Document:

EX-4.2

 Exhibit 4.2 

Dated as of May 16, 2018 

CANADIAN PACIFIC RAILWAY LIMITED 

as Guarantor and 

CANADIAN PACIFIC RAILWAY COMPANY 

as Issuer 
 and 

WELLS FARGO BANK, NATIONAL ASSOCIATION 

as Trustee 
 THIRD
SUPPLEMENTAL INDENTURE 
 to the 

TRUST INDENTURE 
 Dated
as of September 11, 2015 

 THIS THIRD SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”)
dated as of May 16, 2018 among CANADIAN PACIFIC RAILWAY LIMITED, a corporation incorporated under the Canada Business Corporations Act and having its head office in the City of Calgary, in the Province of Alberta
(the “Guarantor”), CANADIAN PACIFIC RAILWAY COMPANY, a corporation incorporated under the Canada Business Corporations Act and having its head office in the City of Calgary, in the Province of Alberta (the
“Issuer”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”). 

RECITALS OF THE ISSUER 

WHEREAS, the Issuer and the Trustee entered into an indenture, dated as of September 11, 2015 (the “Original
Indenture”). Section 8.01(7) of the Original Indenture provides that the Issuer and the Trustee may, without the consent of any Holder, enter into a supplemental indenture to establish the form or terms of Securities of any series as
permitted by Section 2.01 and 3.01 thereof. 
 WHEREAS, pursuant to Sections 2.01 and 3.01 of the Original Indenture, the Issuer
desires to provide for the establishment of a series of Securities under the Original Indenture, and the form and terms thereof, as hereinafter set forth. 

WHEREAS, the Issuer has requested that the Trustee execute and deliver this Third Supplemental Indenture. The Issuer has delivered to
the Trustee an Opinion of Counsel and an Officers’ Certificate pursuant to Sections 1.02 and 8.03 of the Original Indenture to the effect, among other things, that all conditions precedent provided for in the Original Indenture to the
Trustee’s execution and delivery of this Third Supplemental Indenture have been complied with. All acts and things necessary have been done and performed to make this Third Supplemental Indenture enforceable in accordance with its terms, and
the execution and delivery of this Third Supplemental Indenture has been duly authorized in all respects. 
 WHEREAS the proper
officers of the Issuer have duly authorized the creation and issuance of a series of Securities to be designated as 4.000% Notes due 2028 (the “Notes”), to be initially limited (subject to the exceptions described herein and in the
Original Indenture) to the aggregate principal amount of U.S.$500,000,000; the further terms and conditions thereof being hereinafter set forth, all in accordance with a resolution of the directors of the Issuer; 

WHEREAS, the Guarantor desires to fully and unconditionally guarantee the Notes (the “Guarantee”) and the applicable
obligations of the Issuer under the Original Indenture, and to provide therefor, the Guarantor has duly authorized the execution and delivery of this Third Supplemental Indenture; 

NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Notes by
the holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all holders of the Notes, as follows: 
  

  
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 1.    INTERPRETATIONS AND AMENDMENTS 

1.1    Third Supplemental Indenture 

As used herein “Third Supplemental Indenture”, “hereto”, “herein”,
“hereof”, “hereby”, “hereunder” and similar expressions refer to this Third Supplemental Indenture and not to any particular Article, Section or other portion hereof and include any and every
instrument supplemental or ancillary hereto or in implementation hereof, and further include the terms of the Notes set forth in the form of Note annexed as Schedule A hereto. 

1.2    Definitions in Third Supplemental Indenture 

All terms contained in this Third Supplemental Indenture which are defined in the Original Indenture and not defined herein shall, for all
purposes hereof, have the meanings given to such terms in the Original Indenture, unless the context otherwise specifies or requires; provided, however, that notwithstanding the foregoing, the terms “Issuer” and
“Trustee” shall have the respective meanings given to them in the Original Indenture. 

1.3    Interpretation not Affected by Headings 

The division of this Third Supplemental Indenture into Articles and Sections, the provision of the table of contents hereto and the insertion
of headings are for convenience of reference only and shall not affect the construction or interpretation of this Third Supplemental Indenture. 
 
2.    NOTES 
 2.1    Form and Terms of Notes 

There shall be and there is hereby created for issuance under the Original Indenture, as supplemented by this Third Supplemental Indenture a
series of Securities which shall consist of an aggregate principal amount of U.S.$500,000,000 of Notes; provided, however, that if the Issuer shall, at any time after the date hereof, increase the principal amount of Notes which may be issued and
issue such increased principal amount (or any portion thereof), then any such additional Notes so issued shall have the same form and terms (other than the date of issuance and the date from which interest thereon shall begin to accrue and, under
certain circumstances, the first interest payment date), and shall carry the same right to receive accrued and unpaid interest, as the Notes theretofore issued; and provided, further, that, notwithstanding the foregoing, the Issuer shall not be
entitled to increase the principal amount of Notes which may be issued or issue any such increased principal amount if the Issuer has effected satisfaction and discharge of the Indenture pursuant to Section 4.01 of the Original Indenture or
defeasance or covenant defeasance pursuant to Article 12 of the Original Indenture. 
 The Notes will mature, and the principal of the
Notes and accrued and unpaid interest thereon will be due and payable, on June 1, 2028, or such earlier date as the principal of any of the Notes may become due and payable in accordance with the provisions of the Original Indenture and this
Third Supplemental Indenture. 

  
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 The Notes shall bear interest on the principal amount thereof from May 16, 2018 or from the
last date to which interest shall have been paid or duly made available for payment on the Notes, whichever is later, at the rate of 4.000% per annum, payable semi-annually in arrears on June 1 and December 1 (each, an “Interest
Payment Date”) in each year, commencing December 1, 2018 until the principal of and premium, if any, on the Notes is paid or duly made available for payment; and should the Issuer at any time default in the payment of any principal of,
or premium, if any, or interest on the Notes when due, the Issuer shall pay interest (such interest to be payable on demand), to the extent permitted by law, on the amount in default at the same rate applicable to the Notes on which the Issuer
defaulted. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The interest payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Original Indenture, be paid to the Persons in whose names the Notes (or one or more predecessor Notes) are registered at the close of business on May 15 and November 15
(the “Regular Record Dates”), as the case may be, immediately prior to such Interest Payment Date, regardless of whether any such Regular Record Date is a Business Day. Any such interest on the Notes not so punctually paid or duly
provided for on any Interest Payment Date shall be payable as provided in the form of Note annexed hereto as Schedule A to this Third Supplemental Indenture. 

The Notes constitute unsecured obligations of the Issuer and rank pari passu with all of its other unsecured and unsubordinated debt
from time to time outstanding and pari passu with other notes issued pursuant to the Original Indenture. 
 For the purposes only of
the disclosure required by the Interest Act (Canada), and without affecting the amount of interest payable to any holder of a Note or the calculation of interest on any Note, if the rate of interest on any Note is calculated on the basis of a
year (the “deemed year”) which contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by
multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year. 

All payments of principal of and premium, if any, and interest on the Notes will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts, and all references herein to “United States dollars”, “U.S.$” or “U.S. dollars” shall be deemed to refer to
such coin or currency of the United States of America. 
 The principal of and premium, if any, and interest on the Notes shall be payable,
and the Notes may be surrendered for exchange, registration, transfer or discharge from registration, at the Corporate Trust Office of the Trustee, and in such other places as the Issuer may from time to time designate in accordance with the
Original Indenture. The Trustee is hereby appointed as the initial Paying Agent, registrar and transfer agent for the Notes. 
 The Notes
shall be issued only as fully registered Notes, without coupons, in denominations of U.S.$2,000 and integral multiples of U.S.$1,000 thereafter. The Notes will initially be represented by one or more global Securities registered in the name of The
Depository Trust Company, as Depositary or its nominee, or a successor depositary or its nominee. 

  
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 The certificates representing the Notes shall bear the following legend: 

“UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.” 

The Notes and the certificate of authentication of the Trustee endorsed thereon shall be in the form set out in Schedule A to this Third
Supplemental Indenture with such appropriate insertions, omissions, substitutions and variations as the Trustee may approve and shall be numbered in such manner as the Trustee may approve, such approvals of the Trustee concerning the Note to be
conclusively evidenced by its certification of the Note. 
 The Security Register referred to in Section 3.05 of the Original Indenture
shall, with respect to the Notes, be kept at the office or agency that the Issuer may from time to time designate for such purpose (which shall initially be the Corporate Trust Office of the Trustee), and at such other place or places as the Issuer
with the approval of the Trustee may hereafter designate. 
 The Notes shall be subject to redemption at the option of the Issuer as
provided in Article 3 (Optional Redemption of Notes) of this Third Supplemental Indenture and Article 10 of the Original Indenture and the Notes shall be subject to repurchase by the Issuer as provided in Article 4 (Change of Control) of this
Third Supplemental Indenture. The Issuer shall not otherwise be required to redeem, purchase or repay Notes pursuant to any mandatory redemption, sinking fund or analogous provision or at the option of the holders thereof. The Notes will not be
convertible into or exchangeable for securities of any Person. 
 The Issuer shall be required to pay Additional Amounts as contemplated in
Section 9.07 of the Original Indenture. 
 The Notes shall have the other terms and provisions set forth in the form of Note attached
hereto as Schedule A to this Third Supplemental Indenture with the same force and effect as if such terms and provisions were set forth in full herein. 

2.2    Issuance of Notes 

The Notes in the aggregate principal amount of U.S.$500,000,000 shall be executed on behalf of the Issuer by any two of the following
officers: its Chairman of the Board, its President, any of its Vice Presidents, the Secretary, the Treasurer, or any of its Assistant Treasurers and delivered by the Issuer to the Trustee on the date of issue for authentication and delivery pursuant
to and in accordance with the provisions of Section 3.02 of the Original Indenture and, upon the requirements of such provisions being complied with, such Notes shall be authenticated by or on behalf of the Trustee and delivered by it to or
upon the Corporation Order of the Issuer without any further act or formality on the part of the Issuer. The Trustee shall have no duty or responsibility with respect to the use or application of any of the Notes so certified and delivered or the
proceeds thereof. 

  
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 3.    OPTIONAL REDEMPTION OF NOTES 

3.1    Redemption of Notes 

Prior to March 1, 2028 (the date that is three months prior to the maturity date of the Notes), the Issuer may redeem the Notes, in whole
or in part, at the option of the Issuer (in the manner and in accordance with and subject to the terms and provisions set forth in Article 10 of the Original Indenture), at any time or from time to time, at a Redemption Price equal to the greater
of: 
  

	 	(a)	100% of the principal amount of the Notes to be redeemed; and 

  

	 	(b)	the sum of the present values of the remaining scheduled payments of principal and interest thereon that would be due if the Notes matured on March 1, 2028 (the date that is three months prior to the maturity date
of the Notes) (exclusive of any portion of the payments of interest accrued to the date of redemption) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Yield, plus 15 basis points, 

 plus, accrued and unpaid interest to, but
excluding, the Redemption Date; provided that installments of interest on Notes which are due and payable on any date falling on or prior to a Redemption Date will be payable to the registered holders of such Notes (or one or more predecessor
Notes), registered as such as of the close of business on the relevant Regular Record Dates. 
 On or after March 1, 2028 (the date
that is three months prior to the maturity date of the Notes), the Notes will be redeemable, in whole or in part, at the option of the Issuer (in the manner and in accordance with and subject to the terms and provisions set forth in Article 10 of
the Original Indenture), at any time or from time to time, at a Redemption Price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. 

The Issuer will provide notice to the Trustee prior to the Redemption Date of the calculation of the Redemption Price. 

3.2    Certain Additional Definitions 

For the purposes of this Third Supplemental Indenture, the following expressions shall have the following meanings: 

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an
Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed (assuming, for this purpose, that such Notes matured on the Par Call Date) that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. 

  
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 “Comparable Treasury Price” means (1) the average of
the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury Dealer Quotations. 
 “Independent Investment
Banker” means one of the Reference Treasury Dealers selected by the Issuer or, if such firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing in the
United States appointed by the Issuer. 
 “Par Call Date” means, with respect to the Notes, March 1, 2028, the
date that is three months prior to the maturity date of the Notes. 
 “Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 3:30 p.m. New York time on the third Business Day preceding such redemption date. 

“Reference Treasury Dealers” means each of (i) Morgan Stanley & Co. LLC, Barclays
Capital Inc. and Wells Fargo Securities, LLC and/or their affiliates which are primary U.S. government securities dealers in New York City (each, a “Primary Treasury Dealer”), and their respective successors; and
(ii) one other which is a primary U.S. Government securities dealer and its respective successors; provided, however, that if any of the foregoing ceases to be a Primary Treasury Dealer, the Issuer will substitute therefor another Primary
Treasury Dealer. 
 “Treasury Yield” means, with respect to any redemption date, the rate per annum
equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for that redemption date. 
 In the event that the Independent Investment Banker fails to provide the Trustee with
the Reference Treasury Dealer Quotations, the Issuer will use commercially reasonable efforts to assist the Trustee in obtaining such quotations. 
 
4.    CHANGE OF CONTROL 
 4.1    Change of Control 

(a) Upon the occurrence of a Change of Control Triggering Event in respect of the Notes, unless all the Notes have been called for redemption
pursuant to this Section 3.1, each Holder of Notes shall have the right to require the Issuer to repurchase all or any part (equal to U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof) of such Holder’s Notes at an offer
price in cash equal to the Change of Control Payment. 

  
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 (b) Within 30 days following any Change of Control Triggering Event, the Issuer shall send a
notice to each Holder of Notes describing the transaction or transactions that constitute the Change of Control Triggering Event and specifying: 
  

	 	(i)	that the Change of Control Offer is being made pursuant to this Section 4.1 and that all Notes tendered will be accepted for payment; 

 

	 	(ii)	the Change of Control Payment and the purchase date, which shall be a Business Day no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

  

	 	(iii)	the CUSIP number for the Notes; 

  

	 	(iv)	that any Note not tendered will continue to accrue interest; 

  

	 	(v)	that, unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment
Date; 

  

	 	(vi)	that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes to the Paying Agent at the address specified in the notice prior to the close of business
on the third Business Day preceding the Change of Control Payment Date; 

  

	 	(vii)	that Holders will be entitled to withdraw their election referred to in clause (vi) if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; 

 

	 	(viii)	that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion will be equal to U.S.$2,000 in
principal amount or an integral multiple of U.S.$1,000 in excess thereof; and 

  
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	 	(ix)	if such notice is mailed prior to the date of the occurrence of the Change of Control Triggering Event, that the Change of Control Offer is conditional on the Change of Control Triggering Event occurring on or prior to
the Change of Control Payment Date. 

 (c) The Issuer shall cause the Change of Control Offer to remain open for at least 20
Business Days or such longer period as is required by applicable law. The Issuer shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change in Control Triggering Event. To the extent that
the provisions of any securities laws or regulations conflict with the provisions of this Section 4.1, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this
Section 4.1 by virtue of such conflict. 
 (d) On the Change of Control Payment Date, the Issuer will, to the extent lawful: 

 

	 	(i)	accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; 

  

	 	(ii)	deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

 

	 	(iii)	deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuer.

 (e) The Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such
Notes, and the Trustee will promptly authenticate and send (or cause to be transferred by book entry) to each Holder a new note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note
will be in a principal amount of U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 (f) The Issuer shall not be required to make a Change of Control Offer upon a Change of Control Triggering Event if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.1 applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not
withdrawn under such Change of Control Offer. 

  
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 (g) The Issuer may make a Change of Control Offer in advance of, but conditioned on, the
occurrence of a Change of Control Triggering Event but otherwise in accordance with the provisions of this Section 4.1. 
 (h) The
Issuer shall be solely responsible for monitoring the occurrence of a Change of Control Triggering Event. 

4.2    Certain Additional Definitions 

For the purposes of this Third Supplemental Indenture, the following expressions shall have the following meanings: 

“Below Investment Grade Rating Event” means the Notes are rated below an Investment Grade Rating by at least
two out of three of the Rating Agencies (as defined below), if there are three Rating Agencies, or all of the Rating Agencies, if there are less than three Rating Agencies, (the “Required Threshold”) on any date from the date
of the public notice of an arrangement or transaction that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of the Change of Control, which 60-day period shall be extended if, by the end of the 60-day period, the rating of the Notes is under publicly announced consideration for a possible downgrade by such number
of Rating Agencies which, together with the Rating Agencies which have already lowered their ratings on the Notes, as aforesaid, would aggregate in number the Required Threshold, such extension to continue for so long as consideration for a possible
downgrade continues by such number of Rating Agencies which, together with the Rating Agencies which have already lowered their ratings on the Notes, as aforesaid, would aggregate in number the Required Threshold. 

“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or amalgamation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuer and its subsidiaries taken as a whole to any
person (as such term is used in Section 13(d) of the Exchange Act) other than the Issuer, the Guarantor or any of the Issuer’s or Guarantor’s subsidiaries; (2) the consummation of any transaction (including, without limitation,
any merger or amalgamation) the result of which is that any person (as such term is used in Section 13(d) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of
Guarantor’s voting shares; or (3) the first day on which a majority of the members of Guarantor’s Board of Directors are not Continuing Directors. 

“Change of Control Offer” means an offer to repurchase Notes pursuant to Section 4.1 hereof. 

“Change of Control Payment” means, with respect to Notes tendered for repurchase pursuant to a Change of Control
Offer, an amount equal to 101% of the aggregate principal amount of such Notes plus accrued and unpaid interest thereon, if any, to the date of repurchase. 

  
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 “Change of Control Triggering Event” means the occurrence of both a
Change of Control and a Below Investment Grade Rating Event. 
 “Continuing Directors” means, as of any date of
determination, any member of the Board of Directors of Guarantor who (i) was a member of such Board of Directors on the date of the issuance of the Notes; or (ii) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election (either by a specific vote or by approval of Guarantor’s proxy statement in which such member was named as
a nominee for election as a director, without objection to such nomination). 
 “DBRS” means DBRS Limited.

 “Investment Grade Rating” means a rating equal to or higher than BBB (low) (or the equivalent) by DBRS,
Baa3 (or the equivalent) by Moody’s and BBB– (or the equivalent) by S&P. 
 “Moody’s”
means Moody’s Investors Service, Inc. 
 “Rating Agencies” means (1) each of DBRS, Moody’s
and S&P; and (2) if one or more of DBRS, Moody’s or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for any reason outside of the Issuer’s control, a “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, as amended, selected by the Issuer (by a resolution of its Board of Directors) as a replacement
agency for one or more of DBRS, Moody’s or S&P, as the case may be, or if a replacement agency is not selected, the remaining such agencies providing publicly available ratings of the Notes. 

“Required Threshold” has the meaning set forth in the definition of Below Investment Grade Rating Event. 

“S&P” means S&P Global Ratings, a division of S&P Global Inc. 

5.    GUARANTEE 

5.1    Agreement to Guarantee 

The Guarantor hereby fully and unconditionally guarantees to each Holder of Notes, the due and punctual payment of the principal of, premium,
if any, and interest on the Notes, the due and punctual payment of any sinking fund or analogous payments that may be payable with respect to such Notes and the due and punctual payment of any Additional Amounts that may be payable with respect to
such Notes, when and as the same shall become due and payable, whether on the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms hereof and of the Original Indenture, as supplemented by the
supplemental indentures heretofore executed by the Issuer and the Trustee. In case of the failure of the Issuer punctually to make any such payment of principal, premium, if any, or interest, or any such sinking fund or analogous payment that may be
payable with respect to the Notes or any Additional Amounts that may be payable with respect to the Notes, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether on the
Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer. 

  
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 The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal
debtor and not merely surety, and shall be absolute and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of the Notes, the Original Indenture or this Third Supplemental Indenture, any
failure to enforce the provisions of the Notes, the Original Indenture or this Third Supplemental Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto or hereto, by the Holder of the Notes or the Trustee or
any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the
Guarantor, increase the principal amount of the Notes, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to the Notes or the indebtedness evidenced thereby, or with
respect to any sinking fund or analogous payment that may be payable with respect to the Notes or with respect to any Additional Amounts that may be payable with respect to the Notes and all demands whatsoever, and covenants that its obligations
under this Section 5.1 will not be discharged except by payment in full of the principal of, premium, if any, and interest on and any Additional Amounts that may be payable with respect to the Notes. 

The Guarantor shall be subrogated to all rights of each Holder of the Notes, the Trustee and any Paying Agent against the Issuer in respect of
any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Section 5.1; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of or based upon such right of
subrogation until the principal of, premium, if any, and interest on all Notes of the same series issued under the Original Indenture, as supplemented by the supplemental indentures heretofore executed by the Issuer and the Trustee, and any sinking
fund or analogous payments and Additional Amounts with respect to such Notes shall have been paid in full. 
 Any term or provision of the
Original Indenture, as supplemented by the supplemental indentures heretofore executed by the Issuer and the Trustee, and this Third Supplemental Indenture to the contrary notwithstanding, the maximum aggregate amount of the Notes guaranteed
hereunder by the Guarantor shall not exceed the maximum amount that can be hereby guaranteed by the Guarantor without rendering the Guarantee, as it relates to the Guarantor, voidable under applicable law relating to fraudulent conveyance,
fraudulent transfer, corporate benefit, financial assistance or similar laws affecting the rights of creditors generally. 
 By executing
this Third Supplemental Indenture, the Guarantor acknowledges and agrees that the obligations to compensate, reimburse, and indemnify the Trustee under the Original Indenture, including, without limitation, Section 6.03 of the Original
Indenture, shall apply to the Guarantor and that the Guarantor and the Issuer, jointly and severally, are obligated to compensate, reimburse, and indemnify the Trustee in accordance with the terms of the Original Indenture, including, without
limitation, Section 6.03 of the Original Indenture. 

  
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 5.2    Additional Amounts 

The obligations of the Issuer pursuant to Section 9.07 of the Original Indenture shall apply, mutatis mutandis, to the Guarantor. 

5.3    Execution and Delivery 

To evidence its Guarantee set forth in Section 5.1 hereof, the Guarantor hereby agrees that this Third Supplemental Indenture shall be
executed on behalf of the Guarantor by one or more authorized officers or persons holding an equivalent title. 
 The Guarantor hereby
agrees that its Guarantee set forth in Section 5.1 hereof shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes. 

5.4    Release of Guarantee 

The Guarantor will be released and relieved of its obligations under the Guarantee in respect of the Notes, and such Guarantee will be
terminated, upon receipt by the Trustee of a Corporation Order (without the consent of the Trustee) requesting such release, upon (i) satisfaction and discharge of the Original Indenture or (ii) defeasance or covenant defeasance with
respect to the Notes, in each case, under the terms of the Original Indenture. At the request and expense of the Issuer, the Trustee shall execute and deliver an appropriate instrument evidencing such release. 

6.    GENERAL 

6.1    Effectiveness 

This Third Supplemental Indenture will become effective upon its execution and delivery. 

6.2    Effect of Recitals 

The recitals contained herein and in the Notes, except the Trustee’s certificates of authentication, shall be taken as the statements of
the Issuer, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Issuer of the Notes or the
proceeds thereof. The Trustee makes no representations as to the validity or sufficiency of this Third Supplemental Indenture or of the Notes except that the Trustee represents that it is duly authorized to execute and deliver this Third
Supplemental Indenture, authenticate the Notes and perform its obligations under the Original Indenture and hereunder, and that the statements made by it or to be made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Issuer are true and accurate. 

  
 13 

 

 6.3    Ratification of Original Indenture

 The Original Indenture as supplemented by this Third Supplemental Indenture is in all respects ratified and confirmed, and this Third
Supplemental Indenture shall be deemed part of the Original Indenture in the manner and to the extent herein and therein provided. 
 
6.4    Limitation on Liability 
 The Trustee shall act at the direction of the requisite Holders without
liability. 
 6.5    Jurisdiction; Agent for Process 

Each of the parties hereto hereby irrevocably consents to the jurisdiction of the courts of the State of New York and of any U.S. federal
court located in the Borough of Manhattan in the State of New York in connection with any action, suit or other proceeding arising out of or relating to this Third Supplemental Indenture or any action taken or omitted hereunder, and waives any claim
of forum non conveniens and any objections as to laying of venue. 
 By its execution and delivery of this Third Supplemental Indenture, the
Guarantor irrevocably designates and appoints C T Corporation System, 111 8th Avenue, New York, New York 10011, U.S.A. as the Guarantor’s authorized agent (the “Authorized Agent”) upon whom process may be served in any action,
suit or proceeding arising out of or relating to this Third Supplemental Indenture, the Notes and the Guarantee but for that purpose only, and agrees that service of process upon said C T Corporation System, and written notice of such service to the
Guarantor in the manner provided in Section 1.06 of the Original Indenture, shall be deemed in every respect effective service of process upon the Guarantor in any such action, suit or proceeding in any federal or state court in the Borough of
Manhattan, The City of New York. 
 Notwithstanding the foregoing, the Guarantor reserves the right to appoint another Person located or
with an office in the Borough of Manhattan, The City of New York, selected in its discretion, as a successor Authorized Agent, and upon acceptance of such consent to service of process by such a successor the designation of the prior Authorized
Agent shall terminate. The Guarantor shall give written notice to the Trustee and all Holders of the designation by them of a successor Authorized Agent. If for any reason the Authorized Agent ceases to be able to act as the Authorized Agent or to
have an address in the Borough of Manhattan, The City of New York, the Guarantor will designate a successor Authorized Agent in accordance with the preceding sentence. The Guarantor further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary to continue the designation and appointment of said C T Corporation System, or of any successor Authorized Agent of the Corporation, in full force and effect so long as
any of the Notes or Guarantees shall be outstanding. 

  
 14 

 

 6.6    Governing Law 

This Third Supplemental Indenture (including the Guarantee provided herein), the Original Indenture as supplemented hereby and the Notes shall
be governed by and construed in accordance with the laws of the State of New York. 

6.7    Severability 

In case any provision in this Third Supplemental Indenture (including the Guarantee provided herein), the Original Indenture as supplemented
hereby or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

6.8    Acceptance of Trust 

The Trustee hereby accepts the trusts in this Third Supplemental Indenture declared and provided for and agrees to perform the same upon the
terms and conditions herein before set forth in trust for the various Persons who shall from time to time be Holders subject to all the terms and conditions herein set forth. 

6.9    Counterparts and Formal Date 

This Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same instrument and notwithstanding their date of execution shall be deemed to bear the date first above written. 

 IN WITNESS WHEREOF the parties hereto have executed this Third Supplemental Indenture on the date
first above written. 
  

			
	 CANADIAN PACIFIC RAILWAY

LIMITED,

	As Guarantor
		
	By:	 	/s/ Nadeem Velani
		 	 Name: Nadeem Velani
 Title: Executive
Vice-President and
           Chief Financial Officer

		
	By:	 	/s/ Pramod Bhatia
		 	 Name: Pramod Bhatia
 Title:
  Treasurer

	
	 CANADIAN PACIFIC RAILWAY

COMPANY,

	As Issuer
		
	By:	 	/s/ Nadeem Velani
		 	 Name: Nadeem Velani
 Title: Executive
Vice-President and
           Chief Financial Officer

		
	By:	 	/s/ Pramod Bhatia
		 	 Name: Pramod Bhatia
 Title:
  Treasurer

 
			
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as Trustee
		
	By:	 	/s/ Yana Kislenko
		 	 Name: Yana Kislenko
 Title:   Vice
President

 TABLE OF CONTENTS 

 

							
	 	 	 	 	 	  	Page
	 1.
	 	INTERPRETATIONS AND AMENDMENTS	  	2
	 	 	1.1	 	Third Supplemental Indenture	  	2
	 	 	1.2	 	Definitions in Third Supplemental Indenture	  	2
	 	 	1.3	 	Interpretation not Affected by Headings	  	2
			
	 2.
	 	NOTES 	  	2
	 	 	2.1	 	Form and Terms of Notes	  	2
	 	 	2.2	 	Issuance of Notes	  	4
			
	 3.
	 	OPTIONAL REDEMPTION OF NOTES 	  	5
	 	 	3.1	 	Redemption of Notes	  	5
	 	 	3.2	 	Certain Additional Definitions	  	5
			
	 4.
	 	CHANGE OF CONTROL 	  	6
	 	 	4.1	 	Change of Control	  	6
	 	 	4.2	 	Certain Additional Definitions	  	9
			
	 5.
	 	GUARANTEE 	  	10
	 	 	5.1	 	Agreement to Guarantee	  	10
	 	 	5.2	 	Additional Amounts	  	12
	 	 	5.3	 	Execution and Delivery	  	12
	 	 	5.4	 	Release of Guarantee	  	12
			
	 6.
	 	GENERAL 	  	12
	 	 	6.1	 	Effectiveness	  	12
	 	 	6.2	 	Effect of Recitals	  	12
	 	 	6.3	 	Ratification of Original Indenture	  	13
	 	 	6.4	 	Limitation on Liability	  	13
	 	 	6.5	 	Jurisdiction; Agent for Process	  	13
	 	 	6.6	 	Governing Law	  	13
	 	 	6.7	 	Severability	  	14
	 	 	6.8	 	Acceptance of Trust	  	14
	 	 	6.9	 	Counterparts and Formal Date	  	14

 Schedule A 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a
New York corporation (“DTC”), to the Corporation (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 
 Unless and until it
is exchanged in whole or in part for Securities (as defined herein) in definitive registered form, this certificate may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC
or any such nominee to a successor Depositary or a nominee of such successor Depositary. 
 CANADIAN PACIFIC RAILWAY
COMPANY 
 4.000% Notes due 2028 
  

			
	No. 1	  	US$500,000,000
		  	CUSIP: 13645R AY0

 Canadian Pacific Railway Company, a corporation duly organized and existing under the laws of Canada (herein
called the “Corporation”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of
US$500,000,000 (FIVE HUNDRED MILLION UNITED STATES DOLLARS) on June 1, 2028, at the office or agency of the Corporation referred to below, and to pay interest thereon on December 1, 2018 and semi-annually thereafter, on June 1 and
December 1 in each year, from May 16, 2018, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 4.000% per annum, until the principal hereof is paid or duly provided for, and
(to the extent lawful) to pay on demand interest on any overdue interest at the rate borne by the Securities from the date on which such overdue interest becomes payable to the date payment of such interest has been made or duly provided for. The
interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the Regular Record Date for
such interest, which shall be May 15 or November 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and such defaulted interest, and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities, may be paid to the Person in whose name this Security is registered
at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 

 Unless the certificate of authentication hereon has been duly executed by the Trustee by manual
signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. 

(signature page to follow) 

 IN WITNESS WHEREOF, the Corporation has caused this instrument to be duly executed under its
corporate seal. 
 Dated:     
  

			
	 CANADIAN PACIFIC RAILWAY

COMPANY

		
	By	 	 
		 	 Name:
 Title:

		
	By	 	 
		 	 Name:
 Title:

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Securities referred to in, and issued under, the within-mentioned Indenture. 

 

							
		 		 	 WELLS FARGO BANK,

NATIONAL ASSOCIATION
 as Trustee

				
	Dated:
                                    	 		 	By:	 	 
		 		 		 	 Authorized Signatory

 [Reverse of Security] 

This Security is one of a duly authorized issue of securities of the Corporation designated as its 4.000% Notes due 2028 (herein called the
“Securities”), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to US$500,000,000, which may be issued under an indenture dated as of September 11, 2015, among the Corporation and
Wells Fargo Bank, National Association, as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture, as defined below), as supplemented by the Third Supplemental Indenture, among the Corporation,
Canadian Pacific Railway Limited (the “Guarantor”) and the Trustee (as supplemented by the Third Supplemental Indenture, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Corporation, Guarantor, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is a global Security representing US$500,000,000 aggregate principal amount of the Securities. 

Payment of the principal of (and premium, if any, on) and interest on this Security will be made at the office or agency of the Corporation
maintained or caused to be maintained for that purpose in New York, New York or at such other office or agency of the Corporation as may be maintained or caused to be maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of the principal (and premium, if any) and interest may be made at the option of the Corporation (i) by check
mailed to the address of the Person entitled thereto as such address shall appear on the Security Register or (ii) by wire transfer to an account maintained by the Person located in the United States entitled thereto as specified in the
Security Register; provided, that principal paid in relation to any Security, redeemed at the option of the Corporation or upon Maturity, shall be paid to the Holder of such Security only upon presentation and surrender of such Security to
such office or agency referred to above. 
 The Corporation will pay to the Holders such Additional Amounts as may be payable under
Section 9.07 of the Indenture. 
 Prior to March 1, 2028 (the date that is three months prior to the maturity date of the
Securities), the Corporation may redeem the Securities, in whole or in part, at the option of the Corporation, at any time or from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the Securities to be
redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed that would be due if the Securities matured on March 1, 2028 (the date that is three months prior
to the maturity date of the Securities) (exclusive of any portion of the payments of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Yield plus 15 basis points, plus, in the case of (1) and (2), accrued interest thereon to, but excluding, the date of redemption, all as provided
in the Indenture. 
 On or after March 1, 2028 (the date that is three months prior to the maturity date of the Securities) the
Corporation may redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. 

 Holders of Securities to be redeemed will receive notice of redemption delivered at least 30 and
not more than 60 days prior to the date fixed for redemption. 
 “Treasury Yield” means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for that redemption date. 
 “Comparable Treasury Issue” means the United States Treasury
security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Securities to be redeemed (assuming, for this purpose, that the Securities matured on the Par
Call Date) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities. 

“Comparable Treasury Price” means (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. 
 “Independent Investment Banker” means one of the Reference Treasury Dealers selected by the Corporation or, if such
firm is unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing in the United States appointed by the Corporation. 

“Par Call Date” means March 1, 2028, the date that is three months prior to the maturity date of the Securities. 

“Reference Treasury Dealers” means each of (i) Morgan Stanley & Co. LLC, Barclays Capital Inc. and Wells Fargo
Securities, LLC and/or their affiliates which are primary U.S. government securities dealers in New York City (each, a “Primary Treasury Dealer”), and their respective successors; and (ii) one other which is a primary U.S. Government
securities dealer and its respective successors; provided, however, that if any of the foregoing ceases to be a Primary Treasury Dealer, the Corporation will substitute therefor another Primary Treasury Dealer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average,
as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at
3:30p.m. New York time on the third business day preceding such redemption date. 

 The Securities are also subject to redemption as a whole but not in part, at the option of the
Corporation, at any time, on not less than 30 nor more than 60 days’ prior written notice to each Holder of Securities to be redeemed at such Holder’s address appearing on the Security Register at a redemption price equal to 100% of the
principal amount, together with accrued and unpaid interest to but excluding the date fixed for redemption, in the event there is more than an insubstantial risk that the Corporation has become or would become obligated to pay, on the next date on
which any amount would be payable with respect to the Securities, any Additional Amounts as a result of any amendment 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 or amendment is announced or becomes effective on or after May 14, 2018,
all as provided in Section 10.08 of the Indenture. 
 The Securities are also subject to redemption pursuant to Article 3 of the Third
Supplemental Indenture. 
 In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose redemption provision is made in accordance
with the Indenture shall cease to bear interest from and after the Redemption Date. 
 The Securities do not have the benefit of sinking
fund obligations. 
 In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. 
 If an Event of Default shall occur and be
continuing, the principal of all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. 

The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Corporation on this Security and
(b) certain restrictive covenants and the related Defaults and Events of Default, upon compliance by the Corporation with certain conditions set forth therein, which provisions apply to this Security. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Corporation and the rights of the Holders under the Indenture at any time by the Corporation and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of all affected Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities affected thereby, to waive
compliance by the Corporation with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Security.

 No reference herein to the Indenture and no provision of this Security or of the Indenture shall
alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest on this Security at the times, place, and rate, and in the coin or currency, herein prescribed.

 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable on the
Security Register of the Corporation, upon surrender of this Security for registration of transfer at the office or agency of the Corporation maintained or caused to be maintained for such purpose in New York, New York duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Corporation and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The
Securities are issuable only in registered form without coupons in denominations of US$2,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are
exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same. 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to the time of due presentment of this
Security for registration of transfer, the Corporation, the Trustee and any agent of the Corporation or the Trustees may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Corporation, the Trustee nor any agent shall be affected by notice to the contrary. 
 Interest on this Security
shall be computed on the basis of a 360-day year of twelve 30-day months. 

For the purposes only of the disclosure required by the Interest Act (Canada), and without affecting the amount of interest payable to
any holder of a Security or the calculation of interest on any Security, if the rate of interest on any Security is calculated on the basis of a year which contains fewer days than the actual number of days in the calendar year of calculation, such
rate of interest shall be expressed as a yearly rate for the purposes of the Interest Act (Canada) by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in
the deemed year. 
 As provided for in the Indenture, the Corporation may, from time to time, without notice or consent of the Holders,
create and issue additional Securities so that such additional Securities shall be consolidated and form a single series with the Securities initially issued by the Corporation and shall have the same terms as to status, redemption or otherwise as
the Securities originally issued. 

 If at any time, (i) the Depositary notifies the Corporation that it is unwilling or unable
or no longer qualifies to continue as Depositary or if at any time the Depositary shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor
depositary is not appointed by the Corporation within 90 days after the Corporation receives such notice or becomes aware of such condition, as the case may be, or (ii) the Corporation determines that the Securities shall no longer be
represented by a global Security or Securities, then in such event the Corporation will execute and the Trustee will authenticate and deliver Securities in definitive registered form, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of this Security in exchange for this Security. Such Securities in definitive registered form shall be registered in such names and issued in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered. 

The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York. 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.FORM
of WARRANT

 

Warrant
Number ____

 

THE
WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS WARRANT
AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1)
SUCH TRANSACTION IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION OR (2) THE COMPANY IS PROVIDED WITH AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
STATING THAT SUCH TRANSACTION IS IN COMPLIANCE WITH EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE
LAWS. NO TRANSFER OF ANY INTEREST IN THIS WARRANT OR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE EFFECTED WITHOUT FIRST
SURRENDERING THIS WARRANT OR SUCH SECURITIES, AS THE CASE MAY BE, TO THE COMPANY OR ITS TRANSFER AGENT, IF ANY.

 

Warrant
to Purchase

 

Shares
of

 

Common
Stock

 

As
Herein Described

 

May
__, 2018

 

WARRANT
TO PURCHASE COMMON STOCK OF

 

PROVENTION
BIO, INC.

 

This
is to certify that, for value received, MacroGenics, Inc., or a proper assignee (the “Holder”), is entitled to purchase
up to 270,299 shares (“Warrant Shares”) of common stock, $0.0001 par value per share (the “Common Stock”),
of Provention Bio, Inc., a Delaware corporation (the “Company”), subject to the provisions of this Warrant. This Warrant
shall be exercisable at Two Dollars and Fifty Cents ($2.50) per share (the “Exercise Price”). This Warrant also is
subject to the following terms and conditions:

 

    	 

    	 

    

 

1.
Exercise and Payment; Exchange.

 

(a)
This Warrant may be exercised in whole or in part at any time from and after the date hereof (the “Commencement Date”)
through the close of business on May __, 2025 (the “Expiration Date”), at which time this Warrant shall expire and
become void, but if such date is a day on which federal or state chartered banking institutions located in the State of New York
are authorized to close, then on the next succeeding day which shall not be such a day. Exercise (“Exercise”) shall
be by presentation and surrender to the Company, or at the office of any transfer agent designated by the Company (the “Transfer
Agent”), of (i) this Warrant, (ii) the attached exercise form properly executed, and (iii) a certified or official bank
check for the Exercise Price for the number of Warrant Shares specified in the exercise form. If this Warrant is exercised in
part only, the Company or the Transfer Agent shall, upon surrender of the Warrant, execute and deliver a new Warrant evidencing
the rights of the Holder to purchase the remaining number of Warrant Shares purchasable hereunder. Upon receipt by the Company
of this Warrant, the properly executed exercise form, and payment as aforesaid, the Holder shall be deemed to be the holder of
record of the Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then
be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. Under no circumstance
shall the Company be required to make any cash payments or net cash settlement to the Holder in lieu of delivery of the Warrant
Shares.

 

(b)
In lieu of exercising this Warrant for cash pursuant to Section 2 (a), if the fair market value of one Warrant Share is greater
than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Warrant Shares
equal to the value of this Warrant (or of any portion of this Warrant being canceled) by Exercise of this Warrant, in which event
the Company shall issue to the Holder that number of Warrant Shares computed using the following formula:

 

	X	=	Y
    (A – B)	 
	A	 

Where:

 

X
= The number of Warrant Shares to be issued to the Holder

 

Y
= The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being canceled (at the date of such calculation)

 

A
= The fair market value of one Warrant Share (at the date of such calculation)

 

B
= The Exercise Price (as adjusted to the date of such calculation)

 

    	 

    	 

    

 

For
purposes of the calculation above, the fair market value of one Warrant Share shall be determined as set forth in Section 3(a)
– (c) below.

 

(b)
Conditions to Exercise or Exchange. The restrictions in Section 7 shall apply, to the extent applicable by their terms,
to any exercise or exchange of this Warrant permitted by this Section 1.

 

2.
Reservation of Shares. The Company shall, at all times until the expiration of this Warrant, reserve for issuance and delivery
upon exercise of this Warrant the number of Warrant Shares which shall be required for issuance and delivery upon exercise of
this Warrant. Upon issuance, all Warrant Shares will be validly issued and outstanding, fully paid and non-assessable, and free
from all taxes, liens and charges with respect to the issuance thereof.

 

3.
Fractional Interests. The Company shall not issue any fractional shares or scrip representing fractional shares upon the
exercise or exchange of this Warrant. With respect to any fraction of a share resulting from the exercise or exchange hereof,
the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current fair market value per share
of Common Stock, determined as follows:

 

(a)
If the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such an exchange,
the current fair market value shall be the last reported sale price of the Common Stock on such exchange on the last business
day prior to the date of exercise of this Warrant or if no such sale is made on such day, the mean of the closing bid and asked
prices for such day on such exchange;

 

(b)
If the Common Stock is not so listed or admitted to unlisted trading privileges on a national securities exchange, the current
fair market value shall be the mean of the last bid and asked prices reported on the last business day prior to the date of the
exercise of this Warrant by the OTC Markets Group, Inc.; or

 

(c)
If the Common Stock is not so listed or admitted to unlisted trading privileges on a national securities exchange and bid and
asked prices are not so reported, the current fair market value shall be an amount, not less than book value, determined in such
reasonable manner as may be prescribed by the Company in good faith.

 

4.
No Rights as Shareholder. This Warrant shall not entitle the Holder to any rights as a shareholder of the Company, either
at law or in equity. The rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein.

 

5.
Adjustments in Number and Exercise Price of Warrant Shares.

 

5.1
The number of shares of Common Stock for which this Warrant may be exercised and the Exercise Price therefor shall be subject
to adjustment as follows:

 

(a)
If the Company is recapitalized through the subdivision or combination of its outstanding shares of Common Stock into a larger
or smaller number of shares, the number of Warrant Shares shall be increased or reduced, as of the record date for such recapitalization,
in the same proportion as the increase or decrease in the outstanding shares of Common Stock, and the Exercise Price shall be
adjusted so that the aggregate amount payable for the purchase of all of the Warrant Shares issuable hereunder immediately after
the record date for such recapitalization shall equal the aggregate amount so payable immediately before such record date.

 

    	 

    	 

    

 

(b)
If the Company declares a dividend on Common Stock payable in Common Stock or securities convertible into Common Stock, the number
of shares of Common Stock for which this Warrant may be exercised shall be increased as of the record date for determining which
holders of Common Stock shall be entitled to receive such dividend, in proportion to the increase in the number of outstanding
shares (and shares of Common Stock issuable upon conversion of all such securities convertible into Common Stock) of Common Stock
as a result of such dividend, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of
all the Warrant Shares issuable hereunder immediately after the record date for such dividend shall equal the aggregate amount
so payable immediately before such record date.

 

(c)
If the Company distributes to holders of its Common Stock, other than as part of its dissolution or liquidation or the winding
up of its affairs, any evidence of indebtedness or any of its assets (other than cash, Common Stock or securities convertible
into Common Stock), the Company shall give written notice to the Holder of any such distribution at least fifteen (15) days prior
to the proposed record date in order to permit the Holder to exercise this Warrant on or before the record date. There shall be
no adjustment in the number of shares of Common Stock for which this Warrant may be exercised, or in the Exercise Price, by virtue
of any such distribution.

 

(d)
If the Company offers rights or warrants to the holders of Common Stock which entitle them to subscribe to or purchase additional
Common Stock or securities convertible into Common Stock, the Company shall give written notice of any such proposed offering
to the Holder at least fifteen (15) days prior to the proposed record date in order to permit the Holder to exercise this Warrant
on or before such record date. There shall be no adjustment in the number of shares of Common Stock for which this Warrant may
be exercised, or in the Exercise Price, by virtue of any such distribution.

 

(e)
If the event, as a result of which an adjustment is made under paragraph (a) or (b) above, does not occur, then any adjustments
in the Exercise Price or number of shares issuable that were made in accordance with such paragraph (a) or (b) shall be adjusted
to the Exercise Price and number of shares as were in effect immediately prior to the record date for such event.

 

5.2
In the event of any reorganization or reclassification of the outstanding shares of Common Stock (other than a change in par value
or from no par value to par value, or from par value to no par value, or as a result of a subdivision or combination) or in the
event of any consolidation or merger of the Company with another entity after which the Company is not the surviving entity, at
any time prior to the expiration of this Warrant, upon subsequent exercise of this Warrant the Holder shall have the right to
receive the same kind and number of shares of common stock and other securities, cash or other property as would have been distributed
to the Holder upon such reorganization, reclassification, consolidation or merger had the Holder exercised this Warrant immediately
prior to such reorganization, reclassification, consolidation or merger, appropriately adjusted for any subsequent event described
in this Section 5. The Holder shall pay upon such exercise the Exercise Price that otherwise would have been payable pursuant
to the terms of this Warrant. If any such reorganization, reclassification, consolidation or merger results in a cash distribution
in excess of the then applicable Exercise Price, the Holder may, at the Holder’s option, exercise this Warrant without making
payment of the Exercise Price, and in such case the Company shall, upon distribution to the Holder, consider the Exercise Price
to have been paid in full, and in making settlement to the Holder, shall deduct an amount equal to the Exercise Price from the
amount payable to the Holder.

 

    	 

    	 

    

 

5.3
If the Company shall, at any time before the expiration of this Warrant, dissolve, liquidate or wind up its affairs, the Holder
shall have the right to receive upon exercise of this Warrant, in lieu of the shares of Common Stock of the Company that the Holder
otherwise would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid
to the Holder upon any such dissolution, liquidation or winding up with respect to such Common Stock receivable upon exercise
of this Warrant on the date for determining those entitled to receive any such distribution. If any such dissolution, liquidation
or winding up results in any cash distribution in excess of the Exercise Price provided by this Warrant, the Holder may, at the
Holder’s option, exercise this Warrant without making payment of the Exercise Price and, in such case, the Company shall,
upon distribution to the Holder, consider the Exercise Price to have been paid in full and, in making settlement to the Holder,
shall deduct an amount equal to the Exercise Price from the amount payable to the Holder.

 

6.
Notices to Holder. So long as this Warrant shall be outstanding (a) if the Company shall pay any dividends or make any
distribution upon the Common Stock otherwise than in cash or (b) if the Company shall offer generally to the holders of Common
Stock the right to subscribe to or purchase any shares of any class of Common Stock or securities convertible into Common Stock
or any similar rights or (c) if there shall be any capital reorganization of the Company in which the Company is not the surviving
entity, recapitalization of the capital stock of the Company, consolidation or merger of the Company with or into another corporation,
sale, lease or other transfer of all or substantially all of the property and assets of the Company, or voluntary or involuntary
dissolution, liquidation or winding up of the Company, then in such event, the Company shall cause to be mailed to the Holder,
at least thirty (30) days prior to the relevant date described below (or such shorter period as is reasonably possible if thirty
(30) days is not reasonably possible), a notice containing a description of the proposed action and stating the date or expected
date on which a record of the Company’s shareholders is to be taken for the purpose of any such dividend, distribution of
rights, or such reclassification, reorganization, consolidation, merger, conveyance, lease or transfer, dissolution, liquidation
or winding up is to take place and the date or expected date, if any is to be fixed, as of which the holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such event.

 

    	 

    	 

    

 

7.
Transfer, Exercise, Exchange, Assignment or Loss of Warrant, Warrant Shares or Other Securities.

 

7.1
This Warrant may be transferred, exercised, exchanged or assigned (“transferred”), in whole or in part, subject to
the following restrictions. This Warrant and the Warrant Shares or any other securities (“Other Securities”) received
upon exercise of this Warrant shall be subject to restrictions on transferability until registered under the Securities Act of
1933, as amended (the “Securities Act”), unless an exemption from registration is available. Until this Warrant and
the Warrant Shares or Other Securities are so registered or exempt from registration, this Warrant and any certificate for Warrant
Shares or Other Securities issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form
and substance satisfactory to counsel for the Company, stating that this Warrant, the Warrant Shares or Other Securities may not
be sold, transferred or otherwise disposed of unless, in the opinion of counsel satisfactory to the Company, which may be counsel
to the Company, that this Warrant, the Warrant Shares or Other Securities may be transferred without such registration. This Warrant
and the Warrant Shares or Other Securities may also be subject to restrictions on transferability under applicable state securities
or blue sky laws.

 

7.2
Any transfer permitted hereunder shall be made by surrender of this Warrant to the Company or to the Transfer Agent at its offices
with a duly executed request to transfer the Warrant, which shall provide adequate information to effect such transfer and shall
be accompanied by funds sufficient to pay any transfer taxes applicable. The Company or Transfer Agent shall, without charge,
execute and deliver a new Warrant in the name of the transferee named in such transfer request, and this Warrant promptly shall
be cancelled.

 

7.3
Upon receipt by the Company of evidence satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the
case of loss, theft or destruction, of reasonable satisfactory indemnification, or, in the case of mutilation, upon surrender
of this Warrant, the Company will execute and deliver, or instruct the Transfer Agent to execute and deliver, a new Warrant of
like tenor and date, any such lost, stolen or destroyed Warrant thereupon shall become void.

 

8.
Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company with respect to
the issuance of the Warrant as follows:

 

8.1
Legends. The Holder understands and acknowledges that the certificate(s) evidencing the securities issued by the Company
will be imprinted with a restrictive legend as referenced in Section 7.1 above.

 

8.2
Access to Data. The Holder has had an opportunity to discuss the Company’s business, management, and financial affairs
with the Company’s management and the opportunity to review the Company’s facilities and business plans. The Holder
has also had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction.

 

8.3
Authorization. This Warrant and the agreements contemplated hereby, when executed and delivered by the Holder, will constitute
a valid and legally binding obligation of the Holder, enforceable in accordance with their respective terms.

 

    	 

    	 

    

 

8.4
Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action
taken by such Holder, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Warrant or any transaction contemplated hereby.

 

9.
Notices. All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have
been duly given, if delivered in person or mailed, certified, return-receipt requested, postage prepaid to the address previously
provided to the other party, or sent by fax or email (to the extent stated below). Either party hereto may from time to time,
by written notice to the other party, designate a different address. If any notice or other document is sent by certified or registered
mail, return receipt requested, postage prepaid, properly addressed as aforementioned, the same shall be deemed delivered seventy-two
(72) hours after mailing thereof. If any notice is sent by fax or email, it will be deemed to have been delivered on the date
the fax or email thereof is actually received, provided the original thereof is sent by certified mail, in the manner set forth
above, within twenty-four (24) hours after the fax or email is sent.

 

10.
Amendment. Any provision of this Warrant may be amended or the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the mutual written consent of the Company and the
Holder.

 

11.
Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York.

 

[Signature
page follows.]

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.

 

	 	PROVENTION BIO, INC.
	 	 	 
	 	 	 
	 	 	 
	 	By:	               
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:

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