AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 2004
REGISTRATION NO. 333-114696
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM F-9
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CANADIAN PACIFIC RAILWAY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CANADA 4011 98-0001377
(PROVINCE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION NO.,
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IF APPLICABLE)
SUITE 500, 401 - 9TH AVENUE S.W.
CALGARY, ALBERTA
CANADA T2P 4Z4
(403) 319-7000
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
CT CORPORATION SYSTEM
111 - 8TH AVENUE
NEW YORK, NEW YORK 10011
(212) 894-8940
(NAME, ADDRESS AND TELEPHONE NUMBER (INCLUDING AREA CODE)
OF AGENT FOR SERVICE IN THE UNITED STATES)
_________________________________
COPIES TO:
PAUL A. GUTHRIE KEVIN E. JOHNSON ANDREW J. FOLEY
CANADIAN PACIFIC RAILWAY COMPANY MACLEOD DIXON LLP EDWIN S. MAYNARD
SUITE 500, 401 9TH AVENUE S.W. 3700 CANTERRA TOWER PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
CALGARY, ALBERTA, CANADA T2P 4Z4 400 - 3RD AVENUE S.W. 1285 AVENUE OF THE AMERICAS
(403) 319-7000 CALGARY, ALBERTA, CANADA T2P 4H2 NEW YORK, NEW YORK 10019-6064
(403) 267-8222 (212) 373-3000
_________________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
PROVINCE OF ALBERTA, CANADA
(PRINCIPAL JURISDICTION REGULATING THIS OFFERING)
It is proposed that this filing shall become effective (check appropriate box
below):
A. [_] upon filing with the Commission, pursuant to Rule 467(a) (if in
connection with an offering being made contemporaneously in the United
States and Canada).
B. [X] at some future date (check appropriate box below)
1. [_] pursuant to Rule 467(b) on ( ) at ( ) (designate a time
not sooner than 7 calendar days after filing).
2. [_] pursuant to Rule 467(b) on ( ) at ( ) (designate a time
7 calendar days or sooner after filing) because the securities
regulatory authority in the review jurisdiction has issued a
receipt or notification of clearance on ( ).
3. [X] pursuant to Rule 467(b) as soon as practicable after
notification of the Commission by the Registrant or the Canadian
securities regulatory authority of the review jurisdiction that a
receipt or notification of clearance has been issued with respect
hereto.
4. [_] after the filing of the next amendment to this Form (if
preliminary material is being filed).
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to the home jurisdiction's shelf
prospectus offering procedures, check the following box. |X|
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE AS PROVIDED IN RULE 467 UNDER THE SECURITIES
ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A)
OF THE ACT, MAY DETERMINE.
PART I
INFORMATION REQUIRED TO BE
DELIVERED TO OFFEREES OR PURCHASERS
BASE SHELF PROSPECTUS
[GRAPHIC OMITTED]
[LOGO - CANADIAN PACIFIC RAILWWAY]
US$750,000,000
DEBT SECURITIES
Canadian Pacific Railway Company may from time to time, during the 25
month period that this prospectus (including any amendments hereto) remains
effective, offer for sale debt securities in an aggregate principal amount of up
to US$750,000,000 or its equivalent in any other currency. These debt securities
may consist of debentures, notes or other types of debt and may be issuable in
series.
We will provide the specific terms of these securities and all
information omitted from this prospectus in supplements to this prospectus that
will be delivered to you together with this prospectus. You should read this
prospectus and the supplements carefully before you invest.
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
WE ARE PERMITTED TO PREPARE THIS PROSPECTUS IN ACCORDANCE WITH CANADIAN
DISCLOSURE REQUIREMENTS, WHICH ARE DIFFERENT FROM THOSE OF THE UNITED STATES. WE
PREPARE OUR FINANCIAL STATEMENTS IN ACCORDANCE WITH CANADIAN GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, AND THEY ARE SUBJECT TO CANADIAN AUDITING AND AUDITOR
INDEPENDENCE STANDARDS. THUS, THEY MAY NOT BE COMPARABLE TO THE FINANCIAL
STATEMENTS OF UNITED STATES COMPANIES.
OWNING THE SECURITIES MAY SUBJECT YOU TO TAX CONSEQUENCES BOTH IN THE
UNITED STATES AND CANADA. THIS PROSPECTUS OR ANY APPLICABLE PROSPECTUS
SUPPLEMENT MAY NOT DESCRIBE THESE TAX CONSEQUENCES FULLY. YOU SHOULD READ THE
TAX DISCUSSION IN ANY APPLICABLE PROSPECTUS SUPPLEMENT.
YOUR ABILITY TO ENFORCE CIVIL LIABILITIES UNDER UNITED STATES FEDERAL
SECURITIES LAWS MAY BE AFFECTED ADVERSELY BECAUSE WE ARE INCORPORATED UNDER THE
LAWS OF CANADA, MOST OF OUR OFFICERS AND DIRECTORS AND MOST OF THE EXPERTS NAMED
IN THIS PROSPECTUS ARE RESIDENTS OF CANADA, AND ALL OR A SUBSTANTIAL PORTION OF
OUR ASSETS ARE LOCATED OUTSIDE THE UNITED STATES.
THE DEBT SECURITIES OFFERED HEREBY HAVE NOT BEEN QUALIFIED FOR SALE
UNDER THE SECURITIES LAWS OF ANY PROVINCE OR TERRITORY OF CANADA AND ARE NOT
BEING AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN CANADA OR TO
ANY RESIDENT OF CANADA IN CONTRAVENTION OF THE SECURITIES LAWS OF ANY PROVINCE
OR TERRITORY OF CANADA.
THERE IS NO MARKET THROUGH WHICH THESE SECURITIES MAY BE SOLD AND
PURCHASERS MAY NOT BE ABLE TO RESELL SECURITIES PURCHASED UNDER THIS SHORT FORM
PROSPECTUS.
___________________________
May 6 , 2004
TABLE OF CONTENTS
PAGE
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About This Prospectus..........................................................2
Where You Can Find More Information............................................2
Forward Looking Statements.....................................................4
Canadian Pacific Railway Company...............................................6
Use of Proceeds................................................................6
Description of Debt Securities.................................................6
Plan of Distribution..........................................................18
Earnings Coverage.............................................................19
Certain Income Tax Considerations.............................................20
Risk Factors..................................................................21
Legal Matters.................................................................23
Experts .....................................................................23
Documents Filed as Part of the U.S. Registration Statement....................23
Consent of Auditors...........................................................24
ABOUT THIS PROSPECTUS
In this prospectus, unless otherwise specified or the context otherwise
requires, references to "Canadian Pacific Railway", "us", "we" or "our" mean
Canadian Pacific Railway Company and its subsidiaries. Unless otherwise
specified, all dollar amounts contained herein are expressed in Canadian
dollars, and references to "dollars", "Cdn$" or "$" are to Canadian dollars and
all references to "US$" are to United States dollars.
This prospectus is part of a registration statement on Form F-9
relating to the debt securities that we filed with the U.S. Securities and
Exchange Commission ("SEC"). Under the registration statement, we may, from time
to time, sell any combination of the debt securities described in this
prospectus in one or more offerings up to an aggregate principal amount of
US$750,000,000. This prospectus provides you with a general description of the
debt securities that we may offer. Each time we sell debt securities under the
registration statement, we will provide a prospectus supplement that will
contain specific information about the terms of that offering of debt
securities. The prospectus supplement may also add, update or change information
contained in this prospectus. Before you invest, you should read both this
prospectus and any applicable prospectus supplement together with additional
information described under the heading "Where You Can Find More Information".
This prospectus does not contain all of the information set forth in the
registration statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. Reference is made to the registration
statement and the exhibits thereto for further information with respect to
Canadian Pacific Railway and the debt securities.
Unless otherwise indicated, all financial information included and
incorporated by reference in this prospectus is determined using Canadian
generally accepted accounting principles, referred to as "Canadian GAAP".
Canadian GAAP differs from generally accepted accounting principles in the
United States, referred to as "U.S. GAAP". Therefore, the consolidated financial
statements incorporated by reference in this prospectus may not be comparable to
financial statements prepared in accordance with U.S. GAAP. A discussion of the
principal differences between the financial results calculated under Canadian
GAAP and under U.S. GAAP is provided in the notes to the annual consolidated
financial statements incorporated by reference in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Canadian Pacific Railway Company is a wholly-owned subsidiary of
Canadian Pacific Railway Limited ("CPRL"), a publicly traded corporation whose
common shares are listed on the Toronto and New York stock exchanges. Pursuant
to a decision of the applicable Canadian securities regulatory authorities, we
are not subject to certain Canadian continuous disclosure
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requirements provided that CPRL complies with its continuous disclosure
requirements. We remain responsible for filing material change reports upon the
occurrence of a material change in our affairs which is not also a material
change in the affairs of CPRL. The decision further permits us to incorporate by
reference in this prospectus all information or documents that would be required
to be incorporated by reference in a short form prospectus filed by CPRL.
We and CPRL are subject to the information requirements of the U.S.
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports and other information with the SEC. Under the
multijurisdictional disclosure system adopted by Canada and the United States,
such reports and other information may be prepared in accordance with the
disclosure requirements of Canada, which requirements are different from those
of the United States. You may read any document we and CPRL furnish to the SEC
at the SEC's public reference room at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C., 20549. Copies of the same documents may also be obtained from
the public reference room of the SEC at 450 Fifth Street, N.W., Washington D.C.,
20549 by paying a fee. Please call the SEC at 1-800-SEC-0330 or access its
website at WWW.SEC.GOV for further information on the public reference rooms.
Our and CPRL's filings since November 2002 are also electronically available
from the SEC's Electronic Document Gathering and Retrieval System, which is
commonly known by the acronym EDGAR and which may be accessed at WWW.SEC.GOV, as
well as from commercial document retrieval services.
Under applicable law, we are permitted to incorporate by reference in
this prospectus documents which have been filed with securities commissions in
Canada, which means that we can disclose important information to you by
referring you to those documents. Information that is incorporated by reference
is an important part of this prospectus. We incorporate by reference the
documents listed below, which were filed with the securities commission or other
similar authority in each of the provinces of Canada:
o the annual information form of CPRL dated March 3, 2004
including management's discussion and analysis for the year
ended December 31, 2003 incorporated therein by reference;
o CPRL's audited consolidated balance sheets as at December 31,
2003 and 2002 and the consolidated statements of income,
retained income and cash flows for each of the three years in
the period ended December 31, 2003, together with the report
of the auditors thereon;
o CPRL's unaudited comparative interim consolidated financial
statements for the three months ended March 31, 2004 including
management's discussion and analysis; and
o CPRL's management proxy circular dated February 19, 2004,
excluding the portions under the headings "Statement of
Executive Compensation - Compensation Committee Report on
Executive Compensation", "Performance Graph" and "Additional
Items - Corporate Governance" and excluding Appendix 1,
Appendix 2 and Appendix 3.
Any annual information form, audited annual consolidated financial
statements (together with the auditor's report thereon), information circular
(excluding any portions thereof not required to be incorporated by reference
into this prospectus), unaudited interim consolidated financial statements and
the accompanying management's discussion and analysis or material change reports
(excluding confidential material change reports) subsequently filed by CPRL or
us with securities commissions or similar authorities in the relevant provinces
and territories of Canada after the date of this prospectus and prior to the
termination of the offering of debt securities under any prospectus supplement
shall be deemed to be incorporated by reference into this prospectus. To the
extent that any document or information incorporated by reference into this
prospectus is included in a report that is filed with or furnished to the SEC by
CPRL or us on Form 40-F, 20-F, 10-K, 10-Q, 8-K or 6-K (or any respective
successor form), such document or information shall also be deemed to be
incorporated by reference as an exhibit to the registration statement relating
to the debt securities of which this prospectus forms a part.
Upon a new annual information form and related annual financial
statements being filed by CPRL with and, where required, accepted by, the
applicable securities regulatory authorities during the currency of this
prospectus, the previous annual information form, annual financial statements
and all interim financial statements and the accompanying management's
discussion and analysis, material change reports and management proxy circulars
filed prior to the commencement of the then current fiscal year of CPRL will be
deemed no longer to be incorporated into
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this prospectus for purposes of future offers and sales of debt securities under
this prospectus. Upon interim consolidated financial statements and the
accompanying management's discussion and analysis being filed by CPRL with the
applicable securities regulatory authorities during the currency of this
prospectus, all interim consolidated financial statements and the accompanying
management's discussion and analysis filed prior to the new interim consolidated
financial statements shall be deemed no longer to be incorporated into this
prospectus for purposes of future offers and sales of debt securities under this
prospectus.
Copies of each of the documents incorporated by reference into this
prospectus may be obtained by accessing our and CPRL's disclosure documents
available through the Internet on the Canadian System for Electronic Document
Analysis and Retrieval (SEDAR) which may be accessed at WWW.SEDAR.COM or by
requesting a free copy of such documents by writing or calling Canadian Pacific
Railway at the following address and telephone number: Canadian Pacific Railway
Company, Suite 500, 401 - 9th Avenue S.W., Calgary, Alberta, T2P 4Z4, Attention:
Corporate Secretary, (403) 319-6171.
Updated interest coverage ratios will be filed by CPRL quarterly with
the applicable securities regulatory authorities, including the SEC, either as
prospectus supplements or exhibits to CPRL's unaudited interim consolidated
financial statements and audited annual consolidated financial statements and
will be deemed to be incorporated by reference in this prospectus for the
purpose of the offering of the debt securities.
A prospectus supplement containing the specific variable terms of an
offering of debt securities will be delivered to purchasers of such debt
securities together with this prospectus and will be deemed to be incorporated
by reference into this prospectus as of the date of such prospectus supplement
and only for the purposes of the offering of the debt securities covered by that
prospectus supplement.
ANY STATEMENT CONTAINED IN THIS PROSPECTUS OR IN A DOCUMENT
INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO
BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A
STATEMENT CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT WHICH
ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE HEREIN MODIFIES OR
SUPERSEDES SUCH PRIOR STATEMENT. ANY STATEMENT OR DOCUMENT SO MODIFIED OR
SUPERSEDED SHALL NOT, EXCEPT TO THE EXTENT SO MODIFIED OR SUPERSEDED, BE
INCORPORATED BY REFERENCE AND CONSTITUTE A PART OF THIS PROSPECTUS.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR CONTAINED IN ANY APPLICABLE PROSPECTUS
SUPPLEMENT AND ON THE OTHER INFORMATION INCLUDED IN THE REGISTRATION STATEMENT
OF WHICH THIS PROSPECTUS FORMS A PART. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE
YOU WITH DIFFERENT OR ADDITIONAL INFORMATION. WE ARE NOT MAKING AN OFFER OF
THESE DEBT SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED BY
LAW. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR CONTAINED IN ANY APPLICABLE PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THE
APPLICABLE PROSPECTUS SUPPLEMENT.
FORWARD LOOKING STATEMENTS
This prospectus contains or incorporates by reference certain forward
looking statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact included or incorporated by reference in this prospectus that
address activities, events or developments that we expect or anticipate may or
will occur in the future are forward looking statements, and indicate such
things as:
o future capital expenditures (including the amount and nature
thereof);
o business strategies and measures to implement strategies;
o competitive strengths, goals, expansion and growth of our
business and operations; and
o plans and references to our future success and the future
success of companies in which we have equity investments.
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Such forward looking statements are subject to risks, uncertainties and
other factors, many of which are beyond our control, including:
o competition in the railway industry;
o general economic, market or business conditions;
o the opportunities (or lack thereof) that may be presented to
and pursued by us and the companies in which we have equity
investments;
o changes in laws or regulations;
o labour shortages or stoppages; and
o other factors, many of which are beyond our control and the
companies in which we have equity investments.
We caution that the foregoing list of important factors is not
exhaustive. Events or circumstances could cause our actual results to differ
materially from those estimated or projected and expressed in, or implied by,
these forward looking statements. You should also carefully consider the matters
discussed under "Risk Factors" in this prospectus. We do not undertake any
obligation to update publicly or otherwise revise any forward looking
statements, whether as a result of new information, future events or otherwise,
or the foregoing list of factors affecting this information.
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CANADIAN PACIFIC RAILWAY COMPANY
We are one of Canada's oldest corporations and were North America's
first transcontinental railway. From our inception 120 years ago, we have
developed into a fully integrated and technologically advanced Class I railway
providing rail and intermodal freight transportation services over a 14,000 mile
network serving the principal business centres of Canada, the U.S. Midwest and
the U.S. Northeast. We are a wholly-owned subsidiary of CPRL. Our head office
and our registered office is located at Suite 500, 401 - 9th Avenue S.W.,
Calgary, Alberta, T2P 4Z4.
USE OF PROCEEDS
Unless otherwise indicated in an applicable prospectus supplement
relating to a series of debt securities, we will use the net proceeds we receive
from the sale of the debt securities for general corporate purposes, which may
include financing our capital expenditure program and working capital
requirements. We may also use such proceeds for the repayment of indebtedness.
The amount of net proceeds to be used for any such purpose will be set forth in
the applicable prospectus supplement. We may, from time to time, issue debt
instruments and incur additional indebtedness other than through the issue of
debt securities pursuant to this prospectus.
DESCRIPTION OF DEBT SECURITIES
In this section only, "we", "us" or "our" refer only to Canadian
Pacific Railway Company without any of its subsidiaries through which it
operates.
The following description sets forth certain general terms and
provisions of the debt securities. The particular terms and provisions of the
series of debt securities offered by any prospectus supplement, and the extent
to which the general terms and provisions described below may apply thereto,
will be described in the applicable prospectus supplement, which may provide
information that is different from this prospectus.
The debt securities will be issued under a trust indenture (the
"Indenture") dated as of October 30, 2001 between us and The Bank of New York,
as trustee (the "Trustee"), as supplemented by the first supplemental indenture.
A copy of the form of the Indenture and a copy of the form of the first
supplemental indenture have been filed with the SEC as exhibits to the
registration statement of which this prospectus is a part. Debt securities may
also be issued under new indentures between us and a trustee or trustees as will
be discussed in a prospectus supplement for such debt securities. The following
statements with respect to the Indenture and the Securities (as hereinafter
defined) are brief summaries of certain provisions of the Indenture and do not
purport to be complete; these statements are subject to the detailed referenced
provisions of the Indenture, including the definition of capitalized terms used
under this caption. Wherever particular sections or defined terms of the
Indenture are referred to, these sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by this reference. The term "Securities", as used
under this caption, refers to all securities issued under the Indenture,
including the debt securities. Prospective investors should rely on information
in the applicable prospectus supplement if it is different from the following
information.
GENERAL
The Indenture does not limit the aggregate principal amount of
Securities (which may include debentures, notes and other evidences of
indebtedness) which may be issued thereunder, and Securities may be issued
thereunder from time to time in one or more series and may be denominated and
payable in foreign currencies. The Securities offered pursuant to this
prospectus will be issued in an amount up to US$750,000,000 or the equivalent in
other currency or units based on other foreign currencies. The Indenture also
permits us to increase the principal amount of any series of Securities
previously issued and to issue that increased principal amount.
The applicable prospectus supplement will set forth the following terms
relating to the debt securities offered thereby (the "Offered Securities"):
o the specific designation of the Offered Securities;
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o any limit on the aggregate principal amount of the Offered
Securities;
o the extent and manner, if any, to which payment on or in
respect of the Offered Securities will be senior or will be
subordinated to the prior payment of our other liabilities and
obligations;
o the date or dates, if any, on which the Offered Securities
will mature and the portion (if less than all of the principal
amount) of the Offered Securities to be payable upon
declaration of acceleration of maturity;
o the rate or rates (which may be fixed or variable) at which
the Offered Securities will bear interest, if any, the date or
dates from which that interest will accrue and on which that
interest will be payable and the Regular Record Dates for any
interest payable on the Offered Securities which are
Registered Securities;
o any mandatory or optional redemption or sinking fund
provisions, including the period or periods within which, the
price or prices at which and the terms and conditions upon
which the Offered Securities may be redeemed or purchased at
our option or otherwise;
o whether the Offered Securities will be issuable in registered
form or bearer form or both, and, if issuable in bearer form,
the restrictions as to the offer, sale and delivery of the
Offered Securities in bearer form and as to exchanges between
registered and bearer form;
o whether the Offered Securities will be issuable in the form of
one or more Registered Global Securities and, if so, the
identity of the Depository for those Registered Global
Securities;
o the denominations in which any of the Offered Securities which
are in registered form will be issuable, if other than
denominations of US$1,000 and any multiple thereof, and the
denominations in which any of the Offered Securities which are
in bearer form will be issuable, if other than the
denomination of US$1,000;
o each office or agency where the principal of and any premium
and interest on the Offered Securities will be payable, and
each office or agency where the Offered Securities may be
presented for registration of transfer or exchange;
o if other than United States dollars, the foreign currency or
the units based on or relating to foreign currencies in which
the Offered Securities are denominated and/or in which the
payment of the principal of and any premium and interest on
the Offered Securities will or may be payable;
o the terms, if any, on which the Offered Securities may be
converted or exchanged for other of our debt securities or
debt securities of other entities;
o whether and under what circumstances we will pay Additional
Amounts on the Offered Securities of such series in respect of
certain taxes (and the terms of any such payment) and, if so,
whether we will have the option to redeem the Offered
Securities of such series rather than pay the Additional
Amounts (and the terms of any such option);
o any index pursuant to which the amount of payments of
principal of and any premium and interest on the Offered
Securities will or may be determined;
o any applicable Canadian and U.S. federal income tax
considerations; and
o any other terms of the Offered Securities, including covenants
and Events of Default relating solely to the Offered
Securities or any covenants or Events of Default generally
applicable to the Securities which are not to apply to the
Offered Securities.
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Unless otherwise indicated in the applicable prospectus supplement, the
Indenture does not afford the Holders the right to tender Securities to us for
repurchase, or provide for any increase in the rate or rates of interest per
annum at which the Securities will bear interest.
Securities may be issued under the Indenture bearing no interest and
may be offered and sold at a discount below their stated principal amount. The
Canadian and U.S. federal income tax consequences and other special
considerations applicable to those discounted Securities or other Securities
offered and sold at par which are treated as having been issued at a discount
for Canadian and/or U.S. federal income tax purposes will be described in the
prospectus supplement relating thereto.
RANKING AND OTHER INDEBTEDNESS
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities will be our unsecured obligations and will rank pari passu with
all our other unsecured and unsubordinated debt from time to time outstanding
and pari passu with other Securities issued under the Indenture. The debt
securities will be structurally subordinated to all existing and future
liabilities, including trade payables and other indebtedness, of any of our
corporate or partnership subsidiaries.
FORM, DENOMINATION, EXCHANGE AND TRANSFER
Unless otherwise indicated in the applicable prospectus supplement, the
Securities will be issued only in fully registered form without coupons and in
denominations of US$1,000 or any integral multiple thereof. Securities may be
presented for exchange and Registered Securities may be presented for
registration of transfer in the manner, at the places and, subject to the
restrictions set forth in the Indenture and in the applicable prospectus
supplement, without service charge, but upon payment of any taxes or other
governmental charges due in connection therewith. We have appointed the Trustee
as Security Registrar. Securities in bearer form and the coupons appertaining
thereto, if any, will be transferable by delivery.
REGISTERED GLOBAL SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, the
Registered Securities of a particular series will be issued in the form of one
or more Registered Global Securities which will be registered in the name of and
be deposited with a Depository, or its nominee, each of which will be identified
in the prospectus supplement relating to that series. Unless and until
exchanged, in whole or in part, for Securities in definitive registered form, a
Registered Global Security may not be transferred except as a whole by the
Depository for a Registered Global Security to a nominee of that Depository, by
a nominee of that Depository to that Depository or another nominee of that
Depository or by that Depository or any nominee of that Depository to a
successor of that Depository or a nominee of a successor of that Depository.
The specific terms of the depository arrangement with respect to any
portion of a particular series of Securities to be represented by a Registered
Global Security will be described in the prospectus supplement relating to that
series. We anticipate that the following provisions will apply to all depository
arrangements.
Upon the issuance of a Registered Global Security, the Depository
therefor or its nominee will credit, on its book entry and registration system,
the respective principal amounts of the Securities represented by that
Registered Global Security to the accounts of those persons having accounts with
that Depository or its nominee ("participants") as shall be designated by the
underwriters, investment dealers or agents participating in the distribution of
those Securities or by us if those Securities are offered and sold directly by
us. Ownership of beneficial interests in a Registered Global Security will be
limited to participants or persons that may hold beneficial interests through
participants. Ownership of beneficial interests in a Registered Global Security
will be shown on, and the transfer of the ownership of those beneficial
interests will be effected only through, records maintained by the Depository
therefor or its nominee (with respect to beneficial interests of participants)
or by participants or persons that hold through participants (with respect to
interests of persons other than participants). The laws of some states in the
United States require certain purchasers of securities to take physical delivery
thereof in definitive
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form. These depository arrangements and these laws may impair the ability to
transfer beneficial interests in a Registered Global Security.
So long as the Depository for a Registered Global Security or its
nominee is the registered owner thereof, that Depository or its nominee, as the
case may be, will be considered the sole owner or Holder of the Securities
represented by that Registered Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a
Registered Global Security will not be entitled to have Securities of the series
represented by that Registered Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Securities of that
series in definitive form and will not be considered the owners or Holders of
those Securities under the Indenture.
Principal, premium, if any, and interest payments on a Registered
Global Security registered in the name of a Depository or its nominee will be
made to that Depository or nominee, as the case may be, as the registered owner
of that Registered Global Security. None of us, the Trustee or any paying agent
for Securities of the series represented by that Registered Global Security will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial interests in that Registered Global
Security or for maintaining, supervising or reviewing any records relating to
those beneficial interests.
We expect that the Depository for a Registered Global Security or its
nominee, upon receipt of any payment of principal, premium or interest, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of that
Registered Global Security as shown on the records of that Depository or its
nominee. We also expect that payments by participants to owners of beneficial
interests in that Registered Global Security held through those participants
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers registered in "street
name", and will be the responsibility of those participants.
If the Depository for a Registered Global Security representing
Securities of a particular series is at any time unwilling or unable to continue
as Depository, or if the Depository is no longer eligible to continue as
Depository, and a successor Depository is not appointed by us within 90 days, or
if an Event of Default described in clauses (a) or (b) of the first sentence
under "Events of Default" below with respect to a particular series of
Securities has occurred and is continuing, we will issue Registered Securities
of that series in definitive form in exchange for that Registered Global
Security. In addition, we may at any time and in our sole discretion determine
not to have the Securities of a particular series represented by one or more
Registered Global Securities and, in that event, will issue Registered
Securities of that series in definitive form in exchange for all of the
Registered Global Securities representing Securities of that series.
REGISTERED SECURITIES
Unless otherwise indicated in the applicable prospectus supplement,
payment of the principal of and any premium and interest on Registered
Securities (other than a Registered Global Security) will be made at the office
or agency of the Trustee at 101 Barclay Street, 21st Floor West, New York, New
York, 10286, except that, at our option, payment of any interest may be made (a)
by cheque mailed to the address of the Person entitled thereto as that Person's
address will appear in the Security Register or (b) by wire transfer to an
account maintained by the Person entitled thereto as specified in the Security
Register.
NEGATIVE PLEDGE
The Indenture includes a covenant of ours to the effect that, so long
as any of the Securities remain outstanding, we will not, and will not permit
any Subsidiary to, create, assume or otherwise have outstanding any Security
Interest, except for Permitted Encumbrances, on or over any of our present or
future Railway Properties or any of our Subsidiaries or on any shares in the
capital stock of any Railroad Subsidiary securing any Indebtedness of any Person
without also at the same time or prior thereto securing equally and ratably with
such other Indebtedness all of the Securities then Outstanding under the
Indenture.
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CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in
the Indenture. Reference is made to the Indenture for the full definitions of
all such terms.
The term "CAPITAL LEASE OBLIGATION" means the obligation of a Person,
as lessee, to pay rent or other amounts to the lessor under a lease of real or
personal property which is required to be classified and accounted for as a
capital lease on a consolidated balance sheet of such Person in accordance with
GAAP.
The term "CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets determined on a consolidated basis after deducting therefrom:
(a) all current liabilities (excluding any Indebtedness classified
as a current liability and any current liabilities which are
by their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time
as of which the amount thereof is being computed);
(b) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles; and
(c) appropriate adjustments on account of minority interests of
other Persons holding stock of our Subsidiaries,
all as set forth on our most recent balance sheet and our consolidated
Subsidiaries and computed in accordance with GAAP.
The term "GAAP" means generally accepted accounting principles which
are in effect from time to time in Canada (or, if we hereafter determine to
prepare our consolidated financial statements in accordance with generally
accepted accounting principles which are in effect from time to time in the
United States, such principles).
The term "INDEBTEDNESS" means at any time, and whether or not
contingent, all items of indebtedness in respect of any amounts borrowed which,
in accordance with GAAP, would be recorded as indebtedness in our consolidated
financial statements as at the date as of which Indebtedness is to be
determined, and in any event including, without duplication (a) any obligation
for borrowed money, (b) any obligation evidenced by bonds, debentures, notes,
guarantees or other similar instruments, including, without limitation, any such
obligations incurred in connection with the acquisition of property, assets or
businesses, (c) any Purchase Money Obligation, (d) any reimbursement obligation
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (e) any obligation issued or assumed as
the deferred purchase price of property or services, (f) any Capital Lease
Obligation, (g) any payment obligation under interest rate hedging agreements or
arrangements payment of which could not be considered as interest in accordance
with GAAP, (h) any indebtedness in respect of any amounts borrowed or any
Purchase Money Obligation secured by any Security Interest existing on property
owned subject to such Security Interest, whether or not the indebtedness or
Purchase Money Obligation secured thereby shall have been assumed and (i)
guarantees, indemnities, endorsements (other than endorsements for collection in
the ordinary course of business) or similar contingent liabilities in respect of
obligations of another Person for indebtedness of that other Person in respect
of any amounts borrowed by that other Person.
The term "PERMITTED ENCUMBRANCES" means any of the following:
(a) any Security Interest existing as of the date of the first
issuance by us of the Securities issued pursuant to the
Indenture, or arising thereafter pursuant to contractual
commitments entered into prior to such issuance, including
without limitation, any of our outstanding Perpetual 4%
Consolidated Debenture Stock, whether issued, pledged or
vested in trust;
(b) any Security Interest in favor of us or any of our
wholly-owned Subsidiaries;
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(c) any Security Interest existing on the property of any Person
at the time such Person becomes a Subsidiary, or arising
thereafter pursuant to contractual commitments entered into
prior to and not in contemplation of such Person becoming a
Subsidiary;
(d) any Security Interest on property of a Person which Security
Interest exists at the time such Person is merged into, or
amalgamated or consolidated with, us or a Subsidiary, or such
property is otherwise acquired by us or a Subsidiary, provided
that such Security Interest does not extend to property owned
by us or such Subsidiary immediately prior to such merger,
amalgamation, consolidation or acquisition;
(e) any Security Interest already existing on property acquired
(including by way of lease) by us or any of our Subsidiaries
at the time of such acquisition;
(f) any Security Interest securing any Indebtedness incurred in
the ordinary course of business and for the purpose of
carrying on the same, repayable on demand or maturing within
12 months of the date when such Indebtedness is incurred or
the date of any renewal or extension thereof;
(g) any Security Interest in respect of (i) liens for taxes and
assessments not at the time overdue or any liens securing
workmen's compensation assessments, unemployment insurance or
other social security obligations; provided, however, that if
any such liens, duties or assessments are then overdue, we or
the Subsidiary, as the case may be, shall be prosecuting an
appeal or proceedings for review with respect to which it
shall be entitled to or shall have secured a stay in the
enforcement of any such obligations, (ii) any lien for
specified taxes and assessments which are overdue but the
validity of which is being contested at the time by us or the
Subsidiary, as the case may be, in good faith, (iii) any liens
or rights of distress reserved in or exercisable under any
lease for rent and for compliance with the terms of such
lease, (iv) any obligations or duties, affecting our property
or that of a Subsidiary to any municipality or governmental,
statutory or public authority, with respect to any franchise,
grant, license or permit and any defects in title to
structures or other facilities arising from the fact that such
structures or facilities are constructed or installed on lands
held by us or the Subsidiary under government permits, leases,
licenses or other grants, (v) any deposits or liens in
connection with contracts, bids, tenders or expropriation
proceedings, surety or appeal bonds, costs of litigation when
required by law, public and statutory obligations and liens or
claims incidental to current construction or operations
including but not limited to, builders', mechanics',
laborers', materialmen's, warehousemen's, carrier's and other
similar liens, (vi) the right reserved to or vested in any
municipality or governmental or other public authority by any
statutory provision or by the terms of any lease, license,
franchise, grant or permit to terminate any such lease,
license, franchise, grant or permit or to require annual or
other periodic payments as a condition to the continuance
thereof, (vii) any Security Interest the validity of which is
being contested at the time by us or a Subsidiary in good
faith or payment of which has been provided for by creation of
a reserve in an amount in cash sufficient to pay the same in
full, (viii) any easements, rights-of-way and servitudes
(including, without in any way limiting the generality of the
foregoing, easements, rights-of-way and servitudes for
railways, sewers, dykes, drains, gas and water mains or
electric light and power or telephone conduits, poles, wires
and cables) and minor defects, or irregularities of title
that, in our opinion, will not in the aggregate materially and
adversely impair the use or value of the land concerned for
the purpose for which it is held by us or the Subsidiary, as
the case may be, (ix) any security to a public utility or any
municipality or governmental or other public authority when
required by such utility or other authority in connection with
our operations or the operations of our Subsidiary, as the
case may be, (x) any liens and privileges arising out of
judgments or awards with respect to which we or the Subsidiary
shall be prosecuting an appeal or proceedings for review and
with respect to which it shall be entitled to or shall have
secured a stay of execution pending such appeal or proceedings
for review, and (xi) reservations, limitations, provisos and
conditions, if any, expressed in or affecting any grant of
real or immoveable property or any interest therein;
(h) any Security Interest in respect of any Purchase Money
Obligation;
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(i) any extension, renewal, alteration or replacement (or
successive extensions, renewals, alterations or replacements)
in whole or in part, of any Security Interest referred to in
the foregoing clauses (a) through (h) inclusive, provided that
the principal amount of the Indebtedness secured thereby on
the date of such extension, renewal, alteration or replacement
is not increased and the Security Interest is limited to the
property or other assets which secured the Security Interest
so extended, renewed, altered or replaced (plus improvements
on such property or other assets or the proceeds thereof); and
(j) any Security Interest that would otherwise be prohibited
(including any extensions, renewals, alterations or
replacements thereof) provided that the aggregate Indebtedness
outstanding and secured under this clause (j) does not
(calculated at the time of the granting of the Security
Interest) exceed an amount equal to 10% of that portion of
Consolidated Net Tangible Assets attributable to Railway
Properties.
The term "PERSON" means any individual, corporation, limited liability
company, partnership, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
The term "PURCHASE MONEY OBLIGATION" means any monetary obligation
(including a Capital Lease Obligation) created, assumed or incurred prior to, at
the time of, or within 180 days after, the acquisition (including by way of
lease), construction or improvement of any real or tangible personal property,
for the purpose of financing all or any part of the purchase price or lease
payments in respect thereof, provided that the principal amount of such
obligation may not exceed the unpaid portion of the purchase price or lease
payments, as applicable, and further provided that any security given in respect
of such obligation shall not extend to any property other than the property
acquired in connection with which such obligation was created or assumed and
fixed improvements, if any, thereto or erected or constructed thereon and the
proceeds thereof.
The term "RAILROAD SUBSIDIARY" means a Subsidiary whose principal
assets are Railway Properties.
The term "RAILWAY PROPERTIES" means all main and branch lines of
railway located in Canada or the United States, including all real property used
as the right of way for such lines.
The term "SECURITY INTEREST" means any security by way of an
assignment, mortgage, charge, pledge, lien, encumbrance, title retention
agreement or other security interest whatsoever, howsoever created or arising,
whether absolute or contingent, fixed or floating, perfected or not, but not
including any security interest in respect of a lease which is not a Capital
Lease Obligation or any encumbrance that may be deemed to arise solely as a
result of entering into an agreement not in violation of the terms of the
Indenture to sell or otherwise transfer assets or property.
The term "SHAREHOLDERS' EQUITY" means, with respect to any Person, at
any date, the aggregate of the dollar amount of outstanding share capital, the
amount, without duplication, of any surplus, whether contributed or capital, and
retained earnings, subject to any currency translation adjustment, all as set
forth in such Person's most recent annual consolidated balance sheet.
The term "SIGNIFICANT SUBSIDIARY" means a Subsidiary that constitutes a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X of the U.S.
Securities Exchange Act of 1934, as amended.
The term "SUBSIDIARY" means any corporation or other Person of which
there are owned, directly or indirectly, by or for us or by or for any
corporation or other Person in like relation to us, Voting Shares or other
interests which, in the aggregate, entitle the holders thereof to cast more than
50% of the votes which may be cast by the holders of all outstanding Voting
Shares of such first mentioned corporation or other Person for the election of
its directors or, in the case of any Person which is not a corporation, Persons
having similar powers or (if there are no such Persons) entitle the holders
thereof to more than 50% of the income or capital interests (however called)
thereon and includes any corporation in like relation to a Subsidiary.
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The term "VOTING SHARES" means shares of capital stock of any class of
a corporation and other interests of any other Persons having under all
circumstances the right to vote for the election of the directors of such
corporation or in the case of any Person which is not a corporation, Persons
having similar powers or (if there are no such Persons) income or capital
interests (however called), provided that, for the purpose of this definition,
shares or other interests which only carry the right to vote conditionally on
the happening of an event shall not be considered Voting Shares whether or not
such event shall have happened.
CONSOLIDATION, MERGER, AMALGAMATION AND SALE OF ASSETS
We shall not enter into any transaction (whether by way of
reorganization, reconstruction, consolidation, amalgamation, merger, transfer,
sale or otherwise) whereby all or substantially all of our assets would become
the property of any other Person (the "Successor") unless (a) the Successor
shall, prior to or contemporaneously with the consummation of that transaction,
execute those instruments, which may include a supplemental indenture, and do
those things, if any, as shall be necessary or advisable to establish that upon
the consummation of that transaction (i) the Successor will have assumed all of
our covenants and obligations under the Indenture in respect of the Securities
of every series, and (ii) the Securities of every series will be valid and
binding obligations of the Successor entitling the Holders thereof, as against
the Successor Corporation, to all the rights of Holders of Securities under the
Indenture; (b) the Successor is a corporation, company, partnership, or trust
organized and validly existing under the laws of Canada or any province thereof
or of the United States, any state thereof or the District of Columbia and (c)
immediately before and after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing.
We will file with the Trustee, within 15 days after CPRL is required to
file them with the SEC, copies, which may be in electronic format, of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which CPRL may be required to file with the SEC pursuant
to Section 13 or Section 15(d) of the Exchange Act, as amended. Notwithstanding
that CPRL may not be required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, as amended, or otherwise report on an
annual and quarterly basis on forms provided for such annual and quarterly
reporting pursuant to rules and regulations promulgated by the SEC, we will
provide the Trustee:
o within 120 days (or such longer period as the Trustee in its
discretion may consent to) after the end of each fiscal year,
the information required to be contained in CPRL's annual
reports on Form 20-F, Form 40-F or Form 10-K as applicable (or
any successor form); and
o within 65 days (or such longer period as the Trustee in its
discretion may consent to) after the end of each of the first
three fiscal quarters of each fiscal year, the information
required to be contained in CPRL's reports on Form 6-K (or any
successor form) which, regardless of applicable requirements,
will, at a minimum, contain such information required to be
provided in quarterly reports under the laws of Canada or any
province thereof to security holders of a company with
securities listed on the Toronto Stock Exchange, whether or
not CPRL has any of its securities so listed.
EVENTS OF DEFAULT
The occurrence of any of the following events with respect to the
Securities of any series will constitute an "Event of Default" with respect to
the Securities of that series:
(a) default by us in payment of the principal of any of the
Securities of that series when the same becomes due under any
provision of the Indenture or of those Securities;
(b) default by us in payment of any interest due on any of the
Securities of that series and continuance of that default for
a period of 30 days;
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(c) default by us in observing or performing any of the covenants
described above under "Consolidation, Merger, Amalgamation and
Sale of Assets";
(d) default by us in observing or performing any other of our
covenants or conditions contained in the Indenture or in the
Securities of that series and continuance of that default for
a period of 60 days after written notice as provided in the
Indenture;
(e) default by us or any Subsidiary in payment of the principal
of, premium, if any, or interest on any indebtedness for
borrowed money having an outstanding principal amount in
excess of the greater of $75 million and 2% of our
Shareholders' Equity in the aggregate at the time of default
or default in the performance of any other covenant of ours or
any Subsidiary contained in any instrument under which that
indebtedness is created or issued and the holders thereof, or
a trustee, if any, for those holders, declare that
indebtedness to be due and payable prior to the stated
maturities of that indebtedness ("accelerated indebtedness"),
and such acceleration shall not be rescinded or annulled, or
such default under such instrument shall not be remedied or
cured, whether by payment or otherwise, or waived by the
holders of such indebtedness, provided that if such
accelerated indebtedness is the result of an event of default
which is not related to the failure to pay principal or
interest on the terms, at the times and on the conditions set
forth in such instrument, it will not be considered an Event
of Default under this clause (e) until 30 days after such
acceleration;
(f) certain events of bankruptcy, insolvency, winding up,
liquidation or dissolution relating to us or any Significant
Subsidiary;
(g) the taking or entry of certain judgments or decrees against us
or any Subsidiary for the payment of money in excess of the
greater of $75 million and 2% of our Shareholders' Equity in
the aggregate, if we or such Subsidiary, as the case may be,
fail to file an appeal or, if we or such Subsidiary, as the
case may be, do file an appeal, that judgment or decree is not
and does not remain vacated, discharged or stayed as provided
in the Indenture; or
(h) any event of default provided with respect to that series.
If an Event of Default described in clause (a) or (b) above occurs and
is continuing with respect to Securities of any series, unless the principal of
all of the Securities of that series shall have already become due and payable,
the Trustee may, in its discretion, and shall upon request in writing made by
the Holders of not less than 25% in aggregate principal amount of the Securities
of that series then Outstanding, declare the principal of (and premium, if any,
on) all the Securities of that series then Outstanding and the interest accrued
thereon and all other money, if any, owing under the provisions of the Indenture
in respect of those Securities to be due and payable immediately on demand. If
an Event of Default described in clause (d) or (h) above occurs and is
continuing with respect to the Securities of one or more series, unless the
principal of all of the Securities of the affected series shall have already
become due and payable, the Trustee may, in its discretion, and shall upon
request in writing made by the Holders of not less than 25% in aggregate
principal amount of the Securities of all such affected series then Outstanding
(voting as one class), declare the principal of (and premium, if any, on) all
the Securities of all the affected series then Outstanding and the interest
accrued thereon and all other money, if any, owing under the provisions of the
Indenture in respect of those Securities to be due and payable immediately on
demand. If an Event of Default described in clause (c), (e), (f) or (g) above
occurs and is continuing, unless the principal of all Securities then
Outstanding shall have already become due and payable, the Trustee may, in its
discretion, and shall upon request in writing made by the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
(voting as one class), declare the principal of (and premium, if any, on) all
the Securities then Outstanding and the interest accrued thereon and all other
money, if any, owing under the provisions of the Indenture in respect of those
Securities to be due and payable immediately on demand. Upon certain conditions,
any declaration of this kind may be cancelled if all Events of Default with
respect to the Securities of all those affected series then Outstanding shall
have been cured or waived as provided in the Indenture by the Holders of not
less than a majority in aggregate principal amount of the Securities of the
affected series then Outstanding (voting as one class, except in the case of
Events of Default described in clauses (a) and (b) of the first sentence of the
preceding paragraph, as to which each series so affected will vote as a separate
class). See "Modification and Waiver" below.
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Reference is made to the applicable prospectus supplement or
supplements relating to any series of Original Issue Discount Securities for the
particular provisions relating to the acceleration of a portion of the principal
amount thereof upon the occurrence and continuance of an Event of Default with
respect thereto.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of the Holders, unless those Holders shall have provided to the
Trustee reasonable indemnity. Subject to those provisions for indemnity and
certain other limitations contained in the Indenture, the Holders of a majority
in aggregate principal amount of the Securities of all affected series then
Outstanding (voting as one class) will have the right to sanction or direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of those affected series.
The Indenture provides that no Holder of the Securities of any series
will have any right to institute any proceeding with respect to the Indenture or
for any remedy thereunder, unless (a) that Holder shall have previously given to
the Trustee written notice of a continuing Event of Default with respect to the
Securities of that series, (b) the Holders of not less than 25% in aggregate
principal amount of the Securities of all affected series then Outstanding
(voting as one class) shall have made written request, and provided reasonable
indemnity, to the Trustee to institute that proceeding, (c) the Trustee shall
not have received from the Holders of a majority in aggregate principal amount
of the Securities of all affected series then Outstanding (voting as one class)
a direction inconsistent with that request and (d) the Trustee shall have failed
to institute that proceeding within 60 days after that notification, request and
offer of indemnity. However, the Holder of any Security will have an absolute
right to receive payment of the principal of and any premium and interest on
that Security on or after the due dates expressed in that Security and to
institute suit for the enforcement of any of these payments. The Indenture
requires us to furnish to the Trustee annually an Officers' Certificate as to
our compliance with certain covenants, conditions or other requirements
contained in the Indenture and as to any non-compliance therewith.
The Indenture provides that the Trustee may withhold notice to the
Holders of the Securities of one or more series of any default affecting those
series (except defaults as to payment of principal or interest) if it, in good
faith, considers that withholding to be in the best interests of the Holders of
the Securities of those series.
ADDITIONAL AMOUNTS
All payments made by us under or with respect to the debt securities
will be made free and clear of and without withholding or deduction for or on
account of any present or future tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and other liabilities related
thereto) imposed or levied by or on behalf of the Government of Canada or of any
province or territory thereof or by any authority or agency therein or thereof
having power to tax (hereinafter "Canadian Taxes"), unless we are required to
withhold or deduct Canadian Taxes by law or by the interpretation or
administration thereof. If we are 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 debt securities, we will pay as additional interest such additional
amounts ("Additional Amounts") as may be necessary so that the net amount
received by each Holder after such withholding or deduction (and after deducting
any Canadian Taxes on such Additional Amounts) will not be less than the amount
the Holder would have received if such Canadian Taxes had not been withheld or
deducted. However, no Additional Amounts will be payable with respect to a
payment made to a Holder (such Holder, an "Excluded Holder") in respect of the
beneficial owner thereof:
(a) with which we do not deal at arm's length (within the meaning
of the INCOME TAX ACT (Canada)) at the time of making such
payment;
(b) which is subject to such Canadian Taxes by reason of the
Holder being a resident, domicile or national of, or engaged
in business or maintaining a permanent establishment or other
physical presence in or otherwise having some connection with
Canada or any province or territory thereof otherwise than by
the mere holding of debt securities or the receipt of payments
thereunder; or
(c) which is subject to such Canadian Taxes by reason of the
Holder's failure to comply with any certification,
identification, information, documentation or other reporting
requirements if
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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.
We will also:
(a) make such withholding or deduction; and
(b) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law.
We will furnish to the Holders of the debt securities, within 30 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
by us.
We will indemnify and hold harmless each Holder (other than an Excluded
Holder) and upon written request reimburse each such Holder for the amount of:
(a) any Canadian Taxes so levied or imposed and paid by such
Holder as a result of payments made under or with respect to
the debt securities;
(b) any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto; and
(c) any Canadian Taxes imposed with respect to any reimbursement
under clause (a) or (b) above, but excluding any such Canadian
Taxes on such Holder's net income.
Wherever in the Indenture there is mentioned, in any context, the
payment of principal (and premium, if any), interest or any other amount payable
under or with respect to a Security, such mention shall be deemed to include
mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
TAX REDEMPTION
The debt securities will be subject to redemption in whole, but not in
part, at our option, at any time, on not less than 30 nor more than 60 days'
prior written notice, at 100% of the principal amount, together with accrued
interest thereon to the redemption date, in the event there is more than an
insubstantial risk that we have become or would become obligated to pay, on the
next date on which any amount would be payable with respect to the debt
securities, any Additional Amounts as a result of an amendment to or change in
the laws (including any regulations promulgated thereunder) of Canada (or any
political subdivision or taxing authority thereof or therein), or any amendment
to or change in any official position regarding the application or
interpretation of such laws or regulations, which change is announced or becomes
effective on or after the date of this prospectus.
MODIFICATION AND WAIVER
The Indenture permits us and the Trustee to enter into supplemental
indentures without the consent of the Holders of the Securities to, among other
things: (a) secure the Securities of one or more series, (b) evidence the
assumption by the Successor of our covenants and obligations, under the
Indenture and the Securities then Outstanding, (c) add covenants or Events of
Default for the benefit of the Holders of one or more series of the Securities,
(d) cure any ambiguity or correct or supplement any defective provision in the
Indenture which correction will not be prejudicial to the interests of the
Holders of the Securities in any material respect, (e) establish the form and
terms of the Securities of any series, (f) evidence the acceptance of
appointment by a successor Trustee, and (g) make any other modifications which
will not be prejudicial to the interests of the Holders of the Securities in any
material respect.
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The Indenture also permits us and the Trustee, with the consent of the
Holders of a majority in aggregate principal amount of the Securities of each
series then Outstanding and affected (voting as one class), to add any
provisions to, or change in any manner or eliminate any of the provisions of,
the Indenture or modify in any manner the rights of the Holders of the
Securities of each such affected series; provided, however, that we and the
Trustee may not, among other things, without the consent of the Holder of each
Security then Outstanding and affected thereby: (a) change the Stated Maturity
of the principal amount of, or any installment of the principal of or the
interest on, that Security; (b) reduce the principal amount of or the rate of
interest on or any premium payable upon the redemption of that Security; (c)
reduce the amount of principal of an Original Issue Discount Security payable
upon acceleration of the Maturity thereof; (d) change the place or currency of
payment of the principal of or any premium or interest on that Security; (e)
impair the right to institute suit for the enforcement of payment of this kind
with respect to that Security on or after the Stated Maturity thereof; or (f)
reduce the percentage in principal amount of the Outstanding Securities of the
affected series, the consent of whose Holders is required for modification or
amendment of the Indenture, or for any waiver with respect to defaults,
breaches, Events of Default or declarations of acceleration.
The Holders of a majority in aggregate principal amount of the
Securities of all series at the time Outstanding with respect to which a default
or breach or an Event of Default shall have occurred and be continuing (voting
as one class) may on behalf of the Holders of all such affected Securities waive
any past default or breach or Event of Default and its consequences, except a
default in the payment of the principal of or premium or interest on any
Security of any series or an Event of Default in respect of a covenant or
provision of the Indenture or of any Security which cannot be modified or
amended without the consent of the Holder of each Security affected.
DEFEASANCE
The Indenture provides that, at our option, we will be discharged from
any and all obligations with respect to the Securities of any series (except for
certain obligations to register the transfer or exchange of the Securities of
that series, to replace mutilated, destroyed, lost or stolen Securities of that
series, to maintain paying agencies, to compensate and indemnify the Trustee and
to maintain the trust described below) (hereinafter called a "defeasance") upon
the irrevocable deposit with the Trustee, in trust, of money, and/or securities
of the government which issued the currency in which the Securities of that
series are payable or securities backed by the full faith and credit of that
government which, through the payment of the principal thereof and the interest
thereon in accordance with their terms, will provide money, in an amount
sufficient to pay all the principal of and any premium and interest on the
Securities of that series on the Stated Maturity of those payments in accordance
with the terms of the Securities of that series. Such a defeasance may be
effected only if, among other things, (a) we have delivered to the Trustee an
Opinion of Counsel (who may be our independent counsel) stating that we have
received from, or there has been published by, the Internal Revenue Service a
ruling or there has been a change in the applicable laws or regulations, in
either case to the effect that the Holders of the Securities of that series will
not recognize income, gain or loss for United States federal income tax purposes
as a result of that defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if that defeasance had not occurred, and (b) we have
delivered to the Trustee an Opinion of Counsel in Canada (who may be our
independent counsel) or a ruling from the Canada Customs and Revenue Agency to
the effect that the Holders of the Securities of that series will not recognize
income, gain or loss for Canadian federal or provincial income or other Canadian
tax purposes as a result of that defeasance and will be subject to Canadian
federal or provincial income and other Canadian tax on the same amounts, in the
same manner and at the same times as would have been the case if that defeasance
had not occurred (and for the purposes of such opinion, such Canadian counsel
shall assume that Holders of the Securities include holders who are not resident
in Canada). In addition, we may obtain a discharge of the Indenture with respect
to the Securities of all series issued under the Indenture by depositing with
the Trustee, in trust, an amount of money and government securities as shall be
sufficient to pay, at Stated Maturity or upon redemption, all of those
Securities, provided that those Securities are by their terms to become due and
payable within one year or are to be called for redemption within one year.
The Indenture also provides that we may omit to comply with the
restrictive covenants described under the caption "Negative Pledge" and certain
other covenants and no Event of Default shall arise with respect to the
Securities of that series by reason of this failure to comply (hereinafter
called a "covenant defeasance"), upon the irrevocable deposit with the Trustee,
in trust, of money and/or securities of the government which issued the currency
in which the Securities of that series are payable or securities backed by the
full faith and credit of that
-17-
government which, through the payment of the principal thereof and the interest
thereon in accordance with their terms, will provide money, in an amount
sufficient to pay all the principal of and any premium and interest on the
Securities of that series on the Stated Maturity of those payments in accordance
with the terms of the Securities of that series. Our other obligations with
respect to the Securities of that series would remain in full force and effect.
A covenant defeasance may be effected only if, among other things, (a) we have
delivered to the Trustee an Opinion of Counsel (who may be our independent
counsel) to the effect that the Holders of Securities of that series will not
recognize income, gain or loss for United States federal income tax purposes as
a result of the covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if that covenant defeasance had not occurred, and (b)
we have delivered to the Trustee an Opinion of Counsel in Canada (who may be our
independent counsel) or a ruling from the Canada Customs and Revenue Agency to
the effect that the Holders of the Securities of that series will not recognize
income, gain or loss for Canadian federal or provincial income or other Canadian
tax purposes as a result of that defeasance and will be subject to Canadian
federal or provincial income and other Canadian tax on the same amounts, in the
same manner and at the same times as would have been the case if that defeasance
had not occurred (and for the purposes of such opinion, such Canadian counsel
shall assume that Holders of the Securities include Holders who are not resident
in Canada).
In the event that we exercise our option to effect a covenant
defeasance with respect to the Securities of any series and the Securities of
that series are thereafter declared due and payable because of the occurrence of
another Event of Default, the amount of money and securities on deposit with the
Trustee would be sufficient to pay the amounts due on the Securities of that
series at their respective Stated Maturities, but may not be sufficient to pay
the amounts due on the Securities of that series at the time of the acceleration
resulting from that Event of Default. However, we would remain liable for this
deficiency.
CONSENT TO SERVICE
We have designated CT Corporation System, 111 Eighth Avenue, 13th
Floor, New York, New York, 10011 as its authorized agent for service of process
in the United States in any action, suit or proceeding arising out of or
relating to the Indenture or the Securities and for actions brought under
federal or state securities law in any federal or state court located in New
York, New York and irrevocably submit to the non-exclusive jurisdiction of any
such court.
GOVERNING LAW
The Indenture and the Securities will be governed by and construed in
accordance with the laws of the State of New York.
ENFORCEABILITY OF JUDGMENTS
We are incorporated and governed by the laws of Canada. A substantial
portion of our assets are located outside the United States and some or all of
the directors and officers and some or all of the experts named herein are
residents of Canada. As a result, it may be difficult for investors to effect
service within the United States upon us and upon those directors, officers and
experts, or to realize in the United States upon judgments of courts of the
United States predicated upon our civil liability and the civil liability of our
directors, officers or experts. We have also been advised by Macleod Dixon LLP
that there is some doubt as to the enforceability in Canada by a court in
original actions, or in actions to enforce judgments of United States courts, of
liabilities predicated upon United States federal securities laws.
PLAN OF DISTRIBUTION
We may sell the debt securities to or through underwriters or dealers.
We may also sell the debt securities to one or more other purchasers directly or
through agents.
The applicable prospectus supplement will set forth the terms of the
offering, including the name or names of any underwriters or agents, the
purchase price or prices of the debt securities to be offered, the proceeds to
us
-18-
from the sale of the debt securities to be offered, any initial public offering
price, any underwriting discount or commission and any discounts, concessions or
commissions allowed or reallowed or paid by any underwriter to other dealers.
Any initial public offering price and any discounts, concessions or commissions
allowed or reallowed or paid to dealers may be changed from time to time.
The debt securities may be sold from time to time in one or more
transactions at a fixed price or fixed prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to these
prevailing market prices or at negotiated prices.
If so indicated in the applicable prospectus supplement, we may
authorize dealers or other persons acting as our agents to solicit offers by
certain institutions to purchase the debt securities directly from us pursuant
to contracts providing for payment and delivery on a future date. These
contracts will be subject only to the conditions set forth in the applicable
prospectus supplement or supplements, which will also set forth the commission
payable for solicitation of these contracts.
Underwriters, dealers and agents who participate in the distribution of
the debt securities may be entitled under agreements to be entered into with us
to indemnification by us against certain liabilities, including liabilities
under the U.S. Securities Act of 1933, as amended, or to contribution with
respect to payments which those underwriters, dealers or agents may be required
to make in respect thereof. Those underwriters, dealers and agents may be
customers of, engage in transactions with or perform services for us in the
ordinary course of business.
Each series of the debt securities will be a new issue of securities
with no established trading market. Unless otherwise specified in an applicable
prospectus supplement relating to a series of debt securities, the debt
securities will not be listed on any securities exchange or on any automated
dealer quotation system. Some broker-dealers may make a market in the debt
securities, but they will not be obligated to do so and may discontinue any
market-making activities at any time without notice. No assurance can be given
as to the liquidity of the trading market for the debt securities of any series
or that an active public market for the debt securities of any series will
develop. If an active public trading market for the debt securities of any
series does not develop, the market price and liquidity of such series of debt
securities may be adversely affected.
EARNINGS COVERAGE
The following consolidated financial ratios of CPRL are calculated for
the twelve month periods ended December 31, 2003 and March 31, 2004,
respectively. These coverage ratios do not give effect to the issuance of
securities that may be issued pursuant to this prospectus and any prospectus
supplement, since the aggregate principal amounts and the terms of such
securities are not presently known.
December 31, March 31,
Earnings coverage on long-term debt 2003(3) 2004(3)
------------ ---------
Before non-recurring items and foreign exchange on long-term debt (1)........ 3.1x 3.2x
After non-recurring items and foreign exchange on long-term debt (2)......... 3.0x 2.6x
NOTES:
(1) Earnings coverage is equal to net income (before other specified items
and foreign exchange on long-term debt) before interest expense and
income tax expense divided by interest expense on all debt.
(2) Earnings coverage is equal to net income (after other specified items
and foreign exchange on long-term debt) before interest expense and
income tax expense divided by interest expense on all debt.
(3) Effective January 1, 2004, CPRL adopted retroactively new accounting
policies for asset retirement obligations and stock based compensation
as prescribed by Canadian GAAP. The coverages have been calculated
based on restated results for periods prior to January 1, 2004.
CPRL's interest expense requirements amounted to approximately $226.4
million and $222.0 million for the twelve-month period ended December 31, 2003
and March 31, 2004, respectively. CPRL's earnings before interest expense and
income tax expense for the twelve-month period ended December 31, 2003 and March
31, 2004 were approximately $669.2 million and $583.0 million, respectively,
which is 3.0 times and 2.6 times, respectively, our interest expense
requirements for these periods.
-19-
If we offer debt securities having a term to maturity in excess of one
year under this prospectus and a prospectus supplement, the prospectus
supplement will include earnings coverage ratios giving effect to the issuance
of such securities.
CERTAIN INCOME TAX CONSIDERATIONS
The applicable prospectus supplement will describe the material
Canadian federal income tax consequences to investors of purchasing, owning and
disposing of debt securities, including, in the case of an investor who is not a
resident of Canada, whether payments of principal, premium, if any, and interest
will be subject to Canadian non-resident withholding tax.
The applicable prospectus supplement will also describe certain U.S.
federal income tax consequences of the purchase, ownership and disposition of
the debt securities by an investor who is a United States person, including, to
the extent applicable, certain relevant U.S. federal income tax rules pertaining
to capital gains and ordinary income treatment, original issue discount, backup
withholding and the foreign tax credit, and any consequences relating to debt
securities payable in a currency other than U.S. dollars, issued at an original
discount for U.S. federal income tax purposes or containing early redemption
provisions or other special terms.
-20-
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE DEBT SECURITIES SHOULD CONSIDER CAREFULLY
THE RISK FACTORS SET FORTH BELOW AS WELL AS THE OTHER INFORMATION CONTAINED IN
AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND CONTAINED IN THE APPLICABLE
PROSPECTUS SUPPLEMENT BEFORE PURCHASING THE DEBT SECURITIES OFFERED HEREBY.
THE FREIGHT TRANSPORTATION INDUSTRY IS HIGHLY COMPETITIVE
We face intense competition for freight transportation in Canada and
the U.S., including competition from other railways and trucking companies.
Competition is based mainly on price, quality of service and access to markets.
Any improvement in the cost structure or service of our competitors could
increase this competition and materially adversely affect our business or
operating results.
In recent years there has been significant consolidation of the railway
industry in North America. The resulting larger railway companies are able to
offer services in larger market areas and compete with us in these markets. We
cannot assure you that we will be able to compete effectively against current
and future competitors in the railway industry and that further consolidation
within the railway industry will not materially harm our competitive position.
We cannot assure you that competitive pressures will not materially adversely
affect our business, financial condition or operation results.
OUR OPERATIONS ARE SUBJECT TO ADVERSE ECONOMIC CONDITIONS AND FLUCTUATIONS IN
FUEL COSTS AND EXCHANGE RATES
Our freight volumes and revenues are largely dependent upon the health
of the North American and global economy and other factors affecting the volumes
and patterns of international trade. We are also sensitive to factors such as
weather, commodity pricing and global supply and demand, as well as factors
affecting North America's agricultural, mining, forest products, consumer
products, import/export markets and automotive sectors. These factors are beyond
the influence or control of the railway industry generally and us specifically.
We are particularly dependent upon fuel costs which constitute a
significant portion of our operating costs. Fuel prices and supplies are
influenced significantly by international political and economic circumstances.
If a fuel shortage were to arise from OPEC production curtailments, a disruption
of oil imports or otherwise, higher fuel prices could materially affect our
operating results. Specifically, an increase in the price of fuel would result
in lower earnings and increased cash outflows. To manage our exposure to
fluctuations in fuel prices, as part of our fuel hedge policy, we sell or
purchase crude oil futures. To the extent that fuel costs decline below the
levels specified in any such futures contracts, we will not receive the full
benefit of these contracts.
Although we conduct our business and receive revenues primarily in
Canadian dollars, a significant portion of our revenues, expenses, assets and
debt are denominated in U.S. dollars. Thus, our results are affected by
fluctuations in the exchange rate between these currencies. In addition, changes
in the exchange rate between the Canadian dollar and other currencies (including
the U.S. dollar) make the goods transported by the Company more or less
competitive in the world marketplace and thereby affect the Company's revenues
and expenses. To manage our exposure to fluctuations in exchange rates between
Canadian and U.S. dollars on future revenue streams and certain U.S. dollar
expenditures, we sell or purchase forward U.S. dollars at fixed rates in future
periods. To the extent that exchange rates decline below the rate fixed by such
futures contracts, we will not receive the full benefit of these contracts.
THE NORTH AMERICAN RAIL INDUSTRY IS HIGHLY REGULATED
Our railway operations in Canada are subject to regulations under the
CANADA TRANSPORTATION ACT and the RAILWAY SAFETY ACT and certain other statutes
administered by the Canadian Transportation Agency and the Federal Minister of
Transportation. U.S. railway operations are subject to regulation administered
by the Surface Transportation Board and the Federal Railroad Administration.
Other federal, provincial, state and local regulations also govern our railway
operations, as well as a variety of health, safety, labour, environmental and
other matters.
-21-
We are also subject to new statutory and regulatory directives in the
United States addressing homeland security concerns. We cannot assure you that
future decisions by the U.S. government on homeland security matters, or
decisions by the industry in response to security threats to the North American
rail network, will not materially adversely affect our business or operating
results.
WE ARE SUBJECT TO EXTENSIVE ENVIRONMENTAL LAWS AND REGULATIONS
Our operations and real estate assets are subject to extensive federal,
provincial, state and local environmental laws and regulations governing
emissions to the air, discharges to waters and the handling, storage,
transportation and disposal of waste and other materials. We transport hazardous
materials and periodically use hazardous materials in our operations. Any
allegations or findings to the effect that we have violated such laws or
regulations could materially adversely affect our business or operating results.
In certain locations, we operate on properties that have been used for
railways for over a century. We cannot assure you that historic releases of
hazardous waste or materials will not be discovered requiring remediation of our
properties or subjecting us to liability for damages, the cost of which may be
material. Likewise, we cannot assure you that previously identified historic
releases of hazardous waste or materials which are currently subject to
investigation or remediation will not result in unanticipated costs which may be
material. Changing regulations and remedial approaches in Canada and the U.S.
will ultimately impact the costs of remediation and overall environmental
liability. The regulatory tendency towards increased protection of human health
from specific chemicals may mean that sites that were previously remediated, or
that did not require actions, could be subject to further scrutiny. We cannot
assure you that an accidental release of hazardous waste or materials on our
properties will not occur and the costs of remediation of properties affected by
such accidental release may be material.
In the operation of a railroad, it is possible that derailments or
other accidents may occur that could cause harm to human health or to the
environment. As a result, we may incur costs in the future to address any such
harm, including costs relating to the performance of clean-ups, natural resource
damages and compensatory or punitive damages relating to harm to individuals or
property.
WE MAY BE FACED WITH LABOUR SHORTAGES OR STOPPAGES, WHICH WOULD ADVERSELY AFFECT
OUR ABILITY TO PROVIDE SERVICES
Our relations with our employees could deteriorate due to disputes
related to, among other things, wage or benefit levels or our response to
changes in government regulation of workers and the workplace. Our operations
rely heavily on our employees. Any labour shortage or stoppage caused by poor
relations with employees, including those represented by unions, could adversely
affect our ability to provide services and the cost of providing such services,
which could materially harm our business or operating results and materially
harm our relationships with our customers. As of March 31, 2004, approximately
13,200 of our employees were represented by labour unions.
Certain of our union agreements are currently under renegotiation. We
cannot assure you that such negotiations will be resolved in a timely manner or
on terms favourable to us.
WE MAY HAVE TO FUND OUR PENSION PLANS THROUGH CASH CONTRIBUTIONS OVER TIME
We maintain both defined benefit and defined contribution pension
plans. With the general decline in equity markets and current low interest
rates, the plans' unfunded liabilities have increased significantly. Pension
funding requirements are dependent upon various factors, including interest rate
levels, asset returns, regulatory requirements for funding purposes and changes
to pensions plan benefits. Absent favourable changes to these factors, we may
have to satisfy the underfunded amounts of our plans through cash contributions
over time.
CPRL IS SUBJECT TO INDEMNIFICATION OBLIGATIONS UNDER THE ARRANGEMENT AGREEMENT
In connection with the reorganization of Canadian Pacific Limited, we
and CPRL have entered into an arrangement agreement (the "Arrangement
Agreement") which contains a number of representations, warranties and
covenants, including an agreement by each of the parties to indemnify and hold
harmless each other party to the
-22-
Arrangement Agreement against any loss suffered or incurred resulting from a
breach of a representation, warranty or covenant, a covenant that each party
will not take any action, omit to take any action or enter into any transaction
that could adversely impact the tax rulings in Canada or the U.S. including
government opinions and related opinions of counsel and the assumptions upon
which they were made, and the obligation to undertake the transactions
contemplated in the plan of arrangement. With respect to Canadian taxation, in
addition to various transactions that the respective parties are prohibited from
undertaking prior to the implementation of the arrangement, after the
implementation of the arrangement, no party will be permitted to dispose of or
exchange more than 10% of its assets or, among other things, undergo an
acquisition of control without severe adverse consequences where such
disposition or control acquisition is for Canadian tax purposes "part of a
series of transactions or events" that includes the arrangement, except in
limited circumstances. Should either we or CPRL breach the representations and
warranties or fail to satisfy the covenants, CPRL would be obligated to
indemnify the other parties to the Arrangement Agreement for losses incurred in
connection with such breach or failure. In addition, CPRL is required to
indemnify the parties to the Arrangement Agreement against any loss which they
may incur resulting from a claim against CPRL, its business or its assets,
whether arising prior to or after the completion of the arrangement. An
indemnification claim against CPRL pursuant to the provisions of the Arrangement
Agreement could have a material adverse effect upon us.
LEGAL MATTERS
Unless otherwise specified in the applicable prospectus supplement
relating to a series of debt securities, certain legal matters will be passed
upon for us by Macleod Dixon LLP, Calgary, Alberta, and by Paul, Weiss, Rifkind,
Wharton & Garrison LLP, New York, New York. In addition, certain legal matters
relating to United States law will be passed upon for the underwriters, dealers
or agents by Shearman & Sterling LLP, Toronto, Ontario.
The partners and associates of Macleod Dixon LLP and Paul, Weiss,
Rifkind, Wharton & Garrison LLP as a group beneficially own, directly or
indirectly, less than 1% of our outstanding securities.
EXPERTS
The consolidated financial statements of CPRL incorporated in this
prospectus by reference for the years ended December 31, 2003 and 2002 have been
so incorporated by reference in reliance on the audit report of
PricewaterhouseCoopers LLP, chartered accountants, given on the authority of the
said firm as experts in auditing and accounting.
DOCUMENTS FILED AS PART OF THE U.S. REGISTRATION STATEMENT
The following documents have been filed with the SEC as part of the
registration statement of which this prospectus is a part:
o the documents listed in the second paragraph under "Where You
Can Find More Information" in this prospectus;
o consents of accountants and counsel;
o powers of attorney from our directors and officers;
o form of the trust indenture relating to the debt securities;
o form of first supplemental indenture relating to the debt
securities;
o statement of eligibility of the Trustee on Form T-1; and
o earnings coverage calculations.
-23-
CONSENT OF AUDITORS
We have read the short form base shelf prospectus of Canadian Pacific
Railway Company (the "Company") dated May 6, 2004 relating to the issue and sale
of debt securities in an aggregate principal amount of up to US$750,000,000 or
its equivalency in any other currency (the "prospectus"). We have complied with
Canadian generally accepted standards for an auditor's involvement with offering
documents.
We consent to the incorporation by reference in the above-mentioned
prospectus of our report to the shareholders of Canadian Pacific Railway Limited
("CPRL") on the consolidated balance sheets of CPRL as at December 31, 2003 and
2002 and the consolidated statements of income, retained income and cash flows
for each of the years in the three-year period ended December 31, 2003. Our
report is dated February 6, 2004.
"PRICEWATERHOUSECOOPERS LLP"
Chartered Accountants
May 6, 2004
-24-
PART II
INFORMATION NOT REQUIRED TO BE
DELIVERED TO OFFEREES OR PURCHASERS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 124 of the Canada Business Corporations Act provides as
follows:
124. (1) Indemnification. A corporation may indemnify a director or
officer of the corporation, a former director or officer of the
corporation or another individual who acts or acted at the
corporation's request as a director or officer, or an individual acting
in a similar capacity, of another entity, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the individual in respect of any
civil, criminal, administrative, investigative or other proceeding in
which the individual is involved because of that association with the
corporation or other entity.
(2) Advance of Costs. A corporation may advance moneys to a director,
officer or other individual for the costs, charges and expenses of a
proceeding referred to in subsection (1). The individual shall repay
the moneys if the individual does not fulfil the conditions of
subsection (3).
(3) Limitation. A corporation may not indemnify an individual under
subsection (1) unless the individual
(a) acted honestly and in good faith with a view to the best
interests of the corporation, or, as the case may be, to the
best interests of the other entity for which the individual
acted as director or officer or in a similar capacity at the
corporation's request; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the
individual had reasonable grounds for believing that the
individual's conduct was lawful.
(4) Indemnification in derivative actions. A corporation may with the
approval of a court, indemnify an individual referred to in subsection
(1), or advance moneys under subsection (2), in respect of an action by
or on behalf of the corporation or other entity to procure a judgment
in its favour, to which the individual is made a party because of the
individual's association with the corporation or other entity as
described in subsection (1) against all costs, charges and expenses
reasonably incurred by the individual in connection with such action,
if the individual fulfills the conditions set out in subsection (3).
(5) Right to indemnity. Despite subsection (1), an individual referred
to in that subsection is entitled to indemnity from the corporation in
respect of all costs, charges and expenses reasonably incurred by the
individual in connection with the defence of any civil, criminal,
administrative, investigative or other proceeding to which the
individual is subject because of the individual's association with the
corporation or other entity as described in subsection (1), if the
individual seeking indemnity
(a) was not judged by the court or other competent authority to
have
II-1
committed any fault or omitted to do anything that the
individual ought to have done; and
(b) fulfills the conditions set out in subsection (3).
(6) Insurance. A corporation may purchase and maintain insurance for
the benefit of an individual referred to in subsection (1) against any
liability incurred by the individual
(a) in the individual's capacity as a director or officer of the
corporation; or
(b) in the individual's capacity as a director or officer, or
similar capacity, of another entity, if the individual acts
or acted in that capacity at the corporation's request.
(7) Application to court. A corporation, an individual or an entity
referred to in subsection (1) may apply to a court for an order
approving an indemnity under this section and the court may so order
and make any further order that it sees fit.
(8) Notice to Director. An applicant under subsection (7) shall give
the Director notice of the application and the Director is entitled to
appear and be heard in person or by counsel.
(9) Other notice. On an application under subsection (7) the court may
order notice to be given to any interested person and the person is
entitled to appear and be heard in person or by counsel.
The by-laws of the Registrant provide that, subject to the limitations
contained in the CBCA, the Registrant shall indemnify a director or
officer, a former director or officer, or a person who acts or acted at
the Registrant's request as a director or officer of a body corporate
of which the Registrant is or was a shareholder or creditor, and his
heirs and legal representatives against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal
or administrative action or proceeding to which he was made a party by
reason of being or having been a director or officer of the corporation
or such body corporate, if he acted honestly and in good faith with a
view to the best interests of the corporation, and in the case of a
criminal or administrative action or proceeding that is enforced by a
monetary penalty, he had reasonable grounds for believing that his
conduct was lawful.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons
controlling the Corporation pursuant to the foregoing provisions, the
Corporation has been informed that in the opinion of the U.S.
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
II-2
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1* The annual information form of Canadian Pacific Railway Limited
dated March 3, 2004 (incorporated by reference to the Registrant's
Annual Report on Form 40-F filed with the Commission on March 17,
2004, Commission File No. 001-15272).
4.2* Canadian Pacific Railway Limited's audited consolidated balance
sheets as at December 31, 2003 and 2002 and the consolidated
statements of income, retained income and cash flows for each of the
three years in the period ended December 31, 2003, together with the
report of the auditors thereon and including management's discussion
and analysis related thereto (incorporated by reference to the
Registrant's Current Report on Form 6-K filed with the Commission on
March 17, 2004, Commission File No. 001-15272).
4.3* Canadian Pacific Railway Limited's management proxy circular dated
February 19, 2004, excluding the portions under the headings
"Statement of Executive Compensation - Compensation Committee Report
on Executive Compensation," "Performance Graph" and "Additional
Items - Corporate Governance" and excluding Appendix 1, Appendix 2
and Appendix 3 (which portions shall be deemed not to have been
filed as part of, or incorporated by reference in, this Registration
Statement on Form F-9) (incorporated by reference to the
Registrant's Current Report on Form 6-K filed with the Commission on
March 17, 2004, Commission File No. 001-15272).
4.4* Canadian Pacific Railway Limited's unaudited comparative interim
consolidated financial statements for the three months ended March
31, 2004, including management's discussion and analysis related
thereto (incorporated by reference to the Registrant's Current
Report on Form 6-K filed with the Commission on May 6, 2004,
Commission File No. 001-15272).
5.1** Consent of PricewaterhouseCoopers LLP.
5.2* Consent of Macleod Dixon LLP.
6.1* Powers of Attorney.
7.1* Form of Trust Indenture between the Registrant and The Bank of New
York (incorporated by reference to the Registrant's Amendment No. 1
to the Registration Statement on Form F-9 filed with the Commission
on October 22, 2001, Commission File No. 333-14014).
7.2* First Supplemental Indenture, between the Registrant and The Bank
of New York.
7.3* Statement of Eligibility of the Trustee, The Bank of New York, on
Form T-1 (incorporated by reference or to the Registrant's Amendment
No. 1 to the Registration Statement on Form F-9, filed with the
Commission on October 22, 2001, Commission File No. 333-14014).
9.1* Earnings coverage calculations.
----------------------
* Previously filed.
** Filed herewith.
II-3
PART III
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
ITEM 1. UNDERTAKING
The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to the securities registered pursuant to Form F-9 or to transactions in
said securities.
ITEM 2. CONSENT TO SERVICE OF PROCESS
Concurrent with the filing of this Registration Statement on Form F-9,
the Registrant filed with the Commission a written irrevocable consent and power
of attorney on Form F-X.
Any change to the name or address of the agent for service of process
of the Registrant shall be communicated promptly to the Securities and Exchange
Commission by an amendment to the Form F-X referencing the file number of the
relevant registration statement.
III-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form F-9 and has duly caused this Amendment
No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Calgary, Province of
Alberta, Canada, on the 6th day of May, 2004.
CANADIAN PACIFIC RAILWAY COMPANY
By: /s/ Robert J. Ritchie
-------------------------------
Name: Robert J. Ritchie
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on May 6, 2004.
SIGNATURE TITLE
--------- -----
/s/ Robert J. Ritchie President and Chief Executive Officer
------------------------------ and Director (Principal Executive Officer)
Robert J. Ritchie
/s/ Michael T. Waites Executive Vice President and Chief Financial
------------------------------ Officer (Principal Financial Officer)
Michael T. Waites
/s/ B. Grassby Comptroller
------------------------------ (Comptroller and Vice President)
B. Grassby
* Director
------------------------------
S.E. Bachand
* Director
------------------------------
J.E. Cleghorn
* Director
------------------------------
T.W. Faithfull
III-2
* Director
------------------------------
J. Lamarre
Director
------------------------------
J.E. Newall
* Director
------------------------------
Dr. J.R. Nininger
* Director
------------------------------
M. Paquin
Director
------------------------------
M.E.J. Phelps
Director
------------------------------
R. Phillips
Director
------------------------------
M.W. Wright
*By: /s/ J. Joseph Doolan
---------------------------
J. Joseph Doolan
Attorney-in-Fact
III-3
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of
1933, the undersigned has signed this Registration Statement, in the capacity of
the duly authorized representative of the Registrant in the United States, on
May 6, 2004.
SOO LINE CORPORATION
By: /s/ J. Joseph Doolan
------------------------------
J. Joseph Doolan
Vice President and Treasurer
III-4
EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
4.1* The annual information form of Canadian Pacific Railway Limited
dated March 3, 2004 (incorporated by reference to the Registrant's
Annual Report on Form 40-F filed with the Commission on March 17,
2004, Commission File No. 001-15272).
4.2* Canadian Pacific Railway Limited's audited consolidated balance
sheets as at December 31, 2003 and 2002 and the consolidated
statements of income, retained income and cash flows for each of
the three years in the period ended December 31, 2003, together
with the report of the auditors thereon and including management's
discussion and analysis related thereto (incorporated by reference
to the Registrant's Current Report on Form 6-K filed with the
Commission on March 17, 2004, Commission File No. 001-15272).
4.3* Canadian Pacific Railway Limited's management proxy circular dated
February 19, 2004, excluding the portions under the headings
"Statement of Executive Compensation - Compensation Committee
Report on Executive Compensation," "Performance Graph" and
"Additional Items - Corporate Governance" and excluding Appendix 1,
Appendix 2 and Appendix 3 (which portions shall be deemed not to
have been filed as part of, or incorporated by reference in, this
Registration Statement on Form F-9) (incorporated by reference to
the Registrant's Current Report on Form 6-K filed with the
Commission on March 17, 2004, Commission File No. 001-15272).
4.4* Canadian Pacific Railway Limited's unaudited comparative interim
consolidated financial statements for the three months ended March
31, 2004, including management's discussion and analysis related
thereto (incorporated by reference to the Registrant's Current
Report on Form 6-K filed with the Commission on May 6, 2004,
Commission File No. 001-15272).
5.1** Consent of PricewaterhouseCoopers LLP.
5.2* Consent of Macleod Dixon LLP.
6.1* Powers of Attorney.
7.1* Form of Trust Indenture, between the Registrant and The Bank of New
York (incorporated by reference to the Registrant's Amendment No. 1
to the Registration Statement on Form F-9 filed with the Commission
on October 22, 2001, Commission File No. 333-14014).
7.2* First Supplemental Indenture, between the Registrant and The Bank
of New York.
7.3* Statement of Eligibility of the Trustee, The Bank of New York, on
Form T-1 (incorporated by reference or to the Registrant's
Amendment No. 1 to the Registration Statement on Form F-9, filed
with the Commission on October 22, 2001, Commission File No.
333-14014).
9.1* Earnings coverage calculations.
-----------------
* Previously filed.
** Filed herewith.
III-5