Exhibit 1.1
EXECUTION VERSION
BANK
OF MONTREAL
US$1,250,000,000
3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC))
(Subordinated Indebtedness)
Underwriting Agreement
December 7, 2017
BMO Capital Markets Corp.
Citigroup Global Markets Inc.
Goldman Sachs & Co.
LLC
UBS Securities LLC
as Representatives
of the several Underwriters
named in Schedule III hereto
Ladies and Gentlemen:
Bank of Montreal, a
Canadian chartered bank (the “
Bank
”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several underwriters named in Schedule III hereto (individually, an “
Underwriter
” and
collectively, the “
Underwriters
”), for whom BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and UBS Securities LLC (the “
Representatives
”) are acting as representatives,
US$1,250,000,000 aggregate principal amount of the Bank’s 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)), (as described in Schedule I hereto) (the
“
Securities
”), which automatically and immediately convert into common shares of the Bank (the “
Conversion Shares
”) upon the occurrence of a Trigger Event (as defined in the terms of the Securities).
The Securities will be issued under a subordinated debt securities indenture to be dated as of December 12, 2017(the “
Base
Indenture
”) between the Bank and Wells Fargo Bank, National Association, as trustee (the “
Trustee
”), as amended and supplemented by the first supplemental indenture to be dated as of December 12, 2017 (the
“
First
Supplemental
Indenture
” and together with the Base Indenture, the “
Indenture
”), between the Bank and the Trustee.
The Bank has filed with the Securities and Exchange Commission (the “
Commission
”) a registration statement (No.
333-217200)
on Form
F-3
for the registration under the Securities Act of 1933, as amended (the “
Securities
Act
”), of, among other securities, the
Securities. Such registration statement, and any post-effective amendment thereto as of the date of this Agreement, excluding the exhibits thereto, but including all documents incorporated by reference in the prospectus included therein and the
information, if any, deemed to be part of the registration statement pursuant to Rule 430B under the Securities Act, has been declared effective by the Commission. The prospectus filed as part of the registration statement, in the form in which it
has most recently been filed with the Commission on or prior to the date of this Agreement is hereinafter called the “
Basic Prospectus
”; the Basic Prospectus, as supplemented by the preliminary prospectus supplement dated
December 6, 2017 relating to the Securities filed with the Commission pursuant to Rule 424 under the Securities Act is hereinafter called
the “
Preliminary Prospectus”;
the various parts of such registration statement, including all
exhibits thereto but excluding Forms
T-1
and including all documents incorporated by reference in the prospectus included therein and any prospectus supplement relating to the Securities that is filed with the
Commission and deemed by virtue of Rule 430B under the Securities Act to be part of such registration statement, each as amended at the time such part of such registration statement became effective, are hereinafter collectively called the
“
Registration Statement”;
the Basic Prospectus, as supplemented by the final prospectus supplement dated December 7, 2017 relating to the Securities in the form in which it will be filed, or transmitted for filing, with the
Commission, is hereinafter called the “
Prospectus
”; any reference herein to the Basic Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Securities Act, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus shall be
deemed to refer to and include any documents filed under the Securities Exchange Act of 1934, as amended (the “
Exchange Act”),
and incorporated by reference therein, in each case, after the date of the Basic Prospectus, the
Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, as the case may be. The term “
Issuer
Free Writing Prospectus”
means any “
issuer free writing prospectus
,
” as defined in Rule
433(h) under the Securities Act, of the Bank relating to the Securities. The term “
Applicable Time”
means 4:55 p.m. on December 7, 2017. The term “
Pricing Disclosure Package”
means the Preliminary Prospectus,
together with any Issuer Free Writing Prospectus identified on Schedule II hereto.
1.
Representations and Warranties
. The Bank
represents and warrants to, and agrees with, each Underwriter that:
(a) The Bank meets the requirements for use of Form
F-3
under the Securities Act; the Registration Statement has been declared effective by the Commission and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission;
(b) (i) Each part of the Registration Statement, the Pricing
Disclosure Package and the Prospectus conform and, as amended or supplemented as of the Closing Date (as defined below), will conform, in all material respects with the requirements of the Securities Act, the Trust Indenture Act of 1939, as amended
(the “
Trust Indenture Act”)
and the rules and regulations of the Commission thereunder; (ii) each part of the Registration Statement, when such part became effective, and as of the date of this Agreement, did not contain and
each such part, as amended or supplemented as of the Closing Date, will not contain any 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 (iii) the Prospectus, on its date and as amended or supplemented as of the Closing Date, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that with respect to clauses (i) through (iii), the foregoing shall not apply to (A) statements in or omissions from any such document in reliance upon, and in conformity
with, written information furnished to the Bank by the Representatives expressly for use in the preparation thereof, it being understood and agreed that the only such information furnished by any Representative consists of the information described
as such in Section 7(b) hereof, or (B) those parts of the Registration Statement that constitute Statements of Eligibility (Forms
T-1)
under the Trust Indenture Act;
(c) None of (i) the Pricing Disclosure Package as of the Applicable Time and (ii) any Issuer Free Writing Prospectus identified
in Schedule II hereto or any electronic roadshow that is a written communication within the meaning of Rule 433 under the Securities Act made to investors by the Bank in connection with the offering of the Securities (“
Roadshow
”),
each taken together with the
-2-
Pricing Disclosure Package, as of the Applicable Time, included any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading;
provided,
however,
that the representations and warranties in this
Section 1(c) shall not apply to statements or omissions made in the Pricing Disclosure Package or any Issuer Free Writing Prospectus or Roadshow in reliance upon and in conformity with information furnished in writing to the Bank by the
Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Representative consists of the information described as such in Section 7(b) hereof; no Issuer Free Writing Prospectus
conflicts with the information contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus;
(d) The
documents incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, or furnished to the Commission and expressly incorporated by
reference, as the case may be, complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and any further documents so filed and
incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, when such documents become effective or are filed, or furnished and expressly incorporated by reference, with the Commission, as the case may
be, will comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder;
(e) The Bank exists as a Schedule I bank under the
Bank Act
(Canada) (the “
Bank
Act”),
and has the
requisite corporate power and authority to own, lease and operate its properties, to authorize and issue securities as contemplated hereunder, and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus and is qualified to transact business, except to the extent that the failure to be so qualified would not have a Material Adverse Effect (as hereinafter defined);
(f) The Bank is not an “ineligible issuer” in connection with the offering of Securities pursuant to Rule 164 under the Securities
Act. Any Issuer Free Writing Prospectus that the Bank is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder. Each Issuer Free Writing Prospectus that the Bank has filed or is required to file, pursuant to Rule 433(d) under the Securities Act complies or will comply, in all material respects, with the
requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder;
(g) Since the date of the
latest audited financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus there has not been (i) any material change in the share capital (other than as occasioned
by common shares of the Bank having been issued pursuant to the Bank’s employee stock purchase plans, equity incentive option plans or dividend reinvestment plans, as occasioned upon conversion of convertible securities, as occasioned by shares
issued in exchange for subsidiary corporation shares or acquisitions, and other than repurchased under the Bank’s normal course issuer bid), or (ii) any material adverse change in or affecting the financial position, shareholders’
equity or results of operations of the Bank and its consolidated subsidiaries considered as an entirety, in each case, otherwise than as set forth or contemplated in the Registration Statement and the Pricing Disclosure Package (any such change
described in clause (ii) is referred to as a “
Material Adverse Change”);
(h) This Agreement has been duly
authorized, executed and delivered by the Bank;
-3-
(i) All actions required to be taken by or on behalf of the Bank, including the passing of all
requisite resolutions of its directors, have occurred so as to validly authorize, issue and sell the Securities and to validly authorize and reserve for issuance the Conversion Shares as contemplated by this Agreement, and duly, punctually and
faithfully perform all the obligations to be performed by it under this Agreement.
(j) Each of the Base Indenture and the First
Supplemental Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized by the Bank and, when executed and delivered by the Bank, and assuming the due authorization, execution and delivery thereof by the Trustee,
will constitute a legal, valid and binding obligation of the Bank, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles; and the Indenture and the Securities will conform in all material respects to the descriptions thereof in the Pricing Disclosure Package;
(k) The Securities have been duly authorized by the Bank and, when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will constitute legal, valid and binding obligations of the Bank, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Securities will be entitled to the benefits of the
Indenture;
(l) The Conversion Shares have been duly and validly authorized and reserved by the Bank, and, when issued upon conversion
of the Securities in accordance with the terms of the Securities and the Indenture, will be fully paid and
non-assessable,
and the issuance of the Conversion Shares will not be subject to any preemptive right,
right of first refusal or other similar rights to subscribe for purchase securities of the Bank; and the Conversion Shares will conform in all material respects to the description thereof contained in the Pricing Disclosure Package;
(m) The execution and delivery by the Bank of this Agreement, the Indenture and the Securities, the issue and sale of the Securities, the
authorization and issuance of the Conversion Shares and the compliance by the Bank with all of the provisions of the Securities, the Indenture and this Agreement, and the consummation of the transactions herein and therein contemplated, will not
result in a violation or breach of any of the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Bank is a party or by which
the Bank is bound or to which any of the property or assets of the Bank is subject, or result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Bank or any of
its properties, except, in each case, for such conflicts, breaches, defaults and violations that would not have a material adverse effect on the business, financial position, shareholders’ equity or results of operations of the Bank and its
subsidiaries considered as an entirety (a “
Material Adverse Effect”)
or affect the validity of the Securities, nor will such action result in any material violation of the provisions of the Bank Act or a violation of the
by-laws
of the Bank; and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required by the Bank for the solicitation of offers to
purchase Securities, the issue and sale of the Securities, the authorization and issuance of the Conversion Shares or the consummation by the Bank of the other transactions contemplated by this Agreement or the Indenture, except (i) to the
extent that the failure to obtain or make such consents, approvals, authorizations, orders, registrations or qualifications would not have a Material Adverse Effect or affect the validity of the Securities, (ii) such consents, approvals,
authorizations, orders, registrations or qualifications as have been, or will have been prior to the date of this Agreement, obtained under the Securities Act or the Trust Indenture Act and (iii) such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state securities or Blue Sky laws (including insurance laws of any state relating to offers and sales of securities in such state);
-4-
(n) There is no action, suit or proceeding pending or to the knowledge of the executive officers
of the Bank threatened against the Bank or any of its subsidiaries, which has, or may reasonably be expected in the future to have, a Material Adverse Effect, except as set forth or contemplated in the Registration Statement, the Pricing Disclosure
Package and the Prospectus;
(o) The Bank is not, and after giving effect to the offer and sales of the Securities and application of
the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be required to register as an “investment company” under the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder;
(p) KPMG LLP, auditor of the financial statements incorporated by reference into
the Registration Statement, the Pricing Disclosure Package and the Prospectus was an independent registered public accounting firm for the period covered by such auditor’s opinion with respect to such financial statements within the meaning of
the Securities Act and the regulations thereunder and the applicable Canadian securities laws;
(q) The Bank’s consolidated
financial statements included or incorporated by reference in the Registration Statement, the Prospectus and the Pricing Disclosure Package, together with the related schedules and notes comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and present fairly, in all material respects, the consolidated financial position, results of operations and changes in financial position of the Bank and its subsidiaries on
the basis stated therein at the respective dates or for the respective periods to which they apply, and such statements and related schedules and notes have been prepared in accordance with International Financial Reporting Standards consistently
applied throughout the periods involved, except as may be disclosed therein;
(r) Neither the Bank nor any of its subsidiaries or
affiliates, nor any director, officer, or employee, nor, to the Bank’s knowledge, any agent or representative of the Bank or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment,
promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or
government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to
influence official action or secure an improper advantage; and the Bank and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue to
maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein;
(s) The operations of the Bank and its subsidiaries are and have been conducted at all times in material compliance with all applicable
financial recordkeeping and reporting requirements, including, to the extent applicable, those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Bank and its subsidiaries conduct business, the rules and regulations thereunder and any applicable related or similar
rules, regulations or guidelines, issued, administered or enforced by any
-5-
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 the Bank or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the executive officers
of the Bank, threatened; and
(t) (i) The Bank represents that neither the Bank nor any of its subsidiaries (collectively, the
“
Entity
”) or, to the knowledge of the Entity, any director, officer, employee, agent, affiliate or representative of the Entity, is an individual or entity (“
Person
”) that is, or is majority owned or controlled by a
Person that is:
(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control, the Canadian Government, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “
Sanctions
”), nor
(B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without
limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria).
(ii) The Bank represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in any manner that, to the knowledge of the Entity, will result in a violation of
applicable Sanctions in the jurisdiction in which such activity is carried out by such Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).
2.
Purchase and Sale
. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the
Bank agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Bank, at the purchase price by the Underwriters set forth in Schedule III hereto, the amount of the Securities set forth opposite
such Underwriter’s name in Schedule III hereto.
3.
Delivery and Payment
. Delivery of and payment for the Securities shall be
made on the date and at the time specified in Schedule III hereto or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement
between the Representatives and the Bank or as provided in Section 10 hereof. The time and date of such payment are herein referred to as the “
Time of Delivery”
and such date, the “
Closing Date.
” Delivery of
the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Bank by
wire transfer payable in
same-day
funds to an account specified by the Bank. Delivery of the Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
4.
Agreements
. The Bank covenants and agrees with each Underwriter as follows:
(a) (i) To prepare the Prospectus in a form approved by the Underwriters (such approval not to be unreasonably withheld or delayed) and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement; (ii) to make no amendment or
supplement (other than an amendment or supplement as a result of filings by the Bank under the Exchange Act and other than the filing of prospectuses, preliminary prospectuses, preliminary prospectus supplements, free-
-6-
writing prospectuses and other documents pursuant to Rule 424(b) or Rule 433 under the Securities Act relating to
securities other than the Securities purchased by the Underwriters) to the Registration Statement, the Pricing Disclosure Package or the Prospectus prior to the Time of Delivery without having afforded the Representatives a reasonable opportunity to
review such amendment or supplement; (iii) to prepare an Issuer Free Writing Prospectus that is a final term sheet relating to the Securities in the form set forth in Schedule II hereto, and to file such term sheet pursuant to Rule 433(d) under
the Securities Act within the time required by such rule; (iv) to file promptly all other material required to be filed by the Bank with the Commission pursuant to Rule 433(d) under the Securities Act; (v) to file promptly all reports and
any definitive proxy or information statements required to be filed by the Bank with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities, and during such same period to advise the Underwriters, promptly after it receives notice thereof, (1) of the time when any amendment to the Registration Statement has been filed or becomes effective with the
Commission (other than an amendment or supplement as a result of filings by the Bank under the Exchange Act and other than the filing of prospectuses, preliminary prospectuses, preliminary prospectus supplements, free-writing prospectuses and other
documents pursuant to Rule 424(b) or Rule 433 under the Securities Act relating to securities other than the Securities purchased by the Underwriters) or any supplement to the Prospectus or the Pricing Disclosure Package has been filed with the
Commission or, (2) of the issuance by the Commission or any Canadian securities authorities of any stop order or of any order preventing or suspending the use of the Registration Statement, the Pricing Disclosure Package or the Prospectus,
(3) of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or (4) of any request by the Commission or any Canadian
securities authorities to amend or supplement the Registration Statement, the Pricing Disclosure Package, or the Prospectus or for additional information; and (vi) in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of the Registration Statement, the Pricing Disclosure Package, or the Prospectus or suspending any such qualification, to use promptly its commercially reasonable efforts to obtain its withdrawal;
(b) That if, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Pricing
Disclosure Package as then amended and supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at
such time not misleading, the Bank will (i) notify promptly the Representatives so that any use of the Pricing Disclosure Package may cease until it is amended or supplemented; and (ii) amend or supplement the Pricing Disclosure Package to
correct such statement or omission and supply any amendment or supplement to the Underwriters in such quantities as they may reasonably request (including without limitation by preparing and furnishing to the Underwriters the Prospectus);
(c) To furnish the Underwriters with copies of the Registration Statement and each amendment thereto, the Preliminary Prospectus and the
Prospectus, in the form in which it is filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act, in such quantities as the Representatives may reasonably request from time to time; and, if the delivery
of the Prospectus is required at any time within 90 days after sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when the Prospectus is delivered, not misleading, or, if for any other reason it shall
be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act, the Exchange Act or the Trust Indenture
Act, to notify the Representatives as promptly as practicable; and if the Bank shall decide to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to
-7-
so advise the Representatives promptly by telephone (with confirmation in writing) and to prepare and cause to be
filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance;
provided,
however,
that if during such same period an Underwriter continues to own Securities purchased from the Bank which such Underwriter proposes to sell, upon the reasonable request of the Representatives, the Bank shall promptly prepare and file with the
Commission such an amendment or supplement, the expense of such preparation and filing to be borne by the Bank if such amendment or supplement occurs within 90 days of the date of the Prospectus and if after such
90-day
period, by the Underwriters;
(d) That, unless it has or shall have obtained the prior
written consent of the Representatives, 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” (as
defined in Rule 405) required to be filed by the Bank with the Commission or retained by the Bank under Rule 433;
provided
that such prior written consent shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses
included in Schedule II hereto and any Roadshow. Any such free writing prospectus consented to by the Representatives or the Bank is hereinafter referred to as a “
Permitted Free Writing Prospectus.
” The Bank agrees 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;
(e) That, during the period beginning on the date hereof and continuing to and including the Closing Date, the Bank will not, without the
prior consent (such consent not to be unreasonably withheld or delayed) of the Representatives, offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities of the Bank that are substantially similar to the
Securities;
(f) To consider any request by the Representatives to qualify the Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Representatives shall reasonably request;
(g) To use its commercially reasonable efforts
to list, within 30 days from the Closing Date, subject to notice of issuance if applicable, the Conversion Shares on the Toronto Stock Exchange (the “
TSX
”) and the New York Stock Exchange (the “
NYSE
”). The Bank will
use its commercially reasonable efforts to maintain the listing of the Conversion Shares on the TSX and the NYSE;
(h) At all times,
to reserve and keep available, free of preemptive rights, enough common shares of the Bank for the purpose of enabling the Bank to satisfy its obligations to issue the Conversion Shares upon conversion of the Securities;
(i) Not to take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Bank to facilitate the sale or resale of the Securities; and
(j) To pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Bank’s counsel and accountants in
connection with the registration of the Securities and the Conversion Shares under the Securities Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Preliminary Prospectus, the
Prospectus and any
-8-
Issuer Free Writing Prospectus and all other amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters; (ii) the cost of printing, word-processing or reproducing this Agreement, the Registration Statement, any Preliminary Prospectus, the Prospectus, the Pricing Disclosure Package, any Issuer Free Writing
Prospectus, any Blue Sky and legal investment memoranda and any other documents in connection with the offering, purchase, sale and delivery of the Securities and the Conversion Shares; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in Section 4(f) hereof, including fees and disbursements of the Bank’s counsel and reasonable fees and disbursements of the Underwriters’ counsel in
connection with such qualification and in connection with the Blue Sky and legal investment surveys and all filing fees incurred in connection with the review and qualification of the offering of the Securities by the Financial Industry Regulatory
Authority and any filing fees payable to the Canadian securities authorities in connection with the filing of all required exempt distribution reports, and the legal fees relating to the preparation and filing of such reports; (iv) any fees
charged by security rating services for rating the Securities; (v) all fees and expenses in connection with listing the Conversion Shares on applicable stock exchanges; (vi) the cost of preparing the Securities; (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 advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities so long as such advertising expenses have been
pre-approved
by the Bank; (ix) the costs and expenses of the Bank relating to investor presentations on any “road
show” undertaken in connection with the marketing of the offering of the Securities, including, without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Bank, travel and lodging expenses of the representatives and officers of the Bank and any
such consultants, and the cost of any aircraft chartered in connection with the road show; (x) the cost and charges of any transfer agent or registrar; (xi) all reasonable costs and expenses related to the transfer and delivery of the
Securities to the Underwriters, including any transfer or other similar taxes payable thereon; and (xii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in
this Section 4. It is understood, however, that except as provided in this Section 4 and Section 7 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel.
5.
Offering by the Underwriters
.
(a) It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus and
this Agreement;
(b) Each Underwriter severally represents and agrees with the Bank that, unless it has or shall have obtained the
prior written consent of the Bank, 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” (as defined in
Rule 405) required to be filed by the Bank with the Commission or retained by the Bank under Rule 433;
provided
that such prior written consent shall be deemed to have been given in respect of the Permitted Free Writing Prospectus and any
Roadshow;
(c) Each Underwriter severally represents and agrees with the Bank that any offer or sale of the Securities purchased by it
hereunder in Canada or to any resident of Canada shall be effected on a private placement basis in accordance with applicable exemptions under the applicable securities laws in the relevant jurisdiction, including any requirement that such
Underwriter represent and agree that (A) it has not offered, sold, distributed or delivered, and that such Underwriter will not offer, sell, distribute or deliver, any Securities purchased by it hereunder, directly or indirectly in Canada or to
any
-9-
person that is resident in any province or territory of Canada for the purposes of securities laws applicable
therein (including any corporation or other entity organized under the laws of any jurisdiction in Canada), except pursuant to an available exemption from the prospectus requirements and registration requirements of, or otherwise in compliance with,
the securities laws applicable in any of the provinces or territories of Canada; and (B) it will not distribute or deliver the Prospectus or Prospectus Supplement or any other offering material relating to Securities purchased by it hereunder,
in Canada in contravention of the securities laws or regulations of any province or territory of Canada;
(d) Each Underwriter
severally represents and agrees with the Bank that it will comply with or observe any restrictions or limitations set forth in the Prospectus as amended or supplemented on persons to whom, or the jurisdictions or manner in which, the Securities may
be offered, sold, resold or delivered; and
(e) Each Underwriter severally represents and agrees with the Bank that will promptly
advise the Bank upon the completion of the distribution of the offering of the Securities.
6.
Conditions to the Obligations of the
Underwriters
. The several obligations of the Underwriters to purchase the Securities hereunder shall be subject to the condition that all representations and warranties and other statements of the Bank herein are true and correct at and as of
the Closing Date and the Time of Delivery, to the condition that the Bank shall have performed all of its obligations hereunder theretofore in each case to be performed, and to the following additional conditions:
(a) The Prospectus, and any supplement thereto, shall have been filed in the manner and within the time period required by Rule 424(b);
and any other material required to be filed by the Bank pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433;
(b) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission or, to the knowledge of the executive officers of the Bank, shall be contemplated by the Commission; and all requests for additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Representatives;
(c) The Underwriters shall have received, upon request of the
Representatives, from Shearman & Sterling LLP, United States counsel to the Underwriters, such opinion and letter, dated the Closing Date, with respect to matters related to the Registration Statement, the Pricing Disclosure Package and the
Prospectus and such other matters as the Underwriters may request in their reasonable judgment, and the Bank shall have furnished to such counsel such documents as such counsel requests in its reasonable judgment for the purpose of enabling such
counsel to pass upon such matters;
(d) The Underwriters shall have received an opinion and letter of Sullivan & Cromwell
LLP, United States counsel for the Bank, or other counsel satisfactory to the Representatives in their reasonable judgment, dated the Closing Date, to the effect set forth in
Annex I
hereto;
(e) The Underwriters shall have received an opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Bank, or other
counsel satisfactory to the Representatives in their reasonable judgment, dated the Closing Date, to the effect set forth in
Annex II
hereto;
(f) KPMG LLP, the independent registered public accounting firm which audited the financial statements of the Bank and its subsidiaries
included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus, shall have furnished to the
-10-
Underwriters, on the date of this Agreement and at the Closing Date, letters, (which may refer to letters
previously delivered to the Underwriters), dated respectively as of the date of this Agreement and as of the Closing Date (with a
“cut-off”
date no more than three days prior to the date of such
letter), in form and substance satisfactory to the Underwriters, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus;
(g) The Bank shall have furnished or caused to be furnished to the Underwriters a certificate of any Vice Chairman, any Executive or
Senior Vice President, any Executive Managing Director or any Vice President or any principal financial or accounting officer of the Bank, dated the Closing Date, in which such officer, in his or her capacity as such, to the best of his or her
knowledge after reasonable investigation, shall state that (i) the representations and warranties of the Bank contained in Section 1 hereof are true and correct, as of the Closing Date, (ii) the Bank has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date, (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for
that purpose have been instituted or are threatened by the Commission, and (iv) since the respective dates as of which information is given in the Pricing Disclosure Package and the Prospectus (exclusive of any amendments or supplements thereto
made subsequent to the date hereof), there has not been any Material Adverse Change, otherwise than as set forth or contemplated in the Pricing Disclosure Package and the Prospectus (exclusive of any amendments or supplements thereto made subsequent
to the date hereof);
(h) Subsequent to the date of this Agreement or, if earlier, the dates as of which information is given in the
Pricing Disclosure Package and the Prospectus, there shall not have been any Material Adverse Change, except as set forth in or contemplated in the Prospectus (exclusive of any amendment or supplement thereto made subsequent to the date hereof) and
the Pricing Disclosure Package the effect of which, is, in the reasonable judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the purchase and public offering of the Securities on the
terms and in the manner contemplated in the Prospectus (exclusive of any amendment or supplement thereto made subsequent to the date hereof) and the Pricing Disclosure Package; and
(i) The Underwriters shall have received such other opinions, certificates and documents as may be reasonably requested by them and agreed
by the Bank prior to the date of this Agreement.
If any of the conditions specified in this Section 6 shall not have been fulfilled
when and as provided in this Agreement, or if any of the opinions and certificates mentioned above in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives when and as required to be delivered, this
Agreement and all obligations of the Underwriters to purchase the Securities hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Bank in writing or by
telephone or facsimile confirmed in writing.
7.
Indemnification and Contribution
. (a) The Bank will indemnify
and hold harmless each Underwriter, and each person, if any, who controls any of the Underwriters within the meaning of the Securities Act, against any losses (other than loss of profits), claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, including
the
-11-
Roadshow, or arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such Underwriter and such controlling person for any legal or other expenses reasonably incurred by it in connection with investigating or
defending any such action or claim, as incurred;
provided,
however,
that the Bank will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information furnished to the Bank by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in Section 7(b) hereof.
(b) Each Underwriter, severally and not
jointly, will indemnify and hold harmless the Bank and each person, if any, who controls the Bank within the meaning of the Securities Act, against any losses, claims, damages or liabilities to which the Bank or such controlling person may become
subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Preliminary Prospectus, the Pricing Disclosure Package or the Prospectus, each as amended or supplemented, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Bank by such Underwriter through the Representatives expressly for use therein; and will reimburse the Bank for any legal or other expenses reasonably incurred by the Bank or such controlling person in connection
with investigating or defending any such action or claim, as incurred. The Bank acknowledges and agrees that the information set forth under “Supplemental Plan of Distribution (Conflicts of Interest)” beginning on page
S-37
of the Preliminary Prospectus in the first and second sentences of the third paragraph thereon with respect to the selling concession and reallowance to certain dealers, in the sixth paragraph thereon with
respect to stabilization of market prices and in the third and fourth sentences of the seventh paragraph thereon with respect to market making activities of the Underwriters has been provided by the Underwriters to the Bank for use in the
Preliminary Prospectus and the Prospectus and constitutes the only information furnished in writing by or on behalf of the several Underwriters for inclusion in the Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof;
provided,
however,
that the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under such subsection for any legal
-12-
expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties by the same counsel would, in the judgment of counsel, be inappropriate due to actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all such
indemnified parties. Such firm shall be designated in writing by the Underwriters in the case of parties indemnified pursuant to Section 7(a) hereof and by the Bank in the case of parties indemnified pursuant to Section 7(b) hereof. The
indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which such consent shall not be unreasonably conditioned,
delayed or withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is an actual or potential party and indemnity could have been sought hereunder by such indemnified party, unless such
settlement includes (x) no admission of culpability of such indemnified party and (y) an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses (other than loss of profits), claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Bank on the one hand and each Underwriter on
the other from the sale of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, or if the
indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Bank on the one hand and each Underwriter on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative benefits received by the Bank on the one hand and each Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds from the sale of
the Securities (before deducting expenses) received by the Bank bear to the total discounts and commissions received by such Underwriter in respect thereof. The relative fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information supplied by
the Bank on the one hand or by any Underwriter on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Bank and each Underwriter agree that it would
not be just and equitable if contribution pursuant to this subsection (d) were determined by
pro rata
allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending
-13-
any such action or claim. Notwithstanding the provisions of this subsection (d), an Underwriter shall not be
required to contribute any amount in excess of the amount by which the total discounts and commissions received by it exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) or found to be grossly negligent by a court of competent jurisdiction shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Bank under
this Section 7 shall be in addition to any liability which the Bank may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Securities Act; and the
obligations of each Underwriter under this Section 7 shall be in addition to any liability which such Underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Bank and to each
person, if any, who controls the Bank within the meaning of the Securities Act.
8.
Representations and Indemnities to Survive
. The
respective indemnities, agreements, representations, warranties and other statements by any Underwriter and the Bank or its officers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any
investigation or statement as to the results thereof made by or on behalf of any Underwriter or the Bank or any of its officers or directors or any controlling person, and will survive the delivery of and payment for the Securities.
9.
Termination
. The Representatives may terminate this Agreement by notice given to the Bank, prior to delivery and payment for the
Securities, if at any time after the execution and delivery of this Agreement and prior to such payment and delivery: (i) there shall have occurred any suspension or material limitation in trading in securities generally on the New York Stock
Exchange or the Toronto Stock Exchange if the effect of any such event, in the reasonable judgment of the Representatives, makes it impracticable or inadvisable to proceed with the purchase and public offering by the Underwriters of the Securities;
(ii) a general moratorium on commercial banking activities in New York is declared by either Federal or New York State authorities or in Toronto is declared either by federal or provincial authorities; (iii) there shall have occurred any
outbreak or escalation of hostilities or any calamity or crisis involving the United States or Canada or there shall have been any declaration by the United States or Canada of a national emergency or war, other than any such outbreak, escalation or
declaration arising out of or relating to the United States’ war on terrorism that does not represent a significant departure from the conditions that exist on the date of this Agreement; (iv) trading is suspended in the Bank’s
securities on the New York Stock Exchange or the Toronto Stock Exchange; (v) there shall have occurred any downgrading, or the Bank shall have received any written notice of any intended downgrading, in the rating accorded the Bank’s debt
by Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, Standard & Poor’s, a division of McGraw Hill Financial, Inc., Fitch Ratings, a division of The Fitch Group, or DBRS Limited and DBRS, Inc., or any such
organization shall have publicly announced that it has under surveillance or review, with possible negative implications, the ratings accorded the Bank’s debt; or (vi) there shall have occurred any material disruption in securities
settlement, payment or clearance services in the United States or Canada, if, in the case of clauses (iii) and (vi), the effect of such an event in the reasonable judgment of the Representatives, is to make it impracticable or inadvisable to
proceed with the purchase and public offering of the Securities by the Underwriters, on the terms and in the manner contemplated in the Pricing Disclosure Package, as amended or supplemented.
-14-
10.
Default by an Underwriter
. If, on the Closing Date, any one or more of the
Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than
one-tenth
of the aggregate principal amount of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the
principal amount of Securities set forth opposite their respective names in Schedule III bears to the aggregate principal amount of Securities set forth opposite the names of all such
non-defaulting
Underwriters, or in such other proportions as the Representatives may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth
of such principal amount
of Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default
occurs is more than
one-tenth
of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Bank for the purchase of such Securities
are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any
non-defaulting
Underwriter or the Bank. In any such case either the Representatives or the
Bank shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, the Pricing Disclosure Package or the Prospectus, as amended or
supplemented, if applicable, or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
11.
Notices
. Except as otherwise specifically provided herein, all statements, requests, notices and advices hereunder
shall be in writing, or by telephone if promptly confirmed in writing, and if to the Representatives, shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail as set forth in
Annex III
hereto under such Representative’s name, and if to the Bank shall be sufficient in all respects when delivered or sent by registered mail to Bank of Montreal, 100 King Street West, 1 First Canadian Place, 10th Floor, Toronto, Ontario,
Canada M5X 1A1, Facsimile Transmission: (416)
867-7193,
Attention: Senior Vice President and Treasurer, with a copy to Osler, Hoskin & Harcourt LLP, 100 King Street West, Suite 6600, Toronto, Ontario,
Canada M5X 1B8, Facsimile Transmission: (416)
862-6666,
Attention: Kashif Zaman.
12.
Successors
. This Agreement shall be binding upon, and inure solely to the benefit of, each Underwriter and the Bank, and to the extent provided in Section 7 and Section 8 hereof, the officers and directors of the Bank and any person
who controls any Underwriter or the Bank and an affiliate of an Underwriter, and their respective personal representatives, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities through or from any Underwriter hereunder shall be deemed a successor or assign by reason of such purchase.
13.
No fiduciary duty
. The Bank acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement
is an
arm’s-length
commercial transaction between the Bank, on the one hand, and the Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each
Underwriter is acting solely as a principal and not the agent or fiduciary of the Bank, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Bank with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Bank on other matters) or any other obligation to the Bank except the obligations expressly set forth in this Agreement, (iv) the
Underwriters may have interests that differ from the interests of the Bank and (v) the Bank has consulted its own legal and financial advisors to the extent it deemed appropriate. The Bank agrees that it will not claim that the Underwriters, or
any of them, have rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Bank, in connection with such transaction or the process leading thereto.
-15-
14.
Integration
. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Bank and the Underwriters, or any of them, with respect to the subject matter hereof.
15.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
16.
Submission to jurisdiction; authorized agent
. The Bank irrevocably (i) agrees that any legal suit, action or proceeding against the Bank brought by any Underwriter or by any person who controls any Underwriter arising out of or based
upon this Agreement may be instituted in any state or federal court in The City of New York (a “
New
York Court”),
(ii) waives, to the fullest extent it may effectively do so, any objection that it may now or hereafter have to
the laying of venue of any such proceeding, and (iii) submits to the jurisdiction of such courts in any such suit, action or proceeding. The Bank irrevocably waives any immunity to jurisdiction to which it may otherwise be entitled or become
entitled (including immunity to
pre-judgment
attachment, post-judgment attachment and execution) in any legal suit, action or proceeding against it arising out of or based on this Agreement or the transactions
contemplated hereby and thereby that is instituted in any New York Court. The Bank has appointed BMO Capital Markets Corp., 3 Times Square, 28th Floor, New York, New York 10036 (Attention: Legal Department), as its authorized agent (the
“
Authorized Agent”)
upon which process may be served in any such action arising out of or based on this Agreement that may be instituted in any New York Court by any Underwriter or by any person who controls any Underwriter,
expressly consents to the jurisdiction of any such court in respect of any such action, and waives any other requirements of or objections to personal jurisdiction with respect thereto. The Bank represents and warrants that the Authorized Agent has
agreed to act as such agent for service of process and agrees to take any and all action, including the filing of any and all documents and instruments, which 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 Bank shall be deemed, in every respect, effective service of process upon the Bank. Notwithstanding the foregoing, neither the Bank’s appointment of the
Authorized Agent as its agent for service of process nor its consent to the jurisdiction of any New York Court and waiver of any defenses or objections thereto provided in this Section 16 shall apply to any legal action, suit or proceeding
arising out of or based upon United States federal securities laws.
17.
Waiver of Jury Trial
. The Bank and each Underwriter hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
18.
Judgment currency
. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any
currency other than United States dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the relevant
Underwriters could purchase United States dollars with such other currency in The City of New York on the Business Day preceding that on which final judgment is given. The obligation of the Bank with respect to any sum due from it to any Underwriter
or any person controlling 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 or controlling person of any sum in
such other currency, and only to the extent that such Underwriter or controlling person 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 or controlling person hereunder, the Bank agrees as a separate
-16-
obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against
such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Bank an amount equal to the excess of the
dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.
19.
Definitions
. As used
herein, “
Business
Day”
shall mean any day other than a day when the Commission’s office in Washington, D.C. is not open for business or banking institutions are authorized or obligated by law or executive order to close
in The City of New York, New York or Toronto, Ontario.
20.
Counterparts
. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all of such respective counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.
21.
Headings
. The section headings used herein are for convenience only and shall not affect the construction hereof.
22.
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 Bank, 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.
-17-
If the foregoing is in accordance with your understanding, please sign and return to us five
counterparts hereof, whereupon this letter and the acceptance by each of you thereof shall constitute a binding agreement between the Bank and each of you in accordance with its terms.
|
|
|
|
|
Very truly yours,
|
|
|
|
BANK OF MONTREAL
|
|
|
|
|
By:
|
|
/s/ Chris Hughes
|
|
|
|
Name: Chris Hughes
|
|
|
|
Title: Deputy Treasurer
|
|
|
|
|
|
The foregoing Agreement is hereby confirmed and accepted as of the date first above written.
|
|
|
|
BMO CAPITAL MARKETS CORP.
|
|
|
|
|
By:
|
|
/s/ Sean Hayes
|
|
|
|
Name: Sean Hayes
|
|
|
|
Title: Director
|
|
|
|
CITIGROUP GLOBAL MARKETS lNC.
|
|
|
|
|
By:
|
|
/s/ Jack D. McSpadden, Jr.
|
|
|
|
Name: Jack D. McSpadden, Jr.
|
|
|
|
Title: Managing Director
|
|
|
|
GOLDMAN SACHS & CO. LLC
|
|
|
|
|
By:
|
|
/s/ Adam Greene
|
|
|
|
Name: Adam Greene
|
|
|
|
Title: Vice President
|
|
|
|
UBS SECURITIES LLC
|
|
|
|
|
By:
|
|
/s/ James Anderson
|
|
|
|
Name: James Anderson
|
|
|
|
Title: Executive Director
|
|
|
|
|
By:
|
|
/s/ Aneesh Kelker
|
|
|
|
Name: Aneesh Kelker
|
|
|
|
Title: Associate Director
|
|
|
|
For themselves and the other several Underwriters named in Schedule II to the foregoing Agreement
|
Schedule I
December 7, 2017
Pricing
Term Sheet
Bank of Montreal
US$1,250,000,000
3.803%
Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC))
(Subordinated Indebtedness)
|
|
|
|
|
Issuer:
|
|
Bank of Montreal (the “
Bank
”)
|
|
|
|
|
Issue:
|
|
3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) (the “
Notes
”)
|
|
|
|
|
Expected Ratings
*
:
|
|
[Intentionally Omitted]
|
|
|
|
|
Format:
|
|
SEC Registered – Registration Statement
No. 333-217200
|
|
|
|
|
Status and Subordination:
|
|
The Notes will be the Bank’s direct unsecured obligations constituting subordinated indebtedness for the purpose of the
Bank Act
(Canada) (the “
Bank Act
”) and, if the Bank becomes insolvent or is
wound-up
(prior to the occurrence of a Trigger Event (as defined below)), will rank
pari passu
with all other Subordinated Indebtedness (as defined in the Prospectus) of the Bank from time to time
outstanding, except Indebtedness (as defined in the Prospectus) that by its terms is subordinated to such Subordinated Indebtedness.
|
|
|
|
|
|
|
The Notes will not constitute savings accounts, deposits or other obligations that are insured by the United States Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other governmental agency or under the
Canada Deposit Insurance Corporation Act
(Canada), the Bank Act or any other deposit insurance regime designed to ensure the payment of all or a portion of a deposit upon the insolvency of the deposit taking financial institution.
|
|
|
|
|
Principal Amount:
|
|
US$1,250,000,000
|
|
|
|
|
Price to Public:
|
|
100.000%, plus accrued interest, in any, from December 12, 2017
|
|
|
|
|
Underwriting Commission:
|
|
0.450% per Note
|
|
|
|
|
Net Proceeds to the Bank after Underwriting Commission and Before Expenses:
|
|
US$1,244,375,000
|
|
|
|
|
Trade Date:
|
|
December 7, 2017
|
|
|
|
|
Settlement Date:
|
|
December 12, 2017 (T+3)
|
|
|
|
|
Maturity Date:
|
|
December 15, 2032
|
SCHEDULE
I-1
|
|
|
|
|
|
|
Schedule I
|
|
|
|
|
Interest Reset Date:
|
|
December 15, 2027
|
|
|
|
|
Interest Rate:
|
|
Subject to any redemption prior to the Maturity Date, the Notes will bear interest (i) from and including the Settlement Date to, but excluding, the Reset Date, at a rate of 3.803% per annum and (ii) from and including the
Reset Date to, but excluding, the Maturity Date at a rate per annum which will be 1.432% above the
5-Year
Mid-Swap
Rate.
|
|
|
|
|
|
|
For purposes of the foregoing:
|
|
|
|
|
|
|
“
5-Year
Mid-Swap
Rate
” means the
5-year
semi-annual
mid-swap
rate as displayed on the Reset Screen Page on the Reset Interest Determination Date. In the event that the
5-year
semi-annual
mid-swap
rate does not appear on the Reset Screen Page on the Reset Interest Determination Date, the
5-Year
Mid-Swap
Rate shall
be the Reset Reference Bank Rate on the Reset Interest Determination Date.
|
|
|
|
|
|
|
“
Reset Screen Page
” means Reuters screen “ICESWAP1” (or any successor page or, if a successor page is unavailable, an equivalent page of Bloomberg or any comparable provider as determined by the Bank in
its sole discretion) as at 11:00 a.m. (New York time).
|
|
|
|
|
|
|
“
Reset Interest Determination Date
” means the day falling two business days prior to the Reset Date.
|
|
|
|
|
|
|
“
Reset Reference Bank Rate
” means the percentage rate determined on the basis of the
5-Year
Mid-Swap
Rate Quotation provided by five
leading swap dealers in the interbank market to the paying agent as at approximately 11:00 a.m. (New York time) on the Reset Interest Determination Date. If at least three quotations are provided, the
5-Year
Mid-Swap
Rate will be the arithmetic mean of the quotations, eliminating the highest quotation (or, in the event of equality one of the highest) and the lowest quotation (or, in the event of equality, one of the
lowest). If only two quotations are provided, the
5-Year
Mid-Swap
Rate will be the arithmetic mean of the quotations provided. If only one quotation is provided, the
5-Year
Mid-Swap
Rate will be the quotation provided. If no quotations are provided, the
5-Year
Mid-Swap
Rate shall be equal to the last available
5-year
semi-annual
mid-swap
rate on the Reset Screen Page.
|
|
|
|
|
|
|
“
5-Year
Mid-Swap
Rate Quotation
” means, in each case, the arithmetic mean of the bid and offered rates for the semi-annual fixed leg
(calculated on the basis of a
360-day
year of twelve
30-day
months) of a
fixed-for-floating
U.S. dollar interest rate swap which
(i) has a term of 5 years commencing on the Reset Date, (ii) is in an amount that is representative of a single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market and
(iii) has a floating leg based on the
3-month
U.S. dollar LIBOR rate (or such other short-term rate, if any, as shall have generally replaced the
3-month
U.S.
dollar LIBOR rate in the relevant market at the relevant time for purposes of such
fixed-for-floating
U.S. dollar interest rate swaps quotations, as determined by the
Bank in its sole discretion) (calculated on the basis of the actual number of days elapsed in
360-day
year).
|
|
|
|
|
Interest Payment Dates:
|
|
Semi-annually on June 15 and December 15 of each year, beginning on June 15, 2018 (long first coupon). Interest will accrue from December 12, 2017.
|
SCHEDULE
I-2
|
|
|
|
|
|
|
Schedule I
|
|
|
|
|
Benchmark Treasury:
|
|
2.250% UST due November 15, 2027
|
|
|
|
|
Benchmark Treasury Yield:
|
|
2.353%
|
|
|
|
|
Re-Offer
Spread to Benchmark Treasury:
|
|
T + 145 basis points
|
|
|
|
|
Re-Offer
Spread to
10-Year
Mid-Swap Rate:
|
|
10-Year
Mid-Swap
Rate + 1.432%
|
|
|
|
|
Re-Offer
Yield:
|
|
3.803%
|
|
|
|
|
Day Count / Business Day Convention:
|
|
30/360; following, unadjusted
|
|
|
|
|
NVCC Automatic Conversion:
|
|
Upon the occurrence of a Trigger Event, each outstanding Note will automatically and immediately be converted, on a full and permanent basis, without the consent of the holders thereof, and as of the start of business on the date on
which the Trigger Event occurs, into a number of fully-paid and freely tradable common shares of the Bank (“
Common
Shares
”) determined by dividing (a) the product of the Multiplier and the Note Value, by (b) the
Conversion Price (an “
NVCC Automatic
Conversion
”). For the purposes of the foregoing:
|
|
|
|
|
|
|
“
Conversion Price
” means, in respect of each Note, the greater of (i) the Floor Price, and (ii) the Current Market Price.
|
|
|
|
|
|
|
“
Current Market Price
” means the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the “
TSX
”) or, if not then listed on the TSX, on another exchange or market
chosen by the board of directors of the Bank on which the Common Shares are then traded, for the 10 consecutive trading days ending on the trading day immediately prior to the date on which the Trigger Event occurs, converted (if not denominated in
U.S. dollars) into U.S. dollars at the Prevailing Rate on the day immediately prior to the date on which the Trigger Event occurs. If no such trading prices are available, “Current Market Price” shall be the Floor Price.
|
|
|
|
|
|
|
“
Floor Price
” means the U.S. dollar equivalent of $5.00 converted into U.S. dollars at the Prevailing Rate on the day
immediately prior to the date on which the Trigger Event occurs, subject to adjustment in the event of (i) the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all holders of Common Shares as a stock
dividend, (ii) the subdivision, redivision or change of the Common Shares into a greater number of Common Shares, or (iii) the reduction, combination or consolidation of the Common Shares into a lesser number of Common Shares. The
adjustment shall be calculated to the nearest one-tenth of one cent provided that no adjustment of the Floor Price shall be required unless such adjustment would require an increase or decrease of at least 1% of the Floor Price then in effect;
provided, however, that in such case any adjustment that would otherwise be required to be made will be carried forward and will be made at the time of and together with the next subsequent adjustment which, together with any adjustments so carried
forward, will amount to at least 1% of the Floor Price.
“
Multiplier
” means 1.5.
|
SCHEDULE
I-3
|
|
|
|
|
|
|
Schedule I
|
|
|
|
|
|
|
“
Note Value
” means, in respect of each Note, the principal amount of such Note plus accrued and unpaid interest on such Note to, but excluding, the date of the Trigger Event.
|
|
|
|
|
|
|
“
Prevailing Rate
” means, in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12:00 noon (New York time) on that date as appearing on or
derived from the Relevant Page or, if such a rate cannot be determined at such time, the rate prevailing as at or about 12:00 noon (New York time) on the immediately preceding day on which such rate can be so determined or, if such rate cannot be so
determined by reference to the Relevant Page, the rate determined in such other manner as an Independent Financial Adviser (as defined herein) shall consider in good faith appropriate.
|
|
|
|
|
|
|
“
Relevant Page
” means the relevant page on Bloomberg (or such other information service provider) that displays the relevant information.
|
|
|
|
|
Trigger Event:
|
|
Trigger Event has the meaning set out in the Office of the Superintendent of Financial Institutions Canada (“
OSFI
”), Guideline for Capital Adequacy Requirements (CAR), Chapter 2 – Definition of Capital,
effective December 2016, as such term may be amended or superseded by OSFI from time to time, which term currently provides that each of the following constitutes a Trigger Event:
|
|
|
|
|
|
|
• the Superintendent publicly announces that the Bank has been
advised, in writing, that the Superintendent is of the opinion that the Bank has ceased, or is about to cease, to be viable and that, after the conversion of the Notes and all other contingent instruments issued by the Bank and taking into account
any other factors or circumstances that are considered relevant or appropriate, it is reasonably likely that the viability of the Bank will be restored or maintained; or
|
|
|
|
|
|
|
• a federal or provincial government in Canada publicly announces that
the Bank has accepted or agreed to accept a capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent or agency thereof without which the Bank would have been determined by
the Superintendent to be
non-viable.
|
|
|
|
|
Redemption:
|
|
The Bank may, at its option, with the prior written approval of the Superintendent of Financial Institutions Canada (the “
Superintendent
”), redeem the Notes, in whole but not in part, (i) at any time within 90
days following a Regulatory Event Date (as defined in the Prospectus), (ii) at any time following the occurrence of a Tax Event (as defined in the Prospectus) or (iii) on the Reset Date, in each case at a redemption price equal to 100% of the
principal amount thereof, together with accrued and unpaid interest to, but excluding, the date fixed for redemption.
|
|
|
|
|
Events of Default:
|
|
An event of default will occur only if the Bank becomes insolvent or bankrupt or subject to the provisions of the
Winding-up
and Restructuring
Act
(Canada), or if the Bank goes
into liquidation, passes a resolution for the
winding-up,
liquidation or dissolution of the Bank or otherwise acknowledges its insolvency. Neither the failure to make a payment on the Notes when due (including
any interest payment) nor an NVCC Automatic Conversion will constitute an Event of Default.
|
SCHEDULE
I-4
Schedule I
|
|
|
|
|
Common Share Corporate Event:
|
|
In the event of a capital reorganization, consolidation, merger or amalgamation of the Bank or comparable transaction affecting the Common Shares, the Bank will take necessary action to ensure that holders of Notes receive, pursuant
to an NVCC Automatic Conversion, the number of Common Shares or other securities that such holders would have received if the NVCC Automatic Conversion occurred immediately prior to the record date for such event.
|
|
|
|
|
Prohibited Owners:
|
|
Upon an NVCC Automatic Conversion, the Bank reserves the right not to deliver some or all, as applicable, of the Common Shares issuable thereupon to any Ineligible Person (as defined in the Prospectus) or any person who, by virtue
of the operation of the NVCC Automatic Conversion, would become a Significant Shareholder (as defined in the Prospectus) through the acquisition of Common Shares.
|
|
|
|
|
Use of Proceeds:
|
|
The net proceeds will be contributed to the general funds of the Bank and will qualify as Tier 2 capital of the Bank for regulatory purposes.
|
|
|
|
|
Joint Book-Running Managers:
|
|
BMO Capital Markets Corp.
Citigroup Global
Markets Inc.
Goldman Sachs & Co. LLC
UBS Securities
LLC
|
|
|
|
|
Co-Managers:
|
|
HSBC Securities (USA) Inc.
|
|
|
|
Merrill Lynch, Pierce, Fenner & Smith
|
|
|
|
Incorporated
|
|
|
|
Wells Fargo Securities, LLC
|
|
|
|
J.P. Morgan Securities LLC
|
|
|
|
Morgan Stanley & Co. LLC
|
|
|
|
Barclays Capital Inc.
|
|
|
|
Credit Suisse Securities (USA) LLC
|
|
|
|
Desjardins Securities Inc.
|
|
|
|
|
Form and Denomination:
|
|
The Notes will be issued in the form of one or more fully registered global notes registered in the name of the nominee of The Depository Trust Company. The Notes will be issued only in minimum denominations of US$1,000 and integral
multiples of US$1,000 in excess thereof.
|
|
|
|
|
CUSIP / ISIN:
|
|
06368B GS1 / US06368BGS16
|
|
*
|
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
|
Under Rule
15c6-1
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), trades in the
secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade their Notes more than two business days prior to the settlement date
will be required, by virtue of the fact that the Notes initially will settle in three business days (T+3), to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement.
Because Desjardins Securities Inc. is not registered with the U.S. Securities and Exchange Commission (the “SEC”) as a U.S. registered
broker-dealer, it will effect offers and sales of the Notes solely outside of the United States or within the United States to the extent permitted by Rules
15a-6
under the Exchange Act through one or more
U.S. registered broker-dealers and as permitted by the rules and regulations of the Financial Industry Regulatory Authority Inc.
SCHEDULE
I-5
Schedule I
The Bank has filed a registration statement (File
No. 333-217200)
(including a base shelf prospectus dated
April 27, 2017) and a preliminary prospectus supplement dated December 6, 2017 (including the base shelf prospectus, the “Prospectus”) with the SEC for the offering to which this communication relates. Before you invest, you
should read the Prospectus and the documents incorporated therein by reference that the Bank has filed with the SEC for more complete information about the Bank and this offering. You may get these documents for free by visiting EDGAR on the SEC
website at www.sec.gov. Alternately, the Bank, any underwriter or any dealer participating in the offering will arrange to send you the Prospectus if you request it by calling BMO Capital Markets Corp. toll-free at
1-866-864-7760,
Citigroup Global Markets Inc. toll-free at
1-800-831-9146,
Goldman Sachs & Co. LLC toll-free at
1-866-471-2526
or UBS Securities LLC toll-free at
1-888-827-7275.
SCHEDULE
I-6
Schedule II
|
(a)
|
Issuer Free Writing Prospectuses:
|
Term Sheet in the form set forth in Schedule I of this
Agreement.
|
(b)
|
Additional Information in Pricing Disclosure Package:
|
None.
SCHEDULE
II-1
Schedule III
|
|
|
|
|
|
|
Underwriter
|
|
Aggregate Principal
Amount of Securities
|
|
|
BMO Capital Markets Corp.
|
|
US$
|
275,000,000
|
|
|
Citigroup Global Markets Inc.
|
|
|
275,000,000
|
|
|
Goldman Sachs & Co. LLC
|
|
|
275,000,000
|
|
|
UBS Securities LLC
|
|
|
275,000,000
|
|
|
HSBC Securities (USA) Inc.
|
|
|
25,000,000
|
|
|
Merrill Lynch, Pierce, Fenner & Smith
|
|
|
|
|
|
Incorporated
|
|
|
25,000,000
|
|
|
Wells Fargo Securities, LLC
|
|
|
25,000,000
|
|
|
J.P. Morgan Securities LLC
|
|
|
18,750,000
|
|
|
Morgan Stanley & Co. LLC
|
|
|
18,750,000
|
|
|
Barclays Capital Inc.
|
|
|
12,500,000
|
|
|
Credit Suisse Securities (USA) LLC
|
|
|
12,500,000
|
|
|
Desjardins Securities Inc.
|
|
|
12,500,000
|
|
|
|
|
|
|
|
|
Total
|
|
US$
|
1,250,000,000
|
|
|
|
|
|
|
|
Price to Public:
100.000%, plus accrued interest, if any, from December 12, 2017
Purchase Price by the Underwriters:
99.550% of the principal amount of the Securities, plus accrued interest, if any, from December 12, 2017
(representing a purchase price equal to the Price to Public, less a commission payable to the Underwriters of 0.450% of the principal amount of the Securities).
Closing Date, Time and Location:
December 12, 2017 at 9:00 a.m. (New York City time) at Shearman & Sterling LLP, Commerce Court West, 199 Bay
Street, Toronto, Ontario M5L 1E8.
SCHEDULE
III-1
ANNEX I
Form of Opinion of Sullivan & Cromwell LLP
In connection with the several purchases today by you and the other Underwriters named in Schedule III to the Underwriting Agreement, dated
December 7, 2017 (the “Underwriting Agreement”), among Bank of Montreal, a Canadian chartered bank (the “Bank”), and you, as representatives of the several Underwriters named therein (the “Underwriters”), of
US$1,250,000,000 principal amount of the Bank’s 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) (the “Securities”) issued pursuant to the Indenture (the “Base
Indenture”), dated as of December 12, 2017, and the First Supplemental Indenture (the “First Supplemental Indenture”), dated as of December 12, 2017 (together, the “Indenture”), between the Bank and Wells Fargo
Bank, National Association, as Trustee (the “Trustee”), we, as United States counsel for the Bank, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such examination, it is our opinion that:
(1) Assuming the Indenture has been duly authorized, executed and delivered by the Bank insofar as the laws of Canada and
Ontario are concerned, the Indenture has been duly authorized, executed and delivered by the Bank and duly qualified under the Trust Indenture Act of 1939; assuming the Securities have been duly authorized by the Bank insofar as the laws of Canada
and Ontario are concerned, the Securities have been duly authorized, executed, authenticated, issued and delivered; and, subject to the assumptions in this paragraph (1), the Indenture and the Securities constitute valid and legally binding
obligations of the Bank enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to
general equity principles;
provided,
however,
that we express no opinion with respect to the first sentence of Section 301(b) and Article Fifteen of the Base Indenture and Article Seven of the First Supplemental Indenture (and the
corresponding provisions in the Securities), which are governed by the laws of the Province of Ontario and the Federal laws of Canada applicable therein.
(2) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Bank under the
Covered Laws for the issuance, sale and delivery of the Securities by the Bank to the several Underwriters have been obtained or made.
(3) The execution and delivery by the Bank of, and the performance by the Bank of its obligations under, the Indenture, the
Underwriting Agreement and the Securities will not violate any Covered Laws.
(4) Assuming the Underwriting Agreement has
been duly authorized, executed and delivered by the Bank insofar as the laws of Canada and Ontario are concerned, the Underwriting Agreement has been duly authorized, executed and delivered by the Bank.
(5) The Bank is not required to register as an “investment company” under the Investment Company Act of 1940, as
amended.
(6) Assuming the validity of such action under the laws of Canada and Ontario, under the laws of the State of New
York relating to submission to personal jurisdiction, the Bank has validly and effectively submitted to the personal jurisdiction of any state or Federal court in The City of New York, State of New York and has validly appointed BMO Capital Markets
Corp., 3 Times Square, 28
th
Floor, New York, New York 10036 (Attention: Secretary) as its authorized agent for the purposes described in Section 1601 of the Base Indenture and Section 16
of the Underwriting Agreement.
ANNEX
I-1
As contemplated by the qualifications set forth in paragraph (1) above, in rendering the
foregoing opinion, we are expressing no opinion as to Federal or state laws relating to fraudulent transfers.
We are expressing no
opinion in paragraphs (2) and (3) above, insofar as performance by the Bank of its obligations under the Indenture, the Underwriting Agreement or the Securities is concerned, as to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting creditors’ rights. Also, for purposes of the opinions in paragraphs (2) and (3) above, “Covered Laws” means the existing federal laws of the United
States and the existing laws of the State of New York (including the published rules or regulations thereunder) that in our experience normally are applicable to general business corporations and transactions such as those contemplated by the
Indenture, the Underwriting Agreement or the Securities;
provided,
however,
that such term does not include Federal or state securities laws, other antifraud laws and fraudulent transfer laws, tax laws, the Employee Retirement Income
Security Act of 1974, antitrust laws or any law that is applicable to the Bank, the Indenture, the Underwriting Agreement or the Securities or the transactions contemplated thereby solely as part of a regulatory regime applicable to the Bank or its
affiliates due to its or their status, business or assets.
The foregoing opinion is limited to the Federal laws of the United States and
the laws of the State of New York, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. With respect to all matters of the laws of Canada and Ontario, we note that you are receiving the opinion, dated
December 12, 2017, of Osler, Hoskin & Harcourt LLP, Canadian counsel for the Bank, delivered to you pursuant to the Underwriting Agreement, and our opinion is subject to the same assumptions, qualifications and limitations with respect
to such matters as are contained in such opinion of Osler, Hoskin & Harcourt LLP.
In rendering the foregoing opinion, we have
relied as to certain matters upon information obtained from public officials, officers of the Bank and other sources believed by us to be responsible, and we have assumed that the Indenture has been duly authorized, executed and delivered by the
Trustee, that the Securities conform to the specimens thereof examined by us, that the Trustee’s certificates of authentication of the Securities have been manually signed by one of the Trustee’s authorized officers, and that the
signatures on all documents examined by us are genuine, assumptions which we have not independently verified.
This letter is furnished by
us, as United States counsel to the Bank, to you, as representatives of the several Underwriters, solely for the benefit of the several Underwriters in their capacity as such, and may not be relied upon by any other person. This letter may not be
quoted, referred to or furnished to any purchaser or prospective purchaser of the Securities and may not be used in furtherance of any offer or sale of the Securities.
ANNEX
I-2
Form of Letter of Sullivan & Cromwell LLP
This is with reference to the registration under the Securities Act of 1933 (the “Securities Act”) and offering of US$1,250,000,000
aggregate principal amount of 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) (the “Securities”) of Bank of Montreal (the “Bank”).
The Registration Statement relating to the Securities (File
No. 333-217200)
was filed on Form
F-3
in accordance with procedures of the Securities and Exchange Commission (the “Commission”) permitting a delayed or continuous offering of securities pursuant thereto and, if appropriate, a
post-effective amendment, document incorporated by reference therein or prospectus supplement that provides information relating to the terms of the securities and the manner of their distribution. The Securities have been offered by the Prospectus,
dated April 27, 2017 (the “Basic Prospectus”), as supplemented by the Prospectus Supplement, dated December 7, 2017 (the “Prospectus Supplement”), which updates or supplements certain information contained in the Basic
Prospectus. The Basic Prospectus, as supplemented by the Prospectus Supplement, does not necessarily contain a current description of the Bank’s business and affairs since, pursuant to Form
F-3,
it
incorporates by reference certain documents filed with the Commission that contain information as of various dates.
As United States
counsel to the Bank, we reviewed the Registration Statement, the Basic Prospectus, the Prospectus Supplement and the documents listed in Schedule I (those listed documents, taken together with the Basic Prospectus, being referred to herein as the
“Pricing Disclosure Package”) and participated in discussions with your representatives and those of the Bank, its accountants and its Canadian counsel. Between the date of the Prospectus Supplement and the time of delivery of this letter,
we participated in further discussions with your representatives and those of the Bank and its accountants and its Canadian counsel concerning certain matters relating to the Bank and reviewed certificates of certain officers of the Bank, letters
addressed to you from the Bank’s accountants and an opinion addressed to you from the Bank’s Canadian counsel. On the basis of the information that we gained in the course of the performance of the services referred to above, considered in
the light of our understanding of the applicable law (including the requirements of Form
F-3
and the character of prospectus contemplated thereby) and the experience we have gained through our practice under
the Securities Act, we confirm to you that, in our opinion, the Registration Statement, as of the date of the Prospectus Supplement, and the Basic Prospectus, as supplemented by the Prospectus Supplement, as of the date of the Prospectus Supplement,
appeared on their face to be appropriately responsive, in all material respects relevant to the offering of the Securities, to the requirements of the Securities Act, the Trust Indenture Act of 1939 and the applicable rules and regulations of the
Commission thereunder;
provided,
however,
that we express no opinion on compliance as to form in respect of those parts of the Bank’s annual report on Form
40-F
incorporated by reference
into the Basic Prospectus that, in accordance with the Multijurisdictional Disclosure System between Canada and the United States, are prepared in conformity with applicable Canadian requirements (you are receiving an opinion of Osler,
Hoskin & Harcourt LLP in respect of such matters). Also, we confirm to you that the statements contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement and the Pricing Disclosure Package under the captions
“Description of Debt Securities We May Offer,” “United States Federal Income Taxation” and “Plan of Distribution (Conflicts of Interest)” in the Basic Prospectus and “Description of the Notes,” “U.S.
Federal Income Tax Considerations” and “Supplemental Plan of Distribution (Conflicts of Interest)” in the Prospectus Supplement, insofar as they relate to provisions of the Securities, the Indenture (the “Base Indenture”),
dated as of December 12, 2017, and the First Supplemental Indenture (the “First Supplemental Indenture”), dated as of December 12, 2017 (together, the “Indenture”), between the Bank and Wells Fargo Bank, National
Association, as trustee, the Underwriting Agreement, dated December 7, 2017 (the “Underwriting Agreement”), among Bank and you, as representatives of the several Underwriters named therein (the “Underwriters”) or to
provisions of United States federal income tax law therein described, constitute a fair and accurate summary of such provisions in all material respects.
ANNEX
I-3
Further, nothing that came to our attention in the course of such review has caused us to believe
that, insofar as relevant to the offering of the Securities,
(a) the Registration Statement, as of the date of the
Prospectus Supplement, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or
(b) the Pricing Disclosure Package, as of 4:55 P.M. on December 7, 2017, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or
(c) the Basic Prospectus, as supplemented by the Prospectus Supplement, as of the date of the Prospectus Supplement,
contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
We also advise you that nothing that came to our attention in the course of the procedures described in the second sentence of the preceding paragraph has
caused us to believe that the Basic Prospectus, as supplemented by the Prospectus Supplement, as of the time of delivery of this letter, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading.
The limitations inherent in
the independent verification of factual matters and the character of determinations involved in the registration process are such, however, that we do not assume any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Pricing Disclosure Package except to the extent specifically noted in the fourth sentence of the second preceding paragraph. Also, we do not express any
opinion or belief as to the financial statements or other financial data derived from accounting records contained in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Pricing Disclosure Package, or as to
management’s report of its assessment of the effectiveness of the Bank’s internal control over financial reporting or the auditors’ report as to the Bank’s internal control over financial reporting, each as included in the
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Pricing Disclosure Package, as to the statement of the eligibility of the trustee under the Indenture under which the Securities are being issued, or as to any statement
with respect to the laws of Canada or Ontario in the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Pricing Disclosure Package.
This letter is furnished by us, as United States counsel to the Bank, to you, as representatives of the several Underwriters, solely for the
benefit of the several Underwriters in their capacity as such, and may not be relied upon by any other person. This letter may not be quoted, referred to or furnished to any purchaser or prospective purchaser of the Securities and may not be used in
furtherance of any offer or sale of the Securities.
ANNEX
I-4
Schedule I
|
1.
|
Preliminary Prospectus Supplement, dated December 6, 2017, relating to the Securities
|
|
2.
|
Pricing Term Sheet, dated December 7, 2017, relating to the Securities
|
ANNEX
I-5
ANNEX II
Form of Opinion of Osler, Hoskin & Harcourt LLP
Bank of Montreal – US$1,250,000,000 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital
(NVCC))
We have acted as Canadian counsel to Bank of Montreal (the “
Bank
”) in connection with the issue and sale today (the
“
Offering
”) by the Bank of US$1,250,000,000 aggregate principal amount of its 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) (the “
Notes
”)
pursuant to an underwriting agreement dated December 7, 2017 (the “
Underwriting
Agreement”)
among the Bank and BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and UBS Securities
LLC, as representatives (the “
Representatives
”) of the several underwriters named therein (collectively, the “
Underwriters
”). The Notes are issuable under and pursuant to a subordinated debt securities indenture
dated as of December 12, 2017 (the “
Base
Indenture”),
between the Bank and Wells Fargo Bank, National Association, as trustee (the “
Trustee
”), as amended and supplemented by the first supplemental
indenture dated as of December 12, 2017 (the “
First
Supplemental
Indenture”
and together with the Base Indenture, the “
Indenture
”), between the Bank and the Trustee.
This opinion letter is provided at the request of the Underwriters pursuant to Section 6(e) of the Underwriting Agreement. All capitalized terms used in
this opinion letter shall, unless otherwise defined in this opinion letter, have the meanings ascribed to them in the Underwriting Agreement.
We are
solicitors qualified to practise law in the Province of Ontario and we express no opinion as to any laws or any matters governed by any laws other than the laws of the Province of Ontario and the federal laws of Canada applicable therein.
The terms of the Indenture provide that the Notes will convert, upon an NVCC Automatic Conversion (as defined in the Indenture), into common shares in the
capital of the Bank (each, a “
Common
Share”),
subject to certain conditions as described in the Prospectus.
As Canadian counsel
to the Bank, we have examined originals or copies, certified or otherwise authenticated to our satisfaction, of the following:
|
|
1.
|
the preliminary prospectus supplement dated December 6, 2017 (the “
Preliminary
Prospectus Supplement”),
the final prospectus supplement dated December 7, 2017 (the “
Final
Prospectus Supplement”)
and the base prospectus dated April 27, 2017 (the “
Base
Prospectus”
and together with the Preliminary Prospectus Supplement and the Final Prospectus Supplement, the
“
Prospectus
”);
|
|
|
2.
|
the Underwriting Agreement; and
|
In connection with the opinions expressed in this letter we have considered such questions of
law and examined such public and corporate records, certificates and other documents and conducted such other examinations as we have considered necessary or appropriate for the purposes of the opinions hereafter expressed, including the following
documents:
|
|
1.
|
the
by-laws
of the Bank;
|
ANNEX
II-1
|
|
2.
|
officers’ certificates of the Bank as to resolutions of the directors of the Bank authorizing the Registration Statement filed with the U.S. Securities and Exchange Commission (the “
Commission
”) on
Form
F-3
on April 7, 2017 (the “
Registration Statement”),
the Prospectus, and the creation and issuance of the Notes and other related matters; and
|
|
|
3.
|
a Certificate of Confirmation dated [
Osler
,
Hoskin
& Harcourt LLP to provide date]
issued by the Superintendent of Financial Institutions Canada in respect of the Bank (the
“
Certificate
of Confirmation”)
.
|
We have assumed the legal capacity of all individuals, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed, photostatic or facsimile copies.
In expressing the opinion in paragraph 1 as to the existence of the Bank, we have relied exclusively on the Certificate of Confirmation, which certificate we
assume is accurate as of the date hereof.
The opinion expressed in paragraph 5 is based on the assumption that the Indenture has been duly authorized,
executed and delivered by, and is enforceable in accordance with its terms against, the Trustee.
In giving the opinion in paragraph 19 below, we have
relied, as to the fact that the listing of the Common Shares issuable upon a NVCC Automatic Conversion (as defined in the Indenture) has been approved by the Toronto Stock Exchange (the “
TSX
”), exclusively on a letter dated
[
Osler
,
Hoskin
& Harcourt LLP to provide date]
from the TSX (the “
TSX
Letter”)
.
Based upon
the foregoing, and subject to the qualifications expressed herein, we are of the opinion that:
|
|
1.
|
The Bank validly exists as a Schedule I bank under the
Bank Act
(Canada) (the “
Bank
Act”)
.
|
|
|
2.
|
The Bank has the corporate power to (i) execute, deliver and perform its obligations under the Underwriting Agreement and the Indenture, (ii) create, issue, execute, sell and deliver the Notes to be delivered
on the Closing Date, and (iii) issue and deliver the Common Shares into which the Notes may be converted upon a NVCC Automatic Conversion (as defined in the Indenture).
|
|
|
3.
|
All necessary corporate action has been taken by the Bank to authorize the execution and delivery of the Underwriting Agreement and the performance of its obligations thereunder and the Underwriting Agreement has been,
to the extent execution and delivery are matters governed by the laws of the Province of Ontario or the federal laws of Canada applicable therein, duly executed and delivered by the Bank.
|
|
|
4.
|
All necessary corporate action has been taken by the Bank to (i) authorize the creation, issuance, sale and delivery of the Notes to be delivered on the Closing Date, and the Notes have been, to the extent
issuance, execution and delivery are matters governed by the laws of the Province of Ontario or the federal laws of Canada applicable therein, duly issued, executed and delivered by the Bank, and (ii) authorize and reserve for issuance the
Common Shares into which the Notes may be converted upon a NVCC Automatic Conversion (as defined in the Indenture) and to provide that such Common Shares, when duly issued, will be outstanding, fully paid and
non-assessable
shares.
|
ANNEX
II-2
|
|
5.
|
All necessary corporate action has been taken by the Bank to authorize the execution and delivery of the Indenture and the performance of its obligations thereunder and the Indenture has been, to the extent execution
and delivery are matters governed by the laws of the Province of Ontario or the federal laws of Canada applicable therein, duly executed and delivered by the Bank. The Indenture will, with respect to the provisions thereof governed by the laws of
the Province of Ontario and the federal laws of Canada applicable therein, constitute a legal, valid and binding obligation of the Bank enforceable in accordance with its terms. The Notes will, with respect to the provisions thereof governed by the
laws of the Province of Ontario and the federal laws of Canada applicable therein, constitute a legal, valid and binding obligation of the Bank enforceable in accordance with its terms.
|
|
|
6.
|
The execution and delivery of the Underwriting Agreement and the Indenture, the fulfillment of the terms of the Underwriting Agreement and the Indenture by the Bank, and the issuance, sale and delivery of the Notes do
not and will not, and the issuance of the Common Shares upon a NVCC Automatic Conversion (as defined in the Indenture) will not, result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of
time or both, will result in a breach of or default under: (a) any of the terms, conditions or provisions of the Bank Act or the
by-laws
of the Bank; or (b) any law, statute, regulation or rule
applicable to the Bank or its property or assets.
|
|
|
7.
|
The Indenture and the issuance of the Notes thereunder comply, and the issuance of the Common Shares upon a NVCC Automatic Conversion (as defined in the Indenture) will comply, to the extent applicable, with the
provisions of the Bank Act. No registration, filing or recording of the Indenture under the laws of the Province of Ontario or the federal laws of Canada applicable therein is necessary or required for the issue of the Notes or the consummation of
the transactions contemplated by the Underwriting Agreement or the Indenture or the issuance of the Common Shares upon a NVCC Automatic Conversion (as defined in the Indenture). No consent, approval, authorization, license, order of, or filing,
registration, or qualification by the Bank or any of its subsidiaries with, any governmental or regulatory body of Canada or the Province of Ontario under the federal laws of Canada or the laws of the Province of Ontario applicable thereon is
necessary or required in connection with the due authorization, execution, delivery and performance by the Bank of the Underwriting Agreement, the Indenture or the offering, issuance or sale of the Notes pursuant to the Underwriting Agreement and
the Indenture or the issuance of the Common Shares upon a NVCC Automatic Conversion (as defined in the Indenture), except such as have been obtained.
|
|
|
8.
|
All necessary corporate action has been taken by the Bank to authorize the delivery of the Prospectus.
|
|
|
9.
|
The statements in the Registration Statement, under Part II of the Registration Statement under the heading “Indemnification”, insofar as such statements constitute statements of the laws of the Province of
Ontario or the federal laws of Canada applicable therein or purport to summarize provisions of agreements or instruments, have been reviewed by us and fairly summarize the matters described therein and are accurate in all material respects.
|
|
|
10.
|
The statements in the Base Prospectus under the heading “Limitations on Enforcement of U.S. Laws Against the Bank, Our Management and Others” insofar as such statements constitute statements of Canadian
federal or Ontario law, have been reviewed by us and fairly summarize the matters described therein and are accurate in all material respects.
|
ANNEX
II-3
|
|
11.
|
The form of global certificate representing the Notes to be delivered on the Closing Date has been approved by the Bank and, to the extent applicable, complies with the provisions of the Bank Act.
|
|
|
12.
|
The statements as to matters of the federal laws of Canada under the heading “Canadian Federal Income Tax Considerations” in the Final Prospectus Supplement are an accurate summary, in all material respects,
of the principal Canadian federal income tax considerations generally applicable to a
Non-Resident
Holder (as defined therein) who purchases Notes pursuant to the Prospectus, subject to the assumptions,
limitations and qualifications set out therein. The statements as to matters of the federal laws of Canada under the heading “Canadian Taxation—Debt Securities” in the Base Prospectus are an accurate summary, in all material respects,
of the principal Canadian federal income tax considerations generally applicable to a Holder (as defined therein) who purchases debt securities pursuant to the Prospectus, subject to the assumptions, limitations and qualifications set out therein.
|
|
|
13.
|
The Bank’s Annual Information Form dated December 5, 2017 and Management’s Discussion and Analysis, as contained in the Bank’s Annual Report for the year ended October 31, 2017, required to be
filed pursuant to National Instrument
51-102
Continuous Disclosure Obligations
with the Ontario Securities Commission (the “
OSC
”) under Ontario securities laws and which are
incorporated by reference in the Registration Statement, when they were filed with the OSC under Ontario securities laws, appear on their face to have been appropriately responsive in all material respects to the form requirements of Ontario
securities laws as interpreted and applied by the OSC.
|
|
|
14.
|
All payments by the Bank pursuant to the Underwriting Agreement shall be made without withholding for taxes under the
Income Tax Act
(Canada) provided (a) that such payments are not in respect of services
rendered in Canada; and (b) such amounts are reasonable in the circumstances and are (i) payable in respect of services performed in the ordinary course of business carried on by the recipient that includes the performance of such services
for a fee, and further provided that the Bank deals with the particular recipient at arm’s length for purposes of the
Income Tax Act
(Canada), or (ii) payable in satisfaction of a specific expense incurred by the particular
recipient for the performance of a service that was for the benefit of the Bank. No goods and services tax or harmonized sales tax imposed under the federal laws of Canada or provincial sales tax imposed under the laws of the Province of Ontario
will be payable by the Bank or collectable by an Underwriter in respect of the payment of the Underwriters’ Fee as contemplated by the Underwriting Agreement.
|
|
|
15.
|
No stamp duty, documentary taxes or similar taxes are payable by the Bank under the federal laws of Canada or the laws of the Province of Ontario in connection with the creation, issuance, sale and delivery of the Notes
to an Underwriter or the resale of the Notes by an Underwriter to U.S. residents.
|
|
|
16.
|
The submission by the Bank to the
non-exclusive
jurisdiction of the New York Courts (as defined below) in each of Section 16 of the Underwriting Agreement and
Section 1601 of the Base Indenture would be recognized and given effect by an Ontario Court (as defined below) as a valid submission to the New York Courts, provided that the provisions of the Underwriting Agreement and the Indenture, as
applicable, dealing with service of process on the Bank are duly complied with.
|
ANNEX
II-4
|
|
17.
|
An Ontario Court would give a judgment based upon a final and conclusive
in personam
judgment of a court of competent jurisdiction in New York (a “
New
York Court”)
for a sum certain,
obtained against the Bank with respect to a claim arising out of the Underwriting Agreement or the Indenture (a “
New
York Judgment”)
without reconsideration of the merits provided that:
|
|
|
(a)
|
an action to enforce the New York Judgment must be commenced in an Ontario Court within any applicable limitation period;
|
|
|
(b)
|
an Ontario Court has discretion to stay or decline to hear an action on the New York Judgment if such judgment is under appeal, or there is another subsisting judgment in any jurisdiction relating to the same cause of
action;
|
|
|
(c)
|
an Ontario Court will render judgment only in Canadian dollars; and
|
|
|
(d)
|
an action in an Ontario Court on the New York Judgment may be affected by bankruptcy, insolvency or laws affecting the enforcement of creditors’ rights generally;
|
further, an Ontario Court will not give such judgment if:
|
|
(i)
|
the New York Judgment was obtained by fraud or in a manner contrary to the principles of natural justice;
|
|
|
(ii)
|
the New York Judgment is for a claim which would be characterized as based on foreign revenue, expropriatory, or penal, or other public law under Ontario Law (as defined below);
|
|
|
(iii)
|
the New York Judgment is contrary to Public Policy (as defined below) or to an order made by the Attorney General of Canada under the
Foreign Extraterritorial Measures Act
(Canada) or by the
Competition
Tribunal under the Competition Act
(Canada) in respect of certain judgments referred to in such statutes; or
|
|
|
(iv)
|
the New York Judgment has been satisfied or is void or voidable under New York Law (as defined below).
|
|
|
18.
|
In any proceeding in a court of competent jurisdiction in the Province of Ontario (an “
Ontario
Court”)
for the enforcement of the Underwriting Agreement and the Indenture, an Ontario Court would
apply the laws of the State of New York (“
New
York Law”),
in accordance with the parties’ choice of New York Law in the Underwriting Agreement and the Indenture, to all issues which under the laws of the Province of
Ontario and the federal laws applicable in the Province of Ontario (“
Ontario
Law”)
are to be determined in accordance with the chosen law of the contract, provided that:
|
|
|
(a)
|
the parties’ choice of New York Law is bona fide and legal and is not contrary to public policy, as such term is interpreted under Ontario Law (“
Public
Policy”);
|
ANNEX
II-5
|
|
(b)
|
in any such proceeding, an Ontario Court:
|
|
|
(i)
|
will not take judicial notice of the provisions of New York Law but will only apply such provisions if they are pleaded and proven by expert testimony;
|
|
|
(ii)
|
will apply Ontario Law to matters which would be characterized as procedural under Ontario Law;
|
|
|
(iii)
|
will apply provisions of Ontario Law that have overriding effect;
|
|
|
(iv)
|
will not apply any New York Law if its application would be contrary to Public Policy;
|
|
|
(v)
|
will not apply any New York Law if such application would be characterized under Ontario Law as the direct or indirect enforcement of a foreign revenue, expropriatory, penal or other public law; and
|
|
|
(vi)
|
will not enforce the performance of any obligation that is illegal under the laws of any jurisdiction in which the obligation is to be performed; and
|
|
|
(c)
|
an Ontario Court has discretion to decline to hear an action if: (i) it is contrary to Public Policy; (ii) it is not the proper forum to hear such an action; or (iii) another action is properly pending
before, or a decision has been rendered by, a foreign authority relating to the same cause of action.
|
|
|
19.
|
The statements in the Prospectus under the headings “Description of the Notes—Status and Subordination” and “Description of the Notes—NVCC Automatic Conversion” (including in each case, the
corresponding summaries of such sections set forth under the heading “Summary of the Offering”) which are stated to be governed by the laws of the Province of Ontario and the laws of Canada, in each case, insofar as such statements
constitute summaries of documents referred to therein interpreted in accordance with their plain meaning, fairly summarize in all material respects the documents referred to therein.
|
The opinions expressed in paragraph 5 regarding enforceability of the Indenture and the Notes are subject to the qualifications that:
|
|
(a)
|
enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, preference, moratorium, arrangement or
winding-up
laws or other similar laws affecting the
enforcement of creditors’ rights generally;
|
|
|
(b)
|
enforceability may be limited by equitable principles, including the principle that equitable remedies such as specific performance and injunction may only be granted in the discretion of a court of competent
jurisdiction; and
|
|
|
(c)
|
enforceability will be subject to the limitations contained in the
Limitations Act, 2002
(Ontario), and we express no opinion as to whether a court may find any provision of the Indenture to be unenforceable as
an attempt to vary or exclude a limitation period under that Act.
|
ANNEX
II-6
The opinions in this letter are given solely for the benefit of the addressees in connection with the
transactions referred to and may not, in whole or in part, be relied upon by or shown or distributed to any other person.
ANNEX
II-7
ANNEX III
Underwriters
|
|
|
|
|
Name:
|
|
Contact Information:
|
|
BMO Capital Markets Corp.
|
|
3 Times Square, 28th Floor
|
|
|
|
New York, NY 10036
|
|
|
|
Attention: Legal Department
|
|
|
|
|
Citigroup Global Markets Inc.
|
|
388 Greenwich Street
|
|
|
|
New York, NY 10013
|
|
|
|
Attention: Transaction Execution Group
|
|
|
|
|
Goldman Sachs & Co. LLC
|
|
200 West Street
|
|
|
|
New York, NY 10282-2198
|
|
|
|
Attention: Registration Department
|
|
|
|
|
UBS Securities LLC
|
|
1285 Avenue of the Americas
|
|
|
|
New York, NY 10019
|
|
|
|
Attention: Fixed Income Syndicate
|
ANNEX
III-1
Exhibit 4.1
BANK OF MONTREAL
TO
WELLS FARGO BANK, NATIONAL
ASSOCIATION
Trustee
Indenture
Dated as of December 12, 2017
Subordinated
Debt Securities
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
PARTIES
|
|
|
1
|
|
|
|
|
|
RECITALS OF THE BANK
|
|
|
1
|
|
|
|
|
ARTICLE ONE
|
|
|
|
|
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
|
|
|
|
|
|
|
Section 101.
|
|
Definitions
|
|
|
1
|
|
|
Section 102.
|
|
Compliance Certificates and Opinions
|
|
|
7
|
|
|
Section 103.
|
|
Form of Documents Delivered to Trustee
|
|
|
8
|
|
|
Section 104.
|
|
Acts of Holders; Record Dates
|
|
|
9
|
|
|
Section 105.
|
|
Notices, Etc., to Trustee and Bank
|
|
|
10
|
|
|
Section 106.
|
|
Notice to Holders; Waiver
|
|
|
11
|
|
|
Section 107.
|
|
Conflict with Trust Indenture Act
|
|
|
11
|
|
|
Section 108.
|
|
Effect of Headings and Table of Contents
|
|
|
12
|
|
|
Section 109.
|
|
Successors and Assigns
|
|
|
12
|
|
|
Section 110.
|
|
Separability Clause
|
|
|
12
|
|
|
Section 111.
|
|
Benefits of Indenture
|
|
|
12
|
|
|
Section 112.
|
|
Governing Law
|
|
|
12
|
|
|
Section 113.
|
|
Legal Holidays
|
|
|
12
|
|
|
|
|
ARTICLE TWO
|
|
|
|
|
SECURITY FORMS
|
|
|
|
|
|
|
Section 201.
|
|
Forms Generally
|
|
|
13
|
|
|
Section 202.
|
|
Form of Face of Security
|
|
|
13
|
|
|
Section 203.
|
|
Form of Reverse of Security
|
|
|
15
|
|
|
Section 204.
|
|
Form of Legend for Global Securities
|
|
|
18
|
|
|
Section 205.
|
|
Form of Trustee’s Certificate of Authentication
|
|
|
19
|
|
|
|
|
ARTICLE THREE
|
|
|
|
|
THE SECURITIES
|
|
|
|
|
|
|
Section 301.
|
|
Amount Unlimited; Issuable in Series
|
|
|
19
|
|
|
Section 302.
|
|
Denominations
|
|
|
22
|
|
|
Section 303.
|
|
Execution, Authentication, Delivery and Dating
|
|
|
23
|
|
|
Section 304.
|
|
Temporary Securities
|
|
|
24
|
|
|
Section 305.
|
|
Registration, Registration of Transfer and Exchange
|
|
|
25
|
|
|
Section 306.
|
|
Mutilated, Destroyed, Lost and Stolen Securities
|
|
|
26
|
|
|
Section 307.
|
|
Payment of Interest; Interest Rights Preserved
|
|
|
27
|
|
i
|
|
|
|
|
|
|
|
|
Section 308.
|
|
Persons Deemed Owners
|
|
|
28
|
|
|
Section 309.
|
|
Cancellation
|
|
|
28
|
|
|
Section 310.
|
|
Computation of Interest
|
|
|
29
|
|
|
Section 311.
|
|
CUSIP Numbers
|
|
|
29
|
|
|
Section 312.
|
|
Original Issue Discount
|
|
|
29
|
|
|
|
|
ARTICLE FOUR
|
|
|
|
|
SATISFACTION AND DISCHARGE
|
|
|
|
|
|
|
Section 401.
|
|
Satisfaction and Discharge of Indenture
|
|
|
29
|
|
|
Section 402.
|
|
Application of Trust Money
|
|
|
30
|
|
|
|
|
ARTICLE FIVE
|
|
|
|
|
REMEDIES
|
|
|
|
|
|
|
Section 501.
|
|
Events of Default
|
|
|
31
|
|
|
Section 502.
|
|
Acceleration of Maturity; Rescission and Annulment
|
|
|
31
|
|
|
Section 503.
|
|
Suits for Enforcement by Trustee
|
|
|
32
|
|
|
Section 504.
|
|
Trustee May File Proofs of Claim
|
|
|
32
|
|
|
Section 505.
|
|
Trustee May Enforce Claims Without Possession of Securities
|
|
|
33
|
|
|
Section 506.
|
|
Application of Money Collected
|
|
|
33
|
|
|
Section 507.
|
|
Limitation on Suits
|
|
|
33
|
|
|
Section 508.
|
|
Unconditional Right of Holders to Receive Principal, Premium and Interest
|
|
|
34
|
|
|
Section 509.
|
|
Restoration of Rights and Remedies
|
|
|
34
|
|
|
Section 510.
|
|
Rights and Remedies Cumulative
|
|
|
34
|
|
|
Section 511.
|
|
Delay or Omission Not Waiver
|
|
|
34
|
|
|
Section 512.
|
|
Control by Holders
|
|
|
35
|
|
|
Section 513.
|
|
Waiver of Past Defaults
|
|
|
35
|
|
|
Section 514.
|
|
Undertaking for Costs
|
|
|
35
|
|
|
Section 515.
|
|
Waiver of Usury, Stay or Extension Laws
|
|
|
36
|
|
|
|
|
ARTICLE SIX
|
|
|
|
|
THE TRUSTEE
|
|
|
|
|
|
|
Section 601.
|
|
Certain Duties and Responsibilities
|
|
|
36
|
|
|
Section 602.
|
|
Notice of Defaults
|
|
|
36
|
|
|
Section 603.
|
|
Certain Rights of Trustee
|
|
|
36
|
|
|
Section 604.
|
|
Not Responsible for Recitals or Issuance of Securities
|
|
|
38
|
|
|
Section 605.
|
|
May Hold Securities
|
|
|
38
|
|
|
Section 606.
|
|
Money Held in Trust
|
|
|
38
|
|
|
Section 607.
|
|
Compensation and Reimbursement
|
|
|
38
|
|
|
Section 608.
|
|
Conflicting Interests
|
|
|
39
|
|
|
Section 609.
|
|
Corporate Trustee Required; Eligibility
|
|
|
39
|
|
|
Section 610.
|
|
Resignation and Removal; Appointment of Successor
|
|
|
40
|
|
ii
|
|
|
|
|
|
|
|
|
Section 611.
|
|
Acceptance of Appointment by Successor
|
|
|
41
|
|
|
Section 612.
|
|
Merger, Conversion, Consolidation or Succession to Business
|
|
|
42
|
|
|
Section 613.
|
|
Preferential Collection of Claims Against Bank
|
|
|
42
|
|
|
Section 614.
|
|
Appointment of Authenticating Agent
|
|
|
42
|
|
|
|
|
ARTICLE SEVEN
|
|
|
|
|
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND BANK
|
|
|
|
|
|
|
Section 701.
|
|
Bank to Furnish Trustee Names and Addresses of Holders
|
|
|
44
|
|
|
Section 702.
|
|
Preservation of Information; Communications to Holders
|
|
|
44
|
|
|
Section 703.
|
|
Reports by Trustee
|
|
|
45
|
|
|
Section 704.
|
|
Reports by Bank
|
|
|
45
|
|
|
|
|
ARTICLE EIGHT
|
|
|
|
|
CONSOLIDATION, AMALGAMATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
|
|
|
|
|
|
|
Section 801.
|
|
Bank May Consolidate, Etc., Only on Certain Terms
|
|
|
45
|
|
|
Section 802.
|
|
Successor Substituted
|
|
|
46
|
|
|
|
|
ARTICLE NINE
|
|
|
|
|
SUPPLEMENTAL INDENTURES
|
|
|
|
|
|
|
Section 901.
|
|
Supplemental Indentures Without Consent of Holders
|
|
|
46
|
|
|
Section 902.
|
|
Supplemental Indentures With Consent of Holders
|
|
|
47
|
|
|
Section 903.
|
|
Execution of Supplemental Indentures
|
|
|
49
|
|
|
Section 904.
|
|
Effect of Supplemental Indentures
|
|
|
49
|
|
|
Section 905.
|
|
Conformity with Trust Indenture Act
|
|
|
49
|
|
|
Section 906.
|
|
Reference in Securities to Supplemental Indentures
|
|
|
49
|
|
|
|
|
ARTICLE TEN
|
|
|
|
|
COVENANTS
|
|
|
|
|
|
|
Section 1001.
|
|
Payment of Principal, Premium and Interest
|
|
|
49
|
|
|
Section 1002.
|
|
Maintenance of Office or Agency
|
|
|
50
|
|
|
Section 1003.
|
|
Money for Securities Payments to Be Held in Trust
|
|
|
50
|
|
|
Section 1004.
|
|
Statement by Officers as to Default
|
|
|
51
|
|
|
Section 1005.
|
|
Existence
|
|
|
51
|
|
|
Section 1006.
|
|
Waiver of Certain Covenants
|
|
|
51
|
|
iii
|
|
|
|
|
|
|
|
|
ARTICLE ELEVEN
|
|
|
|
|
REDEMPTION OF SECURITIES
|
|
|
|
|
|
|
Section 1101.
|
|
Applicability of Article
|
|
|
52
|
|
|
Section 1102.
|
|
Election to Redeem; Notice to Trustee
|
|
|
52
|
|
|
Section 1103.
|
|
Selection by Trustee of Securities to Be Redeemed
|
|
|
52
|
|
|
Section 1104.
|
|
Notice of Redemption
|
|
|
53
|
|
|
Section 1105.
|
|
Deposit of Redemption Price
|
|
|
54
|
|
|
Section 1106.
|
|
Securities Payable on Redemption Date
|
|
|
54
|
|
|
Section 1107.
|
|
Securities Redeemed in Part
|
|
|
54
|
|
|
|
|
ARTICLE TWELVE
|
|
|
|
|
PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK
AT THE OPTION OF THE HOLDER
|
|
|
|
|
|
|
Section 1201.
|
|
Applicability of Article
|
|
|
54
|
|
|
Section 1202.
|
|
Notice of Repayment Date
|
|
|
55
|
|
|
Section 1203.
|
|
Deposit of Repayment Price
|
|
|
55
|
|
|
Section 1204.
|
|
Securities Payable on Repayment Date
|
|
|
55
|
|
|
Section 1205.
|
|
Securities Repaid in Part
|
|
|
56
|
|
|
|
|
ARTICLE THIRTEEN
|
|
|
|
|
SINKING FUNDS
|
|
|
|
|
|
|
Section 1301.
|
|
Applicability of Article
|
|
|
56
|
|
|
Section 1302.
|
|
Satisfaction of Sinking Fund Payments with Securities
|
|
|
56
|
|
|
Section 1303.
|
|
Redemption of Securities for Sinking Fund
|
|
|
57
|
|
|
|
|
ARTICLE FOURTEEN
|
|
|
|
|
DEFEASANCE AND COVENANT DEFEASANCE
|
|
|
|
|
|
|
Section 1401.
|
|
Bank’s Option to Effect Defeasance or Covenant Defeasance
|
|
|
57
|
|
|
Section 1402.
|
|
Defeasance and Discharge
|
|
|
57
|
|
|
Section 1403.
|
|
Covenant Defeasance
|
|
|
58
|
|
|
Section 1404.
|
|
Conditions to Defeasance or Covenant Defeasance
|
|
|
58
|
|
|
Section 1405.
|
|
Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous
Provisions
|
|
|
60
|
|
|
Section 1406.
|
|
Reinstatement
|
|
|
61
|
|
|
|
|
ARTICLE FIFTEEN
|
|
|
|
|
SUBORDINATION OF SECURITIES
|
|
|
|
|
|
|
Section 1501.
|
|
Securities Subordinate to Deposit Liabilities and Other Indebtedness
|
|
|
61
|
|
iv
|
|
|
|
|
|
|
|
|
Section 1502.
|
|
Further Assurances of Subordination
|
|
|
61
|
|
|
Section 1503.
|
|
Reliance on Judicial Order or Certificate of Liquidating Agent
|
|
|
62
|
|
|
Section 1504.
|
|
Trustee’s Compensation Not Prejudiced
|
|
|
62
|
|
|
|
|
ARTICLE SIXTEEN
|
|
|
|
|
MISCELLANEOUS PROVISIONS
|
|
|
|
|
|
|
Section 1601.
|
|
Consent to Jurisdiction and Service of Process
|
|
|
62
|
|
|
Section 1602.
|
|
Indenture and Securities Solely Corporate Obligations
|
|
|
63
|
|
|
Section 1603.
|
|
Execution in Counterparts
|
|
|
63
|
|
|
Section 1604.
|
|
Waiver of Jury Trial
|
|
|
64
|
|
|
Section 1605.
|
|
Force Majeure
|
|
|
64
|
|
|
Section 1606.
|
|
Patriot Act
|
|
|
64
|
|
v
Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
|
|
|
|
|
Trust Indenture Act Section
|
|
Indenture Section
|
|
§ 310(a)(1)
|
|
609
|
|
(a)(2)
|
|
609
|
|
(a)(3)
|
|
Not Applicable
|
|
(a)(4)
|
|
Not Applicable
|
|
(b)
|
|
608
|
|
|
|
610
|
|
§ 311(a)
|
|
613
|
|
(b)
|
|
613
|
|
§ 312(a)
|
|
701
|
|
|
|
702
|
|
(b)
|
|
702
|
|
(c)
|
|
702
|
|
§ 313(a)
|
|
703
|
|
(b)
|
|
703
|
|
(c)
|
|
703
|
|
(d)
|
|
703
|
|
§ 314(a)
|
|
704
|
|
(a)(4)
|
|
101
|
|
(b)
|
|
1004
|
|
(b)
|
|
Not Applicable
|
|
(c)(1)
|
|
102
|
|
(c)(2)
|
|
102
|
|
(c)(3)
|
|
Not Applicable
|
|
(d)
|
|
Not Applicable
|
|
(e)
|
|
102
|
|
§ 315(a)
|
|
601
|
|
(b)
|
|
602
|
|
(c)
|
|
601
|
|
(d)
|
|
601
|
|
(e)
|
|
514
|
|
§ 316(a)
|
|
101
|
|
(a)(1)(A)
|
|
502
|
|
|
|
512
|
|
(a)(1)(B)
|
|
513
|
|
(a)(2)
|
|
Not Applicable
|
vi
|
|
|
|
|
Trust Indenture Act Section
|
|
Indenture Section
|
|
(b)
|
|
508
|
|
(c)
|
|
104
|
|
§ 317(a)(1)
|
|
503
|
|
(a)(2)
|
|
504
|
|
(b)
|
|
1003
|
|
§ 318(a)
|
|
107
|
Note: This
reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
vii
INDENTURE, dated as of December 12, 2017, between Bank of Montreal, a Canadian chartered
bank (herein called the “
Bank
”), having its principal executive offices located at 100 King Street West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1 and its head office located at 129 rue Saint Jacques, Montreal,
Quebec, Canada H2Y 1L6, and Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States, as Trustee (herein called the “
Trustee
”).
RECITALS OF THE BANK
The Bank
has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated indebtedness (herein called the “
Securities
”), to be issued in one or more series as
provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the Bank, in accordance with its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101.
Definitions
.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the
plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance
with generally accepted accounting principles in Canada, including the accounting requirements of the Superintendent of Financial Institutions Canada, and, except as otherwise herein expressly provided, the term “generally accepted accounting
principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an “Article” or a
“Section” refers to an Article or a Section, as the case may be, of this Indenture;
(5) the words “herein”, “hereof” and
“hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and
(6) all references to dollars and $ shall mean U.S. dollars unless otherwise indicated.
“
Act
”, when used with respect to any Holder, has the meaning specified in Section 104.
“
Affiliate
”
of any specified Person means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“
Authenticating Agent
”
means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the
Trustee to authenticate Securities of one or more series.
“
Authorized Officer
” means the Bank’s Chief Executive
Officer, the Chief Financial Officer, the Chief Risk Officer, the Treasurer or the Deputy Treasurer.
“
Bank
”
means
the Person named as the “Bank” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Bank” shall mean such successor
Person.
“
Bank Act
” means the
Bank Act
(Canada), and any statute hereafter enacted in substitution therefor, as
such Act, or substituted statute, may be amended from time to time.
“
Bank Request
”
or “
Bank
Order
” means a written request or order signed in the name of the Bank by any one of the Authorized Officers or any two of the Head, Capital Management, the Enterprise Controller or the Senior Vice President, Finance or such other
Vice-Presidents or Senior Vice-Presidents so delegated by any one Authorized Officer, acting together for such purpose, each of which shall be deemed to refer to any officer or related change in title that may be approved from time to time by the
Board of Directors or a committee thereof, in replacement of or by amendment to the officers and titles set forth in this sentence or in the definition of Authorized Officer (or any Person designated by one of them in writing as authorized to
execute and deliver the Bank Order or any Person designated by the Board of Directors as authorized to execute and deliver the Bank Order), and delivered to the Trustee.
“
Board of Directors
”
means either the board of directors of the Bank or any duly authorized committee of that board.
“
Board Resolution
”
means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Bank
to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“
Business Day
”
,
when used with respect to any Place of Payment, means, unless otherwise specified as contemplated by
Section 301, each Monday, Tuesday, Wednesday,
2
Thursday and Friday that is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.
“
Commission
”
means the Securities and Exchange Commission, from time to time constituted, created under the Exchange
Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“
Corporate Trust Office
”
means the principal corporate trust office of the Trustee in New York, New York at which at
any particular time its corporate trust business shall be administered, or such other address as the Trustee may designate from time to time by notice to the Holders and the Bank.
“
corporation
”
means a corporation, association, company, limited liability company, joint-stock company, business
trust or other entity.
“
Covenant Defeasance
”
has the meaning specified in Section 1403.
“
Defaulted Interest
”
has the meaning specified in Section 307.
“
Defeasance
”
has the meaning specified in Section 1402.
“
Depositary
”
means, with respect to Securities of any series issuable in whole or in part in the form of one or more
Global Securities, any Person that is designated to act as Depositary for such Securities as contemplated by Section 301.
“
Event of Default
”
has the meaning specified in Section 501.
“
Exchange Act
”
means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended
from time to time.
“
Expiration Date
”
has the meaning specified in Section 104.
“
Global Security
”
means a Security that evidences all or part of the Securities of any series and bears the legend set
forth in Section 204 (or such legend as may be specified as contemplated by Section 301 for such Securities).
“
Holder
”
means a Person in whose name a Security is registered in the Security Register.
“
IFRS
” means International Financial Reporting Standards as issued by the International Accounting Standards Board.
“
Indebtedness
”
at any time means all deposit liabilities of the Bank at such time and all other liabilities and
obligations of the Bank which in accordance with the accounting rules established for Canadian chartered banks issued under the authority of the Superintendent pursuant to the Bank Act or with IFRS, as the case may be, would be included in
determining the total liabilities of the Bank at such time, other than liabilities for
paid-up
capital, contributed surplus, retained earnings and general reserves of the Bank.
3
“
Indenture
”
means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as
contemplated by Section 301.
“
interest
”, when used with respect to an Original Issue Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.
“
Interest Payment Date
”, when used with
respect to any Security, means the Stated Maturity of an installment of interest on such Security.
“
Investment Company
Act
”
means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.
“
Maturity
”, when used with respect to any Security, means the date on which the principal of such Security or an installment
of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, exercise of a Holder’s option to require the Bank to purchase or repay the Security or
otherwise.
“
Notice of Default
”
means a written notice of the kind specified in Section 602.
“
Officer’s Certificate
”
means a certificate signed by any one of the Authorized Officers or any two of the Head,
Capital Management, the Enterprise Controller or the Senior Vice President, Finance or such other Vice-Presidents or Senior Vice- Presidents so delegated by any one Authorized Officer, acting together for such purpose, each of which shall be deemed
to refer to any officer or related change in title that may be approved from time to time by the Board of Directors or a committee thereof, in replacement of or by amendment to the officers and titles set forth in this sentence or in the definition
of Authorized Officer (or any Person designated by one of them in writing as authorized to execute and deliver the Officer’s Certificate or any Person designated by the Board of Directors as authorized to execute and deliver the Officer’s
Certificate). One of the officers signing an Officer’s Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Bank.
“
Opinion of Counsel
”
means a written opinion of counsel, who may be internal or external counsel for the Bank, and who
shall be acceptable to the Trustee.
“
Original Issue Discount Security
”
means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.
“
Outstanding
”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture,
except
:
4
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Bank) in trust or set aside and segregated in trust by the Bank (if the Bank shall act as its own Paying Agent) for the Holders of such
Securities;
provided
that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to Section 1402; and
(4) Securities that have been paid pursuant to Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a
protected purchaser in whose hands such Securities are valid obligations of the Bank;
provided
,
however
, that in determining whether the
Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502,
(B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the
manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Bank or any other obligor upon the Securities or any Affiliate of the Bank or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities that a Responsible Officer of the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Bank or any other obligor upon the Securities
or any Affiliate of the Bank or of such other obligor.
“
Paying Agent
”
means any Person authorized by the Bank to
pay the principal of or any premium or interest on any Securities on behalf of the Bank and may be the Bank in such capacity.
5
“
Person
”
means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
“
Place of Payment
”, when used with respect to the Securities of any series, means the place or places where the principal of
and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301, and as determined by the Trustee and the Bank.
“
Predecessor Security
”
of any particular Security means every previous Security evidencing all or a portion of the
same debt evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
“
Record Date
”
means any Regular
Record Date or Special Record Date.
“
Redemption Date
”, when used with respect to any Security to be redeemed, means the
date fixed for such redemption by or pursuant to this Indenture.
“
Redemption Price
”, when used with respect to any
Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“
Regular Record
Date
”
for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.
“
Repayment Date
”, when used with respect to Securities of any series the terms of which provide each Holder an option to
require the Bank to purchase or repay the Securities held by such Holder, means the date, if any, fixed for such purchase or repayment pursuant to this Indenture.
“
Repayment Price
”, when used with respect to Securities of any series the terms of which provide each Holder an option to
require the Bank to purchase or repay the Securities held by such Holder, means the price, if any, at which such purchase or repayment is to occur pursuant to this Indenture.
“
Responsible Officer
” means, when used with respect to the Trustee, any officer within the corporate trust department of the
Trustee, including any vice president, assistant vice president, trust officer, assistant trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
“
Securities
”
has the meaning stated in the first recital of this Indenture and more particularly means Securities
authenticated and delivered under this Indenture.
6
“
Securities Act
”
means the Securities Act of 1933 and any successor
statute thereto, in each case as amended from time to time.
“
Security Register
”
and “
Security
Registrar
”
have the respective meanings specified in Section 305.
“
Senior Indebtedness
”
means any Indebtedness other than Subordinated Indebtedness, including any Indebtedness to which Securities are expressly subordinated pursuant to Article Fifteen.
“
Special Record Date
”
for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to
Section 307.
“
Stated Maturity
”, when used with respect to any Security or any installment of principal thereof or
interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“
Subordinated Indebtedness
”
at any time means the Bank’s subordinated indebtedness within the meaning of the Bank
Act.
“
Superintendent
” means the Superintendent of Financial Institutions (Canada) appointed pursuant to the
Office of
the Superintendent of Financial Institutions Act
(Canada).
“
Trust Indenture Act
”
means the Trust Indenture
Act of 1939 as in force at the date as of which this instrument was executed;
provided
,
however
,
that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
“
Trustee
”
means the Person named
as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who
is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
“
U.S. Government Obligation
”
has the meaning specified in Section 1404.
“
Vice-President
”, when used with respect to the Bank or the Trustee, means any vice-president, whether or not designated by a
number or a word or words added before or after the title “vice-president.”
Section 102.
Compliance Certificates
and Opinions
.
Upon any application or request by the Bank to the Trustee to take any action under any provision of this Indenture, the
Bank shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officer’s Certificate, if to be given by an officer of the
Bank, or an Opinion of
7
Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates
provided for in Section 1004) shall include,
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in
the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has
been complied with.
Section 103.
Form of Documents Delivered to Trustee
.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any
certificate or opinion of an officer of the Bank may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the Bank stating that the information with respect to such factual matters is in the possession of the Bank, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required
to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 104.
Acts of Holders; Record Dates
.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given,
made or taken by Holders may be embodied
8
in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent or proxy duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Bank. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose
of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Bank, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
For the purposes of this
Indenture, the ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Bank in reliance thereon, whether or not notation of such action is made upon such Security.
The Bank may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give,
make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series,
provided
that the Bank may not set
a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date;
provided
that no such
action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to
prevent the Bank from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and
of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Bank, at its own expense, shall cause notice of such record date, the proposed action by Holders and the
9
applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction
referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date;
provided
that no such action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the
Bank’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Bank in writing and to each Holder of Securities of the relevant series in the manner set forth in
Section 106.
With respect to any record date set pursuant to this Section, the party hereto that sets such record dates may
designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day;
provided
that no such change shall be effective unless notice of the proposed new Expiration Date is given
to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto that set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph;
provided
that the Expiration Date shall not be later than the 180th day after such record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.
Section 105.
Notices, Etc., to Trustee and Bank
.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
10
(1) the Trustee by any Holder or by the Bank shall be
sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office in the manner and as specified in an indenture supplemental hereto, or
(2) the Bank by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, or by overnight courier or facsimile, to the Bank addressed to it at the address of its principal executive offices specified in an indenture supplemental
hereto, or at any other address previously furnished in writing to the Trustee by the Bank.
Section 106.
Notice to
Holders; Waiver
.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his or her address as it appears in the Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Where this Indenture provides for notice of any event (including any notice of redemption) to a Holder of a Global Security (whether by mail
or otherwise), such notice shall be sufficiently given if given to the Depositary for such Security (or its designee), pursuant to the applicable procedures of such Depositary, if any, prescribed for the giving of such notice.
Section 107.
Conflict with Trust Indenture Act
.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part
of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
Section 108.
Effect of Headings and Table of
Contents
.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.
11
Section 109.
Successors and Assigns
.
All covenants and agreements in this Indenture by the Bank shall bind its successors and assigns, whether so expressed or not.
Section 110.
Separability Clause
.
In case any provision in this Indenture or in the Securities 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.
Section 111.
Benefits of
Indenture
.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 112.
Governing Law
.
This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York, except for the first
sentence of Section 301(b) and Article Fifteen which shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.
Section 113.
Legal Holidays
.
In any case where any Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity of any Security shall not be a Business Day at
any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date, Redemption
Date, Repayment Date, or at the Stated Maturity;
provided
,
however
, that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, Repayment Date, or Stated Maturity, as the case may be, to the
date of such payment.
ARTICLE TWO
SECURITY FORMS
Section 201.
Forms Generally
.
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution, other appropriate Bank authorization or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification and such
12
legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution or other appropriate Bank authorization, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant Secretary of the Bank and delivered to the Trustee at or prior to the delivery of the Bank Order contemplated by Section 303 for the authentication and delivery of such
Securities. If all of the Securities of any series established by action taken pursuant to a Board Resolution or other appropriate Bank authorization are not to be issued at one time, it shall not be necessary to deliver a record of such action at
the time of issuance of each Security of such series, but an appropriate record of such action shall be delivered at or before the time of issuance of the first Security of such series.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section 202.
Form of Face of Security
.
[
Insert any legend required by Section
204
]
[
Insert any legend required by the Internal Revenue Code and the Income Tax Act (Canada) and the regulations thereunder
.]
BANK OF MONTREAL
[
Insert title of Securities
]
Subordinated Debt Securities
This security will not constitute a deposit that is insured under
the Canada Deposit Insurance Corporation Act or by the
United States Federal Deposit Insurance Corporation.
|
Issue Date
|
Stated Maturity:
|
Bank of Montreal, a Schedule I bank under the
Bank Act
(Canada) (herein called the “Bank”, which
term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ,
or registered assigns, the principal sum of Dollars on
[
if the Security is to bear interest prior to Maturity
,
insert
—, and to pay interest thereon from or
from the most recent Interest Payment Date to which interest has been paid or duly provided for,
[
semi-annually]
on
and in
each year, commencing , at the rate of % per annum, until the principal hereof is paid or made available
for payment,
[
if applicable
,
insert
— ;
provided
that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of % per annum
(to the extent that
13
the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand].
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 (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the or
(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 will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) 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 of this series not less than 10 days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said
Indenture.]
[
If the Security is not to bear interest prior to Maturity
,
insert
— The principal of this Security
shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of % per annum
(to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand.]
Payment of the principal of (and premium, if any) and
[
if applicable, insert
— any such]
interest on this Security
will be made at the office or agency of the Bank maintained for that 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
[
if applicable, insert
— ;
provided
,
however
, that at the option of the Bank payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register] .
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 executed by the
Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly executed.
Dated:
14
Section 203.
Form of Reverse of Security
.
This Security is one of a duly authorized issue of securities of the Bank (herein called the “Securities”), issued and to be issued
in one or more series under an Indenture, dated as of , 2017 (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument),
between the Bank and Wells Fargo Bank, National Association, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Bank, 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 one of
the series designated on the face hereof
[
if applicable, insert —,
[
initially]
limited in aggregate principal amount to $ ,
provided
that
the Bank may, without the consent of any Holder, at any time and from time to time, increase the initial principal amount.]
[
If
applicable, insert
— The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail,
[
if applicable, insert
— (1) on
in any year commencing with the year and ending with the year through
operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)]
at any time
[
if applicable, insert
— on or after
,
],
as a whole or in part, at the election of the Bank, at the following Redemption Prices (expressed as percentages of
the principal amount): If redeemed
[
if applicable, insert
— on or before , %, and if redeemed]
during the
12-month
period beginning of the years indicated,
|
|
|
|
|
|
|
|
|
Year
|
|
Redemption
Price
|
|
Year
|
|
Redemption
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any
such redemption
[
if applicable, insert
— (whether through operation of the sinking fund or otherwise)]
with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[
(
if applicable, insert
— the securities of this series are also redeemable as set forth hereinafter.]
[
If
applicable, insert
— The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on
in any year commencing with the year and ending with the year
through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the
table below, and (2) at any time
[
if applicable, insert
— on or after
],
as a whole or in part, at
the election of the Bank, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the
12-month
period beginning of the years indicated,
15
|
|
|
|
|
|
|
Year
|
|
Redemption Price For
Redemption Through
Operation of
the
Sinking Fund
|
|
Redemption Price For
Redemption
Otherwise Than
Through Operation of
the
Sinking Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and thereafter at a Redemption Price equal to % of the principal amount, together in the case of any
such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[
If applicable, insert
— The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending with the year
of
[
if applicable, insert
— not less than $ (“mandatory sinking fund”) and not more than]
$ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Bank otherwise than through
[
if applicable, insert
— mandatory]
sinking fund payments may be credited against subsequent
[
if applicable, insert
— mandatory]
sinking fund payments otherwise required to be made
[
if applicable, insert
—, in
the inverse order in which they become due].]
[
If the Security is subject to redemption of any kind, insert
— In the
event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
[
If applicable,
insert reference to any other right of the Bank to redeem a Security of this series.]
[
If applicable, insert
— The Indenture contains provisions for defeasance at any time of
[
the entire indebtedness of
this Security]
[
or]
[
certain restrictive covenants and Events of Default with respect to this Security]
[
, in each
case]
upon compliance with certain conditions set forth in the Indenture.]
[
If applicable,
insert provisions with
respect to the option of Holders to require purchase or repayment of Securities of this series by the Bank at the option of the Holder and the issuance of Securities in lieu of Securities purchased or repaid by the Bank at the option of the Holder.]
[
If applicable,
insert provisions requiring an adjustment to the interest rate in certain circumstances.]
The indebtedness evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness and this Security is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as
16
may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact
for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness whether now outstanding or hereafter created, incurred, assumed or guaranteed, and waives reliance by each such holder upon said provisions.
[
If the Security is not an Original Issue Discount Security, insert
— If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[
If the Security is an Original Issue Discount Security, insert
— If an Event of Default with respect to Securities of this
series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to —
insert formula for
determining the amount
. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Bank’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Bank and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Bank and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time
Outstanding of each series to be affected, or in certain cases the unanimous consent of each of such Holders. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Bank with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or
waiver by 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.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee
written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee security or indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 90 days after receipt of such notice, request and offer of indemnity. The
17
foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Bank, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
For disclosure purposes under the
Interest Act
(Canada), whenever in the Securities of this series or the Indenture interest at a
specified rate is to be calculated on the basis of a period less than a calendar year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by the actual number of days in the relevant calendar year and divided by the
number of days in such period.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Bank in any place where the principal of and any premium and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Bank 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
this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of
$ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Bank or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Bank, the Trustee and any agent of the Bank or the Trustee 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
Bank, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 204.
Form of Legend for Global
Securities
.
Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security
authenticated and delivered hereunder shall bear a legend in substantially the following form:
18
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 205.
Form of Trustee
’
s Certificate of Authentication
.
Subject to Section 614, each of the Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
National Association,
As Trustee
ARTICLE THREE
THE SECURITIES
Section 301.
Amount Unlimited; Issuable in Series
.
(a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is
unlimited.
(b) The Securities are unsecured subordinated indebtedness of the Bank. The Securities may be issued in
one or more series. There shall be established in or pursuant to a Board Resolution or other appropriate Bank authorization and, subject to Section 303, set forth, or determined in the manner provided, in an Officer’s Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from
Securities of any other series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 or
19
1303 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be payable, if other than the
Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the series is payable;
(5) the rate or rates at which any Securities of the series shall bear interest, if any, the date or
dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date;
(6) the place or places where the principal of and any premium and interest on any Securities of the
series shall be payable, the place or places where the Securities of such series may be presented for registration of transfer or exchange, any restrictions that may be applicable to any such transfer or exchange in addition to or in lieu of those
set forth herein, and the place or places where notices and demands to or upon the Bank in respect of the Securities of such series may be made;
(7) the period or periods within which, the price or prices at which and the terms and conditions upon
which any Securities of the series may be redeemed, in whole or in part, at the option of the Bank and the manner in which any election by the Bank to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Bank to redeem or purchase any Securities of the series pursuant to
any sinking fund or analogous provisions or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which any Securities of the series shall be issuable;
(10) if the amount of principal of or any premium or interest on any Securities of the series may be
determined with reference to an index, a financial or economic measure or pursuant to a formula, the manner in which such amounts shall be determined;
(11) if other than the currency of the United States of America, the currency, currencies or currency
units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes
of the definition of “Outstanding” in Section 101;
20
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Bank or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or
currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined);
(13) if other than the entire
principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;
(14) if the principal amount payable at the Stated Maturity of any Securities of the series will not be
determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal
amount shall be determined);
(15) the manner in which any election by the Bank to defease any
Securities of the series pursuant to Section 1402 or Section 1403 shall be evidenced; whether any Securities of the series other than Securities denominated in U.S. dollars and bearing interest at a fixed rate are to be subject to
Section 1402 or Section 1403; or, in the case of Securities denominated in U.S. dollars and bearing interest at a fixed rate, if applicable, that the Securities of the series, in whole or any specified part, shall not be defeasible
pursuant to Section 1402 or Section 1403 or both such Sections;
(16) if applicable, that
any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any
such Global Security in addition to or in lieu of that set forth in Section 204 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the last paragraph of Section 305 in which any such Global Security
may be exchanged in whole or in part for registered Securities, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof
and any other provisions governing exchanges or transfers of any such Global Security;
(17) any
addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to
Section 502;
21
(18) any addition to, deletion from or change in the
covenants set forth in Article Ten which applies to Securities of the series;
(19) if applicable,
any conversion, exercise or exchange provisions, including the terms on which and the period during which such conversion, exercise or exchange may occur;
(20) CUSIP or other identifying numbers of the Securities; and
(21) any other terms of the series (which terms shall not be inconsistent with the provisions of this
Indenture, except as permitted by Section 901(5)).
All Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the Board Resolution or other appropriate Bank authorization referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the
Officer’s Certificate referred to above or in any such indenture supplemental hereto. All Securities of any one series need not be issued at one time and, unless otherwise provided in or pursuant to the Board Resolution or other appropriate
Bank authorization referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto with respect to a series of
Securities, additional Securities of a series may be issued, at the option of the Bank, without the consent of any Holder, at any time and from time to time.
If any of the terms of the series are established by action taken pursuant to a Board Resolution or other appropriate Bank authorization, a
copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Bank and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series.
Section 302.
Denominations
.
The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303.
Execution, Authentication, Delivery and Dating
.
The Securities shall be executed on behalf of the Bank by any one of the Authorized Officers or any two of the Head, Capital Management, the
Enterprise Controller or the Senior Vice President, Finance or such other Vice-Presidents or Senior Vice-Presidents so delegated by any one Authorized Officer, acting together for such purpose, each of which shall be deemed to refer to any officer
or related change in title that may be approved from time to time by the Board of Directors or a committee thereof, in replacement of or by amendment to the officers and titles set forth in this sentence or in the definition of Authorized Officer
(or any Person designated by one of them in writing as authorized to execute and deliver Securities or any
22
Person designated by the Board of Directors as authorized to execute and deliver Securities). The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Bank shall bind the Bank,
notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Bank may deliver Securities of any series executed
by the Bank to the Trustee for authentication, together with a Bank Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Bank Order shall authenticate and deliver such Securities. If the form or terms
of the Securities of the series have been established by or pursuant to one or more Board Resolutions or other appropriate Bank authorization as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to Board Resolution or other
appropriate Bank authorization as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant to Board Resolution or other
appropriate Bank authorization as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee and issued by the Bank in the
manner and subject to any conditions specified in such Opinion of Counsel, and such supplemental indenture (if a supplemental indenture shall be executed in connection with issuing the Securities), will constitute valid and legally binding
obligations of the Bank enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to
general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally
issued at one time, including in the event that the size of a series of Outstanding Securities is increased as contemplated by Section 301, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to
Section 301 or the Bank Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at
23
or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be
issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Bank, and the Bank shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
Section 304.
Temporary Securities
.
Pending the preparation of definitive Securities of any series, the Bank may execute, and upon Bank Order the Trustee shall authenticate and
deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Bank will cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or
agency of the Bank in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Bank shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to
the same benefits under this Indenture as definitive Securities of such series and tenor.
Section 305.
Registration,
Registration of Transfer and Exchange
.
The Bank shall cause to be kept at the Corporate Trust Office of the Trustee a register (the
register maintained in such office and in any other office or agency of the Bank in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may
prescribe, the Bank shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein
provided.
24
Upon surrender for registration of transfer of any Security of a series at the office or agency
of the Bank in a Place of Payment for that series, the Bank shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized
denominations and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for
exchange, the Bank shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Bank, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Indenture, Bank or the
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Bank and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Bank or the Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906, 1107 or 1303 not involving any
transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Bank shall not be
required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of
a notice of redemption of any such Securities selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption
in whole or in part, except the unredeemed portion of any Security being redeemed in part.
The Trustee shall have no obligation or duty
to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository,
Participants or Beneficial Owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of,
this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
25
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name of the
Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in
whole or in part for registered Securities, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary
has notified the Bank that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Security and the Bank does not appoint another institution to act as Depositary within 60 days, (B) there
shall have occurred and be continuing an Event of Default with respect to such Global Security, (C) the Bank so directs the Trustee by a Bank Order or (D) there shall exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by Section 301.
(3) Subject
to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary
for such Global Security shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906, 1107 or 1303 or otherwise, shall be authenticated and delivered in the form of,
and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.
Section 306.
Mutilated, Destroyed, Lost and Stolen Securities
.
If any mutilated Security is surrendered to the Trustee, the Bank shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Bank and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Bank or the Trustee that such Security has been acquired by a protected
purchaser in good faith, the Bank shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
26
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Bank in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new
Security under this Section, the Bank may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security
shall constitute an original additional contractual obligation of the Bank, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are
exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307.
Payment of Interest; Interest Rights Preserved
.
Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Bank, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Bank may elect to
make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Bank shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time
the Bank shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed
27
payment. The Trustee shall promptly notify the Bank of such Special Record Date and, in the name and at the expense of the Bank, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Bank may make payment of any Defaulted Interest on the Securities of any series in any other
lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Bank to the Trustee of the proposed
payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions
of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308.
Persons Deemed Owners
.
Prior to due presentment of a Security for registration of transfer, the Bank, the Trustee and any agent of the Bank or the Trustee may treat
the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Bank, the Trustee nor any agent of the Bank or the Trustee shall be affected by notice to the contrary.
Section 309.
Cancellation
.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Bank may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder
which the Bank may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Bank has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of in accordance with its customary procedures.
28
Section 310.
Computation of Interest
.
Except as
otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a
360-day
year of twelve
30-day
months. For disclosure purposes under the Interest Act (Canada), whenever in this Indenture or any Securities issued hereunder interest at a specified rate is to be calculated on the basis of a period less
than a calendar year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by the actual number of days in the relevant calendar year and divided by the number of days in such period.
Section 311.
CUSIP Numbers
.
The Bank in issuing any series of the Securities may use CUSIP numbers, if then generally in use, and thereafter with respect to such series,
the Trustee may use such numbers in any notice of redemption with respect to such series,
provided
that any such notice may state that no representation is made by the Trustee or the Bank as to the correctness of such numbers either as
printed on the Securities of that series or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities of that series, and any such redemption shall not be affected
by any defect in or omission of such numbers.
Section 312.
Original Issue Discount
.
If any of the Securities is an Original Issue Discount Security, the Bank shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on such Outstanding Original Issue Discount Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time.
ARTICLE FOUR
SATISFACTION AND
DISCHARGE
Section 401.
Satisfaction and Discharge of Indenture
.
This Indenture shall upon Bank Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange
of Securities herein expressly provided for), and the Trustee, at the expense of the Bank, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have
been mutilated, destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Bank and
thereafter repaid to the Bank or discharged from such trust,
29
as provided in Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Bank,
and the Bank, in the case of (i), (ii)
or (iii) above, has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may
be;
(2) the Bank has paid or caused to be paid all other sums payable hereunder by the Bank; and
(3) the Bank has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Bank to the Trustee under Section 607, and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
Section 402.
Application of Trust Money
.
Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall
be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Bank acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.
30
ARTICLE FIVE
REMEDIES
Section 501.
Events of Default
.
“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental
body):
(1) if the Bank shall become insolvent or bankrupt or subject to the provisions of the
Winding-Up
and Restructuring Act
(Canada), or any act that may be substituted therefor, as from time to time amended, or go into liquidation either voluntarily or under an order of a court of competent
jurisdiction, passes a resolution for the
winding-up,
liquidation or dissolution of the Bank or otherwise acknowledges its insolvency (provided that a resolution or order for the
winding-up
of the Bank, with a view to its consolidation, amalgamation or merger with another entity or the transfer of its assets as an entirety to such other entity, as provided in Article Eight, shall not
constitute an Event of Default under this Section 501 if such last-mentioned entity shall, as a part of such consolidation, amalgamation, merger or transfer, and prior to or contemporaneously with the consummation of the transaction, comply
with the conditions to that end stated in Article Eight); or
(2) any other Event of Default
provided with respect to Securities of that series.
Section 502.
Acceleration of Maturity; Rescission and Annulment
.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), together with (unless the terms of the Securities of a particular series otherwise provide) accrued and unpaid interest on all the
Securities of that series, to be due and payable immediately, by a notice in writing to the Bank (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and
payable.
At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Bank and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Bank has paid
or deposited with the Trustee a sum sufficient to pay
31
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series that have become due
otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or
rates prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the
non-payment
of the principal of Securities of that series that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Section 503.
Suits for Enforcement by Trustee
.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
Section 504.
Trustee May File Proofs of Claim
.
In case of any judicial proceeding relative to the Bank (or any other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee
any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement,
32
adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided
,
however
,
that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 505.
Trustee May Enforce Claims Without Possession of Securities
.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of
any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
Section 506.
Application of Money Collected
.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively.
Section 507.
Limitation on Suits
.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with
respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee security or indemnity reasonably satisfactory to
the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;
33
(4) the Trustee for 90 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no
direction inconsistent with such written request has been given to the Trustee during such
90-day
period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
Section 508.
Unconditional Right of Holders to Receive Principal, Premium and Interest
.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption or repayment, on the Redemption Date or
date for repayment, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 509.
Restoration of Rights and Remedies
.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Bank, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 510.
Rights and Remedies Cumulative
.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511.
Delay or Omission Not Waiver
.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and
34
remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 512.
Control by Holders
.
The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series,
provided
that:
(1) such direction shall not be in conflict with any rule of law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with
such direction, and
(3) the Holders have provided the Trustee with security or indemnity reasonably
satisfactory to the Trustee against liability and expenses arising from such action.
Section 513.
Waiver of Past
Defaults
.
The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may, on behalf of
the Holders of all the Securities of such series, waive any past default hereunder with respect to such series and its consequences, except a default:
(1) in the payment of the principal of or any premium or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or
amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 514.
Undertaking for Costs
.
In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess reasonable costs against any such party litigant, in the manner and to the extent provided in the
Trust Indenture Act;
provided
that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Bank.
35
Section 515.
Waiver of Usury, Stay or Extension Laws
.
The Bank covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Bank (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601.
Certain Duties and Responsibilities
.
The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of
this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate security or indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
Section 602.
Notice of Defaults
.
If a default occurs hereunder with respect to Securities of any series, and is actually known to the Trustee pursuant to Section 603(9)
hereof, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act. For the purpose of this Section, the term “
default
” means any event which is,
or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.
Section 603.
Certain Rights of Trustee
.
Subject to the provisions of Section 601:
(1) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Bank mentioned herein
shall be sufficiently evidenced by a Bank Request or Bank Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
36
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officer’s Certificate;
(4) the Trustee may consult with counsel of
its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be
bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Bank, personally or by agent or attorney during the Bank’s normal business hours;
provided
,
however
, that the Trustee shall cause its agents and attorneys to agree in writing to hold
in confidence all such information except to the extent disclosure may be required by law and except to the extent that the Trustee, in its sole judgment, may determine that such disclosure is consistent with its obligations hereunder;
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder, and the Trustee may also employ advisors and
experts to assist in the performance of the Trustee’s powers and duties under this Indenture;
(8) the rights, privileges, protections, immunities and benefits given to the Trustee, including,
without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;
(9) the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer
of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is delivered to a Responsible Officer of the Trustee in accordance with an appropriate manner of delivery as set forth elsewhere in
this Indenture, and such notice references the Securities or this Indenture;
37
(10) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
(11) in no event shall the Trustee be responsible or liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and
(12) the Trustee shall not be required to give any bond or surety in respect of the performance of its
powers and duties hereunder.
Section 604.
Not Responsible for Recitals or Issuance of Securities
.
The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements
of the Bank, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or
application by the Bank of Securities or the proceeds thereof.
Section 605.
May Hold Securities
.
The Trustee, any Paying Agent, any Security Registrar or any other agent of the Bank, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Bank with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 606.
Money Held in Trust
.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as otherwise agreed with the Bank.
Section 607.
Compensation and Reimbursement
.
The Bank agrees:
(1) to pay to the Trustee from time to time such compensation as shall be agreed to in writing between
the Bank and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee (in addition to the compensation for its services) in accordance with any provision of this Indenture (including the reasonable compensation and the reasonable expenses
and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith;
38
(3) to indemnify the Trustee for, and to hold it harmless
against, any and all loss, damages, claims, fees, including without limitation reasonable attorney’s fees and expenses, liability or expense incurred without negligence or willful misconduct or bad faith on its part (as determined by a final
non-appealable
decision of a court of competent jurisdiction), arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the reasonable costs and expenses of
defending itself against any claim or liability (including those of enforcing this Indenture against the Bank) in connection with the exercise or performance of any of its powers or duties hereunder, and including reasonable attorneys’ fees and
expenses and court costs incurred in connection with any action, claim or suit brought to enforce the Trustee’s right to compensation, reimbursement or indemnification;
(4) when the Trustee incurs any expenses or renders any services in connection with an Event of Default
specified in Section 501(1), such expenses (including the reasonable charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under the
Winding-Up
and Restructuring Act of Canada or any similar Canadian or United States federal or state law for the relief of debtors;
(5) in connection with the payment obligations of the Bank in this Section 607, the parties hereto
hereby recognize that the Trustee shall have a claim prior to the Securities on all money or property held by the Trustee in connection with this Indenture, except sums that are held in trust to pay principal and interest on particular Securities;
and
(6) the provisions of this Section shall survive the termination of this Indenture and the
resignation or removal of the Trustee.
Section 608.
Conflicting Interests
.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest
by virtue of being a trustee under this Indenture with respect to Securities of more than one series, dated the date hereof, between the Bank and the Trustee as amended or supplemented.
Section 609.
Corporate Trustee Required; Eligibility
.
There shall at all times be one Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities
of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the
39
Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610.
Resignation and Removal; Appointment of Successor
.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.
The Trustee may
resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Bank. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series, delivered to the Trustee and to the Bank. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the Trustee being removed may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Bank or
by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the
Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Bank or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Bank by a Board Resolution or other appropriate Bank authorization may remove the Trustee with respect to all Securities,
or (B) subject to Section 514, any Holder may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, with respect to the Securities of one or more series, the Bank shall promptly appoint a successor Trustee or Trustees with respect to the
40
Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Bank and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Bank. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Bank or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
The Bank shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall
include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
Section 611.
Acceptance of Appointment by Successor
.
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Bank and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Bank or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee
hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all)
series, the Bank, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and that
(1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
41
Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to
the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but, on request of the Bank or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Bank shall execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612.
Merger, Conversion, Consolidation or Succession to Business
.
Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion, consolidation or sale to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
Section 613.
Preferential Collection of Claims Against Bank
.
If and when the Trustee shall be or become a creditor of the Bank (or any other obligor upon the Securities), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims against the Bank (or any such other obligor).
Section 614.
Appointment of Authenticating Agent
.
The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be
42
entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Bank and shall at all times be a corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of
such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of
this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any
corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent (including the authenticating agency contemplated by this Indenture), shall continue to be an Authenticating Agent,
provided
such
corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Bank. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Bank. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent that shall be acceptable to the Bank and shall give notice of such appointment in the manner provided in
Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Bank agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:
43
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
Dated:
|
|
|
|
|
Wells Fargo Bank, National Association,
|
|
As Trustee
|
|
|
|
|
By
|
|
|
|
|
|
As Authenticating Agent
|
|
|
|
|
By
|
|
|
|
|
|
Authorized Signatory
|
ARTICLE SEVEN
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND BANK
Section 701.
Bank to Furnish Trustee Names and Addresses of Holders
.
The Bank will furnish or cause to be furnished to the Trustee
(1) semi-annually either (i) not later than January 15 and July 15 in each year in the
case of any series of Securities consisting solely of Original Issue Discount Securities which by their terms do not bear interest prior to Maturity, or (ii) not more than 15 days after each Regular Record Date in the case of Securities of any
other series, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the preceding January 1 or July 1 or as of such Regular Record Date, as the case may be;
and
(2) at such other times as the Trustee may request in writing, within 30 days after the receipt
by the Bank of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;
excluding
from any such list names and addresses received by the Trustee in its capacity as Security Registrar.
Section 702.
Preservation of Information; Communications to Holders
.
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
44
The rights of Holders to communicate with other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Bank and the Trustee that neither the Bank nor the Trustee nor
any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
Section 703.
Reports by Trustee
.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant thereto.
A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Bank. The Bank will notify the Trustee when any Securities are listed on any stock exchange.
Section 704.
Reports by Bank
.
The Bank shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports as may be
required by the Trust Indenture Act;
provided
that any such information, documents or reports filed electronically with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be deemed filed with, and delivered to, the
Trustee at the same time as filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and shall not constitute a representation or warranty as to the accuracy or completeness of the reports, information or documents. The Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the Bank’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on Officer’s
Certificates).
ARTICLE EIGHT
CONSOLIDATION, AMALGAMATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801.
Bank May Consolidate, Etc., Only on Certain Terms
.
The Bank shall not merge, amalgamate, consolidate or otherwise combine with another entity or sell or lease substantially all of the
Bank’s assets to another entity, unless:
(1) in case the Bank shall merge, amalgamate,
consolidate or otherwise combine with another entity or sell or lease substantially all of the Bank’s assets to
45
another entity, the surviving, resulting or acquiring entity shall be a duly organized entity and shall be legally responsible for and assume, whether by agreement in the form of a supplemental
indenture, operation of law or otherwise, the Securities and the Bank’s obligations under this Indenture;
(2) any such merger, amalgamation, consolidation or other combination, or sale or lease of assets, would
not result in an Event of Default, nor any event which, after any requirements for giving the Bank default notice and any requirements for lapse of time for the event to become a default were both disregarded, would become an Event of Default; and
(3) the Bank has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel,
each stating that such merger, amalgamation, consolidation or other combination, or sale or lease of assets and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction have been complied with.
Section 802.
Successor Substituted
.
Upon any consolidation or amalgamation of the Bank with, or merger of the Bank into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Bank substantially as an entirety in accordance with Section 801, the successor Person formed by or resulting from such consolidation or amalgamation or into which the Bank is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Bank under this Indenture with the same effect as if such successor Person had been named as the Bank herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL
INDENTURES
Section 901.
Supplemental Indentures Without Consent of Holders
.
Without the consent of any Holders, the Bank and the Trustee, at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to
evidence the succession of another Person to the Bank and the assumption by any such successor of the covenants of the Bank herein and in the Securities; or
(2) to add to the covenants of the Bank for the benefit of some or all of the Holders of all or any
series of Securities or of particular Securities within a series (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series
or such
46
particular Securities) or to surrender any right or power herein conferred upon the Bank; or
(3) to add any additional Events of Default for the benefit of some or all of the Holders of all or any
series of Securities or of particular Securities within a series (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included
solely for the benefit of such series or such particular Securities); or
(4) to add to or change
any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate
any of the provisions of this Indenture in respect of one or more series of Securities,
provided
that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution
of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no Security
described in clause (i) Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with
respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 611; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture,
provided
that such action pursuant to this Clause
(9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect. The Bank’s determination of the applicability of this subsection and whether the interests of the Holders of Securities shall
not be adversely affected, shall be set forth in an Officer’s Certificate delivered to the Trustee.
Section 902.
Supplemental Indentures With Consent of Holders
.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Bank and the Trustee, the Bank and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or
47
changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture;
provided
,
however
, that if the supplemental indenture shall expressly provide that any provision to be changed or eliminated shall apply to fewer than all the Outstanding Securities hereunder or under a particular series under this
Indenture, then, to the extent not inconsistent with the Trust Indenture Act, any such consent may be given by Holders of not less than a majority in principal amount of the Outstanding Securities hereunder or under such series to which such change
or elimination shall apply;
provided
,
further
, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby (whether or not such affected Securities comprise all Securities
under this Indenture or under a particular series),
(1) change the Stated Maturity of the principal
of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or
(2) if any Security provides that the Holder may require the Bank to repurchase such Security, impair
such Holder’s right to require repurchase of such Security on the terms provided therein, or
(3) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent
of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for
in this Indenture, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby;
provided
,
however
,
that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this
proviso, in accordance with the requirements of Sections 611 and 901(8).
A supplemental indenture that changes or eliminates any covenant
or other provision of this Indenture that has expressly been included solely for the benefit of one or more identified series of Securities or Securities within a series of Securities, or that modifies the rights of the Holders of Securities of such
series or Holders of particular Securities within a series with respect to such covenant or other provision, shall be deemed to affect only the rights under this Indenture of the Holders of Securities of the identified series or of particular
Securities within the identified series, and shall be deemed not to affect the rights under this Indenture of the Holders of any other Securities.
48
It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
Section 903.
Execution of Supplemental Indentures
.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the documents required by Section 102, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel and an
Officer’s Certificate stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Section 904.
Effect of Supplemental
Indentures
.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 905.
Conformity with Trust Indenture Act
.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
Section 906.
Reference in Securities to Supplemental Indentures
.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Bank shall so determine, new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Bank, to any such supplemental indenture may be prepared and executed by the Bank and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
Section 1001.
Payment of Principal, Premium and Interest
.
The Bank covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.
49
Section 1002.
Maintenance of Office or Agency
.
The Bank will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Bank in respect of the Securities of that series and this Indenture may
be served. The Bank will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Bank shall fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at such location as determined by the Bank and the Trustee.
The Bank may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time rescind such designations;
provided
,
however
,
that no such designation or rescission shall in any manner relieve the Bank of its obligation to
maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Bank will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other
office or agency.
If the Bank issues Securities of any series through a branch, agency or office other than its head or home office, the
Bank represents that, notwithstanding the place of booking office or jurisdiction of incorporation or organization of the Bank, the obligations of the Bank in respect of such Securities are the same as if it had issued such Securities through its
head or home office.
Section 1003.
Money for Securities Payments to Be Held in Trust
.
If the Bank shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series, deposit in an account established for the purpose of providing the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Bank shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or
any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Bank will
promptly notify the Trustee of its action or failure so to act.
The Bank will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Bank (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon
the written
50
request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.
The Bank may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by
Bank Order direct any Paying Agent to pay, to the Trustee all sums held by the Bank or such Paying Agent, such sums to be held by the Trustee in trust for the benefit of the Persons entitled thereto; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee
or any Paying Agent in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the
Bank on Bank Request; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Bank for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, shall
thereupon cease;
provided
,
however
,
that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Bank cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30
days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Bank.
Section 1004.
Statement by Officers as to Default
.
The Bank will deliver to the Trustee, within 120 days after the end of each fiscal year of the Bank ending after the date hereof, an
Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Bank is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and, if the Bank shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
Section 1005.
Existence
.
Subject to Article Eight, the Bank will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate
existence.
Section 1006.
Waiver of Certain Covenants
.
Subject to Section 502 and Section 902, and except as otherwise specified as contemplated by Section 301 for Securities of such
series, the Bank may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 301(b)(18), 901(2) or 901(7) for the
benefit of the Holders of such series or in Section 1005 if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived,
51
and, until such waiver shall become effective, the obligations of the Bank and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION
OF SECURITIES
Section 1101.
Applicability of Article
.
Subject to any law restricting the redemption of the Securities, Securities of any series that are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.
Section 1102.
Election to Redeem; Notice to Trustee
.
The election of the Bank to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by
Section 301 for such Securities. In case of any redemption at the election of the Bank of the Securities of any series (including any such redemption affecting only a single Security), the Bank shall, at least 45 days prior to the Redemption
Date fixed by the Bank (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities
to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Bank shall furnish the Trustee with an
Officer’s Certificate evidencing compliance with such restriction.
Section 1103.
Selection by Trustee of Securities
to Be Redeemed
.
If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a
specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series,
provided
that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such
series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Bank in writing of the Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.
52
The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities that has been or is to be
redeemed.
Section 1104.
Notice of Redemption
.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.
All notices of redemption shall
state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series consisting of more than a single Security
are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a
single Security are to be redeemed, the principal amount of the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security
to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered for payment of the Redemption
Price,
(6) that the redemption is for a sinking fund, if such is the case; and
(7) if applicable, the CUSIP or other identifying numbers of the Securities of that series.
Notice of redemption of Securities to be redeemed at the election of the Bank shall be given by the Bank or, at the Bank’s request, by
the Trustee in the name and at the expense of the Bank and, unless otherwise specified or contemplated by Section 301, shall be irrevocable.
53
Section 1105.
Deposit of Redemption Price
.
Prior to any Redemption Date, the Bank shall deposit with the Trustee or with a Paying Agent (or, if the Bank is acting as its own Paying
Agent, deposit in an account established for the purpose as provided in Section 1003 an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date or the Securities of the
series provide otherwise) accrued interest on, all the Securities which are to be redeemed on that date.
Section 1106.
Securities Payable on Redemption Date
.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified, and from and after such date (unless the Bank shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the Bank at the Redemption Price, together, if applicable, with accrued interest to the Redemption Date;
provided
,
however
,
that, unless otherwise
specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
Section 1107.
Securities Redeemed in Part
.
Any Security that is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Bank or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Bank and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Bank shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and
in exchange for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK
AT THE OPTION OF THE HOLDER
Section 1201.
Applicability of Article
.
Subject to any applicable law restricting the purchase or repayment of the Securities by the Bank at the option of the Holder, Securities of
any series the terms of which provide to each Holder the option to require the Bank to purchase or repay such Securities in certain
54
circumstances shall, upon exercise of such option, be repayable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
Section 1202.
Notice of Repayment Date
.
Notice of any Repayment Date with respect to Securities of any series shall, unless otherwise specified by the terms of the Securities of such
series, be given by the Bank not less than 30 nor more than 90 days prior to such Repayment Date to each Holder of Securities of such series in accordance with Section 106.
Such notice shall state:
(a) the Repayment Date;
(b) the Repayment Price;
(c) the place or places where, and the date by which, such Securities are to be surrendered for payment of the
Repayment Price;
(d) a description of the procedure which a Holder must follow to exercise the purchase or
repayment option;
(e) that exercise of the purchase or repayment option to elect repayment is irrevocable; and
(f) such other information as the Bank may consider appropriate for inclusion.
No failure of the Bank to give the foregoing notice shall limit any Holder’s right to exercise a repayment right.
Section 1203.
Deposit of Repayment Price
.
Prior to the Repayment Date, the Bank shall deposit with the Trustee or with a Paying Agent (or, if the Bank is acting as its own Paying Agent,
deposit in an account established for the purpose provided in Section 1103) an amount of money sufficient to pay the Repayment Price of and (unless the Repayment Date shall be an Interest Payment Date) accrued and unpaid interest, if any, on
all of the Securities of such series that are to be repaid on that date.
Section 1204.
Securities Payable on Repayment
Date
.
Holders having duly exercised the option to require purchase or repayment by the Bank on any Repayment Date as specified in the
form of Security for such series as provided in Section 203, the Securities of such series so to be purchased or repaid shall, on the Repayment Date, become due and payable at the Repayment Price applicable thereto and from and after such date
(unless the Bank shall default in the payment of the Repayment Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for purchase or repayment in accordance with the terms of such Security,
provided the option has been duly
55
exercised and the Security duly surrendered as specified in the form of such Security, such Security shall be paid by the Bank at the Repayment Price together with accrued interest to the
Repayment Date;
provided
,
however
, that installments of interest whose Stated Maturity is on or prior to such Repayment Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such
at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
If any Security
shall not be paid upon due exercise of the option and surrender thereof for purchase or repayment, the Repayment Price shall, until paid, bear interest from the Repayment Date at the rate prescribed therefor in such Security.
Section 1205.
Securities Repaid in Part
.
Any Security that by its terms may be purchased or repaid by the Bank in part at the option of the Holder and that is to be purchased or repaid
only in part by the Bank shall be surrendered at any office or agency of the Bank designated for that purpose pursuant to Section 1102 (with, if the Bank or the Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Bank and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Bank shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unpurchased or unrepaid portion of the principal of the Security so
surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
Section 1301.
Applicability of Article
.
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any series of Securities is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking
fund payment”. If provided for by the terms of any series of Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1302. Each sinking fund payment shall be applied to the redemption of
Securities of the series as provided for by the terms of such Securities.
Section 1302.
Satisfaction of Sinking Fund
Payments with Securities
.
The Bank (1) may deliver Outstanding Securities of a series (other than any previously called for
redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Bank (a) pursuant to the terms of such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of
56
such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such
Securities as and to the extent provided for by the terms of such series or (b) have been purchased or repaid by the Bank through the exercise of an option by the Holder as provided for in the terms of such Securities;
provided
that the
Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 1303.
Redemption of Securities for Sinking Fund
.
Not less than 60 days prior to each sinking fund payment date for any Securities, the Bank will deliver to the Trustee an Officer’s
Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities pursuant to Section 1302 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Bank in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE FOURTEEN
DEFEASANCE AND
COVENANT DEFEASANCE
Section 1401.
Bank
’
s Option to Effect Defeasance or Covenant Defeasance
.
Unless otherwise provided as contemplated by Section 301, Sections 1402 and 1403 shall apply to any Securities or any series of
Securities, as the case may be, in either case, denominated in U.S. dollars and bearing interest at a fixed rate, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth
below in this Article; and the Bank may elect, at its option at any time, to have Sections 1402 and 1403 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 301 as being defeasible pursuant
to such Section 1402 or 1403, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article. Any such election to have or not to have Sections 1402
and 1403 apply, as the case may be, shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.
Section 1402.
Defeasance and Discharge
.
Upon the Bank’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case
may be, or if this Section shall otherwise apply to any Securities or any series of Securities, as the case may be, the Bank shall be deemed to
57
have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1404 are satisfied
(hereinafter called “
Defeasance
”). For this purpose, such Defeasance means that the Bank shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Bank, shall execute proper instruments acknowledging the same), subject to the following, which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1404 and as more fully set forth in such Section, payments in respect of the principal
of and any premium and interest on such Securities when payments are due, (2) the Bank’s obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this Article, the Bank may exercise its option (if any) to have this Section applied to the Securities of any series notwithstanding the prior exercise of its option (if any) to
have Section 1403 applied to such Securities.
Section 1403.
Covenant Defeasance
.
Upon the Bank’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case
may be, or if this Section shall otherwise apply to any Securities or any series of Securities, as the case may be, (1) the Bank shall be released from its obligations under Section 1005 and any covenants provided pursuant to
Section 301(b)(18), Section 901(2) or Section 901(7) for the benefit of the Holders of such Securities and (2) the occurrence of any event specified in Section 501(2) shall be deemed not to be or result in an Event of
Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1404 are satisfied (hereinafter called “
Covenant Defeasance
”). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Bank may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section, whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected
thereby.
Section 1404.
Conditions to Defeasance or Covenant Defeasance
.
The following shall be the conditions to the application of Section 1402 or 1403 to any Securities or any series of Securities, as the
case may be:
(1) The Bank shall irrevocably have deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government
Obligations that through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination
thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, to pay and discharge,
58
and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated
Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security that is (i) a direct obligation of the United States of America for the payment
of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued
by a bank (as defined in Section 3.(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
(2) In the event of an election to have Section 1402 apply to any Securities or any series of
Securities, as the case may be, the Bank shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Bank has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of
this instrument, there has been a change in the applicable U.S. federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or
loss for U.S. federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to U.S. federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not to occur.
(3) In the event
of an election to have Section 1403 apply to any Securities or any series of Securities, as the case may be, the Bank shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize
gain or loss for U.S. federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to U.S. federal income tax on the same amount, in the same manner and at the same
times as would be the case if such deposit and Covenant Defeasance were not to occur.
(4) No event
that is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of the deposit referred to in clause (1) or, with
regard to any such event specified in Section 501(1), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).
59
(5) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).
(6) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a
default under, any other agreement or instrument to which the Bank is a party or by which it is bound.
(7) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit
constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.
(8) In the event of an election to have Section 1402 apply to any Securities or any series of
Securities, as the case may be, no event or condition may exist that, under the provisions described under Article Fifteen, would prevent the Bank from making payments of any principal, premium or interest on the Securities on the date of the
deposit referred to in clause (1), or at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).
(9) The Bank shall have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with (in each case, subject to the satisfaction of the condition in clause (4)).
Section 1405.
Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions
.
Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1406, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 1404
in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Bank acting as
its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds
except to the extent required by law.
The Bank shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section 1404 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of
Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Bank from time
to time upon Bank Request any money or U.S. Government Obligations held by it as provided in Section 1404 with respect to any Securities which, in the opinion of a
60
nationally recognized firm of independent public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.
Section 1406.
Reinstatement
.
If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Bank has been discharged or released pursuant to
Section 1402 or 1403 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1405 with respect to such Securities in accordance with this Article;
provided
,
however
, that if the Bank makes any payment of principal of or any premium or interest on any such Security following such
reinstatement of its obligations, the Bank shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.
ARTICLE FIFTEEN
SUBORDINATION OF
SECURITIES
Section 1501.
Securities Subordinate to Deposit Liabilities and Other Indebtedness
.
The Securities shall constitute subordinated indebtedness within the meaning of the Bank Act and, in the event of the insolvency or
winding-up
of the Bank, the indebtedness evidenced by the Securities shall rank:
(a) in right of payment equally with and not prior to all other Subordinated Indebtedness of the Bank (except for any
Subordinated Indebtedness which by its terms ranks subordinate to the Securities); and
(b) subordinate in right of
payment to the prior payment in full of Senior Indebtedness of the Bank then outstanding.
The Bank agrees and each Holder of any
Security, by its acceptance of such Security, also agrees and shall be deemed conclusively to have agreed, for the benefit of the present and future holders of Senior Indebtedness, to the provisions of this Article Fifteen and the Bank and each
Holder of any Security by its acceptance of such Security shall be bound by such provisions.
Section 1502.
Further
Assurances of Subordination
.
Each holder of Securities by its acceptance of such Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate further to assure the subordination as provided in this Article Fifteen.
61
Section 1503.
Reliance on Judicial Order or Certificate of Liquidating Agent
.
Upon payment or distribution of assets of the Bank, the Trustee, subject to the provisions of Article Six hereof, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which bankruptcy, dissolution,
winding-up,
liquidation or reorganization proceedings are pending, or
upon any certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, delivered to the Trustee or the Holders of the Securities, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Indebtedness and other Indebtedness of the Bank, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article Fifteen.
Section 1504.
Trustee
’
s Compensation Not Prejudiced
.
Nothing in this Article Fifteen will apply to amounts due to the Trustee pursuant to other sections in this Indenture.
ARTICLE SIXTEEN
MISCELLANEOUS
PROVISIONS
Section 1601.
Consent to Jurisdiction and Service of Process
.
The Bank irrevocably submits to the jurisdiction of any New York State or Federal court sitting in The City of New York over any suit, action
or proceeding arising out of or relating to this Indenture or any Security. The Bank irrevocably waives, to the fullest extent permitted by law, any objection that it may have to the laying of the venue of any such suit, action or proceeding brought
in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in any inconvenient forum. The Bank agrees that final judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Bank and may be enforced in the courts of Canada (or any other courts to the jurisdiction of which the Bank is subject) by a suit upon such judgment, provided that service of process is effected upon the Bank in the
manner specified in the following paragraph or as otherwise permitted by law;
provided
,
however
, that the Bank does not waive, and the foregoing provisions of this sentence shall not constitute or be deemed to constitute a waiver of,
(i) any right to appeal any such judgment, to seek any stay or otherwise to seek reconsideration or review of any such judgment or (ii) any stay of execution or levy pending an appeal from, or a suit, action or proceeding for
reconsideration or review of, any such judgment.
As long as any of the Securities remain outstanding, the Bank will at all times have an
authorized agent in the Borough of Manhattan, The City of New York upon whom process may be served in any legal action or proceeding arising out of or relating to this Indenture or any Security. Service of process upon such agent and written notice
of such service mailed or delivered to the Bank shall to the extent permitted by law be deemed in every respect effective service of process upon the Bank in any such legal action or proceeding. The Bank hereby appoints the Secretary of BMO Capital
Markets Corp., as its agent for such purpose, and
62
covenants and agrees that service of process in any such legal action or proceeding may be made upon it at the office of such agent at BMO Capital Markets Corp., 3 Times Square, 28th Floor, New
York, New York 10036 (Attention: Secretary) (or at such other address in the Borough of Manhattan, The City of New York, as the Bank may designate by written notice to the Trustee).
The Bank hereby consents to process being served in any suit, action or proceeding of the nature referred to in the preceding paragraphs by
service upon such agent together with the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to the address of the Bank in Toronto set forth in the first paragraph of this instrument or to any other
address of which the Bank shall have given written notice to the Trustee. The Bank irrevocably waives, to the fullest extent permitted by law, all claim of error by reason of any such service (but does not waive any right to assert lack of subject
matter jurisdiction) and agrees that such service (i) shall be deemed in every respect effective service of process upon the Bank in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon and personal delivery to the Bank.
Nothing in this Section shall affect the right of the Trustee
or any Holder to serve process in any manner permitted by law or limit the right of the Trustee to bring proceedings against the Bank in the courts of any jurisdiction or jurisdictions.
Section 1602.
Indenture and Securities Solely Corporate Obligations
.
No recourse under or upon any obligation, covenant or agreement of this Indenture, any supplemental indenture, or of any Security, or for any
claim based thereon or otherwise in respect thereof, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Bank or of any successor corporation, either directly or through the Bank, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, shareholders, officers or directors, as such, of the Bank or of any successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or any of the Securities or implied therefrom; and that any and all such personal liability, either at common law or in
equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, shareholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue
of such Securities.
Section 1603.
Execution in Counterparts
.
This 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. The exchange of copies of this Indenture and of signature pages by facsimile or electronic format (i.e., “.pdf” or “.tif”) transmission shall constitute
effective
63
execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or
electronic format (i.e., “.pdf” or “.tif”) shall be deemed to be their original signatures for all purposes.
Section 1604.
Waiver of Jury Trial
.
EACH OF THE BANK AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 1605.
Force Majeure
.
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of
or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
Section 1606.
Patriot Act
.
The parties hereto acknowledge that in accordance with the Customer Identification Program (CIP) requirements under the USA PATRIOT Act and its
implementing regulations, the Trustee in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an
account with the Trustee. The parties hereby agree that they shall provide the Trustee with such information as it may request including, but not limited to, each party’s name, physical address, tax identification number and other information
that will help the Trustee identify and verify each party’s identity such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information.
64
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of
the day and year first above written.
|
|
|
|
|
|
|
BANK OF MONTREAL
|
|
|
|
|
By:
|
|
/s/ Chris Hughes
|
|
|
|
Name:
|
|
Chris Hughes
|
|
|
|
Title:
|
|
Deputy Treasurer
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
|
|
as Trustee
|
|
|
|
|
By:
|
|
/s/ Yana Kislenko
|
|
|
|
Name:
|
|
Yana Kislenko
|
|
|
|
Title:
|
|
Vice President
|
65
Exhibit 4.2
BANK OF MONTREAL
TO
WELLS FARGO BANK, NATIONAL
ASSOCIATION
Trustee
First
Supplemental Indenture
Dated as of December 12, 2017
to
Indenture
Dated as of December 12, 2017
Subordinated
Debt Securities
3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC))
(Subordinated Indebtedness)
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
PARTIES
|
|
|
1
|
|
|
|
|
|
RECITALS OF THE BANK
|
|
|
1
|
|
|
|
|
ARTICLE ONE
|
|
|
|
|
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
|
|
|
|
|
|
|
Section 101.
|
|
Relation to Base Indenture
|
|
|
1
|
|
|
Section 102.
|
|
Definition of Terms
|
|
|
2
|
|
|
Section 103.
|
|
Benefits of First Supplemental Indenture
|
|
|
6
|
|
|
Section 104.
|
|
Conflict with Base Indenture
|
|
|
7
|
|
|
Section 105.
|
|
Provisions of Trust Indenture Act
|
|
|
7
|
|
|
Section 106.
|
|
Separability Clause
|
|
|
7
|
|
|
Section 107.
|
|
Governing Law
|
|
|
7
|
|
|
|
|
ARTICLE TWO
|
|
|
|
|
THE NOTES
|
|
|
|
|
|
|
Section 201.
|
|
Designation and Principal Amount
|
|
|
7
|
|
|
Section 202.
|
|
Maturity
|
|
|
7
|
|
|
Section 203.
|
|
Form, Payment and Appointment
|
|
|
8
|
|
|
Section 204.
|
|
Global Note
|
|
|
8
|
|
|
Section 205.
|
|
Interest
|
|
|
8
|
|
|
Section 206.
|
|
Satisfaction and Discharge
|
|
|
9
|
|
|
Section 207.
|
|
No Repayment at the Option of Holders
|
|
|
9
|
|
|
Section 208.
|
|
No Sinking Fund
|
|
|
9
|
|
|
Section 209.
|
|
Defeasance and Covenant Defeasance
|
|
|
9
|
|
|
Section 210.
|
|
Amendments
|
|
|
10
|
|
|
|
|
ARTICLE THREE
|
|
|
|
|
FORM OF NOTES
|
|
|
|
|
|
|
Section 301.
|
|
Form of Notes
|
|
|
10
|
|
|
|
|
ARTICLE FOUR
|
|
|
|
|
ISSUE OF NOTES
|
|
|
|
|
|
|
Section 401.
|
|
Original Issue of Notes
|
|
|
10
|
|
|
Section 402.
|
|
Additional Issues of Notes
|
|
|
10
|
|
i
|
|
|
|
|
|
|
|
|
ARTICLE FIVE
|
|
|
|
|
REMEDIES
|
|
|
|
|
|
|
Section 501.
|
|
Events of Default
|
|
|
11
|
|
|
Section 502.
|
|
Acceleration of Maturity; Rescission and Annulment
|
|
|
11
|
|
|
Section 503.
|
|
Bank Act Limitation on Payment
|
|
|
11
|
|
|
|
|
ARTICLE SIX
|
|
|
|
|
COVENANTS
|
|
|
|
|
|
|
Section 601.
|
|
Additional Amounts
|
|
|
11
|
|
|
|
|
ARTICLE SEVEN
|
|
|
|
|
CONVERSION INTO COMMON SHARES UPON A TRIGGER EVENT
|
|
|
|
|
|
|
Section 701.
|
|
NVCC Automatic Conversion
|
|
|
13
|
|
|
Section 702.
|
|
Conversion Rate
|
|
|
14
|
|
|
Section 703.
|
|
Time of NVCC Automatic Conversion
|
|
|
14
|
|
|
Section 704.
|
|
Right Not to Deliver Common Shares
|
|
|
14
|
|
|
Section 705.
|
|
No Entitlement to Interest Following an NVCC Automatic Conversion
|
|
|
15
|
|
|
Section 706.
|
|
Fractional Shares
|
|
|
15
|
|
|
Section 707.
|
|
Recapitalizations, Reclassifications and Changes in the Common Shares
|
|
|
15
|
|
|
Section 708.
|
|
Adjustments
|
|
|
16
|
|
|
Section 709.
|
|
General
|
|
|
17
|
|
|
Section 710.
|
|
Agreements of Holders and Beneficial Owners of Notes
|
|
|
17
|
|
|
|
|
ARTICLE EIGHT
|
|
|
|
|
REDEMPTION OF NOTES
|
|
|
|
|
|
|
Section 801.
|
|
Applicability of Article Eleven of the Base Indenture
|
|
|
18
|
|
|
Section 802.
|
|
Regulatory Redemption
|
|
|
18
|
|
|
Section 803.
|
|
Tax Redemption
|
|
|
18
|
|
|
Section 804.
|
|
Optional Redemption
|
|
|
19
|
|
|
Section 805.
|
|
Mandatory Redemption; Open Market Purchases
|
|
|
19
|
|
|
Section 806.
|
|
Notice of Redemption
|
|
|
19
|
|
|
|
|
ARTICLE NINE
|
|
|
|
|
MISCELLANEOUS PROVISION
|
|
|
|
|
|
|
Section 901.
|
|
Ratification of Base Indenture
|
|
|
19
|
|
|
Section 902.
|
|
Trustee Not Responsible for Recitals
|
|
|
19
|
|
|
Section 903.
|
|
Execution in Counterparts
|
|
|
19
|
|
|
Section 904.
|
|
Indenture and Notes Solely Corporate Obligations
|
|
|
20
|
|
|
Section 905.
|
|
Agreement of Subsequent Investors
|
|
|
20
|
|
|
Section 906.
|
|
Waiver of Jury Trial
|
|
|
20
|
|
ii
FIRST SUPPLEMENTAL INDENTURE, dated as of December 12, 2017, between Bank of Montreal, a
Canadian chartered bank (herein called the “
Bank
”), having its principal executive offices located at 100 King Street West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1 and its head office located at 129 rue Saint
Jacques, Montreal, Quebec, Canada H2Y 1L6, and Wells Fargo Bank, National Association, a national banking association organized under the law of the United States of America, as Trustee (herein called the “
Trustee
”).
RECITALS OF THE BANK
WHEREAS,
the Bank and the Trustee have heretofore executed and delivered an Indenture, dated as of December 12, 2017 (the “
Base Indenture
” and, as hereby supplemented and amended, the “
Indenture
”) providing for the
issuance from time to time of series of the Bank’s unsecured subordinated debt indebtedness (hereinafter called the “
Securities
”);
WHEREAS, Section 901(7) of the Base Indenture provides that the Bank and the Trustee may enter into an indenture supplemental to the Base
Indenture to establish the form or terms of Securities of any series as permitted by the Base Indenture;
WHEREAS, pursuant to
Section 301 of the Base Indenture, the Bank wishes to provide for the issuance of $1,250,000,000 aggregate principal amount of a new series of Securities to be known as its 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) (hereinafter called the “
Notes
”), the form of such Notes and the terms, provisions and conditions thereof to be set forth as provided in this First
Supplemental Indenture; and
WHEREAS, the Bank has requested that the Trustee execute and deliver this First Supplemental Indenture; and
all requirements necessary to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, and to make the Notes, when executed by the Bank and authenticated and delivered by the Trustee, the
valid, binding and enforceable obligations of the Bank, have been satisfied; and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects.
NOW, THEREFORE, WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of the Holders of Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Relation to Base Indenture.
This First Supplemental Indenture constitutes an integral part of the Indenture.
1
Section 102.
Definition of Terms
.
For all purposes of this First Supplemental Indenture:
(a) Capitalized terms used herein without definition shall have the meanings set forth in the Base Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;
(c) unless otherwise specified or unless the context requires otherwise, (i) all references in this First
Supplemental Indenture to Sections refer to the corresponding Sections of this First Supplemental Indenture and (ii) the terms “herein”, “hereof”, “hereunder” and any other word of similar import refer to this
First Supplemental Indenture; and
(d) the following terms have the meanings given to them in this
Section 102(d):
“
5-Year
Mid-Swap
Rate
” means the
5-year
semi-annual
mid-swap
rate as displayed on the Reset Screen Page on the Reset Interest Determination Date. In the event that the
5-year
semi-annual
mid-swap
rate does not appear on the Reset Screen Page on the Reset Interest Determination Date, the
5-Year
Mid-Swap
Rate shall be the Reset Reference Bank Rate on the Reset Interest Determination Date.
“
5-Year
Mid-Swap
Rate Quotation
” means, in
each case, the arithmetic mean of the bid and offered rates for the semi-annual fixed leg (calculated on the basis of a
360-day
year of twelve
30-day
months) of a
fixed-for-floating
U.S. dollar interest rate swap which (i) has a term of 5 years commencing on the Reset Date, (ii) is in an amount that is representative of a
single transaction in the relevant market at the relevant time with an acknowledged dealer of good credit in the swap market and (iii) has a floating leg based on the
3-month
U.S. dollar LIBOR rate (or
such other short-term rate, if any, as shall have generally replaced the
3-month
U.S. dollar LIBOR rate in the relevant market at the relevant time for purposes of such
fixed-for-floating
U.S. dollar interest rate swaps quotations, as determined by the Bank in its sole discretion) (calculated on the basis of the actual number of days elapsed in
360-day
year).
“
Additional Amounts
” has the meaning specified in
Section 601.
“
Affiliate
” has the meaning attributed to it in the Bank Act.
“
Bank’s Auditors
” means an independent firm or firms of accountants duly appointed as auditors of the Bank.
“
Business Day
” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions are
authorized or required by law or executive order to close in The City of New York, New York or Toronto, Ontario.
“
Canadian
Taxes
” has the meaning specified in Section 601(a).
2
“
Code
” means the
U.S. Internal Revenue Code of 1986
, and any statute
hereafter enacted in substitution therefor, as such Code, or substituted statute, may be amended from time to time.
“
Common Share
Reorganization
” means any of (i) the issuance of Common Shares or securities exchangeable for or convertible into Common Shares to all holders of Common Shares as a stock dividend, (ii) the subdivision,
re-division
or change of the Common Shares into a greater number of Common Shares, or (iii) the reduction, combination or consolidation of the Common Shares into a lesser number of Common Shares.
“
Common Shares
” means the common shares in the capital of the Bank.
“
Conversion Price
” means, in respect of each Note, the greater of (i) the Floor Price, and (ii) the Current Market
Price.
“
Current Market Price
” means the volume weighted average trading price of the Common Shares on the TSX or, if not
then listed on the TSX, on another exchange or market chosen by the Board of Directors of the Bank on which the Common Shares are then traded, for the 10 consecutive trading days ending on the trading day immediately prior to the date on which the
Trigger Event occurs, converted (if not denominated in U.S. dollars) into U.S. dollars at the Prevailing Rate on the day immediately prior to the date on which the Trigger Event occurs. If no such trading prices are available, “Current Market
Price” shall be the Floor Price.
“
DTC
” has the meaning specified in Section 203.
“
FATCA Withholding Tax
” has the meaning specified in Section 601(f).
“
Floor Price
” means the U.S. dollar equivalent of Canadian $5.00 converted into U.S. dollars at the Prevailing Rate on the
day immediately prior to the date on which the Trigger Event occurs, subject to adjustment in the event of a Common Share Reorganization.
“
Global Note
”
has the meaning specified in Section 204.
“
Independent Financial Adviser
” means an independent financial institution of international repute appointed by the Bank at
its own expense.
“
Ineligible Person
” means (i) any person whose address is in, or whom the Bank or its transfer
agent has reason to believe is a resident of, any jurisdiction outside Canada or the United States to the extent that the issuance by the Bank of Common Shares or delivery of such shares by its transfer agent to that person, pursuant to an NVCC
Automatic Conversion, would require the Bank to take any action to comply with securities, banking or analogous laws of that jurisdiction, and (ii) any person to the extent that the issuance by the Bank of Common Shares, or delivery of such
shares by its transfer agent to that person, pursuant to an NVCC Automatic Conversion, would, at the time of the Trigger Event, cause the Bank to be in violation of any law to which the Bank is subject.
“
Interest Payment Date
” has the meaning specified in Section 205.
“
Issue Date
” means December 12, 2017.
3
“
Maturity Date
” means December 15, 2032.
“
Multiplier
” means 1.5.
“
Note Value
” means, in respect of each Note, the principal amount of such Note plus accrued and unpaid interest on such Note
to, but excluding, the date of the Trigger Event.
“
NVCC Automatic Conversion
” has the meaning specified in
Section 701.
“
OSFI
” means the Office of the Superintendent of Financial Institutions (Canada).
“
Prevailing Rate
” means, in respect of any currencies on any day, the spot rate of exchange between the relevant currencies
prevailing as at or about 12:00 noon (New York time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined at such time, the rate prevailing as at or about 12:00 noon (New York time) on the
immediately preceding day on which such rate can be so determined or, if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other manner as an Independent Financial Adviser shall consider in good faith
appropriate.
“
Regulatory Event Date
” means the date specified in a letter or other written communication from the
Superintendent to the Bank on which the Notes will no longer be recognized in full as eligible “Tier 2 Capital” or will no longer be eligible to be included in full as risk-based “Total Capital” on a consolidated basis under the
guidelines for capital adequacy requirements for banks in Canada as interpreted by the Superintendent.
“
Relevant Page
”
means the relevant page on Bloomberg (or such other information service provider) that displays the relevant information.
“
Reset
Date
” means December 15, 2027.
“
Reset Interest Determination Date
” means the day falling two Business Days
prior to the Reset Date.
“
Reset Reference Bank Rate
” means the percentage rate determined on the basis of the
5-Year
Mid-Swap
Rate Quotation provided by five leading swap dealers in the interbank market to the paying agent as at approximately 11:00 a.m. (New York time) on the Reset
Interest Determination Date. If at least three quotations are provided, the
5-Year
Mid-Swap
Rate will be the arithmetic mean of the quotations, eliminating the highest
quotation (or, in the event of equality one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest). If only two quotations are provided, the
5-Year
Mid-Swap
Rate will be the arithmetic mean of the quotations provided. If only one quotation is provided, the
5-Year
Mid-Swap
Rate will
be the quotation provided. If no quotations are provided, the
5-Year
Mid-Swap
Rate shall be equal to the last available
5-year
semi-annual
mid-swap
rate on the Reset Screen Page.
“
Reset Screen Page
” means
Reuters screen “ICESWAP1” (or any successor page or, if a successor page is unavailable, an equivalent page of Bloomberg or any comparable provider as determined by the Bank in its sole discretion) as at 11:00 a.m. (New York time).
4
“
Significant Shareholder
” means any person who beneficially owns directly, or
indirectly through entities controlled by such person or persons associated with or acting jointly or in concert with such person, a percentage of the total number of outstanding shares of a class of the Bank that is in excess of that permitted by
the Bank Act.
“
Tax Act
” mean the
Income Tax Act
(Canada), and any statute hereafter enacted in substitution
therefor, as such Act, or substituted statute, may be amended from time to time.
“
Tax Event
” means:
(i) as a result of any change (including any announced prospective change) in or amendment to the laws (or any regulations or rulings
promulgated thereunder) of Canada or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such laws, regulations or rulings
(including a holding by a court of competent jurisdiction), which change or amendment is announced and becomes effective on or after December 7, 2017, and which in the written opinion to the Bank of legal counsel of recognized standing has
resulted or will result (assuming, in the case of any announced prospective change, that such announced change will become effective as of the date specified in such announcement and in the form announced) in the Bank becoming obligated to pay, on
the next succeeding date on which payment under the Notes is due, Additional Amounts; or
(ii) on or after December 7, 2017, any
action has been taken by any taxing authority of, or any decision has been rendered by a court of competent jurisdiction in, Canada or any political subdivision or taxing authority thereof or therein, including any of those actions specified in the
paragraph immediately above, whether or not such action was taken or decision was rendered with respect to the Bank, or any change, amendment, application or interpretation shall be officially proposed, which, in any such case, in the written
opinion to the Bank of legal counsel of recognized standing, will result (assuming, in the case of any announced prospective change, that such announced change will become effective as of the date specified in such announcement and in the form
announced) in the Bank becoming obligated to pay, on the next succeeding date on which payment under the Notes is due, Additional Amounts with respect to the Notes; or
(iii) the Bank has received an opinion of independent legal counsel of recognized standing experienced in such matters to the effect that, as
a result of, (x) any amendment to, clarification of, or change (including any announced prospective change) in, the laws, or any regulations thereunder, or any application or interpretation thereof, of Canada, or any political subdivision or
taxing authority thereof or therein, affecting taxation; (y) any judicial decision, administrative pronouncement, published or private ruling, regulatory procedure, rule, notice, announcement, assessment or reassessment (including any notice or
announcement of intent to adopt or issue such decision, pronouncement, ruling, procedure, rule, notice, announcement, assessment or reassessment) (collectively, an “administrative action”); or (z) any amendment to, clarification of,
or change in, the official position with respect to or the interpretation of any administrative action or any interpretation or pronouncement that provides for a position with respect to such administrative action that differs from the theretofore
generally accepted position, in each case (x), (y) or (z), by any legislative body, court, governmental authority or agency, regulatory body or taxing authority, irrespective of the manner in which such amendment,
5
clarification, change, administrative action, interpretation or pronouncement is made known, which amendment, clarification, change or administrative action is effective or which interpretation,
pronouncement or administrative action is announced on or after the date of the issue of the Notes, there is more than an insubstantial risk (assuming any proposed or announced amendment, clarification, change, interpretation, pronouncement or
administrative action is effective and applicable) that the Bank is, or may be, subject to more than a
de
minimis
amount of additional taxes, duties or other governmental charges or civil liabilities because the treatment of any of its
items of income, taxable income, expense, taxable capital or taxable
paid-up
capital with respect to the Notes (including the treatment by the Bank of interest on the Notes) or the treatment of the Notes, as
or as would be reflected in any tax return or form filed, to be filed, or otherwise could have been filed, will not be respected by a taxing authority.
“
Threshold Number
” means the number of Common Shares issuable or deliverable to any Person that would cause that Person to
become a Significant Shareholder, being the sum of (i) the total number of Common Shares held by that Person immediately prior to the NVCC Automatic Conversion and (ii) the total number of Common Shares otherwise issuable or deliverable to
that Person by virtue of the operation of the NVCC Automatic Conversion, less (iii) the greatest number of Common Shares that such Person could hold, directly or indirectly, without being a Significant Shareholder.
“
Trigger Event
” has the meaning set out in the OSFI, Guideline for Capital Adequacy Requirements (CAR), Chapter 2 –
Definition of Capital, effective December 2016, as such term may be amended or superseded by OSFI from time to time, which term currently provides that each of the following constitutes a Trigger Event:
(1) the Superintendent publicly announces that the Bank has been advised, in writing, that the Superintendent is of the
opinion that the Bank has ceased, or is about to cease, to be viable and that, after the conversion of the Notes and all other contingent instruments issued by the Bank and taking into account any other factors or circumstances that are considered
relevant or appropriate, it is reasonably likely that the viability of the Bank will be restored or maintained; or
(2) a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a
capital injection, or equivalent support, from the federal government or any provincial government or political subdivision or agent or agency thereof without which the Bank would have been determined by the Superintendent to be
non-viable.
“
TSX
” means the Toronto Stock Exchange.
Section 103.
Benefits of First Supplemental Indenture
.
Nothing in this First Supplemental Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this First Supplemental Indenture.
6
Section 104.
Conflict with Base Indenture
.
If any provision of this First Supplemental Indenture relating to the Notes is inconsistent with any provision of the Base Indenture, such
provision of this First Supplemental Indenture shall control.
Section 105.
Provisions of Trust Indenture Act
.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part
of and govern this First Supplemental Indenture, the latter provision shall control. If any provision of this First Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this First Supplemental Indenture as so modified or to be excluded, as the case may be.
Section 106.
Separability
Clause
.
In case any provision in this First Supplemental Indenture 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.
Section 107.
Governing Law
.
This First Supplemental Indenture and the Notes shall be governed by and construed in accordance with the law of the State of New York, except
for the first sentence of Section 301(b) and Article Fifteen of the Base Indenture and Article Seven of this First Supplemental Indenture, which shall be governed by and construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein.
ARTICLE TWO
THE NOTES
Section 201.
Designation and Principal Amount
.
The Notes may be issued from time to time upon a Bank Order for the authentication and delivery of Notes pursuant to Section 303 of the
Base Indenture. There is hereby authorized a series of Securities designated as the 3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC)) having an initial aggregate principal amount of
$1,250,000,000 (except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906 or 1107 of the Base Indenture and except for Notes which, pursuant
to Section 303 of the Base Indenture are deemed to never have been authenticated and delivered under the Base Indenture).
Section 202.
Maturity
.
The date upon which the Notes shall become due and payable at final maturity, together with any accrued and unpaid interest then owing, is
December 15, 2032.
7
Section 203.
Form, Payment and Appointment
.
Except as provided in Section 305 of the Base Indenture, the Notes shall be issued only in book-entry form and shall be represented by one
or more Global Notes registered in the name of or held by The Depository Trust Company (and any successor thereto) (“
DTC
”) or its nominee. Principal or the Redemption Price, if any, of a Note shall be payable to the Person in whose
name that Note is registered on the Maturity Date or Redemption Date, as the case may be,
provided
that principal of, the Redemption Price, if any, of and interest on the Notes represented by one or more Global Notes registered in the name of
or held by DTC or its nominee shall be payable in immediately available funds to DTC or its nominee, as the case may be, as the registered holder of such Global Notes. The principal of any certificated Notes shall be payable at the Place of Payment
set forth below;
provided
,
however
, that payment of interest may be made at the option of the Bank by check mailed to the Person entitled thereto at such address as shall appear in the Security Register or by wire transfer to an
account appropriately designated by the Person entitled to payment.
The Notes shall have such other terms as are set forth in the form
thereof attached hereto as
Exhibit A
.
The Security Registrar, Authenticating Agent and Paying Agent for the Notes shall initially
be the Trustee.
The Place of Payment for the Notes shall initially be the Corporate Trust Office of the Trustee.
The Notes shall be issuable and may be transferred only in minimum denominations of $1,000 or any amount in excess thereof that is an integral
multiple of $1,000. The amounts payable with respect to the Notes shall be payable in U.S. dollars.
Section 204.
Global
Note
.
The Notes shall be issued initially in the form of one or more fully registered global notes (each such global note, a
“
Global Note
”) deposited with DTC or its designated custodian or such other Depositary as any officer of the Bank may from time to time designate. Unless and until a Global Note is exchanged for Notes in certificated form, such
Global Note may be transferred, in whole but not in part, and any payments on the Notes shall be made, only to DTC or a nominee of DTC, or to a successor Depositary selected or approved by the Bank or to a nominee of such successor Depositary.
Section 205.
Interest
.
The Notes shall bear interest on their principal amount (i) from and including the Issue Date to, but excluding, the Reset Date, at a rate
of 3.803% per annum and (ii) from and including the Reset Date to, but excluding, the Maturity Date at a rate per annum which shall be 1.432% above the
5-Year
Mid-Swap
Rate.
Interest on the Notes shall be payable semi-annually in arrears on June 15
and December 15 of each year (each, an “
Interest Payment Date
”), commencing June 15, 2018. The Bank
8
shall, following the Reset Date, promptly notify the Trustee in writing of the interest rate payable on the Notes from and including the Reset Date.
If any Interest Payment Date falls on a day that is not a Business Day for the Notes, the Bank shall postpone the making of such interest
payment to the next succeeding Business Day (and no interest shall be paid in respect of the delay).
Interest on the Notes shall be
calculated and paid on the basis of a
360-day
year of twelve
30-day
months.
Section 206.
Satisfaction and Discharge
.
The provisions of Article Four of the Base Indenture shall not be applicable to the Notes; however, the following shall apply to the Notes:
The Indenture shall upon Bank Request cease to be of further effect, and the Trustee, at the expense of the Bank, shall execute proper
instruments acknowledging satisfaction and discharge of the Indenture, when (a) all Notes theretofore authenticated and delivered (other than (i) Notes which have been mutilated, destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 of the Base Indenture and (ii) Notes for whose payment money has theretofore been irrevocably deposited in trust or segregated and held in trust by the Bank and thereafter repaid to the Bank or discharged
from such trust, as provided in Section 1003 of the Base Indenture) have been delivered to a Trustee for cancellation; (b) the Bank has paid or caused to be paid all other sums payable hereunder by the Bank; and (c) the Bank has
delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent herein provided for relating to the satisfaction and discharge of the Indenture have been complied with.
Notwithstanding the satisfaction and discharge of the Indenture, the obligations of the Bank to the Trustee under Section 607 of the Base
Indenture shall survive.
Section 207.
No Repayment at the Option of Holders
.
The provisions of Article Twelve of the Base Indenture relating to purchases or repayments of Securities by the Bank at the option of the
Holder shall not be applicable to the Notes.
Section 208.
No Sinking Fund
.
The provisions of Article Thirteen of the Base Indenture relating to sinking funds shall not be applicable to the Notes.
Section 209.
Defeasance and Covenant Defeasance
.
The provisions of Article Fourteen of the Base Indenture relating to Defeasance and Covenant Defeasance shall not be applicable to the Notes.
9
Section 210.
Amendments
.
Notwithstanding any other provision of the Indenture or the Notes, the Bank shall not, without the prior written approval of the
Superintendent, amend or vary terms of the Notes that would affect the recognition of the Notes as regulatory capital under capital adequacy requirements adopted by the Superintendent.
ARTICLE THREE
FORM OF NOTES
Section 301.
Form of Notes
.
The Notes and the Trustee’s certificate of authentication thereon are to be substantially in the form attached as
Exhibit A
hereto,
with such changes therein as the officer of the Bank executing the Notes (by manual or facsimile signature) may approve, such approval to be conclusively evidenced by their execution thereof.
ARTICLE FOUR
ISSUE OF NOTES
Section 401.
Original Issue of Notes
.
Notes having an aggregate principal amount of $1,250,000,000 may from time to time, upon execution of this First Supplemental Indenture, be
executed by the Bank and delivered to the Trustee for authentication, and upon Bank Order the Trustee shall thereupon authenticate and deliver said Notes in accordance with a Bank Order pursuant to Section 303 of the Base Indenture without any
further action by the Bank (other than as required by the Base Indenture).
Section 402.
Additional Issues of Notes
.
The Bank may from time to time, without notice to or the consent of the Holders of the Notes, issue additional Notes, which Notes shall
rank
pari passu
with the Notes and be identical in all respects as the Notes previously issued (other than issue date, issue price and, if applicable, the first interest payment date and the initial interest accrual date) in order that such
additional Notes may be consolidated and form a single series with the Notes outstanding immediately prior to the issuance of such additional Notes and have the same terms as to status, redemption or otherwise as the Notes. Such additional Notes may
have the same or different CUSIP numbers than the Notes issued on the date hereof or no CUSIP number, as the case may be.
10
ARTICLE FIVE
REMEDIES
Section 501.
Events of Default
.
Notwithstanding any other provisions of the Base Indenture, and for greater certainty, none of (i) a default in the payment of interest on
the Notes, (ii) a default in the performance of any other covenant of the Bank in the Indenture or (iii) the occurrence of an NVCC Automatic Conversion shall constitute an Event of Default under the Indenture or the Notes.
Section 502.
Acceleration of Maturity; Rescission and Annulment
.
The first paragraph of Section 502 of the Base Indenture shall be replaced with the following for purposes of the Notes: At any time prior
to a Trigger Event, upon the occurrence of an Event of Default that is continuing, the Trustee may in its discretion, and shall upon receipt of a written request of Holders of not less than 25% in principal amount of all Outstanding Notes, declare
the principal of and accrued and unpaid interest on all Notes immediately due and payable, by notice in writing to the Bank.
Section 503.
Bank Act Limitation on Payment
.
If any provisions contained, from time to time, in the Bank Act or in any rules, regulations, orders or guidelines passed pursuant thereto or
in connection therewith or guidelines issued by the Superintendent in relation thereto shall limit the right of the Bank to pay the Securities on or before a date prescribed by such provisions (“
Early Payment Restrictions
”),
Sections 501, 502, 503, 507 and 508 of the Base Indenture shall be subject to such Early Payment Restrictions;
provided
that so long as any Early Payment Restriction shall be applicable to any Securities, the Trustee shall take such action,
as shall not be precluded by the Early Payment Restrictions and as it shall be directed to take by the Holders pursuant to Section 512 of the Base Indenture, to preserve and protect the interests of Holders of Securities then Outstanding to
which the Early Payment Restrictions are applicable and to obtain or collect all amounts to which they may be entitled and to distribute the same to them at the earliest time permitted by the Early Payment Restrictions, such action to include,
without limitation, the filing and proving of claims with respect to the Securities then outstanding to which the Early Payment Restrictions are applicable in any insolvency or winding up proceedings relating to the Bank and the enforcement of such
claims on behalf of the Holders of such Securities. The Bank shall, following any such Early Payment Restriction taking effect, promptly notify the Trustee thereof in writing.
ARTICLE SIX
COVENANTS
Section 601.
Additional Amounts
.
(a) All payments made by the Bank under or with respect to the Notes shall be made free and clear of and without
withholding or deduction for or on account of any present or future
11
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 any province or territory thereof or by any authority or agency therein or thereof having power to tax (“
Canadian Taxes
”), unless the Bank is required to withhold or deduct Canadian Taxes by law or by the interpretation or
administration thereof. If the Bank 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 Bank shall pay to each Holder as additional interest such
Additional Amounts (“
Additional Amounts
”) as may be necessary so that the net amount received by each such Holder after such withholding or deduction (and after deducting any Canadian Taxes on such Additional Amounts) shall not be
less than the amount such Holder would have received if such Canadian Taxes had not been withheld or deducted, except as described below. The Bank shall, if any Additional Amounts shall become payable, promptly notify the Trustee thereof in writing.
However, no Additional Amounts shall be payable with respect to a payment made to a Holder in respect of the beneficial owner thereof:
(i) with which the Bank does not deal at
arm’s-length
(for
the purposes of the Income Tax Act at the time of the making of such payment;
(ii) which is a
“specified
non-resident
shareholder” of the Bank for purposes of the Tax Act or a
non-resident
person not dealing at
arm’s-length
with a “specified shareholder” (within the meaning of subsection 18(5) of the Tax Act) of the Bank;
(iii) which is subject to such Canadian Taxes by reason of the holder being a resident, domiciliary or
national of, engaged in business or maintaining a permanent establishment or other physical presence in or otherwise having some connection with Canada or any province or territory thereof otherwise than by the mere holding of the Notes or the
receipt of payments thereunder;
(iv) which is subject to such Canadian Taxes by reason of the
holder’s failure to comply with any certification, identification, 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 (provided that the Bank advises the Trustee and the Holders of such Notes then Outstanding of any change in such requirements);
(v) with respect to any Note presented for payment more than 30 days after the later of (x) the
date payment is due and (y) the date on which funds are made available for payment, except to the extent that the holder thereof would have been entitled to such Additional Amounts on presenting same for payment on or before such thirtieth day;
(vi) with respect to any estate, inheritance, gift, sale, transfer, personal property or similar
tax or other governmental charge; or
12
(vii) which is a fiduciary or partnership or person other
than the sole beneficial owner of such payment to the extent that the Canadian Taxes would not have been imposed on such payment had such holder been the sole beneficial owner of such Notes.
(b) The Bank shall also make such withholding or deduction and remit the full amount deducted or withheld to the
relevant authority in accordance with applicable law.
(c) The Bank shall furnish to the Holders of the relevant
Notes, within 60 days after the date the payment of any Canadian Taxes is due pursuant to applicable law, certified copies of tax receipts or other documents evidencing such payment.
(d) In any event, no Additional Amounts shall be payable under the provisions described above in respect of any Note in
excess of the Additional Amounts which would be required if, at all relevant times, the beneficial owner of such Note were a resident of the United States for purposes of, and was entitled to the benefits of the
Canada-U.S.
Income Tax Convention (1980), as amended, including any protocols thereto. As a result of the limitation on the payment of Additional Amounts discussed in the preceding sentence of this
Section 601(d), the Additional Amounts received by certain Holders in respect of beneficial owners of the Notes may be less than the amount of Canadian Taxes withheld or deducted and, accordingly, the net amount received by such Holders of
those Notes shall be less than the amount such Holders would have received had there been no such withholding or deduction in respect of Canadian taxes.
(e) Wherever in the Indenture there is mentioned, in any context, the payment of principal, or any premium or 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 as set forth in
this Section 601.
(f) Notwithstanding the provisions of this Section 601, all payments shall be made net
of any deduction or withholding imposed or collected pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code,
or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental
agreement) (any such withholding, a “
FATCA Withholding Tax
”), and no Additional Amounts shall be payable as a result of any such FATCA Withholding Tax.
ARTICLE SEVEN
CONVERSION INTO
COMMON SHARES UPON A TRIGGER EVENT
Section 701.
NVCC Automatic Conversion.
Upon the occurrence of a Trigger Event, each outstanding Note shall automatically and immediately be converted, on a full and permanent basis,
without any action on the part of, or the consent of, the Holders of Notes, and as of the start of business on the date on which the Trigger
13
Event occurs, into fully-paid and
non-assessable
Common Shares, in accordance with this Article Seven (an “
NVCC Automatic Conversion
”).
Section 702.
Conversion Rate
.
The number of Common Shares into which each Note is convertible at the time of an NVCC Automatic Conversion shall be equal to the quotient
obtained by dividing (a) the product of the Multiplier and the Note Value, by (b) Conversion Price.
Section 703.
Time of NVCC Automatic Conversion
.
An NVCC Automatic Conversion is deemed to be effected immediately following a Trigger Event and the rights of the Holder of such Notes as the
holder thereof shall cease at such time and the person or persons entitled to receive Common Shares upon an NVCC Automatic Conversion shall be treated for all purposes as having become the holder or holders of record of such Common Shares at such
time.
Subject to Section 704, as promptly as practicable after the occurrence of a Trigger Event, the Bank shall announce the NVCC
Automatic Conversion by way of a press release and shall give notice of the NVCC Automatic Conversion in accordance with the provisions of Section 106 of the Base Indenture to the then Holders of Notes and the Trustee. As promptly as
practicable after the NVCC Automatic Conversion, the Bank shall deliver or cause to be delivered certificates representing Common Shares registered in the name of the Holders of Notes, or as such Holder shall have directed, on presentation and
surrender of the Global Note in accordance with the applicable procedures of the Depositary, or Notes in certificated form, as the case may be, at the Corporate Trust Office. From and after the NVCC Automatic Conversion, the Notes shall cease to be
Outstanding, the Holders thereof shall cease to be entitled to interest thereon, and any certificates representing the Notes shall represent only the right to receive upon surrender thereof certificates representing the applicable number of Common
Shares specified in Section 702. An NVCC Automatic Conversion shall be mandatory and binding upon both the Bank and all Holders of the Notes notwithstanding anything else including, without limitation: (a) any prior action to or in
furtherance of a redemption of the Notes pursuant to the Indenture; and (b) any delay or impediment to the issuance or delivery of the Common Shares to the Holders of the Notes.
Section 704.
Right Not to Deliver Common Shares
.
Upon an NVCC Automatic Conversion, the Bank reserves the right not to deliver some or all, as applicable, of the Common Shares issuable
thereupon to any Person whom the Bank has reason to believe is an Ineligible Person. In such circumstances, the Bank shall hold, as agent of all Ineligible Persons, all Common Shares otherwise deliverable to the Ineligible Persons and shall attempt
to facilitate the sale of such Common Shares to parties other than the Bank and its Affiliates on behalf of such Ineligible Persons through a registered dealer to be retained by the Bank on behalf of such Ineligible Persons. Those sales (if any) may
be made at any time and at any price. The Bank shall not be subject to any liability for failure to sell such Common Shares on behalf of the Ineligible Persons or at any particular price on any particular day. The net proceeds received by the Bank
from the sale of any such Common Shares shall be divided
14
among the Ineligible Persons in proportion to the number of Common Shares that would otherwise have been delivered to them upon the NVCC Automatic Conversion after deducting the costs of sale and
any applicable withholding taxes. The Bank shall deliver a check or send a wire transfer in immediately available funds representing the aggregate net proceeds to DTC (if the Common Shares are then held in the form or one or more global securities)
or in all other cases to such Ineligible Persons in accordance with the regular practices and procedures of DTC or otherwise.
Upon an
NVCC Automatic Conversion, the Bank reserves the right not to deliver some or all, as applicable, of the Common Shares to any Person who, by virtue of the operation of the NVCC Automatic Conversion, would become a Significant Shareholder. In such
circumstances, the Bank shall hold, as agent of that Person, the Threshold Number of Common Shares otherwise deliverable to such Person, and the Bank shall attempt to facilitate the sale of such Common Shares to parties other than the Bank and its
Affiliates on behalf of that Person through a registered dealer to be retained by the Bank on behalf of such Person. Those sales (if any) may be made at any time and at any price. The Bank shall not be subject to any liability for failure to sell
any such Common Shares on behalf of that Person or at any particular price on any particular day. The net proceeds received by the Bank from the sale of any such Common Shares shall be delivered to that Person, after deducting the costs of sale and
any applicable withholding taxes. The Bank shall deliver a check or send a wire transfer in immediately available funds representing the aggregate net proceeds to DTC (if the Common Shares are then held in the form of one or more global securities)
or in all other cases to such Persons in accordance with the regular practices and procedures of DTC or otherwise.
Section 705.
No Entitlement to Interest Following an NVCC Automatic Conversion
Upon an NVCC Automatic Conversion, any accrued and unpaid interest, together with the principal amount of the Notes, shall be deemed paid in
full by the issuance of Common Shares upon such conversion and the Holders of Notes shall have no further rights and the Bank shall have no further obligations under the Indenture. If tax is required to be withheld from such payment of interest in
the form of Common Shares, the number of Common Shares received by a Holder of Notes shall reflect an amount net of any applicable withholding tax.
Section 706.
Fractional Shares
.
In any case where the aggregate number of Common Shares to be issued to a Holder of Notes pursuant to an NVCC Automatic Conversion includes a
fraction of a Common Share, such number of Common Shares to be issued to such Holder shall be rounded down to the nearest whole number of Common Shares and no cash payment shall be made in lieu of such fractional Common Share.
Section 707.
Recapitalizations, Reclassifications and Changes in the Common Shares
.
In the event of a capital reorganization, consolidation, merger or amalgamation of the Bank or comparable transaction affecting the Common
Shares, the Bank shall take necessary action to ensure that Holders of Notes receive, pursuant to an NVCC Automatic Conversion, the
15
number of Common Shares or other securities that such Holders would have received if the NVCC Automatic Conversion occurred immediately prior to the record date for such event.
Section 708.
Adjustments
.
(a) Upon a Common Share Reorganization, the Floor Price shall be adjusted so that it shall equal the price determined by
multiplying the Floor Price in effect immediately prior to such effective date or record date of such event by a fraction:
(i) the numerator of which shall be the total number of Common Shares outstanding on such effective date
or record date before giving effect to such Common Share Reorganization; and
(ii) the denominator
of which shall be the total number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the
number, without duplication, of Common Shares that would have been outstanding had all such securities been exchanged for or converted into Common Shares on such effective date or record date).
The adjustment shall be calculated to the nearest
one-tenth
of one cent provided that no adjustment of
the Floor Price shall be required unless such adjustment would require an increase or decrease of at least 1% of the Floor Price then in effect;
provided
,
however
, that in such case any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustments so carried forward, shall amount to at least 1% of the Floor Price.
(b) In any case in which Section 707 or this Section 708 requires that an adjustment shall become effective
immediately after a record date for an event referred to therein or herein, the Bank may defer, until the occurrence of such event, issuing to the Holders of any Notes upon a NVCC Automatic Conversion occurring after such record date and before the
occurrence of such event, the additional Common Shares issuable upon such conversion by reason of the adjustment required by such event,
provided
,
however
, that the Bank shall deliver to such Holder evidence of such Holder’s right
to receive such additional Common Shares upon the occurrence of such event and the right to receive any dividends or other distributions made on such additional Common Shares declared in favor of Holders of record of Common Shares on and after the
date of the NVCC Automatic Conversion or such later date on which such Holder would, but for the provisions of this Section 708, have become the holder of record of such additional Common Shares.
(c) If at any time a dispute arises with respect to adjustments provided for in Section 707 or this
Section 708, such dispute shall be conclusively determined, subject to the consent if required, of the Toronto Stock Exchange and any other stock exchange on which the Common Shares are then listed, by the Bank’s Auditors, or if they are
unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action of the Board of Directors of the Bank and any such determination shall be binding upon the Bank, the Holders of
16
the Notes and the other shareholders of the Bank. Such auditors or accountants shall be given access to all necessary records of the Bank.
(d) If the Bank sets a record date to take any other action and thereafter and before the taking of any action, the
Bank abandons its plan to take such other action, then no adjustment in the Floor Price shall be made.
(e) The
Bank shall from time to time, immediately after the occurrence of any event that requires an adjustment or readjustment as provided in Section 707 or this Section 708, deliver an Officer’s Certificate of the Bank to the Trustee
specifying the nature of the event requiring the same and the amount of the adjustment or readjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, and the
Trustee shall be entitled to act and rely upon such Officer’s Certificate of the Bank. Such Officer’s Certificate of the Bank and the amount of the adjustment specified therein shall be conclusive and binding on all parties in interest.
Until such Officer’s Certificate of the Bank is received by the Trustee, the Trustee may act and be protected in acting on the presumption that no adjustment has been made or is required. Except in respect of any Common Share Reorganization,
the Bank shall forthwith give notice to the Holders of the Notes specifying the event requiring such adjustment or readjustment and the amount thereof, including the resulting Floor Price.
Section 709.
General
.
(a) Notwithstanding any other provision of the Indenture or the Notes, the conversion of the Notes in connection with an
NVCC Automatic Conversion shall not be an Event of Default and the only consequence of a Trigger Event shall be the conversion of such Notes into Common Shares.
(b) The Trustee shall have no duty to determine the occurrence of an NVCC Automatic Conversion or any calculations in
connection with any such NVCC Automatic Conversion. The Trustee makes no representation as to the validity or value of any securities or assets issued upon an NVCC Automatic Conversion, and the Trustee shall not be responsible for the Bank’s
failure to comply with any provisions of this Article Seven.
Section 710.
Agreements of Holders and Beneficial Owners of
Notes
.
By acquiring any Note, each Holder and beneficial owner of such Note or any interest therein, including any person acquiring
any such Note or interest therein after the date hereof, shall be deemed to have irrevocably acknowledged and agreed with and for the benefit of the Bank and the Trustee as follows:
(a) that a NVCC Automatic Conversion upon the occurrence of a Trigger Event shall not constitute an Event of Default
under the terms of the Notes or the Indenture, and following a NVCC Automatic Conversion no Holder or beneficial owner of the Notes shall have any rights against the Bank with respect to the repayment of the principal of, or interest on, the Notes;
(b) that, upon a NVCC Automatic Conversion, (i) the Trustee shall not be required to take any further
directions from Holders or beneficial owners of the Notes under the Indenture
17
and (ii) the Indenture shall impose no duties upon the Trustee whatsoever with respect to conversion of the Notes into Common Shares upon a Trigger Event;
(c) that such Holder or beneficial owner authorizes, directs and requests DTC and any direct participant in DTC or
other intermediary through which it holds such Notes to take any and all necessary action, if required, to implement the conversion of the Notes into Common Shares upon a Trigger Event without any further action or direction on the part of such
Holder or such beneficial owner or the Trustee; and
(d) that such Holder or beneficial owner acknowledges and
agrees that all authority conferred or agreed to be conferred by any Holder and beneficial owner pursuant to the provisions described above shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and
legal representatives of each Holder and beneficial owner of a Note or any interest therein.
ARTICLE EIGHT
REDEMPTION OF NOTES
Section 801.
Applicability of Article Eleven of the Base Indenture
.
The provisions of Article Eleven of the Base Indenture shall be applicable with respect to the Notes, except as modified herein.
Section 802.
Regulatory Redemption
.
The Bank may, at its option, redeem the Notes with the prior written approval of the Superintendent, in whole but not in part, on not less than
30 days’ and not more than 60 days’ prior notice to the Holders of the Notes, at any time within 90 days following a Regulatory Event Date, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest to, but excluding, the Redemption Date.
The Bank shall, following a Regulatory Event Date, promptly deliver an Officer’s
Certificate of the Bank to the Trustee specifying the nature of such event and a copy of the approval of the Superintendent, and the Trustee shall be entitled to act and rely upon such Officer’s Certificate of the Bank.
Section 803.
Tax Redemption
.
The Bank may, at its option, redeem the Notes, with the prior written approval of the Superintendent, in whole but not in part, on not less
than 30 days’ and not more than 60 days’ prior notice to the Holders of the Notes, at any time following the occurrence of a Tax Event, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued and unpaid interest
to, but excluding, the Redemption Date.
18
Section 804.
Optional Redemption.
The Bank may, at its option, redeem the Notes, with the prior written approval of the Superintendent, in whole but not in part, on not less
than 30 days’ and not more than 60 days’ prior notice to the Holders of the Notes, on the Reset Date, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption
Date.
Section 805.
Mandatory Redemption; Open Market Purchases
.
The Bank shall not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes. Subject to the prior
approval of the Superintendent, the Bank may at any time and from time to time purchase Notes at any price or prices in the open market or otherwise. Notes so purchased by the Bank shall be cancelled and shall not be
re-issued.
Section 806.
Notice of Redemption
.
A notice of redemption delivered in respect of the Notes pursuant to Section 1104 of the Base Indenture shall be irrevocable, except that
the occurrence of a Trigger Event prior to the date fixed for redemption shall automatically rescind such notice of redemption and, in such circumstances, no Notes shall be redeemed and no payment in respect of the Notes shall be due and payable.
ARTICLE NINE
MISCELLANEOUS
PROVISION
Section 901.
Ratification of Base Indenture
.
The Base Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First
Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.
Section 902.
Trustee Not Responsible for Recitals
.
The recitals contained herein and in the Notes, except for a Trustee’s certificate of authentication, shall be taken as the statements of
the Bank, and the Trustee assume no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this First Supplement Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Bank of Notes or the proceeds thereof.
Section 903.
Execution in Counterparts
.
This First 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. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile or electronic format (i.e., “.pdf” or “.tif”)
19
transmission shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture
for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format (i.e., “.pdf” or “.tif”) shall be deemed to be their original signatures for all purposes.
Section 904.
Indenture and Notes Solely Corporate Obligations
.
No recourse under or upon any obligation, covenant or agreement of the Indenture or of Notes, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Bank or of any successor corporation, either directly or through the Bank, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that the Indenture and the Notes are solely corporate obligations, and that no such personal liability whatever shall attach to,
or is or shall be incurred by, the incorporators, shareholders, officers or directors, as such, of the Bank or of any successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in the Indenture or the Notes or implied therefrom; and that any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, shareholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in the Indenture or in the
Notes or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this First Supplemental Indenture and the issue of the Notes.
Section 905.
Agreement of Subsequent Investors.
Holders or beneficial owners of Notes that acquire the Notes in the secondary market shall be deemed to acknowledge, agree to be bound by and
consent to the same provisions specified in the Indenture to the same extent as the Holders or beneficial owners of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and
agreement to be bound by and consent to the terms of the Notes, including in relation to any NVCC Automatic Conversion.
Section 906.
Waiver of Jury Trial
.
EACH OF THE BANK AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
[Signature page follows]
20
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly
executed, all as of the day and year first above written.
|
|
|
|
|
BANK OF MONTREAL
|
|
|
|
|
By:
|
|
/s/ Chris Hughes
|
|
Name:
|
|
Chris Hughes
|
|
Title:
|
|
Deputy Treasurer
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
|
|
|
|
|
By:
|
|
/s/ Yana Kislenko
|
|
Name:
|
|
Yana Kislenko
|
|
Title:
|
|
Vice President
|
21
Exhibit A
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE BANK (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 IN 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.
BANK OF MONTREAL
3.803% Subordinated Notes due 2032
(Non-Viability
Contingent Capital (NVCC))
(Subordinated Indebtedness)
This Security will not constitute a deposit that is insured under
the
Canada Deposit Insurance Corporation Act
or by the
United States Federal Deposit Insurance Corporation.
|
|
|
|
|
|
|
No.:
|
|
|
|
CUSIP No.: 06368B GS1
|
|
|
|
|
|
$
|
|
Issue Date:
Stated Maturity: December 15, 2032
|
|
|
|
|
Bank of Montreal, a Schedule I bank under the
Bank Act
(Canada) (herein called the “Bank”,
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of
$ ( UNITED STATES DOLLARS) on December 15, 2032, and to pay interest thereon from and including
December 12, 2017 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-
annually
on June 15 and December 15 in each year, commencing June 15, 2018, (i) from and including the date of issuance to, but excluding, December 15, 2027 (the
“Reset Date”), at a rate of 3.803% per annum and (ii) from and including the Reset Date to, but excluding, the Maturity Date at a rate per annum which shall be 1.432% above the
5-Year
Mid-Swap
Rate. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the June 1 or December 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment
Date. If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the Bank shall postpone the making of such interest or principal payment to the next succeeding Business Day (and no interest shall be paid in respect
of the delay). 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 may either be paid to the Person in whose name this Security (or one or more Predecessor
Securities) 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 be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Security may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. A “Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions are authorized or required by law or executive order to close in The City of New York,
New York or Toronto, Ontario.
Payment of the principal of and interest on this Security shall be made at the office or agency of the Bank
maintained for that 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
that payment of the principal of and interest on the Securities
represented by one or more Global Securities registered in the name of or held by DTC or its nominee shall be payable in immediately available funds to DTC or its nominee, as the case may be, as the registered holder of such Global Security.
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 executed by a
Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. The signature of the executing officer of the Bank on this Security may
be manual or by facsimile.
2
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly executed.
Dated:
|
|
|
|
|
BANK OF MONTREAL
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Dated:
|
|
|
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION
|
|
As Trustee
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
3
(REVERSE OF SECURITY)
This Security is one of a duly authorized issue of securities of the Bank (herein called the “
Securities
”), issued and to be
issued in one or more series under an Indenture, dated as of December 12, 2017 (the “
Base Indenture
”), among the Bank and Wells Fargo Bank, National Association (herein called the “
Trustee
”, which terms include
any successor trustee under the Indenture), as amended and supplemented by the First Supplemental Indenture, dated as of December 12, 2017, among the Bank and the Trustee (the “
Supplemental
Indenture
” and, together with
the Base Indenture, the “
Indenture
”), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Bank, 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 one of the series designated on the face hereof initially limited in aggregate principal amount to $1,250,000,000, provided the
Bank may, without the consent of any Holder, at any time and from time to time, increase the initial principal amount.
The Securities are
the Bank’s direct unsecured obligations, constituting subordinated indebtedness for the purpose of the Bank Act.
The indebtedness
evidenced by this Security is, to the extent provided in the Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness and this Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his, her or its behalf to take such actions as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the Trustee as his or her
attorney-in-fact
for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness whether now outstanding or hereafter created, incurred, assumed
or guaranteed, and waives reliance by each such holder upon said provisions.
Upon the occurrence of a Trigger Event, each outstanding
Security shall automatically and immediately be converted, on a full and permanent basis, without the consent of the Holders thereof, into that number of fully-paid Common Shares of the Bank determined by dividing (a) the product of the
Multiplier and the Note Value, by (b) the Conversion Price.
The Bank may, at its option, redeem the Notes with the prior written
approval of the Superintendent, in whole but not in part, on not less than 30 days’ and not more than 60 days’ prior notice to the Holders of the Notes, at any time within 90 days following a Regulatory Event Date, at a Redemption Price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date. The Bank may, at its option, redeem the Notes, with the prior written approval of the Superintendent, in whole but not in part,
on not less than 30 days’ and not more than 60 days’ prior notice to the Holders of the Notes, at any time following the occurrence of a Tax Event, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest to, but excluding, the Redemption Date. The Bank may, at its option, redeem the Notes, with the prior written approval of the Superintendent, in whole but not in part, on not less than 30 days’ and not more than 60 days’
prior notice to the
4
Holders of the Notes, on the Reset Date, at a Redemption Price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date.
If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Bank and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Bank and the
Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected, or in certain cases the unanimous consent of each of such Holders. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Bank with certain
provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by 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.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to
the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default
as Trustee and offered the Trustee security or indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any such proceeding, for 90 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this
Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Bank,
which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
For disclosure purposes under the
Interest Act
(Canada), whenever in the Securities of this series or the Indenture interest at a
specified rate is to be calculated on the basis of a period less than a calendar year, the yearly rate of interest to which such rate is equivalent is such rate multiplied by the actual number of days in the relevant calendar year and divided by the
number of days in such period.
5
As provided in the Indenture and subject to certain limitations therein set forth, the transfer
of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Bank in any place where the principal of and any premium and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Bank 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 this series and of like tenor, of authorized denominations and for the same aggregate principal amount, shall be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
Any Holder who transfers any Security shall provide or cause to be
provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The
Trustee may rely on information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
No
service charge shall be made for any such registration of transfer or exchange, but the Bank and the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Bank, the Trustee and any agent of the Bank or the Trustee 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 Bank, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security not otherwise defined herein that are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
6
