Canadian Pacific Kansas City Ltd 8-K, filed Mar 17, 2025
Canadian Pacific Kansas City Ltd (CP)
About this 8-K
Canadian Pacific Kansas City Ltd filed this 8-K on March 17, 2025, reporting on events of March 12, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
March 17, 2025 (
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading |
Name of each exchange | ||
| Common Shares, without par value, of Canadian Pacific Kansas City Limited | CP | Toronto Stock Exchange | ||
| Perpetual 4% Consolidated Debenture Stock of Canadian Pacific Railway Company | BC87 | London Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 1.01. | Entry into a Material Definitive Agreement. |
On March 17, 2025, Canadian Pacific Railway Company (the “Company”) completed its offering of U.S.$600,000,000 aggregate principal amount of 4.800% notes due 2030 (the “2030 Notes”) and U.S.$600,000,000 aggregate principal amount of 5.200% notes due 2035 (the “2035 Notes”) (collectively, the “Notes”). The Notes are guaranteed (the “Guarantee” and, together with the Notes, the “Securities”) by Canadian Pacific Kansas City Limited, the parent of the Company (the “Guarantor”).
In connection with the offering, on March 12, 2025, the Company and the Guarantor entered into an Underwriting Agreement (the “Underwriting Agreement”) with Wells Fargo Securities, LLC, BofA Securities, Inc., Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, as representatives of the several Underwriters listed in Schedule 1 thereto. The Underwriting Agreement contains customary representations, covenants and indemnification provisions.
The offering of the Securities was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form F-10 (File No. 333-285353) filed with the Securities and Exchange Commission (the “Commission”) on February 27, 2025. The terms of the Securities are described in the Company’s prospectus, dated March 6, 2025, as supplemented by a final prospectus supplement, dated March 12, 2025, as filed with the Commission on March 13, 2025.
The Securities were issued pursuant to an Indenture, dated as of September 11, 2015, by the Company and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the Seventh Supplemental Indenture, dated as of March 17, 2025 (the “Seventh Supplemental Indenture”), by and among the Company, the Guarantor and the Trustee.
The descriptions of the Underwriting Agreement, the Securities and the Seventh Supplemental Indenture in this Current Report on Form 8-K are summaries and are qualified in their entirety by reference to the complete terms of the Underwriting Agreement, the Seventh Supplemental Indenture and the forms of Notes included in the Seventh Supplemental Indenture. The Underwriting Agreement, Seventh Supplemental Indenture and the forms of Notes are attached hereto as Exhibits 4.1, 4.2, 4.3, and 4.4, respectively, and are each incorporated by reference herein.
| ITEM 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
| ITEM 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
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 hereunto duly authorized.
| Dated: March 17, 2025 | ||||||
| CANADIAN PACIFIC KANSAS CITY LIMITED | ||||||
|
|
By: | /s/ Tyler Robinson | |||
| Name: | Tyler Robinson | |||||
| Title: | General Counsel & Assistant Corporate Secretary | |||||
Exhibit 4.1
Execution Version
CANADIAN PACIFIC RAILWAY COMPANY
US$600,000,000 4.800% Notes due 2030
US$600,000,000 5.200% Notes due 2035
Underwriting Agreement
March 12, 2025
Wells Fargo Securities, LLC
BofA Securities, Inc.
Goldman Sachs & Co. LLC
Morgan Stanley & Co. LLC
As Representatives of the several Underwriters listed in Schedule 1 hereto
c/o Wells Fargo Securities, LLC
550 South Tryon Street, 5th Floor
Charlotte, North Carolina 28202
c/o BofA Securities, Inc.
One Bryant Park
New York, New York 10036
c/o Goldman Sachs & Co. LLC
200 West Street
New York, New York 10282
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Canadian Pacific Railway Company, a Canadian corporation (the “Company”) and wholly owned subsidiary of Canadian Pacific Kansas City Limited, a Canadian corporation (“Parent”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), US$600,000,000 principal amount of its 4.800% notes due 2030 (the “2030 Notes”) and US$600,000,000 principal amount of its 5.200% notes due 2035 (the “2035 Notes,” and, together with the 2030 Notes, the “Notes”), to be fully and unconditionally guaranteed on an unsecured basis by Parent (the “Guarantee” and, together with the Notes, the “Securities”). The Securities will be issued pursuant to the Indenture dated as of September 11, 2015 (the “Base Indenture”) between the Company and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended by a Supplemental Indenture to be dated as of the Closing Date (as defined herein) (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”).
The Company and Parent hereby confirm their agreement with the several Underwriters concerning the purchase and sale of the Securities, as follows:
Defined Terms. The terms which follow, when used in this underwriting agreement (the “Agreement”), shall have the meanings indicated below:
“Base Prospectus” means the prospectus referred to section 1 of this Agreement contained in the Registration Statement at the Effective Date, or the Canadian short form base shelf prospectus dated March 6, 2025 at the time the Canadian Securities Commissions issued the Passport Receipt for such short form base shelf prospectus, including all documents incorporated by reference therein.
“business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are obligated by law or regulation to close in New York City, Toronto or Calgary.
“Canadian Final Prospectus” means the final prospectus supplement of the Company relating to the Notes, together with the Base Prospectus, and, unless the context otherwise requires, includes all documents incorporated by reference into the Base Prospectus for the purposes of the distribution of the Notes.
“Canadian Securities Laws” shall mean all applicable securities laws in each of the provinces of Canada and all rules, regulations policy statements, instruments, blanket orders and notices thereunder, as modified by and including the applicable requirements of the MRRS Decision.
“Canadian Securities Commissions” shall mean the securities commission or similar regulatory authority in each of the provinces of Canada.
“Commission” or the “SEC” shall mean the U.S. Securities and Exchange Commission.
“Effective Date” shall mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto became or becomes effective.
“Environmental Claim” shall mean any administrative action, regulatory action, judicial action, suit, demand, demand letter, claim, lien, notice of non-compliance or violation, investigation or proceeding relating in any way to any Environmental Laws.
“Environmental Laws” shall mean any Canadian, United States and other applicable foreign, federal, provincial, state, local or municipal laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Governmental Agency” shall mean any court or governmental agency or body having jurisdiction over Parent or any of its subsidiaries or any of their properties.
“Governmental Authorization” shall mean any consent, approval, authorization, order, permit, license, filing, registration, clearance or qualification of, or with any statute, order, rule or regulation of any Governmental Agency.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as defined in Rule 433.
“MRRS Decision” means, collectively (i) the MRRS Decision Document “In the Matter of the Securities Legislation of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Québec, New Brunswick, Nova Scotia, Newfoundland, Prince Edward Island, the Northwest Territories, the Yukon and Nunavut and In the Matter of the Mutual Reliance Review System for Exemptive Relief Applications and In the Matter of Canadian Pacific Limited, PanCanadian Petroleum Limited, Canadian Pacific Railway
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Company, CP Ships Limited, Canadian Pacific Railway Limited, Fording Arrangement Inc., PanCanadian Energy Corporation and FHR Investments Inc.” dated September 21, 2001 and issued by the Alberta Securities Commission (the “ASC MRRS Decision”), (ii) the Order 2011-00051 “In the Matter of the Securities Act, S.N.B. 2004 c.S-5.5, as amended (Act) and In the Matter of Canadian Pacific Railway Company” dated June 20, 2011 and issued by the New Brunswick Securities Commission (the “NB Order”), and (iii) the Order “In the Matter of the Securities Legislation of Prince Edward Island and In the Matter of Canadian Pacific Railway Company” dated June 17, 2011 and issued by the Prince Edward Island Securities Office (the “PEI Order”).
“Offering Documents” means, collectively, the Registration Statement, the Preliminary Prospectus, the U.S. Final Prospectus, the Canadian Final Prospectus and any Issuer Free Writing Prospectus.
“Passport Receipt” means the receipt issued by the Principal Regulator, which is deemed to also be a receipt of the other Canadian Securities Commissions (except for the Ontario Securities Commission) and which evidences the receipt of the Ontario Securities Commission, pursuant to the Passport System, for the Base Prospectus.
“Passport System” means, collectively, Multilateral Instrument 11-102 – Passport System and National Policy 11-202 – Process for Prospectus Reviews in Multiple Jurisdictions.
“Preliminary Prospectus” shall mean any preliminary prospectus supplement to the Base Prospectus which describes the Securities and the offering thereof and is used by the Underwriters prior to filing of the U.S. Final Prospectus or the Canadian Final Prospectus, together with the Base Prospectus.
“Principal Regulator” means the Alberta Securities Commission.
“Regulations” shall mean the rules and regulations of the Commission under the Securities Act.
“Securities Laws” means, collectively, the Canadian Securities Laws and the U.S. Securities Laws.
“Shelf Procedures” shall mean the rules and procedures established under National Instrument 44-102.
“Significant Subsidiary” shall have the meaning set forth under Rule 1-02 of Regulation S-X under the Securities Act.
“U.S. Securities Laws” means all of the applicable federal and state securities laws and regulations of the United States, including without limitation the Securities Act, the Exchange Act and the respective rules and regulations of the SEC thereunder.
“USCA Final Prospectuses” means the Canadian Final Prospectus and the U.S. Final Prospectus or any amendment or supplement thereto.
1. Registration Statement. The Company and Parent have prepared and filed with the Commission a registration statement on Form F-10 (No. 333-285353) dated February 27, 2025, as amended, providing for the registration of the Securities, under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”). Such registration statement, which includes the Base Prospectus (with such deletions therefrom and additions
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thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission), in the form heretofore delivered to the Underwriters, including exhibits to such registration statement and all documents incorporated by reference in the prospectus contained therein, and any post-effective amendments thereto, has become effective under the Securities Act. Such registration statement (and any further amendments thereto) including any exhibits, and the prospectus constituting a part thereof, and any prospectus supplements provided to the Underwriters by the Company for use in connection with the offering of the Securities which are not required to be filed by the Company pursuant to General Instruction II.L. of Form F-10, and all documents incorporated therein by reference, in each case as from time to time amended or supplemented by the filing of documents with the Canadian Securities Commissions or with the Commission pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”) or otherwise, are referred to herein as the “Registration Statement” and the “U.S. Final Prospectus,” respectively, except that if any revised prospectus shall be supplemented by a prospectus supplement relating to an offering of the Securities that is filed with the Commission pursuant to General Instruction II.L. of Form F-10, the term “U.S. Final Prospectus” shall refer to such revised prospectus from and after the time it is so filed.
At or prior to 4:10 P.M., New York City time, on March 12, 2025, the time when sales of the Securities were first made (the “Applicable Time”), the Company had prepared the following information: the Base Prospectus, the Preliminary Prospectus and each Free Writing Prospectus listed on Annex A hereto (collectively, the “Disclosure Package”).
As used in this Agreement, “misrepresentation,” “material fact,” and “material change” shall have the meanings given to such terms under the securities laws of the United States.
2. Purchase of the Securities.
(a) The Company and Parent agree to issue and sell the Securities to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company and Parent the respective principal amount of Securities set forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to (1) 99.256% of the principal amount of the 2030 Notes and (2) 98.807% of the principal amount of the 2035 Notes, all with accrued interest, if any, from March 17, 2025 to the Closing Date (as defined below). The Company and Parent will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.
(b) Payment for, and delivery of, the Securities will be made at the offices of Davis Polk & Wardwell LLP at 9:00 A.M. New York City time on March 17, 2025, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date.”
(c) Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Representatives against delivery to the nominee of The Depository Trust Company (“DTC”), for the account of the Underwriters, of one or more global notes representing the Notes (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Company. The Global Note will be made available for inspection by the Representatives not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.
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3. Representations and Warranties of the Company and Parent. The Company and Parent, jointly and severally, represent and warrant to each Underwriter that:
(a) Shelf Procedures. The Company meets the eligibility requirements to use the Shelf Procedures and has obtained the Passport Receipt; no order suspending the distribution of the Notes has been issued by any Canadian Securities Commission and no proceeding for that purpose has been initiated or threatened by any Canadian Securities Commission;
(b) Form F-10 Eligibility. The Company meets the general eligibility requirements for use of Form F-10 under the Securities Act, has filed a registration statement on Form F-10 (File No. 333-285353), as amended, in respect of the Securities and an appointment of agent for service of process on Form F-X (the “Form F-X”) in conjunction with the filing of such registration statement with the Commission and has caused the Trustee to prepare and file with the Commission a Statement of Eligibility and Qualification on Form T-1 (the “Form T-1”); such registration statement and any post-effective amendments thereto, in each case including the Canadian Final Prospectus (with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission), each in the form heretofore delivered or to be delivered to the Representatives and, including exhibits to such registration statement and any documents incorporated by reference in the prospectus contained therein, to the Representatives for delivery by them to each of the other Underwriters, became effective under the Securities Act in such form; no other document with respect to such registration statement or documents incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission and no other document incorporated by reference in the prospectus contained therein has heretofore been filed with the Canadian Securities Commissions, except for any documents filed with the Commission or the Canadian Securities Commissions subsequent to the date of such effectiveness in the form heretofore delivered to the Representatives for delivery by them to each of the other Underwriters; no stop order suspending the effectiveness of such registration statement has been issued and to the Company’s knowledge, no proceeding for that purpose has been initiated or, threatened by the Commission; any reference herein to any Preliminary Prospectus, Canadian Final Prospectus or U.S. Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein as of the date of such Preliminary Prospectus, Canadian Final Prospectus or U.S. Final Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus, Canadian Final Prospectus or U.S. Final Prospectus shall be deemed to refer to and include any documents filed as of the date of such amendment or supplement under Canadian Securities Laws or U.S. Securities Laws, as the case may be, and incorporated by reference in such amendment or supplement;
(c) Incorporated Documents. Any documents included or incorporated by reference in the Registration Statement, the Disclosure Package, the Base Prospectus or the USCA Final Prospectuses, when they became effective or were filed with the Commission or the Canadian Securities Commissions, as the case may be, conformed in all material respects to any applicable requirements of the Securities Laws and any further documents so filed and included or incorporated by reference in the Registration Statement, Disclosure Package, the Base Prospectus or the USCA Final Prospectuses, when such documents become effective or are filed with the Commission or the Canadian Securities Commissions, as the case may be, will conform in all material respects to the applicable requirements of the Securities Laws;
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(d) MRRS Validity. The MRRS Decision has not been altered, varied or amended since the date of issuance thereof and remains in full force and effect, as applicable to the Company, and the Company has not received any notice of revocation or modification of the MRRS Decision from any of the Canadian Securities Commissions;
(e) MRRS Compliance. The Company and Parent, each is, and during the period up to and including the Closing Date will be, in full compliance with the requirements of sections 9.1, 9.2, 9.3 and 9.4 of the ASC MRRS Decision, the NB Order and the PEI Order;
(f) Registration Statement and Prospectus. On the Effective Date, the Registration Statement did, and on the date it is first filed and on the Closing Date the U.S. Final Prospectus will, conform in all material respects with the Canadian Final Prospectus (with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the applicable rules and regulations of the Commission thereunder), and with the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission under both the Securities Act and the Trust Indenture Act; on the date each was first filed, the Base Prospectus did and the Canadian Final Prospectus will, and on the Closing Date each will, conform in all material respects with the applicable requirements of Canadian Securities Laws and the rules and regulations of the Canadian Securities Commissions; the Registration Statement, as of the Effective Date, and the Base Prospectus as of its filing date, and in each case at the Closing Date, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the USCA Final Prospectuses, will not as of their filing dates and as of the Closing Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement, the Canadian Final Prospectus or the U.S. Final Prospectus, or to the Form T-1 of the Trustee, as the case may be.
(g) Disclosure Package. The Disclosure Package, and each electronic roadshow, if any, as of the Applicable Time did not, and as of the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and Parent make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company and Parent in writing by such Underwriter through the Representatives expressly for use in such Disclosure Package.
(h) Issuer Free Writing Prospectus. Each of the Company and Parent agree that, unless it has obtained the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company and Parent that, unless it has obtained the prior written consent of the Company and Parent, respectively, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing Prospectus required to be filed by the Company or the Parent with the Commission or retained by the Company under Rule 433, other than the information contained in the pricing term sheet listed on Annex A hereto; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free
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Writing Prospectuses listed on Annex A hereto. Any such Free Writing Prospectus consented to by the Representatives or the Company and the Parent is hereinafter referred to as a “Permitted Free Writing Prospectus.” Each of the Company and the Parent agree that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. Each Issuer Free Writing Prospectus and the pricing term sheet listed on Annex A hereto does not include any information that conflicts with the information contained in the Registration Statement or the Disclosure Package; provided that the Company and Parent make no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company and Parent in writing by such Underwriter through the Representatives expressly for use in such Issuer Free Writing Prospectus, it being understood and agreed that the only such information furnished by any Underwriter consists of the Underwriter Information as described in Section 7(b) hereof.
(i) Ineligible Issuer. At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Securities Act), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer. The Representatives have notified the Company and Parent of the earliest time that an offering participant made a bona fide offer of the Securities.
(j) Organization and Good Standing of the Company. The Company has been duly incorporated and is valid and subsisting as a corporation under the laws of Canada with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto).,The Company is duly qualified or registered to do business as an extra-provincial corporation, and is in good standing, under the laws of each jurisdiction which requires such qualification or registration, except for such failure to be so qualified, registered or in good standing as would not, individually or in the aggregate, constitute a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, or the Company and its subsidiaries, taken as a whole.
(k) Organization and Good Standing of Parent. Parent has been duly incorporated and is valid and subsisting as a corporation under the laws of Canada with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto). The Parent is duly qualified or registered to do business as an extra-provincial corporation, and is in good standing, under the laws of each jurisdiction which requires such qualification or registration, except for such failure to be so qualified, registered or in good standing as would not, individually or in the aggregate, constitute a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, or the Company and its subsidiaries, taken as a whole.
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(l) Subsidiary Organization and Good Standing. Each of the Parent’s subsidiaries (other than the Company), and each of the Company’s subsidiaries, has been duly incorporated or is otherwise duly formed and, to the best of Parent’s or Company’s knowledge as the case may be, is validly existing, in good standing under the laws of the jurisdiction in which it is incorporated, chartered or organized, as the case may be, with full corporate or other power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Disclosure Package and the USCA Final Prospectuses, and is, if applicable, duly qualified or registered to do business as an extra-jurisdictional corporation or partnership and, to the best of Parent’s or Company’s knowledge as the case may be, is in good standing under the laws of each jurisdiction which requires such qualification or registration, except for such failure to be so qualified, registered or in good standing as would not, individually or in the aggregate, constitute a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries or the Company and its subsidiaries, taken as a whole.
(m) Capitalization of Parent. Parent has an authorized capitalization as set forth in the Disclosure Package and the USCA Final Prospectuses and all of the issued shares of capital stock of Parent have been duly and validly authorized and issued and are fully paid and non-assessable; and all the outstanding shares of capital stock, or other ownership interests, of each subsidiary of Parent have been duly and validly authorized and issued and are fully paid and nonassessable, as applicable, and, except as otherwise set forth in the USCA Final Prospectuses, all outstanding shares of capital stock, or other ownership interests, of the subsidiaries are owned by Parent either directly or through wholly owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances.
(n) Capitalization of Company. All of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all the outstanding shares of capital stock, or other ownership interests, of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and nonassessable, as applicable, and, except as otherwise set forth in the USCA Final Prospectuses, all outstanding shares of capital stock, or other ownership interests, of the subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances.
(o) Disclosure. There is no contract or other document of a character required to be described in the Registration Statement, the Disclosure Package or the USCA Final Prospectuses, or to be filed as an exhibit thereto, which is not described or filed as required; and the statements in the Disclosure Package or the USCA Final Prospectuses under the headings “Material Income Tax Considerations,” “Description of Debt Securities and Guarantee” and “Description of The Notes” insofar as such statements purport to describe the provisions of the laws and documents therein, are accurate and fair summaries of the matters described therein in all material respects.
(p) Due Authorization. Each of the Company and Parent has full corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Securities, the Indenture, and this Agreement has been duly authorized, executed and delivered by the Company and Parent.
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(q) Investment Company Act. Neither the Company nor Parent is, or after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in each of the Registration Statement, the Disclosure Package and the USCA Final Prospectuses, will be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).
(r) No Consents Required. No Governmental Authorization is required in connection with the transactions contemplated herein, except such as have been obtained under the Securities Act, Trust Indenture Act, Canada Business Corporations Act and the Canadian Securities Laws and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Disclosure Package and the USCA Final Prospectuses.
(s) No Conflicts. Neither the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated will conflict with, result in a breach or violation or imposition of any lien, charge or encumbrance upon any property or assets of Parent or any of its subsidiaries pursuant to, (i) the constating documents or by-laws of Parent or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which Parent or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to Parent or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over Parent or any of its subsidiaries or any of its or their properties.
(t) Financial Statements. The consolidated historical financial statements of Parent included or incorporated by reference in the Disclosure Package, the USCA Final Prospectuses and the Registration Statement present fairly in all material respects the financial condition, results of operations and cash flows of Parent (on a consolidated basis) as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity with U.S. generally accepted accounting principles, applied on a consistent basis throughout the periods involved (except as otherwise noted therein). Any selected financial data set forth in the Disclosure Package, the USCA Final Prospectuses and the Registration Statement fairly present or will present, on the basis stated for such data in the Disclosure Package, the USCA Final Prospectuses and the Registration Statement, the information included therein.
(u) Legal Proceedings. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), no action, suit or proceeding by or before any court or Governmental Authority involving Parent or any of its subsidiaries or its or their property is pending or, to the best knowledge of Parent, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
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(v) Property. Except as set forth in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), each of Parent and its subsidiaries owns or leases or is entitled to own or lease all such properties as are necessary to the conduct of its operations as presently conducted, except such as would not, individually or in the aggregate, constitute a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole.
(w) No Violation or Default. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), neither Parent nor any subsidiary is in violation or default of (i) any provision of its charter or bylaws or other constating documents, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over Parent or such subsidiary or any of its properties, as applicable, except, in the case of (ii) or (iii) such violation or default as would not, individually or in the aggregate, constitute a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole.
(x) Independent Accountants. (1) Ernst & Young LLP, who has certified certain financial statements of Parent and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements included or incorporated by reference in the Disclosure Package and the USCA Final Prospectuses, are independent chartered accountants, with respect to Parent and its consolidated subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Laws. (2) PricewaterhouseCoopers LLP, who has certified certain financial statements of Kansas City Southern and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements included or incorporated by reference in the Disclosure Package and the USCA Final Prospectuses, are, to the knowledge of the Company, independent chartered accountants, with respect to Kansas City Southern and its consolidated subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Laws.
(y) Taxes. Except as disclosed in the USCA Final Prospectuses and the Disclosure Package, Parent and each of its subsidiaries has filed all domestic, foreign, federal, provincial, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
(z) No Labor Disputes. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), no labor problem or dispute with the employees of Parent or any of its subsidiaries exists or is threatened
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or imminent and Parent is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, in each case that could have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
(aa) Insurance. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), Parent and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring Parent or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; Parent and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no material claims by Parent or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither Parent nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole.
(bb) No Restrictions on Subsidiaries. Except as set forth in or contemplated by the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), no subsidiary of Parent is currently prohibited, directly or indirectly, from paying any dividends to Parent, from making any other distribution on such subsidiary’s capital stock or other ownership interest, from repaying to Parent any loans or advances to such subsidiary from Parent or from transferring any of such subsidiary’s property or assets to Parent or any other subsidiary of Parent.
(cc) Licenses and Permits. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), Parent and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by the appropriate foreign, federal, provincial, state, municipal or local regulatory authorities necessary to conduct their respective businesses except where the failure to possess such license, certificate, permit or other authorization would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, and neither Parent nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such license, certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
(dd) Accounting Controls. Parent and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles, and to maintain asset accountability; (iii) access
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to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(ee) No Stabilization. Neither the Company nor Parent has taken, directly or indirectly, any action designed to or that would constitute or that is intended to or that might reasonably be expected to cause or result in, under the Securities Laws or otherwise, stabilization, maintenance or manipulation of the price of any security of the Company or Parent to facilitate the sale or resale of the Securities.
(ff) Certain Environmental Matters. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), Parent and its subsidiaries are (i) in compliance with Environmental Laws, (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business. Except as set forth in or contemplated in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), neither Parent nor any of the subsidiaries has been named as a “potentially responsible party” with respect to any material environmental issue under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or under any similar Canadian legislation.
In the ordinary course of its business, Parent periodically reviews the effect of Environmental Laws on the business, operations and properties of Parent and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties); Parent also conducts pre-acquisition investigations of new railroad properties to identify potential violations of Environmental Laws, trains management personnel in the recognition of and proper response to incidents of noncompliance with Environmental Laws and establishes procedures for communicating such incidents to Parent’s headquarters. On the basis of such review, except as set forth in or contemplated in the Disclosure Package or USCA Final Prospectuses has concluded that such associated costs and liabilities would not, singly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business.
(gg) Compliance with ERISA. Each of Parent and its subsidiaries has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the United States Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations and published interpretations thereunder with respect to each “plan” (as defined in Section 3(3) of ERISA and such regulations and published interpretations) in which employees of Parent and its subsidiaries are eligible to participate and each such plan is in compliance with the presently applicable
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provisions of ERISA and such regulations and published interpretations. Parent and its subsidiaries have not incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other than for the payment of premiums in the ordinary course) or to any such plan under Title IV of ERISA, in each case, except as would not, individually or in the aggregate, have a material adverse effect on the condition (financial or otherwise), prospectus, earnings, business or properties of Parent and its subsidiaries, taken as a whole.
(hh) Subsidiaries. The subsidiaries listed on Schedule 2 attached hereto are the only Significant Subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X under the Securities Act) of Parent and there are no other subsidiaries material to the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole.
(ii) The Notes and the Guarantee. The Notes have been duly authorized by the Company, and, when issued and delivered pursuant to this Agreement, such Notes will have been duly executed, authenticated, issued and delivered and, upon payment for the Notes by the Representatives to the Company, will constitute valid and legally binding obligations of the Company entitled to the benefits of the Indenture, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyances or transfer, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). The Guarantee has been duly authorized by Parent, and, when the Guarantee is issued and delivered pursuant to the Indenture, such Guarantee will have been duly executed, issued and delivered and, upon payment for the Notes by the Representatives to the Company, will constitute the valid and legally binding obligation of Parent entitled to the benefits of the Indenture, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyances or transfer, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
(jj) The Indenture. The Indenture has been duly authorized by the Company and Parent, and the Base Indenture has been duly qualified under the Trust Indenture Act, and the Indenture constitutes a valid and legally binding instrument of the Company and Parent, and enforceable against the Company and Parent in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyances or transfer, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); no registration, filing or recording of the Indenture under the laws of Canada or any province thereof is necessary in order to preserve or protect the validity or enforceability of the Indenture or the Securities issued thereunder; and the Indenture conforms, and the Securities will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the USCA Final Prospectuses with respect to such Securities.
(kk) Title to Real and Personal Property. Except as described in or contemplated by the Disclosure Package or USCA Final Prospectuses (exclusive of any supplement thereto), Parent and each subsidiary has good and sufficient title to all items of real property and improvements and to all equipment and personal property owned by each of them, in each case free and clear of any security interests, liens, encumbrances, duties, claims and other defects, except such as do not materially interfere with the use made or proposed to be made of such
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property by Parent or such subsidiary and the real property, improvements, equipment and personal property held under lease by Parent or any subsidiary are held under valid, subsisting and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by Parent or such subsidiary.
(ll) Class I Railroad. The Company is a Class I railway (a railroad earning a minimum of US$1.05 billion in revenues annually as defined by the Surface Transportation Board in the United States).
(mm) Intellectual Property. Parent and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s and Parents’ business as now conducted or as proposed in the Disclosure Package or the USCA Final Prospectuses to be conducted. Except as set forth in the Disclosure Package or the USCA Final Prospectuses (i) there are no rights of third parties to any such Intellectual Property, except for any rights that may exist that would not, individually or in the aggregate, cause a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole; (ii) there is no material infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the knowledge of the Company or Parent, threatened action, suit, proceeding or claim by others challenging the Company’s or Parent’s rights in or to any such Intellectual Property that could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, and the Company and Parent are unaware of any facts which would form a reasonable basis for any such claim; (iv) there is no pending or, to the knowledge of the Company or Parent, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property that could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, and the Company and Parent are unaware of any facts which would form a reasonable basis for any such claim; and (v) there is no pending or, to the knowledge of the Company or Parent, threatened action, suit, proceeding or claim by others that the Company or Parent infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others that could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, and the Company and Parent are unaware of any other fact which would form a reasonable basis for any such claim.
(nn) No Unlawful Payments. Neither Parent nor any of its subsidiaries nor, to the best knowledge of Parent, any director, officer, agent, employee or other person associated with or acting on behalf of Parent or any of its subsidiaries is aware of or has, directly or indirectly, (i) made or authorized any contribution, payment or gift to any foreign or domestic government official, employee, agency, authority or instrumentality or (ii) made any contribution to any candidate for public office, in either case, where either the payment or the purpose of such contribution, payment or gift is prohibited under the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the Corruption of Foreign Public Officials Act (Canada) or the rules and regulations promulgated thereunder.
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(oo) Compliance with Anti-Money Laundering Laws. The operations of Parent and its subsidiaries are and have been conducted at all times in compliance with applicable money laundering statutes of all jurisdictions where Parent or any of its subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving Parent or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of Parent, threatened.
(pp) No Conflicts with Sanctions Laws. None of Parent, any of its subsidiaries or, to the knowledge of Parent, any director, officer, agent, employee or affiliate of Parent or any of its subsidiaries is currently the target of any sanctions administered or enforced by the U.S. Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the U.S. Department of State or the Government of Canada; and the Company will not directly or indirectly use the proceeds of the offering of the Securities contemplated hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person that, at the time of such financing, is the target of any sanctions administered or enforced by OFAC.
(qq) Certificates. Any certificate signed by any officer of the Company or Parent, as the case may be, and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Company or Parent, as applicable, as to matters covered thereby, to each Underwriter.
(rr) Exchange. No Canadian Securities Commission or similar authority or the Toronto Stock Exchange or the New York Stock Exchange or the SEC has issued any order which is currently outstanding preventing or suspending trading in any securities of the Company or Parent, no such proceeding is, to the knowledge of the Company or Parent, as applicable, pending, contemplated or threatened and neither the Company nor Parent is in material default of any requirement of Securities Laws.
(ss) No Order. No order preventing, ceasing or suspending trading in any securities of the Company or Parent, or prohibiting the issue and sale of securities by the Company or Parent has been issued and no proceedings for either of such purposes have been, to the knowledge of the Company or Parent, as applicable, instituted or are pending or threatened by any Canadian Securities Commission or similar authority.
4. Further Agreements of the Company and Parent. Each of the Company and Parent covenants and agrees with each Underwriter that:
(a) It shall deliver or cause to be delivered to the Underwriters and their counsel the documents set out below at the respective times indicated:
(i) prior to or contemporaneously, as nearly as practicable, with the filing thereof with the Commission and the Canadian Securities Commissions, copies of the Preliminary Prospectus, as filed with the Commission and the Canadian Securities Commissions, as applicable;
(ii) prior to or contemporaneously, as nearly as practicable, with the filing thereof with the Commission and the Canadian Securities Commissions, copies of the
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Canadian Final Prospectus and U.S. Final Prospectus, as have been filed with the Commission and the Canadian Securities Commissions, as applicable;
(iii) as soon as they are available, copies of any documents incorporated by reference in or exhibits to the Disclosure Package, the USCA Final Prospectuses, the Registration Statement or any amendment to any of them which have not been previously available on EDGAR or delivered to the Underwriters; and
(iv) at the Applicable Time, a comfort letter from each of Ernst & Young LLP and PricewaterhouseCoopers LLP, addressed to the Underwriters and dated the date of this Agreement, in form and substance satisfactory to the Underwriters, acting reasonably, relating to the verification of certain of the financial information and statistical and accounting data relating to the Parent and its subsidiaries (for Ernst & Young LLP) and to Kansas City Southern and its subsidiaries (for PricewaterhouseCoopers LLP), each as contained in any such document, the Registration Statement, the Disclosure Package and the USCA Final Prospectuses or any documents incorporated by reference therein, which comfort letter shall be based on a review having a cut-off date not more than two business days prior to the date of such letter. Such letters shall also state that such auditors are independent public accountants within the meaning of the Securities Laws, and that in their opinion, the financial statements of the Parent (for Ernst & Young LLP) and of Kansas City Southern (for PricewaterhouseCoopers LLP) included or incorporated by reference in the USCA Final Prospectuses and the Registration Statement, as the case may be, comply as to form in all material respects with the published accounting requirements of the Securities Act and the related regulations and with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations adopted by the Commission, including the applicable requirements of Form F-10, applied on a consistent basis throughout the periods involved.
(b) Required Filings. Prior to the termination of the offering of the Securities, it will not file any amendment to the Registration Statement or supplement (including the USCA Final Prospectuses or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished a copy to the Representatives for their review prior to filing and will not file any such proposed amendment or supplement to which the Representatives reasonably object and is not otherwise required to be filed by the Company in accordance with applicable laws (including any Securities Laws), in which case the Representatives shall be provided the opportunity to make reasonable changes to such filings. Subject to the foregoing sentence and immediately following the execution of this Agreement, the Company will prepare the USCA Final Prospectuses setting forth the principal amount of the Notes or Securities, as applicable, covered thereby and their terms not otherwise specified in the Indenture pursuant to which the Securities are being issued, the names of the Underwriters participating in the offering and the principal amount of Securities which each severally has agreed to purchase, the names of the Underwriters acting as co-managers in connection with the offering, the price at which the Securities are to be purchased by the Underwriters from the Company, the initial public offering price, the selling concession and reallowance, if any, in a form reasonably approved by the Representatives and shall file (i) such Canadian Final Prospectus with the Canadian Securities Commissions in accordance with the Shelf Procedures and (ii) such U.S. Final Prospectus with the Commission pursuant to General Instruction II.L. of Form F-10 not later than the Commission’s close of business on the business day following the date of the filing thereof with the Canadian Securities Commissions. The
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Company will prepare a final term sheet, containing solely a description of the Securities, in a form approved by the Representatives, acting reasonably, and will file such term sheet pursuant to Rule 433(d) under the Securities Act within the time required by such Rule 433 and will promptly file all materials required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act.
(c) Delivery of Copies. The Company shall deliver to the Underwriters, as soon as practicable, at offices designated by the Underwriters, such number of commercial copies of the USCA Final Prospectuses as the Underwriters may reasonably request by instructions to the printer thereof given no later than the day prior to the time when the Company plans to authorize the printing of the commercial copies of the USCA Final Prospectuses. The Company shall, as soon as possible following a request by the Underwriters, cause to be delivered to the Underwriters such additional commercial copies of the USCA Final Prospectuses in such numbers and at such offices in such cities as the Underwriters may reasonably request from time to time. The Company shall from time to time deliver to the Underwriters, as soon as practicable at the offices in such cities designated by the Underwriters pursuant to this Section 4(c), the number of copies of any documents incorporated, or containing information incorporated by reference in the USCA Final Prospectuses which the Underwriters may from time to time reasonably request.
(d) Notification. During the period from the date hereof until the completion of the distribution of the Securities and at any time when a prospectus relating to the Securities is required to be delivered under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company shall promptly notify the Representatives, in each case in writing, with full particulars of:
(i) any change (actual, anticipated, contemplated or threatened) in the business, affairs, operations, assets, liabilities (contingent or otherwise), capital or ownership of Parent or any of its subsidiaries;
(ii) any change in any matter covered by a statement contained in any Offering Document or amendment or supplement to any of them; or
(iii) any other event or circumstance in respect of Parent or its Subsidiaries; of which it is aware and which:
(A) is, or may be, of such a nature as to render the USCA Final Prospectuses misleading or untrue in any material respect or would result in any of such documents containing a misrepresentation or which would result in any of such documents not complying with any of the Securities Laws or which would reasonably be expected to have a significant effect on the market price or value of the Securities, or
(B) results in it being necessary to amend the Registration Statement or to amend or supplement the USCA Final Prospectuses in order that such document will not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the case of the Registration Statement, not misleading, and in the case of the USCA Final Prospectuses, in the light of the circumstances under which such statements are made, not misleading, or makes it necessary to
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amend or supplement the Registration Statement or the USCA Final Prospectuses to comply with the requirements of the Securities Act and the published rules and regulations thereunder.
The Company and Parent shall in good faith discuss with the Representatives any change, event or circumstance (actual or proposed within the knowledge of the Company or Parent) which is of such a nature that there is reasonable doubt whether notice need be given to the Representatives pursuant to this section and, in any event, prior to making any filing referred to in Section 4(d).
(e) The Company and Parent shall promptly comply to the reasonable satisfaction of the Underwriters and their counsel with any applicable filing and other requirements under the Securities Laws arising as a result of any change, event or circumstance referred to in Section 4(d) and the Company and Parent shall prepare and file under all applicable Securities Laws, with all reasonable dispatch, and in any event within any time limit prescribed under applicable Securities Laws, any amendment or supplement to the Registration Statement as may be required under applicable Securities Laws; provided that the Company and Parent shall allow the Underwriters and their counsel to participate fully in the preparation of any such amendment or supplement to the Registration Statement and to conduct all due diligence investigations which the Underwriters may reasonably require in order to fulfill their obligations as underwriters and the Underwriters shall have approved the form of any amendment or supplement to the Registration Statement, such approval not to be unreasonably withheld or conditioned and to be provided in a timely manner. The Company and Parent shall further promptly deliver to the Underwriters and their counsel a copy of each amendment or supplement to the Registration Statement signed as required by applicable Securities Laws, such number of commercial copies of each amendment or supplement to the Registration Statement as the Underwriters may reasonably request, in the same manner as set forth in Section 4(b) hereof, as well as opinions and letters with respect to each such amendment or supplement to the Registration Statement.
(f) During the period commencing on the date hereof and ending on the completion of the distribution of the Securities offered hereby, the Company and Parent will promptly inform the Underwriters of the full particulars of:
(i) any request of the SEC or any Canadian Securities Commission, as applicable, for any amendment to any Offering Documents or for any additional information;
(ii) the issuance by any Canadian Securities Commission, the SEC or by any other competent authority of any order to cease or suspend trading of any securities of the Company or Parent, or of the institution or threat of institution of any proceedings for that purpose; or
(iii) the receipt by the Company or Parent of any communication from any Canadian Securities Commission, the SEC, the Toronto Stock Exchange, the New York Stock Exchange or any other competent authority relating to any Offering Document or the distribution of the Securities offered hereby.
(g) Ongoing Compliance. Each of the Company and Parent will promptly file all reports required to be filed by it with the Canadian Securities Commissions pursuant to Canadian Securities Laws and the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange
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Act for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a)) in connection with the offering or sale of the Securities (the “Prospectus Delivery Period”), and during such same period will advise the Underwriters, promptly after it receives notice thereof, of the issuance by the SEC or any Canadian Securities Commission of any stop order, cease trade order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of the Securities for offering or sale in the United States, of the initiation or threat, to the knowledge of the Company or Parent, of any proceeding for any such purpose, or of any request by the SEC or any Canadian Securities Commission for the amending or supplementing of the Registration Statement or the USCA Final Prospectuses or for additional information relating to the Securities; and the Company and Parent will use their commercially reasonable efforts to prevent the issuance of any such stop order or any such order preventing or suspending the use of any prospectus relating to the Securities or the suspension of any such qualification and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use its commercially reasonable efforts to obtain the withdrawal of such order as soon as possible;
(h) Clear Market. Neither the Company nor Parent will, without the prior written consent of the Representatives, offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company, Parent or any of their respective affiliates, or any person in privity with the Company, Parent or any of their respective affiliates, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission or the Canadian Securities Commissions, in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any debt securities issued or guaranteed by the Company or Parent, as the case may be (other than the Securities), which mature more than one year after Closing, or publicly announce an intention to effect any such transaction, until the business day following the Closing Date;
(i) DTC. The Company will assist the Underwriters in arranging for the Securities to be eligible for clearance and settlement through DTC.
(j) No Stabilization. Neither the Company nor Parent will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.
(k) Reports. Each of the Company and Parent will timely file such reports pursuant to the Securities Laws as are necessary in order to make generally available to its securityholders an earnings statement for the purposes of, and to provide the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the Securities Act or other equivalent section under the Securities Laws.
(l) Due Diligence. The Company and Parent shall allow the Underwriters to conduct all “due diligence” investigations which the Underwriters may reasonably request to enable the Underwriters to fulfill their obligations as underwriters.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents, covenants and agrees with the Company that:
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(a) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering (and will promptly notify the Company and Parent if any such proceeding against it is initiated during the Prospectus Delivery Period).
(b) It (i) will not directly or indirectly offer to sell or resell, or sell or resell, any Securities in Canada or to residents of Canada in contravention of Canadian Securities Laws; and (ii) has not undertaken and will not undertake any action, including advertisement or solicitation, in furtherance of the distribution of the Securities in Canada. Each Underwriter further agrees, severally and not jointly, that it will include comparable provisions in any sub-underwriting, banking group or selling group agreement or similar agreement with respect to the Securities that may be entered into by such Underwriter in connection with the offering of the Securities.
6. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Securities on the Closing Date as provided herein is subject to the performance by the Company and Parent of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose, shall be pending before or threatened by the Commission or any Canadian Securities Commission; the USCA Final Prospectuses and each Issuer Free Writing Prospectus shall have been timely filed with the Canadian Securities Commissions (to the extent required under Canadian Securities Laws) and the Commission under the Securities Laws (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 4(a) hereof; and all requests by the Commission and any Canadian Securities Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.
(b) Certificate of Company. The Representatives shall have received a certificate of the Chief Financial Officer and one other senior officer of each of the Company and Parent, dated the Closing Date, certifying that:
(i) the signers of such certificate have carefully examined the Registration Statement, the Disclosure Package and the USCA Final Prospectuses, any supplements to the Disclosure Package and the USCA Final Prospectuses and this Agreement;
(ii) the representations and warranties of the Company and Parent in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Company and Parent have complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date;
(iii) no stop order suspending the effectiveness of the Registration Statement or stop order preventing or suspending the use of any prospectus (including any Issuer Free Writing Prospectus) relating to the Securities has been issued and no proceedings for that purpose have been instituted or, to the Company’s or Parent’s knowledge, threatened by the Commission or any Canadian Securities Commission; and
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(iv) since the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and the USCA Final Prospectuses (exclusive of any supplement thereto), there has been no material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the USCA Final Prospectuses (exclusive of any supplement thereto).
(c) the Underwriters shall have received the comfort letters of Ernst & Young LLP and PricewaterhouseCoopers LLP, addressed to the Underwriters and dated the Closing Date, in form and substance satisfactory to the Underwriters, acting reasonably, bringing the information contained in the comfort letter of such auditors to be delivered on the date of this Agreement, forward to the Closing Date, which comfort letters shall be based on a review having a cut-off date not more than two business days prior to the Closing Date;
(d) the Underwriters shall have received legal opinions, and, in the case of Sullivan & Cromwell LLP and Davis Polk & Wardwell LLP, negative assurance letters, dated the Closing Date; from Sullivan & Cromwell LLP, U.S. counsel for the Company, to the effect set forth in Exhibit A-1 hereto; from Bennett Jones LLP, Canadian counsel for the Company, to the effect set forth in Exhibit A-2 hereto; from Stinson LLP, to the effect set forth in Exhibit A-3 hereto; and from Davis Polk & Wardwell LLP, U.S. counsel for the Underwriters, with respect to the offering and sale of the Securities in the United States, the Registration Statement, the Disclosure Package, the U.S. Final Prospectus (together with any amendment or supplement thereto) and other related matters as the Underwriters may reasonably require, it being understood that counsel for the Underwriters may rely on the opinions of counsel for the Company as to all matters not governed by the laws of the respective jurisdictions in which they are qualified to practice, and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of the Company, Parent, auditors and public officials, and that the opinions of counsel may be subject to usual qualifications as to equitable remedies, creditors’ rights laws and public policy considerations;
(e) subsequent to the Applicable Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the USCA Final Prospectuses (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letters referred to in paragraph (a)(iv) of Section 4 and paragraph (c) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of Parent and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the USCA Final Prospectuses (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof) and the USCA Final Prospectuses (exclusive of any supplement thereto).
(f) subsequent to the Applicable Time, there shall not have been any decrease in the rating of any of the Company’s or Parent’s debt securities by any “nationally recognized statistical rating organization” (as defined for purposes of Section 3(a)(62)(B) under the Exchange Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change; and
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(g) the Underwriters shall have received such further certificates and documents as they may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Company and Parent jointly and severally agree to and shall indemnify and hold harmless each of the Underwriters, their affiliates involved in the distribution of the Securities and their respective directors, officers, shareholders, agents and employees and each person who controls any Underwriter and its affiliates involved in the distribution of the Securities within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against all liabilities, claims, demands, losses (other than loss of profit in connection with the distribution of the Securities), costs, damages and expenses (including, without limitation, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such liability, claim, demand, or loss) in any way caused by or arising directly or indirectly from or in consequence of:
(i) any information or statement (except where made in reliance on and in conformity with Underwriters Information) in any Offering Document or in the Disclosure Package, the USCA Final Prospectuses or in any other document incorporated therein by reference being or being alleged to be a misrepresentation or untrue, or any omission or alleged omission to state therein any fact or information (except where made in reliance on and in conformity with Underwriters Information) 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;
(ii) any order made or any inquiry, investigation or proceeding commenced or threatened by any securities regulatory or other competent authority based upon any untrue statement, omission or misrepresentation or alleged untrue statement, omission or misrepresentation (except where made in reliance on and in conformity with Underwriters Information), preventing or restricting the trading in or the distribution of the Securities or any of them in the United States;
(iii) the Company or Parent not complying with any requirement of applicable Securities Laws in connection with the transactions contemplated herein; and
(iv) any breach of, default under or non-compliance by the Company or Parent with any representation, warranty, term or condition of this Agreement.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company and Parent, each of their directors, each of their officers who signs the Registration Statement, and each person who controls the Company or Parent within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and Parent to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company and Parent by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any
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Underwriter may otherwise have. The Company and Parent acknowledge that (i) the statements set forth in the second to last paragraph of the cover page regarding delivery of the Securities and, under the heading “Underwriting,” (ii) the list of Underwriters and their respective participation in the sale of the Securities, (iii) the sentences related to concessions and reallowances, (iv) the sentence related to certain underwriters not being U.S. registered broker-dealers (“Sales of notes in the U.S. by any underwriter that is not a broker-dealer registered with the SEC will be made only through one or more SEC-registered broker-dealers in compliance with applicable securities laws and the rules of FINRA.”) and (v) the paragraph related to stabilization, syndicate covering transactions and penalty bids in the Preliminary Prospectus and the USCA Final Prospectuses constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Registration Statement, the USCA Final Prospectuses or the Disclosure Package (together, “Underwriter Information”).
(c) As used in this Section 7, (i) “Indemnified Party” means a person seeking indemnity or making a claim for indemnification under Section 7(a) or (b), as applicable, and “Indemnified Parties” means each of them, and (ii) “Indemnifying Party” means the applicable person or persons against whom such indemnity may be sought.
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 7(a) or (b) hereof is unavailable, in whole or in part, for any reason to an Indemnified Party in respect of any liabilities, claims, demands, losses, costs, damages and expenses referred to therein, then each Indemnifying Party shall contribute to the aggregate amount paid or payable (or, if such indemnity is unavailable only in respect of a portion of the amount so paid or payable, such portion of the amount so paid or payable) by such Indemnified Party or Indemnified Parties as a result of such liabilities, claims, demands, losses, costs, damages and expenses:
(i) in such proportion as is appropriate to reflect as between the Company, Parent and the Underwriters, the relative benefits received by the Company and Parent on the one hand and by the Underwriters on the other hand from the offering of the Securities; or
(ii) if the allocation provided by clause (c)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (c)(i) above but also the relative fault of the Company and Parent on the one hand and the Underwriters on the other hand, as well as any other relevant equitable considerations; provided that no Underwriter shall in any event be liable to contribute, in the aggregate, any amount in excess of the amount of the total underwriting discounts and commissions received by the Underwriter with respect to the offering of the Securities.
The relative benefits received by the Company and Parent on the one hand and the Underwriters on the other shall be deemed to be in the same ratio as the total net proceeds from the distribution of the Securities (before deducting expenses) received by the Company and Parent is to the total underwriting discounts and commissions received by the Underwriters in connection with the sale of the Securities, based on the purchase price of the Securities.
The relative fault of the Company and Parent on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the matters or things referred to in Section 7(a) or (b) hereof which resulted in such liabilities, claims, demands, losses, costs, damages and expenses relate to information supplied by or steps or actions taken or done or
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not taken or done (including any non-compliance, breach or default) by or on behalf of the Company or Parent or by the Underwriters and the relative intent, knowledge, access to information and opportunity to correct or prevent such statement, omission or misrepresentation, or other matter or thing referred to in Section 7(a) or (b) hereof.
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(c) were determined by any method of allocation which does not take into account the equitable considerations referred to above in this Section 7(c). Notwithstanding the provisions of this Section 7(c), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(d) If any matter or thing contemplated by this Section 7 shall be asserted against any Indemnified Party, the Indemnified Party concerned shall promptly notify the Indemnifying Party and the other parties to this Agreement of the nature of such claim (provided that any failure to so notify the Indemnifying Party or any such other party promptly shall relieve the Indemnifying Party of liability under this Section 7 only to the extent that such failure prejudices the Indemnifying Party’s to defend such claim), and the Indemnifying Party shall, subject as hereinafter provided, be entitled (but not required) to assume the defense of any suit or proceeding (including any governmental or regulatory investigation or proceeding) brought to enforce such claim. Any such defense shall be through legal counsel acceptable to the Indemnified Party (whose acceptance shall not be unreasonably withheld) and no admission of liability or settlement shall be made by the Indemnifying Party or any other Indemnified Party in respect of any Indemnified Party without, in each case, the prior written consent of the Indemnified Party. An Indemnified Party shall have the right to employ separate counsel in any such suit and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Indemnified Party unless: (i) the Indemnifying Party fails to assume the defense of such suit on behalf of the Indemnified Party within a reasonable period of time; or (ii) the employment of such counsel has been authorized in writing by the Indemnifying Party; or (iii) the named parties to any such suit or proceeding include the Indemnified Party as well as the Indemnifying Party and the Indemnified Party shall have received a written opinion from counsel that there may be one or more legal defenses available to the Indemnified Party which are different from or in addition to those available to the Indemnifying Party and that representation of the Indemnified Party by counsel to the Indemnifying Party is inadvisable as a result of the potential or actual conflicts of interest of those represented (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such suit or proceeding on behalf of the Indemnified Party and shall be liable to pay the reasonable fees and expenses of counsel for the Indemnified Party), it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate law firm for all such Indemnified Parties (other than local counsel).
It is the intention of the parties to constitute each of the Underwriters, the Company and Parent as trustees for their respective affiliates involved in the distribution of the Securities and the respective directors, officers, shareholders, agents and employees, and each person who controls any Underwriter, the Company or Parent, respectively, of the covenants of the applicable Indemnifying Party under Section 7(a) and 7(b) hereof, as applicable, with respect to their
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respective directors, officers, shareholders, affiliates involved in the distribution of the Securities offered hereby, agents and employees, and each person who controls any Underwriter, and the Underwriters, the Company and Parent agree to accept such trust and to hold and enforce such covenants on behalf of such persons.
(e) The Company and Parent agree that in case any legal proceedings or investigation shall be brought against or initiated against them by any governmental commission, regulatory authority, exchange, court or other authority and any of the Underwriters or their representatives or related Indemnified Parties shall be required to testify or respond to procedures designed to discover information regarding, in connection with or relating to the performance of professional services rendered to the Company or Parent by one or more of the Underwriters or their affiliates involved in the distribution of the Securities in connection with the sale of the Securities offered hereby, the Company and Parent agree to pay the Underwriter or their affiliates involved in the distribution of the Securities offered hereby the reasonable costs (including an amount to reimburse the Underwriter for the time spent by the personnel in connection therewith on a per diem basis and out-of-pocket expenses) in connection therewith.
(f) The rights provided in this Section 7 shall be in addition to and not in derogation of any other right which the Underwriters, the Company or Parent may have by statute or otherwise at law.
8. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above.
9. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company and Parent prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in common shares of Parent shall have been suspended by the Commission, the Alberta Securities Commission, the New York Stock Exchange or the Toronto Stock Exchange, (ii) trading in securities generally on the New York Stock Exchange or the Toronto Stock Exchange or the Nasdaq National Market shall have been suspended or limited or minimum prices shall have been established on any of such exchanges, (iii) a banking moratorium shall have been declared either by authorities in the United States, Canada or New York, (iv) a change or development involving a prospective change in Canadian taxation affecting the Securities or the transfer thereof or the imposition of exchange controls by the United States or Canada, or (v) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States or Canada of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Disclosure Package (exclusive of any supplement thereto) and the USCA Final Prospectuses (exclusive of any supplement thereto).
10. Defaulting Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule 1 hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the
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aggregate principal amount of Securities set forth in Schedule 1 hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company and Parent. In the event of a default by any Underwriter as set forth in this Section 10, the Closing Date shall be postponed for such period, not exceeding five business days, as the Representatives shall determine in order that the required changes in the Registration Statement and the USCA Final Prospectuses or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company, Parent and any nondefaulting Underwriter for damages occasioned by its default hereunder.
11. Payment of Expenses. The Company and Parent, jointly and severally, agree to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Issuer Free Writing Prospectus and the USCA Final Prospectuses, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Issuer Free Writing Prospectus, the Preliminary Prospectus, the USCA Final Prospectuses, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration and qualification) and the preparation and printing of any blue sky memorandum; (v) the transportation and other expenses in connection with presentations to prospective purchasers of the Securities; (vi) the fees and expenses of the Company and Parent’s accountants and the fees and expenses of counsel (including local and special counsel) for the Company and Parent; (vii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (viii) any fees charged by securities rating services for rating the Securities; and (ix) all other costs and expenses of the Company, Parent and the Representatives incident to the performance by the Company and Parent of their obligations hereunder.
If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 9(ii) hereof or because of any refusal, inability or failure on the part of the Company or Parent to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company and Parent will reimburse the Underwriters severally through the Representatives on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities; provided however, that solely for the purpose of this Section 11, the condition set forth in Section 6(e)(ii) shall not include a change, or any development involving a prospective change affecting the condition (financial or otherwise), earnings, business or properties of the North American railway companies taken as a whole and which materially affects substantially all such companies.
12. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, Parent and the Underwriters contained in this Agreement or made by or on behalf of the Company, Parent or the Underwriters pursuant to this Agreement or any certificate
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delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, Parent or the Underwriters.
13. Compliance with USA Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company and Parent, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.
14. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Underwriters, will be mailed, delivered or telefaxed to the Representatives at Wells Fargo Securities, LLC at 550 South Tryon Street, 5th Floor, Charlotte, North Carolina 28202, Attention: Transaction Management, email: tmgcapitalmarkets@wellsfargo.com; BofA Securities, Inc., 114 West 47th Street, NY8-114-07-01, New York, New York 10036, Attention: High Grade Debt Capital Markets Transaction Management/Legal, facsimile: (212) 901-7881; Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282, Attention: Registration Department, facsimile: (212) 902-9316, email: registration-syndops@ny.email.gs.com; and Morgan Stanley & Co. LLC, 1585 Broadway, 29th Floor, New York, New York 10036, Attention: Investment Banking Division, facsimile: (212) 507-8999; or, if sent to the Company or Parent, will be mailed, delivered or telefaxed to Canadian Pacific Railway Company and confirmed to it at 7550 Ogden Dale Road S.E., Calgary, Alberta, T2C 4X9, attention of the Legal Department.
15. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 7 hereof, and no other person will have any right or obligation hereunder.
16. Submission to Jurisdiction; Agent for Service; Waiver of Immunities. Each of the Company and Parent irrevocably (i) agrees that any legal suit, action or proceeding against the Company or Parent brought by any Underwriter or by any person who controls any Underwriter arising out of or based upon this Agreement or the transactions contemplated thereby may be instituted in any New York Court, (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding and (iii) submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company and Parent have appointed CT Corporation System, New York, New York, as their authorized agent (the “Authorized Agent”) upon whom process may be served, at 28 Liberty Street, 42nd Floor, New York, New York, 10005, USA, in any such action arising out of or based on this Agreement or the transactions contemplated hereby which may be instituted in any New York Court by any Underwriter or by any person who controls any Underwriter, expressly consent to the jurisdiction of any such court in respect of any such action, and waive any other requirements of or objections to personal jurisdiction with respect thereto. Such appointment shall be irrevocable. The Company and Parent represent and warrant that the Authorized Agent has agreed to act as such agent for service of process and agree to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company or Parent shall be deemed, in every respect, effective service of process upon the Company or Parent, as the case may be.
To the extent that either of the Company or Parent has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment
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prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of its obligations under the above-referenced documents, to the extent permitted by law.
The provisions of this Section 16 shall survive any termination of this Agreement, in whole or in part.
17. Judgment Currency. The obligation of the Company and Parent in respect of any sum due to any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter of any sum adjudged to be so due in such other currency, on which (and only to the extent that) such Underwriter may in accordance with normal banking procedures purchase United States dollars with such other currency; if the United States dollars so purchased are less than the sum originally due to such Underwriter hereunder, the Company and Parent agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter hereunder, such Underwriter agrees to pay to the Company or Parent, as the case may be, an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter hereunder.
18. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
19. Counterparts. The Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement or the other Transaction Documents shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
20. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.
21. Entire Agreement. This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Securities, represents the entire agreement between the Company and Parent on the one hand and the Underwriters on the other hand with respect to the preparation of any preliminary prospectus, the Disclosure Package, the USCA Final Prospectuses, the conduct of the offering, and the purchase and sale of the Securities.
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The Company and Parent acknowledge that in connection with the offering of the Securities: (i) the Underwriters have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company, Parent or any other person, (ii) the Underwriters owe the Company and Parent only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company and Parent. The Company and Parent waive to the full extent permitted by applicable law any claims they may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.
22. Recognition of the U.S. Special Resolution Regimes. Notwithstanding any other provisions herein, (i) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. (ii) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
As used in this section:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[Signature pages follow]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
| Very truly yours, | ||
| Canadian Pacific Railway Company | ||
| By: | /s/ Nadeem Velani | |
| Name: | Nadeem Velani | |
| Title: | Executive Vice-President and Chief Financial Officer | |
| By: | /s/ Chris De Bruyn | |
| Name: | Chris De Bruyn | |
| Title: | Vice-President Capital Markets and Treasurer | |
| Canadian Pacific Kansas City Limited | ||
| By: | /s/ Nadeem Velani | |
| Name: | Nadeem Velani | |
| Title: | Executive Vice-President and Chief Financial Officer | |
| By: | /s/ Chris De Bruyn | |
| Name: | Chris De Bruyn | |
| Title: | Vice-President Capital Markets and Treasurer | |
[Signature Page to Underwriting Agreement]
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| WELLS FARGO SECURITIES, LLC | ||
| By: | /s/ Carolyn Hurley | |
| Authorized Signatory | ||
| Name: Carolyn Hurley | ||
| Title: Managing Director | ||
[Signature Page to Underwriting Agreement]
31
| BOFA SECURITIES, INC. | ||
| By: | /s/ Robert Colucci | |
| Authorized Signatory | ||
| Name: Robert Colucci | ||
| Title: Managing Director | ||
[Signature Page to Underwriting Agreement]
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| GOLDMAN SACHS & CO. LLC | ||
| By: | /s/ Jonathan Zwart | |
| Authorized Signatory | ||
| Name: Jonathan Zwart | ||
| Title: Managing Director | ||
[Signature Page to Underwriting Agreement]
33
| MORGAN STANLEY & CO. LLC | ||
| By: | /s/ Aisha Farman | |
| Authorized Signatory | ||
| Name: Aisha Farman | ||
| Title: Vice President | ||
[Signature Page to Underwriting Agreement]
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Schedule 1
| Underwriter |
Principal Amount | |||||||
| 2030 Notes | 2035 Notes | |||||||
| Wells Fargo Securities, LLC |
$ | 90,000,000 | $ | 90,000,000 | ||||
| BofA Securities, Inc. |
$ | 78,000,000 | $ | 78,000,000 | ||||
| Goldman Sachs & Co. LLC |
$ | 78,000,000 | $ | 78,000,000 | ||||
| Morgan Stanley & Co. LLC |
$ | 78,000,000 | $ | 78,000,000 | ||||
| BMO Capital Markets Corp. |
$ | 48,000,000 | $ | 48,000,000 | ||||
| CIBC World Markets Corp. |
$ | 48,000,000 | $ | 48,000,000 | ||||
| RBC Capital Markets, LLC |
$ | 48,000,000 | $ | 48,000,000 | ||||
| Scotia Capital (USA) Inc. |
$ | 48,000,000 | $ | 48,000,000 | ||||
| SMBC Nikko Securities America, Inc. |
$ | 48,000,000 | $ | 48,000,000 | ||||
| ATB Securities Inc. |
$ | 12,000,000 | $ | 12,000,000 | ||||
| Desjardins Securities Inc. |
$ | 12,000,000 | $ | 12,000,000 | ||||
| U.S. Bancorp Investments, Inc. |
$ | 12,000,000 | $ | 12,000,000 | ||||
|
|
|
|
|
|||||
| Total |
$ | 600,000,000 | $ | 600,000,000 | ||||
Schedule 2
Significant Subsidiaries
| Significant Subsidiary |
Incorporated Under the Laws of: | |
| • Canadian Pacific Railway Company |
• Canada | |
| • 16147011 Canada Inc. |
• Canada | |
| • Caymex Transportation, Inc. |
• Delaware | |
| • 3939804 Canada Inc. |
• Canada | |
| • CPFL S.à.r.l. |
• Luxembourg | |
| • CP (US) Holding Corporation |
• Delaware | |
| • Soo Line Corporation |
• Minnesota | |
| • Soo Line Railroad Company |
• Minnesota | |
| • CPKCM Holdings, S. de R.L. de C.V. |
• Mexico | |
| • Cygnus Canadian Holding Company Ltd. |
• Canada | |
| • CPFS AG |
• Switzerland | |
| • Cygnus Holding LLC |
• Delaware | |
| • Kansas City Southern |
• Delaware | |
| • Kansas City Southern de Mexico, S.A. de C.V. |
• Mexico | |
| • Kansas City Southern International Ventures, LLC |
• Delaware | |
| • KSU Holdings LLC |
• Delaware | |
| • NAFTA Rail, S. de R.L. de C.V. |
• Mexico | |
| • North American Freight Transportation Rail Corporation, S. de R.L. de C.V. |
• Mexico | |
| • The Kansas City Southern Railway Company |
• Missouri |
Annex A
| 1. | Pricing Term Sheet, dated March 12, 2025. |
Filed Pursuant to Rule 433
Registration Statement File No. 333-285353
March 12, 2025
CANADIAN PACIFIC RAILWAY COMPANY
Pricing Term Sheet
The information in this pricing term sheet relates to the offering by Canadian Pacific Railway Company of US$600,000,000 of its 4.800% Notes due 2030 (the “2030 Notes”) and US$600,000,000 of its 5.200% Notes due 2035 (the “2035 Notes,” and, together with the 2030 Notes, the “Offering”) and should be read together with the preliminary prospectus supplement dated March 12, 2025 (the “Preliminary Prospectus Supplement”), including the documents incorporated by reference therein and the related base prospectus dated March 6, 2025. Terms used but not defined herein, with respect to the Offering, have the meanings ascribed to them in the Preliminary Prospectus Supplement.
| Issuer: | Canadian Pacific Railway Company | |
| Guarantor: | Canadian Pacific Kansas City Limited | |
| Expected Ratings*: | [Intentionally Omitted] | |
| Pricing Date: | March 12, 2025 | |
| Settlement Date**: | March 17, 2025 (T+3) | |
| Interest Payment Dates: | 2030 Notes : March 30 and September 30, 2035 Notes : March 30 and September 30, | |
| Title: | 4.800% Notes due 2030 5.200% Notes due 2035 | |
| Principal Amount: | 2030 Notes : $600,000,000 2035 Notes : $600,000,000 | |
| Maturity Date: | 2030 Notes : March 30, 2030 2035 Notes : March 30, 2035 | |
| Coupon: | 2030 Notes : 4.800% 2035 Notes : 5.200% | |
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| Benchmark Treasury: | 2030 Notes : 4.000% due February 28, 2030 2035 Notes : 4.625% due February 15, 2035 | |
| Benchmark Treasury Price / Yield: | 2030 Notes : 99-20 1⁄4 / 4.082% 2035 Notes : 102-14 / 4.320% | |
| Spread to Benchmark Treasury: | 2030 Notes : +75 basis points 2035 Notes : +95 basis points | |
| Yield to Maturity: | 2030 Notes : 4.832% 2035 Notes : 5.270% | |
| Price to the Public: | 2030 Notes : 99.856% of the principal amount 2035 Notes : 99.457% of the principal amount | |
| Optional Redemption Provisions: | Make-Whole Call: 2030 Notes: Prior to February 28, 2030 at T+15 bps 2035 Notes: Prior to December 30, 2034 at T+15 bps
Par Call: 2030 Notes: On or after February 28, 2030 at 100% 2035 Notes: On or after December 30, 2034 at 100% | |
| Change of Control: | At 101% of principal, plus accrued and unpaid interest to the repurchase date | |
| CUSIP/ISIN: | 2030 Notes: 13645R BJ2 / US13645RBJ23 2035 Notes: 13645R BK9 / US13645RBK95 | |
| Denominations: | $2,000 and integral multiples of $1,000 in excess thereof | |
| Joint Book-Running Managers: | Wells Fargo Securities, LLC BofA Securities, Inc. Goldman Sachs & Co. LLC Morgan Stanley & Co. LLC BMO Capital Markets Corp. CIBC World Markets Corp. RBC Capital Markets, LLC Scotia Capital (USA) Inc. SMBC Nikko Securities America, Inc. | |
| Co-Managers: | ATB Securities Inc. Desjardins Securities Inc. U.S. Bancorp Investments, Inc. | |
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*Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
**Note: It is expected that delivery of the Notes will be made against payment therefor on or about March 17, 2025, which will be the third business day following the date of the pricing of the Notes (such settlement cycle being referred to as “T+3”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are generally required to settle in one business day, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes prior to the business day preceding the date of delivery of the Notes will be required, by virtue of the fact that the Notes will initially settle in T+3, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the Notes who wish to trade the Notes prior to the business day preceding the date of delivery of the Notes should consult their own advisors.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Wells Fargo Securities, LLC toll free at +1-800-645-3751, BofA Securities, Inc. toll free at +1-800-294-1322, Goldman Sachs & Co. LLC toll free at 1-866-471-2526, or Morgan Stanley & Co. LLC toll free at +1-866-718-1649.
ANY LEGENDS, DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH LEGENDS, DISCLAIMERS OR OTHER NOTICES HAVE BEEN AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION HAVING BEEN SENT VIA BLOOMBERG OR ANOTHER SYSTEM.
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Exhibit A-1
Form of Opinion and 10b-5 Letter of Sullivan & Cromwell LLP,
U.S. Counsel for the Company
[Intentionally Omitted]
A-1-1
Exhibit A-2
Form of Opinion of Bennett Jones LLP,
Canadian Counsel for the Company
[Intentionally Omitted]
A-2-1
Exhibit A-3
Form of Opinion of Stinson LLP
[Intentionally Omitted]
A-3-1
Exhibit 4.2
Dated as of March 17, 2025
CANADIAN PACIFIC KANSAS CITY LIMITED
as Guarantor and
CANADIAN PACIFIC RAILWAY COMPANY
as Issuer
and
COMPUTERSHARE TRUST COMPANY, N.A.
as Trustee
SEVENTH SUPPLEMENTAL INDENTURE
to the
TRUST INDENTURE
Dated as of September 11, 2015
THIS SEVENTH SUPPLEMENTAL INDENTURE (this “Seventh Supplemental Indenture”) dated as of March 17, 2025 among CANADIAN PACIFIC KANSAS CITY LIMITED, a corporation incorporated under the Canada Business Corporations Act and having its head office in the City of Calgary, in the Province of Alberta (the “Guarantor”), CANADIAN PACIFIC RAILWAY COMPANY, a corporation incorporated under the Canada Business Corporations Act and having its head office in the City of Calgary, in the Province of Alberta (the “Issuer”) and COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as successor to Wells Fargo, National Association under the Original Indenture (as defined below) and the applicable supplemental indentures executed prior to the date hereof, as trustee (the “Trustee”).
RECITALS OF THE ISSUER
WHEREAS, the Issuer and the Trustee entered into an indenture, dated as of September 11, 2015 (the “Original Indenture”). Section 8.01(7) of the Original Indenture provides that the Issuer and the Trustee may, without the consent of any Holder, enter into a supplemental indenture to establish the form or terms of Securities of any series as permitted by Section 2.01 and 3.01 thereof.
WHEREAS, pursuant to Sections 2.01 and 3.01 of the Original Indenture, the Issuer desires to provide for the establishment of two additional series of Securities under the Original Indenture, and the form and terms thereof, as hereinafter set forth.
WHEREAS, the Issuer has requested that the Trustee execute and deliver this Seventh Supplemental Indenture. The Issuer has delivered to the Trustee an Opinion of Counsel and an Officers’ Certificate pursuant to Sections 1.02 and 8.03 of the Original Indenture to the effect, among other things, that all conditions precedent provided for in the Original Indenture to the Trustee’s execution and delivery of this Seventh Supplemental Indenture have been complied with. All acts and things necessary have been done and performed to make this Seventh Supplemental Indenture enforceable in accordance with its terms, and the execution and delivery of this Seventh Supplemental Indenture has been duly authorized in all respects.
WHEREAS the proper Officers of the Issuer have duly authorized the creation and issuance of two additional series of Securities under the Original Indenture, to be designated as (i) 4.800% Notes due 2030 (the “2030 Notes”), to be initially limited (subject to the exceptions described herein and in the Original Indenture) to the aggregate principal amount of U.S.$600,000,000; and (ii) 5.200% Notes due 2035 (the “2035 Notes,” and, together with the 2030 Notes, the “Notes”), to be initially limited (subject to the exceptions described herein and in the Original Indenture) to the aggregate principal amount of U.S.$600,000,000; the further terms and conditions thereof being hereinafter set forth, all in accordance with a resolution of the directors of the Issuer.
WHEREAS, the Guarantor desires to fully and unconditionally guarantee the Notes (the “Guarantee”) and the applicable obligations of the Issuer under the Original Indenture (as amended herein with respect to the Notes), and to provide therefor, the Guarantor has duly authorized the execution and delivery of this Seventh Supplemental Indenture.
WHEREAS, pursuant to Section 3.01(15) of the Original Indenture, the Issuer desires to amend the provisions of the Original Indenture for purposes of the Notes only regarding whether and under what circumstances the Issuer will pay Additional Amounts (as defined below) on the Notes to any Holder in respect of any tax, assessment or governmental charge.
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WHEREAS, pursuant to Section 3.01(23) of the Original Indenture, the Issuer desires to amend certain other provisions of the Original Indenture for purposes of the Notes only.
NOW, THEREFORE, THIS SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Notes by the holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all holders of the Notes, as follows:
| 1. | INTERPRETATIONS AND AMENDMENTS |
| 1.1 | Seventh Supplemental Indenture |
As used herein “Seventh Supplemental Indenture”, “hereto”, “herein”, “hereof”, “hereby”, “hereunder” and similar expressions refer to this Seventh Supplemental Indenture and not to any particular Article, Section or other portion hereof and include any and every instrument supplemental or ancillary hereto or in implementation hereof, and further include the terms of the Notes set forth in the form of Notes annexed as Schedules A1 and A2 hereto.
| 1.2 | Definitions in Seventh Supplemental Indenture |
All terms contained in this Seventh Supplemental Indenture which are defined in the Original Indenture and not defined herein shall, for all purposes hereof, have the meanings given to such terms in the Original Indenture, unless the context otherwise specifies or requires; provided, however, that notwithstanding the foregoing, the terms “Issuer” and “Trustee” shall have the respective meanings given to them in the Original Indenture.
| 1.3 | Interpretation not Affected by Headings |
The division of this Seventh Supplemental Indenture into Articles and Sections, the provision of the table of contents hereto and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Seventh Supplemental Indenture.
| 2. | NOTES |
| 2.1 | Form and Terms of Notes |
There shall be and there is hereby created for issuance under the Original Indenture, as supplemented by this Seventh Supplemental Indenture a series of Securities which shall consist of an aggregate principal amount of U.S.$600,000,000 2030 Notes and a series of Securities which shall consist of an aggregate principal amount of U.S.$600,000,000 2035 Notes; provided, however, that if the Issuer shall, at any time after the date hereof, increase the principal amount of the 2030 Notes or 2035 Notes, which may be issued and issue such increased principal amount (or any portion thereof), then any such additional 2030 Notes or 2035 Notes so issued shall have the same form and terms (other than the date of issuance and the date from which interest thereon shall begin to accrue and, under certain circumstances, the first interest payment date), and shall carry the same right to receive accrued and unpaid interest, as the 2030 Notes or 2035 Notes theretofore issued, as the case may be; and provided, further, that, notwithstanding the foregoing, the Issuer shall not be entitled to increase the principal amount of 2030 Notes or 2035 Notes which may be
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issued or issue any such increased principal amount if the Issuer has effected satisfaction and discharge of the Original Indenture pursuant to Section 4.01 of the Original Indenture or defeasance or covenant defeasance pursuant to Article 12 of the Original Indenture.
The 2030 Notes will mature, and the principal of the 2030 Notes and accrued and unpaid interest thereon will be due and payable, on March 30, 2030, or such earlier date as the principal of any of the 2030 Notes may become due and payable in accordance with the provisions of the Original Indenture and this Seventh Supplemental Indenture.
The 2035 Notes will mature, and the principal of the 2035 Notes and accrued and unpaid interest thereon will be due and payable, on March 30, 2035, or such earlier date as the principal of any of the 2035 Notes may become due and payable in accordance with the provisions of the Original Indenture and this Seventh Supplemental Indenture.
The 2030 Notes shall bear interest on the principal amount thereof from the date hereof or from the last date to which interest shall have been paid or duly made available for payment on the 2030 Notes, whichever is later, at the rate of 4.800% per annum, payable semiannually in arrears on March 30 and September 30 (each, a “2030 Notes Interest Payment Date”) in each year, commencing September 30, 2025 until the principal of and premium, if any, on the 2030 Notes is paid or duly made available for payment; and should the Issuer at any time default in the payment of any principal of, or premium, if any, or interest on the 2030 Notes, when due, the Issuer shall pay interest (such interest to be payable on demand), to the extent permitted by law, on the amount in default at the same rate applicable to the 2030 Notes. Interest on the 2030 Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest payable, and punctually paid or duly provided for, on any 2030 Notes Interest Payment Date will, as provided in the Original Indenture, be paid to the Persons in whose names the 2030 Notes (or one or more predecessor Notes) are registered at the close of business on March 15 and September 15 (the “2030 Notes Regular Record Dates”), as the case may be, immediately prior to such 2030 Notes Interest Payment Date, regardless of whether any such 2030 Notes Regular Record Date is a Business Day. Any such interest on the 2030 Notes not so punctually paid or duly provided for on any 2030 Notes Interest Payment Date shall be payable as provided in the form of 2030 Note annexed hereto as Schedule Al to this Seventh Supplemental Indenture.
The 2035 Notes shall bear interest on the principal amount thereof from the date hereof or from the last date to which interest shall have been paid or duly made available for payment on the 2035 Notes, whichever is later, at the rate of 5.200% per annum, payable semiannually in arrears on March 30 and September 30 (each, a “2035 Notes Interest Payment Date”) in each year, commencing September 30, 2025 until the principal of and premium, if any, on the 2035 Notes is paid or duly made available for payment; and should the Issuer at any time default in the payment of any principal of, or premium, if any, or interest on the 2035 Notes, when due, the Issuer shall pay interest (such interest to be payable on demand), to the extent permitted by law, on the amount in default at the same rate applicable to the 2035 Notes. Interest on the 2035 Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest payable, and punctually paid or duly provided for, on any 2035 Notes Interest Payment Date will, as provided in the Original Indenture, be paid to the Persons in whose names the 2035 Notes (or one or more predecessor Notes) are registered at the close of business on March 15 and September 15 (the “2035 Notes Regular Record Dates”), as the case may be, immediately prior to such 2035 Notes Interest Payment Date, regardless of whether any such 2035 Notes Regular Record Date is a Business Day. Any such interest on the 2035 Notes not so punctually paid or duly provided for on any 2035 Notes Interest Payment Date shall be payable as provided in the form of 2035 Note annexed hereto as Schedule A2 to this Seventh Supplemental Indenture.
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The Notes constitute unsecured obligations of the Issuer and rank pari passu with all of its other unsecured and unsubordinated debt from time to time outstanding and pari passu with other notes issued pursuant to the Original Indenture.
For the purposes only of the disclosure required by the Interest Act (Canada), and without affecting the amount of interest payable to any holder of a Note or the calculation of interest on any Note, if the rate of interest on any Note is calculated on the basis of a year (the “deemed year”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.
All payments of principal of and premium, if any, and interest on the Notes (including Additional Amounts, if any) will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, and all references herein to “United States dollars”, “U.S.$” or “U.S. dollars” shall be deemed to refer to such coin or currency of the United States of America.
The principal of and premium, if any, and interest on the Notes shall be payable, and the Notes may be surrendered for exchange, registration, transfer or discharge from registration, at the Corporate Trust Office of the Trustee, and in such other places as the Issuer may from time to time designate in accordance with the Original Indenture. The Trustee is hereby appointed as the initial Paying Agent, registrar and transfer agent for the Notes.
The Notes of each series shall be issued only as fully registered Notes, without coupons, in denominations of U.S.$2,000 and integral multiples of U.S.$1,000 thereafter. Each series of Notes will initially be represented by one or more global Securities (collectively, the “Global Notes”) registered in the name of The Depository Trust Company, as Depositary or its nominee, or a successor depositary or its nominee.
The certificates representing the Notes shall bear the following legend:
“UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”
The 2030 Notes and 2035 Notes and the certificate of authentication of the Trustee endorsed thereon shall be in the form set out in Schedules A1 and A2 to this Seventh Supplemental Indenture with such appropriate insertions, omissions, substitutions and variations as the Trustee may approve and shall be numbered in such manner as the Trustee may approve, such approvals of the Trustee concerning the Note to be conclusively evidenced by its certification of the Note.
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The Security Register referred to in Section 3.05 of the Original Indenture shall, with respect to the Notes, be kept at the office or agency that the Issuer may from time to time designate for such purpose (which shall initially be the Corporate Trust Office of the Trustee), and at such other place or places as the Issuer with the approval of the Trustee may hereafter designate.
The Notes shall be subject to redemption at the option of the Issuer as provided in Article 3 (Optional Redemption of Notes) of this Seventh Supplemental Indenture and Article 10 of the Original Indenture and the Notes shall be subject to repurchase by the Issuer as provided in Article 4 (Change of Control) of this Seventh Supplemental Indenture. The Issuer shall not otherwise be required to redeem, purchase or repay Notes pursuant to any mandatory redemption, sinking fund or analogous provision or at the option of the holders thereof. The Notes will not be convertible into or exchangeable for securities of any Person.
The Notes shall have the other terms and provisions set forth in the applicable forms of 2030 Notes and 2035 Notes attached hereto as Schedules A1 and A2 to this Seventh Supplemental Indenture with the same force and effect as if such terms and provisions were set forth in full herein.
| 2.2 | Issuance of Notes |
Each of the 2030 Notes in the aggregate principal amount of U.S.$600,000,000 and the 2035 Notes in the aggregate principal amount of U.S.$600,000,000 shall be executed on behalf of the Issuer by any two of the following Officers: its Chairman of the Board, its President, any of its Vice Presidents, the Secretary, the Treasurer, or any of its Assistant Treasurers and delivered by the Issuer to the Trustee on the date of issue for authentication and delivery pursuant to and in accordance with the provisions of Section 3.02 of the Original Indenture and, upon the requirements of such provisions being complied with, such Notes shall be authenticated by or on behalf of the Trustee and delivered by it to or upon the Corporation Order of the Issuer without any further act or formality on the part of the Issuer. The Trustee shall have no duty or responsibility with respect to the use or application of any of the Notes so certified and delivered or the proceeds thereof.
| 3. | REDEMPTION OF NOTES |
| 3.1 | Optional Redemption of Notes |
Prior to the applicable Par Call Date (as defined below), the Issuer may redeem any of the 2030 Notes or the 2035 Notes, in whole or in part, at the Issuer’s option (in the manner and in accordance with and subject to the terms and provisions set forth in Article 10 of the Original Indenture to the extent not otherwise provided below), at any time or from time to time at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of:
| 1. | (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the applicable series of Notes to be redeemed matured on the applicable Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus the applicable Make-Whole Spread set forth in the table below less (b) interest accrued to the date of redemption, and |
| 2. | 100% of the principal amount of the applicable series of Notes to redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the Redemption Date. |
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For purposes hereof, “Par Call Date” and “Make-Whole Spread” in respect of an applicable series of Notes shall mean the date and spread set forth under the applicable heading below across from the name of such series of Notes.
| Series of Notes |
Par Call Date |
Make-Whole Spread | ||
| 2030 Notes | February 28, 2030 (one month prior to the maturity date of such Notes) |
+15 basis points | ||
| 2035 Notes | December 30, 2034 (three months prior to the maturity date of such Notes) |
+15 basis points |
On or after the applicable Par Call Date, the Issuer may redeem the 2030 Notes or the 2035 Notes, in whole or in part, at the Issuer’s option, at any time or from time to time at a redemption price equal to 100% of the principal amount of the applicable Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.
The Issuer shall provide to Holders of Notes to be redeemed a notice of redemption delivered at least 10 and not more than 60 days prior to the date fixed for redemption.
The Issuer’s actions and determinations in determining the redemption price shall be conclusive and binding for all purposes, absent manifest error.
In the case of a partial redemption, selection of the applicable series of Notes for redemption will be made pro rata, by lot or by such other method as the Trustee in its sole discretion deems appropriate and fair. No Notes of a principal amount of U.S.$1,000 or less will be redeemed in part. If any Note is to be redeemed in part only, the notice of redemption that relates to the Note will state the portion of the principal amount of the Note to be redeemed. A new Note in a principal amount equal to the unredeemed portion of the Note will be issued in the name of the holder of the Note upon surrender for cancellation of the original Note. For so long as the Notes are held by DTC (or another depositary), the redemption of the Notes shall be done in accordance with the policies and procedures of the depositary.
Unless the Issuer defaults in payment of the redemption price, on and after the Redemption Date interest will cease to accrue on the applicable series of Notes or portions thereof called for redemption.
| 3.2 | Certain Additional Definitions |
For the purposes of this Seventh Supplemental Indenture, the following expression shall have the following meaning:
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Issuer and specified in writing to the Trustee in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Issuer after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the
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Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading) (“H.15 TCM”). In determining the Treasury Rate, the Issuer shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the applicable Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life – and shall interpolate to the applicable Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 TCM is no longer published, the Issuer shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the applicable Par Call Date. If there is no United States Treasury security maturing on the applicable Par Call Date but there are two or more United States Treasury securities with a maturity date equally distant from the applicable Par Call Date, one with a maturity date preceding the applicable Par Call Date and one with a maturity date following the applicable Par Call Date, the Issuer shall select the United States Treasury security with a maturity date preceding the applicable Par Call Date. If there are two or more United States Treasury securities maturing on the applicable Par Call Date or two or more United States Treasury securities meeting the criteria of the preceding sentence, the Issuer shall select from among these two or more United States Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
| 4. | CHANGE OF CONTROL |
| 4.1 | Change of Control |
| (a) | Upon the occurrence of a Change of Control Triggering Event in respect of the Notes, unless all the Notes have been called for redemption pursuant to Section 3.1, each Holder of Notes shall have the right to require the Issuer to repurchase all or any part (equal to U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof) of such Holder’s Notes at an offer price in cash equal to the Change of Control Payment. |
| (b) | Within 30 days following any Change of Control Triggering Event, the Issuer shall send a notice to each Holder of Notes of the applicable series describing the transaction or transactions that constitute the Change of Control Triggering Event and specifying: |
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| (i) | that the Change of Control Offer is being made pursuant to this Section 4.1 and that all Notes tendered will be accepted for payment; |
| (ii) | the Change of Control Payment and the purchase date, which shall be a Business Day no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”); |
| (iii) | the CUSIP number for the Notes; |
| (iv) | that any Note not tendered will continue to accrue interest; |
| (v) | that, unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date; |
| (vi) | that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; |
| (vii) | that Holders will be entitled to withdraw their election referred to in clause (vi) if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing its election to have the Notes purchased; |
| (viii) | that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion will be equal to U.S.$2,000 in principal amount or an integral multiple of U.S.$1,000 in excess thereof; and |
| (ix) | if such notice is mailed prior to the date of the occurrence of the Change of Control Triggering Event, that the Change of Control Offer is conditional on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. |
| (c) | The Issuer shall cause the Change of Control Offer to remain open for at least 20 Business Days or such longer period as is required by applicable law. The Issuer shall comply with the requirements of Rule 14e-l under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes of the applicable series as a result of a Change in Control Triggering Event. To the extent that the provisions of any |
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| securities laws or regulations conflict with the provisions of this Section 4.1, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.1 by virtue of such conflict. |
| (d) | On the Change of Control Payment Date, the Issuer will, to the extent lawful: |
| (i) | accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; |
| (ii) | deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and |
| (iii) | deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuer. |
| (e) | The Paying Agent will promptly mail to each Holder of Notes of the applicable series properly tendered the Change of Control Payment for such series of Notes, and the Trustee will promptly authenticate and send (or cause to be transferred by book entry) to each Holder a new note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a principal amount of U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. |
| (f) | The Issuer shall not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.1 applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under such Change of Control Offer. |
| (g) | The Issuer may make a Change of Control Offer in advance of, but conditioned on, the occurrence of a Change of Control Triggering Event but otherwise in accordance with the provisions of this Section 4.1. |
| (h) | The Issuer shall be solely responsible for monitoring the occurrence of a Change of Control Triggering Event. |
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| 4.2 | Certain Additional Definitions |
For the purposes of this Seventh Supplemental Indenture, the following expressions shall have the following meanings:
“Below Investment Grade Rating Event” means the Notes of the applicable series are rated below an Investment Grade Rating by at least two out of three of the Rating Agencies (as defined below), if there are three or more Rating Agencies, or all of the Rating Agencies, if there are less than three Rating Agencies, (the “Required Threshold”) on any date from the date of the public notice of an arrangement or transaction that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control, which 60-day period shall be extended if, by the end of the 60-day period, the rating of the Notes of such series is under publicly announced consideration for a possible downgrade by such number of Rating Agencies which, together with the Rating Agencies which have already lowered their ratings on the Notes of such series, as aforesaid, would aggregate in number the Required Threshold, such extension to continue for so long as consideration for a possible downgrade continues by such number of Rating Agencies which, together with the Rating Agencies which have already lowered their ratings on the Notes of such series, as aforesaid, would aggregate in number the Required Threshold.
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or amalgamation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuer and its subsidiaries taken as a whole to any person (as such term is used in Section 13(d) of the Exchange Act) other than the Issuer, the Guarantor or any of the Issuer’s or Guarantor’s subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or amalgamation) the result of which is that any person (as such term is used in Section 13(d) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of Guarantor’s voting shares; or (3) the first day on which a majority of the members of Guarantor’s Board of Directors are not Continuing Directors.
“Change of Control Offer” means an offer to repurchase Notes pursuant to Section 4.1 hereof.
“Change of Control Payment” means, with respect to Notes tendered for repurchase pursuant to a Change of Control Offer, an amount equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of Guarantor who (i) was a member of such Board of Directors on the date of the issuance of the Notes; or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election (either by a specific vote or by approval of Guarantor’s proxy statement in which such member was named as a nominee for election as a director, without objection to such nomination).
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s, BBB- (or the equivalent) by S&P, or the equivalent investment grade credit rating from any other Rating Agency.
“Moody’s” means Moody’s Investors Service, Inc.
“Rating Agencies” means any “nationally recognized statistical rating organization” within the meaning of Rule 15c3-l(c)(2)(vi)(F) under the Exchange Act then providing publicly available ratings of the Notes.
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“Required Threshold” has the meaning set forth in the definition of Below Investment Grade Rating Event.
“S&P” means S&P Global Ratings, a division of S&P Global Inc.
| 5 | AMENDMENTS TO ORIGINAL INDENTURE FOR PURPOSES OF THE NOTES |
| 5.1 | Amendment to Section 1.01 |
For purposes of the Notes, the definitions of “Additional Amounts”, “Canadian Taxes”, “Excluded Holder” and “GAAP” in Section 1.01 of the Original Indenture are hereby deleted and replaced with the following:
“Additional Amounts” has the meaning specified in Section 9.07;
“Canadian Taxes” has the meaning specified in Section 9.07;
“Excluded Holder” has the meaning specified in Section 9.07;
“GAAP” means, at any time, accounting principles generally accepted in the United States at the relevant time applied on a consistent basis, provided that, if reference to “GAAP” is in respect of any financial statements which are prepared in accordance with generally accepted accounting principles of Canada, “GAAP” shall mean generally accepted accounting principles in Canada as recommended in the Handbook of the Chartered Professional Accountants Canada (as may be amended, supplemented or replaced from time to time) at the relevant time, applied on a consistent basis.
| 5.2 | Amendment of Section 9.07 |
For purposes of the Notes, Section 9.07 of the Original Indenture is hereby deleted and replaced with the following:
All payments made by the Issuer or Guarantor under or with respect to the Notes will be made free and clear of and without withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge (including penalties, interest and other liabilities related thereto) imposed or levied by or on behalf of the Government of Canada or of any province or territory thereof or by any authority or agency therein or thereof having power to tax (hereinafter “Canadian Taxes”), unless the Issuer (or the Guarantor, as applicable) is required to withhold or deduct Canadian Taxes by law or by the interpretation or administration thereof. If the Issuer (or the Guarantor, as applicable) is so required to withhold or deduct any amount for or on account of Canadian Taxes from any payment made under or with respect to the Notes, the Issuer (or the Guarantor, as applicable) will pay as additional interest such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by each Holder after such withholding or deduction (and after any withholding or deduction of any Canadian Taxes on such Additional Amounts) will not be less than the amount the Holder would have received if such
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Canadian Taxes had not been withheld or deducted. However, no Additional Amounts will be payable with respect to a payment made to a Holder (such Holder, an “Excluded Holder”) in respect of:
| (a) | Canadian Taxes imposed by reason of the holder or beneficial owner being a Person with which the Issuer does not deal at arm’s length (within the meaning of the Income Tax Act (Canada)) at the time of making such payment; |
| (b) | Canadian Taxes imposed by reason of the holder or beneficial owner being a resident, domicile or national of, or engaged in business or maintaining a permanent establishment or other physical presence in or otherwise having some present or former connection with Canada or any province or territory thereof (otherwise than any connection arising by the mere holding of the Notes or the receipt of payments thereunder); |
| (c) | Canadian Taxes imposed by reason of the holder or beneficial owner being a “specified non-resident shareholder” (within the meaning of subsection 18(5) of the Income Tax Act (Canada)) of the Issuer or a non-resident person not dealing at arm’s length, for purposes of the Income Tax Act (Canada), with a “specified shareholder” (within the meaning of subsection 18(5) of the Income Tax Act (Canada)) of the Issuer; |
| (d) | Canadian Taxes imposed by reason of the holder or beneficial owner being an entity in respect of which the Issuer is a “specified entity” (as defined in subsection 18.4(1) of the Income Tax Act (Canada)) at the time of making such payment; |
| (e) | Canadian Taxes imposed by reason of the holder’s or the beneficial owner’s failure to comply with any certification, identification, information, documentation or other reporting requirements if compliance is required by law, regulation, administrative practice or an applicable treaty as a precondition to exemption from, or a reduction in the rate of deduction or withholding of, such Canadian Taxes; |
| (f) | any Canadian Taxes that are payable otherwise than by deduction or withholding from a payment under or with respect to the Notes (other than Canadian Taxes imposed pursuant to section 803 of the Income Tax Regulations (Canada)); |
| (g) | any Canadian Taxes that are estate, inheritance, gift, sales, excise, transfer, capital gains, personal property or similar taxes; |
| (h) | any Canadian Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (or any amended or successor version of such sections that are substantively comparable), any regulations promulgated thereunder, any official interpretations thereof, any intergovernmental agreement or treaty between Canada and the United States with respect to the foregoing and any law, regulation, or official interpretation thereof implementing such intergovernmental agreement, or any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code of 1986, as amended; or |
| (i) | any combination of clauses (a) through (h) above. |
Further, no Additional Amounts will be paid with respect to any payment on a Note to a holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent such beneficiary or settlor with respect to such fiduciary, a member of such partnership, or such beneficial owner would not have been entitled to payment of the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of such Note.
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The Issuer (or Guarantor, as applicable) shall also:
| (a) | make such withholding or deduction; and |
| (b) | remit the full amount deducted or withheld to the relevant authority in accordance with applicable law. |
The Issuer shall furnish to the Trustee and the Holders of the Notes, within 30 days after the date the remittance of any Canadian Taxes is due pursuant to applicable law, certified copies of tax receipts or other documents evidencing such remittance by the Issuer (or Guarantor, as applicable).
Without duplication of any obligation to pay Additional Amounts as described above, the Issuer will indemnify and hold harmless each Holder (other than an Excluded Holder) and upon written request reimburse each such Holder for the amount of:
| (a) | any Canadian Taxes so levied or imposed and paid by such Holder as a result of payments made under or with respect to the Notes; |
| (b) | any liability (including penalties, interest and expenses) arising therefrom or with respect thereto; and |
| (c) | any Canadian Taxes imposed with respect to any reimbursement under clause (a) or (b) above, but excluding any such Canadian Taxes measured or based on such Holder’s net income, revenue or capital. |
Further, no Additional Amounts or indemnity will be payable in excess of the Additional Amounts or indemnity which would be required if the holder of the Note was a resident of the United States for purposes of, and entitled to claim the benefits under, the Canada-United States Income Tax Convention (1980), as amended.
Wherever in the Original Indenture (as amended by this Seventh Supplemental Indenture) there is mentioned, in any context, the payment of principal (and premium, if any), interest or any other amount payable under or with respect to a Note, such mention shall be deemed to include mention of the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
| 6 | GUARANTEE |
| 6.1 | Agreement to Guarantee |
The Guarantor hereby fully and unconditionally guarantees to each Holder of Notes, the due and punctual payment of the principal of, premium, if any, and interest on the Notes, the due and punctual payment of any sinking fund or analogous payments that may be payable with respect to such Notes and the due and punctual payment of any Additional Amounts that may be payable with respect to such Notes, when and as the same shall become due and payable, whether on the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms hereof and of the Original Indenture, as supplemented by the supplemental indentures heretofore executed by the Issuer and the Trustee including this Seventh Supplemental Indenture. In case of the failure of the Issuer punctually to make any such payment of principal, premium, if any, or interest, or any such sinking fund or analogous payment that may be payable with respect to the Notes or any Additional Amounts that may be payable with respect to the Notes, the
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Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether on the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.
The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of the Notes, the Original Indenture or this Seventh Supplemental Indenture, any failure to enforce the provisions of the Notes, the Original Indenture or this Seventh Supplemental Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto or hereto, by the Holder of the Notes or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of the Notes, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to the Notes or the indebtedness evidenced thereby, or with respect to any sinking fund or analogous payment that may be payable with respect to the Notes or with respect to any Additional Amounts that may be payable with respect to the Notes and all demands whatsoever, and covenants that its obligations under this Section 6.1 will not be discharged except by payment in full of the principal of, premium, if any, and interest on and any Additional Amounts that may be payable with respect to the Notes.
The Guarantor shall be subrogated to all rights of each Holder of the Notes, the Trustee and any Paying Agent against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Section 6.1; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all Notes of the same series issued under the Original Indenture, as supplemented by the supplemental indentures heretofore executed by the Issuer and the Trustee including this Seventh Supplemental Indenture, and any sinking fund or analogous payments and Additional Amounts with respect to such Notes shall have been paid in full.
Any term or provision of the Original Indenture, as supplemented by the supplemental indentures heretofore executed by the Issuer and the Trustee, and this Seventh Supplemental Indenture to the contrary notwithstanding, the maximum aggregate amount of the Notes guaranteed hereunder by the Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the Guarantor without rendering the Guarantee, as it relates to the Guarantor, voidable under applicable law relating to fraudulent conveyance, fraudulent transfer, corporate benefit, financial assistance or similar laws affecting the rights of creditors generally.
By executing this Seventh Supplemental Indenture, the Guarantor acknowledges and agrees that the obligations to compensate, reimburse, and indemnify the Trustee under the Original Indenture, including, without limitation, Section 6.03 of the Original Indenture, shall apply to the Guarantor and that the Guarantor and the Issuer, jointly and severally, are obligated to compensate, reimburse, and indemnify the Trustee in accordance with the terms of the Original Indenture, including, without limitation, Section 6.03 of the Original Indenture.
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| 6.2 | Execution and Delivery |
To evidence its Guarantee set forth in Section 6.1 hereof, the Guarantor hereby agrees that this Seventh Supplemental Indenture shall be executed on behalf of the Guarantor by one or more authorized Officers or Persons holding an equivalent title.
The Guarantor hereby agrees that its Guarantee set forth in Section 6.1 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.
| 6.3 | Release of Guarantee |
The Guarantor will be released and relieved of its obligations under the Guarantee in respect of the Notes, and such Guarantee will be terminated, upon receipt by the Trustee of a Corporation Order (without the consent of the Trustee) requesting such release, upon (i) satisfaction and discharge of the Original Indenture or (ii) defeasance or covenant defeasance with respect to the Notes, in each case, under the terms of the Original Indenture. At the request and expense of the Issuer, the Trustee shall execute and deliver an appropriate instrument evidencing such release.
| 7 | GENERAL |
| 7.1 | Effectiveness |
This Seventh Supplemental Indenture will become effective upon its execution and delivery.
| 7.2 | Effect of Recitals |
The recitals contained herein and in the Notes, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Issuer of the Notes or the proceeds thereof. The Trustee makes no representations as to the validity or sufficiency of this Seventh Supplemental Indenture or of the Notes except that the Trustee represents that it is duly authorized to execute and deliver this Seventh Supplemental Indenture, authenticate the Notes and perform its obligations under the Original Indenture and hereunder, and that the statements made by it or to be made by it in a Statement of Eligibility and Qualification on Form T-l supplied to the Issuer are true and accurate.
| 7.3 | Ratification of Original Indenture |
The Original Indenture as supplemented by this Seventh Supplemental Indenture is in all respects ratified and confirmed, and this Seventh Supplemental Indenture shall be deemed part of the Original Indenture in the manner and to the extent herein and therein provided.
| 7.4 | Limitation on Liability |
The Trustee shall act at the direction of the requisite Holders without liability.
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| 7.5 | Jurisdiction; Agent for Process |
Each of the parties hereto hereby irrevocably consents to the jurisdiction of the courts of the State of New York and of any U.S. federal court located in the Borough of Manhattan in the State of New York in connection with any action, suit or other proceeding arising out of or relating to this Seventh Supplemental Indenture or any action taken or omitted hereunder, and waives any claim of forum non conveniens and any objections as to laying of venue.
By its execution and delivery of this Seventh Supplemental Indenture, the Guarantor and the Issuer designate and appoint C T Corporation System, 28 Liberty St., New York, New York 10005, U.S.A, as the Guarantor’s and the Issuer’s authorized agent (the “Authorized Agent”) upon whom process may be served in any action, suit or proceeding arising out of or relating to this Seventh Supplemental Indenture, the Notes and the Guarantee but for that purpose only, and agree that service of process upon said C T Corporation System, and written notice of such service to the Guarantor or the Issuer in the manner provided in Section 1.06 of the Original Indenture, shall be deemed in every respect effective service of process upon the Guarantor or the Issuer, respectively, in any such action, suit or proceeding in any federal or state court in the Borough of Manhattan, The City of New York.
Notwithstanding the foregoing, the Guarantor and the Issuer reserve the right to appoint another Person located or with an office in the Borough of Manhattan, The City of New York, selected in the discretion of the Issuer or the Guarantor, as applicable, as a successor Authorized Agent, and upon acceptance of such consent to service of process by such a successor the designation of the prior Authorized Agent shall terminate. The Guarantor or the Issuer, as applicable, shall give written notice to the Trustee and all Holders of the designation by them of a successor Authorized Agent. If for any reason an Authorized Agent ceases to be able to act as an Authorized Agent or to have an address in the Borough of Manhattan, The City of New York, the Guarantor or the Issuer, as applicable, will designate a successor Authorized Agent in accordance with the preceding sentence. The Guarantor or the Issuer, as applicable, further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue the designation and appointment of said C T Corporation System, or of any successor Authorized Agent of the Guarantor or the Issuer, as applicable, in full force and effect so long as any of the Notes or Guarantees shall be outstanding.
| 7.6 | Governing Law |
This Seventh Supplemental Indenture (including the Guarantee provided herein), the Original Indenture as supplemented hereby and the Notes shall be governed by and construed in accordance with the laws of the State of New York.
| 7.7 | Severability |
In case any provision in this Seventh Supplemental Indenture (including the Guarantee provided herein), the Original Indenture as supplemented hereby or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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| 7.8 | Acceptance of Trust |
The Trustee hereby accepts the trusts in this Seventh Supplemental Indenture declared and provided for and agrees to perform the same upon the terms and conditions herein before set forth in trust for the various Persons who shall from time to time be Holders subject to all the terms and conditions herein set forth.
| 7.9 | Counterparts and Formal Date |
This Seventh Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument and notwithstanding their date of execution shall be deemed to bear the date first above written. This Seventh Supplemental Indenture, the Original Indenture as supplemented hereby and the Notes shall be valid, binding, and enforceable against a party only when executed and delivered by an authorized individual on behalf of the party by means of (i) any electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including relevant provisions of the Uniform Commercial Code (the “UCC”) (collectively, “Signature Law”); (ii) an original manual signature; or (iii) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto and thereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Seventh Supplemental Indenture, the Original Indenture as supplemented hereby and the Notes may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.
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IN WITNESS WHEREOF the parties hereto have executed this Seventh Supplemental Indenture on the date first above written.
| CANADIAN PACIFIC RAILWAY COMPANY, | ||
| As Issuer | ||
| By: | /s/ Nadeem Velani | |
| Name: Nadeem Velani | ||
| Title: Executive Vice-President and Chief Financial Officer | ||
| By: | /s/ Chris De Bruyn | |
| Name: Chris De Bruyn | ||
| Title: Vice-President Capital Markets and Treasurer | ||
| CANADIAN PACIFIC KANSAS CITY LIMITED, | ||
| As Guarantor | ||
| By: | /s/ Nadeem Velani | |
| Name: Nadeem Velani | ||
| Title: Executive Vice-President and Chief Financial Officer | ||
| By: | /s/ Chris De Bruyn | |
| Name: Chris De Bruyn | ||
| Title: Vice-President Capital Markets and Treasurer | ||
[Signature Page to Seventh Supplemental Indenture]
| COMPUTERSHARE TRUST COMPANY, N.A., | ||
| As Trustee | ||
| By: | /s/ Corey J. Dahlstrand | |
| Name: Corey J. Dahlstrand | ||
| Title: Vice President | ||
[Signature Page to Seventh Supplemental Indenture]
TABLE OF CONTENTS
| Page | ||||||||
| 1. |
INTERPRETATIONS AND AMENDMENTS | 2 | ||||||
| 1.1 | Seventh Supplemental Indenture | 2 | ||||||
| 1.2 | Definitions in Seventh Supplemental Indenture | 2 | ||||||
| 1.3 | Interpretation not Affected by Headings | 2 | ||||||
| 2. |
NOTES | 2 | ||||||
| 2.1 | Form and Terms of Notes | 2 | ||||||
| 2.2 | Issuance of Notes | 5 | ||||||
| 3. |
REDEMPTION OF NOTES | 5 | ||||||
| 3.1 | Optional Redemption of Notes | 5 | ||||||
| 3.2 | Certain Additional Definitions | 6 | ||||||
| 4. |
CHANGE OF CONTROL | 7 | ||||||
| 4.1 | Change of Control | 7 | ||||||
| 4.2 | Certain Additional Definitions | 10 | ||||||
| 5. |
AMENDMENTS TO ORIGINAL INDENTURE FOR PURPOSES OF THE NOTES | 11 | ||||||
| 5.1 | Amendment to Section 1.01 | 11 | ||||||
| 5.2 | Amendment to Section 9.07 | 11 | ||||||
| 6. |
GUARANTEE | 13 | ||||||
| 6.1 | Agreement to Guarantee | 13 | ||||||
| 6.2 | Execution and Delivery | 15 | ||||||
| 6.3 | Release of Guarantee | 15 | ||||||
| 7. |
GENERAL | 15 | ||||||
| 7.1 | Effectiveness | 15 | ||||||
| 7.2 | Effect of Recitals | 15 | ||||||
| 7.3 | Ratification of Original Indenture | 15 | ||||||
| 7.4 | Limitation on Liability | 15 | ||||||
| 7.5 | Jurisdiction; Agent for Process | 16 | ||||||
| 7.6 | Governing Law | 16 | ||||||
| 7.7 | Severability | 16 | ||||||
| 7.8 | Acceptance of Trust | 17 | ||||||
| 7.9 | Counterparts and Formal Date | 17 | ||||||
Schedule A-l
See attached
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Corporation (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES (AS DEFINED HEREIN) IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
CANADIAN PACIFIC RAILWAY COMPANY
4.800% Notes due 2030
| No. [●] |
US$[●] | |||||
| CUSIP: 13645R BJ2 |
Canadian Pacific Railway Company, a corporation duly organized and existing under the laws of Canada (herein called the “Corporation”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of US$[•] ([•] MILLION UNITED STATES DOLLARS) on March 30, 2030, at the office or agency of the Corporation referred to below, and to pay interest thereon on September 30, 2025 and semi-annually thereafter, on March 30 and September 30 in each year, from the date hereof, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 4.800% per annum, until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand interest on any overdue interest at the rate borne by the Securities from the date on which such overdue interest becomes payable to the date payment of such interest has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and such defaulted interest, and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities, may be paid to the Person in
whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.
(signature page to follow)
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its corporate seal.
Dated: March 17, 2025
| CANADIAN PACIFIC RAILWAY COMPANY | ||
| By: |
| |
| Name: Nadeem Velani | ||
| Title: Executive Vice-President and Chief Financial Officer | ||
| By: |
| |
| Name: Chris De Bruyn | ||
| Title: Vice-President Capital Markets and Treasurer | ||
[Signature Page to Global Note]
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in, and issued under, the within-mentioned Indenture.
| COMPUTERSHARE TRUST COMPANY, N.A., as | ||
| Trustee | ||
| By: |
| |
| Authorized Signatory | ||
Dated: March 17, 2025
[Signature Page to Global Note]
[Reverse of Security]
This Security is one of a duly authorized issue of securities of the Corporation designated as its 4.800% Notes due 2030 (herein called the “Securities”), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to US$[•], which may be issued under an indenture dated as of September 11, 2015, among the Corporation and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture, as defined below), as supplemented by the Seventh Supplemental Indenture, among the Corporation, Canadian Pacific Kansas City Limited (the “Guarantor”) and the Trustee (as supplemented by the Seventh Supplemental Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Corporation, Guarantor, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is a global Security representing US$[•] aggregate principal amount of the Securities.
Payment of the principal of (and premium, if any, on) and interest on this Security will be made at the office or agency of the Corporation maintained or caused to be maintained for that purpose in New York, New York or at such other office or agency of the Corporation as may be maintained or caused to be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of the principal (and premium, if any) and interest may be made at the option of the Corporation (i) by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or (ii) by wire transfer to an account maintained by the Person located in the United States entitled thereto as specified in the Security Register; provided, that principal paid in relation to any Security, redeemed at the option of the Corporation or upon Maturity, shall be paid to the Holder of such Security only upon presentation and surrender of such Security to such office or agency referred to above.
The Corporation will pay to the Holders such Additional Amounts as may be payable under Section 9.07 of the Indenture, as amended by Article 5 for purposes of the Securities (Amendments to Original Indenture for purposes of the Notes) of the Seventh Supplemental Indenture.
Prior to the Par Call Date (as defined below), the Corporation may redeem this Security, in whole or in part, at the Corporation’s option (in the manner and in accordance with and subject to the terms and provisions set forth in Article 10 of the Original Indenture to the extent not otherwise provided below), at any time or from time to time at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of:
| 1. | (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Securities to be redeemed matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus the Make-Whole Spread (as defined below) less (b) interest accrued to the date of redemption, and |
| 2. | 100% of the principal amount of the Securities to redeemed, |
plus, in either case, accrued and unpaid interest thereon to, but excluding, the Redemption Date.
For purposes hereof, “Par Call Date” in respect of the Securities shall mean February 28, 2030 and “Make-Whole Spread” in respect of the Securities shall mean 15 basis points.
On or after the Par Call Date, the Corporation may redeem the Securities, in whole or in part, at the Corporation’s option, at any time or from time to time at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
The Corporation shall provide to Holders of the Securities to be redeemed a notice of redemption delivered at least 10 and not more than 60 days prior to the date fixed for redemption.
The Corporation’s actions and determinations in determining the redemption price shall be conclusive and binding for all purposes, absent manifest error.
In the case of a partial redemption, selection of the Securities for redemption will be made pro rata, by lot or by such other method as the Trustee in its sole discretion deems appropriate and fair. No Securities of a principal amount of US$1,000 or less will be redeemed in part. If any Security is to be redeemed in part only, the notice of redemption that relates to the Security will state the portion of the principal amount of the Security to be redeemed. A new Security in a principal amount equal to the unredeemed portion of the Security will be issued in the name of the Holder of the Security upon surrender for cancellation of the original Security. For so long as the Securities are held by DTC (or another depositary), the redemption of the Securities shall be done in accordance with the policies and procedures of the depositary.
Unless the Corporation defaults in payment of the redemption price, on and after the Redemption Date interest will cease to accrue on the Securities or portions thereof called for redemption.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Corporation and specified in writing to the Trustee in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Corporation after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading) (“H.15 TCM”). In determining the Treasury Rate, the Corporation shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life – and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 TCM is no longer published, the Corporation shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date. If there is no United States Treasury security maturing on the Par Call Date but there are two or more United States Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date, the Corporation shall select the United States Treasury security with a maturity date preceding the Par Call Date. If there are two or more United States Treasury securities maturing on the Par Call Date or two or more United States Treasury securities meeting the criteria of the preceding sentence, the Corporation shall select from among these two or more United States Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose redemption provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date.
The Securities do not have the benefit of sinking fund obligations.
If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Corporation on this Security and (b) certain restrictive covenants and the related Defaults and Events of Default, upon compliance by the Corporation with certain conditions set forth therein, which provisions apply to this Security.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of all affected Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities affected thereby, to waive compliance by the Corporation with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the Security Register of the Corporation, upon surrender of this Security for registration of transfer at the office or agency of the Corporation maintained or caused to be maintained for such purpose in New York, New York duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in denominations of US$2,000 and any integral multiple of US$1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustees may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Corporation, the Trustee nor any agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.
For the purposes only of the disclosure required by the Interest Act (Canada), and without affecting the amount of interest payable to any holder of a Security or the calculation of interest on any Security, if the rate of interest on any Security is calculated on the basis of a year which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.
As provided for in the Indenture, the Corporation may, from time to time, without notice or consent of the Holders, create and issue additional Securities so that such additional Securities shall be consolidated and form a single series with the Securities initially issued by the Corporation and shall have the same terms as to status, redemption or otherwise as the Securities originally issued.
If at any time, (i) the Depositary notifies the Corporation that it is unwilling or unable or no longer qualifies to continue as Depositary or if at any time the Depositary shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor depositary is not appointed by the Corporation within 90 days after the
Corporation receives such notice or becomes aware of such condition, as the case may be, or (ii) the Corporation determines that the Securities shall no longer be represented by a global Security or Securities, then in such event the Corporation will execute and the Trustee will authenticate and deliver Securities in definitive registered form, in authorized denominations, and in an aggregate principal amount equal to the principal amount of this Security in exchange for this Security. Such Securities in definitive registered form shall be registered in such names and issued in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.
The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Schedule A-2
See attached
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Corporation (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES (AS DEFINED HEREIN) IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
CANADIAN PACIFIC RAILWAY COMPANY
5.200% Notes due 2035
| No. [●] |
US$[●] | |||
| CUSIP: 13645R BK9 |
Canadian Pacific Railway Company, a corporation duly organized and existing under the laws of Canada (herein called the “Corporation”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of US$[●] ([●] MILLION UNITED STATES DOLLARS) on March 30, 2035, at the office or agency of the Corporation referred to below, and to pay interest thereon on September 30, 2025 and semi-annually thereafter, on March 30 and September 30 in each year, from the date hereof, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 5.200% per annum, until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand interest on any overdue interest at the rate borne by the Securities from the date on which such overdue interest becomes payable to the date payment of such interest has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for such interest, which shall be March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and such defaulted interest, and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities, may be paid to the Person in
whose name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.
(signature page to follow)
IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its corporate seal.
Dated: March 17, 2025
| CANADIAN PACIFIC RAILWAY COMPANY | ||
| By: |
| |
| Name: Nadeem Velani | ||
| Title: Executive Vice-President and Chief Financial Officer | ||
| By: |
| |
| Name: Chris De Bruyn | ||
| Title: Vice-President Capital Markets and Treasurer | ||
[Signature Page to Global Note]
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in, and issued under, the within-mentioned Indenture.
| COMPUTERSHARE TRUST COMPANY, N.A., as | ||
| Trustee | ||
| By: |
| |
| Authorized Signatory | ||
Dated: March 17, 2025
[Signature Page to Global Note]
[Reverse of Security]
This Security is one of a duly authorized issue of securities of the Corporation designated as its 5.200% Notes due 2035 (herein called the “Securities”), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to US$[●], which may be issued under an indenture dated as of September 11, 2015, among the Corporation and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture, as defined below), as supplemented by the Seventh Supplemental Indenture, among the Corporation, Canadian Pacific Kansas City Limited (the “Guarantor”) and the Trustee (as supplemented by the Seventh Supplemental Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Corporation, Guarantor, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is a global Security representing US$[●] aggregate principal amount of the Securities.
Payment of the principal of (and premium, if any, on) and interest on this Security will be made at the office or agency of the Corporation maintained or caused to be maintained for that purpose in New York, New York or at such other office or agency of the Corporation as may be maintained or caused to be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of the principal (and premium, if any) and interest may be made at the option of the Corporation (i) by check mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or (ii) by wire transfer to an account maintained by the Person located in the United States entitled thereto as specified in the Security Register; provided, that principal paid in relation to any Security, redeemed at the option of the Corporation or upon Maturity, shall be paid to the Holder of such Security only upon presentation and surrender of such Security to such office or agency referred to above.
The Corporation will pay to the Holders such Additional Amounts as may be payable under Section 9.07 of the Indenture, as amended by Article 5 for purposes of the Securities (Amendments to Original Indenture for purposes of the Notes) of the Seventh Supplemental Indenture.
Prior to the Par Call Date (as defined below), the Corporation may redeem this Security, in whole or in part, at the Corporation’s option (in the manner and in accordance with and subject to the terms and provisions set forth in Article 10 of the Original Indenture to the extent not otherwise provided below), at any time or from time to time at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of:
| 1. | (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Securities to be redeemed matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus the Make-Whole Spread (as defined below) less (b) interest accrued to the date of redemption, and |
| 2. | 100% of the principal amount of the Securities to redeemed, |
plus, in either case, accrued and unpaid interest thereon to, but excluding, the Redemption Date.
For purposes hereof, “Par Call Date” in respect of the Securities shall mean December 30, 2034 and “Make-Whole Spread” in respect of the Securities shall mean 15 basis points.
On or after the Par Call Date, the Corporation may redeem the Securities, in whole or in part, at the Corporation’s option, at any time or from time to time at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
The Corporation shall provide to Holders of the Securities to be redeemed a notice of redemption delivered at least 10 and not more than 60 days prior to the date fixed for redemption.
The Corporation’s actions and determinations in determining the redemption price shall be conclusive and binding for all purposes, absent manifest error.
In the case of a partial redemption, selection of the Securities for redemption will be made pro rata, by lot or by such other method as the Trustee in its sole discretion deems appropriate and fair. No Securities of a principal amount of US$1,000 or less will be redeemed in part. If any Security is to be redeemed in part only, the notice of redemption that relates to the Security will state the portion of the principal amount of the Security to be redeemed. A new Security in a principal amount equal to the unredeemed portion of the Security will be issued in the name of the Holder of the Security upon surrender for cancellation of the original Security. For so long as the Securities are held by DTC (or another depositary), the redemption of the Securities shall be done in accordance with the policies and procedures of the depositary.
Unless the Corporation defaults in payment of the redemption price, on and after the Redemption Date interest will cease to accrue on the Securities or portions thereof called for redemption.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Corporation and specified in writing to the Trustee in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Corporation after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily)—H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading) (“H.15 TCM”). In determining the Treasury Rate, the Corporation shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields – one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life – and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 TCM is no longer published, the Corporation shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date. If there is no United States Treasury security maturing on the Par Call Date but there are two or more United States Treasury securities with a maturity date equally distant from the Par Call
Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date, the Corporation shall select the United States Treasury security with a maturity date preceding the Par Call Date. If there are two or more United States Treasury securities maturing on the Par Call Date or two or more United States Treasury securities meeting the criteria of the preceding sentence, the Corporation shall select from among these two or more United States Treasury securities the United States Treasury security that is trading closest to par based upon the average of the bid and asked prices for such United States Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable United States Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose redemption provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date.
The Securities do not have the benefit of sinking fund obligations.
If an Event of Default shall occur and be continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Corporation on this Security and (b) certain restrictive covenants and the related Defaults and Events of Default, upon compliance by the Corporation with certain conditions set forth therein, which provisions apply to this Security.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Corporation and the rights of the Holders under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of all affected Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities affected thereby, to waive compliance by the Corporation with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the Security Register of the Corporation, upon surrender of this Security for registration of transfer at the office or agency of the Corporation maintained or caused to be maintained for such purpose in New York, New York duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in denominations of US$2,000 and any integral multiple of US$1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Corporation may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustees may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Corporation, the Trustee nor any agent shall be affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day year of twelve 30-day months.
For the purposes only of the disclosure required by the Interest Act (Canada), and without affecting the amount of interest payable to any holder of a Security or the calculation of interest on any Security, if the rate of interest on any Security is calculated on the basis of a year which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.
As provided for in the Indenture, the Corporation may, from time to time, without notice or consent of the Holders, create and issue additional Securities so that such additional Securities shall be consolidated and form a single series with the Securities initially issued by the Corporation and shall have the same terms as to status, redemption or otherwise as the Securities originally issued.
If at any time, (i) the Depositary notifies the Corporation that it is unwilling or unable or no longer qualifies to continue as Depositary or if at any time the Depositary shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor depositary is not appointed by the Corporation within 90 days after the Corporation receives such notice or becomes aware of such condition, as the case may be, or (ii) the Corporation determines that the Securities shall no longer be represented by a global Security or Securities, then in such event the Corporation will execute and the Trustee will authenticate and deliver Securities in definitive registered form, in authorized denominations, and in an aggregate principal amount equal to the principal amount of this Security in exchange for this Security. Such Securities in definitive registered form shall be registered in such names and issued in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.
The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.