Document:

gbsn-ex101_6.htm

 

Exhibit 10.1

January 23, 2017

 

[             ]

 

Dear Sirs:

This agreement (this “Agreement”) is being delivered to you in connection with that certain understanding by and among Great Basin Scientific, Inc., a Delaware corporation, with headquarters located at 420 E. South Temple, Suite 520, Salt Lake City, UT 84111 (the “Company”) and [         ]. (the “Holder”).

Reference is hereby made to that certain Securities Purchase Agreement, dated June 29, 2016, by and among the Company, the Holder and certain other buyers signatory thereto (as amended prior to the date hereof, the “2016 SPA”), pursuant to which the Holder acquired (i) senior secured convertible notes (as amended prior to the date hereof, the “2016 Holder Notes”) and (ii) warrants to acquire shares of Common Stock as. Capitalized terms not defined herein shall have the meaning as set forth in the 2016 SPA or in the 2016 Holder Notes, as applicable. 

The Holder, constituting the Required Holders under the 2016 Notes, and the Company hereby agree to further amend the 2016 Notes pursuant to Section 19 of the 2016 Notes as set forth herein, which amendments shall be binding on the Holder and all holders of the Other Notes (the “Other Holders”) as follows: 

A.Section 18(c) of the 2016 Notes is hereby amended and restated, as follows:

"(c)Leak-Out.  

(i)During the period commencing on January 3, 2017 and ending with close of trading on March 1, 2017, exclusive (such period, the "Restricted Period"), neither the Holder, nor any of its Buyer Trading Affiliates (as defined in the 2016 SPA), collectively, shall sell, directly or indirectly, (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) on any Trading Day during the Restricted Period (any such date, a “Date of Determination”), more than the Holder's Pro Rata Share (as defined below) of the trading volume of Common Stock on the Principal Market (or such other primary market in which the Common Stock is then trading) as reported by Bloomberg for the applicable Date of Determination; provided, that the foregoing restrictions shall not apply to any actual “long” (as defined in Regulation SHO of the 1934 Act) sales by the Holder or any of its Buyer Trading Affiliates at a price greater than $0.50 per share (in each case, as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar events occurring after January 23, 2017) (each such transfer a “Permitted Transfer”); provided, 

 

further, that neither the Holder, nor any of its Buyer Trading Affiliates  shall sell, directly or indirectly, (including, without limitation, any sales, short sales, swaps or any derivative transactions that would be equivalent to any sales or short positions) any Common Stock on January 23, 2017.  As used herein, "Holder's Pro Rata Share" means 55% of a percentage determined by multiplying 100 and a fraction (i) the numerator of which is the outstanding Principal amount of this Note on January 23, 2017 and (ii) the denominator of which is the sum of (x) the outstanding Principal amount of this Note on January 23, 2017 and (y) the outstanding principal amounts of all Other Notes on January 23, 2017; provided, however, that to the extent the Holder and/or any holder of Other Notes withdraws cash from its Holder Master Control Account, the Holder's Pro Rata Share shall be computed anew for the Holder and all holders of Other Notes as of the date of such cash withdrawal and the Company shall promptly, but in any event within one (1) Business Day of such cash withdrawal, deliver written notice thereof to all holders of Notes and advise holders of Notes of their respective revised Holder's Pro Rata Share, which revised Holder's Pro rata Share shall be effective as of the date such holders receive such written notice.

(ii)Notwithstanding anything herein to the contrary, during the Restricted Period, the Holder may, directly or indirectly, sell or transfer all, or any part, of this Note or the Holder's Warrants (or any securities issuable upon conversion or exercise of this Notes or the Holder's Warrants, as applicable) (the “Restricted Securities”) to any Person (an “Assignee”) without complying with (or otherwise limited by) the restrictions set forth in this Section 18(c); provided, that as a condition to any such sale or transfer an authorized signatory of the Company and such Assignee duly execute and deliver an agreement containing the same provisions as contained in this Section 18(c) (an “Assignee Agreement”) and sales of the Holder and its Buyer Trading Affiliates and all Assignees (other than Permitted Transfers) shall be aggregated for all purposes of this Section 18(c) and all Assignee Agreements."

For the avoidance of doubt, after giving effect to the foregoing amendments, the Holder’s Pro Rata Share for the Holder as of the date hereof shall be 42.5%.

The Company hereby acknowledges and agrees that as of the date hereof one or more Equity Conditions Failures have occurred and are continuing and, therefore, a Control Account Holder Release Event has occurred and is continuing.

The Company hereby confirms and agrees that (i) except with respect to the amendments set forth in this Agreement as of the date hereof, the 2016 Note and the other Transaction Documents (as defined in the 2016 SPA) shall continue to be, in full force and effect, (ii) the execution, delivery and effectiveness of this Agreement shall not operate as an amendment of any right, power or remedy of the Holder except to the extent expressly set forth herein and (iii) as of the date hereof, the 2016 Note will be deemed to be fully amended and restated to reflect the amendments set forth above.

 

The Company shall, on or before 8:30 a.m., New York City time, on January 23, 2017, issue a Current Report on Form 8-K attaching this Agreement as an exhibit thereto (including all attachments, the “8-K Filing”) disclosing all material terms of the transactions contemplated hereby.  From and after the filing of the 8-K Filing, the Holder shall not be in possession of any material, nonpublic information received from the Company or any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents, that is not disclosed in the 8-K Filing.  In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the older or any of its affiliates, on the other hand, shall terminate and be of no further force or effect.  The Company shall not, and shall cause its officers, directors, employees, affiliates and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from and after the date hereof without the express written consent of the Holder.  To the extent that the Company delivers any material, non-public information to the Holder without the Holder’s express prior written consent, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent with respect to, or a duty to the to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agent or not to trade on the basis of, such material, non-public information. The Company shall not disclose the name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.  The Company understands and confirms that the Holder will rely on the foregoing representations in effecting transactions in securities of the Company.

The Company shall reimburse the Holder for its legal fees and expenses in connection with the preparation and negotiation of this Agreement and transactions contemplated thereby, by paying, promptly but in any event within five (5) Business Days of the date hereof, any such amount to Schulte Roth & Zabel LLP (the “Holder Counsel Expense”) by wire transfer of immediately available funds in accordance with the written instructions of Schulte Roth & Zabel LLP delivered to the Company.  The Holder Counsel Expense shall be paid by the Company whether or not the transactions contemplated by this Waiver are consummated.  Except as otherwise set forth above, each party to this Waiver shall bear its own expenses in connection with the transactions contemplated hereby.

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing in accordance with the information set forth in the 2016 SPA.

This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, letters and understandings relating to the subject matter hereof and are fully binding on the parties hereto. 

 

This Agreement may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. This Agreement may be executed and accepted by facsimile or PDF signature and any such signature shall be of the same force and effect as an original signature.

 The terms of this Agreement shall be binding upon and shall inure to the benefit of each of the parties hereto and their respective successors and assigns.

 This Agreement may not be amended or modified except in writing signed by each of the parties hereto.

 All questions concerning the construction, validity, enforcement and interpretation of this letter agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.

 Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this letter agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereby irrevocably waives any right it may have, and agrees not to request, a jury trial for the adjudication of any dispute hereunder or in connection with or arising out of this letter agreement or any transaction contemplated hereby. 

 Each party hereto acknowledges that, in view of the uniqueness of the transactions contemplated by this letter agreement, the other parties hereto may not have an adequate remedy at law for money damages in the event that this Agreement has not been performed in accordance with its terms, and therefore agrees that such other parties shall be entitled to seek specific enforcement of the terms hereof in addition to any other remedy it may seek, at law or in equity.

The obligations of the Holder under this Agreement are several and not joint with the obligations of any Other Holder under any other agreement, and the Holder shall not be responsible in any way for the performance of the obligations of any Other Holder under any such other agreement. Nothing contained herein or in this Agreement, and no action taken by the Holder 

 

pursuant hereto, shall be deemed to constitute the Holder and the Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement and the Company acknowledges that the Holder and the Other Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any other Agreement. The Company and the Holder confirm that the Holder has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for such purpose nor shall the Holder have any right of enforcement or otherwise against any Other Holder related hereto.

The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof that none of the terms offered to any Other Holder with respect to any restrictions on the sale of Securities (as defined in the 2016 SPA) or amendments to the terms of the 2016 Notes substantially in the form of this Agreement (or any amendment, modification, waiver or release thereof) (each a “Settlement Document”), is or will be more favorable to such Other Holder than those of the Holder and this Agreement. If, and whenever on or after the date hereof, the Company enters into a Settlement Document, then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such Settlement Document, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. The provisions of this paragraph shall apply similarly and equally to each Settlement Document.

[The remainder of the page is intentionally left blank]

 

 

Sincerely,

GREAT BASIN SCIENTIFIC, INC.

 

By: ____________________________

       Name:

       Title:

 

Agreed to and Acknowledged:

“HOLDER”

 

[                ]. 

By: [               ]

 

By: ____________________________

       Name: 

 Title: 

 

 

[Signature Page to Agreement]EX-10.1

 Exhibit 10.1 

THIS SEPARATION AGREEMENT is made as of January 18, 2017 (the “Agreement”) 

BETWEEN: 
 CANADIAN PACIFIC RAILWAY
LIMITED (the “Company”) 
 - and - 

E. HUNTER HARRISON (the “Executive”) 

RECITALS: 
  

	A.	The Company and the Executive are party to an employment agreement dated June 28, 2012, as amended on May 5, 2014 (the “Employment Agreement”). 

 

	B.	The Company and the Executive contemplated that the Executive would retire on June 30, 2017. The Company and the Executive entered into a consulting agreement on July 25, 2016 (the “Consulting
Agreement”) pursuant to which the Executive has agreed to provide consulting services to the Company following his retirement. 

  

	C.	The Executive approached the Company’s board of directors (the “Board”) to see if modifications could be made to his Employment Agreement that would allow him to pursue other opportunities, which
would include opportunities involving certain other Class 1 Railroads. In order to pursue such opportunities, the Executive wishes to be released from certain non-competition and non-solicitation restrictions contained in his Employment Agreement.

  

	D.	The Board established a special committee of independent directors (the “Special Committee”) to conduct discussions on behalf of the Company with the Executive relating to the Executive’s
separation from the Company. 

  

	E.	Upon the recommendation of the Special Committee, the Board has determined that it is in the best interests of the Company to provide a limited waiver of the non-competition and non-solicitation covenants in the
Employment Agreement to enable the Executive to pursue other opportunities, which include opportunities involving certain other Class 1 Railroads, in exchange for the forfeiture by the Executive of certain benefits and equity awards and his
agreement to certain other terms and conditions. 

 NOW, THEREFORE in consideration of the foregoing and the promises
and covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged and intending to be legally bound by this Agreement the undersigned agree as follows: 

 

	1.	Definitions. Capitalized terms used and not defined in this Agreement shall have the meanings ascribed to such terms in the Employment Agreement. 

 

	2.	Termination. The Executive’s employment with the Company is terminated effective January 31, 2017 (the “Resignation Date”). 

 

	3.	Limited Waiver of Non-Competition and Non-Solicitation. Section 7 of the Employment Agreement is replaced in its entirety by the following: 

 Non-Solicitation of Employees/Covenants Against Competition 

(a) The Executive acknowledges that by reason of his employment the services he renders to the Company are of a special or unusual character
with a unique value to the Company, the loss of which the Company believes cannot adequately be compensated by damages in an action at law. In view of the Confidential Information known or to be obtained by, or disclosed to the Executive, as set
forth above, and as a material inducement to the Company to enter into this Agreement, the Executive covenants and agrees during his employment with the Company and during the Covenant Period (as defined below), the Executive will not, except as
otherwise authorized by this Agreement, directly or indirectly, own, manage, engage in, operate, control, work for, consult with, render services for, maintain any interest in (proprietary, financial or otherwise) or participate in the ownership,
management, operation or control of, whether in corporate proprietorship or partnership form or otherwise, any of CN, BNSF Railway Co. or Union Pacific Railroad, provided, however, that the restrictions contained in this Agreement shall not restrict
the acquisition by the Executive, directly or indirectly, of less than 2% of the outstanding capital stock of any of CN, BNSF Railway Co. or Union Pacific Railroad. 

As used herein, the “Covenant Period” shall mean the period of the Executive’s employment with the Company and thirty
six (36) months following the termination of the Executive’s employment, regardless of the reason for termination. 
 (b) The
Executive further covenants and agrees that during the Covenant Period, the Executive shall not, directly or indirectly cause, solicit, induce or encourage any employee of the Company at the level of Manager or above to leave such employment or
hire, employ or otherwise engage any such individual, other than the Company’s current Chief of Staff. For purposes of this Section 7(b), general newspaper and other media advertisements shall not be considered solicitation of Company
employees, but hiring such persons so solicited shall not be permitted in violation of the prior sentence. 
  

	4.	Unpaid Salary, Bonus, Accrued Vacation and Expenses. On or prior to the first regular payroll date of the Company following the Resignation Date, the Company shall pay the Executive a lump sum amount equal to
(i) any accrued but unpaid base salary, (ii) any unpaid or unreimbursed business expenses, (iii) any accrued but unused vacation, and (iv) any other amounts owing, but still unpaid, to the Executive up to the Resignation Date.
The Company shall pay the Executive his cash bonus with respect to 2016 on the date active named executive officers of the Company are paid their bonus for 2016 in an amount based purely on corporate results with no negative discretion. The
Executive shall not be eligible for any bonus for the 2017 calendar year. 

  
 2 

	5.	Surrender of Equity Awards and Forfeiture of Benefits. A complete list of all equity awards granted to the Executive by the Company and outstanding as of the Resignation Date is set forth on
Schedule A. In consideration of the limited waivers set out in Section 3 of this Agreement, the Executive agrees to (i) forfeit all pension and post-retirement benefits, other than under the registered pension plan(s), if any,
(ii) forfeit all health benefits, including retiree medical benefits and Medicare supplement policy for the Executive or his spouse, provided that the Executive’s medical benefits under the Company’s health plans will terminate on
February 28, 2017, other than COBRA rights (which the Company represents and warrants the Executive and his dependents shall have available) and (iii) forfeit all other benefits and perquisites the Executive is entitled to receive from the
Company of any kind or nature whatsoever other than tax equalization entitlements as provided in the Employment Agreement. The Executive agrees to surrender for cancellation his vested PSUs granted on January 31, 2014 in exchange for a cash
payment of US$4,806,470 on or prior to the first regular payroll date of the Company following the Resignation Date. The Executive also agrees to surrender for cancellation all of the Executive’s remaining PSUs and vested and unvested options
and DSUs as set out on Schedule A, other than the Specified Number (as defined below) of the 650,000 vested options (the “Retained Options”) granted to the Executive pursuant to the standalone option agreement dated
June 26, 2012, as amended on May 5, 2014 (the “Option Agreement”). The “Specified Number” shall be the number of options obtained by subtracting US$55,000,000 from the value, based on the closing price of
the Company’s common stock on the New York Stock Exchange (“NYSE”) on January 30, 2017, of all options and DSUs that are vested or would vest prior to the Resignation Date (the “Remaining Amount”), and
dividing the Remaining Amount by the difference between the closing price of the Company’s common stock on the NYSE on January 30, 2017 and the exercise price of the options, with currency conversion as appropriate in accordance with
Company practice. 

  

	6.	Cashless Exercise of Retained Options. The Executive and the Company agree that, notwithstanding the fact that the Executive’s Retained Options are not exercisable until June 26, 2017, the Board hereby
permits the Executive to exercise the Retained Options on the Resignation Date or thereafter and the Executive will elect a “cashless” exercise of the Retained Options on the Resignation Date (or as soon thereafter as legally permitted) in
accordance with Section 4.3 of the Option Agreement. 

  

	7.	Sale of Company Shares. The Executive agrees to sell all of the shares of the Company owned, directly or indirectly, by the Executive by no later than May 31, 2017. 

 

	8.	Indemnification and Insurance. All rights of indemnification and director and officer liability insurance coverage in respect of the Executive under the Employment Agreement or otherwise shall remain in full
force and effect. 

  

	9.	Confidentiality and Return of Confidential Information. The Executive agrees that he will continue to be bound by the confidentiality obligations contained in Section 5 of the Employment Agreement following
the Resignation Date. The Executive agrees to promptly deliver to the Company all documents, media and other items in his possession containing Confidential Information, including all complete or partial copies, recording, abstracts, notes or
reproductions of any kind made from or about such documents, media, items or information contained therein in accordance with Section 6 of the Employment Agreement. The Executive may retain his address book and cell phone number.

  
 3 

	10.	Standstill. The Executive agrees that for a period of thirty six (36) months following the Resignation Date, he shall not, directly or indirectly, or jointly or in concert with any person, (i) purchase,
offer or agree to purchase any securities, direct or indirect rights or options to acquire securities or, except in the ordinary course, assets of the Company; (ii) enter into, offer or agree to enter into or engage in any discussions or
negotiations with respect to any acquisition or other business combination transaction relating to the Company, or any acquisition transaction relating to all or, except in the ordinary course, part of the Company’s assets, or propose any of
the foregoing; (iii) solicit proxies from the Company’s shareholders or otherwise attempt to influence the conduct of the Company’s shareholders or the voting of any of the Company’s voting securities; (iv) form, join or in
any way participate in any group acting jointly or in concert with respect to the foregoing; (v) seek any modification to or waiver of the foregoing, other than on a confidential basis that will not require the Company to make a public
announcement; (vi) seek, propose or otherwise act alone or in concert with others, to influence or control the management, board of directors or policies of the Company; (vii) make any public announcement, or take any action which could
require the Company to make any public announcement, with respect to any of the foregoing; (viii) advise, assist or encourage, act as a financing source for or otherwise invest in any other person in connection with any of the foregoing
activities; or (ix) disclose any intention, plan or arrangement, or take any action inconsistent with the foregoing. 

  

	11.	Resignation and Release. In accordance with Section 9 of the Employment Agreement, the Executive agrees to resign from all positions held by him with the Company and its subsidiaries effective as of the
Resignation Date and agrees to execute and deliver a full and final release of the Company in the form annexed hereto as Schedule B. 

  

	12.	Termination of Consulting Agreement. The Company and the Executive acknowledge that the condition precedent to the Consulting Agreement taking effect will not be met as a result of the Executive’s
resignation prior to June 30, 2017. Accordingly, the Company and the Executive agree that the Consulting Agreement is terminated and cancelled without any notice or compensation in lieu of notice effective as of the Resignation Date, including
cancelation of any restrictive covenants therein. 

  

	13.	Deemed Breach by Executive. 

 The Executive agrees that he will be deemed to be in
breach of the non-competition, non-solicitation, standstill and confidentiality obligations set out in Sections 5 through 7 of the Employment Agreement, as amended by Section 3 of this Agreement, as well as Sections 9 and 10 of this Agreement,
as applicable (the “Obligations”), if (i) he subsequently becomes engaged as an employee, director, consultant, investor or otherwise in any entity (the “Subsequent Employer”) and (ii) the Subsequent
Employer takes any action while the Executive is so engaged where (A) the Executive could reasonably be expected to have had the ability to control the decision or, unless the Executive opposes the decision, substantially influences the
decision to take any such action, (B) the taking of such action by the Subsequent Employer would constitute a breach of any of the Obligations if the actions were taken directly by the Executive, (C) other than with respect to hiring
personnel, the action is not one taken in the ordinary course consistent with the past practice of the Subsequent Employer’s business and (D) the action does not involve the exercise by the Subsequent Employer of an existing contractual
right as of the date the Executive becomes engaged with the Subsequent Employer, provided that a breach shall be deemed to occur only if the Company gives written notice to the Executive of the breach and the breach is not cured within 10 business
days of receipt of such notice. If the Executive breaches or is deemed to be in breach of any of the provisions listed in this Section 13, the limited waiver of the Executive’s non-competition and non-solicitation obligations set out in
Section 7 of the Employment Agreement, as amended by Section 3 of this Agreement, shall be revoked, and the Company shall be entitled to injunctive relief and/or damages from the Executive personally in accordance with Section 15 of
this Agreement, including a requirement that the Executive resign from or cease to be engaged with the Subsequent Employer. Notwithstanding the foregoing, if the Executive’s Subsequent Employer enters into an agreement directly with the Company
and agrees to comparable Obligations, the Executive shall not automatically be deemed to be in breach of the Obligations by virtue of any actions taken by the Subsequent Employer, although the Executive will remain liable for any actions that he
takes personally. 

  
 4 

	14.	Governing Law and Submission to Jurisdiction. This Agreement is a contract made under and shall be governed by and construed in accordance with the laws of the Province of Alberta and the laws of Canada
applicable therein. Each of the Company and the Executive (i) attorns to the exclusive jurisdiction of the courts of the Province of Alberta over any action or proceeding arising out of or relating to this Agreement, (ii) waives any
objection that it might otherwise be entitled to assert to the jurisdiction of such courts and (iii) agrees not to assert that such courts are not a convenient forum for the determination of any such action or proceeding. 

 

	15.	Injunctive Relief. In addition to any remedies that may be available at law or in equity as a result of a breach of this Agreement, in the event of a breach, deemed breach, or threatened breach by the Executive
of any of the Obligations, the Company shall have the right to seek monetary damages and equitable relief, including, without limitation, specific performance by means of an injunction against the Executive to prevent or restrain any such breach.

  

	16.	Survival. The provisions of Sections 5 through 7, 9 and 12 through 19 of the Employment Agreement, as amended by this Agreement, shall survive the Resignation Date and shall continue in full force and effect in
accordance with their terms. 

  

	17.	Enurement. This Agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective heirs, attorneys, guardians, estate trustees, executors, trustees, successors (including
any successor by reason of amalgamation of any party) and permitted assigns. 

  

	18.	Entire Agreement. This Agreement together with the sections of the Employment Agreement that survive the Resignation Date set forth the entire agreement between the Executive and the Company regarding the subject
matter hereof and the Executive is not relying upon any representations or promises that are not expressly included in this Agreement or the sections of the Employment Agreement that survive the Resignation Date. 

 

	19.	Amendments and Waivers. No amendments to this Agreement shall be valid or binding unless in writing and duly executed by both parties. No waiver of any breach of any term or provision of this Agreement shall be
binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, shall be limited to the specific breach waived. 

 

	20.	Severability. If any provision of this Agreement or its application in a circumstance is restricted, prohibited or unenforceable, the provision shall be ineffective only to the extent of the restriction,
prohibition or unenforceability without invalidating the remaining provisions of this Agreement and without affecting its application to other circumstances. 

  

	21.	Counterparts. This Agreement may be executed in counterparts and delivered by means of facsimile or portable document format (PDF), each of which when so executed and delivered shall be an original, but all such
counterparts together shall constitute one and the same instrument. 

 [Signature page follows.] 

  
 5 

 IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

  

			
	CANADIAN PACIFIC RAILWAY LIMITED
		
	By:	 	 /s/ Andrew F. Reardon

		 	Name: Andrew F. Reardon
		 	Title:   Chairman of the Board
		
		 	 /s/ E. Hunter Harrison

E. Hunter Harrison

  
 6 

 SCHEDULE A 

(See attached.) 

  
 7 

 Hunter Harrison 
  

																															
		  				  				  				  	 	Cdn	  	  	 	Price on Jan .16,2017	  	  	$	194.65	  	  	
		  				  				  				  	 	USD	  	  				  				  	$	148.48	  	  	Vesting Schedule
								
	 	  	# of
Units	 	  	Grant
Price	 	  	 	 	  	 	 	  	Outstanding	 	  	Total
Realized
Equity Value
(USD)	 	  	 
	 Grant Date
	  	  	  	 	 	  	 	 	  	Vested	 	  	Unvested	 	  	  	 
	 Options
	  				  				  				  				  				  				  				  	
	 Initial Grant
	  				  				  				  				  				  				  				  	
	 June 26, 2012
	  	 	650,000	  	  	$	73.39	  	  				  	 	Cdn	  	  	$	59,114,250	  	  	$	—  	  	  	$	59,114,250	  	  	100% vested June ’16, available June 2017
	 LTIP Grants
	  				  				  				  				  				  				  				  	
	 Jan. 31, 2014
	  	 	103,280	  	  	$	168.84	  	  				  	 	Cdn	  	  	$	1,499,432	  	  	$	499,811	  	  	$	1,999,243	  	  	50% 2016, 25% 2017, 25% 2018
	 Jan. 23, 2015
	  	 	84,593	  	  	$	175.92	  	  				  	 	USD	  	  	$	—  	  	  	$	—  	  	  	$	—  	  	  	25% 2016, 25% 2017, 25% 2018, 25% 2019
	 Jan. 22, 2016
	  	 	129,620	  	  	$	116.80	  	  				  	 	USD	  	  	$	1,026,590	  	  	$	3,079,771	  	  	$	4,106,362	  	  	25% 2017, 25% 2018, 25% 2019, 25% 2020
		  				  				  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	
	 Total LTIP Options:
	  				  				  				  				  	$	61,640,272	  	  	$	3,579,582	  	  	$	65,219,854	  	  	
	 	  	 	 	  	Perf.	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 
	 PSUs (LTIP Grant)
	  	 	 	  	Factor	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 	 	  	 
	 Jan. 31, 2014
	  	 	27,348	  	  	 	118%	  	  	 	198.59	  	  	 	Cdn	  	  	$	4,806,470	  	  				  	$	4,806,470	  	  	Payable March 2017, performance warranting
	 Jan. 23, 2015
	  	 	22,459	  	  	 	130%	  	  				  	 	USD	  	  	$	—  	  	  	$	4,335,126	  	  	$	4,335,126	  	  	Payable March 2018, performance warranting
		  				  				  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	
	 Total:
	  				  				  				  				  	$	4,806,470	  	  	$	4,335,126	  	  	$	9,141,596	  	  	
									
	 DSUs
	  				  				  				  				  				  				  				  	
	 Initial Grant
	  				  				  				  				  				  				  				  	
	 June 26, 2012
	  	 	25,877	  	  				  				  	 	USD	  	  	$	3,842,217	  	  	$	—  	  	  	$	3,842,217	  	  	100% vested June 2016; Payable 1 year post retirement
	 Bonus DSUs
	  				  				  				  				  				  				  				  	
	 1-Feb-13
	  	 	13,482	  	  				  				  				  	$	2,001,830	  	  				  	$	2,001,830	  	  	
	 Feb-14
	  	 	29,019	  	  				  				  	 	USD	  	  	$	4,308,673	  	  				  	$	4,308,673	  	  	Payable 1 year post retirement
		  				  				  				  				  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	
	 Total value in US funds:
	   
	  				  				  	 	76,599,462	  	  	 	7,914,708	  	  	 	84,514,169	  	  	
								
	 exchange rate CDN$ = USD
	   
	  	$	0.75	  	  				  				  				  				  				  	

  

											
	 Pension Liability as at December 31, 2016 ($1.5M)
	  	 	20,375,000	  	  	Bonus Payment at 100% for both components	  	$	3,300,000	  
				
	 Pension Liability as at December 31, 2016 ($2.0M)
	  	 	27,150,000	  	  	Bonus Payment at 150% for both components	  	$	4,950,000	  
				
	 Current Expense on CP’s Books for outstanding unvested options:
	  				  	Company performance indicates 170% but Management recommending	  			
	 2014 – CEO Grant:
	  	 	275,705	  	  		  			
	 2015 – CEO Grant:
	  	 	492,449	  	  	Forfeited 2017 Grant with target value of $6,600,000	  
	 2016 – CEO Grant:
	  	 	1,047,674	  	  		  			
		  	  
	  
	 	  		  			
	 Total:
	  	 	1,815,828	  	  		  			

  
 8 

 SCHEDULE B 

FORM OF FULL AND FINAL RELEASE 

I, E. HUNTER HARRISON, in exchange for the limited waiver by Canadian Pacific Railway Limited of certain restrictive covenants
contained in my employment agreement referred to in the attached separation agreement (the “Separation Agreement”) dated January 18, 2017 (and subject to the terms thereof) and such other good and valuable consideration, the
sufficiency of which is hereby expressly acknowledged, do hereby remise, release and forever discharge CANADIAN PACIFIC RAILWAY LIMITED and all of its affiliated and related entities and their predecessors and successors (the
“Companies”) and, in such capacities, their respective officers, directors, shareholders, employees and agents (hereinafter with the Companies, collectively referred to as the “Releasees”) of and from all actions,
causes of action, debts, demands, torts, dues, bonds, accounts, covenants, contracts and claims whatsoever which I ever had, now have or which I can, shall or may hereafter have for or by reason of any cause, matter or thing whatsoever, including
without limiting the generality of the foregoing any actions, causes of action, suits, debts, demands, torts or claims relating to my employment or the termination of my employment with any of the Releasees, except any actions, causes of action,
debts, demands, torts, dues, bonds, accounts, covenants, contracts and claims relating to the specific terms of the Separation Agreement. I also agree not to make any claim or take any proceedings in respect of the claims released against any
person, corporation or other entity who or which might claim contribution or indemnity from any of the Releasees. 
 Except as provided for
in, or under, the Separation Agreement, I hereby specifically covenant, represent and warrant to the Releasees that I have no further claim against any of the Releasees for or arising out of my employment or cessation of employment which
specifically includes any claims for salary, wages, notice of termination, reinstatement, pay instead of notice, severance pay, bonus, incentive compensation, variable compensation, stock, stock options, restricted share units, warrants, equity,
interest and/or vacation pay, overtime, overtime pay, benefits, pension, perquisites or claims under contract (including without limitation my employment agreement), the common law, Company policy, employment standards legislation (including without
limitation the Employment Standards Code (Alberta) and the Canada Labour Code), human rights legislation (including without limitation the Alberta Human Rights Act, the Canadian Human Rights Act and the Employment
Equity Act), occupational health and safety legislation (including without limitation the Occupational Health and Safety Act (Alberta), the Occupational Health and Safety Code (Alberta), and the Workers Compensation Act
(Alberta)) or similar legislation. I also acknowledge that the monies paid to me include any severance pay and notice pay to which I am entitled under any employment standards legislation (including without limitation the Employment Standards
Code (Alberta) and the Canada Labour Code). In the event that I should hereafter make any claim or demand or commence or threaten to commence any action, claim or proceeding against any of the Releasees for or by reason of any
cause, matter or thing related to my employment or the cessation thereof, this document may be raised as a complete bar to any such claim, demand or action. 

I have read the above Full and Final Release and have obtained independent legal advice and I understand that it contains a full and final
release of all claims that I have or may have against the Releasees and that there is no admission of liability on the part of any of the Releasees and that any such liability is denied. 

All of the foregoing shall enure to the benefit of the Releasees, their successors and assigns, and be binding upon me and my respective
heirs, executors, administrators, successors and assigns. 

  
 9 

 IN WITNESS WHEREOF I have duly executed this Full and Final Release this 31st day of January, 2017. 
  

					
	SIGNED, SEALED AND DELIVERED	  	)	  	
	in the presence of	  	)	  	
		  	)	  	
		  	)	  	
		  		  	  

		  	)	  	E. HUNTER HARRISON
	  
	  	)	  	
	 Witness
	  	)	  	

  
 10

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