described under "Plan of Distribution") and until both the second
and final instalments have been fully paid to the Custodian on or
before the Second Instalment Date and the Final Instalment Date,
respectively. The Common Shares offered hereby will be pledged
to the Selling Shareholder by the Underwriters at closing and will
be held in the possession of the Security Agent subject to the terms
of the Instalment Receipt Agreement. By acquiring and holding an
Instalment Receipt, the Holder thereof acknowledges that the
Common Shares represented thereby will be held as continuing
security for the obligations of such Holder to pay the unpaid
instalments and other amounts payable under the Instalment Receipt
Agreement and that the pledge will remain in effect and be binding
and effective notwithstanding any transfer of or other dealings with
the Instalment Receipt and the rights evidenced or arising thereby.
<PAGE>
Following payment of the first instalment, beneficial
ownership of the Common Shares will be represented by first
instalment receipts ("First Instalment Receipts") and following
payment of the second instalment, beneficial ownership of the
Common Shares will be represented by second instalment receipts
("Second Instalment Receipts"). Certificates evidencing the First
Instalment Receipts will be available for delivery at closing and
certificates evidencing the Second Instalment Receipts will be
issued after timely payment of the second instalment and
presentation and delivery of First Instalment Receipts, as more
fully described below.
A First Instalment Receipt will, among other things,
evidence that the first instalment has been paid in respect of the
number of Common Shares specified therein and the right of the
Holder thereof, subject to compliance with the provisions of the
Instalment Receipt Agreement, to become the Holder of a Second
Instalment Receipt upon payment in full of the second instalment
with respect to such shares. A Second Instalment Receipt will,
among other things, evidence that the first and second instalments
have been paid in respect of the number of Common Shares
specified therein and the right of the Holder thereof, subject to
compliance with the provisions of the Instalment Receipt
Agreement, to become the registered holder of such shares upon
payment in full of the final instalment with respect to such shares.
By becoming a Holder of a First Instalment Receipt, a
person is deemed: (a) to have assumed the obligations to pay the
second instalment (and to thereupon receive a Second Instalment
Receipt) and to comply with the terms of the Second Instalment
Receipt including the obligation to pay the final instalment; and (b)
to have acquired the Common Shares represented by the First
Instalment Receipt subject to the pledge of such Common Shares
which secures such obligations. By becoming a Holder of a Second
Instalment Receipt, a person is deemed: (a) to have assumed the
obligation to pay the final instalment and to thereupon become
entitled to receive a share certificate representing such Common
Shares; and (b) to continue to beneficially own the Common Shares
represented by the Second Instalment Receipt, subject to the pledge
of such Common Shares which secures such obligation.
The Instalment Receipt Agreement will require the
Custodian to mail to the Holders of Instalment Receipts, as
determined on a date being not more than 14 days before the date
of mailing, notices of the Second Instalment Date and the Final
Instalment Date and the amount of the relevant instalment not less
than 30 days prior to the Second Instalment Date and the Final
Instalment Date, respectively. Payment of the second instalment
and the final instalment is required when due whether or not a
Holder receives a notice of the Second Instalment Date or of the
Final Instalment Date from the Custodian. Subject to compliance
with the provisions of the Instalment Receipt Agreement, as soon
as practicable after: (a) timely payment of the second instalment
and presentation and surrender of the relevant First Instalment
Receipt certificate, a Second Instalment Receipt will be registered<PAGE>
in the name of, and a certificate evidencing the Second Instalment
Receipt will be forwarded to, the Holder of the First Instalment
Receipt; and (b) timely payment of the final instalment and
presentation and surrender of the relevant Second Instalment
Receipt certificate, the Common Shares represented thereby will be
registered in the name of, and a certificate evidencing Common
Shares will be forwarded to, the Holder of the Second Instalment
Receipt, in either case, without additional charge.
A Holder of an Instalment Receipt will be entitled to make
payment, in accordance with the provisions of the Instalment
Receipt Agreement, of the second instalment and the final
instalment at any time prior to the Second Instalment Date and the
Final Instalment Date with respect to any Common Shares
represented thereby and thereby to become the registered holder of
such Common Shares.
Rights and Privileges
Under the Instalment Receipt Agreement, Holders of
Instalment Receipts will have the same rights and privileges, and
be subject to the same limitations, as registered holders of common
shares of Suncor, except for certain rights and privileges which are
limited under the Instalment Receipt Agreement in order to protect
the value of the collateral secured by the pledge to the Selling
Shareholder of the Common Shares represented by the Instalment
Receipts or except where the exercise of such rights and privileges
would not be practicable. In particular, a Holder of Instalment
Receipts will be entitled under arrangements through the
Custodian, in the manner set forth in the Instalment Receipt
Agreement, unless it has defaulted on its obligations thereunder, to
participate fully in all dividends and other distributions on the
Common Shares, to exercise the votes attached to the Common
Shares represented by such Instalment Receipts and to receive
periodic reports and other materials in like manner as if it were the
registered holder of the Common Shares.
In particular, the Instalment Receipt Agreement will
contain the following provisions:
(a) Dividends on Common Shares which are declared
to be payable in cash (other than Excess
Dividends, as defined below), shall be remitted,
net of any applicable withholding taxes, to
persons who, on the applicable dividend record
date in respect of such Common Shares, are
Holders of the Instalment Receipts representing
such Common Shares. "Excess Dividends" means
the aggregate of (i) the amount, if any, by which
in a particular fiscal year ending December 31 the
aggregate of all cash dividends declared and paid
in respect of the Common Shares exceeds $1.75
per common share, (ii) all cash paid in respect of
the Common Shares on a Reorganization (as
<PAGE>
defined below) and (iii) all cash paid in respect of
the Common Shares on a liquidation, dissolution
or winding up of Suncor.
(b) Excess Dividends will not be distributed by the
Custodian to the Holders of Instalment Receipts
but will be remitted for the benefit of the Selling
Shareholder to be applied equally in reduction of
the second and final instalments payable on the
Common Shares by all Holders. Any balance
remaining shall be remitted by the Custodian, net
of any unpaid applicable withholding taxes, to the
Holders according to their entitlement.
(c) Dividends paid in additional common shares of
Suncor ("Stock Dividends") shall be registered in
the name of the Custodian and shall be held by
the Security Agent as security for the
performance of the obligations of the Holders of
Instalment Receipts to pay the second instalment
and the final instalment and upon payment of the
final instalment, shall be distributed to the
Holders according to their entitlement.
(d) If Suncor issues or distributes (including on
liquidation, dissolution or winding up) to all, or
substantially all, of the holders of common shares
of Suncor, any (i) securities, (ii) options, rights
or warrants to purchase any securities, (iii)
evidences of indebtedness or (iv) assets, whether
of Suncor or of any other corporation (excluding
cash dividends and Stock Dividends) (collectively,
the "Distributed Property"), the Custodian will,
as promptly as commercially reasonable, sell such
Distributed Property. The Custodian shall remit
the net proceeds from such sale for the benefit of
the Selling Shareholder to be applied equally in
reduction of the second and final instalments
payable on the Common Shares by all Holders.
Any balance remaining shall be remitted by the
Custodian, net of any unpaid applicable
withholding taxes, to the Holders according to
their entitlement.
(e) Upon any subdivision or consolidation of the
common shares of Suncor, the number of shares
to be registered in the name of a Holder of an
Instalment Receipt on payment of the final
instalment will be adjusted proportionately, and
the adjusted number of such shares shall be
registered in the name of the Custodian and held
by the Security Agent as security for the
performance of the obligations of the Holder.
<PAGE>
(f) Upon any change or reclassification of the
common shares of Suncor or any amalgamation,
merger, reorganization, transfer of all or
substantially all of the assets or other similar
transaction affecting Suncor (a "Reorganization"),
the appropriate kind and number of shares or
other securities or property resulting from such
Reorganization will be substituted for the
Common Shares represented by an Instalment
Receipt, and will be registered in the name of the
Custodian and held by the Security Agent as
security for the performance of the obligations of
the Holder of such Instalment Receipt.
Transfer of Instalment Receipts
Transfers of Instalment Receipts will be registrable at the
principal offices of the Custodian in Toronto, Montreal, Calgary,
Edmonton and Vancouver. Upon registration of the transfer of an
Instalment Receipt, the transferee will acquire the transferor's
rights, subject to the pledge in favour of the Selling Shareholder,
and become subject to the obligations of a Holder under the
Instalment Receipt Agreement, including the assumption by the
transferee of the obligation to pay the second instalment, if
applicable, and the final instalment. The person requesting
registration of the transfer of an Instalment Receipt is deemed to
warrant such person's authority to do so as, or on behalf of the
transferee. Upon registration of such transfer, the transferor will
cease to have any further rights or obligations thereunder. No
transfer of a First Instalment Receipt tendered for registration after
the Second Instalment Date, and no transfer of a Second Instalment
Receipt tendered for registration after the Final Instalment Date,
will be accepted for registration (subject to certain exceptions
applicable to intermediaries holding Instalment Receipts on behalf
of non-registered holders).
Liability of Instalment Receipt Holders
Pursuant to the Instalment Receipt Agreement, the
Underwriters will pledge the Common Shares purchased on an
instalment basis to secure payment of the second instalment and the
final instalment. If payment of the second instalment or the final
instalment is not duly received by the Custodian from a Holder of
Instalment Receipts when due, the Instalment Receipt Agreement
will provide that (except as set out below) any Common Shares
(and any securities or property substituted therefor or in addition
thereto) then remaining pledged under the Instalment Receipt
Agreement in respect of such Instalment Receipts, may, at the
option of the Selling Shareholder, subject to complying with
applicable law, be reacquired by the Selling Shareholder in full
satisfaction of the obligations of such Holder of Instalment Receipts
secured thereby. The Instalment Receipt Agreement will further
provide that the Selling Shareholder may direct the Custodian to
sell the Common Shares (and any securities or property substituted
therefor or in addition thereto) in respect of which payment of the
<PAGE>
second instalment or the final instalment was not duly received, in
accordance with the requirements of applicable law and of the
Instalment Receipt Agreement, and remit to the Holder of the
Instalment Receipt the Holder's pro rata portion of the proceeds of
such sale after deducting therefrom the amount of the remaining
unpaid instalments together with the Holder's pro rata portion of
the costs of such sale, which shall in any event not exceed $1.00
per Common Share. Notwithstanding the foregoing, in the event
that payment of the second instalment or the final instalment in
respect of an aggregate of less than 5% of the Common Shares
represented by Instalment Receipts has not been duly received by
the Custodian when due, the Custodian must sell the Common
Shares (and any securities or property substituted therefor or in
addition thereto) in respect of which payment of the second
instalment or the final instalment was not duly received and apply
the proceeds of such sale in the manner described above. The
Instalment Receipt Agreement will provide that unless the Selling
Shareholder shall have reacquired the Common Shares in full
satisfaction of the obligations of a Holder, the foregoing shall not
limit any other remedies available to the Selling Shareholder
against such Holder of the Instalment Receipt in the event the
proceeds of such sale are insufficient to cover the amount of the
second instalment, if applicable, and the final instalment and the
costs of sale (such costs of sale not to exceed $1.00 per Common
Share) and accordingly, such Holder shall in such circumstances
remain liable to the Selling Shareholder for any such deficiency.
Holders of Instalment Receipts who are non-residents of
Canada will be required to pay the cost of all withholding taxes
payable in respect of any cash dividends, Excess Dividends, Stock
Dividends, Distributed Property or Reorganization. Any such
withholding tax will be payable on such distributions even if the
payment thereof is directed to the Selling Shareholder on account
of the non-resident's unpaid instalments and even if there is not
sufficient cash in the distribution to pay such withholding tax.
Provision for the payment of this tax by non-residents is set out in
the Instalment Receipt Agreement.
General
The Custodian may require Holders of Instalment Receipts
from time to time to furnish such information and documents as
may be necessary or appropriate to comply with any fiscal or other
laws or regulations relating to common shares of Suncor or to
rights and obligations represented by Instalment Receipts. The
Custodian and the Security Agent shall not be responsible for any
taxes, duties, governmental charges or expenses which are or may
become payable in respect of the Common Shares or Instalment
Receipts. In this regard, the Custodian and the Security Agent shall
be entitled to deduct or withhold from any payment or other
distribution required or
contemplated by the Instalment Receipt Agreement such money or
property, or to require Holders of Instalment Receipts to make any
<PAGE>
required payments, and to withhold delivery of certificates
representing the Common Shares from defaulting Holders of
Instalment Receipts until satisfactory provision for payment is
made, in respect of any non-resident Canadian withholding taxes.
The Selling Shareholder will be liable for charges and
expenses of the Custodian and the Security Agent except for any
taxes, duties and other government charges which may be payable
by Holders of Instalment Receipts as described above.
Apart from changes which do not materially prejudice the
Holders of Instalment Receipts as a group (which may be made
without consent of such Holders), the Instalment Receipt
Agreement may not be amended without the affirmative vote of the
Holders of Instalment Receipts entitled to not less than two-thirds
of the Common Shares represented by Instalment Receipts which
are represented and voted at a meeting duly called for the purpose.
The procedure for such meetings will be substantially similar to
that governing meetings of holders of Suncor's common shares.
PLAN OF DISTRIBUTION
Pursuant to an Underwriting Agreement dated May 24,
1995 (the "Underwriting Agreement") among Suncor, Sun, the
Selling Shareholder, Nesbitt Burns Inc., Gordon Capital
Corporation, RBC Dominion Securities Inc., Wood Gundy Inc.,
ScotiaMcLeod Inc., Goldman Sachs Canada, Midland Walwyn
Capital Inc., Richardson Greenshields of Canada Limited, First
Marathon Securities Limited, Levesque Beaubien Geoffrion Inc.,
Toronto Dominion Securities Inc., and Peters & Co. Limited, as
underwriters (collectively, the "Underwriters") the Selling
Shareholder has agreed to sell and the Underwriters have severally
agreed to purchase, as principals, on June 8, 1995, or on such later
date as may be agreed upon by the parties but in any event not
later than July 6, 1995, an aggregate of 29,935,412 Common
Shares at a purchase price of $39.00 per Common Share payable in
cash to the Selling Shareholder as to $13.00 per Common Share by
the Underwriters against delivery of Common Share certificates, as
to $13.00 per share (being the second instalment on the Common
Shares) by the registered holders of Instalment Receipts on or
before June 10, 1996, and as to $13.00 per share (being the final
instalment on the Common Shares) by the registered holders of
Instalment Receipts on or before December 30, 1996. The Selling
Shareholder has agreed to pay to the Underwriters at closing a fee
of $46,699,242.72 for their services performed in connection with
this offering. The Selling Shareholder, Sun and Suncor have agreed
to indemnify the Underwriters and their directors, officers,
employees and agents against certain liabilities.
The Underwriting Agreement provides that the
Underwriters may, at their discretion, terminate their obligations
thereunder upon the occurrence of certain stated events. The
Underwriters, however, shall take up and pay for all of the
Common Shares if any are purchased under the Underwriting
Agreement. Suncor has agreed with the Underwriters that it will
not, for the period ending 90 days after the closing, issue or sell
<PAGE>
any common shares of Suncor or any securities convertible into or
exchangeable or exercisable for common shares of Suncor, except
common shares of Suncor required to be issued pursuant to
officers', directors' and employees' stock options or other awards
now outstanding or hereinafter issued in the ordinary course,
without the prior consent of Nesbitt Burns Inc.
The Instalment Receipts and the Common Shares
underlying the Instalment Receipts have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), and may not be offered or
sold within the United States or to, or for the account or benefit of,
U.S. persons except in certain transactions exempt from the
registration requirements of the U.S. Securities Act. Each
Underwriter has agreed that, except as permitted by the
Underwriting Agreement, it will not offer or sell any Instalment
Receipts or Common Shares underlying Instalment Receipts (i) as
part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing
date, within the United States or to, or for the account or benefit
of, U.S. persons, and it will have sent to each dealer to which it
sells Instalment Receipts or Common Shares underlying Instalment
Receipts during the restricted period a confirmation or other notice
setting forth the restrictions on offers and sales of the Instalment
Receipts or Common Shares underlying Instalment Receipts within
the United States or to, or for the account or benefit of, U.S.
persons. Terms used in this paragraph have the meanings given to
them by Regulation S under the U.S. Securities Act.
In addition, until 40 days after the commencement of the
offering, an offer or sale of Instalment Receipts or Common
Shares underlying Instalment Receipts within the United States by a
dealer that is not participating in the offering may violate the
registration requirements of the U.S. Securities Act.
Pursuant to policy statements of the Ontario Securities
Commission and the Commission des valeurs mobilieres du
Quebec, the Underwriters may not, throughout the period of
distribution under this short form prospectus, bid for or purchase
Common Shares or Instalment Receipts representing Common
Shares. The foregoing restriction is subject to certain exceptions,
as long as the bid or purchase is not engaged in for the purpose of
creating actual or apparent active trading in or raising the price of
such securities. These exceptions include a bid or purchase
permitted under the by-laws and rules of The Toronto Stock
Exchange and The Montreal Exchange relating to market
stabilization and passive market making activities and a bid or
purchase made for and on behalf of a customer where the order
was not solicited during the period of distribution. Pursuant to the
first mentioned exception, in connection with this offering the
Underwriters may over allot or effect transactions which stabilize
or maintain the market price of the Common Shares or Instalment
Receipts representing Common Shares of Suncor at levels other
than those which otherwise might prevail on the open market.
Throughout the period of distribution such transactions, if
commenced, may be discontinued at any time.
<PAGE>
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Osler, Hoskin & Harcourt, counsel for
Suncor, Fasken Campbell Godfrey, counsel for the Selling
Shareholder and Sun, and Davies, Ward & Beck, counsel for the
Underwriters, the following summary describes the principal
Canadian federal income tax considerations generally applicable to
a Holder who acquires Common Shares pursuant to this offering
and who, for purposes of the Income Tax Act (Canada) (the "Tax
Act"), is a resident of Canada, holds such shares as capital
property and deals at arm's length with Suncor, the Selling
Shareholder, Sun and the Underwriters. Generally, Common
Shares will be considered capital property to a Holder provided
that such Holder does not hold the Common Shares in the course
of carrying on a business and has not acquired them in a
transaction or transactions considered to be an adventure in the
nature of trade. Certain Holders whose Common Shares might not
otherwise qualify as capital property may be entitled to obtain such
qualification in certain circumstances by making the election
permitted by subsection 39(4) of the Tax Act. This summary is not
addressed to Holders that are "financial institutions" for purposes
of the mark-to-market rules contained in the Proposed Amendments
(as defined below) or to Holders, an interest in which would be a
"tax shelter investment" as defined in such Proposed Amendments.
This summary is based upon the current provisions of the
Tax Act and the regulations thereto (the "Regulations") in force as
of the date hereof, all specific proposals to amend 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 counsel's understanding of the current
administrative and assessing policies of Revenue Canada. This
description is not exhaustive of all possible Canadian federal
income tax consequences and, except for the Proposed
Amendments, does not anticipate any changes in the law whether
by legislative, governmental or judicial decision or action, nor does
it take into account provincial or foreign tax considerations, which
may differ significantly from those discussed herein. A reference
herein to a "Common Share" includes a Common Share
represented by an Instalment Receipt.
Holders that are trusts governed by a registered retirement
savings plan, registered retirement income fund or a deferred profit
sharing plan are referred to the additional Canadian federal income
tax considerations relevant to such holders under "Eligibility for
Investment".
The summary is of a general nature only and is not
intended to be legal or tax advice to any particular Holder.
Consequently, holders should consult their own tax advisors with
respect to their individual circumstances.
<PAGE>
Taxation of Dividends
Dividends received (including Excess Dividends applied to
reduce the amount of the second instalment or the final instalment
and Stock Dividends) on a Common Share will be included in a
Holder's income as taxable dividends received from a taxable
Canadian corporation. Normal gross-up and dividend tax credit
rules will generally apply to dividends received by an individual,
and dividends received by a corporation will normally be
deductible in computing its taxable income. Certain corporations
(including a private corporation as defined in the Tax Act) may be
liable to pay a refundable tax under Part IV of the Tax Act on such
dividends.
Disposition of Common Shares
Upon the disposition or deemed disposition of a Common
Share, a Holder will realize a capital gain (or a capital loss) to the
extent that the proceeds of disposition are greater (or less) than the
aggregate of the adjusted cost base to the Holder of the Common
Share and any reasonable costs of disposition. In this regard, the
adjusted cost base to a Holder of a Common Share will include all
amounts paid or payable by the Holder for such Common Share,
including the amount of the second instalment and the final
instalment. For purposes of determining the adjusted cost base of
such Common Shares the adjusted cost base of the Common Share
will be averaged with the adjusted cost base of any other common
shares of Suncor then owned by such Holder as capital property
other than common shares of Suncor owned or deemed to have
been owned on December 31, 1971 for purposes of the Income
Tax Application Rules. The proceeds of disposition to a holder
who disposes of a Common Share will include the amount of any
unpaid instalment.
Three-quarters of any capital gain realized by a Holder
will be required to be included in computing the Holder's income
as a taxable capital gain. Three-quarters of any capital loss realized
by a Holder may normally be deducted by such Holder against
taxable capital gains realized by the Holder in the year of
disposition or the three preceding taxation years, or any subsequent
taxation years, subject to detailed rules contained in the Tax Act in
this regard.
In the case of a Holder that is a corporation, the amount
of any capital loss otherwise determined resulting from the
disposition of a Common Share may be reduced by the amount of
dividends previously received or deemed to have been received
thereon in accordance with detailed rules contained in the Tax Act
in this regard. Analogous rules apply where a corporation is a
member of a partnership or a beneficiary of a trust which owns
Common Shares. The Proposed Amendments will extend these
rules to apply where a trust or partnership is a member of a
partnership or beneficiary of a trust that owns Common Shares.
<PAGE>
Where the collateral constituted by a Common Share is
accepted by the Selling Shareholder in full satisfaction of the
obligations of a Holder as a consequence of the Holder's failure to
pay the second instalment or the final instalment, the Holder will
be subject to special rules in the Tax Act relating to repossession
by a seller of property previously sold.
ELIGIBILITY FOR INVESTMENT
In the opinion of Osler, Hoskin & Harcourt, counsel for
Suncor, Fasken Campbell Godfrey, counsel for the Selling
Shareholder and Sun, and Davies, Ward & Beck, counsel for the
Underwriters, at the date of closing, the Common Shares
represented by Instalment Receipts offered by this prospectus will
be eligible investments, without resort to the so-called "basket"
provisions, and in certain cases subject to prudent investment
requirements and to additional requirements relating to investment
or lending policies or goals, under or by the following statutes:
Insurance Companies Act (Canada)
Insurance Act (Ontario)
an Act respecting insurance (Quebec)
Trust and Loan Companies Act (Canada)
Loan and Trust Corporations Act (Ontario)
an Act respecting trust companies and savings
companies (Quebec)
Pension Benefits Standards Act, 1985 (Canada)
Pension Benefits Act (Ontario)
Supplemental Pension Plans Act (Quebec)
Trustee Act (Ontario)
In addition, in the opinion of such counsel, the Common
Shares represented by Instalment Receipts will, at the date of
closing, be qualified investments under the Income Tax Act
(Canada) for trusts governed by a registered retirement savings
plan, registered retirement income fund or a deferred profit sharing
plan.
LEGAL MATTERS
The matters referred to under "Eligibility of Investment"
and certain other legal matters in respect of this offering will be
passed upon on behalf of Suncor by Osler, Hoskin & Harcourt, on
behalf of the Selling Shareholder and Sun by Fasken Campbell
Godfrey and on behalf of the Underwriters by Davies, Ward &
Beck. At May 31, 1995, the partners and associates of each of
Osler, Hoskin & Harcourt, Fasken Campbell Godfrey and Davies,
Ward & Beck owned beneficially, directly or indirectly, less than
1% of the outstanding common shares of Suncor.
AUDITORS, TRANSFER AGENT AND REGISTRAR
Suncor's auditors are Coopers & Lybrand, 145 King
Street West, Toronto, Ontario, M5H 1V8.
<PAGE>
Suncor's Transfer Agent and Registrar is Montreal Trust
Company of Canada at its principal Stock and Bond Transfer
offices located in Toronto, Montreal, Calgary, Edmonton and
Vancouver.
STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION
Securities legislation in several of the provinces provides
purchasers with the right to withdraw from an agreement to
purchase securities within two business days after receipt or
deemed receipt of a prospectus and any amendment. In several of
the provinces, securities legislation further provides a purchaser
with remedies for rescission or, in certain provinces, damages
where the prospectus and any amendment contains a
misrepresentation or is not delivered to the purchaser, provided
that such remedies for rescission or damages are exercised by the
purchaser within the time limit prescribed by the securities
legislation of the purchaser's province. The purchaser should refer
to any applicable provisions of the securities legislation of the
purchaser's province for the particulars of these rights or consult
with a legal advisor.
<PAGE>
CERTIFICATE OF SUNCOR
Dated June 1, 1995
The foregoing, together with the documents incorporated
herein by reference, constitutes full, true and plain disclosure of all
material facts relating to the securities offered by this short form
prospectus, as required by the securities laws of the provinces of
Canada. For the purpose of the Province of Quebec, this simplified
prospectus, as supplemented by the documents incorporated herein
by reference, contains no misrepresentation that is likely to affect
the value or the market price of the securities to be distributed.
(Signed) Richard L. George (Signed) David W. Byler
President Senior Vice President, Finance
and Chief Executive Officer(as Chief Financial Officer)
On behalf of the Board of Directors
(Signed) Ardagh S. Kingsmill, Q.C.(Signed) Bryan P. Davies
Director Director
<PAGE>
CERTIFICATE OF THE UNDERWRITERS
Dated June 1, 1995
To the best of our knowledge, information and belief, the
foregoing, together with the documents incorporated herein by
reference, constitutes full, true and plain disclosure of all material
facts relating to the securities offered by this short form prospectus
as required by the securities laws of the provinces of Canada. For
the purposes of the Securities Act (Quebec) and the regulation
thereunder, to our knowledge, this simplified prospectus, as
supplemented by the documents incorporated herein by reference,
contains no misrepresentation that is likely to affect the value or
the market price of the securities to be distributed.
Nesbitt Burns Inc.
By: (signed) Donald K. Johnson
Gordon Capital CorporationRBC Dominion Securities Inc.
By: (signed) By: (signed)
L. Robin Cornwell Rosemarie N. Baker
Wood Gundy Inc. ScotiaMcLeod Inc.
By: (signed) Carol S. PerryBy: (signed) Daniel F. Sullivan
Goldman
Sachs Richardson First
Canada Midland Greenshields Marathon
By: Goldman Sachs Walwyn of Canada Securities
Canada Inc. Capital Inc. Limited Limited
By: (signed) By: (signed)By: (signed)By: (signed)
David J. Donald A. William G. Richard S.
Gluskin Fox Copland Hallisey
Levesque BeaubienToronto DominionPeters & Co. Limited
Geoffrion Inc. Securities Inc.
By: (signed) By: (signed) By: (signed)
Ian D. McPhersonRobert T. WrightMichael J. Tims
The following includes the name of every person or
company having an interest, either directly or indirectly, to the
extent of not less than 5% in the capital of the Underwriters:
Nesbitt Burns Inc.: The Nesbitt Burns Corporation Limited, a
majority-owned subsidiary of a Canadian chartered bank;
<PAGE>
Gordon Capital Corporation: D. M. Beatty, B. Cameron, J.
R. Connacher, J. N. Green, R. Li, R. S. Lloyd and D. G. Nelson;
RBC Dominion Securities Inc.: RBC Dominion Securities
Limited, a majority-owned subsidiary of a Canadian chartered
bank;
Wood Gundy Inc.: a wholly-owned subsidiary of The CIBC
Wood Gundy Corporation, a majority-owned subsidiary of a
Canadian chartered bank;
ScotiaMcLeod Inc.: a wholly-owned subsidiary of a Canadian
chartered bank;
Goldman Sachs Canada: a limited partnership in which The
Goldman, Sachs Group L.P. is the limited partner and Goldman
Sachs Canada Inc., a wholly-owned subsidiary of The Goldman
Sachs Group L.P., is the general partner;
Midland Walwyn Capital Inc.: a wholly-owned subsidiary of
Midland Walwyn Inc.;
Richardson Greenshields of Canada Limited: a wholly-
owned subsidiary of Richardson Greenshields Limited;
First Marathon Securities Limited: a wholly-owned subsidiary
of First Marathon Inc.;
Levesque Beaubien Geoffrion Inc.: a wholly-owned subsidiary
of Levesque, Beaubien and Company Inc., a majority-owned
controlled subsidiary of a Canadian chartered bank;
Toronto Dominion Securities Inc.: a wholly-owned subsidiary
of a Canadian chartered bank; and
Peters & Co. Limited: Robert G. Peters, Michael J. Tims,
Wilfred A. Gobert, Robert M. Wilkinson, J. Cameron Bailey and
William D. Bonner.
<PAGE>
Suncor inc.
<PAGE>
<PAGE> 1
EXHIBIT 4.1
Articles of Incorporation
of Sun Company, Inc.
<PAGE>
<PAGE> 2
Articles of Incorporation of Sun Company, Inc.
First: The name of the Corporation is "Sun Company, Inc."
Second: The location and post office address of its registered office in
this Commonwealth is 1801 Market Street, Philadelphia, Pennsylvania 19103.
Third: The Corporation shall have unlimited power to engage in and to do
any lawful act concerning any or all lawful business for which corporations
may be incorporated under the provisions of the Act of May 5, 1933 (P.L.
364, as amended). The Corporation is incorporated under the provisions of
said Act.
Fourth: The total number of shares of capital stock which this
Corporation shall have authority to issue is Two Hundred Fifteen Million
(215,000,000) to be divided into two classes consisting of Fifteen Million
(15,000,000) shares designated as "Cumulative Preference Stock"
(hereinafter called "Preference Stock"), without par value, and Two Hundred
Million (200,000,000) shares designated as "Common Stock," (hereinafter
called "Common Stock"), $1 par value.
The following is a description of each class of capital stock and a
statement of the preferences, qualifications, privileges, limitations,
restrictions, and other special or relative rights granted to or imposed
upon the shares of each class:
Preference Stock
1. Authority of Board of Directors. Authority is hereby vested in the
Board of Directors, by resolution, to divide any or all of the authorized
shares of Preference Stock into series and, within the limitations provided
by law and this Article Fourth, to fix and determine the designations,
preferences, qualifications, privileges, limitations, options, conversion
rights, and other special rights of each such series, including but not
limited to the right to fix and determine:
(a) the designation of and the number of shares issuable in each such
series;
(b) the annual dividend rate, expressed in a dollar amount per share, for
each such series;
(c) the right, if any, of the Corporation to redeem shares of any such
series, and the terms and conditions on which shares of each such series
may be redeemed;
(d) the amounts payable upon shares of each such series in the event of
the voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(e) the sinking fund provisions, if any, for the redemption or purchase
of shares of each such series;
(f) the voting rights, if any, for the shares of each such series;
provided, however, that the number of votes per share of Preference Stock
shall in no event exceed one (1);
(g) the terms and conditions, if any, on which shares of each such series
may be converted into shares of stock of this Corporation; provided,
however, that shares of Preference Stock shall not be convertible into
shares of any class of stock of the Corporation other than Common Stock and
shall not be convertible into more than one share of Common Stock, or such
greater or lesser number as will reflect the effect of stock dividends,
stock splits or stock combinations affecting Common Stock and occurring
after May 9, 1980, subject to such terms and conditions, including
provision for fractional shares, as the Board of Directors shall authorize;
<PAGE>
<PAGE> 3
(h) the stated value per share for each such series; and
(i) any and all such other provisions as may be fixed or determined by
the Board of Directors of the Corporation pursuant to Pennsylvania law.
2. Parity of Series of Preference Stock and Shares Within Series;
Priority of Preference Stock. All shares of the same series of Preference
Stock shall be identical with each other share of such series in all
respects, except that shares of any one series issued at different times
may differ as to the dates from which dividends thereon shall be
cumulative. Except as determined by the Board of Directors as permitted by
the provisions of paragraph 1 hereof, all series of Preference Stock shall
rank equally with and be identical in all respects to each other series.
Preference Stock shall rank, as to dividends and upon liquidation,
dissolution or winding up, prior to Common Stock and to any other capital
stock of the Corporation hereafter authorized, other than capital stock
which shall by its terms rank prior to or on a parity with Preference Stock
and which shall be authorized pursuant to subparagraph 9(a) hereof.
3. Dividends. Before any dividends (other than dividends payable in
stock ranking junior to Preference Stock) on any class or classes of stock
of the Corporation ranking junior to Preference Stock as to dividends or
upon liquidation shall be declared and set apart for payment or paid, the
holders of shares of Preference Stock of each series shall be entitled to
receive cash dividends, when and as declared by the Board of Directors at
the annual rate, and no more, fixed in the resolution adopted by the Board
of Directors providing for the issue of such series. Such dividends shall
be payable in cash quarterly, each such quarterly payment to be in respect
of the quarterly period ending with the day next preceding the date of such
payment (except in the case of the first dividend which shall be in respect
of the period beginning with the initial date of issue of such shares and
ending with the day next preceding the date of such payment), to holders of
Preference Stock of record on the respective dates, not exceeding forty
(40) days preceding such quarterly dividend payment dates, fixed for that
purpose by the Board of Directors. With respect to each series of
Preference Stock, such dividends shall be cumulative from the date or dates
of issue of such series, which date or dates may be set by the Board of
Directors pursuant to the provisions of paragraph 1 hereof. No dividends
shall be declared or paid or set apart for payment on any series of
Preference Stock in respect of any quarterly dividend period unless there
shall likewise be or have been declared and paid or set apart for payment
on all shares of Preference Stock of each other series at the time
outstanding like dividends in proportion to the respective annual dividend
rates fixed therefor as hereinbefore provided for all quarterly dividend
periods coinciding with or ending before such quarterly dividend period.
Accruals of dividends shall not bear interest.
4. Redemption. The Corporation, at the option of the Board of Directors,
may, at any time permitted by the resolution adopted by the Board of
Directors providing for the issue of any series of Preference Stock and at
the redemption price or prices stated in said resolution, redeem the whole
or any part of the shares of such series at the time outstanding. If at
any time less than all of the shares of Preference Stock then outstanding
are to be called for redemption, the shares to be redeemed may be selected
by lot or by such other equitable method as the Board of Directors in its
discretion may determine. Notice of every redemption, stating the
redemption date, the redemption price, and the placement of payment
<PAGE>
<PAGE> 4
thereof, shall be given by mailing a copy of such notice at least thirty
(30) days and not more than sixty (60) days prior to the date fixed for
redemption to the holders of record of the shares of Preference Stock to be
redeemed at their addresses as the same shall appear on the books of the
Corporation. The Corporation, upon mailing notice of redemption as
aforesaid or upon irrevocably authorizing the bank or trust company
hereinafter mentioned to mail such notice, may deposit or cause to be
deposited in trust with a bank or trust company in the City of
Philadelphia, Commonwealth of Pennsylvania, or in the Borough of Manhattan,
City and State of New York, an amount equal to the redemption price of the
shares to be redeemed plus any accrued and unpaid dividends thereon, which
amount shall be payable to the holders of the shares to be redeemed upon
surrender of certificates therefor on or after the date fixed for
redemption or prior thereto if so directed by the Board of Directors. Upon
such deposit, or if no such deposit is made, then from and after the date
fixed for redemption unless the Board of Directors shall default in making
payment of the redemption price plus accrued and unpaid dividends upon
surrender of certificates as aforesaid, the shares called for redemption
shall cease to be outstanding and the holders thereof shall cease to be
stockholders with respect to such shares and shall have no interest in or
claim against the Corporation with respect to such shares other than the
right to receive the redemption price plus accrued and unpaid dividends
from such bank or trust company or from the Corporation, as the case may
be, without interest thereon, upon surrender of certificates as aforesaid;
provided, that conversion rights, if any, of shares called for redemption
shall terminate at the close of business on the business day prior to the
date fixed for redemption. Any funds so deposited which shall not be
required for such redemption because of the exercise of conversion rights
subsequent to the date of such deposit shall be returned to the
Corporation. In case any holder of shares of Preference Stock which have
been called for redemption shall not, within six (6) years after the date
of such deposit, have claimed the amount deposited with respect to the
redemption thereof, such bank or trust company, upon demand, shall pay over
to the Corporation such unclaimed amount and shall thereupon be relieved of
all responsibility in respect thereof to such holder, and thereafter such
holder shall look only to the Corporation for payment thereof. Any
interest which may accrue on funds so deposited shall be paid to the
Corporation from time to time.
5. Status of Shares of Preference Stock Redeemed or Acquired. Unless
otherwise specifically provided in the resolutions of the Board of
Directors authorizing the issue of any series of Preference Stock, shares
of any series of Preference Stock which have been redeemed, purchased or
acquired by the Corporation by means other than conversion (whether through
the operation of a sinking fund or otherwise) shall have the status of
authorized and unissued shares of Preference Stock and may be reissued as a
part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preference Stock to be
created by resolution of the Board of Directors or as part of any other
series of Preference Stock. Shares of any series of Preference Stock
converted shall not be reissued and the Board of Directors shall take
appropriate actions to reflect the conversion of Preference Stock from time
to time by effecting reductions in the number of shares of Preference Stock
which the Corporation is authorized to issue.
<PAGE>
<PAGE> 5
6. Redemption or Acquisition of Preference Stock During Default in
Payment of Dividends. If at any time the Corporation shall have failed to
pay dividends in full on Preference Stock, thereafter and until dividends
in full including all accrued and unpaid dividends on shares of all series
of Preference Stock at the time outstanding, shall have been declared and
set apart for payment or paid, (i) the Corporation, without the affirmative
vote or consent of the holders of at least a majority of the shares of
Preference Stock at the time outstanding, voting or consenting separately
as a class without regard to series, given in person or by proxy, either in
writing or by resolution adopted at a meeting, shall not redeem less than
all the shares of Preference Stock at such time outstanding, regardless of
series, other than in accordance with paragraph 8 hereof and (ii) neither
the Corporation nor any subsidiary shall purchase any shares of Preference
Stock except in accordance with a purchase offer made in writing or by
publication, as determined by the Board of Directors, in their sole
discretion after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series, shall
determine (which determination shall be final and conclusive) will result
in fair and equitable treatment among the respective series; provided,
however, that (iii) unless prohibited by the provisions applicable to any
series, the Corporation, to meet the requirements of any sinking fund
provision with respect to any series, may use shares of such series
acquired by it prior to such failure and then held by it as treasury stock,
and (iv) nothing shall prevent the Corporation from completing the purchase
or redemption of shares of Preference Stock for which a purchase contract
was entered into for any sinking fund purposes or the notice of redemption
of which was mailed to the holders thereof, prior to such default.
7. Dividends and Distributions on and Redemption and Acquisition of
Junior Classes of Stock. So long as any shares of Preference Stock are
outstanding, the Corporation shall not declare or set apart for payment or
pay any dividends (other than stock dividends payable on shares of stock
ranking junior to Preference Stock) or make any distribution on any other
class or classes of stock of the Corporation ranking junior to Preference
Stock as to dividends or upon liquidation and shall not redeem, purchase or
otherwise acquire, or permit any subsidiary to purchase or otherwise
acquire, any shares of any such junior class if at the time of making such
declaration, payment, distribution, redemption, purchase or acquisition the
Corporation shall be in default with respect to any dividend payable on, or
any obligation to purchase, shares of any series of Preference Stock;
provided, however, that, notwithstanding the foregoing, the Corporation may
at any time redeem, purchase or otherwise acquire shares of stock of any
such junior class in exchange for, or out of the net cash proceeds from the
sale of, other shares of stock of any junior class.
8. Retirement of Shares. If in any case the amounts payable with respect
to any obligations to retire shares of Preference Stock are not paid in
full in the case of all series with respect to which such obligations
exist, the number of shares of the various series to be retired shall be in
proportion to the respective amounts which would be payable on account of
such obligations if all amounts payable were discharged in full.
9. Action by Corporation Requiring Approval of Preference Stock. The
Corporation shall not, without the affirmative vote or consent of the
holders of at least 66 2/3% of the number of shares of Preference Stock at
the time outstanding, voting or consenting (as the case may be) separately
<PAGE>
<PAGE> 6
as a class without regard to series, given in person or by proxy, either in
writing or by resolution adopted at a meeting:
(a) create any class of stock ranking prior to or on a parity with
Preference Stock as to dividends or upon liquidation or increase the
authorized number of shares of any such previously authorized class of
stock;
(b) alter or change any of the provisions hereof so as adversely to
affect the preferences, special rights or powers given to the Preference
Stock;
(c) increase the number of shares of Preference Stock which the
Corporation is authorized to issue; or
(d) alter or change any of the provisions hereof or of the resolution
adopted by the Board of Directors providing for the issue of such series so
as adversely to affect the preferences, special rights or powers given to
such series.
10. Special Voting Rights. If the Corporation shall have failed to pay,
or declare and set apart for payment, dividends on Preference Stock in an
aggregate amount equivalent to six (6) full quarterly dividends on all
shares of Preference Stock at the time outstanding, the number of Directors
of the Corporation shall be increased by two (2) at the first annual
meeting of the shareholders of the Corporation held thereafter, and at such
meeting and at each subsequent annual meeting until dividends payable for
all past quarterly dividend periods on all outstanding shares of Preference
Stock shall have been paid, or declared and set apart for payment, in full,
the holders of the shares of Preference Stock shall have, in addition to
any other voting rights which they otherwise may have, the exclusive and
special right, voting separately as a class without regard to series, each
share of Preference Stock entitling the holder thereof to one (1) vote per
share, to elect two (2) additional members of the Board of Directors to
hold office for a term of one (1) year; provided, that the right to vote as
a class upon the election of such two (2) additional Directors shall not
limit the right of holders of any series of Preference Stock to vote upon
the election of all other Directors and upon other matters if and to the
extent that such holders are entitled to vote pursuant to the resolution
adopted by the Board of Directors pursuant to paragraph 1 hereof, providing
for the issue of such series. Upon such payment, or declaration and
setting apart for payment, in full, the terms of the two (2) additional
Directors so elected shall forthwith terminate, and the number of Directors
of the Corporation shall be reduced by two (2) and such voting right of the
holders of shares of Preference Stock shall cease, subject to increase in
the number of Directors as aforesaid and to revesting of such voting right
in the event of each and every additional failure in the payment of
dividends in an aggregate amount equivalent to six (6) full quarterly
dividends as aforesaid.
11. Liquidation of the Corporation. Upon the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, Preference Stock
shall be preferred as to assets over Common Stock and any other class or
classes of stock ranking junior to Preference Stock so that the holders of
shares of Preference Stock of each series shall be entitled to be paid or
to have set apart for payment, before any distribution is made to the
holders of Common Stock and any other class or classes of stock ranking
junior to Preference Stock, the amount fixed in accordance with paragraph 1
<PAGE>
<PAGE> 7
hereof plus an amount equal to all dividends accrued and unpaid up to and
including the date fixed for such payment and the holders of Preference
Stock shall not be entitled to any other payment.
If upon any such liquidation, dissolution or winding up of the
Corporation, its net assets shall be insufficient to permit the payment in
full of the respective amounts to which the holders of all outstanding
shares of Preference Stock are entitled as above provided, the entire
remaining net assets of the Corporation shall be distributed among the
holders of Preference Stock in amounts proportionate to the full
preferential amounts to which they are respectively entitled.
For the purposes of this paragraph 11, the voluntary sale, lease,
exchange or transfer for cash, shares of stock (securities or other
consideration) of all or substantially all the Corporation's property or
assets to, or its consolidation or merger with, one or more corporations
shall not be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation.
12. Voting Rights. Except as otherwise provided by the provisions of
this Article Fourth or by statute or when fixed in accordance with the
provisions of paragraph 1 hereof, the holders of shares of Preference Stock
shall not be entitled to any voting rights.
13. Definitions. For the purposes of this Article Fourth and of any
resolution of the Board of Directors providing for the issue of any series
of Preference Stock or of any statement filed with the Secretary of State
of the Commonwealth of Pennsylvania (unless otherwise provided in any such
resolution or statement):
(a) The term "outstanding," when used in reference to shares of stock,
shall mean issued shares excluding:
(i) shares held by the Corporation or a subsidiary; and
(ii) shares called for redemption if funds for the redemption
thereof have been deposited in trust.
(b) Any class or classes of stock of the Corporation shall be deemed to
rank:
(i) prior to Preference Stock, either as to dividends or upon
liquidation, if the holders of such class or classes shall be entitled to
the receipt of dividends or amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to
the holders of Preference Stock;
(ii) on a parity with Preference Stock, either as to dividends or upon
liquidation, whether or not the dividend rates or dividend payment dates or
the redemption or liquidation prices per share thereof be different from
those of Preference Stock, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in proportion
to their respective dividend rates or liquidation prices, without
preference or priority one (1) over the other as between the holders of
such class or classes and the holders of Preference Stock; and
(iii) junior to Preference Stock, either as to dividends or upon
liquidation, if the rights of the holders of such class or classes shall be
subject or subordinate to the rights of the holders of Preference Stock in
respect of the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be.
(c) The term "subsidiary" as used herein shall mean any corporation 51%
or more of the outstanding stock having voting rights of which is at the
time owned or controlled directly or indirectly by the Corporation.
<PAGE>
<PAGE> 8
Common Stock
Each holder of record of Common Stock shall have the right to one (1)
vote for each share of Common Stock standing in his name on the books of
the Corporation. Except as required by law or as otherwise specifically
provided in this Article Fourth, the holders of Preference Stock having
voting rights and holders of Common Stock shall vote together as one class.
Preemptive Rights
Neither the holders of Preference Stock nor the holders of Common Stock
shall have any preemptive rights, and the Corporation shall have the right
to issue and to sell to any person or persons any shares of its capital
stock or any option rights or any securities having conversion or option
rights, without first offering such shares, rights or securities to any
holders of Preference Stock or Common Stock.
Fifth: 1. The affirmative vote of the holders of not less than 75% of the
outstanding shares of "Voting Stock" held by shareholders other than a
"Related Person" shall be required for the approval or authorization of any
"Business Combination" of the Corporation with any Related Person;
provided, however, that the 75% voting requirement shall not be applicable
if:
(i) The "Continuing Directors" of the Corporation by at least a two-
thirds vote of such Continuing Directors have expressly approved such
Business Combination either in advance of or subsequent to such Related
Person's having become a Related Person; or
(ii) The cash or fair market value (as determined by at least two-thirds
of the Continuing Directors) of the property, securities or other
consideration to be received per share by holders of Voting Stock of the
Corporation in the Business Combination is not less than the "Highest Per
Share Price" or the "Highest Equivalent Price" paid by the Related Person
in acquiring any of its holdings of the Corporation's Voting Stock.
2. For purposes of this Article FIFTH:
(i) The term "Business Combination" shall mean (a) any merger or
consolidation of the Corporation or a subsidiary of the Corporation with or
into a Related Person, (b) any sale, lease, exchange, transfer or other
disposition, including without limitation a mortgage or any other security
device, of all or any "Substantial Part" of the assets either of the
Corporation (including without limitation any voting securities of a
subsidiary) or of a subsidiary of the Corporation to a Related Person, (c)
any merger or consolidation of a Related Person with or into the
Corporation or a subsidiary of the Corporation, (d) any sale, lease,
exchange, transfer or other disposition, including without limitation a
mortgage or other security device, of all or any Substantial Part of the
assets of a Related Person to the Corporation or a subsidiary of the
Corporation, (e) the issuance of any securities of the Corporation or a
subsidiary of the Corporation to a Related Person other than the issuance
on a pro rata basis to all holders of shares of the same class pursuant to
a stock split or stock dividend, or a distribution of warrants or rights,
(f) any recapitalization that would have the effect of increasing the
voting power of a Related Person, and (g) any agreement, contract or other
arrangement providing for any of the transactions described in this
definition of Business Combination.
<PAGE>
<PAGE> 9
(ii) The term "Related Person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with its
"Affiliates" and "Associates" becomes the "Beneficial Owner" of an
aggregate of 10% or more of the outstanding Voting Stock of the
Corporation, and any Affiliate or Associate of any such individual,
corporation, partnership or other person or entity; provided, however, that
the term "Related Person" shall not include (1) a person or entity whose
acquisition of such aggregate percentage of Voting Stock was approved in
advance by two-thirds of the Continuing Directors or (2) any trustee or
fiduciary when acting in such capacity with respect to any employee benefit
plan of the Corporation or a wholly owned subsidiary of the Corporation.
No person who became a Related Person prior to December 31, 1983 shall be
treated as a Related Person for the purpose of voting on any amendment,
alteration, change or repeal of this Article FIFTH or voting on any
Business Combination to which such Related Person is not a party.
(iii) The term "Substantial Part" shall mean an amount equal to 10%. or
more of the fair market value as determined by two-thirds of the Continuing
Directors of the total consolidated assets of the Corporation and its
subsidiaries taken as a whole as of the end of its most recent fiscal year
ended prior to the time the determination is being made.
(iv) The term "Beneficial Owner" shall mean any person (1) who
beneficially owns shares of Voting Stock within the meaning ascribed in
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on the date of adoption of this Article
FIFTH by the shareholders of the Corporation, or (2) who has the right to
acquire voting Shares (whether or not such right is exercisable
immediately) pursuant to any agreement, contract, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
(v) For purposes of subparagraph l(ii) of this Article FIFTH, the term
"other consideration to be received" shall include, without limitation, the
value per share of Common Stock or other capital stock of the Corporation
retained by its existing shareholders as adjusted to give effect to the
proposed Business Combination in the event of any Business Combination in
which the Corporation is a surviving corporation.
(vi) The term 'Voting Stock" shall mean all of the outstanding shares of
Common Stock entitled to vote on each matter on which the holders of record
of Common Stock shall be entitled to vote, and each reference to a
proportion of shares of Voting Stock shall refer to such proportion of the
votes entitled to be cast by such shares.
(vii) The term "Continuing Director" shall mean a Director who was a
member of the Board of Directors of the Corporation immediately prior to
the time that the Related Person involved in a Business Combination became
a Related Person. As to any person who became a Related Person prior to
December 31, 1983, a Continuing Director shall mean a Director who was a
member of the Board of Directors on December 31, 1983.
(viii) A Related Person shall be deemed to have acquired a share of the
Voting Stock of the Corporation at the time when such Related Person became
the Beneficial Owner thereof. With respect to the shares owned by
Affiliates, Associates or other persons whose ownership is attributed to a
<PAGE>
<PAGE> 10
Related Person under the foregoing definition of Related Person, if the
price paid by such Related Person for such shares is not determinable by
two-thirds of the Continuing Directions, the price so paid shall be deemed
to be the higher of (a) the price paid upon the acquisition thereof by the
Affiliate, Associate or other person or (b) the market price of the shares
in question at the time when the Related Person became the Beneficial Owner
thereof.
(ix) The terms "Highest Per Share Price" and "Highest Equivalent Price"
as used in this Article FIFTH shall mean the following: If there is only
one (1) class of capital stock of the Corporation issued and outstanding,
the Highest Per Share Price shall mean the highest price that can be
determined to have been paid at any time by the Related Person for any
share or shares of that class of capital stock. If there is more than one
class of capital stock of the Corporation issued and outstanding, the
Highest Equivalent Price shall mean, with respect to each class and series
of capital stock of the Corporation, the amount determined by two-thirds of
the Continuing Directors, on whatever basis they believe is appropriate, to
be the highest per share price equivalent of the highest price that can be
determined to have been paid at any time by the Related Person for any
share or shares of any class of series of capital stock of the Corporation.
In determining the Highest Per Share Price and Highest Equivalent Price,
all purchases by the Related Person shall be taken into account regardless
of whether the shares were purchased before or after the Related Person
became a Related Person. Also, the Highest Per Share Price and the Highest
Equivalent Price shall include any brokerage commissions, transfer taxes
and soliciting dealers' fees or other value paid by the Related Person with
respect to the shares of capital stock of the Corporation acquire by the
Related Person.
(x) The terms "Affiliate" and "Associate" shall have the same meaning as
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934 as on the date of the adoption of this Article FIFTH
by the shareholders of the Corporation.
3. The provisions set forth in this Article FIFTH may not be amended,
altered, changed or repealed in any respect unless such action is approved
by the affirmative vote of the holders of not less than 75% of the
outstanding shares of Voting Stock of the Corporation at a meeting of the
shareholders duly called for the consideration of such amendment,
alteration, change or repeal; provided, however, that if there is a Related
Person, such action must also be approved by the affirmative vote of the
holders of not less than 75% of the outstanding shares of Voting Stock not
held by any Related Person.
Sixth: The duration of the Corporation shall be perpetual.
Seventh: The business and affairs of the Corporation shall be managed by
a Board of Directors. The number of Directors of the Corporation shall be
fixed from time to time by the Bylaws but shall not be fixed at less than
five (5). The number of the Directors may be increased or diminished (but
not to less than five (5)), as may from time to time be provided in the
Bylaws. In case of any increase in the number of Directors the additional
Directors shall be elected as may be provided in the Bylaws, either by the
Directors or by the shareholders.
<PAGE>
<PAGE> 11
The shareholders of the Corporation shall not be entitled to cumulative
voting rights in the election of Directors.
Any officer elected or appointed by the Board of Directors may be removed
at any time by affirmative vote of a majority of the whole Board of
Directors.
The Board of Directors, by the affirmative vote of a majority of the
whole Board, may appoint from the Directors an Executive Committee, of
which a majority shall constitute a quorum, and to such extent as shall be
provided in the Bylaws such Committee shall have and may exercise all or
any of the powers of the Board of Directors, including the power to cause
the seal of the Corporation to be affixed to all papers that may require
it.
The Board of Directors, by the affirmative vote of a majority of the
whole Board, may appoint any other standing committees, and such standing
committees shall have and may exercise such powers as shall be conferred or
authorized by the Bylaws.
The Board of Directors shall have power from time to time to fix and to
determine and to vary the amount of the working capital of the Corporation
and to direct and determine the use and disposition of any surplus or net
profits over and above the capital stock paid in.
Subject always to alteration and repeal by the shareholders, and to
Bylaws made by the shareholders, the Board of Directors may make Bylaws and
from time to time to time may alter, amend or repeal any Bylaws; and any
Bylaws made by the Board of Directors may be so altered or repealed by the
shareholders at any annual meeting or at any special meeting, provided
notice of such proposed alteration or repeal be included in the notice of
the special meeting.
Eighth: 1. Any direct or indirect purchase or other acquisition by the
Corporation of any "Equity Security" of any class or series from any "Five
Percent Holder", if such Five Percent Holder has been the "Beneficial
Owner" of such security for less than two years prior to the earlier of the
date of such purchase or any agreement in respect thereof at a price in
excess of the "Fair Market Value" thereof, shall, except as hereinafter
expressly provided, require the affirmative vote of the holders of at least
a majority of the "Voting Stock" excluding Voting Stock of which such Five
Percent Holder is the Beneficial Owner; provided, however, that the
foregoing majority voting requirement shall not be applicable with respect
to (i) any purchase or other acquisition of an Equity Security made as part
of a tender or exchange offer by the Corporation to purchase Equity
Securities of the same class made on the same terms to all holders of such
security, or (ii) a purchase program effected on the open market and not
the result of a privately-negotiated transaction, or (iii) any optional or
required redemption of an Equity Security pursuant to the terms of such
security.
2. For purposes of this Article EIGHTH:
(i) The term "Equity Security" means an equity security of the
Corporation within the meaning ascribed to such term in Section 3(a)(11) of
the Securities Exchange Act of 1934, as in effect on January 1, 1985.
(ii) The term "Fair Market Value" means, in the case of any Equity
Security, the closing sale price on the trading day immediately preceding
the earlier of the date of any purchase subject to Paragraph 1 of this
Article EIGHTH, or the date of any agreement in respect thereof (such
earlier date, the "Valuation Date"), of a share of such Equity Security on
<PAGE>
<PAGE> 12
the Composite Tape for New York Stock Exchange Listed Stocks, or, if such
security is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such security is not listed on such Exchange, on the
principal United States securities exchange registered under the Securities
Exchange Act of 1934 on which such security is listed, or, if such security
is not listed on any such Exchange, the closing bid quotation with respect
to such security on the trading day immediately preceding the Valuation
Date on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such quotations are
available, the Fair Market Value on the Valuation Date of such security as
determined by the Board of Directors in good faith.
(iii) The term "Person" shall mean any individual, corporation,
partnership or other entity and shall include any group comprised of any
Person and any other Person with whom such Person or any Affiliate or
Associate of such Person has any agreement, arrangement or understanding,
directly or indirectly, for the purpose of acquiring, holding, voting or
disposing of Voting Stock, and any member of such group.
(iv) The term "Five Percent Holder" shall mean and include any Person
which, together with its "Affiliates" and "Associates" becomes the
Beneficial Owner of an aggregate of five percent (5%) or more of any class
of Voting Stock of the Corporation, and any Affiliate or Associate of any
such Person; provided, however, that for purposes of this Article EIGHTH,
including, without limitation, Paragraphs 1 and 4 hereof, the term Five
Percent Holder shall not include (1) any trustee or fiduciary when acting
in such capacity with respect to any employee benefit plan of the
Corporation or a wholly owned subsidiary of the Corporation or (2) any
Person that would have been a Five Percent Holder on December 31, 1984 if
this Article EIGHTH were then in effect.
(v) The terms "Affiliate" and "Associate" shall have the meanings
ascribed to them in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on May 3, 1984.
(vi) The term "Beneficial Owner" shall mean any person (1) who
beneficially owns shares of Voting Stock within the meaning ascribed in
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on May 3, 1984, or (2) who has the right
to acquire Voting Stock (whether or not such right is exercisable
immediately) pursuant to any agreement, contract, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise.
(vii) The term "Voting Stock" shall mean all of the outstanding shares of
Common Stock, and the outstanding shares of any class or series of stock
having a preference over the Common Stock as to dividends or upon
liquidation entitled to vote on each matter on which the holders of Common
Stock shall be entitled to vote, and each reference to a vote of a
proportion of shares of Voting Stock shall refer to such proportion of the
votes entitled to be cast by such shares.
(viii) In any determination whether a Person is a Five Percent Holder for
purposes of this Article EIGHTH, the relevant class of securities
outstanding shall be deemed to comprise all such securities deemed owned by
such Person and its Affiliates and Associates through application of
<PAGE>
<PAGE> 13
Paragraph 2(vi)(2) of this Article EIGHTH, but shall not include any other
securities of such class which may be issuable pursuant to any agreement,
contract, arrangement or understanding, or upon exercise of conversion
rights, exchange rights, warrants or options, or otherwise.
3. The Board of Directors shall have the power to interpret all the
provisions of this Article EIGHTH and their application to a particular
transaction, including, without limitation, the power to determine (a)
whether a Person is a Five Percent Holder, (b) the number of shares of
Voting Stock or other Equity Securities of which any Person and its
Affiliates and Associates are the Beneficial Owners, (c) whether a Person
is an Affiliate or Associate of another, and (d) what is Fair Market Value
and whether a price is above Fair Market Value as of a given date. Any
such determination made by the Board of Directors shall be conclusive and
binding to the fullest extent permitted by law.
4. The provisions set forth in this Article EIGHTH may not be amended,
altered, changed or repealed in any respect and no provision inconsistent
herewith shall be adopted unless such action is approved by the affirmative
vote of the holders of at least 75% of the Voting Stock of the Corporation
at any annual meeting of shareholders or at any special meeting duly called
for that purpose, provided notice of such amendment, alteration, change or
repeal or adoption be included in the notice of the special meeting;
provided, however, that if there is a Five Percent Holder such action must
also be approved by the affirmative vote of the holders of at least 75%. of
the Voting Stock excluding Voting Stock of which any Five Percent Holder is
the Beneficial Owner.
Ninth: 1. Directors and Officers as Fiduciaries. A Director or Officer
of the Corporation shall stand in a fiduciary relation to the Corporation
and shall perform his or her duties as a Director or officer, including his
or her duties as a member of any committee of the board upon which he or
she may serve, in good faith, in a manner he or she reasonably believes to
be in the best interests of the Corporation, and with such care, including
reasonable inquiry, skill and diligence, as a person of ordinary prudence
would use under similar circumstances. In performing his or her duties, a
Director or officer shall be entitled to rely in good faith on information,
opinions, reports or statements, including financial statements and other
financial data, in each case prepared or presented by one or more officers
of employees of the Corporation whom the Director or officer reasonably
believes to be reliable and competent with respect to the matters
presented, counsel, public accountants or other persons as to matters that
the Director or officer reasonably believes to be within the professional
or expert competence of such person, or a committee of the Board of
Directors upon which the Director or officer does not serve, duly
designated in accordance with law, as to matters within its designated
authority, which committee the Director or officer reasonably believes to
merit confidence. A Director or officer shall not be considered to be
acting in good faith if he or she has knowledge concerning the matter in
question that would cause his or her reliance to be unwarranted. Absent
breach of fiduciary duty, lack of good faith or self-dealing, actions taken
as a Director or officer of the Corporation or any failure to take any
action shall be presumed to be in the best interests of the Corporation.
2. Personal Liability of Directors. A Director of the Corporation shall
not be personally liable, as such, for monetary damages (including without
<PAGE>
<PAGE> 14
limitation, any judgment, amount paid in settlement, penalty, punitive
damages or expense of any nature (including, without limitation, attorneys'
fees and disbursements)) for any action taken, or any failure to take any
action, unless (1) the Director has breached the duties of his or her
office or has failed to perform his or her duties as a Director in good
faith, in a manner he or she reasonably believed to be in the best
interests of the Corporation and with such care, including reasonable
inquiry, skill and diligence, as a person of ordinary prudence would use
under similar circumstances; and (2) the breach or failure to perform
constitutes self-dealing, willful misconduct or recklessness.
3. Personal Liability of Officers. An officer of the Corporation shall not
be personally liable, as such, to the Corporation or its shareholders for
monetary damages (including without limitation, any judgment, amount paid
in settlement, penalty, punitive damages or expense or any nature
(including, without limitation, attorneys' fees and disbursements)) for any
action taken, or any failure to take any action, unless (1) the officer has
breached the duties of his or her office or has failed to perform his or
her duties as an officer in good faith, in a manner he or she reasonably
believed to be in the best interests of the Corporation and with such care,
including reasonable inquiry, skill and diligence, as a person of ordinary
prudence would use under similar circumstances; and (2) the breach or
failure to perform constitutes self-dealing, willful misconduct or
recklessness.
Tenth: Any record holder of at least ten percent (10%) of the outstanding
shares of the Corporation's Voting Stock shall have the rights to:
(a) call a special meeting of the shareholders; and
(b) to propose an amendment to the articles by a petition setting forth
the proposed amendment, which petition shall be directed to, and filed
with, the Board of Directors;
subject, however, to all limitations and restrictions which are, or may
hereafter be, imposed on, or with respect to, the Corporation's Voting
Stock and/or record holders of the Corporation's Voting Stock by
Pennsylvania statutory law (other than the provisions of Section 2521(a) of
the Pennsylvania Business Corporation Law of 1988), these articles, or the
Corporation's Bylaws. For purposes of this Article TENTH, the term "Voting
Stock" shall mean all of the outstanding shares of Common Stock, and the
outstanding shares of any class or series of stock having preference over
the Common Stock as to liquidation entitled to vote on each matter on which
the holders of Common Stock shall be entitled to vote, and reference to a
percentage of shares of Voting Stock shall refer to the percentage of votes
entitled to be cast by such shares.
<PAGE>
<PAGE> 15
Approved and Filed: August 4, 1971
Amended and Restated: March 30, 1990
Amended: December 23, 1992
Amended: May 4, 1995
I, Secretary of Sun Company, Inc.
hereby certify that the foregoing is a true and correct copy of the
Articles of Incorporation of Sun Company, Inc.
Date:
Secretary
- -----------------------------------
<PAGE>
<PAGE> 1
EXHIBIT 4.2
Sun Company, Inc.
Bylaws
5/4/95
<PAGE>
<PAGE> 2
Table of Contents
Article I Page
Directors
Section 1 - Membership 4
Section 2 - Vacancies 4
Section 3 - Emergency Board 4
Section 4 - Liability of Directors 5
Section 5 - Nomination of Directors 5
Article II
Meetings of the Board of Directors
Section 1 - Place 6
Section 2 - Annual & Regular Meetings 6
Section 3 - Special Meetings 6
Section 4 - Notice 6
Section 5 - Waiver of Notice 6
Section 6 - Notice of Adjourned Meeting 6
Section 7 - Quorum 6
Section 8 - Consent Action 7
Article III
Committees
Section 1 - Executive Committee 7
Section 2 - Notice 7
Section 3 - Special Committees 7
Section 4 - Relationship to Board 7
Section 5 - Quorum 7
Section 6 - Vacancies 7
Article IV
Officers
Section 1 - Designation 8
Section 2 - Authority 8
Section 3 - Chairman of the Board 8
Section 4 - Vice Chairman of the Board 8
Section 5 - President 9
Section 6 - Executive Vice Presidents 9
Section 7 - Vice Presidents 9
Section 8 - Secretary 9
Section 9 - Treasurer 9
Section 10 - Comptroller 9
Section 11 - General Auditor 9
Section 12 - Assistant Officers 10
Article V
Meetings of Shareholders
Section 1 - Annual Meetings 10
Section 2 - Special Meetings 10
Section 3 - Notice 10
Section 4 - Quorum 10
Section 5 - Voting 10
Section 6 - Adjournment 10
Section 7 - Proxies 11
Section 8 - Shareholders List 11
<PAGE>
<PAGE> 3
Section 9 - Record Date 11
Section 10 - Certification by Nominee 11
Section 11 - Judge of Election 12
Article VI
Stock Certificates
Section 1 - Description 12
Section 2 - Transfers 12
Section 3 - Registered Shareholders 12
Section 4 - Lost Certificates 13
Section 5 - Dividends 13
Article VII
Indemnification
Section 1 - General 13
Section 2 - Agreements for Indemnification
and Funding 13
Section 3 - Expenses 13
Section 4 - Disputes 14
Article VIII
General Provisions
Section 1 - Voting Shares of Other
Corporations 14
Section 2 - Seal 14
Section 3 - Inapplicability of Certain
Section of the Pennsylvania Business
Corporation Law 14
Section 4 - Amendments 14
<PAGE>
<PAGE> 4
Sun Company, Inc. Bylaws
Article I: Directors
Membership
Section 1. The business and affairs of the Corporation shall be managed
by a Board of Directors consisting of the number of Directors equal to
those elected at the annual meeting of shareholders or as may from time to
time be determined by the Board, except that it shall not consist of less
than five members. Except as hereinafter provided in the case of
vacancies, Directors shall be elected by ballot at the annual meeting of
shareholders and shall hold office for one year and until successors are
duly elected and qualified, or until earlier resignation or removal.
Directors need not be residents of the state of the Commonwealth of
Pennsylvania.
Vacancies
Section 2. Vacancies in the Board of Directors may be filled by a
majority of the incumbent members of the Board, though such majority be
less than a quorum. If the number of Directors is at any time increased,
the incumbent Directors may by majority vote elect any additional Director.
Such newly elected Director shall hold office until the next annual meeting
of the shareholders and until a successor is elected and qualified, or
until earlier resignation or removal.
Emergency Board
Section 3. In the event of any emergency by reason of nuclear attack or
other attacks by enemy forces upon the North American Continent, there
shall be constituted without further action or authority an Emergency Board
of Directors. In the event of an emergency by reason of physical disasters
of national or greater scope, an attack upon the United States outside the
North American Continent, or an imminent threat of an attack or physical
disaster of national or greater scope upon the North American Continent,
there shall be constituted an Emergency Board of Directors by declaration
of the Chairman of the Board of Directors. The Emergency Board shall
consist of at least three members from the regular Board of Directors or
from officers of the Corporation or its subsidiaries who are not members of
the regular Board of Directors but who have been designated as alternate
members of the Emergency Board. The Emergency Board may exercise all of
the powers of the regular Board of Directors in the management of the
business, affairs and property of the Corporation during the emergency and
until such time as the regular Board of Directors shall resume the exercise
of its powers.
The original members of the Emergency Board shall be the Chairman, the
President and the Executive Vice Presidents who are members of the Board of
Directors, provided however, that any vacancy existing because of the
unavailability of any two of the foregoing persons shall be filled by the
alternate members. The Chairman of the Board shall serve as Chairman of
any meeting of the Emergency Board or, in the event of his unavailability
for any reason, the President or an Executive Vice President, in order
designated by the Chairman of the Board, shall serve in this capacity. In
the event of the unavailability for any reason of all of the foregoing
persons, an alternate member shall serve as Chairman at any meeting of the
Emergency Board in the order previously designated for membership by
resolution of the regular Board of Directors.
<PAGE>
<PAGE> 5
Meetings may be called by any member of the Emergency Board. Two members
shall constitute a quorum for the transaction of business and the act of
any two members present at a meeting shall be the act of the Emergency
Board. Meetings may be held by any means of communication and Directors
shall be deemed present if they are in communication with other directors
by any means. Notice of meetings may be given at any time and in any
manner, provided that a reasonable effort shall be made to give actual
notice to each member of the Emergency Board.
To the extent not inconsistent with this Section 3 of Article I, the
Bylaws in their entirety shall remain in effect during any such emergency.
No officer, Director or employee acting in good faith in accordance with
this Section 3 of Article I or any resolutions made pursuant hereto, shall
be liable for his conduct unless it is willful misconduct.
Liability of Directors
Section 4. A Director of the Corporation shall not be personally liable
for monetary damages, as such, for any action taken or any failure to take
any action, unless (1) he has breached the duties of his office or has
failed to perform his duties as a Director in good faith, in a manner he
reasonably believed to be in the best interest of the Corporation and with
such care, including reasonable inquiry, skill and diligence, as a person
or ordinary prudence would use under similar circumstances; and (2) the
breach or failure to perform constitutes self-dealing, willful misconduct
or recklessness.
Nomination of Directors
Section 5. Nominations for election to the Board of Directors may be made
by shareholders entitled to vote for the election of Directors only in the
manner specified in this Section. Shareholders may submit nominations for
consideration by a committee appointed by the Board of Directors for that
purpose. A nomination shall be submitted in writing to the Secretary of
the Corporation no later than the December 31st prior to the Annual Meeting
at which such nomination is intended to be considered. Nominations may be
made at any meeting of shareholders called for the purpose of election of
Directors if written notice of the shareholder's intent to make such
nominations at the meeting is delivered to the Secretary of the Corporation
at least 30 days before such meeting. Such nominations and written notice
shall contain the following information:
a) name, residence and business address of the nominating shareholder;
b) a representation that the shareholder is a record holder or beneficial
owner of the Corporation's voting shares and a statement of the number of
such shares:
c) a representation that the shareholder intends to appear in person or
by proxy at the meeting to nominate the individuals specified in the
notice, if the nominations are to be made at a meeting of shareholders;
d) information regarding each nominee such as would be required to be
included in a proxy statement;
e) a description of all arrangements or understandings between and among
the shareholder and each and every nominee; and
f) the written consent of each nominee to serve as a Director, if
elected.
<PAGE>
<PAGE> 6
The judge of election or the person presiding at the meeting, in the
absence of the judge of election, shall determine whether any nomination is
made according to these procedures and should be accepted. Such decision
shall be deemed conclusive and binding on all shareholders of the
Corporation.
Article II: Meetings of the Board of Directors
Place
Section 1. Meetings of the Board of Directors, regular or special may be
held either within or without the Commonwealth of Pennsylvania.
Annual & Regular Meetings
Section 2. As soon as practicable following their election at the annual
meeting of the shareholders, the Directors shall meet for the purpose of
organization. Regular meetings of the Board of Directors thereafter may be
held at such times and at such places as the Board may by resolution
determine.
Special Meetings
Section 3. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board of Directors, the Vice Chairman, the
President, an Executive Vice President who is a member of the Board of
Directors, or upon the written request of a majority of the Directors.
Notice
Section 4. No notice shall be required of the meeting of the Board of
Directors for the purpose of organization or for the regular meetings fixed
as aforesaid, but at least forty-eight hours notice shall be given by mail
or telegram of all special meetings of the Directors specifying the place,
day and hour of the meeting. Neither the business to be transacted nor the
purpose of any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. This notice
may be waived by a Director in writing either before or after the meeting.
Waiver of Notice
Section 5. The attendance of a Director at any meeting small constitute a
waiver of notice of such meeting except where a Director attends for the
express purpose of objecting to the transaction of any business because the
meeting has not been lawfully called or convened.
Notice of Adjourned Meeting
Section 6. Notice of an adjourned meeting of the Board of Directors need
not be given if the time and place are fixed at the meeting adjourning.
Quorum
Section 7. At all meetings of the Board of Directors, a majority of the
Directors in office shall constitute a quorum for the transaction of
business. The act of a majority of the Directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors,
unless the act of a greater or lesser number is required by statute or the
Articles of Incorporation. The majority of Directors present, though less
than a quorum, may adjourn any meeting from time to time.
<PAGE>
<PAGE> 7
Consent Action
Section 8. Any action required to be taken at a meeting of the Board or
any committee thereof shall be deemed the action of the Board of Directors
or of a committee thereof if all the Directors or committee members, as the
case may be, execute, either before or after the action is taken, a written
consent thereto, and the consent is filed with the records of the
Corporation.
Article III: Committees
Executive Committee
Section 1. The Board of Directors shall designate an Executive Committee
consisting of such number of members as may be determined from time to time
to serve at the pleasure of the Board who shall be elected from the members
of the Board by a majority of the whole Board. The Committee shall elect a
Chairman from among its members. To the extent permitted by Pennsylvania
laws, the Executive Committee may exercise all or any of the powers of the
Board of Directors in the management of the business, affairs and property
of the Corporation during the interval between meetings of the Board;
provided however, that no action shall be taken by the Executive Committee
if any member of such Committee has voted in opposition thereto.
Notice
Section 2. The Executive Committee need not hold its meetings at any
particular time or place, but such meetings shall be held upon reasonable
notice to members of the Committee.
Special Committees
Section 3. The Board of Directors may appoint such other standing or
special committees, and officers therefor, as it may deem proper, and, to
the extent permitted by Pennsylvania laws, may delegate to such committees
any of the powers possessed by the Board which may be required by such
committees in carrying out the purposes for which they are appointed. Each
of such committees shall have at least three members. Membership on the
Board of Directors shall not be prerequisite to membership on such
committees.
Relationship to Board
Section 4. Committees shall be responsible to the full Board of Directors
and shall report upon the exercise of their powers and duties at each
regular meeting of the Board of Directors, or when called upon by the
Board.
Quorum
Section 5. A majority of any committee shall constitute a quorum for the
transaction of business, and shall be required to constitute the act of the
committee.
Vacancies
Section 5. The Board of Directors may fill vacancies in any committee,
and may appoint one or more alternate members of a committee who shall have
the power to act in the absence or disability of a member of such
committee. The Board of Directors may abolish any committee at its
pleasure, and may remove a committee member from membership on a committee
at any time, with or without cause.
<PAGE>
<PAGE> 8
Article IV: Officers
Designation
Section 1. The officers of the Corporation shall be chosen by the Board
of Directors at its organization meeting and shall include a Chairman of
the Board of Directors, a President, one or more Executive Vice Presidents,
one or more Vice Presidents, any of whom at the pleasure of the Board may
be designated Senior Vice President or Group Vice President, a Secretary, a
Treasurer,a Comptroller, and a General Auditor, all of who shall be the
principal officers of the Corporation and may include one or more Vice
Chairmen of the Board who would be principal officers, and such other
officers and assistant officers as the Board of Directors may from time to
time determine. Any number of offices may be held by the same person, but
no officer shall execute, acknowledge or verify any instrument in more than
one capacity if such instrument is required by law to be executed,
acknowledged or verified by two or more officers. Of the officers so
chosen by the Board of Directors, the Chairman of the Board of Directors,
the Vice Chairmen of the Board of Directors, and the President shall be
chosen from among the Directors. All officers of the Corporation shall
hold their offices at the pleasure of the Board of Directors.
Authority
Section 2. Notwithstanding the legal authority conferred by these Bylaws
upon the officers named herein, the Board of Directors may by resolution
establish such positions of authority, supervision and responsibility as in
the judgment of the Board may be necessary or appropriate for the internal
administration of the affairs of the Corporation. The performance of any
duty by any officer shall be conclusive evidence of his authority to act,
including the delegation of any of his powers to other officers or
employees under his direction.
The Board of Directors may designate either the Chairman of the Board or
the President as the Chief Executive Officer or the Chief Operating Officer
of the Corporation.
The Chief Executive Officer shall have general supervision of the affairs
of the Corporation, subject to the policies and direction of the Board of
Directors, and shall supervise and direct all officers and employees of the
Corporation, but may delegate in his discretion any of his powers to any
officer or such other executives as he may designate.
The Chief Operating Officer shall have general supervision and direction
of all operating officers and employees of the Corporation but may delegate
in his discretion any of his powers to any Vice President or such other
executives as he may designate.
Chairman of the Board
Section 3. The Chairman of the Board of Directors shall preside at all
meetings of the shareholders and of the Board of Directors. He shall ex-
officio be a member of all committees of the Board of Directors except as
otherwise determined by the Board. He shall also perform such other duties
as the Board of Directors may from time to time assign to him.
Vice Chairman of the Board
Section 4. The Vice Chairman of the Board of Directors shall perform such
duties as the Board of Directors or the Chairman may from time to time
assign to them.
<PAGE>
<PAGE> 9
President
Section 5. The President shall perform such duties as the Board of
Directors or the Chairman may from time to time assign to him.
Executive Vice Presidents
Section 6. The Executive Vice Presidents shall perform such duties as
shall, from time to time, be imposed upon them by the Chairman or the
President.
Vice Presidents
Section 7. The Vice Presidents shall perform such duties and shall be
responsible to such officers of the Corporation as the Chairman, President
or an Executive Vice President may direct.
Secretary
Section 8. The Secretary shall keep the minutes of all meetings of the
shareholders, the Board of Directors, all committees of the Board except as
otherwise designated by the Board and shall give all notices of meetings of
the shareholders, the Boards and the committees of the Board of which he
serves as Secretary. He shall have control of the custody of all deeds,
contracts, agreements, and other corporate records, except as otherwise
provided in these Bylaws or by the Board of Directors, and shall attend to
such correspondence of the Corporation as the Chairman shall direct. He
shall be the custodian of the seal of the Corporation and shall affix it to
any instrument requiring the same, except as otherwise provided herein or
by the Board of Directors. He shall be responsible to such officer or
officers of the Corporation as the Chairman may designate.
Treasurer
Section 9. The Treasurer shall be responsible for all receipts and
disbursements of the Corporation and the custodianship of the Corporation's
funds. He shall have full authority, directly or by his delegation to
selected officers or other employees, to receive and give receipts for all
moneys due and payable to the Corporation from any source whatever, and to
endorse checks, drafts, and warrants in its name and on its behalf. He
shall be responsible for depositing the funds of the Corporation in its
name in such depositories as may be designated by him; shall sign or
delegate the signing of all checks, notes and drafts and shall be charged
with the general establishment of the Corporation's policies and procedures
relating to short-term financing, cash management, credits and collections
and insurance.
Comptroller
Section 10. The Comptroller shall be the chief accounting officer of the
Corporation and shall arrange for the keeping of adequate records of all
assets, liabilities and transactions of the Corporation.
General Auditor
Section 11. The General Auditor shall be chief control officer of the
Corporation and shall be responsible for the establishment of internal
controls. He shall see that adequate audits are currently and regularly
made.
<PAGE>
<PAGE> 10
Assistant Officers
Section 12. Assistant officers shall perform such duties as their
immediate principal officers may from time to time direct or delegate, and,
during the absence of said principal officers, shall perform all the duties
of said principal officers.
Article V: Meetings of Shareholders
Annual Meetings
Section 1. The annual meeting of the shareholders for the election of
Directors for the ensuing year and for the transaction of such other
business as may be properly brought before the meeting shall be held each
year on such day and at such time and place, either within or without
Pennsylvania, as shall be determined in advance by the Board of Directors.
Special Meetings
Section 2. Special meetings of the shareholders may be called at any time
by the Chairman of the Board of Directors or by the order of the Board of
Directors. Special meetings of the shareholders may also be called by any
shareholder entitled to call such a meeting pursuant to, and in compliance
with, the provisions of Article TENTH of the Articles of Incorporation of
the Corporation.
Notice
Section 3. Unless waived, written notice of the time, place and purpose
of every meeting of the shareholders shall be given by the Secretary not
less than five nor more than ninety days before the date of the meeting
either personally or by mail, to each shareholder of record entitled to
vote at such meeting.
Quorum
Section 4. Unless otherwise provided in the Articles of Incorporation, by
statute or these Bylaws, at all meetings of shareholders, the presence in
person or by proxy, of shareholders entitled to cast a majority of the
votes which all shareholders are entitled to cast at the meeting shall
constitute a quorum for the transaction of business.
Voting
Section 5. When a quorum is present at any meeting of the shareholders,
the shareholders entitled to vote and casting a majority of the votes at
the meeting shall decide any question brought before such meeting, unless
the question is one which, by express provision of law, the Articles of
Incorporation, or these Bylaws, requires a different vote, in which case
such express provision shall govern and control the decision of such
question. The shareholders present in person or by proxy at any duly
organized meeting may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Adjournment
Section 6. The holders of shares entitled to cast a majority of the votes
present or represented at any meeting may adjourn the meeting from time to
time, though such majority constitutes less than a quorum. When a meeting
is adjourned to another time or place, it shall not be necessary to give
notice of the adjourned meeting if the time and place to which the meeting
is adjourned are announced at the meeting adjourning and at the adjourned
<PAGE>
<PAGE> 11
meeting only such business is transacted as might have been transacted at
the original meeting.
Proxies
Section 7. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting may
authorize another person or persons to act for him by proxy. Every proxy
shall be executed in writing by the shareholder or his agent. No proxy
shall be valid after eleven months from the date of its execution, unless a
longer time is expressly provided therein. Unless it is coupled with an
interest, a proxy shall be revocable at will. A proxy shall not be revoked
by the death or incapacity of the shareholder but shall continue in force
until revoked by the personal representative or guardian of the
shareholder. The presence at any meeting of a shareholder who has given a
proxy shall not revoke such proxy unless the shareholder shall file written
notice of such revocation with the Secretary of the meeting prior to the
voting of such proxy.
Shareholders List
Section 8. The officer or agent having charge of the stock transfer books
for shares of the Corporation shall make and certify a complete list of the
shareholders entitled to vote at a shareholders' meeting or any adjournment
thereof. Such list shall be arranged alphabetically within class and
series, with the address of and the number of shares held by each
shareholder. The information contained in such list shall be made
available to the shareholders by appropriate means at the time and place of
the meeting of shareholders.
Record Date
Section 9. For the purpose of determining the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or for the purpose of determining shareholders entitled to receive
payment of any dividend or allotment of any right, or for the purpose of
any other action, the Board of Directors may fix, in advance, a record date
for any such determination of shareholders. Such date shall not be more
than ninety days before the date of such meeting nor more than ninety days
prior to any other action. In such case only such shareholders as shall be
shareholders of record on the date so fixed shall be entitled to notice of,
and to vote at such meeting, or to receive payment of such dividend, or to
receive such allotments of rights or to exercise such rights, as the case
may be, notwithstanding transfer of any shares on the books of the
Corporation after any record date so fixed. When the determination of
shareholders of record entitled to notice of or to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, unless the Board fixes a new record
date under this section for the adjourned meeting.
Certification by Nominee
Section 10. The nominee shareholder of record of a shareholder dividend
reinvestment plan or of an employee benefit plan may certify in writing to
the Corporation that all or a portion of the shares of the Corporation
registered in the name of such nominee are held for the account of a
specified person or persons. Such certification shall be received by the
Corporation no later than 15 days after the record date for each special or
<PAGE>
<PAGE> 12
annual meeting of shareholders. The certification shall be in the form
specified by the Corporation and shall include such information as the
name, address and number of shares of the beneficial owners, taxpayer
identification number, and any other information that the Corporation may
deem necessary. Upon receipt by the Corporation of such certification, the
person or persons specified in the certification shall be deemed, for the
purposes of notice of and voting at the meeting of shareholders, to be the
holders of record of the number of shares specified, in place of the
nominee shareholder of record.
Judge of Election
Section 11. In advance of any meeting of shareholders the Board may
appoint one or three judges of election to act at the meeting or any
adjournment thereof. If such judges are not so provided by the Board or
shall fail to qualify, the person presiding at a shareholder meeting may,
and on the request of any shareholder entitled to vote thereat shall, make
such appointment. In case any person appointed as judge of election fails
to appear or act, the vacancy may be filled by appointment made by the
Board in advance of the meeting or at the meeting by the person presiding
thereat. Each judge of election, before entering upon the discharge of his
duties, shall take and sign an oath faithfully to execute the duties of
judge of election at such meeting with strict impartiality and according to
the best of his ability. No person shall be elected a Director at a
meeting at which he has served as a judge of election.
Article VI: Stock Certificates
Description
Section 1. Certificates evidencing the ownership of the shares of stock
of the Corporation of any class shall be issued to those entitled to them
by transfer or otherwise. Each certificate shall bear a distinguishing
number, the actual or facsimile signatures of the Chairman of the Board and
of the Secretary, the actual or facsimile seal of the Corporation, and such
recitals as may be required by law. The stock certificates in any class or
classes shall be issued in numerical order, and a full record of the
issuance of each such certificate shall be made in the books usually kept
for that purpose or required by law. The certificates shall be of such
form and design as the Board of Directors may adopt and the form and design
thereof may from time to time be changed by the Board.
Transfers
Section 2. All shares of stock may be transferred on the books of the
Corporation by the registered holders thereof or by their attorneys legally
constituted or their legal representatives by surrender of the certificates
therefor for cancellation and a written assignment of the shares evidenced
thereby. The Board of Directors may from time to time appoint such
transfer Agents and Registrars of stock as it may deem advisable and may
define their powers and duties.
Registered Shareholders
Section 3. The Corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold such person liable for
calls and assessments and shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Pennsylvania.
<PAGE>
<PAGE> 13
Lost Certificates
Section 4. Any person or persons applying for a certificate of stock to
be issued in lieu of one alleged to be lost or destroyed shall, pursuant to
the laws of Pennsylvania relating to lost or destroyed certificates of
stock, furnish to the Corporation such information as the Board of
Directors may require to ascertain whether a certificate of stock has been
lost or destroyed.
Dividends
Section 5. If any date appointed for the payment of any dividend, or
fixed for determining the shareholders of record to whom the same is
payable, shall in any year fall upon a Sunday or legal holiday, then such
dividend shall be payable or such shareholders of record shall be
determined on the next succeeding day not a Sunday or legal holiday.
Article VII: Indemnification
General
Section 1. The Corporation shall pay on behalf of any individual who is
or was a Director, officer, employee or agent of the Corporation, or who is
or was serving at the request of the Corporation as Director, officer,
trustee, fiduciary, employee or agent of any other domestic or foreign
corporation or partnership, joint venture, sole proprietorship, trust or
other enterprise, or who is or was serving as a fiduciary with respect to
any employee benefit plan as a result of his employment by, or service as a
Director of, the Corporation ("Indemnified Person") all expenses, including
attorneys' fees and disbursements, incurred by such person in the defense
or settlement of any civil, criminal, administrative or arbitrative
proceeding pending, threatened or completed against such person by reason
of his being or having been such Indemnified Person, and shall indemnity
such person against amounts paid or incurred by him in satisfaction of
settlements, judgments, fines, and penalties in connection with any such
proceeding, including any proceeding by or in the right of the Corporation,
except where such indemnification is expressly prohibited by applicable law
or where the acts or failures to act of the Indemnified Person constitute
willful misconduct, self-dealing or recklessness. The foregoing right to
payment and to indemnification shall not be exclusive of other rights to
which such person may be entitled as a matter of law or otherwise.
Agreements for Indemnification and Funding
Section 2. The Corporation is authorized, but not required, to enter into
agreements for indemnification with any Indemnified Person, however,
failure to enter into such agreements shall not in any way limit the rights
of such Indemnified Persons hereunder. The Corporation may, in addition to
the foregoing, create a fund of any nature, which may, but need not be,
under the control of a trustee, or otherwise secure or insure in any manner
its indemnification obligations.
Expenses
Section 3. Expenses incurred by a Director, officer, employee or agent in
defending a civil or criminal action, suit or proceeding shall be paid by
the Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation.
<PAGE>
<PAGE> 14
Disputes
Section 4. Any dispute related to the right to indemnification of or
advancement of expenses to Indemnified Persons as provided under thing
Article, except with respect to indemnification for liabilities arising
under the Securities Act of 1933 which the Corporation has undertaken to
submit to a court for adjudication, shall be decided only by arbitration in
accordance with the commercial arbitration rules then in effect of the
American Arbitration Association.
Article VIII: General Provisions
Voting Shares of Other Corporations
Section 1. The Chairman or the Vice Chairmen of the Board of Directors,
the President, any Executive Vice President, any Vice President, or the
Secretary of the Corporation may vote, or appoint a proxy to vote, the
shares of any other business corporation or nonprofit corporation which are
registered in the name of the Corporation.
Seal
Section 2. The seal of the Corporation shall be circular in form, and
shall have inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal Pennsylvania."
Inapplicability of Certain Sections of the Pennsylvania Business
Corporation Law
Section 3. 15 Pa.C.S. SS 2541-2548 (formerly Section 910),15 Pa.C.S. SS
2551-2556 (formerly Section 91 1) and 15 Pa.C.S. SS 2571-2575 as adopted
December 23, 1983, March 23, 1988 and April 27, 1990, respectively, shall
not be applicable to this Corporation.
Amendments
Section 4. These Bylaws, including Article I, Section 4 entitled
"Liability of Directors" and Article VII entitled "Indemnification," may be
altered or amended at any annual meeting of shareholders, or at any special
meeting called for that purpose, by the shareholders entitled to vote and
casting a majority of the votes at the meeting, or at any duly constituted
meeting of the Board of Directors, by a majority of the Directors then in
office. Any alteration or amendment of Article 1, Section 4 and Article
VII shall be prospective only and shall not affect any rights or
obligations then existing.
<PAGE>
<PAGE> 14
Certificate
I, Secretary of Sun Company, Inc., a
Pennsylvania corporation, hereby certify that the foregoing is a true,
correct and complete copy of the Bylaws of Sun Company, Inc., as amended on
May 4, 1995 and that said Bylaws are in full force and effect on this date.
In Witness Whereof, I have set my hand and the seal of Sun Company, Inc.,
this day of 19
SUN COMPANY, INC.
Secretary
Bylaws Footnote:
All references to gender are denoted as "he."
<PAGE>
EXHIBIT 4.3
SUN COMPANY, INC.
Statement of Designation for the
Issuance of Preference Stock
Pursuant to Section 1522 of the
Pennsylvania Business Corporation Law
Pursuant to section 1522 of the Pennsylvania Business Corporation
Law of 1988, as amended, Sun Company, Inc., a Pennsylvania corporation
("Corporation"), does hereby file this Statement of Designation for
the Issuance of Preference Stock in such series as designated by the
Board of Directors of the Corporation by resolutions duly adopted at
its meeting held Monday, June 12, 1995, and the Corporation, acting
through its duly authorized officers, does hereby certify as follows:
FIRST: That the Articles of Incorporation of the Corporation
("Articles of Incorporation") at Article Fourth provide that,
The total number of shares of capital stock which this
Corporation shall have authority to issue is Two Hundred Fifteen
Million (215,000,000) to be divided into two classes consisting
of Fifteen Million (15,000,000) shares designated as "Cumulative
Preference Stock" (hereinafter called "Preference Stock"),
without par value, and Two Hundred Million (200,000,000) shares
designated as "Common Stock" (hereinafter called "Common Stock"),
$1 par value.
SECOND: That Article Fourth of the Articles of Incorporation
further provides that authority is vested in the Board of Directors,
by resolution, to divide any or all of the authorized shares of
Preference Stock into series and to fix and determine the
designations, preferences, qualifications, privileges, limitations,
options, conversion rights, and other special rights of each such
series.
THIRD: That, pursuant to the authority so vested in the Board of
Directors by the Articles of Incorporation, the Board of Directors
duly approved the following actions and adopted the following
resolutions:
RESOLVED, That pursuant to the authority vested in the Board
of Directors pursuant to the Articles of Incorporation of this
Corporation, Twelve Million Five Hundred Thousand (12,500,000)
shares of Preference Stock are hereby approved for issuance in
such series as shall be hereinafter designated as the "Series A
Cumulative Preference Stock," and each share of such Series A
Cumulative Preference Stock shall be imposed upon and granted the
preferences, qualifications, privileges, limitations and other
special rights set forth in the attached Exhibit A, which is
incorporated into this resolution by reference; and
FURTHER RESOLVED, That pursuant to the authority vested in
the Board of Directors pursuant to section 1522 of the
Pennsylvania Business Corporation Law of 1988, as amended, the
<PAGE>
Corporation is hereby authorized to amend and restate the
Articles of Incorporation to reflect the terms and provisions of
the Series A Cumulative Preference Stock set forth in Exhibit A
attached hereto.
FOURTH: That said resolutions were duly adopted by the Board of
Directors at its meeting held on Monday, June 12, 1995 and such
resolutions remain in full force and effect, without amendment.
IN WITNESS WHEREOF, the Corporation, acting through the
undersigned duly authorized officers has executed this Statement and
caused the corporate seal of the Corporation to be affixed as of this
12th day of June 1995.
_______________________________
R. M. Aiken, Jr.
Senior Vice President and
Chief Financial Officer
ATTEST:
__________________________
Ann C. Mule
Secretary
<PAGE>
Exhibit A
SERIES A CUMULATIVE PREFERENCE STOCK
1. Designation. The designation of the series of
Preference Stock authorized by this resolution shall be Series A
Cumulative Preference Stock (the "Series A Preference Stock")
consisting of 12,500,000 shares.
2. Rank. The Series A Preference Stock shall rank, as to
dividends and upon liquidation, dissolution or winding up, prior to
the Common Stock and to any other capital stock of the Corporation
hereafter authorized, other than capital stock which shall by its
terms rank prior to or on a parity with the Series A Preference Stock
and which shall be authorized pursuant to paragraph 6(d) hereof. Any
class or classes of stock of the Corporation shall be deemed to rank:
(i) prior to Series A Preference Stock, either as to
dividends or upon liquidation, if the holders of such class or
classes shall be entitled to the receipt of dividends or amounts
distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series A
Preference Stock;
(ii) on a parity with Series A Preference Stock,
either as to dividends or upon liquidation, whether or not the
dividend rates or dividend payment dates or the redemption or
liquidation prices per share thereof be different from those of
Series A Preference Stock, if the holders of such class or
classes shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or
priority one (1) over the other as between the holder of such
class or classes and the holders of Series A Preference Stock
("Parity Stock"); and
(iii) junior to Series A Preference Stock, either as to
dividends or upon liquidation, if the rights of the holders of
such class or classes shall be subject or subordinate to the
rights of the holders of Series A Preference Stock in respect of
the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be
("Junior Stock").
<PAGE>
3 Dividends.
(a) The holders of outstanding shares of the Series A
Preference Stock shall be entitled to receive, when and as declared by
the Board of Directors, cash dividends accruing at the per share rate
of $3.60 per annum (the "Dividend Rate") and no more, payable in cash
quarterly, each such quarterly payment to be in respect of the
quarterly period ending with the day next preceding the date of such
payment (except in the case of the first dividend which shall be in
respect of the period beginning with June 12, 1995 and ending with the
day next preceding the date of such payment),
to holders of Series A Preference Stock of record on the respective
dates, not exceeding forty (40) days preceding such quarterly dividend
payment dates, fixed for that purpose by the Board of Directors. Such
dividends shall be cumulative from June 12, 1995 and shall accrue
daily. Accruals of dividends shall not bear interest. Dividends will
be payable on or before each March 13, June 13, September 13 and
December 13 (or, if any such day is not a business day, on the next
succeeding business day).
(b) Before any dividends (other than dividends payable in
Junior Stock) on any class or classes of stock of the Corporation
ranking junior to Series A Preference Stock as to dividends or upon
liquidation shall be declared and set apart for payments or paid, the
holders of shares of Series A Preference Stock shall be entitled to
receive cash dividends, when and as declared by the Board of Directors
at the Dividend Rate, and no more. No dividends shall be declared or
paid or set apart for payment on the Series A Preference Stock in
respect of any quarterly dividend period unless there shall likewise
be or have been declared and paid or set apart for payment on all
shares of Preference Stock of each other series at the time
outstanding like dividends in proportion to the respective annual
dividend rates fixed therefor for all quarterly dividend periods
coinciding with or ending before such quarterly dividend period.
(c) So long as any shares of Series A Preference Stock are
outstanding, the Corporation shall not declare or set apart for
payment or pay any dividends (other than stock dividends payable on
shares of Junior Stock) or make any distribution on any other class or
classes of stock of the Corporation ranking junior to Series A
Preference Stock as to dividends or upon liquidation and shall not
redeem, purchase or otherwise acquire, or permit any subsidiary to
purchase or otherwise acquire, any shares of any such Junior Stock if
at the time of making such declaration, payment, distribution,
redemption, purchase or acquisition the Corporation shall be in
default with respect to any dividend payable on, or any obligation to
purchase, shares of Series A Preference Stock; provided, however,
that, notwithstanding the foregoing, the Corporation may at any time
redeem, purchase or otherwise acquire shares of stock of any such
Junior Stock in exchange for, or out of the net cash proceeds from the
sale of, other shares of stock of any Junior Stock.
<PAGE>
4. Redemptions.
(a) Right to Call for Redemption. At any time and from time to
time, the Corporation shall have the right to call, in whole or in
part, the outstanding shares of the Series A Preference Stock for
redemption, subject to the notice provisions set forth in paragraph
(4)(h). On the redemption date (the "Redemption Date") with respect
to any such redemption, the Corporation shall deliver to the holders
thereof, in exchange for each such share called for redemption, the
following consideration:
(1) in the event such Redemption Date is prior to June 12, 1998
(the "Specified Date"),
(i) a number of shares of Common Stock equal to the
Call Price (as defined in paragraph (4)(g)(ii)) in effect on
the Redemption Date divided by the Current Market Price of
the Common Stock determined as of the second Trading Date
immediately preceding the Notice Date, plus
(ii) an amount in cash equal to all accrued and unpaid
dividends on such share of Series A Preference Stock to and
including the Redemption Date, whether or not declared, out
of funds legally available therefor (and dividends shall
cease to accrue on such share as of such Redemption Date);
and
(2) in the event such Redemption Date is on or after the
Specified Date,
(i) shares of Common Stock at the Common Equivalent
Rate (determined as provided in this paragraph (4)) in
effect on the Redemption Date; plus
(ii) an amount in cash equal to all accrued and unpaid
dividends on such share of Series A Preference Stock to and
including the Redemption Date, whether or not declared, out
of funds legally available for the payment of dividends (and
dividends shall cease to accrue on such share as of such
Redemption Date).
If at any time less than all of the shares of Series A Preference
Stock then outstanding are to be called for redemption, the shares to
be redeemed may be selected by lot or such other equitable method as
the Board of Directors of the Corporation in its discretion may
determine.
(b) Redemption or Acquisition of Series A Preference Stock
During Default in Payment of Dividends. If at any time the
Corporation shall have failed to pay dividends in full on Preference
Stock, thereafter and until dividends in full including all accrued
and unpaid dividends on shares of all series of Preference Stock at
the time outstanding, shall have been declared and set apart for
payment or paid, (i) the Corporation, without the affirmative vote or
consent of the holders of at least a majority of the shares of
Preference Stock at the time outstanding, voting or consenting
<PAGE>
separately as a class without regard to series, given in person or by
proxy, either in writing or by resolution adopted at a meeting, shall
not redeem less than all the shares of Preference Stock at such time
outstanding, regardless of series, other than in accordance with
paragraph 4(f) hereof and (ii) neither the Corporation nor any
subsidiary shall purchase any shares of Preference Stock except in
accordance with a purchase offer made in writing or by publication, as
determined by the Board of Directors, in their sole discretion after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series, shall
determine (which determination shall be final and conclusive) will
result in fair and equitable treatment among the respective series;
provided, however, that (iii) unless prohibited by the provisions
applicable to any series, the Corporation, to meet the requirements of
any sinking fund provision with respect to any series, may use shares
of such series acquired by it prior to such failure and then held by
it as treasury stock, and (iv) nothing shall prevent the Corporation
from completing the purchase or redemption of shares of Preference
Stock for which a purchase contract was entered into for any sinking
fund purposes or the notice of redemption of which was mailed to the
holders thereof, prior to such default.
(c) Common Equivalent Rate; Adjustments. The Common Equivalent
Rate to be used to determine the number of shares of Common
Stock to be delivered on the redemption of the Series A
Preference Stock in exchange for shares of Common Stock
pursuant to paragraph (4)(a)(2) (a "Specified Redemption")
shall be initially two shares of Common Stock for each share
of Series A Preference Stock; provided, however, that such
Common Equivalent Rate shall be subject to adjustment from
time to time as provided below in this paragraph (4)(c).
All adjustments to the Common Equivalent Rate shall be
calculated to the nearest 1/100th of a share of Common
Stock. Such rate as adjusted and in effect at any time is
herein called the "Common Equivalent Rate."
(i) If the Corporation shall do any of the following (an
"Adjustment Event"):
(A) pay a dividend or make a distribution with respect to
Common Stock in shares of Common Stock,
(B) subdivide, reclassify or split its outstanding shares
of Common Stock into a greater number of shares,
(C) combine or reclassify its outstanding shares of Common
Stock into a smaller number of shares, or
(D) issue by reclassification of its shares of Common Stock
any shares of Common Stock other than in a Fundamental
Transaction (as defined in paragraph 4(g)(iv)),
then the Common Equivalent Rate in effect immediately prior to
such Adjustment Event shall be adjusted so that the holder of a
share of the Series A Preference Stock shall be entitled to
receive on the redemption of such share of the Series A
Preference Stock, the number of shares of Common Stock that such
holder would have owned or been entitled to receive after the
<PAGE>
happening of the Adjustment Event had such share of the Series A
Preference Stock been redeemed pursuant to paragraph 4(a)
immediately prior to the record date for such Adjustment Event,
if any, or such Adjustment Event. Where the Adjustment Event is
a dividend or distribution, the adjustment to the Common
Equivalent Rate shall become effective as of the close of
business on the record date for determination of stockholders
entitled to receive such dividend or distribution; where the
Adjustment Event is a subdivision, split, combination or
reclassification, the adjustment to the Common Equivalent Rate
shall become effective immediately after the effective date of
such subdivision, split, combination or reclassification; and any
shares of Common Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the close of
business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock
under clauses (ii) and (iii) below. Such adjustment shall be
made successively.
(ii) If the Corporation shall, after the date hereof, issue
rights or warrants to all holders of its Common Stock entitling
them (for a period not exceeding 45 days from the date of such
issuance) to subscribe for or purchase shares of Common Stock at
a price per share less than the Current Market Price of the
Common Stock (determined pursuant to paragraph (4)(c)(v)), on the
record date for the determination of stockholders entitled to
receive such rights or warrants, then in each case the Common
Equivalent Rate shall be adjusted by multiplying the Common
Equivalent Rate in effect immediately prior to the date of
issuance of such rights or warrants by a fraction (A) the
numerator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of additional
shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants, and (B) the denominator of
which shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants, immediately
prior to such issuance, plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares
of Common Stock so offered for subscription or purchase pursuant
to such rights or warrants would purchase at such Current Market
Price (determined by multiplying such total number of shares by
the exercise price of such rights or warrants and dividing the
product so obtained by such Current Market Price). Such
adjustment shall become effective as of the close of business on
the record date for the determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of
Common Stock are not delivered after the expiration of such
rights or warrants, the Common Equivalent Rate shall be
readjusted to the Common Equivalent Rate which would then be in
effect had the adjustments made upon the issuance of such rights
or warrants been made upon the basis of delivery of only the
number of shares of Common Stock actually delivered. Such
adjustment shall be made successively.
<PAGE>
(iii) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock of evidences of
its indebtedness or other assets (including shares of capital
stock of the Corporation (other than Common Stock) but excluding
any distributions and dividends referred to in clause (i) above
or any cash dividends), or shall issue to all holders of its
Common Stock rights or warrants to subscribe for or purchase any
of its securities (other than those referred to in clause (ii)
above), then in each such case, the Common Equivalent Rate shall
be adjusted by multiplying the Common Equivalent Rate in effect
on the record date mentioned below by a fraction (A) the
numerator of which shall be the Current Market Price of the
Common Stock (determined pursuant to paragraph (4)(c)(v)) on the
record date for the determination of stockholders entitled to
receive such dividend or distribution, and (B) the denominator of
which shall be such Current Market Price per share of Common
Stock less the fair market value (as determined by the Board of
Directors of the Corporation, whose determination shall be
conclusive) as of such record date of the portion of the assets
or evidences of indebtedness so distributed, or of such
subscription rights or warrants, applicable to one share of
Common Stock. Such adjustment shall become effective on the
opening of business on the business day next following the record
date for the determination of stockholders entitled to receive
such dividend or distribution.
(iv) Anything in this paragraph (4) notwithstanding, the
Corporation shall be entitled to make such upward adjustment in
the Common Equivalent Rate, in addition to those required by this
paragraph (4), as the Corporation in its sole discretion may
determine to be advisable, in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock
or securities, or a distribution of securities convertible into
or exchangeable for stock (or any transaction that could be
treated as any of the foregoing transactions pursuant to Section
305 of the Internal Revenue Code of 1986, as amended) hereafter
made by the Corporation to its stockholders shall not be taxable.
If the Corporation determines that an adjustment to the Common
Equivalent Rate should be made pursuant to this paragraph
(4)(c)(iv), such adjustment shall be made effective as of such
date as the Board of Directors of the Corporation determines.
The determination of the Board of Directors of the Corporation as
to whether an adjustment to the Common Equivalent Rate should be
made pursuant to the foregoing provisions of this paragraph
(4)(c)(iv), and, if so, as to what adjustment should be made and
when, shall be conclusive, final and binding on the Corporation
and all stockholders of the Corporation.
(v) As used in this paragraph (4), the "Current Market
Price" of a share of Common Stock on any date shall be, except as
otherwise specifically provided, the average of the daily Closing
Prices (as defined in paragraph (4)(g)(iii)) for the five
consecutive Trading Dates ending on and including the date of
determination of the Current Market Price; provided that if the
Closing Price of the Common Stock on the Trading Date next
<PAGE>
following such five-day period (the "next-day closing price") is
less than 95% of such average Closing Price, then the Current
Market Price per share of Common Stock on such date of
determination will be the next-day closing price; provided,
further, that, with respect to any redemption or antidilution
adjustment, if any event that results in an adjustment of the
Common Equivalent Rate occurs during the period beginning on the
first day of the applicable determination period and ending on
the applicable redemption date, the Current Market Price as
determined pursuant to the foregoing will be appropriately
adjusted to reflect the occurrence of such event.
(vi) In any case in which paragraph (4)(c) shall
require that an adjustment as a result of any event become
effective as of the close of business on the record date and the
date fixed for Specified Redemption pursuant to paragraph
(4)(a)(2) occurs after such record date, but before the
occurrence of such event, the Corporation may in its sole
discretion elect to defer the following until after the
occurrence of such event: (A) issuing to the holder of any
redeemed shares of the Series A Preference Stock the additional
shares of Common Stock issuable upon such redemption as a result
of such adjustment and (B) paying to such holder any amount in
cash in lieu of a fractional share of Common Stock pursuant to
paragraph (4)(e).
(vii) Before taking any action which would cause an
adjustment to the Common Equivalent Rate that would cause the
Corporation to issue shares of Common Stock for consideration
below the then par value (if any) of the Common Stock upon
redemption of the Series A Preference Stock, the Corporation will
take any corporate action that may, in the opinion of its
counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable shares of such
Common Stock at such adjusted Common Equivalent Rate.
(d) Notice of Adjustments. Whenever the Common Equivalent
Rate is adjusted as herein provided, the Corporation shall:
(i) forthwith compute the adjusted Common Equivalent
Rate in accordance with this paragraph (4) and prepare a
certificate signed by the Chief Executive Officer, the Chief
Financial Officer, any Vice President, or the Treasurer of the
Corporation setting forth the adjusted Common Equivalent Rate,
the method of calculation thereof in reasonable detail and the
facts requiring such adjustment and upon which such adjustment is
based, which certificate shall be conclusive, final and binding
evidence of the correctness of the adjustment, and file such
certificate forthwith with the transfer agent or agents for the
Series A Preference Stock and the Common Stock; and
(ii) mail a notice stating that the Common Equivalent
Rate has been adjusted, the facts requiring such adjustment and
upon which such adjustment is based and setting forth the
adjusted Common Equivalent Rate to the holders of record of the
outstanding shares of the Series A Preference Stock at or prior
<PAGE>
to the time the Corporation mails an interim statement to its
stockholders covering the fiscal quarter during which the facts
requiring such adjustment occurred, but in any event within 45
days of the end of such fiscal quarter.
(e) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon
the redemption of any shares of Series A Preference Stock. Instead of
any fractional interest in a share of Common Stock which would
otherwise be deliverable upon the redemption of a share of Series A
Preference Stock, the Corporation shall pay to the holder of such
share an amount in cash (computed to the nearest cent) equal to the
same fraction of the Current Market Price of the Common Stock
determined as of the second Trading Date immediately preceding the
relevant Notice Date. If more than one share shall be surrendered for
redemption at one time by the same holder, the number of full shares
of Common Stock issuable upon redemption thereof shall be computed on
the basis of the aggregate number of shares of Series A Preference
Stock so surrendered.
(f) Retirement. Shares of Series A Preference Stock which have
been redeemed, purchased or acquired by the Corporation (whether
through the operation of a sinking fund or otherwise) shall have the
status of authorized and unissued shares of Preference Stock and may
be reissued as a part of the series of which they were originally a
part or may be reclassified and reissued as part of a new series of
Preference Stock to be created by resolution of the Board of Directors
or as part of any other series of Preference Stock. If in any case
the amounts payable with respect to any obligations to retire shares
of Series A Preference Stock and any other series of Preference Stock
are not paid in full in the case of all series with respect to which
such obligations exist, the number of shares of the various series to
be retired shall be in proportion to the respective amounts which
would be payable on account of such obligations if all amounts payable
were discharged in full.
(g) Definitions. As used in this paragraph 4 or elsewhere
herein:
(i) the term "business day" shall mean any day other
than a Saturday, Sunday, or a day on which banking institutions
in the State of New York or the Commonwealth of Pennsylvania are
authorized or obligated by law or executive order to close or are
closed because of a banking moratorium or otherwise;
(ii) the term "Call Price" shall mean the per share price
(payable in shares of Common Stock) at which the Corporation may
redeem shares of Series A Preference Stock pursuant to paragraph
4(a)(1)), which shall be initially equal to $84.79952, declining
by $.004444 on each day following June 12, 1995 (computed on the
basis of a 360-day year of twelve 30-day months) to $80.26664 on
April 12, 1998 and equal to $80 thereafter through June 11, 1998,
if not sooner redeemed;
<PAGE>
(iii) the term "Closing Price" on any day shall mean the
closing sale price regular way (with any relevant due bills
attached) on such day, or in case no such sale takes place on
such day, the average of the reported closing bid and asked
prices regular way (with any relevant due bills attached), in
each case on the New York Stock Exchange Consolidated Tape (or
any successor composite tape reporting transactions on national
securities exchanges), or, if the Common Stock is not listed or
admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Stock is listed or
admitted to trading (which shall be the national securities
exchange on which the greatest number of shares of Common Stock
has been traded during the five consecutive Trading Dates ending
on and including the date of determination of the Current Market
Price), or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked
prices regular way (with any relevant due bills attached) of the
Common Stock on the over-the-counter market on the day in
question as reported by the National Association of Securities
Dealers Automated Quotation System, or a similarly generally
accepted reporting service, or if not so available, as determined
in good faith by the Board of Directors on the basis of such
relevant factors as the Board of Directors in good faith
considers appropriate;
(iv) the term "Fundamental Transaction" shall mean a merger
or consolidation of the Corporation, a share exchange, division or
conversion of the Corporation's capital stock or an amendment of the
Corporation's Articles of Incorporation that results in the conversion
or exchange of Common Stock into, or the right of the holders thereof
to receive, in lieu of or in addition to their shares of Common Stock,
other securities or other property (whether of the Corporation or any
other entity);
(v) the term "Notice Date" with respect to any notice given
by the Corporation in connection with a redemption of any of the
Series A Preference Stock shall be the commencement of the mailing of
such notice to the holders of the Series A Preference Stock in
accordance with paragraph (4)(h);
(vi) the term "outstanding," when used in reference to
shares of stock, shall mean issued shares excluding:
(A) shares held by the Corporation or a subsidiary; and
(B) shares called for redemption if funds for the
redemption thereof have been deposited in trust;
(vii) the term "subsidiary" as used herein shall mean any
corporation 51% or more of the outstanding stock having voting
rights of which is at the time owned or controlled directly or
indirectly by the Corporation; and
(viii) the term "Trading Date" shall mean a date on which the
New York Stock Exchange (or any successor to such Exchange) is
open for the transaction of business.
<PAGE>
(h) Method of Redemption. Notice of every redemption, stating
the redemption date, the redemption price, and the placement of
payment thereof, shall be given by mailing a copy of such notice at
least thirty (30) days and not more than sixty (60) days prior to the
date fixed for redemption to the holders of record of the shares of
Series A Preference Stock to be redeemed at their addresses as the
same shall appear on the books of the Corporation. The Corporation,
upon mailing notice of redemption as aforesaid or upon irrevocably
authorizing the bank or trust company hereinafter mentioned to mail
such notice, may deposit or cause to be deposited in trust with a bank
or trust company in the City of Philadelphia, Commonwealth of
Pennsylvania, or in the Borough of Manhattan, City and State of New
York, an amount equal to the redemption price of the shares to be
redeemed plus any accrued and unpaid dividends thereon, which amount
shall be payable to the holders of the shares to be redeemed upon
surrender of certificates therefor on or after the date fixed for
redemption or prior thereto if so directed by the Board of Directors.
Upon such deposit, or if no such deposit is made, then from and after
the date fixed for redemption unless the Board of Directors shall
default in making payment of the redemption price plus accrued and
unpaid dividends upon surrender of certificates as aforesaid, the
shares called for redemption shall cease to be outstanding and the
holders thereof shall cease to be stockholders with respect to such
shares and shall have no interest in or claim against the Corporation
with respect to such shares other than the right to receive the
redemption price plus accrued and unpaid dividends from such bank or
trust company or from the Corporation, as the case may be, without
interest thereon, upon surrender of certificates as aforesaid. In
case any holder of shares of Series A Preference Stock which have been
called for redemption shall not, within six (6) years after the date
of such deposit, have claimed the amount deposited with respect to the
redemption thereof, such bank or trust company, upon demand, shall pay
over to the Corporation such unclaimed amount and shall thereupon be
relieved of all responsibility in respect thereof to such holder, and
thereafter such holder shall look only to the Corporation for payment
thereof. Any interest which may accrue on funds so deposited shall be
paid to the Corporation from time to time.
(i) Surrender of Certificates; Status. Each holder of
shares of Series A Preference Stock to be redeemed shall surrender the
certificates evidencing such shares (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state) to the Corporation at the place
designated in the notice of such redemption and shall thereupon be
entitled to receive certificates evidencing shares of Common Stock and
to receive any other funds payable pursuant to this paragraph (4)
following such surrender and following the date of such redemption.
In case fewer than all the shares represented by any such surrendered
certificate are called for redemption, a new certificate shall be
issued at the expense of the Corporation representing the unredeemed
shares. If such notice of redemption shall have been given, and if on
the date fixed for redemption shares of Common Stock and other funds
necessary for the redemption shall have been either set aside by the
Corporation separate and apart from its other funds or assets in trust
for the account of the holders of the shares to be redeemed (and so as
to be and continue to be available therefor) or deposited with a bank
or trust company as provided in paragraph (4)(h), then,
<PAGE>
notwithstanding that the certificates evidencing any shares of Series
A Preference Stock so called for redemption shall not have been
surrendered, the shares represented thereby so called for redemption
shall be deemed no longer outstanding, dividends with respect to the
shares so called for redemption shall cease to accrue after the date
fixed for redemption, and all rights with respect to the shares so
called for redemption shall forthwith after such date cease and
terminate, except for the right of the holders to receive the shares
of Common Stock and other funds, if any, payable pursuant to this
paragraph (4) without interest upon surrender of their certificates
therefor.
(j) Dividend Payments. The holders of shares of Series A
Preference Stock at the close of business on a dividend payment record
date shall be entitled to receive the dividend payable on such shares
on the corresponding dividend payment date notwithstanding the call
for redemption thereof (except that holders of shares called for
redemption on a date occurring between such record date and the
dividend payment date or on such dividend payment date shall not be
entitled to receive such dividend on such dividend payment date but
instead will receive accrued and unpaid dividends to such redemption
date.
(k) Payment of Taxes. The Corporation will pay any and all
documentary, stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on the
redemption of shares of Series A Preference Stock pursuant to this
paragraph (4); provided, however, that the Corporation shall not be
required to pay any tax which may be payable in respect of any
registration of transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the registered holder of
Series A Preference Stock redeemed or to be redeemed, and no such
issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax
has been paid.
5. Liquidation Preference.
(a) Upon the voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the Series A Preference Stock shall
be preferred as to assets over Common Stock and any other Junior Stock
so that the holder of each share of the Series A Preference Stock
shall be entitled to be paid or to have set apart for payment in
respect of each such share, before any distribution is made to the
holders of Common Stock and any other Junior Stock, a liquidation
preference equal to twice the fair market value (as determined by the
Board of Directors of the Corporation based on advice of tax counsel
in accordance with United States federal income tax principles, which
determination shall be conclusive) of a Series A Depositary Share (as
defined in the Deposit Agreement dated as of June 13, 1995 between the
Corporation and First Chicago Trust Company of New York, as
Depositary) on the date of issuance thereof, plus an amount equal to
all dividends accrued and unpaid up to and including the date fixed
for such payment, and such holder of a share of the Series A
Preference Stock shall not be entitled to any other payment. If upon
any such liquidation, dissolution or winding up of the Corporation,
<PAGE>
its net assets shall be insufficient to permit the payment in full of
the respective amounts to which the holders of all outstanding shares
of the Series A Preference Stock and any outstanding Preference Stock
that is Parity Stock are entitled, the entire remaining net assets of
the Corporation shall be distributed among the holders of the Series A
Preference Stock and any outstanding Preference Stock that is Parity
Stock, in amounts proportionate to the full preferential amounts to
which they are respectively entitled.
(b) The voluntary sale, lease, exchange or transfer for cash,
shares of stock (securities or other consideration) of all or
substantially all the Corporation's property or assets to, or its
consolidation or merger with, one or more corporations shall not be
deemed to be a voluntary or involuntary liquidation, dissolution or
winding up of the Corporation.
6. Voting Rights.
(a) The holders of record of shares of Series A Preference Stock
shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (6) or as otherwise provided in the
Articles of Incorporation or by statute.
(b) The holders of shares of Series A Preference Stock shall be
entitled to vote on all matters submitted to a vote of the holders of
the Common Stock, voting together with the holders of the Common Stock
(and any other class or series of capital stock of the Corporation
entitled to vote together with the Common Stock) as one class. Each
share of the Series A Preference Stock shall be entitled to one vote.
(c) (i) If the Corporation shall have failed to pay, or declare
and set apart for payment, dividends on Preference Stock in an
aggregate amount equivalent to six (6) full quarterly dividends on all
shares of Preference Stock at the time outstanding, the number of
Directors of the Corporation shall be increased by two (2) at the
first annual meeting of the shareholders of the Corporation held
thereafter, and at such meeting and at each subsequent annual meeting
until dividends payable for all past quarterly dividend periods on all
outstanding shares of Preference Stock shall have been paid, or
declared and set apart for payment, in full, the holders of the shares
of Preference Stock shall have, in addition to any other voting rights
which they otherwise may have, the exclusive and special right, voting
separately as a class without regard to series, each share of
Preference Stock entitling the holder thereof to one (1) vote per
share, to elect two (2) additional members of the Board of Directors
to hold office for a term of one (1) year; provided, that the right to
vote as a class upon the election of such two (2) additional Directors
shall not limit the right of holders of the Series A Preference Stock
to vote upon the election of all other Directors and upon other
matters set forth in paragraph 6(b) above.
(ii) Upon such payment, or declaration and setting apart for
payment, in full, the terms of the two (2) additional Directors so
elected shall forthwith terminate, and the number of Directors of the
Corporation shall be reduced by two (2) and such voting right of the
holders of shares of Preference Stock shall cease, subject to increase
in the number of Directors as aforesaid and to revesting of such
<PAGE>
voting right in the event of each and every additional failure in the
payment of dividends in an aggregate amount equivalent to six (6) full
quarterly dividends as aforesaid.
(d) The Corporation shall not, without the affirmative vote or
consent of the holders of at least 66 2/3% of the number of shares of
Preference Stock at the time outstanding, voting or consenting (as the
case may be) separately as a class without regard to series, given in
person or by proxy, either in writing or by resolution adopted at a
meeting:
(i) create any class of stock ranking prior to or on a parity
with Preference Stock as to dividends or upon liquidation or increase
the authorized number of shares of any such previously authorized
class of stock;
(ii) alter or change any of the provisions of the Articles of
Incorporation so as to adversely affect the preferences, special
rights or powers given to the Preference Stock;
(iii) increase the number of shares of Preference Stock which the
Corporation is authorized to issue; or
(iv) alter or change any of the provisions of the Articles of
Incorporation or hereof so as to adversely affect the preferences,
special rights or powers given to the Series A Preference Stock.
7. Conversion. The Series A Preference Stock shall not have
any conversion rights to convert into Common Stock.
8. Fundamental Transactions. Upon the effectiveness of a
Fundamental Transaction at any time, each share of Series A Preference
Stock shall be entitled to receive consideration per share (i) of the
same type as is offered to or to be received by holders of Common
Stock pursuant to or in connection with such Fundamental Transaction
and (ii) having a fair value equal to the fair value of the Common
Stock that each share of Series A Preference Stock would receive if
such share of Series A Preference Stock were redeemed by the Company
immediately prior to such time in accordance with paragraph 4 hereof.
<PAGE>
EXHIBIT 99.1
UNDERWRITING AGREEMENT
May 24, 1995
Sun Company, Inc.
Ten Penn Center
1801 Market Street
Philadelphia, Pennsylvania
19103-1699
Attention: Mr. Robert M. Aiken, Jr.
Sun Canada, Inc.
c/o P.O. Box 20
Toronto-Dominion Centre
Toronto, Ontario
M5K 1N6
Suncor Inc.
36 York Mills Road
North York, Ontario
M2P 2C5
Dear Sirs:
The undersigned, Nesbitt Burns Inc. ("Nesbitt Burns"),
Gordon Capital Corporation, RBC Dominion Securities Inc., Wood
Gundy Inc., ScotiaMcLeod Inc., Goldman Sachs Canada, Midland Walwyn
Capital Inc., Richardson Greenshields of Canada Limited, First
Marathon Securities Limited, Levesque Beaubien Geoffrion Inc.,
Toronto Dominion Securities Inc. and Peters & Co. Limited
(hereinafter individually referred to as an "Underwriter" and
collectively as the "Underwriters") understand that Sun Canada,
Inc., a wholly-owned subsidiary of Sun Company, Inc., proposes to
sell 29,935,412 common shares (the "Offered Securities") of Suncor
Inc. (the "Company"). Sun Canada Inc. and Sun Company, Inc., whose
obligations shall be joint and several hereunder, are hereinafter
referred to as the "Selling Shareholder". The Offered Securities
will have attributes in all material respects the same as described
in the English and French language versions of the Company's
preliminary short form prospectus to be dated May 25, 1995 and
signed and delivered by the Company and the Underwriters.
The Underwriters further understand that at the Closing
Time, as defined herein, the issued and outstanding share capital
of the Company will consist of 54,584,319 common shares, plus such
number, if any, of common shares as may have been issued after
April 30, 1995 pursuant to officers' and employees' stock options
now outstanding or hereafter issued in the ordinary course or as a
result of the tender of outstanding scrip certificates.
<PAGE>
Based upon and subject to the representations,
warranties, terms and conditions contained herein:
(a) Each of the Underwriters offers to purchase from the
Selling Shareholder at the Closing Time all but not less
than all its respective portion of the Offered Securities
(based on the applicable percentage participation set
forth in Section 23 hereof) at a price of $39.00 per
share. The Offered Securities will be sold on an
instalment basis and, prior to full payment, will be
evidenced by instalment receipts (the "Instalment
Receipts"). The Purchase Price for each Offered Security
shall be payable in three instalments. The first
instalment of $13.00 (the "First Instalment") shall be
paid by the Underwriters on the Closing Date, the second
instalment of $13.00 (the "Second Instalment") shall be
payable by the registered holders of the Instalment
Receipts on or before June 10, 1996 and the third
instalment of $13.00 (the "Final Instalment") shall be
payable by the registered holders of Instalment Receipts
on or before December 30, 1996.
(b) In consideration of the agreement of the Underwriters to
purchase, market and distribute to the public the Offered
Securities which will result from the acceptance of this
offer and in consideration of the services rendered and
to be rendered by the Underwriters in connection with,
among other things, the organization, documentation and
management of the proposed offering, including the
provision of financial and marketing advice, assistance
in the preparation of documentation, including the
Preliminary Prospectus and the Prospectus (both as
hereinafter defined), the formation of any special
selling group necessary to distribute the Offered
Securities, and performing administrative work in
connection with the distribution of the Offered
Securities, Sun Canada, Inc. shall pay and Sun Company,
Inc. shall cause it to pay the Underwriters at the
Closing Time a fee (the "Underwriting Fee") of $1.56 per
Offered Security purchased by the Underwriters against
receipt of the purchase price of the Offered Securities.
Terms and Conditions
1. Definitions: In this Agreement:
(a) "Business Day" means a day on which The Toronto Stock
Exchange is open for trading and banks are open for
business in the cities of Toronto and Calgary;
<PAGE>
(b) "Canadian Securities Acts" means, collectively, the
applicable securities laws of each of the provinces of
Canada and the respective regulations and rules made
thereunder;
(c) "Closing" means the completion of the purchase and sale
of the Offered Securities to take place at the Closing
Time;
(d) "Closing Date" means June 8, 1995, or such other date as
may be agreed to by the parties hereto but in no event
later than July 6, 1995;
(e) "Closing Time" means 8:30 a.m. (Toronto time) on the
Closing Date, or such other time on the Closing Date as
the parties may agree upon;
(f) "Common Shares" means the common shares in the capital of
the Company;
(g) "Company's Excluded Provisions" means, collectively,
information or statements relating solely to the Selling
Firms or the Selling Shareholder or any of them, or set
forth in the second paragraph under the heading "Voting
Shares and Principal Holders Thereof" in the Company's
Management Proxy Circular dated March 1, 1995, paragraph
five under the heading "Plan of Distribution" and all
paragraphs under the heading "Selling Shareholder" in the
Preliminary Prospectus, and any statements appearing on
the face page of the Preliminary Prospectus derived
therefrom, together with the corresponding paragraphs in
the Prospectus;
(h) "Custodian" means Montreal Trust Company of Canada,
appointed as custodian pursuant to the Instalment
Agreement;
(i) "distribution" means distribution or distribution to the
public, as the case may be, under relevant securities
legislation in any province of Canada, and "distribute"
has a corresponding meaning;
(j) "Instalment Agreement" means an agreement to be dated as
of the Closing Date among the Selling Shareholder, the
Company, the Underwriters, the Security Agent and the
Custodian pursuant to which the Instalment Receipts are
to be issued;
<PAGE>
(k) "Majority Underwriters" means Underwriters that are
obligated to purchase, in the aggregate, more than 50% of
the Offered Securities;
(l) the meanings of the terms "material change", "material
fact" and "misrepresentation" shall have the respective
meanings given thereto by the Canadian Securities Acts or
any of them;
(m) "Preliminary Prospectus" means the short form preliminary
prospectus signed and certified in accordance with the
Canadian Securities Acts, and the French language version
thereof, relating to the offering and distribution of the
Offered Securities to the public in the Qualifying
Jurisdictions, including the documents incorporated
therein by reference;
(n) "Prospectus" means the final short form prospectus of the
Company to be approved, signed and certified in
accordance with the Canadian Securities Acts, and the
French language version thereof, relating to the offering
and distribution of the Offered Securities to the public
in the Qualifying Jurisdictions, including the documents
incorporated therein by reference;
(o) "Qualifying Jurisdictions" means all of the provinces of
Canada;
(p) "Regulation S" means Regulation S promulgated by the U.S.
Securities and Exchange Commission under the U.S.
Securities Act of 1933, as amended;
(q) "Securities Commissions" means, collectively, the British
Columbia, Alberta, Saskatchewan, Manitoba, Ontario and
Nova Scotia Securities Commissions, Commission des
valeurs mobilieres du Quebec, the Prince Edward Island
and Newfoundland Departments of Justice and the Office of
the Administrator of Securities (New Brunswick);
(r) "Security Agent" means a corporation to be incorporated
and wholly-owned by the Custodian, which shall be
appointed as security agent pursuant to the Instalment
Agreement;
(s) "Selling Firms" means the Underwriters and other
investment dealers and brokers with which the
Underwriters have a contractual relationship for the
distribution of the Offered Securities;
<PAGE>
(t) "Selling Shareholder's Excluded Provisions" means,
collectively, information or statements relating solely
to the Selling Firms, or set forth in paragraph five
under the heading "Plan of Distribution", in the
Preliminary Prospectus, and any statements appearing on
the face page of the Preliminary Prospectus derived
therefrom, together with the corresponding paragraphs in
the Prospectus;
(u) Supplementary Material" means, collectively, any
amendment to the Prospectus, any amended or supplemental
Preliminary Prospectus or Prospectus which may be filed
by or on behalf of the Company under the Canadian
Securities Acts in connection with the offering of the
Offered Securities; and
(v) "U.S. Securities Laws" means the Securities Act of 1933
as amended, of the United States, and any other laws of
the United States applicable in connection with the
offering for sale or sale of the Instalment Receipts and
the Offered Securities.
2. Offered Securities: Each of the Company and the Selling
Shareholder represents and warrants that the Offered Securities are
duly and validly authorized and issued, are outstanding as fully
paid and non-assessable shares in the capital of the Company and
have attributes and characteristics which conform in all material
respects to the attributes and characteristics described in the
Preliminary Prospectus.
3. Filing: The Company and the Selling Shareholder shall
use all reasonable efforts to fulfil as soon as practicable to the
reasonable satisfaction of the Underwriters' counsel all legal
requirements to be fulfilled by the Company and the Selling
Shareholder, respectively, to enable the Offered Securities to be
offered for sale and sold to the public in the Qualifying
Jurisdictions by the Underwriters directly or through other
investment dealers and brokers who comply with the applicable
securities laws of the Qualifying Jurisdictions. Without limiting
the generality of the foregoing, these legal requirements include
the preparation and filing of the Preliminary Prospectus and the
Prospectus in each Qualifying Jurisdiction and the obtaining of
appropriate receipts and permissions promptly. The Preliminary
Prospectus and all required accompanying documents shall be filed
in Ontario no later than 5:00 p.m. (local time) on May 25, 1995,
and in all other Qualifying Jurisdictions no later than 5:00 p.m.
(local time) on May 26, 1995. The Prospectus and all required
accompanying documents shall be filed in Ontario no later than 5:00
p.m. (local time) on June 2, 1995 and in all other Qualifying
Jurisdictions no later than 5:00 p.m. (local time) on June 5, 1995.
<PAGE>
4. Offering to the Public:
(a) The Underwriters will offer the Offered Securities, for
sale to the public in Canada directly, and will offer the
Instalment Receipts and the Offered Securities in the United States
through investment dealers and brokers duly licensed under
applicable laws in each case only as permitted by applicable laws
and in the manner described herein, at an offering price not
exceeding the offering price set forth on the cover page of the
Prospectus and upon the terms and conditions set forth in the
agreement resulting from the acceptance of this offer. The
Underwriters agree that they will distribute the Instalment
Receipts and the Offered Securities in a manner which complies in
all respects with all applicable laws and regulations of each
jurisdiction in which the Instalment Receipts and the Offered
Securities are offered for sale, whether or not any securities are
actually sold in such jurisdictions, or the Preliminary Prospectus,
the Prospectus or any other offering material may be distributed
and will not distribute the Instalment Receipts and the Offered
Securities or publish any prospectus, circular, advertisement or
other offering material in any jurisdiction outside the Qualifying
Jurisdictions in such manner as to require registration of the
Instalment Receipts and the Offered Securities, or the filing of a
prospectus or any similar document with respect to the Instalment
Receipts and the Offered Securities by the Company or the Selling
Shareholder or as a result of which the Company or the Selling
Shareholder or any of their respective directors, officers or
employees could become subject to any inquiry, investigation or
proceeding commenced or threatened by any securities regulatory
authority, stock exchange or other competent authority, under the
laws of any jurisdiction other than the Qualifying Jurisdictions
and will require each Selling Firm to agree not to distribute the
Instalment Receipts and the Offered Securities except as permitted
in the agreement resulting from the acceptance of this offer. For
the purposes of this paragraph, the Underwriters shall be entitled
to assume that the Offered Securities are qualified for
distribution under the securities laws of those Qualifying
Jurisdictions where a receipt or similar document for the
Prospectus shall have been obtained from the applicable securities
regulatory authority following the filing of the Prospectus.
Notwithstanding the foregoing provisions of this paragraph, an
Underwriter will not be liable to the Company under this paragraph
with respect to a default by another Underwriter under this
paragraph.
(b) The Company and the Selling Shareholder shall cooperate
in all respects with the Underwriters to allow and assist the
Underwriters to participate fully in the preparation of the
Preliminary Prospectus and Prospectus and any Supplementary
<PAGE>
Material and shall allow the Underwriters to conduct all "due
diligence" investigations which the Underwriters may reasonably
require to fulfil the Underwriters' obligations as underwriters and
to enable the Underwriters responsibly to execute any certificate
required to be executed by the Underwriters in such documentation.
(c) The Underwriters agree that they and their United States
broker-dealer affiliates will comply, and they will provide in any
selling group agreement that each member of the selling group will
comply, with the U.S. selling restrictions set forth in Schedule A
to this Agreement, provided, however, that an Underwriter which is
not itself in breach of this paragraph or Schedule A will not be
liable to the Company under this paragraph or Schedule A with
respect to a breach by another Underwriter or, provided that the
Underwriters have provided in any selling group agreement that
members of the selling group will comply with such U.S. selling
restrictions, by a member of the selling group of this paragraph or
Schedule A.
(d) The Underwriters acknowledge that neither the Company nor
the Selling Shareholder is taking any steps to qualify the Offered
Securities for distribution outside of Canada.
(e) The Selling Shareholder undertakes and agrees that
the entering into of the Instalment Agreement by the Underwriters,
and the holding of the Offered Securities pursuant thereto, shall
satisfy and release the Underwriters in respect of any obligation
with respect to payment of the Second Instalment and Final
Instalment (other than obligations of the Underwriters as
registered holders of Instalment Receipts), and that thereafter
only the registered holder of an Instalment Receipt from time to
time shall have any obligations with respect to the payment of the
Second Instalment and Final Instalment.
(f) The Selling Shareholder and the Company shall take
all such reasonable action within their power as may be necessary
to ensure that the Instalment Receipts are listed on the Toronto
and Montreal stock exchanges at all times on and after the Closing
Date at least until the due date for payment of the Final
Instalment.
5. Delivery of Documents: The Company shall deliver and the
Selling Shareholder shall use all reasonable efforts to cause to be
delivered to the Underwriters the documents set out below, as
appropriate, at the respective times indicated:
(a) immediately prior to the filing of each of the
Preliminary Prospectus and the Prospectus with the
Securities Commissions, the Preliminary Prospectus and
Prospectus, as the case may be, prepared in accordance
with the Canadian Securities Acts and signed by the
<PAGE>
Company and the Selling Shareholder as required thereby;
(b) immediately prior to the filing thereof with the
Commission des valeurs mobilieres du Quebec, the French
language version of each of the Preliminary Prospectus
and the Prospectus signed by the Company;
(c) on the date of the filing of the French language version
of each of the Preliminary Prospectus and the Prospectus,
an opinion of Coopers & Lybrand, the auditors of the
Company, in form and content satisfactory to the
Underwriters, acting reasonably, to the effect that the
French language versions of the sections entitled
"Selected Consolidated Financial Information",
Management's Discussion and Analysis", the audited
consolidated financial statements of the Company and the
notes thereto, together with the auditors' report thereon
and the unaudited interim financial statements of the
Company, and the notes thereto, which are contained or
incorporated by reference in the French language version
of the Preliminary Prospectus or the Prospectus, as the
case may be, (all of which information is hereinafter
referred to as "Financial Information") are in all
material respects a complete and proper translation of
the corresponding items in or incorporated by reference
in the English language version of such document;
(d) on the date of the filing of the French language version
of each of the Preliminary Prospectus and the Prospectus,
an opinion of Quebec counsel to the Company, dated the
date of the Preliminary Prospectus or the date of the
Prospectus, as applicable, in form and content
satisfactory to the Underwriters to the effect that the
French language version of the Prospectus (except the
Financial Information) is in all material respects a
complete and accurate translation of the English language
version of the Prospectus and that the two versions are
not susceptible to any materially different
interpretations with respect to any material matter
contained therein; and
(e) forthwith upon preparation, any amendment to the
Preliminary Prospectus or the Prospectus prepared in
accordance with the Canadian Securities Acts and signed
by the Company and the Selling Shareholder as required
thereby.
The Company shall promptly deliver and the Selling Shareholder
shall use all reasonable efforts to cause to be delivered to the
<PAGE>
Underwriters any Supplementary Material required to be prepared or
filed by the Company under the laws of any Qualifying Jurisdiction.
Such Supplementary Material shall be in form and substance
satisfactory to the Underwriters, acting reasonably.
The delivery to the Underwriters of the Preliminary
Prospectus, the Prospectus and any Supplementary Material shall
constitute the consent by the Company and the Selling Shareholder
to the use by the Underwriters and the other Selling Firms of such
documents in the applicable jurisdictions in connection with the
distribution of the Offered Securities in compliance with the
provisions of this offer and subject to the provisions of Section
4 hereof.
6. Distribution: As soon as possible, and in any event not
later than May 26, 1995, in the case of the Preliminary Prospectus
and within 48 hours from the filing of the Prospectus or the
execution of any amendment or supplement to the Preliminary
Prospectus or the Prospectus, the Company shall deliver and the
Selling Shareholder shall use all reasonable efforts to cause to be
delivered to the Underwriters without charge commercial copies of
the Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, as the case may be, in such numbers and at such
locations as the Underwriters may reasonably require by
instructions given within 24 hours of each time any such filing or
execution occurs.
7. Opinions and Comfort Letter:
(a) Coincident with the signing of the Prospectus, the
Company shall deliver and the Selling Shareholder shall use all
reasonable efforts to cause to be delivered to the Underwriters,
dated the date of the Prospectus, an expanded comfort letter from
Coopers & Lybrand with respect to the financial and accounting
information regarding the Company contained in the Prospectus which
comfort letter shall be in addition to the consent letters
addressed to the Securities Commissions and shall be based on a
review by the auditors having a cutoff date not more than three
Business Days prior to the date of the expanded comfort letter,
which is acceptable in form and substance to the Underwriters,
acting reasonably.
(b) Opinions and comfort letters similar to those referred to
in paragraphs 5(c) and (d), in the case of the Preliminary
Prospectus and the Prospectus, and in paragraph 7(a), in the case
of the Prospectus, hereof shall be delivered to the Underwriters
coincident with the signing of any amended or supplemental
Preliminary Prospectus or Prospectus in each case dated the date of
such amended or supplemental Preliminary Prospectus or Prospectus.
<PAGE>
8. Material Change: During the period of distribution, the
Company and the Selling Shareholder shall promptly notify the
Underwriters in writing of:
(a) any change (actual, contemplated or threatened), in or
affecting the business, prospects, affairs, management,
operations, assets, liabilities (contingent or
otherwise), capital or ownership of the Company; or
(b) any change in any fact contained or referred to in the
Preliminary Prospectus, the Prospectus or any
Supplementary Material as it exists immediately prior to
such change;
which change is, or may be, of such a nature as to render the
Preliminary Prospectus, the Prospectus or any Supplementary
Material as it exists immediately prior to such change, misleading
or untrue or would result in any of such documents, as they exist
immediately prior to such change, containing a misrepresentation or
which would result in any of such documents, as they exist
immediately prior to such change, not complying with the laws of
any Qualifying Jurisdiction or jurisdiction in the United States in
which the Offered Securities are being offered for sale or which
change would reasonably be expected to have a significant effect on
the market price or value of any securities of the Company. The
obligation of the Selling Shareholder so to notify shall only
relate to changes known or which reasonably ought to have been
known to the Selling Shareholder as a principal shareholder of the
Company. The Company and the Selling Shareholder shall, to the
reasonable satisfaction of the Underwriters' counsel, promptly
comply, in the case of the Company and use all reasonable efforts
to cause to be complied with, in the case of the Selling
Shareholder, with all applicable filing and other requirements
under securities laws in the Qualifying Jurisdictions and elsewhere
arising as a result of such change, it being acknowledged that the
Company shall not be required to file a registration statement
under U.S. Securities Laws or otherwise qualify the Offered
Securities for distribution outside Canada. The Company and the
Selling Shareholder shall in good faith discuss with the
Underwriters any change in circumstances (actual or proposed within
the Company's or the Selling Shareholder's knowledge) which is of
such a nature that there is reasonable doubt whether notice need be
given to the Underwriters pursuant to this section and, in any
event, prior to making any filing referred to in this Section 8.
In addition, if during the period from the signing of the
Preliminary Prospectus or the Prospectus to the completion of the
distribution of the Offered Securities as notified to the Company
and the Selling Shareholder pursuant to Section 18 there is any
<PAGE>
change in any applicable securities laws which results in a
requirement to file Supplementary Material, the Company and the
Selling Shareholder each shall promptly, to the reasonable
satisfaction of the Underwriters' counsel, make any such filing
required to be made by it, in the applicable jurisdiction or
jurisdictions, it being acknowledged that the Company shall not be
required to file a registration statement under U.S. Securities
Laws or otherwise qualify the Offered Securities for distribution
outside Canada.
9. Representations and Warranties
(a) The delivery by the Company to the Underwriters of
the documents referred to in Sections 5(a) and (d) hereof shall
constitute the Company's representation and warranty to the
Underwriters that:
(A) except with respect to the Company's Excluded
Provisions, each such document at the time of
its signing or filing fully complied with the
requirements of the applicable securities laws
in the Qualifying Jurisdictions pursuant to
which it was filed and all the information and
statements contained therein are, at the
respective dates of delivery thereof, true and
accurate, contain no misrepresentation and
constitute full, true and plain disclosure of
all material facts relating to the Company and
its subsidiaries, taken together, and relating
to the subsidiaries, as required by the
applicable securities laws in the Qualifying
Jurisdictions;
(B) except with respect to the Company's Excluded
Provisions, no material fact or information
has been omitted from the said documents and
no other fact or information has been omitted
therefrom which is necessary to make the
statements contained therein not misleading in
light of the circumstances in which they were
made;
(C) the financial statements included or
incorporated by reference in such documents
present fairly the consolidated financial
position of the Company as at the dates
indicated and the results of its operations
for the periods specified and except as
<PAGE>
otherwise stated in such documents, the said
financial statements have been prepared in
conformity with generally accepted accounting
principles applied on a consistent basis;
(D) each of the Company and its material
subsidiaries has been duly incorporated and is
validly existing as a subsisting corporation
under the laws of its jurisdiction of
incorporation with corporate power and
authority to own, lease and operate its
properties and to conduct its business as
described in the Preliminary Prospectus or
Prospectus; and each of the Company and its
material subsidiaries is duly qualified as a
foreign or extra-provincial corporation, as
the case may be, to transact business in each
jurisdiction in which such qualification is
required, whether by reason of the ownership
or leasing of property or the conduct of
business, except where failure to so qualify
would not have a material adverse effect on
the condition, financial or otherwise, or the
earnings, business affairs or business
prospects of the Company and its subsidiaries,
taken as a whole;
(E) the Company and each of its material
subsidiaries is not in violation of its
charter or by-laws; the Company and each of
its subsidiaries is not in default in the
performance or observance of any obligation,
agreement, covenant or condition contained in
any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to
which it is a party or by which it may be
bound or to which any of its property or
assets is subject, other than defaults that in
the aggregate do not have a material adverse
effect on the condition, financial or
otherwise, or the earnings, business affairs
or business prospects of the Company and its
subsidiaries, taken as a whole; and the
execution, delivery and performance of the
agreement which will result from the Company's
and the Selling Shareholder's acceptance of
this offer and the consummation of the
transactions contemplated herein have been
duly authorized by all necessary corporate
<PAGE>
action and will not conflict with or
constitute a breach of, or default under, or
result in the creation or imposition of any
lien, charge or encumbrance upon any property
or assets of the Company or any of its
subsidiaries pursuant to any contract,
indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company
or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries
may be bound or to which any of the property
or assets of the Company or any of its
subsidiaries is subject (other than conflicts,
breaches, defaults, liens, charges and
encumbrances that in the aggregate do not have
a material adverse effect on the condition,
financial or otherwise, or the earnings,
business affairs or business prospects of the
Company and its subsidiaries, taken as a
whole), nor will such action result in any
violation of the provisions of the charter or
by-laws of the Company or any of its
subsidiaries or any applicable law,
administrative regulation or administrative or
court decree (other than violations that in
the aggregate do not have a material adverse
effect on the condition, financial or
otherwise, or the earnings, business affairs
or business prospects of the Company and its
subsidiaries, taken as a whole);
(F) no authorization, approval or consent of any
court or governmental authority or agency in
Canada is required to be obtained by the
Company in connection with the sale and
delivery of the Offered Securities hereunder,
except such as may be required under the
Canadian Securities Acts; the Company has not
caused any copies of the Preliminary
Prospectus, the Prospectus or any amendments
or reproductions thereof or thereto to be
distributed or delivered to any persons
(except parties hereto and their employees and
advisers) in the United States, its
territories or possessions;
(G) Sun Canada, Inc. is the registered holder on
the books of the Company of 29,935,412 of the
54,584,319 total issued and outstanding Common
<PAGE>
Shares, which as at April 30, 1995,
constituted all of the issued and outstanding
shares in the capital of the Company and
approximately 40 common shares are subject to
issuance pursuant to outstanding scrip
certificates;
(H) as of the date hereof, no person, firm or
corporation has any agreement or option, or
right or privilege (whether pre-emptive or
contractual) capable of becoming an agreement
for the purchase, subscription or issuance of
any of the unissued shares, securities or
warrants (including convertible securities or
warrants) of the Company except for the common
shares of the Company issuable to directors,
officers and employees pursuant to stock
options now outstanding or as a result of the
tender of outstanding scrip certificates;
(I) all authorizations, approvals and consents to
be obtained by the Company under applicable
laws or otherwise for the execution and
delivery of the agreement which will result
from the Company's and the Selling
Shareholder's acceptance of this offer have
been obtained and are in full force, and the
said agreement will be a legal, valid and
binding agreement of the Company enforceable
in accordance with its terms subject to
equitable principles and laws respecting the
enforcement of creditors' rights.
(b) The delivery by the Company to the Underwriters of the
documents referred to in Sections 5(a) and (d) hereof shall
constitute the Selling Shareholder's representation and warranty to
the Underwriters that:
(A) each of Sun Company, Inc. and Sun Canada, Inc.
has been duly incorporated, and is validly
existing as a subsisting corporation under the
laws of Pennsylvania (in the case of Sun
Company, Inc.) and Delaware (in the case of
Sun Canada, Inc.), and Sun Canada, Inc. has
the corporate power and authority to own and
to sell the Offered Shares as contemplated
hereby;
<PAGE>
(B) the execution, delivery and performance of
this Agreement and the consummation of the
transactions contemplated herein have been
duly authorized by all necessary corporate
action by the Selling Shareholder and will not
result in any violation of the provisions of
the charter or by-laws of the Selling
Shareholder or any applicable law,
administrative regulation or administrative or
court decree binding on the Selling
Shareholder;
(C) no authorization, approval or consent of any
court or governmental authority or agency is
required to be obtained by the Selling
Shareholder in connection with the sale and
delivery of the Offered Securities in any
Qualifying Jurisdictions or jurisdiction in
the United States, except as may be required
under applicable securities laws therein;
(D) at the Closing Time, Sun Canada, Inc. will
have good and marketable title to the Offered
Securities free and clear of any pledge, lien,
security interest, encumbrance, claim or
equity; and upon delivery of the Offered
Securities against payment of the purchase
price therefor as herein contemplated, the
Underwriters will receive good and marketable
title to the Offered Securities free and clear
of any pledge, lien, security interest,
encumbrance, claim or equity, except as
provided in the Instalment Agreement;
(E) all authorizations, approvals and consents
under applicable laws or otherwise for the
execution and delivery by the Selling
Shareholder of the agreement which will result
from the acceptance of this offer have been
obtained and are in full force; and the
Selling Shareholder has full right, power and
authority to enter into the said agreement and
to sell, transfer and deliver the Offered
Securities; and the said agreement will be a
legal, valid and binding agreement of the
Selling Shareholder enforceable in accordance
with its terms subject to equitable principles
and laws respecting the enforcement of
creditors' rights;
<PAGE>
(F) the Selling Shareholder is not prompted to
sell the Offered Securities to be sold by it
hereunder by a material fact or material
change concerning the offering of the Offered
Securities that is not set forth in the
Preliminary Prospectus or the Prospectus;
(G) except with respect to the Selling
Shareholder's Excluded Provisions, each
document referred to in Section 5 hereof at
the time of its signing or filing fully
complied with the requirements of the
applicable securities laws in the Qualifying
Jurisdictions pursuant to which it was filed
and all the information and statements
contained therein are at the respective dates
of delivery thereof, true and accurate,
contain no misrepresentation and constitute
full, true and plain disclosure of all
material facts relating to the Company and its
subsidiaries, taken together, and relating to
the Offered Securities, as required by the
applicable securities laws in the Qualifying
Jurisdictions;
(H) except with respect to the Selling
Shareholder's Excluded Provisions, no material
fact or information has been omitted from the
said documents and no other fact or
information has been omitted therefrom which
is necessary to make the statements contained
therein not misleading in light of the
circumstances in which they were made;
(I) the financial statements included in such
documents present fairly the consolidated
financial position of the Company as at the
dates indicated and the results of its
operations for the periods specified and
except as otherwise stated in such documents,
the said financial statements have been
prepared in conformity with generally accepted
accounting principles applied on a consistent
basis;
(J) the Selling Shareholder has not caused any
copies of the Preliminary Prospectus, the
Prospectus, or any amendments or reproductions
<PAGE>
thereof or thereto to be distributed or
delivered to any persons (except the parties
hereto and their employees and advisers) in
the United States, its territories or
possessions; and
(K) none of the Selling Shareholder nor any of
their affiliates (other than the Company and
its subsidiaries) or any person acting on
their behalf has offered or will offer to sell
the Instalment Receipts or the Offered
Securities by means of any form of general
solicitation or general advertising (as those
terms are used in Regulation D under the U.S.
Securities Act of 1933, as amended) or in any
manner involving a public offering within the
meaning of Section 4(2) of the U.S. Securities
Act of 1933, as amended.
(c) Any certificate signed by any officer or other authorized
signatory of the Company or the Selling Shareholder and delivered
to the Underwriters or to their counsel shall be deemed a
representation and warranty by the Company or by the Selling
Shareholder, respectively, to each Underwriter as to the matters
covered by the certificate.
(d) The Underwriters individually represent and warrant to
the Company and the Selling Shareholder that their marketing
documentation and all other statements made, whether in writing or
orally, by them or their employees or agents, will only include
information contained in or derived from the Preliminary
Prospectus, the Prospectus or any Supplementary Material or taken
or derived from publicly available industry or market reports,
sources or data, and will not purport to make a statement
attributable to the Company or the Selling Shareholder unless such
statement is found in the Preliminary Prospectus, the Prospectus or
any Supplementary Material.
(e) Each of the Company and the Selling Shareholder hereby
represent, warrant, covenant and agree to and with the Underwriters
that:
(i) neither it, its affiliates nor any person
acting on its behalf has offered or will offer
to sell the Offered Securities or the
Instalment Receipts by means of any form of
general solicitation or general advertising
(as those terms are used in Regulation D under
the U.S. Securities Act of 1933, as amended)
<PAGE>
or in any manner involving a public offering
within the meaning of Section 4(2) of the U.S.
Securities Act of 1933, as amended;
(ii) neither it, its affiliates or any person
acting on its behalf has engaged or will
engage in any directed selling efforts in the
United States within the meaning of Regulation
S with respect to the Offered Securities or
the Instalment Receipts; and
(iii) it has complied and will comply with the
applicable offering restriction requirements
of Regulation S.
10. Closing: The Underwriters' purchase of the Offered
Securities under the agreement resulting from the acceptance of
this offer shall take place at the Closing Time at the offices of
Osler, Hoskin and Harcourt, 66th Floor, 1 First Canadian Place,
Toronto, Ontario or at such other place as may be agreed by the
Underwriters and the Selling Shareholder.
11. Closing Conditions: The obligations of the Underwriters
under the agreement resulting from the acceptance of this offer are
conditional upon and subject to the Underwriters receiving, at the
Closing Time:
(a) evidence satisfactory to the Underwriters that the
Selling Shareholder and the Company have obtained all
necessary approvals for the listing of the Instalment
Receipts on the Toronto and Montreal stock exchanges;
(b) one definitive and bilingual share certificate
representing the Offered Securities registered in the
name of Nesbitt Burns (or in such other name or names as
the Underwriters may notify the Selling Shareholder of in
writing not less than 48 hours prior to the Closing Time)
against payment to the Selling Shareholder, or as the
Selling Shareholder may direct to the Underwriters in
writing no less than 24 hours prior to the Closing Time,
of the aggregate First Instalment for the Offered
Securities by bank draft or certified cheque payable in
Toronto;
(c) the Underwriting Fee by bank draft or certified cheque
payable in Toronto and made payable to Nesbitt Burns (or
as the Underwriters may direct by notice given to the
Selling Shareholder in writing not less than 24 hours
prior to the Closing Time);
<PAGE>
(d) three certificates dated as of Closing Time, one signed
on behalf of the Company by the President and Chief
Executive Officer and the Senior Vice-President, Finance
of the Company or such other persons as may be agreed
upon by the Underwriters, acting reasonably, and one
signed on behalf of each of Sun Company, Inc. and Sun
Canada, Inc. by an authorized signatory who is acceptable
to the Underwriters, acting reasonably, certifying that
to the best of the knowledge, information and belief of
each such person, after having made or caused to be made
all reasonable inquiries and having carefully examined
the Prospectus and any amendments thereto and except as
may be disclosed in the Prospectus or any amendments
thereto:
(i) no order ceasing or suspending trading in any
securities of the Company or prohibiting the
sale of the Offered Securities has been issued
and, to the knowledge of such person, no
proceedings for such purposes are pending or
threatened;
(ii) since the date of the Prospectus, (A) there
has been no material change, (actual,
contemplate or threatened) in the business,
affairs, operations, management, assets,
liabilities (contingent or otherwise) or
capital of the Company and its subsidiaries,
taken as a whole, and (B) there have been no
dividends (other than regular dividends),
repayment of an equity advance or other
distribution of any kind declared, paid or
made by the Company on or in respect of its
equity capital;
(iii) since the date of the Prospectus, no
transaction material to the Company and its
subsidiaries, taken as a whole, has been
entered into by the Company or any of its
subsidiaries, except in the normal course of
its business;
(iv) in the case of the Company's certificate,
neither the Company nor any of its
subsidiaries have any material contingent
liability out of the ordinary course of
business which is material to the Company and
its subsidiaries taken as a whole;
<PAGE>
(v) in the case of the Company's certificate,
there are no actions, suits, proceedings or
inquiries in existence or, to the knowledge of
such officers, pending or threatened against
or affecting the Company or any of its
subsidiaries at law or in equity or before or
by any federal, provincial, municipal or other
governmental department, commission, board,
bureau, agency or instrumentality, which may
in any way materially affect the Company and
its subsidiaries as a whole;
(vi) the representations and warranties on the part
of the Company (in the case of its
certificate) or the Selling Shareholder (in
the case of its certificates) contemplated in
Section 9 hereof are true and correct at
Closing Time as if made at such time; and
(vii) the Company (in the case of its certificate)
and the Selling Shareholder (in the case of
its certificates) has complied with all
covenants and satisfied all terms and
conditions hereof to be complied with and
satisfied by it except to the extent that the
same has been waived by the Underwriters in
writing pursuant to Section 20 hereof;
(e) a duly executed Instalment Agreement in scope, form and
substance reasonably satisfactory to the Underwriters
which will provide that the Company will only take action
that gives rise to the exercise of a right of dissent of
its Shareholders if the registered holders of Instalment
Receipts are offered the identical rights of dissent
subject to a requirement to the effect that a dissenting
holder who wishes to make a demand for payment in
accordance with such dissent rights must first prepay the
Second Instalment and the Final Instalment;
(f) opinions, to the reasonable satisfaction of the
Underwriters and their counsel, addressed to the
Underwriters, as to all such legal matters as the
Underwriters may reasonably request including, without
limitation:
(i) of Osler, Hoskin & Harcourt as counsel to the
Company as to the incorporation and existence
of the Company, the authorized capital of the
Company, the authorization and execution of
<PAGE>
the Preliminary Prospectus and the Prospectus
on behalf of the Company, the qualification
for distribution of the Offered Securities in
the Qualifying Jurisdictions, the conformity
of the Offered Securities to the description
thereof in the Prospectus, the validity and
enforceability of each of the agreement which
will result from the acceptance of this offer
and the Instalment Agreement (subject to the
normal opinion qualifications and in
particular as to the enforceability of the
indemnity and contribution provisions hereof),
compliance with the constating documents of
the Company, the qualification of the Offered
Securities as investments under the statutes
listed in the Prospectus without recourse to
the so-called "basket" provisions thereof, the
approval of the form of share certificate and
the opinion expressed in the Prospectus under
the heading "Canadian Federal Income Tax
Considerations";
(ii) of the Assistant General Counsel of Sun
Company, Inc. as regards United States laws
and Fasken Campbell Godfrey as special
Canadian counsel to the Selling Shareholder
and Sun as regards Canadian law, as to the
incorporation and existence of the Selling
Shareholder, the sale of the Offered
Securities hereunder, the qualification for
distribution of the Offered Securities in the
Qualifying Jurisdictions, the validity and
enforceability of each of the agreement which
will result from the acceptance of this offer
and the Instalment Agreement (subject to the
normal opinion qualifications and in
particular as to the enforceability of the
indemnity and contribution provisions hereof),
compliance with the constating documents of
the Selling Shareholder, the qualification of
the Offered Securities as investments under
the statutes listed in the Prospectus without
recourse to the so-called "basket" provisions
thereof and the opinion referred to in the
Prospectus under the heading "Canadian Federal
Income Tax Considerations";
(iii) of Davies, Ward & Beck as counsel to the
Underwriters, as to the incorporation,
<PAGE>
organization and existence of the Company, the
authorized capital of the Company, the
authorization and execution of the Preliminary
Prospectus and the Prospectus by the Company,
the qualification for distribution of the
Offered Securities in the Qualifying
Jurisdictions, the conformity of the Offered
Securities to the description thereof in the
Prospectus, the validity and enforceability of
the agreement which will result from the
acceptance of this offer (subject to the
normal opinion qualifications and in
particular as to the enforceability of the
indemnity and contribution provisions hereof),
the qualification of the Offered Securities as
investments under the statutes listed in the
Prospectus without recourse to the so-called
"basket" provisions thereof and the opinion
referred to in the Prospectus under the
heading "Canadian Federal Income Tax
Considerations", counsel to the Underwriters
being permitted to rely on counsel to the
Company and the Selling Shareholder with
respect to matters pertaining to the Company
and the Selling Shareholder;
all counsel may rely on local counsel acceptable to
them in other jurisdictions with respect to matters
governed by the laws of jurisdictions other than their
home jurisdictions and also may rely, as to matter of
fact alone, on certificates or statutory declarations
of corporate officers, the auditors of the Company and
public officials;
(g) a comfort letter from the Company's auditors dated the
Closing Date to the same effect as the letter referred to
in clause 7(b) hereof bringing the information contained
in the comfort letter referred to in clause 7(b) forward
to the Closing Time, provided that such comfort letter
shall be based on a review by the auditors having a
cutoff date not more than three business days prior to
the Closing Date; and
(h) an opinion of the Company's Quebec counsel, dated the
Closing Date and acceptable in form and substance to the
Underwriters' counsel, as to compliance with the laws of
the Province of Quebec relating to the use of the French
language.
<PAGE>
12. Delivery of Certificates: At the Closing Time, the
definitive certificates representing the Offered Securities, along
with a duly executed instrument of transfer and assignment in
favour of the Custodian shall be delivered, as required by the
Instalment Agreement. The Custodian shall thereupon deliver to the
Underwriters an Instalment Receipt in favour of Nesbitt Burns which
shall be immediately exchangeable, as provided for in the
Instalment Agreement, for such number of Instalment Receipts in
such denominations and in such names as the Underwriters may
instruct, not less than two Business Days prior to the Closing
Time, which shall be available for exchange and delivery at the
expense of the Selling Shareholder, at the principal offices of the
Custodian in Vancouver, Calgary, Edmonton, Toronto and Montreal.
13. Indemnities by the Company and Selling Shareholder: The
Company and the Selling Shareholder, jointly and severally (subject
to section 14), shall protect and indemnify the Underwriters and
their directors, officers, employees and agents (the "Indemnified
Parties") from and against all losses (other than losses of profit
in connection with the distribution of the Offered Securities),
claims, costs, damages and liabilities caused by or arising
directly or indirectly by reason of:
(a) any information or statement (except any information or
statement relating to solely the Underwriters or any of
them) contained in the Preliminary Prospectus, the
Prospectus or in any amendment or supplement to either
thereof (except any document or material delivered or
filed solely by the Selling Firms or any of them) being
or being alleged to be a misrepresentation or untrue or
any omission or alleged omission to state therein any
material fact (except facts relating solely to the
Selling Firms or any of them) required to be stated
therein or necessary to make any of the statements
therein not misleading in light of the circumstances in
which they were made;
(b) any order made or any inquiry, investigation or
proceeding instituted, threatened or announced by any
court, securities regulatory authority, stock exchange or
by any other competent authority, based upon any untrue
statement, omission or misrepresentation or alleged
untrue statement, omission or misrepresentation (except
a statement, omission or misrepresentation relating
solely to the Selling Firms or any of them) in the
Preliminary Prospectus, the Prospectus or in any
amendment or supplement to either thereof (except any
document or material delivered or filed solely by the
<PAGE>
Selling Firms or any of them) preventing or restricting
the trading in or the sale of distribution of the Offered
Securities or any of them or any other securities of the
Company in any jurisdiction;
(c) the Company not complying with any requirement of
applicable legislation of Canada or any Qualifying
Jurisdictions to make any document available for
inspection; or
(d) the breach of any representations, warranties or
covenants of the Company or the Selling Shareholder
herein (except, in the case of the Company's indemnity,
the representations, warranties and covenants of the
Selling Shareholder);
and will reimburse the Indemnified Parties for all costs, charges
and expenses, as incurred, which any of them may pay or incur in
connection with investigating or disputing any such claim or
action. This indemnity will be in addition to any liability which
the Company or the Selling Shareholder may otherwise have.
If any claim contemplated by this Section shall be
asserted against any of the Indemnified Parties, or if any
potential claim contemplated by this Section shall come to the
knowledge of any of the Indemnified Parties, the Indemnified Party
concerned shall notify the Company and the Selling Shareholder as
soon as reasonably practicable of the nature of such claim
(provided that any failure to so notify in respect of any potential
claim shall not affect the Company's or the Selling Shareholder's
liability under this Section and provided further that any failure
to so notify in respect of any actual claim shall affect the
Company's or the Selling Shareholder's liability under this Section
only to the extent that the Company or the Selling Shareholder is
prejudiced by such failure). The Company shall, subject as
hereinafter provided, be entitled (but not required) to assume the
defence on behalf of the Indemnified Party of any suit brought to
enforce such claim; provided that the defence shall be through
legal counsel selected by the Company and acceptable to the
Indemnified Party, acting reasonably, and no admission of liability
shall be made by the Company or the Selling Shareholder or the
Indemnified Party without, in each case, the prior written consent
of all the parties hereto, such consent not to be unreasonably
withheld. An Indemnified Party shall have the right to employ
separate counsel in any such suit and participate in the defence
thereof but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless:
<PAGE>
(i) the Company fails to assume the defence of
such suit on behalf of the Indemnified party
within ten days of receiving notice of such
suit;
(ii) the employment of such counsel has been
authorized by the Company; or
(iii) the named parties to any such suit (including
any added or third parties) include both the
Indemnified Party and the Company or the
Selling Shareholder and the Indemnified Party
shall have been advised by counsel that
representation of the Indemnified Party by
counsel for the Company or the Selling
Shareholder is inappropriate as a result of
potential or actual conflicting interests of
those represented;
(in each of which cases (i), (ii) or (iii) the Company shall not
have the right to assume the defence of such suit on behalf of the
Indemnified Party but the Company shall be liable to pay the
reasonable fees and expenses of one firm of separate counsel for
all Indemnified Parties and, in addition, one firm of local counsel
in each applicable jurisdiction).
In the event the Company and the Selling Shareholder
jointly notify the Indemnified Party in writing, the Selling
Shareholder may assume the defence of any suit brought to enforce
any such claim, and all the rights and responsibilities of the
Company provided in the foregoing paragraph shall be deemed to be
rights and responsibilities of the Selling Shareholder, mutatis
mutandis.
The Company and the Selling Shareholder further agree not
to claim contribution from the Indemnified Parties in the event of
any action brought against the Company as a result of any
information, statement or omission referred to in (a) or (b) above
(except any information or statement relating solely to the Selling
Firms or any of them).
The Company and the Selling Shareholder hereby
acknowledge that the Underwriters are acting as agents for the
Underwriters' directors, officers, employees and agents as regards
the covenants of the Company and the Selling Shareholder under this
Section and Section 15 with respect to all such directors,
officers, employees and agents.
14. Indemnity Qualifications: Notwithstanding the provisions
of Section 13 hereof:
<PAGE>
(a) the Company shall have no responsibility to indemnify the
Indemnified Parties with respect to any claim
contemplated by Section 13(a) or 13(b) hereof in respect
of the Company's Excluded Provisions or any information
or statement corresponding thereto in any amendment or
supplement to the Preliminary Prospectus or the
Prospectus;
(b) the Selling Shareholder shall have no responsibility to
indemnify the Indemnified Parties with respect to any
claim contemplated by Section 13(a) or 13(b) hereof in
respect of the Selling Shareholder's Excluded Provisions
or any information or statement corresponding thereto in
any amendment or supplement to the Preliminary Prospectus
or the Prospectus;
(c) the Selling Shareholder shall have no responsibility to
indemnify the Indemnified Parties in respect of any claim
contemplated by Section 13(c) hereof; and
(d) the foregoing rights of indemnity shall not enure to any
Indemnified Party if the Company and the Selling
Shareholder have complied with the provisions of Section
8 hereof and the claim for indemnification relates to a
person asserting a claim in respect of an alleged untrue
statement in or alleged omission from any document,
including the Preliminary Prospectus or the Prospectus,
and such person was not provided with a copy of the
Prospectus or Supplementary Material which corrects such
alleged untrue statement or alleged omission and which is
required, under applicable law, to be delivered to such
person by such Indemnified Party.
15. Contribution:
(a) In order to provide for just and equitable contribution
in circumstances in which the indemnity provided in Section 13
hereof, as modified by Section 14 hereof, would otherwise be
available in accordance with its terms but is, for any reason not
solely attributable to any one or more of the Indemnified Parties,
held to be unavailable to or unenforceable by the Indemnified
Parties or enforceable otherwise than in accordance with its terms,
the Underwriters and the Company and the Selling Shareholder shall
contribute to the aggregate of all claims, expenses, costs and
liabilities and all losses (other than losses of profits) of the
nature contemplated in Section 13 hereof and suffered or incurred
by the Indemnified Parties in proportions such that the
Underwriters shall be responsible for the portion represented by
the percentage that the total Underwriting Fee payable by the
<PAGE>
Selling Shareholder bears to the total gross proceeds to the
Selling Shareholder of the Offered Securities, both as determined
pursuant to the provisions hereof, and the Company and the Selling
Shareholder shall, subject to paragraph (b) of this section, be
responsible for the balance, whether or not it has been sued or
sued separately; provided that the Underwriters shall not in any
event be liable to contribute, in the aggregate, any amount in
excess of such total Underwriting Fee or any portion thereof
actually received. However, no party who has engaged in any fraud,
fraudulent misrepresentation or gross negligence shall be entitled
to claim contribution from any person who has not engaged in such
fraud, fraudulent, misrepresentation or gross negligence.
(b) Notwithstanding the provisions of Section 15(a):
(i) the Company shall have no responsibility to
contribute in respect of any claim
contemplated by Section 13(a) or 13(b) hereof
in respect of the Company's Excluded
Provisions or any information or statement
corresponding thereto in any amendment or
supplement to the Preliminary Prospectus or
the Prospectus;
(ii) the Selling Shareholder shall have no
responsibility to contribute in respect of any
claim contemplated by Section 13(a) or (b)
hereof in respect of the Selling Shareholder's
Excluded Provisions or any information or
statement corresponding thereto in any
amendment or supplement to the Preliminary
Prospectus or the Prospectus; and
(iii) the Selling Shareholder shall have no
responsibility to contribute in respect of any
claim contemplated by Section 13(c) hereof.
(c) The rights to contribution provided in this Section shall
be in addition to and not in derogation of any other right to
contribution which the Indemnified Parties or the Company or the
Selling Shareholder may have by statute or otherwise at law
provided that paragraph (b) of this section shall apply, mutatis
mutandis, in respect of such other right.
(d) If an Indemnified Party has reason to believe that a
claim for contribution may arise, the Indemnified Party shall give
the Company and the Selling Shareholder notice thereof in writing,
but failure to so notify shall not relieve the Company or the
Selling Shareholder of any obligation which they may have to the
<PAGE>
Indemnified Party under this Section provided that the Company or
the Selling Shareholder is not materially prejudiced by such
failure, and the right of the Company (or, in the circumstances
contemplated by Section 13, of the Selling Shareholder) to assume
the defence of such Indemnified Party shall apply as set out in
Section 13 hereof, mutatis mutandis.
16. Expenses: Whether or not the transactions herein
contemplated shall be completed, all expenses of or incidental to
the issue, delivery and sale of the Offered Securities and of or
incidental to all other matters in connection with the transactions
herein set out shall be borne by the Selling Shareholder including,
without limitation, expenses payable in connection with the
qualification of the Offered Securities for sale to the public
(including filing fees payable to securities regulatory
authorities), listing fees, the fees and expenses of the Company's
counsel and auditors, all costs incurred in connection with the
preparation, translation, printing and delivery of the Preliminary
Prospectus and the Prospectus including commercial copies thereof,
any Supplementary Material and the definitive certificates in
bilingual form representing the Offered Securities; provided,
however, that no such payment shall be made for any taxes for which
any Underwriter is entitled to a credit or refund. The fees and
disbursements of the Underwriters' counsel and the Underwriters'
"out-of-pocket" expenses will be borne by the Underwriters except
that the Underwriters shall be reimbursed by the Selling
Shareholder for all of these fees, disbursements and expenses if
the sale of the Offered Securities, as herein contemplated, is not
completed because of an action or inaction of the Company or the
Selling Shareholder or for any other reason which is not a default
hereunder by the Underwriters or which is not an election by the
Majority Underwriters to terminate this Agreement under Section 17,
it being recognized that a default by any of the Underwriters shall
not affect the entitlement of the other Underwriters to
reimbursement even if they do not elect to purchase the defaulting
Underwriters' share of the Offered Securities. If the Underwriters
decide to place a "tombstone" advertisement in respect of the
transaction without any request for same from the Selling
Shareholder, the cost of such advertisement shall be for the
account of the Underwriters; otherwise such cost shall be shared as
to 50% by the Underwriters and 50% by the Selling Shareholder.
17. Early Termination: In addition to any other remedies
which may be available to the Underwriters, the obligations of the
Underwriters to purchase the Offered Securities may be terminated,
at the election of the Majority Underwriters, if prior to the
Closing Time:
<PAGE>
(a) there should develop, occur or come into effect or
existence any catastrophe, crisis or accident of national
or international consequence, any law or regulation or
any other event, action or occurrence of any nature
whatsoever including, without limiting the generality of
the foregoing, any outbreak of war, rebellion or armed
hostilities which, in the opinion of the Underwriters,
acting reasonably, materially and adversely affects or
may materially and adversely affect the Canadian or
United States financial markets or the business of the
Company and its subsidiaries (taken as a whole), by
giving the Company and the Selling Shareholder written
notice to that effect not later than the Closing Time;
(b) any order or ruling is issued, any inquiry, investigation
or other proceeding (whether formal or informal) in
relation to the Company or its directors or officers, is
made, threatened or announced by any officer or official
of any stock exchange, securities commission or other
regulatory authority, or any law or regulation is
promulgated or changed which, in the opinion of the
Underwriters, acting reasonably, operates to prevent or
restrict trading in or distribution of the Offered
Securities, by giving the Company and the Selling
Shareholder written notice to that effect not later than
the Closing Time; or
(c) there shall occur any material change or change in a
material fact such as is contemplated by subsection 8(a)
hereof (other than a change related solely to the Selling
Firms) which, in the opinion of the Underwriters, acting
reasonably, materially and adversely affects or may
materially and adversely affect the market price or value
of the Common Shares, by giving the Company and the
Selling Shareholder written notice to that effect not
later than the Closing Time.
In the event of any such termination, the Underwriters
who have not elected to so terminate shall be deemed
contemporaneously to have terminated their respective obligations
hereunder unless such Underwriters shall have been given written
notice by the Selling Shareholder of such termination and shall,
within 24 hours of receipt of such notice, have given the Selling
Shareholder and the Company written notice to the effect that such
remaining Underwriters thereby assume, pro rata, the obligations of
the Majority Underwriters who have terminated their obligations
hereunder.
<PAGE>
If the obligations of the Underwriters are terminated
hereunder there shall be no further liability on the part of the
Underwriters to the Company or the Selling Shareholder and the
liability of the Company and of the Selling Shareholder hereunder
shall be limited to their respective obligations under Sections 13,
14, 15 and 16 hereof relating to Indemnities, Contribution and
Expenses.
18. Completion of Distribution: After the Closing Time, the
Underwriters shall:
(a) use their best efforts to complete the distribution of
the Offered Securities as promptly as possible; and
(b) give prompt notice to the Company and the Selling
Shareholder once the Underwriters and other Selling Firms
have ceased distribution of the Offered Securities, and
of the total proceeds realized from such distribution in
each province and territory of Canada and in the United
States.
19. Restrictions on Sales: Except where Closing does not
occur, the Company agrees that it will not, without the prior
consent of Nesbitt Burns, which consent will not be unreasonably
withheld, offer, sell or otherwise dispose of any Common Shares or
any securities convertible into or exchangeable or exercisable for
Common Shares or agree to do so or publicly announce any intention
to do so (except Common Shares required to be issued pursuant to
directors', officers' and employees' stock options or other awards
now outstanding or hereafter issued in the ordinary course or as a
result of the tender of scrip certificates) for a period of 90 days
from the Closing Date.
20. Terms and Conditions: All material terms and conditions
of this offer shall be construed as conditions, and any breach or
failure to comply with any such terms or conditions by the Company
or the Selling Shareholder shall entitle the Underwriters, without
limitation of any of their other remedies, to terminate their
obligation to purchase the Offered Securities by giving written
notice to that effect to the Company and the Selling Shareholder
prior to the Closing Time. It is understood that the Underwriters
may waive in whole or in part, or extend the time for compliance
with, any of such terms and conditions without prejudice to their
rights in respect of any other of such terms and conditions or any
other or subsequent breach or non-compliance, provided that to be
binding on the Underwriters any such waiver or extension must be in
writing.
<PAGE>
21. Survival: The representations, warranties, obligations,
indemnities and agreements of the Company, the Selling Shareholder
and the Underwriters contained herein or delivered pursuant hereto
shall survive the purchase by the Underwriters of the Offered
Securities and shall continue in full force and effect
notwithstanding any subsequent disposition by the Underwriters of
the Offered Securities and the Underwriters shall be entitled to
rely on the representations and warranties of the Company and the
Selling Shareholder contained herein or delivered pursuant hereto
notwithstanding any investigation which the Underwriters may
undertake or which may be undertaken on their behalf.
22. Notices: Any notice or other communication to be given
hereunder shall be addressed as follows:
To the Company:
Suncor Inc.
36 York Mills Road
North York, Ontario
M2P 2C5
Attention: Donald R. Brown, Q.C.
Vice President and General Counsel
Telephone: (416) 733-7300
Fax: (416) 733-7975
To the Selling Shareholder:
Sun Company, Inc.
Ten Penn Center
1801 Market Street
Philadelphia, Pennsylvania
19103-1699
Attention: Assistant General Counsel
Telephone: (215) 977-6332
Fax: (215) 977-6733
- and -
Sun Canada, Inc.
c/o P.O. Box 20
Toronto-Dominion Centre
Toronto, Ontario
Canada M5K 1N6
Attention: D.J. Steadman
Telephone: (416) 868-3443
Fax: (416) 364-7813
<PAGE>
To the Underwriters:
Nesbitt Burns Inc.
Suite 5000
1 First Canadian Place
Toronto, Ontario
M5X 1H3
Attention: Donald K. Johnson
Telephone: (416) 359-4000
Fax: (416) 359-4404
Any such notice or other communication shall be in writing and,
unless delivered personally to a responsible officer of the
addressee, shall be given by courier service or facsimile
transmission and shall be deemed to have been received, if given by
facsimile transmission, on the day of sending (or if such day is
not a Business Day, the next Business Day) and, if given by courier
service, on the next business day following the sending thereof.
The Company, the Selling Shareholder and any of the Underwriters
may change their respective addresses for notices by notice given
in the manner aforesaid.
23. Participation: The Underwriters' obligations hereunder
are several and not joint. Accordingly:
(a) each of the Underwriters shall be obligated to purchase
only the portion of the Offered Securities set opposite
its name hereinafter in this Section; and
(b) except as hereinafter provided, if on the Closing Date
any one or more of the Underwriters fails or refuses to
purchase its or their applicable percentage of the
Offered Securities, the non-defaulting Underwriters who
shall be willing and able to purchase their own
applicable percentages of the Offered Securities shall be
relieved of their obligations hereunder;
provided that, notwithstanding the provisions of clauses (a) and
(b) of this Section, (i) if the aggregate number of Offered
Securities which a defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed 10% of the total number of
Offered Securities, the non-defaulting Underwriters shall be
obliged severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities which such defaulting
Underwriter or Underwriters have failed to purchase or (ii) if the
aggregate number of Offered Securities which such defaulting
<PAGE>
Underwriter or Underwriters agreed but failed to purchase exceeds
10% of the total number of Offered Securities, those Underwriters
who shall be willing and able to purchase their respective
applicable percentages of the Offered Securities shall have the
right, but not the obligation (except as herein provided), to
purchase the Offered Securities not purchased by the defaulting
Underwriters pro rata or on such other basis as may be agreed among
the non-defaulting Underwriters.
Notwithstanding anything contained herein, the Underwriters shall
not be entitled to purchase in any event less than all the Offered
Securities.
The applicable portion of the Offered Securities which
each of the Underwriters shall separately be obliged to purchase is
the percentage represented as a fraction as follows:
Nesbitt Burns Inc. 24.121%
Gordon Capital Corporation 19.096%
RBC Dominion Securities Inc. 19.096%
Wood Gundy Inc. 15.075%
ScotiaMcLeod Inc. 9.045%
Goldman Sachs Canada 3.015%
Midland Walwyn Capital Inc. 3.015%
Richardson Greenshields of Canada Limited 3.015%
First Marathon Securities Limited 2.010%
Levesque Beaubien Geoffrion Inc. 1.005%
Toronto Dominion Securities Inc. 1.005%
Peters & Co. Limited 0.502%
Nothing contained in this section shall relieve from responsibility
to the Selling Shareholder hereunder an Underwriter who shall
default in its obligation to purchase its applicable percentage of
the Offered Securities.
24. Lead Underwriter: Except with respect to Section 17
(Termination), all transactions and notices on behalf of the
Underwriters hereunder or contemplated hereby may be carried out or
given on behalf of the Underwriters by Nesbitt Burns.
25. Stabilization: In connection with the distribution of
the Offered Securities, the Underwriters may over-allot or effect
transactions which stabilize or maintain the market price of the
Offered Securities at levels other than those which might otherwise
prevail in the open market, but in each case only as permitted by
applicable law. Such stabilizing transactions, if any, may be
discontinued at any time.
<PAGE>
26. Severability: If any provision of Section 13 or 15
(Indemnity or Contribution) is determined to be void or
unenforceable in whole or in part, it shall be deemed not to affect
or impair the validity of any other provision of the agreement
resulting from the acceptance of this offer and such void or
unenforceable provision shall be severable from the said agreement.
27. Time of Essence: Time shall be of the essence of the
agreement resulting from the acceptance of this offer.
28. Governing Law: The agreement resulting from the
acceptance of this offer shall be governed by and construed in
accordance with the laws of the Province of Ontario and the courts
of such province shall have exclusive jurisdiction over any dispute
hereunder, to which jurisdiction the parties attorn.
29. Counterparts: This offer and the agreement resulting
from the acceptance of this offer may be executed by manual or
facsimile signature in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding
and is agreed by you, will you please confirm your acceptance by
signing the enclosed copies of this letter and returning the same
to the Underwriters.
Yours truly,
NESBITT BURNS INC.
by ___________________________
GORDON CAPITAL CORPORATION
by ___________________________
RBC DOMINION SECURITIES INC.
by ___________________________
WOOD GUNDY INC.
by ___________________________
SCOTIAMCLEOD INC.
by ___________________________
GOLDMAN SACHS CANADA
by GOLDMAN SACHS CANADA INC.
by ___________________________
<PAGE>
MIDLAND WALWYN CAPITAL INC.
by ___________________________
RICHARDSON GREENSHIELDS OF
CANADA LIMITED
by ___________________________
FIRST MARATHON SECURITIES
LIMITED
by ___________________________
LEVESQUE BEAUBIEN GEOFFRION
INC.
by ___________________________
TORONTO DOMINION SECURITIES
INC.
by ___________________________
PETERS & CO. LIMITED
by ___________________________
Accepted and agreed to this 24th day of May, 1995.
SUN COMPANY, INC. SUNCOR INC.
by ___________________________ by ___________________________
___________________________
SUN CANADA, INC.
by ___________________________
<PAGE>
SCHEDULE A
1. Each of the Underwriters makes the following
representations and warranties:
(a) (i) The Offered Securities and the Instalment Receipts
have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S.
Securities Act") and may not be offered or sold within
the United States or to, or for the account or benefit
of, U.S. persons except in transactions exempt from the
registration requirements of the U.S. Securities Act.
Neither it, its U.S. broker-dealer affiliates nor any
selling group member have engaged or will engage in any
directed selling efforts in the United States (as defined
in Rule 902 of Regulation S under the U.S. Securities
Act) with respect to the Offered Securities and the
Instalment Receipts, and it has complied and will comply
with the offering restriction requirements of Rule 903 of
Regulation S. It and its U.S. broker-dealer affiliates
have not offered or sold, and will not offer or sell any
of the Instalment Receipts or the Offered Securities (i)
as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, except
in accordance with Rule 903 of Regulation S or as
provided in paragraph 2 below.
(ii) It and its U.S. broker-dealer affiliates agree
that, at or prior to confirmation of the sale of the
Instalment Receipts and the Offered Securities, the
Underwriter or U.S. broker-dealer affiliate thereof
making such sale will have sent to each distributor,
dealer or person receiving a selling concession, fee or
other remuneration that purchases Instalment Receipts and
the Offered Securities from it during the restricted
period a confirmation or notice to substantially the
following effect:
"The Instalment Receipts and the Comon Shares
covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended
(the "1933 Act"), and may not be offered or
sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii)
otherwise until 40 days after the later of the
commencement of the offering and the Closing
Date, except in either case in accordance with
Regulation S under the 1933 Act. Terms used
herein have the meanings given to them in
Regulation S."
<PAGE>
(b) Other than any banking or selling group agreement, we
have not entered and will not enter into any contractual
arrangement with respect to the distribution of the
Instalment Receipts and the Offered Securities, except
with our affiliates or with the prior written consent of
the Company and the Selling Shareholder, which consent
shall not be unreasonably withheld.
(c) The Underwriters shall require each Selling Firm to
agree, for the benefit of the Selling Shareholder and the
Company, to comply with, and shall use reasonable efforts
to ensure that each Selling Firm complies with, the
provisions of clauses (a) and (b) above as if such
provisions applied to such Selling Firm.
2. Each of the Underwriters represents, warrants and agrees
to the Company and the Selling Shareholder that:
(a) All offers and sales of the Instalment Receipts and the
Offered Securities in the United States will be effected
in accordance with all applicable U.S. broker-dealer
requirements.
(b) They have not used and will not use any written material
other than the Preliminary Prospectus, the Prospectus,
any Supplementary Material, any document incorporated
therein by reference and a cover letter to accompany such
documents, together with a U.S. purchaser letter as
contemplated by paragraph (e) below, and each offeree of
the Instalment Receipts and the Offered Securities in the
United States has been or will be sent a copy of such
documents.
(c) They reasonably believe that each such offeree is an
institutional "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the U.S. Securities Act.
(d) Neither they nor their U.S. broker-dealer affiliates have
utilized any form of general solicitation or general
advertising (as those terms are used in Regulation D
under the U.S. Securities Act) or have offered to sell
any of the Instalment Receipts or the Offered Securities
in any manner involving a public offering within the
meaning of Section 4(2) of the U.S. Securities Act.
<PAGE>
(e) Prior to any sale of Offered Securities or Instalment
Receipts to any purchaser in the United States or to a
U.S. person (a "U.S. Purchaser"), it will cause each U.S.
Purchaser to represent, warrant and agree in writing to
the Company and the Selling Shareholder that such U.S.
Purchaser:
(i) is authorized to consummate the purchase of the
Offered Securities or Instalment Receipts;
(ii) understands that the Offered Securities or
Instalment Receipts have not been and will not be
registered under the U.S. Securities Act and that
such sale is being made in reliance on an
exemption from registration under the U.S.
Securities Act;
(iii) has received a copy, for its information only, of
the Prospectus relating to the Offered Securities
or Instalment Receipts and the documents
incorporated by reference therein, and a U.S.
covering memorandum and has had access to such
additional information, if any, concerning the
Company as it has considered necessary in
connection with its decision to invest in the
Offered Securities or Instalment Receipts;
(iv) has such knowledge and experience in financial and
business matters as to be capable of evaluating
the merits and risks of its investment in the
Offered Securities or Instalment Receipts and is
able to bear the economic risks of such
investment;
(v) is an institutional "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under
the U.S. Securities Act and is acquiring the
Instalment Receipts and the Offered Securities for
its own account or for the account of an
institutional "accredited investor" as to which it
has investment management discretion, and not with
a view to any resale, distribution or other
disposition of the Offered Securities or
Instalment Receipts in violation of the United
States securities laws;
<PAGE>
(vi) is purchasing Offered Securities or Instalment
Receipts for its own account having an aggregate
purchase price of at least U.S. $100,000 or for
one or more accounts as to which has investment
management discretion and each such account is
purchasing Offered Securities or Instalment
Receipts having such an aggregate purchase price;
(vii) agrees that if it decides to offer, sell or
otherwise transfer any of the Offered Securities
or Instalment Receipts, it will not offer, sell or
otherwise transfer any of such Offered Securities
or Instalment Receipts, directly or indirectly,
unless:
(I) the sale is to the Company; or
(II) (A) the sale is to an institutional
"accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under
the U.S. Securities Act and is of a
number of Offered Securities having an
aggregate market value at the time of
such sale of not less than U.S.
$100,000, (B) a purchaser's letter
containing representations, warranties
and agreements substantially similar to
those contained in this agreement
(except that such purchaser's letter
need not contain the representation set
forth in paragraph (iii) above), and
satisfactory to the Underwriters and the
Company, is executed by the purchaser
and delivered to the Underwriters and
the Company, prior to the sale and (C)
all offers or solicitations in
connection with the sale are arranged
and conducted solely by the Underwriters
or the Company; or
(III) the sale is made outside the United
States in compliance with the
requirements of Rule 904 of Regulation S
under the U.S. Securities Act and in
compliance with applicable local laws
and regulations; or
<PAGE>
(IV) the sale is made pursuant to the
exemption from registration under the
U.S. Securities Act provided by Rule 144
thereunder (acknowledging that the
holding period therein may not begin
until all instalments of the purchase
price have been paid); or
(V) the Offered Securities or Instalment
Receipts are sold in a transaction that
does not require registration under the
U.S. Securities Act or any applicable
United States state laws and regulations
governing the offer and sale of
securities, and it has therefor
furnished to the Underwriters and the
Company an opinion of counsel to that
effect from U.S. counsel of recognized
standing reasonably satisfactory to the
Company;
(vii) understands and acknowledges that upon the
original purchase thereof, and until such time as
the same is no longer required under applicable
requirements of the U.S. Securities Act or
applicable state laws, the certificates
representing the Instalment Receipts, and all
certificates issued in exchange therefor or in
substitution thereof, shall bear the following
legend:
"THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES
ACT"). THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF THE CORPORATION
THAT SUCH SECURITIES MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED ONLY
(A) TO THE CORPORATION, (B) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH
RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (AND APPLICABLE STATE
<PAGE>
SECURITIES LAWS AND REGULATIONS), (D) PURSUANT
TO ANOTHER EXEMPTION FROM REGISTRATION AFTER
PROVIDING AN OPINION OF U.S. COUNSEL
SATISFACTORY TO THE CORPORATION OR (E) IN
COMPLIANCE WITH CERTAIN OTHER PROCEDURES
SATISFACTORY TO THE CORPORATION. DELIVERY OF
THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. A NEW CERTIFICATE,
BEARING NO LEGEND, DELIVERY OF WHICH WILL
CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED
FROM MONTREAL TRUST COMPANY OF CANADA UPON
DELIVERY OF THIS CERTIFICATE AND A DULY
EXECUTED DECLARATION, IN A FORM SATISFACTORY
TO MONTREAL TRUST COMPANY OF CANADA AND THE
CORPORATION, TO THE EFFECT THAT THE SALE OF
THE SECURITIES REPRESENTED HEREBY IS BEING
MADE IN COMPLIANCE WITH RULE 904 OF
REGULATIONS UNDER THE SECURITIES ACT;
and that all certificates representing Offered
Securities (and all certificates issued in
exchange therefor or in substitution thereof)
issued upon surrender of any Instalment Receipt so
legended will bear the same legend, provided that
if the Offered Securities or Instalment Receipts
are being sold under paragraph (vii)(III) above,
the legend may be removed by providing a
declaration to Montreal Trust Company of Canada,
as registrar and transfer agent, to the following
effect (or as the Company may prescribe from time
to time):
"The undersigned (A) acknowledges that
the sale of the securities to which this
declaration relates is being made in
relianceon Rule 904 of Regulation S under
the United States Securities Act of 1933
(the "Securities Act") and (B) certifies
that (1) it is not an affiliate of Suncor
Inc. (as defined in Rule 405 under the
Securities Act), (2) the offer of such
securities was not made to a person in
the United States, and either (a) at the
time the buy order was originated, the
buyer was outside the United States, or
the seller and any person acting on its
behalf reasonably believe that the buyer
<PAGE>
was outside the United States or (b) the
transaction was executed on or through the
facilities of The Toronto Stock Exchange, the
Montreal Exchange or the Vancouver Stock
Exchange and neither the seller nor any person
acting on its behalf knows that the
transaction has been prearranged with a buyer
in the United States and (3) neither the
seller nor any person acting on its behalf
engaged in any directed selling efforts in
connection with the offer and sale of such
securities. Terms used herein have the
meanings given to them by Regulation S."
and provided that, if any such Offered Securities or
Instalment Receipts are being sold under paragraph
(vii)(IV) above, the legend may be removed by delivery to
Montreal Trust Company of Canada of an opinion of
counsel, of recognized standing reasonably satisfactory
to the Company, that such legend is no longer required
under applicable requirements of the Securities Act or
state securities laws; and
(ix) consents to the Company making a notation on
its records or giving instructions to the
Custodian or any transfer agent of the Offered
Securities in order to implement the
restrictions on transfer set forth and
described herein.
<PAGE>
EXHIBIT 99.2
SUN CANADA, INC.
- - and -
SUN COMPANY, INC.
- - and -
SUNCOR INC.
- - and -
NESBITT BURNS INC.
GORDON CAPITAL CORPORATION
RBC DOMINION SECURITIES INC.
WOOD GUNDY INC.
SCOTIAMcLEOD INC.
GOLDMAN SACHS CANADA
MIDLAND WALWYN CAPITAL INC.
RICHARDSON GREENSHIELDS OF CANADA LIMITED
FIRST MARATHON SECURITIES LIMITED
LEVESQUE BEAUBIEN GEOFFRION INC.
TORONTO DOMINION SECURITIES INC.
PETERS & CO. LIMITED
- - and -
THE R-M TRUST COMPANY
- - and -
MONTREAL TRUST COMPANY OF CANADA
INSTALMENT RECEIPT AND PLEDGE AGREEMENT
MADE as of June 8, 1995
<PAGE>
INDEX
Section Page
Recitals 1
1. Interpretation
1(1) Definitions 1
1(2) Number and Gender 8
1(3) Severability 8
1(4) Divisions of Agreement 8
1(5) Paramountcy 8
2. Effectuating of Pledge and Issue of
Instalment Receipts
2(1) Delivery of Share Certificates by
Underwriters 8
2(2) Registration of Shares; Beneficial
Ownership 9
2(3) Pledge 9
2(4) Issue of First Instalment
Receipts 10
2(5) Custodian and Security Agent 10
2(6) Delivery of the Collateral 12
2(7) Legend 12
3 Instalment Receipts
3(1) Forms of Instalment Receipts 14
3(2) Title to Instalment Receipts 14
3(3) Shares Represented by
Instalment Receipts 15
3(4) Use of Suncor Trade Mark 15
4. Maintenance of Listing; Securities
Qualification
4(1) Listings 15
4(2) Securities Qualification
Requirements 15
<PAGE>
5. Payment of Instalments
5(1) Instalment Notices 16
5(2) Prepayment of Instalments 17
5(3) Consequences of Due Payment of
Instalments 17
5(4) Consequences of Non-Payment of an
Instalment 18
5(5) Payments to Selling Shareholder 24
5(6) Securities Qualification 24
6. Instalment Receipts and Issuance of
Share Certificates
6(1) Instalment Receipts 24
6(2) Issuance of Share Certificates 24
7. Rights and Liabilities of Registered
Holders
7(1) Cash Dividends, Cash, Distributed
Property and Stock Dividends 25
7(2) Liability for Taxes 29
7(3) Meetings of the Company,
Attendance, Voting 34
7(4) General 35
7(5) Convening of Meetings 36
7(6) Transfers of Instalment Receipts 36
7(7) Notices, Reports, etc. 38
7(8) Inspection of the Register 38
7(9) Record Dates 38
7(10) Payments by Cheque 38
7(11) U.S. Tax Information Reporting 40
8. The Custodian and the Security Agent
8(1) Appointment of Custodian 41
8(2) Appointment of Security Agent 41
8(3) Termination of Appointment 41
8(4) Notice of Change of the Custodian
or the Security Agent 41
8(5) Consequences of Change of the
Custodian or the Security Agent 41
8(6) Remuneration and Reimbursement
of the Custodian and the
Security Agent 42
<PAGE>
8(7) The Register 42
8(8) Records Retention 42
8(9) Availability of Records 43
8(10) Transfer Facilities 43
8(11) No Transfers After Second
Payment Time or Final Payment
Time 43
8(12) Documents Forwarded to the
Selling Shareholder 43
8(13) Custodian's Performance of Duties 43
8(14) Security Agent's Performance of
Duties 43
8(15) No Indemnity 43
9. Protection and Indemnity of the
Custodian, the Security Agent and
the Company
9(1) Reliance on Experts 44
9(2) Reliance on Certificate 44
9(3) Discretion 44
9(4) Indemnification of Custodian
and Security Agent 44
9(5) Indemnification of the Company 44
9(6) Notice of Claims 45
9(7) Limitation of Indemnities 46
9(8) Reliance on Minutes 46
9(9) Non-Entitlement to Indemnity 46
9(10) Conflict of Interest 46
10. General
10(1) Notices 47
10(2) Power to Amend 48
10(3) Compliance with Laws 48
10(4) Termination 49
10(5) Joint and Several Liability 49
10(6) Governing Law 49
10(7) Document in English 49
10(8) Time of the Essence 49
10(9) Counterparts 49
11. Assignment; Successor Rights
11(1) Assignment by the Selling
Shareholder 50
11(2) Assumption by Assignee 50
11(3) Information to Assignee 50
11(4) Certificates, etc. 50
11(5) No Set-Off 50
11(6) Assignment by Other Parties 51
11(7) Successors and Assigns 51
<PAGE>
Schedules
1 Form of First Instalment Receipt
2 Form of Second Instalment Receipt
3 Notice of Payment Due Relating to
Common Shares of Suncor Inc.
Sold by Sun Canada, Inc.
4 Meetings of Registered Holders
<PAGE>
INSTALMENT RECEIPT AND PLEDGE AGREEMENT
THIS AGREEMENT made as of June 8, 1995, among SUN CANADA,
INC., a corporation incorporated under the laws of Delaware
("Sun Canada" or the "Selling Shareholder"), SUN COMPANY, INC.,
a corporation incorporated under the laws of Pennsylvania
("Sun"), SUNCOR INC., a corporation incorporated under the laws
of Canada (the "Company"), NESBITT BURNS INC., GORDON CAPITAL
CORPORATION, RBC DOMINION SECURITIES INC., WOOD GUNDY INC.,
SCOTIAMcLEOD INC., GOLDMAN SACHS CANADA, MIDLAND WALWYN CAPITAL
INC., RICHARDSON GREENSHIELDS OF CANADA LIMITED, FIRST MARATHON
SECURITIES LIMITED, LEVESQUE BEAUBIEN GEOFFRION INC., TORONTO
DOMINION SECURITIES INC. and PETERS & CO. LIMITED (collectively,
the "Underwriters"), THE R-M TRUST COMPANY, a trust company
incorporated under the laws of Canada, and MONTREAL TRUST
COMPANY OF CANADA, a trust company incorporated under the laws
of Canada.
WHEREAS:
A. Sun Canada, the owner of 29,935,412 common shares of the
Company, has agreed to sell all such common shares to the
Underwriters pursuant to an agreement (the "Underwriting
Agreement") dated May 24, 1995 among Sun Canada, Sun, the
Company and the Underwriters at the price of $39.00 per common
share, payable in 3 instalments of $13.00 each.
B. The Underwriting Agreement provides that the certificate
for the shares sold thereunder shall be delivered as required by
this agreement.
WITNESSETH that, in consideration of the premises and their
respective covenants hereinafter contained, the parties hereto
agree as follows:
1. Interpretation
(1) Definitions. In this agreement, unless the context
otherwise requires, the following terms shall have the following
respective meanings:
"affiliate" and "subsidiary" have the same respective
meanings ascribed to those terms in the Securities Act
(Ontario) at the date hereof.
"Agents" has the meaning ascribed thereto in subsection
9(4).
<PAGE>
"articles" has the meaning ascribed thereto in the CBCA,
as currently in force.
"business day" means a day which is not a Saturday, a
Sunday or a statutory holiday in the Province of Ontario
or the Province of Alberta.
"Cash Dividends" means dividends declared and paid in
cash on any Common Shares that constitute part of the
Collateral.
"CBCA" means the Canada Business Corporations Act, as
amended from time to time, and includes any statute
passed from time to time in substitution therefor, as
amended from time to time.
"Collateral" has the meaning ascribed to that term in
subsection 2(3).
"Common Shares" means common shares of the Company,
however designated, and includes securities issued in
substitution therefor on a Reorganization.
"Conditions" means the terms and conditions endorsed on
an Instalment Receipt.
"Costs of Sale" means all reasonable expenses of every
type of the Selling Shareholder paid by it or on its
behalf in connection with the realization or sale of
Instalment Shares and other Collateral as provided for in
paragraph 5(4)(iv), including without limitation, legal
and accounting charges, brokerage fees, interest expense
equal to an amount determined by reference to the then
prevailing prime rate plus one per cent applied to the
deficiency owing on applicable Instalments of Defaulting
Purchasers calculated daily and compounded monthly, for
a period beginning on the Second Instalment Date or the
Final Instalment Date, as applicable, and ending on the
date that payment under paragraph 5(4)(vi) is made to the
Selling Shareholder, the cost of obtaining any orders or
rulings required to be obtained from securities
regulatory authorities, underwriting fees and charges and
the costs incurred in connection with the preparation and
filing of any prospectus or other required documents;
provided that, whatever the actual amount of such
expenses, for the purposes of this agreement the Costs of
<PAGE>
Sale shall not exceed $1.00 per Instalment Share sold and
any expenses of the type referred to above in excess of
$1.00 per Instalment Share sold will be the sole
responsibility of the Selling Shareholder.
"Custodian" means Montreal Trust Company of Canada or
such other trust company as may from time to time be
appointed, as provided in section 8, by the Selling
Shareholder to act as Custodian, and any reference to
presentation, surrender or delivery to the Custodian
hereunder means presentation, surrender or delivery, as
the case may be, to it at its principal Stock and Bond
Transfer office in any of the Designated Cities.
"Defaulting Purchaser" has the meaning ascribed to that
term in paragraph 5(4)(vi).
"Designated Cities" means Montreal, Toronto, Calgary,
Edmonton and Vancouver.
"Distributed Property" means any (i) securities, (ii)
options, rights or warrants to purchase any securities,
(iii) securities convertible into or exchangeable for
securities, property or other assets, (iv) evidences of
indebtedness, or (v) other property or assets, in each
case whether of the Company or of any other person,
distributed or issued by the Company or any of its
subsidiaries or affiliates to all, or substantially all,
of the holders of Common Shares, including, without
limitation, (a) any of the foregoing distributed or
issued upon a liquidation, dissolution or winding-up of
the Company, and (b) any right, option, warrant or other
security issued under a shareholder protection rights
plan after the same has been separated from a related
Common Share; but not including Cash Dividends, Stock
Dividends and securities, cash or other property issued
or delivered pursuant to a Reorganization.
"Excess Dividends" means, in respect of an Instalment
Share on a particular date, that amount which is the
aggregate of:
(i) all Cash Dividends paid in a fiscal year of the
Company ending after December 31, 1994 to the
extent that the aggregate amount exceeds $1.75 per
Common Share;
(ii) all cash (other than Cash Dividends) paid in
respect of the Instalment Share under a
Reorganization; and
<PAGE>
(iii) all cash paid in respect of the Instalment Share
on a liquidation, dissolution or winding-up of the
Company;
but not including amounts previously paid as Excess
Dividends.
"Excess Proceeds" has the meaning ascribed thereto in
paragraph 7(1)(ii).
"Final Instalment" means the final instalment of $13.00
on account of the purchase price for each Instalment
Share which is due and payable at the Final Payment Time,
as such amount is reduced to the extent of any payment or
set-off provided for in this agreement.
"Final Payment Time" means 1:00 p.m. (local time) on
December 30, 1996.
"First Instalment" means the initial payment of $13.00
per share on account of the purchase price for an
Instalment Share payable on the closing of the sale of
Instalment Shares to the Underwriters pursuant to the
Underwriting Agreement.
"First Instalment Receipt" means an Instalment Receipt in
the form annexed as Schedule 1 representing payment of
the First Instalment in respect of a Related Share.
"First Named" means, in relation to joint Registered
Holders in respect of a particular Instalment Receipt,
the person named first in respect thereof in the
Register.
"Instalment", without more, means a Second Instalment or
a Final Instalment.
"Instalment Notice" means a notice sent or published
pursuant to subsection 5(1).
"Instalment Receipt" means a First Instalment Receipt or
a Second Instalment Receipt.
"Instalment Shares" means the 29,935,412 Common Shares
sold to the Underwriters pursuant to the Underwriting
Agreement and includes (i) such other securities and
other property as are added thereto or substituted
therefor pursuant to subsection 3(3), and (ii) any right,
option, warrant or other security issued in respect of a
Common Share under a shareholder protection rights plan
prior to the separation thereof from the related
Instalment Share.
<PAGE>
"Intermediary" means an intermediary within the meaning
ascribed to that term in NP 41 which has delivered to the
Company and the Custodian, in accordance with paragraph
7(2)(viii), a notice that such person is an intermediary
which holds Instalment Receipts on behalf of
Non-registered Holders.
"Managing Underwriter" means Nesbitt Burns Inc.
"Non-registered Holder" means a non-registered holder of
an Instalment Receipt within the meaning ascribed to that
term in NP 41, whose Instalment Receipt is held by an
Intermediary.
"Non-registered Defaulting Purchaser" has the meaning
ascribed to that term in paragraph 7(6)(vii).
"non-resident Registered Holder" means a Registered
Holder who is not resident in Canada for the purposes of
the Income Tax Act (Canada).
"NP 41" means National Policy Statement No. 41 of the
Canadian Securities Administrators, as amended or
substituted for from time to time.
"Obligations" means the indebtedness, obligation and
liability of a Registered Holder from time to time to pay
to the Selling Shareholder, in respect of each Instalment
Share, an Instalment at or before each of the Second
Payment Time and the Final Payment Time and, in the event
of a sale as provided for in paragraph 5(4)(iv), the pro
rata share of the Costs of Sale for which the Registered
Holder of the Instalment Receipt representing such
Instalment Share is liable pursuant to paragraph
5(4)(vi).
"person" includes an individual, a corporation, a
partnership, an estate or trust, an unincorporated
organization and a government or governmental
organization.
"Pledge" means each of the pledges of Instalment Shares
to secure the Obligations in respect of such Instalment
Shares, as provided in subsection 2(3).
"pledge" means, as the context requires, (i) mortgage,
hypothecate, pledge, charge, assign and grant a security
interest in or (ii) a mortgage, hypothecation, pledge,
charge, assignment and security interest.
<PAGE>
"PPSA" means the Personal Property Security Act
(Ontario), as amended from time to time, and includes any
statute passed from time to time in substitution
therefor, as amended from time to time, and reference to
a specific section of the PPSA shall be deemed to include
a reference to any similar successor provision of the
PPSA.
"prime rate" means that rate of interest, expressed as a
rate per annum, announced by the Bank of Montreal from
time to time as its reference rate for Canadian-dollar
denominated loans to Canadian commercial borrowers.
"Proceeds" has the meaning ascribed to that term in the
PPSA.
"Register" means the register which is to be kept by the
Custodian under subsection 8(7).
"Registered Holder" means the person shown in the
Register as the holder of an Instalment Receipt and,
where the context so admits, includes joint holders of
such Instalment Receipt.
"Regulation S" means Regulation S as adopted by the
United States Securities and Exchange Commission under
the U.S. Securities Act.
"Related Shares" in relation to any Instalment Receipt
means the Instalment Shares represented by such
Instalment Receipt.
"Reorganization" means any (i) subdivision,
consolidation, reclassification or other similar change
of the Instalment Shares, or (ii) reorganization,
amalgamation, arrangement, merger or sale of assets
affecting the Company or to which it is a party, transfer
of all or substantially all of the assets of the Company,
or similar transaction affecting the Company as a result
of which holders of Instalment Shares shall be entitled
to receive securities, cash or other property in exchange
for, in conversion of, or in respect of the Instalment
Shares.
"Second Instalment" means the instalment of $13.00 per
share on account of the purchase price for each
Instalment Share which is due and payable at the Second
Payment Time as such amount is reduced to the extent of
any payment or set-off provided for in this agreement.
<PAGE>
"Second Instalment Receipt" means an Instalment Receipt
in the form annexed as Schedule 2 representing payment of
the First Instalment and the Second Instalment in respect
of a Related Share.
"Second Payment Time" means 1:00 p.m. (local time) on
June 10, 1996.
"Security Agent" means The R-M Trust Company or such
other corporation as may from time to time be appointed,
as provided in section 8, by the Selling Shareholder to
act as Security Agent.
"Special Resolution" has the meaning ascribed to that
term in paragraph 18 of Schedule 4.
"Stock Dividends" means dividends declared and paid on
the Instalment Shares solely by the issuance or
distribution of Common Shares; provided that, for the
purposes of this definition and the definitions of Cash
Dividends and Distributed Property, if dividends shall be
declared and paid in a combination of two or more of (i)
cash, (ii) other property and (iii) by the issuance or
distribution of Common Shares, the cash portion of such
dividends, if any, shall be deemed to be Cash Dividends,
the other property portion of such dividends, if any,
shall be deemed to be Distributed Property and the Common
Share portion of such dividends, if any, shall be deemed
to be Stock Dividends.
"Taxes" means any taxes, duties or governmental charges
or levies, including, without limitation, Withholding
Tax, which may become payable in respect of any Related
Shares or Instalment Receipts or rights represented
thereby or distributions in respect thereof, and interest
and penalties in respect thereof, liability for payment,
collection or remittance of which may be lawfully
asserted against any of the Selling Shareholder, the
Custodian or the Security Agent as the result of any
transaction herein contemplated, whether under any
present or future fiscal or other law or regulation.
"Transfer Agent" means the transfer agent from time to
time for the Common Shares.
"Underwriters' Receipt" has the meaning ascribed to that
term in subsection 2(4).
<PAGE>
"United States" has the meaning given to it in Regulation
S.
"U.S. Person" has the meaning given to it in Regulation
S.
"U.S. Securities Act" means the United States Securities
Act of 1933, as amended from time to time, and the rules
and regulations of the United States Securities and
Exchange Commission thereunder.
"Withholding Tax" means withholding tax levied under Part
XIII of the Income Tax Act (Canada) and includes any
similar Tax hereafter levied in addition to or in
substitution therefor, and any penalties or interest in
respect thereof.
(2) Number and Gender. In this agreement, words importing the
singular number include the plural and vice versa and words
importing gender include the masculine, feminine and neuter
genders.
(3) Severability. In the event that any one or more of the
provisions contained herein shall be invalid, illegal or
unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
(4) Divisions of Agreement. The division of this agreement into
sections, subsections and other subdivisions and the provision of
headings are for convenience of reference only and shall not affect
the interpretation of the provisions to which they relate or of any
other provisions hereof. References to a specific section,
subsection or other subdivision or schedule are to the
corresponding section, subsection or other subdivision or schedule
of this agreement unless the context otherwise requires.
(5) Paramountcy. In the event of any inconsistency between the
provisions of this agreement and the provisions of any one or more
of the schedules hereto, the provisions of this agreement shall
prevail.
2. Effectuating of Pledge and Issue of Instalment Receipts
(1) Delivery of Share Certificates by Underwriters. The
Underwriters shall, upon the closing of the sale of Instalment
Shares to the Underwriters provided for in the Underwriting
Agreement, deliver to the Selling Shareholder the share
certificate(s) representing such Instalment Shares, along with duly
executed instruments of transfer and assignment in favour of the
Custodian. Each Underwriter irrevocably authorizes and directs the
<PAGE>
Managing Underwriter, on its behalf, to deliver the share
certificate(s) representing the Instalment Shares as provided in
this subsection (1). Forthwith after taking possession of such
certificate(s), the Selling Shareholder shall deliver the same to
the Security Agent, to be held by it on behalf of the Selling
Shareholder.
(2) Registration of Shares; Beneficial Ownership. Upon receipt of
the share certificate(s) as specified in subsection (1), the
Security Agent shall promptly deliver the same to the Transfer
Agent, cause the registration of the Instalment Shares in the name
of the Custodian, and take possession of a duly registered share
certificate or duly registered share certificates in respect of the
Instalment Shares. Subject to the terms and conditions of this
agreement and the Pledge of the Instalment Shares in favour of the
Selling Shareholder, beneficial title to the Instalment Shares
shall be held by the Registered Holders and legal title to each of
the Instalment Shares shall be held by the Custodian on behalf of
the Selling Shareholder.
(3) Pledge. As continuing security for the due and punctual
payment of the Obligations in respect of the Instalment Shares and
any obligations of any Registered Holder in respect of Withholding
Tax and any other unpaid Taxes payable pursuant to subsection 7(2),
each of the Underwriters, upon delivery by the Selling Shareholder
of the certificate(s) representing the Instalment Shares as
provided in subsection (1), pledges and grants to the Selling
Shareholder, and for greater certainty and without limitation, the
Selling Shareholder hereby reserves and takes, a fixed and specific
purchase money security interest in each of the Instalment Shares
purchased by such Underwriter pursuant to the Underwriting
Agreement, all Proceeds, accretions thereto and substitutions
therefor and all property from time to time received, receivable or
otherwise issued or distributed in respect of the Related Shares
including, without limitation, all Cash Dividends, whether or not
Excess Dividends, Distributed Property, Stock Dividends, all
securities, cash or other property under a Reorganization and
Proceeds of any thereof, in each case paid or payable on or after
the date hereof until the Final Payment Time or paid or payable
after the Final Payment Time if the Final Instalment in respect of
such Shares has not been paid (all such property and assets being
collectively referred to herein as the "Collateral"). None of the
Selling Shareholder and the Underwriters has agreed to postpone the
time for attachment of such security interest. Such security
interest in the Instalment Shares shall attach contemporaneously
with the Underwriters first acquiring rights therein and shall be
conclusively deemed for all purposes to continue despite any sale
or transfer of, or any other dealing whatsoever in or with, an
Instalment Receipt and the rights represented or arising thereby.
In addition, as continuing security for the obligation of each
Registered Holder of an Instalment Receipt to pay the Obligations
<PAGE>
referable to the Related Shares represented thereby, each
Registered Holder of an Instalment Receipt shall be conclusively
deemed for all purposes to have acknowledged and confirmed the
Pledge as a continuing security for the Obligations assumed by such
Registered Holder referable to such Related Shares and any
obligations of such Registered Holder in respect of Withholding Tax
and any other unpaid Taxes payable pursuant to subsection 7(2). For
greater certainty, the Company hereby subordinates and postpones
any security interest it has or may have at any time in the
Instalment Shares to the security interest of the Selling
Shareholder.
(4) Issue of First Instalment Receipts. Upon the registration in
the name of the Custodian, as provided for in subsection (2), of
the Instalment Shares represented by the share certificate(s)
delivered by the Underwriters to the Selling Shareholder pursuant
to subsection (1), the Custodian shall execute, issue and deliver
to the Managing Underwriter, on behalf of the Underwriters, a First
Instalment Receipt (the "Underwriters' Receipt"), registered in the
name of the Managing Underwriter, representing such Instalment
Shares. The Managing Underwriter shall notify the Custodian in
writing of the persons to whom First Instalment Receipts are to be
issued on the transfer of the Underwriters' Receipt and the
respective numbers of Instalment Shares to be respectively
represented thereby. Upon receipt from the Managing Underwriter of
such notice and of the Underwriters' Receipt, endorsed for
transfer, or accompanied by a duly executed instrument of transfer
and assignment, in form satisfactory to the Custodian, in
accordance with such notice, the Custodian shall register such
transfers and shall execute and issue, and shall, at its principal
Stock and Bond Transfer office in each of the Designated Cities (as
specified in such notice), deliver to the Underwriters or as the
Managing Underwriter may in such notice direct, First Instalment
Receipts, registered in the name or names of such person or
persons, and representing such respective numbers of Instalment
Shares, as stipulated by the Managing Underwriter in such notice.
(5) Custodian and Security Agent.
(i) The Security Agent hereby agrees that it shall at all
times hold possession of the Collateral in Ontario and
the Custodian hereby agrees that it shall execute, issue
and deliver Instalment Receipts as contemplated in
subsections 2(4) and 6(1) and paragraph 7(6)(v), solely
as agent for and on behalf of the Selling Shareholder and
not as agent for or on behalf of the Underwriters, any
Registered Holder or any other person, anything herein or
otherwise to the contrary notwithstanding.
(ii) The Custodian hereby irrevocably directs the Company to
deliver to the Security Agent, for the purpose of
perfecting the security interest in the Collateral, all
Cash Dividends, all Distributed Property, all Stock
Dividends, and all securities, cash or other property
issued or delivered under a Reorganization which would
otherwise be delivered to the Custodian in its capacity
as registered holder of the Instalment Shares, provided
that all Cash Dividends which do not constitute Excess
Dividends shall be delivered to the Custodian (unless the
Selling Shareholder otherwise directs in accordance with
paragraph (iii)) and all Distributed Property, Stock
Dividends and all securities or other property issued or
delivered pursuant to a Reorganization shall be
registered in the name of the Custodian, and this shall
be the Company's good and sufficient authority to do so.
The Company hereby acknowledges such direction and agrees
to act in accordance therewith. If at any time,
notwithstanding the foregoing direction, the Custodian
receives any Cash Dividends which constitute Excess
Dividends or Cash Dividends which the Selling Shareholder
has directed in accordance with paragraph (iii) to be
paid to the Security Agent, Distributed Property, Stock
Dividends or securities or other property issued or
delivered under a Reorganization, the Custodian shall
forthwith remit or deliver the same to the Security Agent
for the purpose of perfecting the security interest
therein, and for such purpose the Custodian hereby agrees
that during the period such property is in its
possession, it shall hold the same as agent for the
Selling Shareholder and not as agent for the Registered
Holders. The Company hereby appoints the Custodian as
the Company's agent to withhold and remit all applicable
Withholding Tax payable in respect of all Cash Dividends,
Stock Dividends, Distributed Property and other
securities, cash or other property issued or delivered
under a Reorganization, and the Custodian accepts such
appointment.
(iii) The Selling Shareholder may direct the Company to pay all
or any part of a Cash Dividend which is not an Excess
Dividend (in an amount not in excess of such Cash
Dividend net of applicable Withholding Tax) to the
Security Agent in lieu of the Custodian, to satisfy in
whole or in part (a) any Obligation which is then due and
unpaid in respect of an Instalment Receipt held by a
Registered Holder or (b) any obligation of a Registered
Holder in respect of Withholding Tax or any other unpaid
Taxes payable pursuant to subsection 7(2); provided that
the Selling Shareholder gives written notice to the
Company, the Custodian and the Security Agent, not less
than 5 business days prior to the payment date for such
Cash Dividend, of the aggregate amount of the Cash
<PAGE>
Dividend to be paid to the Security Agent in lieu of the
Custodian, the name of each Registered Holder in respect
of which any part of such Cash Dividend is to be paid to
the Security Agent in lieu of the Custodian, the amount
and nature of the obligations of such Registered Holder
to the Selling Shareholder in respect of which such Cash
Dividend will be so applied and the amount of Withholding
Tax, if any, payable in respect thereof. Any notice
provided by the Selling Shareholder to the Company under
this paragraph shall be the Company's good and sufficient
authority to do so and the Company agrees to act in
accordance therewith.
(6) Delivery of the Collateral. In addition to the certificates
representing the Instalment Shares, as referred to in subsection
(1), all other instruments representing or evidencing the
Collateral shall be delivered to and held by the Security Agent
pursuant hereto in Ontario as agent for, and in trust for, the
Selling Shareholder as security for the Obligations and other
amounts from time to time owing as specified in subsection (3) and
shall be registered in the name of the Custodian or, if
registration is not possible, be in suitable form for transfer by
delivery to, or shall be accompanied by duly executed instruments
of transfer or assignment in favour of, the Custodian, all in form
and substance satisfactory to the Custodian and the Selling
Shareholder, and the Custodian shall deliver to the Security Agent
stock transfer powers or other instruments of transfer in respect
of the Collateral duly endorsed in blank.
(7) Legend. Each Instalment Receipt issued into the United States
or to a U.S. Person pursuant to the provisions of subsection (4) on
the transfer of the Underwriters' Receipt (and all Instalment
Receipts issued in exchange therefor or in substitution or on
transfer thereof pursuant to the provisions of subsections 5(3),
6(1) or paragraph 7(6)(v)) shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE
BENEFIT OF THE COMPANY THAT SUCH SECURITIES
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY (A) TO THE COMPANY, (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (AND APPLICABLE STATE SECURITIES
LAWS AND REGULATIONS),
<PAGE>
(D) PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION AFTER PROVIDING AN OPINION OF
U.S. COUNSEL SATISFACTORY TO THE COMPANY, OR
(E) IN COMPLIANCE WITH CERTAIN OTHER
PROCEDURES SATISFACTORY TO THE COMPANY.
DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A
NEW CERTIFICATE, BEARING NO LEGEND, DELIVERY
OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY
BE OBTAINED FROM MONTREAL TRUST COMPANY OF
CANADA UPON DELIVERY OF THIS CERTIFICATE AND A
DULY EXECUTED DECLARATION, IN A FORM
SATISFACTORY TO MONTREAL TRUST COMPANY OF
CANADA AND THE COMPANY, TO THE EFFECT THAT THE
SALE OF THE SECURITIES REPRESENTED HEREBY IS
BEING MADE IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT.
Provided that the Instalment Receipt will be reissued without such
legend if disposed of in accordance with the provisions of (C), (D)
or (E) above (if an applicable legal opinion of counsel of
recognized standing reasonably satisfactory to the Company states
that such legend would no longer be required under United States
securities laws), or if the Instalment Receipt is being transferred
or disposed of in accordance with (B) above and the transferor
provides the declaration below to the Custodian:
The undersigned (A) acknowledges that the sale of
the securities to which this declaration relates is
being made in reliance on Rule 904 of Regulation S
under the United States Securities Act of 1933 (the
"Securities Act"), and (B) certifies that (1) it is
not an affiliate of Suncor Inc. (as defined under
Rule 405 of the Securities Act), (2) the offer of
such securities was not made to a person in the
United States and either (a) at the time the buy
order was originated, the buyer was outside the
United States, or the seller and any person acting
on its behalf reasonably believe that the buyer was
outside the United States or (b) the transaction
was executed on or through the facilities of The
Toronto Stock Exchange, The Montreal Exchange or
the Vancouver Stock Exchange and neither the seller
nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in
the United States and (3) neither the seller, nor
any affiliate of the seller nor any person acting
<PAGE>
on their behalf engaged in any directed selling
efforts in connection with the offer and sale of
such securities. Terms used herein have the
meanings given to them by Regulation S.
In, or concurrently with the delivery of, the notice provided for
in subsection (4), the Managing Underwriter shall notify the
Custodian in writing of the persons whose Instalment Receipts are
to bear such legend, and the Selling Shareholder, the Company and
the Custodian shall be conclusively entitled to assume that only
such persons are within the United States or U.S. Persons for the
purposes of this subsection. The Custodian shall maintain a list
of all Registered Holders from time to time of legended Instalment
Receipts or, in its capacity as registrar for the Common Shares and
Transfer Agent, of legended Common Share certificates issued in
accordance with subsection 5(3).
3. Instalment Receipts
(1) Forms of Instalment Receipts.
(i) First Instalment Receipts shall be substantially
in the form set out in Schedule 1 and shall have
endorsed thereon Conditions substantially in the
form set out in that Schedule;
(ii) Second Instalment Receipts shall be substantially
in the form set out in Schedule 2 and shall have
endorsed thereon Conditions substantially in the
form set out in that Schedule;
(iii) Instalment Receipts shall bear the manual
signature of a duly authorized representative of
the Custodian; and
(iv) Instalment Receipts may be endorsed with or have
incorporated in the text thereof such legends or
recitals or changes not inconsistent with the
provisions of this agreement as may be required
to comply with applicable law or with the
requirements of any securities exchange on which
Instalment Receipts may be listed or to indicate
any special limitations or restrictions to which
any Instalment Receipts are subject.
(2) Title to Instalment Receipts. The Company, the Selling
Shareholder, the Custodian and the Security Agent, notwithstanding
any notice to the contrary and unless otherwise required by law,
shall treat the Registered Holder of an Instalment Receipt as the
absolute owner thereof and of the rights represented thereby for
<PAGE>
all purposes, including determining the person entitled to any
distribution of dividends or other distributions or to any notice
provided for in this agreement.
(3) Shares Represented by Instalment Receipts. Upon any
Reorganization or any liquidation, dissolution or winding-up of the
Company, as a result of which any securities or property or cash
shall be received by the Custodian in exchange for or on conversion
of or in respect of the Instalment Shares, the Instalment Receipts
shall thenceforth represent the right to receive such Instalment
Shares as so modified or added to, or the securities, property or
cash so substituted for, such Instalment Shares, in the same manner
and subject to the same conditions as if such Instalment Receipts
specifically represented the right to receive such Instalment
Shares as so modified or added to or the securities, property or
cash so substituted, all of which shall be subject to the Pledge,
and the Custodian shall, forthwith after the receipt by it of any
security certificates resulting from any such Reorganization or any
such liquidation, dissolution or winding-up or any such securities,
property and/or cash, deliver the same to the Security Agent, to be
held by the Security Agent on behalf of the Selling Shareholder.
(4) Use of Suncor Trade Mark. The Company hereby irrevocably
consents to the use of the SUNCOR design trade mark on the
Instalment Receipts.
4. Maintenance of Listing; Securities Qualification
(1) Listings. The Company and the Selling Shareholder shall, at
the Selling Shareholder's expense, use all reasonable efforts to
list and maintain the listing on The Toronto Stock Exchange and The
Montreal Exchange of (i) the First Instalment Receipts until the
Second Payment Time, and (ii) the Second Instalment Receipts
thereafter until the Final Payment Time.
(2) Securities Qualification Requirements. In the event that, in
the reasonable opinion of the Selling Shareholder or the Company,
any prospectus or registration statement is required to be filed
with, or any permission is required to be obtained from, any
governmental authority in Canada or any other step is required
under any federal or provincial law of Canada before any securities
which a Registered Holder is entitled to receive hereunder may
properly and legally be delivered and thereafter traded, which is
not required in respect of such securities generally, the Selling
Shareholder and the Company shall take such required action, at the
expense of the Selling Shareholder and subject to agreement between
the Selling Shareholder and the Company with respect to terms and
conditions as to timing, notice, indemnities and other matters
relating to such action.
<PAGE>
5. Payment of Instalments
(1) Instalment Notices.
(i) On or after April 25, 1996 but not later than May
10, 1996 in respect of the Second Instalment, and
on or after November 14, 1996 but not later than
November 29, 1996 in respect of the Final
Instalment, the Custodian shall cause to be
delivered or sent by first class prepaid mail to
each Registered Holder (or to the First Named in
the case of joint Registered Holders) of an
outstanding Instalment Receipt (as determined as
of a date not more than 14 days before the date of
mailing of such notice) a notice substantially in
the form set out in Schedule 3, duly completed.
Such notice shall be amended to reflect any
changes made to the amount of the Second
Instalment and/or Final Instalment pursuant to
subsection 7(1). The failure to give such notice,
and/or the failure of a Registered Holder to
receive the same, shall not affect the obligation
of a Registered Holder to pay the Instalments on
the Instalment Shares represented by
suchRegistered Holder's Instalment Receipts as,
when and in the manner required by this agreement.
(ii) Not later than March 11, 1996 in respect of the
Second Instalment and not later than September 30,
1996 in respect of the Final Instalment, the
Custodian shall cause to be published (a) once in
the Report on Business section of a weekday
national edition of The Globe and Mail and (b) once
in the City of Montreal in a daily newspaper in the
French language of general circulation in the City
of Montreal, a notice setting out the Second
Payment Time or the Final Payment Time, as
applicable, and the amount of the Second Instalment
or Final Instalment, as applicable, to become due
in respect of each Instalment Share. Such notice
shall also contain a statement substantially to the
following effect:
"Failure by a Registered Holder to pay to the
Custodian the total amount of the [Insert "Second"
or "Final", as applicable] Instalment on the Common
Shares that are represented by his or her [Insert
"First" or "Second", as applicable] Instalment
Receipt as provided in the Instalment Receipt
Agreement and at or before 1:00 p.m. (local time)
on [Insert "June 10, 1996" or "December 30, 1996",
<PAGE>
as applicable] may result in such Common Shares
being acquired by the Selling Shareholder in
satisfaction of the obligations of the Registered
Holder in respect of such Common Shares, or being
sold by the Custodian. Notwithstanding the
foregoing, if payment of such [Insert "Second" or
"Final", as applicable] Instalment is not made in
respect of an aggregate of less than 5% of all the
Common Shares represented by all [Insert "First" or
"Second", as applicable] Instalment Receipts then
outstanding, such Common Shares must be sold. In
the event of a sale, the Registered Holder will be
responsible for his or her portion of the Costs of
Sale (to a maximum of $1.00 per Common Share) and
will be liable for any deficiency as and to the
extent provided for in the Instalment Receipt
Agreement."
(2) Prepayment of Instalments. Any Registered Holder shall be
entitled at any time prior to the Final Payment Time to prepay the
aggregate amount of the unpaid Instalments in respect of the
Instalment Shares represented by any Instalment Receipt registered
in the Registered Holder's name, but shall not otherwise be
entitled to prepay, in whole or in part, any Instalment prior to
the Second Payment Time or the Final Payment Time, as the case may
be. A Registered Holder who holds a First Instalment Receipt and
who prepays such aggregate amount of unpaid Instalments before the
Second Payment Time shall have the same rights, mutatis mutandis,
upon presentation and surrender to the Custodian of the Registered
Holder's First Instalment Receipt as if the Registered Holder had
duly paid the Second Instalment and received a Second Instalment
Receipt and duly paid the Final Instalment and duly presented and
surrendered to the Custodian such Registered Holder's Second
Instalment Receipt in accordance with subsection (3).
(3) Consequences of Due Payment of Instalments. Subject to the
provisions of paragraph 7(2)(vii), upon presentation and surrender
to the Custodian of any First Instalment Receipt, and due payment
to the Custodian of the aggregate amount of the Second Instalments
in respect of the Related Shares represented by such First
Instalment Receipt, at the Second Payment Time, the First
Instalment Receipt shall be cancelled, the Custodian shall issue
and send a Second Instalment Receipt to such Registered Holder in
accordance with paragraph 10(1)(iii) and thereupon such First
Instalment Receipt shall cease to be outstanding. Subject to the
provisions of paragraph 7(2)(vii), upon presentation and surrender
to the Custodian of any Second Instalment Receipt, and due payment
to the Custodian of the aggregate amount of the Final Instalments
in respect of the Related Shares represented by such Instalment
Receipt, at or prior to the Final Payment Time, the Second
Instalment Receipt shall be cancelled, the Pledge of the Collateral
<PAGE>
in respect of the Related Shares shall be released without any
further action, the Security Agent and the Custodian shall deliver
to the Transfer Agent a share certificate or share certificates
representing such Related Shares duly endorsed for transfer of such
Related Shares to the Registered Holder of such Second Instalment
Receipt, and the Company shall cause the Transfer Agent to register
such Related Shares in the register of shareholders of the Company
in the name of such Registered Holder with such Registered Holder's
address as shown in the Register and issue a share certificate
representing such Related Shares in the name of such Registered
Holder and deliver or cause to be delivered such share certificate
to the Custodian, and, subject to the provisions of subsection
10(3), the Custodian shall send such share certificate to such
Registered Holder in accordance with paragraph 10(1)(iii) and
thereupon such Second Instalment Receipt shall cease to be
outstanding. If such Instalment Receipt bears the legend provided
for in subsection 2(7), the share certificate(s) representing the
Related Shares so registered in the name of the Registered Holder
shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE CORPORATION, (B)
OUTSIDE THE UNITED STATES INACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(AND APPLICABLE STATE SECURITIES LAWS AND
REGULATIONS), (D) PURSUANT TO ANOTHER EXEMPTION
FROM REGISTRATION AFTER PROVIDING AN OPINION OF
U.S. COUNSEL SATISFACTORY TO THE CORPORATION, OR
(E) IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES
SATISFACTORY TO THE CORPORATION. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA. A NEW CERTIFICATE, BEARING NO LEGEND,
DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY"
MAY BE OBTAINED FROM MONTREAL TRUST COMPANY OF
CANADA UPON DELIVERY OF THIS CERTIFICATE AND A DULY
EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
MONTREAL TRUST COMPANY OF CANADA AND THE
CORPORATION, TO THE EFFECT THAT THE SALE OF THE
SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT.
(4) Consequences of Non-Payment of an Instalment.
<PAGE>
(i) By acquiring and holding an Instalment Receipt, the
Registered Holder thereof will be conclusively deemed to
have acknowledged and agreed (a) to be bound by this
agreement, (b) that the Registered Holder has assumed and
is bound to pay the Obligations outstanding at the date
of such acquisition in respect of the Related Shares
represented by such Instalment Receipt, (c) that such
Related Shares are at the time of such acquisition and
will continue to be pledged to the Selling Shareholder
pursuant to this agreement to secure the Obligations in
respect of the Related Shares and any obligations of such
Registered Holder in respect of Withholding Tax and any
other unpaid Taxes pursuant to subsection 7(2), (d) that
the Registered Holder's rights in respect of such Related
Shares are and will continue to be subject to the
provisions of this agreement, and (e) that the Pledge is
and will remain in effect and be binding and effective
notwithstanding any prior, concurrent or subsequent
transfer of or otherdealings with the Instalment Receipts
from time to time representing such Related Shares and
the rights represented or arising thereby.
(ii) The Custodian shall promptly notify the Selling
Shareholder of all Registered Holders of Instalment
Receipts who have failed to effect payment of the Second
Instalment by the Second Payment Time or the Final
Instalment by the Final Payment Time. If the Custodian
has not received payment of such Instalments by such
times from a Registered Holder, such Registered Holder
shall have no further right to pay such Second Instalment
or Final Instalment, as the case may be, and the rights
and obligations of the Selling Shareholder and such
Registered Holder shall be only those set forth in this
subsection 5(4) and the Registered Holder shall have no
further rights under section 7, except the rights under
paragraph 7(6)(vii).
(iii) If, pursuant to paragraph (ii), the Custodian notifies
the Selling Shareholder that the Second Instalments or
the Final Instalments, as the case may be, in respect of
5% or more of the Instalment Shares forming part of the
Collateral immediately prior to the Second Payment Time
or the Final Payment Time, as the case may be, have not
been duly paid by the Second Payment Time or the Final
Payment Time, as the case may be, then, subject to
receiving a notice to the contrary from the Selling
Shareholder within 20 days after the notice given
pursuant to paragraph (ii), the Selling Shareholder shall
be deemed to have advised the Custodian that it proposes
to accept the Instalment Shares (and any other related
Collateral) then subject to the Pledge and in respect of
<PAGE>
which the applicable Instalments have not been duly paid,
in satisfaction of the Obligations secured hereby, and,
in such event, the Custodian shall, as agent for the
Selling Shareholder and on its behalf, give such notices
to Registered Holders of Instalment Receipts representing
any of such Instalment Shares and to all such other
persons as are entitled, and do all such other things as
counsel for the Selling Shareholder shall advise are
required by the PPSA and any other applicable law in
order to enable such acceptance of the Collateral to
occur. The Security Agent shall not release the
Instalment Shares to the Selling Shareholder until it has
received an opinion of counsel for the Selling
Shareholder that all provisions of applicable law have
been complied with to entitle the Selling Shareholder to
receive such Instalment Shares.
(iv) If (a), pursuant to paragraph (ii), the Custodian
notifies the Selling Shareholder that the Second
Instalments or the Final Instalments, as the case may be,
in respect of less than 5% of the Instalment Shares
forming part of the Collateral immediately prior to the
Second Payment Time or the Final Payment Time, as the
case may be, have not been duly paid by the Second
Payment Time or the Final Payment Time, as the case may
be, or (b) the Custodian receives from the Selling
Shareholder the notice referred to in paragraph (iii), or
(c) counsel for the Selling Shareholder advises the
Custodian that such Instalment Shares or any part or
parts thereof are required by applicable law to be
disposed of, the Custodian shall (after consultation with
the Selling Shareholder), as soon as practicable and in
a commercially reasonable manner, sell such Instalment
Shares and all other related non-cash Collateral, or such
part or parts thereof, as the case may be, free and clear
of the Pledge; provided that such sale by the Custodian:
(A) of securities which are listed for trading on a
stock exchange, shall be made on that exchange, or
if listed for trading on more than one stock
exchange, then on that exchange on which there has
been the largest number of such securities traded
in the preceding 30 trading days, unless, in each
case, the Selling Shareholder advises the Custodian
in writing that in its opinion sale in such manner
cannot be completed within a reasonable period of
time without a material adverse effect on the
trading price of such securities on such exchange;
and
<PAGE>
(B) in any other case shall be made by private or
public sale in such commercially reasonable manner
as the Custodian shall determine.
The Custodian shall do all things within its power to enable the
Security Agent to make good delivery of any Instalment Shares or
other Collateral so sold by the Custodian and to continue the
Security Agent's possession of Instalment Shares and other
Collateral not sold, including, without limitation, providing
appropriate powers of attorney to transfer sold Instalment Shares
and other Collateral and assisting in obtaining new securities
certificates representing unsold Instalment Shares and other
Collateral (where applicable).
(v) If any Instalment Shares and other Collateral are
accepted by the Selling Shareholder pursuant to paragraph
(iii) in satisfaction of the Obligations secured thereby,
the Custodian shall promptly transfer such Instalment
Shares and other Collateral to the Selling Shareholder.
The Security Agent shall, on the written instructions
from time to time of the Custodian, promptly deliver to
the Custodian certificates representing the Instalment
Shares and other Collateral sold as required by paragraph
(iv) or required to be transferred to the Selling
Shareholder pursuant to the foregoing provisions of this
paragraph. Each time that Instalment Shares and other
Collateral are sold by the Custodian pursuant to
paragraph (iv), the Registered Holders of the Instalment
Receipts which are required by paragraph (iv) to be sold
shall be deemed to have sold the Instalment Shares and
other Collateral so sold on a basis pro rata to the
number of Instalment Shares respectively represented by
their Instalment Receipts.
(vi) As soon as reasonably practicable after the sale of all
such Instalment Shares and other Collateral as are
required hereby at any particular time to be sold, the
Custodian shall pay to the Selling Shareholder, out of
and to the extent of the Proceeds of sale of such
Instalment Shares and other Collateral and any interest
earned on or with respect to such Proceeds, an amount
equal to the aggregate of the unpaid Instalments and the
Costs of Sale in respect of such Instalment Shares.
Subject to the provisions of paragraph 7(2)(v), if such
Proceeds and interest exceed the aggregate amount of such
payments to the Selling Shareholder,the Custodian shall
(subject to the requirements of applicable law) then pay
the amount of such excess to the Registered Holders of
the Instalment Receipts representing such Instalment
Shares (each, a "Defaulting Purchaser"), on a basis pro
rata to the number of Instalment Shares respectively
<PAGE>
represented by their Instalment Receipts. If such
Proceeds and interest are less than the aggregate of the
unpaid Instalments and the Costs of Sale in respect of
such Instalment Shares, each Registered Holder of
Instalment Receipts representing any of such Instalment
Shares shall be and remain liable to the Selling
Shareholder to pay to it, on demand, an amount equal to
such Registered Holder's portion of the deficiency,
calculated on the basis of the ratio which the Instalment
Shares so sold which are represented by such Registered
Holder's Instalment Receipts is of all such Instalment
Shares so sold. The Selling Shareholder shall advise the
Custodian in writing of the Costs of Sale paid by the
Selling Shareholder.
(vii) The Company and the Selling Shareholder shall not, in any
event, and the Custodian and the Security Agent shall
not, except in case of fraudulent or reckless conduct, be
liable or responsible for any delay or failure to effect
realization, for any inability to obtain the best or most
favourable price for any Instalment Share or (except as
required by applicable law) for any accounting to
Registered Holders on realization. The Custodian shall,
if so requested in writing, provide any Registered Holder
or the Selling Shareholder with a statement of (a) the
Proceeds of sale of the Instalment Shares sold as
required by paragraph (iv), (b) the interest, if any,
earned on or with respect to such Proceeds and (c) the
Costs of Sale of such Instalment Shares, which, absent
manifest error and subject to applicable law, shall be
conclusive of the sums referred to therein.
(viii) Any payments to be made to a Defaulting Purchaser under
paragraph (vi) shall be made by sending by mail, postage
prepaid, a cheque to the Defaulting Purchaser (in the
case of joint Registered Holders, to the First Named).
The mailing of such cheque shall satisfy and discharge
any liability for the moneys represented thereby unless
such cheque is not paid on due presentation; provided
that in the event of the non-receipt of such cheque by
the Defaulting Purchaser, or the loss or destruction
thereof, the Custodian, upon being furnished with
reasonable evidence of such non-receipt, loss or
destruction and indemnity satisfactory to it, shall issue
to the Defaulting Purchaser a replacement cheque for the
amount of such cheque. Neither the Selling Shareholder
nor the Custodian shall be responsible for any loss or
delay in transmission. Unless otherwise provided by
applicable law, any such payment which is represented by
such cheque which has not been presented for payment
within 6 years after the date on which it was issued or
<PAGE>
which otherwise remains unclaimed for a period of 6 years
after such date of issue shall be forfeited and shall be
paid by the Custodian at the written request of the
Selling Shareholder to or to the order of the Selling
Shareholder.
(ix) The procedures, rights and remedies set out in this
subsection shall be in addition to, and not in derogation
of, any right or remedy which is available to the Selling
Shareholder under this agreement or applicable law in the
event that the Proceeds of sale or other disposition of
any Instalment Shares and other related Collateral is
less than the aggregate of the Instalments with respect
thereto, the applicable pro rata portion of the Costs of
Sale and any other amounts owing to the Selling
Shareholder hereunder, and the exercise of or failure to
exercise any right or remedy either in whole or in part
shall not affect the exercise of any other right or
remedy.
<PAGE>
(5) Payments to Selling Shareholder. As soon as reasonably
practicable after the receipt of any payment under subsections (2)
or (3), the Custodian shall pay the amount thereof to the Selling
Shareholder.
(6) Securities Qualification. In the event that the Custodian,
pursuant to the terms of this agreement, is required to sell or
dispose of, on behalf of the Selling Shareholder, any Collateral,
and in the reasonable opinion of the Selling Shareholder the
cooperation of the Company is required to facilitate the offering
and sale to the public or otherwise of such Collateral, the Selling
Shareholder may request that the Company cooperate in the
preparation and filing of all documentation or the taking of all
action necessary or desirable to effect such sale or disposition,
and the Company shall, at the expense of the Selling Shareholder
and subject to agreement between the Selling Shareholder and the
Company with respect to terms and conditions as to timing, notice,
indemnities and other matters, use all reasonable efforts to
cooperate in the preparation and filing of all such documentation
and cooperate in the taking of all such action.
6. Instalment Receipts and Issuance of Share Certificates
(1) Instalment Receipts. A Registered Holder who at any time
before the Final Payment Time requires more than one Instalment
Receipt in respect of the Instalment Shares represented by any of
the Registered Holder's Instalment Receipts shall be entitled to
have the same issued by the Custodian (but in the aggregate
representing the same number of Instalment Shares as are
represented by the Instalment Receipt being replaced), upon
delivery and surrender to the Custodian of the Instalment Receipt
being replaced and payment of the Custodian's reasonable charges.
Upon the registration by the Custodian of a transfer of an
Instalment Receipt, such Instalment Receipt shall be cancelled and
a new Instalment Receipt (representing the same number of
Instalment Shares) issued to and in the name of the transferee,
subject to compliance with the requirements of subsection 7(6).
(2) Issuance of Share Certificates. For purposes of the issuance
of share certificates pursuant to subsection 5(3), the Custodian
shall, as soon as reasonably practicable after the Final Payment
Time, provide the Transfer Agent with a list of the Registered
Holders in respect of whose Instalment Receipts the Instalments
have been duly paid and the other requirements of subsection 5(3)
have been satisfied (other than Instalment Receipts in respect of
which the Instalments have been prepaid as provided for in
subsection 5(2)).
<PAGE>
7. Rights and Liabilities of Registered Holders
(1) Cash Dividends, Cash, Distributed Property and Stock
Dividends.
(i) All Cash Dividends which do not constitute Excess
Dividends (other than Cash Dividends directed to be paid
to the Security Agent in accordance with paragraph
2(5)(iii)) shall, forthwith after receipt thereof by the
Custodian, be remitted by the Custodian (net of any
applicable Withholding Tax) to the Registered Holders of
record on the record date for such dividends determined
pursuant to subsection 7(9) entitled thereto. All Cash
Dividends and other cash which constitute Excess
Dividends shall, immediately after receipt thereof by
the Security Agent pursuant to paragraph 2(5)(ii), be
deemed to have been applied: (a) if such dividends are
paid at or after the Second Payment Time, in reduction
pro rata of and to the extent of the aggregate unpaid
amount of the Final Instalments and, (b) if such
dividends are paid prior to the Second Payment Time,
equally in reduction pro rata of and to the extent of
the aggregate unpaid amount of the Second Instalments
and the Final Instalments, and, in each case, be
remitted to or held on behalf of the Selling Shareholder
in accordance with the Selling Shareholder's written
instruction. For greater certainty, to the extent that
such Excess Dividends received by the Security Agent
exceed the aggregate unpaid amount of the Final
Instalments and Second Instalments, such excess shall be
delivered promptly by the Security Agent to the
Custodian, after receipt of a certificate of the
Custodian as to such aggregate unpaid amount, and
remitted (net of any applicable Withholding Tax) by the
Custodian pro rata to the Registered Holders of record
on the record date for such dividends in accordance with
subsection 7(9). All Cash Dividends directed to be paid
to the Security Agent in accordance with paragraph
2(5)(iii), shall, promptly after receipt thereof by the
Security Agent, be remitted to or held on behalf of the
Selling Shareholder in accordance with the Selling
Shareholder's written instructions, and in the absence
of suchinstructions, shall be held in an
interest-bearing account with a Canadian bank or trust
company.
(ii) All Distributed Property received by the Security Agent
pursuant to paragraph 2(5)(ii) prior to the termination
of the Pledge in respect of the Related Shares shall, as
promptly as commercially reasonable, be sold by the
Custodian (after consultation with the Selling
<PAGE>
Shareholder) for cash in the market or by tender or by
private contract on such date or dates and at such price
or prices as the Custodian shall determine; provided,
however, that any right, option, warrant or other
security issued under a shareholder protection rights
plan constituting Distributed Property shall be held by
the Custodian and shall be sold by it only if and when
the same have separated from the Instalment Share and
the terms thereof have been adjusted to make the same
exercisable at a price or subject to terms and
conditions which give them more than merely nominal
value, in which event the Custodian shall, as promptly
as commercially reasonable, sell the same in any manner
permitted hereunder other than by private contract to a
person or group of persons purchasing the same other
than for distribution to the public. The Security Agent
shall deliver such Distributed Property to the purchaser
or purchasers thereof at the direction of the Custodian
in order to facilitate such sales, and the Custodian
shall unconditionally and irrevocably direct the
purchaser or purchasers of such Distributed Property to
pay the purchase price therefor (a) in an amount equal
to the costs of disposition in connection with the sale
thereof, to the Custodian; (b) in an amount (the "Excess
Proceeds") equal to the purchase price less the amount
referred to in (a), to the extent that such net Proceeds
do not exceed the unpaid balance of the Second
Instalments and the Final Instalments in respect of the
Related Shares, to the Security Agent; and (c) in the
amount of the balance, being the amount of such net
Proceeds which do not constitute Excess Proceeds, to the
Custodian. Nothing in the foregoing sentence shall be
construed as requiring the Security Agent to deliver any
Distributed Property to a purchaser thereof prior to the
concurrent receipt of the Excess Proceeds referred to in
clause (b) of such sentence. The Custodian shall then
immediately remit pro rata to the Registered Holders of
record on the record date for the distribution
determined pursuant to subsection 7(9), all such net
Proceeds that did not constitute Excess Proceeds (net of
applicable Withholding Tax). All Excess Proceeds shall
be deemed to have been applied upon receipt by the
Security Agent: (a) if such excess is distributed at or
after the Second Payment Time, in reduction pro rata of
and to the extent of the aggregate unpaid amount of the
Final Instalments and, (b) if such excess is distributed
prior to the Second Payment Time, equally in reduction
pro rata of and to the extent of the aggregate unpaid
amount of the Second Instalments and Final Instalments,
and in each case, shall be remitted to or held on behalf
<PAGE>
of the Selling Shareholder in accordance with the
Selling Shareholder's written instructions, and in the
absence of such instructions, shall be held in an
interest-bearing account with a Canadian bank or trust
company.
(iii) All Stock Dividends received by the Security Agent
pursuant to paragraph 2(5)(ii) shall be registered in
the Custodian's name and held by the Security Agent in
accordance with paragraph 2(5)(i) pending payment of the
Second Instalments and the Final Instalments. The
Custodian shall deliver to the Security Agent stock
transfer powers duly endorsed in blank in respect of the
Stock Dividends. Upon payment by a Registered Holder of
the Second Instalment and the Final Instalment for any
Instalment Share and receipt of a notice from the
Custodian confirming such payment, the Selling
Shareholder shall promptly instruct the Custodian by
written notice to, and the Custodian shall, promptly,
transfer to the Registered Holder, the Stock Dividends
so held in respect of such Instalment Share; provided
that where one or more Registered Holders would be
entitled to receive a fractional share as a result of
such Stock Dividends which it would not be entitled to
receive had it been a registered holder of such share,
the Custodian shall (after consultation with the Selling
Shareholder) as promptly as commercially reasonable
sell all fractional shares to which all Registered
Holders are entitled for cash in the market or by tender
or by private contract on such date or dates and at such
price or prices as the Custodian shall determine and
promptly thereafter remit pro rata to each such
Registered Holder the amount of cash received from the
sale of such fractional shares, less any costs of
disposition in connection with the sale thereof.
(iv) Forthwith after receipt by the Security Agent of
securities or other property pursuant to a
Reorganization, such securities or other property shall
be registered in the name of the Custodian or, if
registration is not possible, be in suitable form for
transfer by delivery to or shall be accompanied by duly
executed instruments of transfer or assignment in favour
of the Custodian, and the Custodian shall deliver to the
Security Agent stock transfer powers or other
instruments for transfer duly endorsed in blank in
respect of such securities or other property.
(v) All Cash Dividends, Distributed Property or Stock
Dividends received by the Custodian or the Security
Agent in respect of any Instalment Share after all
<PAGE>
Instalments (and Costs of Sale, if applicable) in
respect of such Instalment Share have been paid shall be
delivered by the Security Agent to the Custodian (if
applicable) and in any event remitted by the Custodian
to the Registered Holder (net of applicable Withholding
Tax) on the record date for such dividend or
distribution or, if the record date is after the date of
such payment, to the Registered Holder at the time all
Instalments (and Costs of Sale, if applicable) in
respect of such Instalment Share were paid.
(vi) If pursuant to this subsection, the amount of the Second
Instalment and/or Final Instalment is reduced, the
Custodian shall, (a) promptly after determination of the
amount of the reduction, give notice to the Company and
the Selling Shareholder of such amount, and (b) promptly
after application of the reduction against the Second
Instalment, if applicable, and the Final Instalment,
give notice to the Registered Holders informing them of
the payment made on behalf of the Registered Holders and
the resulting reduced amount of the Second Instalment
and/or Final Instalment. In addition, the Company
shall, by way of a press release, disclose the resulting
reduced amount of the Second Instalment and/or Final
Instalment. The Custodian shall note the amount of such
reduction upon all Instalment Receipts issued subsequent
to such reduction or thereafter tendered to it for such
purpose by hand stamping or overprinting such
certificates.
(vii) For so long as the Instalment Shares are registered in
the name of the Custodian, the Company will use its best
efforts to pay each Cash Dividend (to the extent such
dividend is not an Excess Dividend or a Cash Dividend
directed to be paid by the Selling Shareholder to the
Security Agent pursuant to paragraph 2(5)(iii)) to the
Custodian by delivering to the Custodian either (a) a
cheque or (b) a banker's draft for such dividend payable
to the Custodian (or cheques payable to the Registered
Holders) at least 3 business days prior to the date on
which such dividend is to be paid. The Custodian will
use its best efforts to remit Cash Dividends received by
it for distribution to the Registered Holders entitled
thereto pursuant to paragraph (i) in a manner such that
such dividends will be remitted to the Registered
Holders entitled thereto at the same time as Cash
Dividends are remitted to all other holders of Common
Shares.
<PAGE>
(viii) Notwithstanding anything provided herein to the
contrary, the Selling Shareholder may, at any time prior
to the application pursuant to this subsection (1) of
any Excess Proceeds or Excess Dividends, the disposition
of any Distributed Property or the registration of any
Stock Dividend or securities or other property under a
Reorganization in the name of the Custodian, by written
notice given to the Custodian (with a copy of such
notice to each of the Company and the Security Agent)
waive its right to have the same soapplied, disposed of
or registered, as the case may be, to the extent set out
in such notice, and, in such event the Custodian shall,
subject to the provisions of subsection (2) and the
provisions of paragraph (iii) as to fractional shares,
forthwith pay or transfer to the Registered Holder the
amount of the Excess Proceeds, Excess Dividends,
Distributed Property, Stock Dividend or securities or
other property the application, distribution or
registration of which, as the case may be, was so
waived, net of any Withholding Tax applicable to amounts
payable to or credited in respect of a Registered
Holder.
(ix) For greater certainty, any payments or transfers made by
the Custodian to any Registered Holder of any amounts or
property in accordance with provisions of this
subsection shall be and be deemed to be made free and
clear of the Pledge.
(2) Liability for Taxes.
(i) As between each Registered Holder and the parties
hereto, the Registered Holder shall be liable for all
Taxes which may become payable by, on behalf of or for
the account of such Registered Holder.
(ii) For the purposes of this subsection (2), "distribution"
means any payment, issue or distribution to holders of
Common Shares of any Excess Dividend, Stock Dividend,
Distributed Property or any securities or other property
issued or distributed under a Reorganization. In the
event that the Company wishes or becomes bound to make
a distribution, other than a non-cash distribution
under a Reorganization, (a) the Company will fix a
record date (in this subsection, the "record date") for
the distribution for the purpose of determining which of
its shareholders will participate in the distribution,
(b) the Company will notify the Custodian and the
Selling Shareholder of the particulars of the
distribution, the record date and the date on which the
distribution will be paid or made (in this subsection,
the "payment date") forthwith following the
<PAGE>
determination by the directors of the Company of such
record date and payment date, but in any event not less
than 10 business days prior to the record date, and (c)
the Company will ensure that the record date will
precede the payment date by not less than 14 business
days. Each of the Custodian and the Company shall
provide the other with all information in its possession
necessary for the Custodian to determine the amount of
Withholding Tax to be remitted on behalf of each
non-resident Registered Holder and otherwise to perform
its obligations under this subsection.
(iii) Whenever the Company proposes to make a distribution in
respect of which the Custodian will become obligated to
withhold an amount in respect of Withholding Tax payable
by a non-resident Registered Holder, the Custodian shall
promptly upon receipt of the notice thereof in
accordance with paragraph (ii) give to each non-resident
Registered Holder a notice containing a statement of
such requirement, a request that the non-resident
Registered Holder remit to the Custodian the amount of
such Withholding Tax, or the Custodian's estimate
thereof, and a statement that upon failure to remit such
payment the non-resident Registered Holder will become
liable to pay such amount to the Selling Shareholder and
that amounts properly otherwise payable to such
non-resident Registered Holder may be reduced in whole
or partial satisfaction of such liability. The request
for payment shall set out the manner in which payment is
to be made, the date before which payment must be made
(which date shall precede the payment date by no less
than 3 business days) and the consequences of failure to
make such payment.
(iv) In the event that a non-resident Registered Holder fails
to remit the payment referred to in paragraph (iii), and
if the Custodian or the Security Agent shall receive a
demand for or be obliged (on behalf of the Company or
otherwise) to withhold and remit any Withholding Tax from
or in respect of a distribution to be made or credited
to, on behalf of or for the account of such non-resident
Registered Holder, the Custodian shall, and is hereby
authorized to, withhold the amount of the Withholding Tax
from the relevant distribution.
(v) To the extent that the withholding and remittance
provided for under paragraph (iv) would reduce the amount
of the distribution to be paid to the Security Agent and
applied pursuant to subsection (1) to an amount which is
less than the amount to be so paid and applied with
respect to the Related Shares of any other Registered
<PAGE>
Holder, then (a) if the withholding and remittance is in
respect of an Excess Dividend or Distributed Property
such withheld amount shall be deemed to have been paid to
the Security Agent and applied, in accordance with
subsection (1), on account of the Final Instalment and
the Second Instalment, if applicable, with respect to
such non-resident Registered Holder's Related Shares and
the Selling Shareholder shall be deemed to have paid on
account of such Withholding Tax on behalf of such
non-resident Registered Holder such amount as is equal to
the amount withheld and remitted by the Custodian
pursuant to paragraph (iv) and such non-resident
Registered Holder shall be liable to pay the Selling
Shareholder an amount equal to any such amount so deemed
to be paid or (b) if the withholding and remittance is in
respect of a Stock Dividend or a non-cash distribution
under a Reorganization then, prior to any such payment
being made to the Selling Shareholder, the Selling
Shareholder shall make arrangements satisfactory to the
Custodian whereby the Selling Shareholder shall pay to
the Custodian on behalf of such non-resident Registered
Holder such amount as is equal to the Withholding Tax
required to be withheld and remitted by the Custodian,
prior to the time required for remittance of such
Withholding Tax to the applicable governmental
authorities and such non-resident Registered Holder shall
be liable to pay the Selling Shareholder any such amount
paid by the Selling Shareholder to the Custodian. Any
amount paid or deemed to be paid on behalf of a
non-resident Registered Holder by the Selling Shareholder
pursuant to this paragraph shall bear interest at the
prime rate plus one per cent,calculated daily and
compounded monthly from the date of payment or deemed
payment. The Custodian shall maintain a separate
register representing the identity of and amount owing by
each such non-resident Registered Holder to the Selling
Shareholder. The Custodian may withhold any such amount
owing by a non-resident Registered Holder from any
concurrent or subsequent distribution or payment that
would, were it not for such withholding, have been
actually made to such non-resident Registered Holder and
shall apply amounts so withheld to reimburse the Selling
Shareholder for amounts paid or deemed to have been paid
by it pursuant to this paragraph.
(vi) Any amount withheld by the Custodian on account of
Withholding Tax, including all such amounts paid or
deemed to be paid on behalf of a non-resident Registered
Holder by the Selling Shareholder pursuant to paragraph
(v) or in respect of a Cash Dividend which is not an
<PAGE>
Excess Dividend, shall be remitted by the Custodian to
the appropriate government authorities within the time
required by law and evidence thereof shall be delivered
to the Company and the Selling Shareholder forthwith.
(vii) The obligation of a non-resident Registered Holder to pay
to the Selling Shareholder all amounts owing pursuant to
paragraph (v) shall survive (a) the sale or transfer of
any or all of the non-resident Registered Holder's
Instalment Receipts to any other party and (b) payment in
whole or in part of the Second Instalment and the Final
Instalment in respect of the non-resident Registered
Holder's Instalment Receipts. The Custodian and the
Selling Shareholder shall be entitled to withhold
delivery of certificates for Second Instalment Receipts,
if applicable, and of share certificates in respect of
the Related Shares to which such non-resident Registered
Holder may be entitled until such payment has been
received and if the non-resident Registered Holder is
also a Defaulting Purchaser, such obligation may be
recovered in accordance with paragraph 5(4)(vi).
Notwithstanding the foregoing, the obligation of a
non-resident Registered Holder to pay the Selling
Shareholder all amounts owing under paragraph (v) is a
personal obligation of the non-resident Registered Holder
and shall not be assumed by or deemed to be assumed by
any subsequent transferee of the Instalment Receipt or
the Related Shares held by such non-resident Registered
Holder.
(viii) Each of the Company and the Custodian shall, from time to
time at the request of the other, acting reasonably,
provide to the other such information as the requesting
party may reasonably request as to Registered Holders
which the Custodian or the Company believe are
Intermediaries. In connection with any proposed payment
or distribution to holders of Common Shares, the Company
may give to any such Intermediary notice specifying a
record date and a payment date in respect of such
proposed distribution and requesting the Intermediary, if
applicable, to give written notice to the Company and the
Custodian, no later than the second business day
immediately following the record date (which notice shall
only be effective if received by the Company by such
date):
(a) that the Intermediary holds Instalment
Receipts on behalf of Non-registered Holders
in respect of whom Taxes will be payable in
connection with the distribution;
<PAGE>
(b) providing details of the names, addresses,
holdings of Instalment Receipts, Withholding
Tax payable (if reasonably calculable by the
Intermediary) and such other details
concerning such Non-registered Holders as the
Company or the Custodian may reasonably
require; and
(c) authorizing and directing the Company, and the
Custodian to pay, credit, withhold and remit
such Withholding Tax on account of such
Non-registered Holders in respect of the
distribution or to the appropriate
governmental authorities within the required
time.
(ix) Upon receipt from an Intermediary of a proper notice in
accordance with paragraph (viii), the provisions of
paragraphs (i) to (vii) shall apply, mutatis mutandis, in
respect of each Non-registered Holder of Instalment
Receipts listed in such notice, as if each reference in
those paragraphs to a Registered Holder were a reference
to such Non-registered Holder; provided, however, that
the rights of the Custodian and the Selling Shareholder
under this subsection in respect of a failure by a
Non-registered Holder to make payment in respect of
Withholding Tax in accordance with paragraphs (iii) and
(v), shall continue as against the Registered Holder of
the relevant Instalment Receipts and the liability of
such Registered Holder in respect thereof shall be joint
and several with any liability of such Non-registered
Holder in respect thereof.
(x) Each of the Company, the Selling Shareholder and the
Custodian shall be entitled to rely upon the Register as
being accurate, and shall not incur nor assume any
liability to any person, including any Registered Holder,
for such reliance upon the Register. In the event an
Intermediary delivers a notice in accordance with
paragraph (viii), each of the Company, the Selling
Shareholder and the Custodian shall be entitled to rely
upon such notice as being accurate, and shall not incur
nor assume any liability to any person, including any
Intermediary, any Registered Holder or any Non-registered
Holder, for such reliance upon such notice.
(xi) The provisions of this subsection shall apply
notwithstanding any other provision of this agreement.
<PAGE>
(3) Meetings of the Company, Attendance, Voting.
(i) Whenever the Company proposes to convene a general
meeting of its shareholders (the record date for which
meeting is after the date of this agreement and before
the date on which the Final Payment Time occurs), other
than a meeting of the holders of a specific class or
series of its shares other than Common Shares, it shall
in the manner provided in subsection 10(1) and within the
time periods required by applicable law (including the
requirements of NP 41), send to each Registered Holder as
of the applicable record date for such meeting a copy of
the notice of the meeting and all other materials (except
forms of proxy) sent to the registered holders of Common
Shares together therewith, at the same date (or as soon
thereafter as is reasonably practicable) as such notice
and other material is sent to the registered holders of
such Common Shares. The Company shall provide and
enclose with such copy of the notice a form of
appointment whereby the Registered Holder may appoint a
person (who may be such Registered Holder) as proxy in
relation to the Related Shares represented by such
Instalment Receipt to act and vote at the meeting to the
same extent as if such Registered Holder were the
registered holder of such Related Shares. Such forms
shall otherwise be drawn in such manner and with such
content as the Custodian and the Company may approve
(such approval not to be unreasonably withheld or
delayed) and in any event shall be subject to compliance
with the articles and the by-laws of the Company and all
applicable law. The Custodian shall execute and deliver
to the Company prior to the meeting proxies authorizing
the Registered Holders as of the applicable record date,
with power of substitution, to act and vote at the
meeting in respect of their respective Related Shares on
behalf of the Custodian as registered holder of the
Instalment Shares.
(ii) If, following the sending of the materials referred to in
paragraph (i) in respect of any meeting, a Registered
Holder shall transfer the Registered Holder's Instalment
Receipts or any part thereof or have any of the
Registered Holder's Related Shares sold or accepted as
provided for in subsection 5(4), the provisions of
subsection 138(2) or (3) of the CBCA shall apply to such
Registered Holder as if such holder had been the
registered holder of the Related Shares and had
transferred the ownership thereof after the applicable
record date. If for any reason the Custodian acts on or
fails to act on any transfer, neither the transferor nor
the transferee nor any other party hereto shall be
<PAGE>
entitled to object or have any action or claim in respect
thereof against the Custodian.
(iii) If in respect of any meeting of shareholders of the
Company any Registered Holder fails to exercise or is
lawfully prevented from exercising the Registered
Holder's right under this agreement to be represented at
such meeting, the Custodian shall not exercise at such
meeting the voting rights attached to the Instalment
Shares to which such Registered Holder's Instalment
Receipts relate and the Registered Holder shall not be
entitled to object.
(iv) The Custodian shall not agree to the abridgement of the
required time for the giving of any notice, or to waive
notice, of any meeting of shareholders of the Company or
sign a resolution in writing of shareholders of the
Company without first obtaining the authorization of the
Registered Holders in the manner provided in Schedule 4.
(4) General.
(i) A Registered Holder that, if registered as the holder of
such Registered Holder's Related Shares, would have some
right under law or by statute or by virtue of the
articles or the by-laws of the Company not otherwise
expressly dealt with in this section (other than the
right to be registered as the owner of or receive or
transfer the share certificates representing the Related
Shares), may give written notice to the Custodian
requiring it to exercise those rights on its behalf as it
shall direct and at its expense.
(ii) If the Custodian receives a notice referred to in
paragraph (i), the Custodian may as a condition of
compliance require from the Registered Holder that the
Registered Holder lodge the applicable Instalment Receipt
with the Custodian and provide such security and/or
indemnity as to costs, expenses or other liabilities as
the Custodian may reasonably require and shall subject to
the foregoing exercise on behalf of that Registered
Holder as it may direct the rights in question.
(iii) Notwithstanding paragraph (i), if the registered holders
of Common Shares are entitled to a right to dissent under
section 190 of the CBCA prior to the Final Payment Time
in connection with any proposed action of the Company,
then the Company shall offer a right of dissent to
Registered Holders to the same extent that registered
holders of Common Shares have a right of dissent under
section 190 of the CBCA, subject to the provisions of
<PAGE>
this paragraph. The Custodian shall (after consultation
with the Company), if so directed by a Registered Holder,
but subject to the Custodian's rights under paragraph
(ii), deliver a written objection pursuant to subsection
190(5) of the CBCA in respect of all but not less than
all of the Related Shares represented by such Registered
Holder's Instalment Receipts and shall thereafter remit
to such Registered Holder the notice received under
subsection 190(6) of the CBCA. The Registered Holder
shall, if it desires to proceed to deliver a demand for
payment under subsection 190(7) of the CBCA, first duly
pay all unpaid Instalments and other amounts owing to the
Selling Shareholder hereunder in respect of the
Registered Holder's Instalment Receipts and become the
registered holder of the relevant Related Shares, in
which case the Company shall not object to the continued
exercise of rights of dissent in respect of such shares
solely on the grounds that the shares have been
transferred from the Custodian to the Registered Holder
pursuant to this agreement following the delivery of the
written objection by the Custodian referred to above.
The Registered Holders acknowledge that the foregoing
procedure is necessary in order to protect the value of
the Collateral held pursuant to section 2 by the Security
Agent on behalf of the Selling Shareholder.
(iv) Notwithstanding paragraph (i), a Registered Holder of an
Instalment Receipt shall not be entitled to elect to
receive Stock Dividends in lieu of Cash Dividends.
(5) Convening of Meetings. Meetings of the Registered Holders may
be convened and held in accordance with the provisions of Schedule
4.
(6) Transfers of Instalment Receipts.
(i) A Registered Holder may transfer any of the
Registered Holder's Instalment Receipts, and
the rights represented thereby, in the manner
and subject to the terms and conditions set
out in this agreement and the schedules
hereto. A transfer of an Instalment Receipt
by the Registered Holder of such Instalment
Receipt shall constitute a transfer of such
Registered Holder's rights hereunder in
respect of such Instalment Receipt and the
Related Shares.
<PAGE>
(ii) A person, including a transferor, who, directly or
indirectly or through Intermediaries, requests
registration of the transfer of an Instalment Receipt, is
deemed to warrant such person's authority to do so as or
on behalf of the transferee.
(iii) Instalment Receipts shall, as between the transferor and
transferee, be transferable by delivery thereof properly
endorsed or accompanied by proper instruments of transfer
in suitable form for transfer by delivery.
(iv) Except in respect of the transfers provided for in
subsection 2(4), which shall be effected as provided for
in that subsection, in order for a transferee of an
Instalment Receipt to be entitled to obtain registration
on the Register in respect of a transfer of such
Instalment Receipt, the Registered Holder of such
Instalment Receipt and the transferee shall be required
to comply with the transfer requirements set out in the
Instalment Receipt.
(v) If any Instalment Receipt shall become defaced, lost,
stolen or destroyed, then it may be replaced on such
terms, if any, as to evidence and indemnity with or
without security (if such Instalment Receipt is lost,
stolen or destroyed) as the Custodian may think fit but,
in the case of defacement, the defaced Instalment Receipt
shall be surrendered to the Custodian before a new
Instalment Receipt is issued. In the case of loss, theft
or destruction, the Registered Holder shall also pay to
the Custodian (if demanded) all expenses incidental to
the investigation of evidence of loss, theft or
destruction and the preparation of the requisite form of
indemnity as aforesaid. Any such indemnity shall, if so
required by the Custodian, be in the form of an
open-penalty bond for an indefinite amount in favour of
the Selling Shareholder and the Custodian issued by an
insurance company licensed to carry on business in the
Province of Ontario.
(vi) Upon the registration on the Register of a transfer of an
Instalment Receipt, the transferor of such Instalment
Receipt shall cease to have any obligation to pay the
Instalments in respect of the Instalment Shares
represented by such Instalment Receipt, which obligation
shall be conclusively deemed to have been assumed by the
transferee of such Instalment Receipt. Notwithstanding
the foregoing provisions of this paragraph, upon the
registration in the Register of the transfers of the
Underwriters' Receipt from the Managing Underwriter, the
<PAGE>
Underwriters shall cease to have any further rights under
this agreement with respect to such Instalment Receipt
and no recourse may be had against them in respect of any
obligations under or pursuant to such Instalment Receipt
except by way of enforcement against the Collateral as
provided in this agreement, and the liability of the
Underwriters in respect of such Instalment Receipt shall
be limited to the extent, if any, that such liability may
be required for the purposes of enforceability and
enforcement of the Pledge.
(vii) In the event that:
(a) an Intermediary is the Registered Holder of an
Instalment Receipt at the Second Payment Time or
the Final Payment Time, as applicable;
(b) such Intermediary holds the Instalment Receipt on
behalf of a Non-registered Holder; and
(c) such Non-registered Holder has failed to pay in
full, or cause to be paid in full, when due, to the
Custodian the Second Instalment or the Final
Instalment, as applicable, in respect of the
Instalment Receipts held on its behalf by such
Intermediary (any such Non-registered Holder being
referred to in this paragraph as a "Non-registered
Defaulting Purchaser");
then, forthwith after the Second Payment Time or the
Final Payment Time, as applicable, but in any event prior
to the Selling Shareholder having realized upon the
Collateral, such Intermediary may, notwithstanding
subsection 8(11), cause to be transferred into the name
of such Non-registered Defaulting Purchaser the
Instalment Receipts held by such Intermediary on behalf
of such Non-registered Defaulting Purchaser, and the
Custodian shall register such transfer into the name of
such Non-registered Defaulting Purchaser.
(viii) To the extent not inconsistent with the terms of this
agreement, the provisions of the CBCA respecting the
transfer of securities shall apply, mutatis mutandis, to
the transfer of Instalment Receipts.
(7) Notices, Reports, etc. Whenever the Company shall send to the
Custodian in its capacity as registered holder of Instalment Shares
any report, accounts, financial statement, circular or other
document relating in any way to the affairs of the Company, the
Company shall furnish to the Custodian sufficient quantities
<PAGE>
thereof to enable the Custodian to send, and the Custodian shall
send as soon as is reasonably practicable, to each Registered
Holder a copy thereof, provided that no Registered Holder shall by
virtue of this subsection become entitled thereto unless the
Registered Holder would be so entitled if the Registered Holder
were registered as a holder of Common Shares.
(8) Inspection of the Register. A Registered Holder may, upon
production of satisfactory evidence that the Registered Holder is
a Registered Holder, examine during the usual business hours of the
Company or the Transfer Agent or Custodian, as the case may be, and
may take extracts from, free of charge, the Register, any
securities register of the Company, the articles and the by-laws of
the Company, the minutes of meetings and resolutions of
shareholders of the Company and copies of all notices filed with
the Director under the CBCA. Such examination shall take place at
the principal Stock and Bond Transfer office of the Custodian in
Toronto in the case of the Register; at the principal office of the
Transfer Agent or other agent of the Company in the case of any
securities register of the Company; and at the registered office of
the Company in the case of all other such records.
(9) Record Dates. The record date in respect of any of the rights
conferred by the holding of Instalment Receipts shall be the same
record date as that fixed by the Company in respect of the Related
Shares.
(10) Payments by Cheque. Any moneys to be distributed by the
Custodian to a Registered Holder may be paid by cheque sent by
mail, postage prepaid, to the Registered Holder, or in the case of
joint Registered Holders to the First Named, to the address shown
on the Register, or to such address as the Registered Holder may in
writing direct. Every such cheque sent by mail shall be at the
risk of the Registered Holder and shall be made payable to the
order of the person to whom it is sent and the sending of such
cheque shall satisfy and discharge all liability for the amount
thereof as between the Registered Holder, on the one hand, and the
Custodian, the Company and the Selling Shareholder, on the other,
unless such cheque is not paid on due presentation; provided that
in the event of the non-receipt of such cheque by the person to
whom it is sent, or the loss or destruction thereof, the Custodian,
upon being furnished with reasonable evidence of such non-receipt,
loss or destruction and indemnity satisfactory to it, shall issue
to such person a replacement cheque for the amount of such cheque.
Unless otherwise provided by applicable law, any amount represented
by such cheque which has not been presented for payment within 6
years after the date on which it was issued or which remains
unclaimed for a period of 6 years after the date of such
distribution shall be forfeited and shall be paid by the Custodian
at the written request of the Selling Shareholder, to or to the
order of the Selling Shareholder.
<PAGE>
(11) U.S.Tax Information Reporting. For purposes of the
"portfolio interest" rules under United States tax law, the
Custodian shall act as a foreign paying agent in respect of the
Registered Holders who are U.S. Persons with respect to their
obligation to pay Instalments to any payee who is a foreign
corporation for purposes of Section 881(a) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code") or a nonresident
alien individual for purposes of Section 871(a) of the Code. In
the event of sale or transfer by the Selling Shareholder of the
right to receive Instalments or in the event of any subsequent
transfer, the purchaser or the transferee shall be required to
provide the Custodian with 2 duly completed copies of United States
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, or any other applicable form duly requested by the Custodian,
as well as a certificate representing that the purchaser or
transferee is neither a 10%, within the meaning of Section
871(h)(3)(B) of the Code, shareholder of any of the Registered
Holders who are U.S. Persons nor a controlled foreign corporation
with respect to which any of the Registered Holders who are U.S.
Persons is a related person within the meaning of Section 864(d)(4)
of the Code (or, in lieu of such form and certificate, such
purchaser or transferee may provide the Custodian, if applicable,
with United States Internal Revenue Service Form 1001 or 4224
representing that such purchaser or transferee is exempt from
United States federal withholding tax on the portion of any
Instalment constituting interest or original issue discount for
United States federal income tax purposes), unless such purchaser
or transferee is a U.S. Person or a corporation organized under the
laws of the United States or any State thereof (and furnishes the
Custodian with a duly completed United States Internal Revenue
Service Form W-9). If such a purchaser or transferee does not
provide the Custodian with the appropriate forms and certificate
and otherwise fails to demonstrate its exemption from United States
federal withholding tax on any portion of an Instalment
constituting interest or original issue discount for United States
federal income tax purposes, then the Custodian shall withhold the
appropriate amount of tax from any payment to such purchaser or
transferee from Registered Holders who are U. S. Persons and remit
such tax to the United States Internal Revenue Service on behalf of
the Registered Holders who are U.S. Persons. Notwithstanding the
provisions of subsection 10(2), the Selling Shareholder and the
Custodian may, at any time and from time to time, modify, amend,
supplement or delete all or any part of this subsection, provided
that, in their reasonable opinion, such modification, amendment,
supplement or deletion does not materially prejudice the Registered
Holders as a group or the Underwriters.
8. The Custodian and the Security Agent
<PAGE>
(1) Appointment of Custodian. The Selling Shareholder hereby
appoints Montreal Trust Company of Canada as the initial Custodian
under and for the purposes of this agreement, and Montreal Trust
Company of Canada hereby accepts such appointment.
(2) Appointment of Security Agent. The Selling Shareholder hereby
appoints The R-M Trust Company as the initial Security Agent under
and for the purposes of this agreement, and The R-M Trust Company
hereby accepts such appointment.
(3) Termination of Appointment. The Selling Shareholder may at any
time, and within 60 days after the receipt by it of written notice
from the Custodian that it wishes its appointment terminated or
from the Security Agent that it wishes its appointment terminated,
shall, terminate such appointment. The Selling Shareholder shall,
concurrently with any such termination of the appointment of the
Custodian or the Security Agent, appoint a new Custodian or a new
Security Agent, as the case may be. Any appointment of a new
Custodian or a new Security Agent shall be represented by a written
agreement among the new Custodian or Security Agent, the Selling
Shareholder and the Company, in which the new Custodian or Security
Agent shall undertake and agree to perform its obligations as such
under this agreement. Each of the Custodian and the Security Agent
shall be a body corporate registered to carry on business as a
trust corporation under the laws of the Province of Ontario or, in
the case of the Security Agent, a corporation having its registered
and principal office in the Province of Ontario and an affiliate of
or otherwise under the de facto control and management of such a
registered trust corporation.
(4) Notice of Change of the Custodian or the Security Agent.
Notice of any change of the Custodian or the Security Agent shall
be given by the successor Custodian or the successor Security
Agent, as the case may be, to the Registered Holders within 30 days
after the appointment of such successor Custodian and/or successor
Security Agent.
(5) Consequences of Change of the Custodian or the Security Agent.
If the appointment of the Custodian hereunder terminates for any
reason whatsoever, the Custodian shall, on the date on which such
termination takes effect, deliver to the Transfer Agent duly
executed instruments of transfer and assignment in favour of the
successor Custodian of the Instalment Shares, vest or cause to be
vested in the successor Custodian any cash, securities or other
property then held by it hereunder and deliver to the successor
Custodian the Register and all other books and records maintained
by it pursuant to this agreement, upon payment of any outstanding
fees owed. Upon such delivery and vesting being carried out, the
successor Custodian shall be substituted for its predecessor for
all purposes hereof. If the appointment of the Security Agent
<PAGE>
hereunder terminates for any reason whatsoever, the Security Agent
shall, on the date on which such termination takes effect, deliver
to the Transfer Agent the share certificate(s) representing the
Instalment Shares and vest or cause to be vested in the successor
Security Agent any cash, securities or other property held by it
hereunder. Upon such delivery and vesting being carried out, the
successor Security Agent shall be substituted for its predecessor
for all purposes hereof. Upon the delivery to the Transfer Agent
of the share certificate(s) representing the Instalment Shares and
duly executed instruments of transfer and assignment as aforesaid,
the Company shall cause the registration of the Instalment Shares
in the name of the successor Custodian or the delivery to the
successor Security Agent of the share certificate(s) representing
the Instalment Shares, registered in the name of the successor
Custodian, as the case may be. Any expense payable as a result of
the termination of the appointment of the Custodian or the Security
Agent shall be paid by the Selling Shareholder if such termination
is at the instance of the Selling Shareholder; provided that if the
termination of the Custodian is at its request and without any
prior request or fault of the Selling Shareholder, such expense
shall be paid by the Custodian.
(6) Remuneration and Reimbursement of the Custodian and the
Security Agent. The Custodian and the Security Agent shall each be
remunerated for the performance of its duties hereunder, and
reimbursed in respect of its costs and expenses, by the Selling
Shareholder and by Sun at such rate and in such manner as may from
time to time be agreed in writing by the parties concerned.
(7) The Register. The Custodian shall cause a register to be kept
at its principal Stock and Bond Transfer office in the Municipality
of Metropolitan Toronto, Ontario and shall ensure that the
following particulars are entered therein:
(i) the names and addresses of the Registered Holders;
(ii) a statement of each holding of Related Shares represented
by Instalment Receipts (for which purpose separate
holdings by the same Registered Holder need only be
aggregated if the Registered Holder's name and address in
respect of each holding are identical);
(iii) the date on which each person was entered in the Register
as a Registered Holder in respect of each holding; and
(iv) the date on which each person ceased to be the Registered
Holder in respect of each holding.
(8) Records Retention. The Custodian shall retain until the
termination of this agreement, and the Selling Shareholder shall
retain or cause to be retained until the sixth anniversary of the
day of the Final Payment Time:
<PAGE>
(i) all instruments of transfer of Instalment Receipts which
are lodged for registration (or copies thereof),
including the details shown thereon of the persons by or
through whom they are lodged; and
(ii) all cancelled Instalment Receipts (or copies thereof).
(9) Availability of Records. The Custodian shall ensure that the
Register and any other books or records caused to be maintained by
it hereunder are promptly made available, and that copies thereof
are supplied, as and when requested by the Selling Shareholder or
the Company so to do.
(10) Transfer Facilities. The Custodian shall cause facilities to
be maintained for the transfer and delivery of Instalment Receipts
at its principal Stock and Bond Transfer office in each of the
Designated Cities.
(11) No Transfers After Second Payment Time or Final Payment Time.
Except as provided in paragraph 7(6)(vii), the Custodian shall not
accept any transfer of a First Instalment Receipt after the Second
Payment Time or any transfer of a Second Instalment Receipt after
the Final Payment Time.
(12) Documents Forwarded to the Selling Shareholder. Immediately
prior to the termination of this agreement, the Custodian shall
deliver to the Selling Shareholder, or as it may direct in writing,
the documents referred to in subsections (7) and (8) and all other
property in its possession as a result of this agreement and not at
such time otherwise disposed of in accordance with the terms of
this agreement.
(13) Custodian's Performance of Duties. In performing its duties
hereunder, the Custodian will act diligently, honestly and in good
faith and, subject always to express obligations to the Selling
Shareholder in respect of the Collateral specified in this
agreement, with a view to the best interests of the Registered
Holders and shall exercise the same degree of care as a reasonably
prudent custodian would exercise in comparable circumstances.
(14) Security Agent's Performance of Duties. In performing its
duties hereunder, the Security Agent will act diligently, honestly
and in good faith and with a view to the best interests of the
Selling Shareholder and shall exercise the same degree of care as
a reasonably prudent security agent would exercise in comparable
circumstances.
(15) No Indemnity. It is agreed that neither the Custodian nor the
Security Agent shall have any claims against the Underwriters or
the Company for any indemnification hereunder.
<PAGE>
9. Protection and Indemnity of the Custodian, the Security
Agent and the Company
(1) Reliance on Experts. Each of the Custodian and the Security
Agent may rely and act on the opinion or advice of, or information
obtained from, any lawyer, banker, broker, accountant or other
expert appointed or retained by either the Company or the Selling
Shareholder and the Custodian and the Security Agent shall not be
responsible for any loss occasioned by so relying and acting.
(2) Reliance on Certificate. Each of the Custodian and the
Security Agent may in appropriate circumstances request, and may
rely on and accept as sufficient evidence of any fact or matter, a
certificate signed by any authorized signatory or signatories of
the Company or the Selling Shareholder, whichever is appropriate,
or, in addition, in the case of the Security Agent, of the
Custodian, as to the fact or matter upon which it may, in the
exercise of any of its duties, powers, authorities and discretions
hereunder, be required to be satisfied or to have information, and
it shall not be bound to call for further evidence and not be
responsible for any loss that may be occasioned by acting on any
such certificate.
(3) Discretion. Each of the Custodian and the Security Agent
shall, as regards all the powers, authorities and discretions
hereby vested in it, have reasonable discretion as to the exercise
thereof and it shall not be responsible for any loss, costs,
damages, expenses or inconvenience which may result from the
exercise or non-exercise thereof in the absence of negligence.
(4) Indemnification of Custodian and Security Agent. The Custodian
and the Security Agent, and every attorney, manager, agent,
delegate or other person appointed by either of them under this
agreement (the "Agents") is each hereby indemnified by the Selling
Shareholder and by Sun from and against all losses, liabilities,
claims, proceedings, actions, demands and damages and all costs and
expenses in connection therewith which it may incur or which may be
made or brought against it as a result of the execution or
purported execution of its duties or obligations under or pursuant
to this agreement; provided that this indemnity applies only to the
extent that such losses, liabilities, claims, proceedings, demands
or damages or costs or expenses in connection therewith do not
result from the wilful act or default or negligence of, or breach
of the obligations of the Custodian or the Security Agent hereunder
by, the Custodian or the Security Agent, as applicable, or any of
its Agents.
(5) Indemnification of the Company. The Company is hereby
indemnified by the Selling Shareholder and by Sun from and against
all losses, liabilities, claims, proceedings, actions, demands and
damages and all costs and expenses in connection therewith which it
<PAGE>
may incur or which may be made or brought against it which arise
out of, or in connection with, this agreement; provided that this
indemnity applies only to the extent that such losses, liabilities,
claims, proceedings, actions, demands or damages or costs or
expenses in connection therewith do not result from the wilful act
or default or negligence of, or breach of its obligations hereunder
by, the Company.
(6) Notice of Claims. If any action or claim shall be brought
against the Custodian or the Security Agent, any of the Agents or
the Company in respect of which it appears to the Custodian or the
Security Agent or any Agent in question or the Company, as the case
may be, that indemnity may be sought by such person from the
Selling Shareholder and Sun pursuant to subsections (4) or (5), as
the case may be, the Custodian, the Security Agent and the Agent or
the Company, as the case may be, shall as soon as practicable
notify the Selling Shareholder and Sun in writing of such action or
claim and if the Selling Shareholder or Sun assumes the defence of
such action or claim in accordance with this subsection, the
Custodian, the Security Agent and the Agent, or the Company, as the
case may be, shall provide the Selling Shareholder and Sun, subject
to the indemnity contained in subsections (4) or (5), as the case
may be, with such information and assistance as the Selling
Shareholder and Sun shall reasonably request. The Selling
Shareholder and Sun shall, subject as hereinafter in this
subsection provided, be entitled (but not required) to assume the
defence of any such action or claim through legal counsel selected
by the Selling Shareholder and Sun and acceptable to the
indemnified party acting reasonably and no admission of liability
shall be made by the Selling Shareholder or by Sun or by the
indemnified party without, in each case, the prior written consent
of each of the others, such consent not to be unreasonably
withheld. An indemnified party shall have the right to employ
separate counsel in any such action or claim and participate in the
defence thereof, but the fees and expenses of such counsel shall be
at the expense of the indemnified party unless (a) the Selling
Shareholder and Sun fail to assume the defence of such action or
claim on behalf of the indemnified party within 21 days after
receiving notice of such action or claim, or (b) the Selling
Shareholder and Sun otherwise agree in writing, or (c) the named
parties to such action or claim include both the indemnified party
and the Selling Shareholder and/or Sun and the indemnified party
shall have been advised by counsel that there may be one or more
legal defences available to it that are different from or in
addition to those available to the Selling Shareholder and/or Sun,
as the case may be, and if the indemnified party notifies the
Selling Shareholder and Sun in writing that it elects to employ its
own legal advisers, in each of which cases the Selling Shareholder
and Sun shall not have the right to assume the defence of such
action or claim on behalf of the indemnified party, but the Selling
<PAGE>
Shareholder and Sun shall be liable to pay the reasonable fees and
expenses of one firm of separate counsel for all indemnified
parties and, in addition, one firm of local counsel in each
applicable jurisdiction.
(7) Limitation of Indemnities. The indemnities contained in
subsections (4) and (5) shall not extend to any losses,
liabilities, claims, proceedings, actions, demands or damages which
may result from the settlement or compromise of any action or claim
brought against the Custodian, the Security Agent or an Agent or
the Company, as the case may be, made or effected without the prior
written consent of the Selling Shareholder and Sun (such consent
not to be unreasonably withheld in a case where the Selling
Shareholder and Sun have not at the time such consent is sought
assumed the defence of the action or claim) or, except as provided
in subsection (6), to any legal expenses which may result from the
employment by the Custodian, the Security Agent or an Agent or the
Company, as the case may be, of its own legal advisers in
connection with any action or claim against it after the defence of
such action or claim has been assumed by the Selling Shareholder
and Sun.
(8) Reliance on Minutes. The Custodian shall not be responsible
for having acted upon any resolution purporting to have been passed
at any meeting of Registered Holders in respect whereof minutes
have been made and signed though it may subsequently be found that
there was some defect in the constitution of the meeting or the
passing of the resolution or that for any reason the resolution was
not valid or binding upon the Registered Holders.
(9) Non-Entitlement to Indemnity. Nothing in the preceding
subsections of this section shall, in any case in which the
Custodian or the Security Agent has failed to show the degree of
care and diligence required of it hereunder or by applicable law,
exempt the Custodian or the Security Agent from or indemnify it
against any liability in relation to its duties hereunder.
(10) Conflict of Interest. Each of the Custodian and the Security
Agent, in the performance of its obligations hereunder, shall be
the agent of the Selling Shareholder and not the agent of the
Underwriters or of any Registered Holder of an Instalment Receipt.
The Custodian shall not acquire, hold or deal with in its personal
capacity, either in its own name or in the name of a nominee, any
Instalment Receipts or any Instalment Shares but may so acquire,
hold or deal with any other shares or securities or interests
therein for the time being issued by the Company or enter into any
contract or have financial dealings with the Company or the
Selling Shareholder without being liable to account therefor under
this agreement. In addition, the Custodian shall be entitled to
acquire, hold and deal in Instalment Receipts and, after the
<PAGE>
issuance as provided in subsection 5(3) of share certificates
representing any Instalment Shares, such Instalment Shares, on
behalf of any estate, trust or person in respect of which it is an
executor, trustee or statutory guardian of property and on behalf
of any customer of the Custodian, in each case without being liable
to account therefor under this agreement. The Security Agent shall
not acquire, hold or deal with in its personal capacity, on behalf
of any estate, trust or person in respect of which it is an
executor, trustee or statutory guardian of property, on behalf or
for the account of any other person or in any other capacity
whatsoever, and either in its own name or in the name of such
estate, trust or person or the name of a nominee, and will not in
any manner act as the agent of any Registered Holder of, any
Instalment Receipt or, except as specifically provided herein and
as agent for the Selling Shareholder, any Instalment Shares.
10. General
(1) Notices.
(i) Any notice to be given by the Company or the Selling
Shareholder or Sun or the Custodian or the Security Agent
to any of the others shall be signed by an authorized
signatory of the party giving the notice. Any such notice
shall be addressed to the relevant party at its address
set out below or at such other address as may be notified
from time to time in accordance with this section. Any
such notice to the Selling Shareholder shall be addressed
to Three Christina Center, 201 North Walnut Street, Suite
1300, Wilmington, DE 19801, Attention: President. Any
such notice to Sun shall be addressed to Ten Penn Center,
1801 Market Street, Philadelphia, PA 19103-1699,
Attention: Assistant General Counsel. Any such
notice to the Company shall be addressed to 36 York Mills
Road, North York, Ontario M2P 2C5, Attention: Vice
President and General Counsel. Any such notice to the
Custodian shall be addressed to 8th Floor, 151 Front
Street West, Toronto, Ontario M5J 2N1, Attention:
Manager, Client Services. Any such notice to the
Security Agent shall be addressed to 5th Floor, 393
University Avenue, Toronto, Ontario M5G 2M7, Attention:
Manager, Corporate Trust. Any such notice to the
Underwriters shall be given to the Managing Underwriter
and shall be addressed to Nesbitt Burns Inc., Suite 5000,
1 First Canadian Place, Toronto, Ontario M5X 1H3,
Attention: D. K. Johnson.
(ii) Any notice to a party hereto shall be deemed to have been
duly given if personally delivered.
<PAGE>
(iii) Any notice to be given and any documents to be sent to
any Registered Holder may be given or sent to the
Registered Shareholder's address shown on the Register in
any manner permitted by the CBCA and the by-laws of the
Company from time to time in force in respect of notices
to shareholders and shall be deemed to be received (if
given or sent in such a manner) at the time specified in
the CBCA or such by-laws, the provisions of which shall
apply mutatis mutandis to notices given or documents sent
to Registered Holders.
(iv) Whenever payments are to be made or documents are to be
sent to any Registered Holder by the Custodian or by the
Selling Shareholder or by the Company, or by a Registered
Holder to the Custodian or to the Selling Shareholder or
to the Company, then if such payment is made or such
document is sent by any manner other than personal
delivery, such payment or document be so made or sent at
the risk of the Registered Holder.
(2) Power to Amend. All and any provisions of this agreement and
the Instalment Receipts may from time to time be amended by
agreement among the Company, the Custodian, the Security Agent, the
Selling Shareholder and Sun in any respect which they deem
necessary or desirable, without the need for any consent by or on
behalf of the Underwriters or the Registered Holders, for the
purpose of curing any ambiguity or of curing, correcting or
supplementing any defective provision contained herein or in any
manner which the Company, the Custodian, the Security Agent, the
Selling Shareholder and Sun may deem necessary or expedient and
which does not in their reasonable opinion materially prejudice the
Registered Holders as a group or the Underwriters. Any other
amendments shall, before being made by the Company, the Custodian,
the Security Agent, the Selling Shareholder and Sun, be authorized
by Special Resolution. The Underwriters shall not be required or
entitled to be parties to any amending agreement, but no amendment
of this agreement shall in any manner modify or extend the
obligations or liabilities of the Underwriters hereunder. If this
agreement is amended, references herein to this agreement shall,
unless the context otherwise requires, be construed, as from the
date from which such amendment is expressed to be made, as
references to this agreement as so amended.
(3) Compliance with Laws. The Custodian may require Registered
Holders from time to time to execute or furnish such documents and
to furnish such information as, in the reasonable opinion of the
Custodian, may be necessary or appropriate to comply with any
fiscal or other laws or regulations relating to the Related Shares
or the Instalment Receipts or to rights and obligations represented
by the Instalment Receipts.
<PAGE>
(4) Termination. This agreement and the rights and obligations of
the parties hereto shall terminate on the first day after the day
after which no further Instalments and other amounts payable
pursuant hereto in respect of the Instalment Shares remain unpaid
and no Instalment Shares or other property (other than cash
represented by cheques in favour of Registered Holders which have
not been presented for payment) remain deposited with the Custodian
or held by the Security Agent; provided, however, that such
termination shall not affect any obligation of any party hereto to
make any payment to any of the others or to Registered Holders
accrued at the date of termination or any obligation of a party
hereto to indemnify any of the other parties hereto (including,
without limitation, the indemnifications provided for in
subsections 9(4) and (5)) and that the provisions of paragraphs
5(4)(vi) and (viii) and 7(2)(vii) and subsections 7(10) and 8(8)
shall remain in full force and effect notwithstanding such
termination. From and after the Final Payment Time, the Instalment
Receipts shall cease, except as and to the extent provided in
subsection 5(3), to entitle the Registered Holders thereof to
become the registered holder of any Instalment Shares.
(5) Joint and Several Liability. The obligations of Sun and Sun
Canada under this agreement are joint and several and all
obligations of Sun or Sun Canada under this agreement are equally
the obligations of the other.
(6) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein and the courts of such
Province shall have exclusive jurisdiction over any dispute
hereunder, to which jurisdiction the parties attorn.
(7) Document in English. The parties hereto acknowledge that they
have requested and are satisfied that this agreement and all
documents relating thereto be drafted in the English language. Les
parties aux presentes reconnaissent qu'elles ont exige que la
presente convention et tous les documents qui s'y rattachent soient
rediges, et executes en anglais et s'en declarent satisfaites.
(8) Time of the Essence. Time shall be of the essence of this
agreement.
(9) Counterparts. This agreement may be executed in any number of
counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but
one and the same agreement.
11. Assignment; Successor Rights.
<PAGE>
(1) Assignment by the Selling Shareholder. The Selling
Shareholder may freely assign, either absolutely or by way of
security, this agreement and/or all or any part of its rights under
this agreement to any person (each, an "assignee") without the
consent of or notice to any other party hereto; provided, however,
that no such assignment shall, except as provided in subsection
(2), relieve the Selling Shareholder or Sun from all or any part of
its obligations hereunder.
(2) Assumption by Assignee. The Selling Shareholder may, but
shall not be bound to, deliver to the Company, the Custodian and
the Security Agent an agreement by which an assignee which is one
or more Canadian Schedule I banks assumes the obligations and
agrees to be bound by all the terms and conditions of this
agreement to the extent of the assignment to the assignee as if
such assignee had been an original party hereto. Upon any such
assignment and such assumption of the obligations of the Selling
Shareholder by an assignee, the Selling Shareholder and Sun, on the
one hand, and the Company, the Custodian and the Security Agent, on
the other hand, shall be mutually released from their respective
obligations hereunder to the extent of such assignment and
assumption and shall thenceforth have no liability or obligations
to each other to such extent, except in respect of matters which
shall have arisen prior to such assignment.
(3) Information to Assignee. The Selling Shareholder and Sun may
give any assignee or proposed assignee copies of financial
statements and other reports and information furnished to either of
them by or on behalf of the Company in connection with the offering
and sale of the Instalment Receipts if the Selling Shareholder and
Sun obtain from the assignee or proposed assignee substantially the
same agreement as to confidentiality, if any, as they have
furnished to the Company in connection with such statements,
reports and information, mutatis mutandis.
(4) Certificates, etc. The Company, the Custodian and the
Security Agent shall, without charge to the assignee, give such
certificates, acknowledgments and further assurances in respect of
this agreement as the Selling Shareholder, Sun or any assignee may
reasonably require in connection with any assignment pursuant to
subsection (1).
(5) No Set-Off. From and after the effective date of an
assignment to an assignee, no party to this agreement and no
Registered Holder shall have any right of set-off against any
amounts held by or under the control of such party hereunder or
pursuant hereto or against any amounts owing by such Registered
Holder hereunder, as the case may be, in respect of any
indebtedness of or claim against such assignee, whether settled or
not.
<PAGE>
(6) Assignment by Other Parties. None of the parties hereto other
than the Selling Shareholder may assign its rights under this
agreement, except as provided in section 8 in the case of the
Custodian and the Security Agent and in paragraph 7(6)(i) in the
case of a Registered Holder (including, without limitation, the
Managing Underwriter), without the prior written consent of the
parties hereto other than such proposed assignor.
(7) Successors and Assigns. Subject to the foregoing provisions
of this section, this agreement shall enure to the benefit of and
be binding upon the parties hereto and their respective successors
and permitted assigns.
IN WITNESS WHEREOF the parties have executed this agreement.
SUN CANADA, INC.
by:
Authorized Officer
SUN COMPANY, INC.
by:
Manager, Finance-Mergers and
Acquisitions
SUNCOR INC.
by:
NESBITT BURNS INC.
by:
GORDON CAPITAL CORPORATION
by:
<PAGE>
RBC DOMINION SECURITIES INC.
by:
WOOD GUNDY INC.
by:
SCOTIAMcLEOD INC.
by:
GOLDMAN SACHS CANADA
by GOLDMAN SACHS CANADA INC.
by:
MIDLAND WALWYN CAPITAL INC.
by:
<PAGE>
RICHARDSON GREENSHIELDS OF CANADA
LIMITED
by:
FIRST MARATHON SECURITIES LIMITED
by:
LEVESQUE BEAUBIEN GEOFFRION INC.
by:
TORONTO DOMINION SECURITIES INC.
by:
PETERS & CO. LIMITED
by:
<PAGE>
THE R-M TRUST COMPANY
by:
[Corporate Seal] Linda Whitfield
Senior Solicitor
and by:
Stephanie Knox
Account Officer
MONTREAL TRUST COMPANY
OF CANADA
by:
[Corporate Seal] Assistant Vice-President
and by:
Manager, Client Services
<PAGE>
SCHEDULE 1
Form of First Instalment Receipt
Printer's proof annexed
<PAGE>
SCHEDULE 2
Form of Second Instalment Receipt
Printer's proof annexed
<PAGE>
SCHEDULE 3
NOTICE OF PAYMENT DUE RELATING TO COMMON SHARES
OF SUNCOR INC.
SOLD BY SUN CANADA, INC.
[NAME OF REGISTERED HOLDER]
(1) No. of common shares Number of [Insert
for which payment is due: "First" or "Second",
as applicable]
Instalment Receipt:
---------------
(2) Amount of [Insert "Second"
or "Final", as applicable]
Instalment per common share
$13.00 [or as applicable]
(3) Total amount of [Insert "Second" or "Final", as applicable]
Instalments:
$
(4) Time and Date for Payment: by 1:00 p.m. (local time) [Second
Instalment, insert "June 10, 1996". Final Instalment, insert
"December 30, 1996".]
In accordance with the terms of the Instalment Receipt and Pledge
Agreement made as of June 8, 1995 and made among Sun Canada, Inc.,
Sun Company, Inc., Suncor Inc., Nesbitt Burns Inc. Gordon Capital
Corporation, RBC Dominion Securities Inc., Wood Gundy Inc.,
ScotiaMcLeod Inc., Goldman Sachs Canada, Midland Walwyn Capital
Inc., Richardson Greenshields of Canada Limited, First Marathon
Securities Limited, Levesque Beaubien Geoffrion Inc., Toronto
Dominion Securities Inc., Peters & Co. Limited, The R-M Trust
Company and Montreal Trust Company of Canada (the "Custodian") (the
"Instalment Receipt Agreement") the [Insert "Second" or "Final", as
applicable] Instalment of $13.00 per share on the number of common
shares of Suncor Inc. ("Common Shares") shown in (1) above is due
for payment not later than the time and date set out in (4) above.
The total amount of [Insert "Second" or "Final", as applicable]
Instalments shown in (3) above must be sent or delivered to the
Custodian at one of the addresses shown below together with your
[Insert "First" or "Second", as applicable] Instalment Receipts so
that they are actually received by the Custodian by such time.
<PAGE>
Failure to pay the total amount of the [Insert "Second" or "Final",
as applicable] Instalments at or before the time for payment set
out in (4) above and to satisfy the other requirements set out in
this paragraph may result in your Common Shares being accepted by
Sun Canada, Inc. in satisfaction of the obligations secured by the
pledge thereof which secures, or sold by the Custodian pursuant to
the pledge thereof securing, among other things, the [Insert
"Second" or "Final", as applicable] Instalments. The Instalment
Receipt Agreement also provides that you will be responsible for
your portion of the costs of sale, in the event of a sale and you
will be liable for any deficiency as and to the extent provided for
in such agreement.
In the Instalment Receipt Agreement, the Underwriters (as defined
therein) pledged the Common Shares purchased on an instalment basis
to secure payment of the Second and the Final Instalment. If
payment of the [Insert "Second" or "Final", as applicable]
Instalment is not duly received by the Custodian from a Registered
Holder of an Instalment Receipt at or prior to the time and date
set out in (4) above, the Instalment Receipt Agreement provides
that (except as set out below) any Common Shares (and any
substituted securities or property) then remaining pledged under
the Instalment Receipt Agreement in respect of such Instalment
Receipts, may, at the option of the Selling Shareholder, subject to
complying with applicable law, be reacquired by the Selling
Shareholder in full satisfaction of the obligations of such
Registered Holder. The Instalment Receipt Agreement further
provides that the Selling Shareholder may direct the Custodian to
sell the Common Shares and any substituted securities or property
in respect of which payment of the [Insert "Second" or "Final", as
applicable] Instalment was not duly received, in accordance with
the requirements of applicable law and of the Instalment Receipt
Agreement, and remit to the Registered Holder of the relevant
Instalment Receipt the Registered Holder's pro rata portion of the
proceeds of such sale after deducting therefrom the amount of the
remaining unpaid Instalments together with the Registered Holder's
pro rata portion of the costs of such sale, which costs shall not,
in any event, exceed $1.00 per Common Share. Notwithstanding the
foregoing, in the event that payment of the [Insert "Second" or
"Final", as applicable] Instalment in respect of an aggregate of
less than 5% of the Common Shares represented by Instalment
Receipts is not duly received by the Custodian when due, the
Custodian must sell the Common Shares or any substituted securities
or property in respect of which payment of the [Insert "Second" or
"Final", as applicable] Instalment has not been duly received and
apply the proceeds of such sale in the manner described above. The
Instalment Receipt Agreement provides that, unless the Selling
Shareholder shall have reacquired the Common Shares in full
satisfaction of the obligations of a Registered Holder, the
foregoing shall not limit any other remedies available to the
<PAGE>
Selling Shareholder against such Registered Holder of an Instalment
Receipt in the event the proceeds of such sale are insufficient to
cover the amount of the [Insert "Second" or "Final", as
applicable] Instalment and costs of sale (such costs not to exceed
$1.00 per Common Share), and accordingly, such Registered Holder
shall in such circumstances remain liable to the Selling
Shareholder for any such deficiency.
Registered Holders of Instalment Receipts who are non-residents of
Canada are required to pay the costs of all withholding taxes
payable in respect of any Cash Dividends, Excess Dividends, Stock
Dividends, Distributed Property or Reorganization. Any such
withholding tax is payable on such distributions even if the
payment thereof is directed to the Selling Shareholder on account
of the non-resident's unpaid Instalment and even if there is not
sufficient cash in the distribution to pay such withholding tax.
Provision for the payment of this tax by non-residents is set out
in the Instalment Receipt Agreement.
Following actual receipt of cleared funds in the total amount of
the [Insert "Second" or "Final", as applicable] Instalments and
satisfaction of the other requirements set out in the previous
paragraph, the Custodian will (except as provided in the Instalment
Receipt Agreement) cause a [Insert "Second Instalment Receipt" or
"share certificate", as applicable] for the number of Common Shares
shown in (1) above to be sent to you.
Payment may be made by certified cheque, banker's draft or money
order payable at par in Canada in Canadian dollars to MONTREAL
TRUST COMPANY OF CANADA at one of the addresses set out below.
All payments and deliveries are sent at the risk of the sender and
are only effective when cleared funds and such deliveries are
actually received. If payments or deliveries are made by mail,
registered mail is strongly suggested. The Custodian is not obliged
to re-present a cheque which is returned unpaid on first
presentation or to inform you that it has been so returned.
<PAGE>
Addresses of Montreal Trust Company of Canada to which payment may
be sent:
By Mail By Hand
Stock Transfer Services
151 Front Street West
8th Floor
Toronto, Ontario
M5J 2N1<PAGE>
Stock Transfer Services
151 Front Street West
8th Floor
Toronto, Ontario
M5J 2N1<PAGE>
<PAGE>
Stock Transfer Services
Place Montreal Trust
6th Floor
1800 McGill College Avenue
Montreal, Quebec
H3A 3K9
<PAGE>
Stock Transfer Services
411 - 8th Avenue S.W.
Calgary, Alberta
T2P 1E7
<PAGE>
Stock Transfer Services
Eaton Centre
10200 - 102 Avenue
Edmonton, Alberta
T5J 4B7
<PAGE>
Stock Transfer Services
510 Burrard Street, 2nd Floor
Vancouver, British Columbia
V6C 3B9
<PAGE>
SCHEDULE 4
Meetings of Registered Holders
1. Convening of Meeting
The Custodian or Sun Canada and Sun (acting jointly) or
the Company may at any time convene a meeting of the Registered
Holders and the Custodian shall do so upon a requisition in writing
by the Registered Holders of Instalment Receipts representing at
least 5% of all Instalment Shares represented by Instalment
Receipts which are then outstanding and upon receiving such
indemnity against the costs of summoning and holding such meeting
as it may reasonably require. The Company may at any time convene
a meeting of the Registered Holders at its own expense. Every
meeting shall be held in the Municipality of Metropolitan Toronto,
Ontario or the City of Calgary, Alberta, or such other place in
Canada as the Company, Sun Canada, Sun and the Custodian may
decide.
2. Notice of Meetings
At least 21 days' notice, but not more than 50 days'
notice, specifying the place, day and hour of meeting shall be
given to the Registered Holders of outstanding Instalment Receipts
of any meeting of the Registered Holders. The procedure for
sending notice of meeting and meeting-related materials set out in
NP 41 shall apply to all such meetings, mutatis mutandis. A copy
of the notice shall be sent by prepaid mail to each of the Company,
Sun Canada and Sun, the Custodian and the Security Agent, but no
notice need be sent to the person convening the meeting. Such
notice shall specify the general nature of the business to be
transacted at the meeting thereby convened and shall be given in
the manner provided in the Instalment Receipt Agreement, but the
accidental omission to give such notice to, or the non-receipt of
such notice by, any Registered Holder, Sun Canada, Sun, the
Security Agent, the Custodian or the Company shall not invalidate
any of the proceedings at the meeting. In case of a meeting being
convened for the purpose of passing a Special Resolution, the
notice shall also state the terms of the Special Resolution. Any
Registered Holder present, either in person or by proxy, at any
meeting of the Registered Holders shall for all purposes be deemed
to have received due notice of such meeting and, where requisite,
of the purposes for which such meeting was convened.
3. Quorum
At any such meeting persons at least 2 in number being
the Registered Holders of Instalment Receipts representing at least
30% of the Instalment Shares represented by Instalment Receipts
which are then outstanding, and/or proxies for such Registered
Holders, shall (except for the purpose of passing a Special
Resolution) form a quorum for the transaction of business. The
<PAGE>
quorum at any such meeting for passing a Special Resolution shall
be at least 2 persons who are the Registered Holders of Instalment
Receipts representing at least a majority of the Instalment Shares
represented by Instalment Receipts which are then outstanding
and/or proxies for such Registered Holders. No business shall be
transacted at any meeting unless the requisite quorum be present at
the commencement of business. If within 15 minutes from the time
appointed for any meeting a quorum is not present, or, if
subsequent to the opening of a meeting there ceases to be a quorum
present, the meeting, if convened on the requisition of Registered
Holders, shall be dissolved but in any other case the meeting shall
stand adjourned to such day (not being less than 14 or more than 21
days thereafter), time and place as may be appointed by the Chair
and at such adjourned meeting the Registered Holders present in
person or by proxy and entitled to vote (whatever percentage of all
the Instalment Shares is represented by their Instalment Receipts)
shall form a quorum and shall have power to pass any Special
Resolution or other resolution and to decide upon all matters which
could properly have been disposed of at the meeting from which the
adjournment took place. At least 10 days' notice of any adjourned
meeting at which a Special Resolution is to be submitted shall be
given in the manner provided in paragraph 2 of this schedule and
such notice shall state that 2 Registered Holders present in person
or by proxy at the adjourned meeting, whatever the percentage of
Instalment Shares is represented by their Instalment Receipts,
shall form a quorum.
4. Chair
Some person (who may but need not be a Registered Holder
or the proxy of a Registered Holder) nominated in writing by the
Custodian shall be entitled to take the chair at every such meeting
and if no person is so nominated or if at any meeting a person so
nominated shall not be present within 5 minutes after the time
appointed for holding the meeting or shall be unable or shall
refuse or fail to act, the Registered Holders present in person or
by proxy shall choose one of their number or a representative of
the Company, Sun Canada or Sun to be Chair.
5. Attendance by Sun Canada, Sun, the Security Agent, the
Custodian and Company
Sun Canada, Sun, the Security Agent, the Custodian and
the Company and their duly authorized representatives may attend
and speak at any such meeting.
6. Voting
Every question, other than a Special Resolution,
submitted to a meeting of the Registered Holders shall be decided
<PAGE>
in the first instance by a show of hands and a majority of the
votes cast on such question shall be sufficient for all purposes
and shall be the decision of the meeting (except as otherwise
prescribed by law). In case of an equality of votes, the Chair
shall, either on a show of hands or at a poll, have a casting vote
in addition to the votes (if any) to which the Chair may be
entitled as a Registered Holder or proxy for a Registered Holder.
On a show of hands every Registered Holder or proxy for a
Registered Holder who is present in person shall have one vote.
7. Chair's Declarations
At any meeting of the Registered Holders, unless a poll
is demanded by the Chair or by at least one Registered Holder
present in person or by proxy (either before or after any vote by
a show of hands), a declaration by the Chair that a resolution has
been carried or lost or carried by a particular majority shall be
conclusive evidence of the fact. The Chair's decision on all
matters or things shall be conclusive and binding upon the meeting.
8. Polls
If at any such meeting a poll is demanded as aforesaid,
or if the question to be considered is a proposed Special
Resolution, a poll shall be held in such manner and either at once
or after an adjournment as the Chair directs and the result of such
poll shall be deemed to be the resolution of the meeting at which
the poll was held. The Chair may, or if a ballot is to be taken
shall, appoint one or more persons to act as scrutineers of the
meeting or any adjournment thereof. The demand for a poll may be
withdrawn at any time prior to the taking of a ballot. On a poll
every Registered Holder who is present in person or by proxy shall
have one vote for each Instalment Share represented by such
Registered Holder's Instalment Receipts.
9. Objections and Errors
If (i) any objection shall be raised to the qualification
of any voter (whether on a show of hands or on a poll) or (ii) any
votes have been counted which ought not to have been counted or
have not been counted which ought to have been counted, then the
objection or error shall not vitiate the decision of the meeting or
adjourned meeting on any resolution unless the same is raised or
pointed out at the meeting or, as the case may be, the adjourned
meeting at which the vote objected to is given or tendered or at
which the error occurs. Any objection or error shall be referred
to the Chair of the meeting and shall only vitiate the decision of
the meeting on any resolution if the Chair decides that the same
may have affected the decision of the meeting. The decision of the
Chair on such matters shall be final and conclusive.
<PAGE>
10. Adjournments
The Chair may with the consent of (and shall if directed
by) any meeting at which a quorum is present adjourn the same from
time to time and from place to place, but if it appears to the
Chair of any meeting that it is likely to be impracticable to hold
or continue that meeting because of the number of Registered
Holders present in person or by proxy or wishing to attend, the
Chair may adjourn the meeting to another time and place or sine die
without the need for such consent. No business shall be transacted
at any adjourned meeting except business which might lawfully have
been transacted at the meeting from which the adjournment took
place. Except as provided in paragraph 3 of this schedule, it
shall not be necessary to give notice to the Registered Holders of
an adjourned meeting.
11. Time and Place of Polls
Any poll demanded at any meeting on the election of a
Chair or on any question of adjournment shall be taken at the
meeting without adjournment. A poll demanded on any other question
shall be taken at such time and place as the Chair directs.
12. Entitlement to Vote
The Registered Holder or in the case of joint Registered
Holders any one of them shall be entitled to vote in respect of any
Instalment Receipts either in person or by proxy and in the latter
case as if such joint Registered Holder were solely entitled
thereto and if more than one of such joint Registered Holders be
present at any meeting either personally or by proxy that one of
the joint Registered Holders so present who is First Named shall
alone be entitled to vote.
13. Form of Proxy
Every instrument appointing a proxy shall be in writing
under the hand of the appointor or of its attorney duly authorized
in writing or in the case of a corporation under its corporate seal
or under the hand of its duly authorized representative or
attorney.
14. Identity of Proxy
A proxy need not be a Registered Holder.
15. Lodging of Proxies
The instrument appointing a proxy, the power of attorney
or the other authority (if any) under which it is signed or a
<PAGE>
notarially certified copy of such power or authority must be
deposited at the office of the Custodian at which notices may from
time to time be served on it under section 10 of the Instalment
Receipt Agreement or such other place as shall be appointed for
that purpose in the notice convening the meeting or in any document
accompanying such notice, prior to the time appointed for holding
the meeting or the taking of a poll at which the person named in
such instrument proposes to vote, or, if specified in the notice
convening the meeting or in any document accompanying such notice,
not less than 48 hours before the time appointed for holding the
meeting or adjourned meeting or the taking of a poll at which the
person named in such instrument proposes to vote. A vote given in
accordance with the terms of an instrument of proxy shall be valid
notwithstanding the previous death or insanity of the principal or
revocation of the proxy or of the power or authority under which
the instrument of proxy was signed or the transfer of the
Instalment Receipts in respect of which the vote is given, provided
no intimation in writing of the death, insanity, revocation or
transfer stall have been received at the said office of the
Custodian at which notices may from time to time be served on it
under section 10 of the Instalment Receipt Agreement before the
commencement of the meeting or adjourned meeting or the taking of
a poll at which the instrument of proxy is to be used. No
instrument appointing a proxy or power or authority shall be valid
after the expiration of 12 months from the date named in it as the
date of its execution. The instrument appointing a proxy shall be
deemed to confer authority to demand or join in demanding a poll.
16. Special Resolution
A meeting of the Registered Holders shall, in addition to
the powers given in the Instalment Receipt Agreement and above in
this schedule, have the following powers exercisable by Special
Resolution, namely:
(a) power to sanction any modification or compromise of or
arrangement in respect of the rights of the Registered
Holders against the Company, the Custodian or the
Selling Shareholder whether such rights shall arise
under the Instalment Receipt Agreement or otherwise;
(b) power to assent to any modifications of, additions or
amendments to or deletions from the provisions contained
in the Instalment Receipt Agreement or the Instalment
Receipts proposed or agreed to by the Company and the
Selling Shareholder and to authorize the Custodian on
its own behalf and on behalf of the Registered Holders
to concur in and execute any supplemental agreement
embodying any such modifications, additions, amendments
and/or deletions;
<PAGE>
(c) power to agree to the release or exoneration of the
Custodian from any liability in respect of anything done
or omitted to be done by the Custodian before the giving
of such release; and
(d) power to authorize the Custodian to agree to the
abridgement of the required time for the giving of any
notice of, or to waive notice of, any meeting of
shareholders of the Company or to sign a resolution in
writing of shareholders of the Company,
provided that no meeting of Registered Holders shall have power to
vary the rights of any Registered Holder, on due compliance with
the provisions of the Instalment Receipt Agreement, to pay for, and
take a transfer of, the Related Shares represented by his
Instalment Receipts and, pending such transfer, to enjoy all the
rights of ownership conferred by the Instalment Receipt Agreement
upon him in respect of the Related Shares represented by his
Instalment Receipts or to modify or abrogate any right any
Registered Holder would otherwise have to receive the profits and
income rising directly or indirectly from the Related Shares
represented by his Instalment Receipts.
17. Binding Effect of Special Resolution
A Special Resolution passed at a meeting of the
Registered Holders duly convened and held in accordance with this
agreement shall be binding upon all the Registered Holders whether
present or not present at such meeting and each of the Registered
Holders and the Custodian (subject to the provisions for its
indemnity contained in the Instalment Receipt Agreement) shall be
bound to give effect thereto accordingly.
18. Meaning of "Special Resolution"
The expression "Special Resolution" when used in this
schedule means a resolution passed at a meeting of the Registered
Holders duly convened and held in accordance with the provisions
herein contained relating to a meeting for passing a Special
Resolution by a majority consisting of not less than two-thirds of
the votes given on a poll.
19. Resolutions in Writing
A resolution in writing signed by or on behalf of all the
Registered Holders of outstanding Instalment Receipts shall for all
purposes be as valid and effectual as a Special Resolution passed
at a meeting of the Registered Holders duly convened and held.
Such resolution in writing may be contained in one or more
<PAGE>
counterparts each signed by or on behalf of one or more of the
Registered Holders.
20. Minutes
Minutes of all resolutions and proceedings at every such
meeting as aforesaid shall be made and duly entered in books to be
from time to time provided for that purpose by the Custodian and
any such minutes as aforesaid if purporting to be signed by the
Chair of the meeting at which such resolutions were passed or
proceedings had or by the Chair of the next succeeding meeting of
the Registered Holders shall be conclusive evidence of the matters
therein contained and until the contrary is proved every such
meeting in respect of the proceedings of which minutes have been
made shall be deemed to have been duly convened and held and all
resolutions passed and proceedings had thereat to have been duly
passed and had.
21. Relationship with Instalment Receipt Agreement
The provisions of this schedule are in addition to and
not in substitution for the provisions of the Instalment Receipt
Agreement concerning meetings of the Registered Holders and notices
thereof.
22. Time
In determining under any provisions of this schedule when
notice of any meeting must be given, the date of giving of the
notice shall be included and the date of the meeting shall be
excluded.
23. Definitions.
In this schedule, "Instalment Receipt Agreement" means
the agreement made as of June 8, 1995 among Sun Canada, Inc., Sun
Company, Inc., Suncor Inc., Nesbitt Burns Inc., Gordon Capital
Corporation, RBC Dominion Securities Inc., Wood Gundy Inc.,
ScotiaMcLeod Inc., Goldman Sachs Canada, Midland Walwyn Capital
Inc., Richardson Greenshields of Canada Limited, First Marathon
Securities Limited, Levesque Beaubien Geoffrion Inc., Toronto
Dominion Securities Inc., Peters & Co. Limited, The R-M Trust
Company and Montreal Trust Company of Canada providing, inter alia,
for the issuance of Instalment Receipts, and terms defined in the
Instalment Receipt Agreement have the meanings ascribed to them
therein when used in this schedule.
