FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

For the month of: January, 2022    Commission File Number: 001-13354

BANK OF MONTREAL

(Name of Registrant)

 

100 King Street West  
1 First Canadian Place   129 rue Saint-Jacques
Toronto, Ontario   Montreal, Quebec
Canada, M5X 1A1   Canada, H2Y 1L6
(Executive Offices)   (Head Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F              Form 40-F  

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  Yes    No  

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    .

 

 

INCORPORATION BY REFERENCE

The information contained in this Form 6-K and any exhibits hereto shall be deemed filed with the Securities and Exchange Commission (“SEC”) solely for purposes of incorporation by reference into and as part of the following registration statements of the registrant on file with and declared effective by the SEC:

 

  1.

Registration Statement – Form F-3 – File No. 333-237342

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    BANK OF MONTREAL
    By:  

/s/ Caroline Dufaux

    Name:   Caroline Dufaux
    Title:   Head, Capital Management and Funding
Date: January 10, 2022      


EXHIBIT INDEX

 

Exhibit    Description of Exhibit
1.1    Underwriting Agreement, dated January 5, 2022, among Bank of Montreal and BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. as representatives of the several Underwriters named therein.
4.1    Fourth Supplemental Indenture, dated as of January 10, 2022, between the Bank and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as Trustee.
5.1    Opinion of Sullivan & Cromwell LLP, U.S. counsel to the Bank.
5.2    Opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel to the Bank.
8.1    Opinion of Sullivan & Cromwell LLP, U.S. tax counsel to the Bank.
8.2    Opinion of Osler, Hoskin & Harcourt LLP, Canadian tax counsel to the Bank.
23.1    Consent of Sullivan & Cromwell LLP (included in Exhibit 5.1 and 8.1 above).
23.2    Consent of Osler, Hoskin & Harcourt LLP (included in Exhibit 5.2 and 8.2 above).

Exhibit 1.1

BANK OF MONTREAL

US$1,250,000,000

3.088% Subordinated Notes due 2037

(Non-Viability Contingent Capital (NVCC))

(Subordinated Indebtedness)

Underwriting Agreement

January 5, 2022

BMO Capital Markets Corp.

Goldman Sachs & Co. LLC

Morgan Stanley & Co. LLC

BNP Paribas Securities Corp.

HSBC Securities (USA) Inc.

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., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and HSBC Securities (USA) Inc. (the “Representatives”) are acting as representatives, US$1,250,000,000 aggregate principal amount of the Bank’s 3.088% Subordinated Notes due 2037 (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 dated as of December 12, 2017 (the “Base Indenture”) between the Bank and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended and supplemented by the fourth supplemental indenture to be dated as of January 10, 2022 (the “Fourth 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. 333-237342) on Form F-3 for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of, among other securities, the Securities and the Conversion Shares. 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


January 5, 2022 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 January 5, 2022 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 5:45 p.m. on January 5, 2022. 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

 

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Bank in connection with the offering of the Securities (“Roadshow”), each taken together with the Pricing Disclosure Package, as of the Applicable Time, included 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 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”);

 

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(h)       This Agreement has been duly authorized, executed and delivered by the Bank;

(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 Fourth 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

 

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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);

(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

 

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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 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”) nor, 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

 

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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) 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

 

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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 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

 

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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 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

 

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(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 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;

 

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(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 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 two business 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, any Vice President, any Head, Capital Management 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

 

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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 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-42 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

 

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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 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

 

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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 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, S&P Global Ratings, a division of S&P Global 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.

 

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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: Rick Fullerton.

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

 

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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.

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

 

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sum originally due to such Underwriter or controlling person hereunder, the Bank agrees as a separate 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.

23.        U.S. Special Resolution Regime. In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below), the transfer from such Underwriter of this Underwriting Agreement, and any interest and obligation in or under this Underwriting Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Underwriting Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

In the event that any Underwriter is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under this Underwriting Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Underwriting Agreement were governed by the laws of the United States or a state of the United States.

For purposes of the prior two paragraphs:

BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

Covered Entity” means any of the following:

 

  (i)

a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

 

-17-


  (ii)

a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

  (iii)

a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

-18-


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/ Caroline Dufaux
  Name: Caroline Dufaux
 

Title:    Global Head, Capital Management

            and Funding

 

[Signature Page to Underwriting Agreement]


The foregoing Agreement is hereby

confirmed and accepted as of the

date first above written.

 

BMO CAPITAL MARKETS CORP.
By:        /s/ Zain Leela
  Name:      Zain Leela
  Title:         Director

 

GOLDMAN SACHS & CO. LLC
By:        /s/ Ali Malik
  Name:      Ali Malik
  Title:         Managing Director

 

MORGAN STANLEY & CO. LLC
By:        /s/ Yurij Slyz
  Name:      Yurij Slyz
  Title:         Executive Director

 

BNP PARIBAS SECURITIES CORP.
By:        /s/ Lestocq Orman
  Name:      Lestocq Orman
  Title:         Director, Debt Capital                  Markets

 

HSBC SECURITIES (USA) INC.
By:        /s/ Edward Schweitzer
  Name:      Edward Schweitzer
  Title:         Head of US FIG DCM

For themselves and the other

several Underwriters named in

Schedule II to the foregoing

Agreement

 

[Signature Page to Underwriting Agreement]


Schedule I

January 5, 2022

Pricing Term Sheet

Bank of Montreal

 

LOGO

US$1,250,000,000

3.088% Subordinated Notes due 2037

(Non-Viability Contingent Capital (NVCC))

(Subordinated Indebtedness)

 

Issuer:   

Bank of Montreal (the “Bank”)

Issue:    3.088% Subordinated Notes due 2037 (Non-Viability Contingent Capital (NVCC)) (the “Notes”)
Expected Ratings*:    [intentionally omitted]
Format:    SEC Registered
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, if any, from January 10, 2022
Underwriting Commission:    0.450% per Note

 

SCHEDULE I-1


Net Proceeds to the Bank after Underwriting Commission and Before Expenses:   

US$1,244,375,000

Trade Date:   

January 5, 2022

Issue Date:   

January 10, 2022; (T+3)

Maturity Date:   

January 10, 2037

Reset Date:   

January 10, 2032

Interest Rate:   

Subject to any redemption prior to the Maturity Date, the Notes will bear interest (i) from and including the Issue Date to, but excluding, the Reset Date, at a rate of 3.088% per annum and (ii) from and including the Reset Date to, but excluding, the Maturity Date at a rate per annum equal to the applicable 5- Year Treasury Rate plus 1.40%. For purposes of the foregoing:

 

5-Year Treasury Rate” means the average of the yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, for the five business days appearing (or, if fewer than five business days appear, such number of business days appearing) under the caption “Treasury Constant Maturities” in the most recently published statistical release designated H.15 Daily Update or any successor publication which is published by the Federal Reserve Board, as determined by the calculation agent in its sole discretion. If no calculation is provided as described above, then the calculation agent, after consulting such sources as it deems comparable to any of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, will determine the 5-Year Treasury Rate in its sole discretion, provided that if the calculation agent determines there is an industry-accepted successor five-year treasury rate, then the calculation agent will use such successor rate. If the calculation agent has determined a substitute or successor base rate in accordance with the foregoing, the calculation agent in its sole discretion may determine the business day convention, the definition of business day and the reset rate determination date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to the five-year treasury rate, in a manner that is consistent with industry accepted practices for such substitute or successor base rate.

 

SCHEDULE I-2


  

The 5-Year Treasury Rate will be determined by the calculation agent on the third business day immediately preceding the Reset Date.

 

The interest rate on the Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application. In no event will the interest rate on the Notes be less than zero.

Interest Payment Dates:    Semi-annually on January 10 and July 10 of each year, beginning on July 10, 2022. Interest will accrue from January 10, 2022.
Benchmark Treasury:    1.375% UST due November 15, 2031
Benchmark Treasury Yield:    1.688%
Re-Offer Spread to Benchmark Treasury:    T + 140 basis points
Re-Offer Yield:    3.088%
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, non-assessable and freely tradable common shares of the Bank (the “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

 

SCHEDULE I-3


   are available, the “Current Market Price” will 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 will be calculated to the nearest one-tenth of one cent provided that no adjustment of the Floor Price will 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.

 

Note Value” means, in respect of each Note, the principal amount of such Note plus any 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 in the Prospectus) 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),

 

SCHEDULE I-4


  

Chapter 2 – Definition of Capital, effective November 2018, 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.

Optional 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, plus any 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 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. Neither the failure to make a payment on the Notes when due (including any interest payment) nor an NVCC Automatic Conversion upon the occurrence of a Trigger Event will constitute an Event of Default.
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

 

SCHEDULE I-5


   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.

Goldman Sachs & Co. LLC

Morgan Stanley & Co. LLC

BNP Paribas Securities Corp.

HSBC Securities (USA) Inc.

Co-Managers:   

BofA Securities, Inc.

Citigroup Global Markets Inc.

Desjardins Securities Inc.

J.P. Morgan Securities LLC

Mischler Financial Group, Inc.

National Bank of Canada Financial Inc.

Nomura Securities International, Inc.

Samuel A. Ramirez & Company, Inc.

UBS Securities LLC

Wells Fargo Securities, LLC

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:    06368D H72 / US06368DH723

 

* 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, 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

 

SCHEDULE I-6


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.

Certain of the underwriters may not be U.S. registered broker-dealers and accordingly will not effect any sales within the United States except in compliance with applicable U.S. laws and regulations, including the rules of the Financial Industry Regulatory Authority (“FINRA”).

The Bank has filed a registration statement (File No. 333-237342) (including a base shelf prospectus dated April 20, 2020) and a preliminary prospectus supplement dated January 5, 2022 (including the base shelf prospectus, the “Prospectus”) with the U.S. Securities and Exchange Commission (“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, Goldman Sachs & Co. LLC toll-free at 1-866-471-2526, Morgan Stanley & Co. LLC toll-free at 1-866-718-1649, BNP Paribas Securities Corp. toll-free at 1-800-854-5674 or HSBC Securities (USA) Inc. toll-free at 1-866-811-8049.

 

SCHEDULE I-7


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$375,000,000  

Goldman Sachs & Co. LLC

     212,500,000  

Morgan Stanley & Co. LLC

     212,500,000  

BNP Paribas Securities Corp.

     162,500,000  

HSBC Securities (USA) Inc.

     162,500,000  

BofA Securities, Inc.

     12,500,000  

Citigroup Global Markets Inc.

     12,500,000  

Desjardins Securities Inc.

     12,500,000  

J.P. Morgan Securities LLC

     12,500,000  

Mischler Financial Group, Inc.

     12,500,000  

National Bank of Canada Financial Inc.

     12,500,000  

Nomura Securities International, Inc.

     12,500,000  

Samuel A. Ramirez & Company, Inc.

     12,500,000  

UBS Securities LLC

     12,500,000  

Wells Fargo Securities, LLC

     12,500,000  
  

 

 

 

Total

                 US$1,250,000,000  
  

 

 

 

Price to Public: 100.000%, plus accrued interest, if any, from January 10, 2022

Purchase Price by the Underwriters: 99.550% of the principal amount of the Securities, plus accrued interest, if any, from January 10, 2022 (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: January 10, 2022 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

ANNEX I

 

ANNEX I-1


Form of Letter of Sullivan & Cromwell LLP

ANNEX I

 

ANNEX I-2


ANNEX II

Form of Opinion of Osler, Hoskin & Harcourt LLP

ANNEX II

 

ANNEX II-1


ANNEX III

Underwriters

 

Name:    Contact Information:
BMO Capital Markets Corp.   

151 West 42nd Street, 32nd Floor,

New York, New York 10036

Attention: Legal Department

 

Goldman Sachs & Co. LLC   

200 West Street

New York, NY 10282

Attention: Registration Department

 

Morgan Stanley & Co. LLC   

Morgan Stanley & Co. LLC

1585 Broadway, 29th Floor

New York, NY 10036

Attention: Investment Banking Division

 

BNP Paribas Securities Corp.   

787 Seventh Avenue

New York, New York, 10019

 

HSBC Securities (USA) Inc.   

452 Fifth Avenue

New York, New York 10018

Attention: Transaction Management Group

 

 

ANNEX III-1

Exhibit 4.1

 

 

BANK OF MONTREAL

TO

COMPUTERSHARE TRUST COMPANY, N.A. AS SUCCESSOR TO WELLS FARGO

BANK, NATIONAL ASSOCIATION

Trustee

 

 

Fourth Supplemental Indenture

Dated as of January 10, 2022

to

Indenture

Dated as of December 12, 2017

 

 

Subordinated Debt Securities

 

 

3.088% Subordinated Notes due 2037

(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 Fourth Supplemental Indenture.      6  

Section 104.

   Conflict with Base Indenture.      6  

Section 105.

   Provisions of Trust Indenture Act.      6  

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.      7  

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.      10  

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.      12  

ARTICLE SEVEN

 

CONVERSION INTO COMMON SHARES UPON A TRIGGER EVENT

 

Section 701.

   NVCC Automatic Conversion.      14  

Section 702.

   Conversion Rate.      14  

Section 703.

   Time of NVCC Automatic Conversion.      14  

Section 704.

   Right Not to Deliver Common Shares.      15  

Section 705.

   No Entitlement to Interest Following an NVCC Automatic Conversion      15  

Section 706.

   Fractional Shares.      16  

Section 707.

   Recapitalizations, Reclassifications and Changes in the Common Shares.      16  

Section 708.

   Adjustments.      16  

Section 709.

   General.      17  

Section 710.

   Agreements of Holders and Beneficial Owners of Notes.      18  

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.      19  

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.      20  

Section 903.

   Execution in Counterparts.      20  

Section 904.

   Indenture and Notes Solely Corporate Obligations.      20  

Section 905.

   Agreement of Subsequent Investors.      21  

Section 906.

   Waiver of Jury Trial.      21  

 

ii


FOURTH SUPPLEMENTAL INDENTURE, dated as of January 10, 2022 (this “Fourth Supplemental Indenture”), 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 Computershare Trust Company, N.A. as successor to 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 securities (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 3.088% Subordinated Notes due 2037 (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 Fourth Supplemental Indenture; and

WHEREAS, the Bank has requested that the Trustee execute and deliver this Fourth Supplemental Indenture; and all requirements necessary to make this Fourth 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 Fourth 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 Fourth Supplemental Indenture constitutes an integral part of the Indenture.

 

1


Section 102.    Definition of Terms.

For all purposes of this Fourth 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 Fourth Supplemental Indenture has the same meaning throughout;

(c) unless otherwise specified or unless the context requires otherwise, (i) all references in this Fourth Supplemental Indenture to Sections refer to the corresponding Sections of this Fourth Supplemental Indenture and (ii) the terms “herein”, “hereof”, “hereunder” and any other word of similar import refer to this Fourth Supplemental Indenture; and

(d) the following terms have the meanings given to them in this Section 102(d):

5-Year Treasury Rate” means the average of the yields on actively traded U.S. Treasury securities adjusted to constant maturity, for five-year maturities, for the five business days appearing (or, if fewer than five business days appear, such number of business days appearing) under the caption “Treasury Constant Maturities’’ in the most recently published statistical release designated H.15 Daily Update or any successor publication which is published by the Federal Reserve Board, as determined by the Calculation Agent in its sole discretion. If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable to any of the foregoing calculations, or any such source as it deems reasonable from which to estimate the five-year treasury rate, will determine the 5-Year Treasury Rate in its sole discretion, provided that if the Calculation Agent determines there is an industry-accepted successor five-year treasury rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may determine the business day convention, the definition of business day and the reset rate determination date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to the five-year treasury rate, in a manner that is consistent with industry accepted practices for such substitute or successor base rate.

Additional Amounts” has the meaning specified in Section 601(a).

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.

 

2


Calculation Agent” means such bank or other entity (which may be the Bank or an affiliate of the Bank) as may be appointed by the Bank to act as calculation agent for the Notes.

Canadian Taxes” has the meaning specified in Section 601(a).

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, the Current Market Price shall be the Floor Price.

DTC” has the meaning specified in Section 203.

Early Payment Restrictions” has the meaning specified in Section 503.

FATCA Withholding Tax” has the meaning specified in Section 601(g).

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,

 

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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 January 10, 2022.

Maturity Date” means January 10, 2037.

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 January 10, 2032.

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:

 

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(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 January 5, 2022, 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 January 5, 2022, 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 preceding clause (i), 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, 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

 

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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 November 2018, 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 Fourth Supplemental Indenture.

Nothing in this Fourth 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 Fourth Supplemental Indenture.

Section 104.    Conflict with Base Indenture.

If any provision of this Fourth Supplemental Indenture relating to the Notes is inconsistent with any provision of the Base Indenture, such provision of this Fourth 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 the Trust Indenture Act to be a part of and govern this Fourth Supplemental Indenture, the latter provision shall control. If any provision of this Fourth

 

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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 Fourth Supplemental Indenture as so modified or to be excluded, as the case may be.

Section 106. Separability Clause.

In case any provision in this Fourth 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 Fourth 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 Fourth Supplemental Indenture, which shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal 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 3.088% Subordinated Notes due 2037 (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 January 10, 2037.

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 or 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

 

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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 3.088% per annum and (ii) from and including the Reset Date to, but excluding, the Maturity Date at a rate per annum which shall be 1.40% above the 5-Year Treasury Rate. The 5-Year Treasury Rate shall be determined by the Calculation Agent on the third Business Day immediately preceding the Reset Date.

Interest on the Notes shall be payable semi-annually in arrears on January 10 and July 10 of each year (each, an “Interest Payment Date”), commencing July 10, 2022. The Bank 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).

 

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Interest on the Notes shall in no event be higher than the maximum rate permitted by New York law as the same may be modified by the United States law of general application. In no event shall the interest rate on the Notes be less than zero.

All determinations and calculations of the Calculation Agent, in the absence of manifest error, shall be conclusive and binding on the Bank and the Holders of the Notes. For the avoidance of doubt and notwithstanding anything to the contrary in the Notes or this Fourth Supplementation Indenture, any determination by the Calculation Agent with respect to or in connection with the implementation of a substitute or successor base rate in accordance with the 5-Year Treasury Rate shall become effective without, and shall not be subject to, consent from the holders of the Notes or any other party.

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.

 

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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.

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, facsimile or electronic format (i.e. “.pdf” or “.tif”) 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 Fourth 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.

 

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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.

 

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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 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 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

 

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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

(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)        In the event of the occurrence of any transaction or event resulting in a successor to the Bank, all references to Canada in the preceding paragraphs of this subsection shall be deemed to be references to the jurisdiction of organization of the successor entity.

(g)        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.

 

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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 Event occurs, into fully-paid, non-assessable and freely tradable 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) the 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.

 

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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 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 of 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.

 

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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 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

 

16


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 TSX 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 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.

 

17


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 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

 

18


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.

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. The purchases may be made in the open market or by tender or private agreement, in any manner and at any price or at differing prices. Notwithstanding the foregoing, any subsidiary of the Bank may purchase Notes in the ordinary course of its business of dealing in securities.

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 Fourth Supplemental Indenture, is in all respects ratified and confirmed, and this Fourth Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.

 

19


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 Fourth Supplemental 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; E-signatures; Authorized Officer.

This Fourth 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 Fourth Supplemental Indenture and of signature pages by (i) facsimile or (ii) electronic format (i.e., “.pdf” or “.tif”) transmission or (iii) any electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including relevant provisions of the New York Uniform Commercial Code (collectively, “Signature Law”) shall constitute effective execution and delivery of this Fourth Supplemental Indenture as to the parties hereto and may be used in lieu of the original Fourth Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, electronic format (i.e., “.pdf” or “.tif”) or any electronic signature permitted by Signature Law shall be deemed to be their original signatures for all purposes. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof.

Notwithstanding anything to the contrary in the Indenture, the definition of “Authorized Officer” in the Base Indenture shall be amended by inserting the words “, or the Head, Capital Management and Funding” immediately following the term “Deputy Treasurer”.

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

 

20


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 Fourth 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 FOURTH SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

[Signature page follows]

 

21


IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

BANK OF MONTREAL
By:   /s/ Caroline Dufaux                            
Name: Caroline Dufaux
Title: Head, Capital Management and Funding

 

COMPUTERSHRE TRUST COMPANY, N.A.,

as successor to Wells Fargo Bank,

National Association

as Trustee
By:   /s/ Scott Little                                      
Name: Scott Little
Title: Vice President

 

 

[Signature Page to Fourth Supplemental Indenture]

 

22


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

3.088% Subordinated Notes due 2037

(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.: N-   

CUSIP No.:

06368D H72

Issue Date: January 10, 2022

Stated Maturity: January 10, 2037

   $

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 January 10, 2037, and to


pay interest thereon from and including January 10, 2022 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on January 10 and July 10 in each year, commencing July 10, 2022, (i) from and including the date of issuance to, but excluding, January 10, 2032 (the “Reset Date”), at a rate of 3.088% per annum and (ii) from and including the Reset Date to, but excluding, the Maturity Date at a rate per annum which shall be 1.40% above the 5-Year Treasury 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 December 26 or June 25 (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, by facsimile, electronic format (i.e. “.pdf” or “.tif”) or any electronic signature permitted by Signature Law.

 

2


IN WITNESS WHEREOF, the Bank has caused this instrument to be duly executed.

Dated: January 10, 2022

 

BANK OF MONTREAL
By:    
Name: Caroline Dufaux
Title: Head, Capital Management and Funding

 

3


TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

Dated: January 10, 2022

 

COMPUTERSHARE TRUST COMPANY,
N.A. as successor to Wells Fargo Bank,
National Association,
As Trustee
By:    
Name:  
Title:  

 

4


(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 Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association (herein called the “Trustee”, which terms include any successor trustee under the Indenture), as amended and supplemented by the Fourth Supplemental Indenture, dated as of January 10, 2022, 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 a number of fully-paid, non-assessable and freely tradable 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 Securities 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 Securities, 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 Securities, 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 Securities, 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

 

5


Date. The Bank may, at its option, redeem the Securities, 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 Securities, 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

 

6


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, 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.

 

7

Exhibit 5.1

 

LOGO

 

TELEPHONE: 1-212-558-4000

 

FACSIMILE: 1-212-558-3588

 

WWW.SULLCROM.COM

  

125 Broad Street

New York, New York 10004-2498

 

___________

 

LOS ANGELES • PALO ALTO • WASHINGTON, D.C.

 

BRUSSELS • FRANKFURT • LONDON • PARIS

 

BEIJING • HONG KONG • TOKYO

 

MELBOURNE • SYDNEY

January 10, 2022                                    

Bank of Montreal,

100 King Street West,

1 First Canadian Place,

Toronto, Ontario,

Canada M5X 1A1.

Ladies and Gentlemen:

We are acting as counsel to Bank of Montreal, a Canadian chartered bank (the “Bank”), in connection with the issuance and delivery of US$1,250,000,000 principal amount of the Bank’s 3.088% Subordinated Notes due 2037 (Non-Viability Contingent Capital (NVCC)) (the “Notes”). The Bank filed with the Securities and Exchange Commission, on March 23, 2020, a registration statement on Form F-3 (File No. 333-237342), as subsequently amended on April 20, 2020 (the “Registration Statement”) under the Securities Act of 1933 (the “Act”) relating to, among other things, the proposed offer and sale of US$1,250,000,000 aggregate principal amount of the Notes. The Notes are being issued pursuant to the Indenture, dated as of December 12, 2017, as supplemented by the Fourth Supplemental Indenture thereto, dated as of January 10, 2022 (together, the “Indenture”), between the Bank and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”).

We have examined such corporate records, certificates and other documents, and such questions of United States federal and New York state 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 the Notes constitute valid and legally binding obligations of the Bank, 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 subordination provisions of the Indenture or the Notes or the provisions of the Indenture or the Notes relating to an NVCC Automatic Conversion upon the occurrence of a Trigger Event (as such terms are defined in the Indenture) that, under the terms of the Indenture or the Notes, as applicable, are governed by the laws of the Province of Ontario and the federal law of Canada applicable therein.

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.


Bank of Montreal       -2-

 

In rendering the foregoing opinion, we are not passing upon, and assume no responsibility for, any disclosure in the Registration Statement or any related prospectus or other offering material regarding the Bank or the Notes or their offering and sale.

We have relied as to certain factual matters on information obtained from public officials, officers of the Bank and other sources believed by us to be responsible, and we have assumed, without independent verification, that the Bank is duly organized, validly existing and in good standing under the laws of Canada, that all corporate action by the Bank related to the Notes was duly authorized as a matter of Canadian law, that the Indenture has been duly authorized, executed and delivered by the Bank insofar as the laws of Canada are concerned, that the Indenture has been duly authorized, executed and delivered by the Trustee, that the Notes conform to the specimens thereof examined by us, that the Notes have been duly authenticated by one of the Trustee’s authorized officers, that the Notes have been delivered against payment as contemplated in the Registration Statement and that the signatures on all documents examined by us are genuine.

We hereby consent to the filing of this opinion as an exhibit to a Current Report on Form 6-K to be incorporated by reference in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

 

Very truly yours,
/s/ SULLIVAN & CROMWELL LLP

Exhibit 5.2

 

    

 

Osler, Hoskin & Harcourt LLP

Box 50, 1 First Canadian Place

Toronto, Ontario, Canada M5X 1B8

416.362.2111 MAIN

416.862.6666 FACSIMILE

     

LOGO

 

 

Toronto

 

Montréal

 

Calgary

 

Ottawa

 

Vancouver

 

New York

  

January 10, 2022

 

Bank of Montreal

1 First Canadian Place

18th Floor

Toronto, ON M5X 1A1

 

Dear Sirs/Mesdames:

Bank of Montreal – US$1,250,000,000 3.088% Subordinated Notes due 2037 (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 3.088% Subordinated Notes due 2037 (Non-Viability Contingent Capital (NVCC)) (the “Notes”) pursuant to an underwriting agreement dated January 5, 2022 (the “Underwriting Agreement”) among the Bank and BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and HSBC Securities (USA) Inc., 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 Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended and supplemented by the fourth supplemental indenture dated as of January 10, 2022 (the “Fourth Supplemental Indenture” and together with the Base Indenture, the “Indenture”), between the Bank and the Trustee.

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 January 5, 2022 (the “Preliminary Prospectus Supplement”), the final prospectus supplement dated January 5, 2022 (the “Final Prospectus Supplement”) and the base


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prospectus dated April 20, 2020 (the “Base Prospectus” and together with the Preliminary Prospectus Supplement and the Final Prospectus Supplement, the “Prospectus”);

 

  2.

the Underwriting Agreement; and

 

  3.

the Indenture.

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;

 

  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 March 23, 2020 and Amendment No. 1 thereto dated April 20, 2020 (collectively, the “Registration Statement”), the Prospectus, and the creation and issuance of the Notes and other related matters; and

 

  3.

a Certificate of Confirmation dated January 7, 2022 issued by the Superintendent of Financial Institutions Canada in respect of the Bank (the “Certificate of Confirmation”).

We understand that the Registration Statement and the Prospectus were filed with the Commission in connection with the Notes.

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, facsimile or electronic 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 3 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.


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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) and has the corporate power to own, lease and operate its properties, to conduct its business as described in the Prospectus, to create, issue and sell the Notes, to issue and deliver the Common Shares into which the Notes may be converted upon a NVCC Automatic Conversion (as defined in the Indenture), and to execute, deliver and perform its obligations under the Indenture.

 

  2.

The creation, issuance, sale and delivery of the Notes have been duly authorized by the Bank and the Notes have been, to the extent issuance, execution and delivery are matters governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, duly issued, executed and delivered by the Bank. All necessary corporate action has been taken by the Bank to 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 such Common Shares, when duly issued in accordance with the Indenture, will be validly issued, fully paid and non-assessable shares. The Notes, 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 their terms.

 

  3.

The Indenture has been duly authorized, executed and, to the extent delivery is a matter governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, delivered by the Bank and, with respect to the provisions thereof governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, constitutes a legal, valid and binding obligation of the Bank enforceable in accordance with its terms.

 

  4.

The execution and delivery by the Bank of, and the performance by the Bank of its obligations under, the Notes and the Indenture, and the issuance and delivery of the Common Shares upon a NVCC Automatic Conversion (as defined in the Indenture), do not contravene any existing provision of applicable law or result in a breach (whether after notice or lapse of time or both) of any of the terms, conditions or provisions of the Bank Act (Canada) or the by-laws of the Bank.

The opinions set forth in paragraphs 2 and 3 above as to the enforceability of the Notes and the Indenture, respectively, are subject to the qualifications that:

 

  (i)

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;


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  (ii)

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

 

  (iii)

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.

This opinion is rendered solely in connection with the transactions covered hereby, is limited to the matters stated herein, and no opinions may be implied or inferred beyond matters expressly stated herein.

We hereby consent to the filing of this opinion as an exhibit to a Current Report on Form 6-K to be incorporated by reference in the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the United States Securities Act of 1933.

Yours truly,

/s/ Osler, Hoskin & Harcourt LLP

Exhibit 8.1

 

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TELEPHONE: 1-212-558-4000

FACSIMILE: 1-212-558-3588

WWW.SULLCROM.COM

  

 

125 Broad Street

New York, New York 10004-2498

 

LOS ANGELES • PALO ALTO • WASHINGTON, D.C.

 

BRUSSELS • FRANKFURT • LONDON • PARIS

 

BEIJING • HONG KONG • TOKYO

 

MELBOURNE • SYDNEY

 

January 10, 2022

Bank of Montreal,

100 King Street West,

1 First Canadian Place,

Toronto, Ontario,

Canada M5X 1A1.

Ladies and Gentlemen:

We are acting as special United States federal taxation counsel to Bank of Montreal, a Canadian chartered bank (the “Bank”), in connection with the issuance and delivery of the debt securities identified in Annex A to this letter (the “Notes”) as described in the Prospectus Supplement dated January 5, 2022 (the “Prospectus Supplement”) to the Prospectus dated April 20, 2020 (the “Prospectus”) contained in the Registration Statement on Form F-3, File No. 333-237342 (the “Registration Statement”). We hereby confirm to you that the statements of U.S. tax law set forth under the heading “U.S. Federal Income Tax Considerations” in the Prospectus Supplement are our opinion and constitute a fair and accurate summary of the material tax consequences of owning the Notes, subject to the limitations and exceptions set forth in the Prospectus.

We hereby consent to the filing of this opinion as an exhibit to a Current Report on Form 6-K incorporated by reference in the Registration Statement, and to the reference to our opinion in the Prospectus Supplement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

 

Very truly yours,
/s/ SULLIVAN & CROMWELL LLP


ANNEX A

 

Title of Note

  

Date of Prospectus Supplement

  

Date of Issue of Note

US$1,250,000,000 aggregate

principal amount of 3.088%

Subordinated Notes due 2037

(Non-Viability Contingent Capital

(NVCC))

  

January 5, 2022

  

January 10, 2022

Exhibit 8.2

 

    

 

Osler, Hoskin & Harcourt LLP

Box 50, 1 First Canadian Place

Toronto, Ontario, Canada M5X 1B8

416.362.2111 MAIN

416.862.6666 FACSIMILE

     

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Toronto

 

Montréal

 

Calgary

 

Ottawa

 

Vancouver

 

New York

  

January 10, 2022

 

Bank of Montreal

1 First Canadian Place

18th Floor

Toronto, ON M5X 1A1

 

Dear Sirs/Mesdames:

Bank of Montreal – US$1,250,000,000 3.088% Subordinated Notes due 2037 (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 the Bank’s 3.088% Subordinated Notes due 2037 (Non-Viability Contingent Capital (NVCC)) (the “Notes”).

We hereby confirm to you that the statements of Canadian tax law set forth under the heading “Canadian Federal Income Tax Considerations” in the final prospectus supplement relating to the Notes, dated January 5, 2022 (the “Prospectus Supplement”), are our opinion and are accurate in all material respects subject to the limitations and qualifications therein.

We hereby consent to the filing of this opinion as an exhibit to the Bank’s Report of Foreign Private Issuer on Form 6-K and to the reference to us under the heading “Canadian Federal Income Tax Considerations” in the Prospectus Supplement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the United States Securities Act of 1933.

 

        Yours truly,
   /s/ Osler, Hoskin & Harcourt LLP