Exhibit 99.1
UNDERWRITING AGREEMENT
July 10, 2020
Algonquin Power & Utilities Corp.
Oakville, Ontario L6J 2X1
Attention: | Mr. Arun Banskota, President |
Dear Sirs and Mesdames:
Scotia Capital Inc. and CIBC World Markets Inc. (together, the "Lead Underwriters"), TD Securities Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., National Bank Financial Inc., Desjardins Securities Inc., Raymond James Ltd., Industrial Alliance Securities Inc., J.P. Morgan Securities Canada Inc. and Wells Fargo Securities Canada, Ltd. (individually, an "Underwriter" and collectively with the Lead Underwriters, the "Underwriters") understand that Algonquin Power & Utilities Corp. (the "Corporation") proposes to issue and sell 32,170,000 Common Shares (as hereinafter defined) of the Corporation (the "Firm Securities"). In addition, the Underwriters understand that the Corporation proposes to grant to the Underwriters a one-time option (the "Over-Allotment Option") to purchase additional Common Shares from the Corporation (the "Optional Securities") for the sole purpose of covering over-allotments, in an amount equal to up to 15% of the number of Firm Securities (collectively, the Firm Securities and the Optional Securities are referred to as the "Purchased Securities").
We also understand that the Corporation has filed the Base Prospectuses (as hereinafter defined) relating to the qualification for distribution of Common Shares, unsecured debt securities, subscription receipts, preferred shares of any series, warrants, share purchase contracts, share purchase or equity units and units of the Corporation and has filed: (i) with the Securities Commissions (as hereinafter defined), the preliminary prospectus supplement (in both English and French languages) relating to the offering of the Purchased Securities, which excludes certain pricing and other information that it is permitted to be excluded from such preliminary prospectus supplement (the "Canadian Preliminary Prospectus Supplement") and the July 2020 Marketing Materials (as hereinafter defined); and (ii) with the SEC (as hereinafter defined), the preliminary prospectus supplement relating to the offering of the Purchased Securities, which excludes certain pricing and other information (the "U.S. Preliminary Prospectus Supplement") and is prepared:
A. | to authorize and issue the Purchased Securities; and |
B. | to prepare and file, without delay: |
(i) | with the Securities Commissions in accordance with Canadian Securities Laws (as hereinafter defined), the final prospectus supplement (in both the English and French languages) relating to the offering of the Purchased Securities which includes the pricing and other information omitted from the Canadian Preliminary Prospectus Supplement (the "Canadian Prospectus Supplement"), and all necessary related documents in order to qualify the distribution of the Purchased Securities and the Over-Allotment Option in each of the Canadian Qualifying Jurisdictions (as hereinafter defined); and |
(ii) | with the SEC, in accordance with the 1933 Act (as hereinafter defined) and the rules and regulations of the SEC, the final prospectus supplement relating to the offering of the Purchased Securities and the Over-Allotment Option which includes the pricing and other information omitted from the U.S. Preliminary Prospectus Supplement (the "U.S. Prospectus Supplement") |
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(collectively, the "Offering").
Based upon the foregoing and on the basis of the representations, warranties, covenants and agreements contained herein and subject to the terms and conditions set out below, the Corporation agrees to (i) sell to each of the Underwriters, and each of the Underwriters agrees severally (and not jointly or jointly and severally) to purchase from the Corporation, the respective percentage of the Firm Securities set forth opposite the name of such Underwriter in Section 15.1 at a purchase price of C$17.10 (the "Purchase Price") per Firm Security (for an aggregate purchase price of C$550,107,000); and (ii) in the event and to the extent the Over-Allotment Option granted to the Underwriters pursuant to this Agreement is exercised by the Underwriters, the Corporation agrees to sell to the Underwriters, and each of the Underwriters agrees severally (and not jointly or jointly and severally) to purchase from the Corporation the respective percentage of the Optional Securities set forth opposite the name of such Underwriter in Section 15.1 at the purchase price of C$17.10 per Optional Security in the manner contemplated in Article 3.
The Corporation shall pay to the Underwriters a fee (the "Commission") at the Time of Closing (as hereinafter defined) or the Option Closing Time (as hereinafter defined), as applicable, equal to 4.0% of the aggregate gross proceeds of Purchased Securities in consideration of the services to be rendered by the Underwriters in connection with such distributions, including, without limitation, acting as financial advisor to the Corporation in the preparation of documentation relating to the sale of the Purchased Securities; assisting the Corporation in connection with the preparation and finalization of the Prospectus Supplements (as hereinafter defined) and any amendments thereto; performing administrative work in connection with these matters; and all other services arising out of this Agreement.
The Purchased Securities will be offered for sale at an initial offering price not exceeding the price per security specified on the cover page of the Prospectus Supplements (as hereinafter defined), provided that after the Underwriters have made a reasonable effort to sell all of the Purchased Securities at such price, the Underwriters may subsequently reduce the offering price of the Purchased Securities from time to time in order to sell any of the Purchased Securities remaining unsold. Each agreement of the Underwriters establishing a banking, selling or other group in respect of the distribution shall contain a similar covenant by each Selling Firm (as hereinafter defined). Any such reduction in the offering price shall not affect the Purchase Price to be paid to the Corporation.
Concurrently with the execution of this Agreement, the Corporation entered into a subscription agreement with an institutional investor providing for the sale by the Corporation to certain investment funds managed by the institutional investor of 20,470,000 Common Shares (the "Concurrent Offering Shares") at a price of C$17.10 per Common Share, for total gross proceeds of C$350,037,000 (the "Concurrent Offering"). The completion of the Offering and the completion of the Concurrent Offering are not conditional on each other.
The services provided by the Underwriters in connection herewith will not be subject to the goods and services tax or harmonized sales tax provided for in the Excise Tax Act (Canada) and taxable supplies provided will be incidental to the exempt financial services provided.
The agreement resulting from the acceptance of this letter by the Corporation shall be subject to the following terms and conditions:
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DEFINITIONS
In this Agreement, in addition to the terms defined above or elsewhere in this Agreement, the following terms shall have the following meanings:
"1933 Act" means the United States Securities Act of 1933, as amended, and the rules and regulations thereunder;
"1934 Act" means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder;
"Agreement" means this agreement, dated the date hereof, by and among the Corporation and each of the Underwriters;
"Algonquin Companies" means those corporations set out on page 2 of the Annual Information Form under the heading "Significant Subsidiaries", which are owned directly or indirectly by the Corporation;
"Algonquin Entities" means, collectively, the Algonquin Companies, the Algonquin Partnerships and the Algonquin Trusts;
"Algonquin Partnerships" means those partnerships set out on page 2 of the Annual Information Form under the heading "Significant Subsidiaries", which are owned directly or indirectly by the Corporation;
"Algonquin Trusts" means those trusts set out on page 2 of the Annual Information Form under the heading "Significant Subsidiaries", which are owned directly or indirectly by the Corporation;
"Annual Information Form" means the annual information form of the Corporation dated February 27, 2020;
"Anti-Money Laundering Laws" has the meaning ascribed thereto in Section 8.1(pp) hereof;
"Applicable Securities Laws" means all Canadian Securities Laws and all applicable securities laws in the United States and the respective regulations, rules, instruments, blanket orders and blanket rulings thereunder;
"Atlantica" means Atlantica Sustainable Infrastructure plc;
"Beneficiaries" has the meaning ascribed thereto in Section 2(e) of Schedule A hereto;
"Bribery Act" has the meaning ascribed thereto in Section 8.1(nn) hereof;
"Business Day" means any day, excluding Saturday, Sunday and any other day which is a legal, statutory or civic holiday or a day on which banking institutions are required by law, regulation or local proclamation to close in the City of Toronto, Province of Ontario, or the City of New York, State of New York, United States;
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"Canadian Base Prospectus" means the final unallocated short form base shelf prospectus (in both the English and French languages) of the Corporation dated April 3, 2020, filed with the Securities Commissions in connection with the qualification for distribution of the Corporation's Common Shares, unsecured debt securities, subscription receipts, preferred shares of any series, warrants, share purchase contracts, share purchase or equity units and units of the Corporation in each of the Canadian Qualifying Jurisdictions and, unless the context otherwise requires, includes all documents incorporated by reference therein and all documents otherwise deemed to be incorporated by reference therein;
"Canadian Preliminary Prospectus Supplement" has the meaning ascribed thereto on the first page hereof;
"Canadian Prospectus" means, collectively, the Canadian Base Prospectus and the Canadian Prospectus Supplement, including the documents incorporated or deemed to be incorporated by reference therein but not including any prospectus supplement other than the Canadian Prospectus Supplement;
"Canadian Prospectus Supplement" has the meaning ascribed thereto on the first page hereof;
"Canadian Securities Laws" means all applicable securities laws in the Canadian Qualifying Jurisdictions and the applicable rules and regulations under such laws, together with applicable published national, multilateral and local policy statements, instruments, notices, blanket orders and blanket rulings of the Securities Commissions;
"CIBC" means CIBC World Markets Inc.;
"Claim" has the meaning ascribed thereto in Section 1(a) of Schedule A hereto;
"Closing" means the completion of the purchase of the Firm Securities;
"Closing Date" means the date on which the purchase of the Firm Securities will be completed which is scheduled for July 17, 2020 or such later date as the Corporation and the Underwriters mutually agree in writing;
"Concurrent Offering" has the meaning ascribed thereto on the second page hereof;
"Concurrent Offering Shares" has the meaning ascribed thereto on the second page hereof;
"Corporation" means Algonquin Power & Utilities Corp., a corporation incorporated under the laws of Canada;
"Corporation Additional Written Communication" has the meaning ascribed thereto in Section 8.1(d) hereof;
"COVID-19 Outbreak" has the meaning ascribed thereto in Section 8.1(uu);
"Disclosure Documents" means collectively, the U.S. Base Prospectus, the U.S. Preliminary Prospectus Supplement, and the applicable Issuer Free Writing Prospectus(es), if any;
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"distribution" and "distribution to the public" have the meaning as those terms are defined in Applicable Securities Laws and the term "misrepresentation" has the meaning ascribed to it in Applicable Securities Laws;
"documents incorporated by reference" means collectively those documents incorporated by reference in the Prospectuses, including any other document prepared by the Corporation and filed with the Securities Commissions or the SEC after the date of this Agreement and before the completion of the distribution of the Purchased Securities that is of a type that is required to be incorporated by reference in the Prospectuses pursuant to NI 44- 101 or pursuant to Applicable Securities Laws of the United States, respectively;
"EDGAR" means the SEC's Electronic Data Gathering, Analysis and Retrieval System;
"Environmental Laws" means any Canadian, United States and other foreign, federal, provincial, state, local or municipal laws, statutes, codes, rules, orders, regulations and common law relating to the protection of human health and safety, the environment, natural resources or to hazardous or toxic substances or wastes, pollutants or contaminants;
"Facilities" has the meaning ascribed thereto in Section 8.1(cc) hereof;
"FCPA" has the meaning ascribed thereto in Section 8.1(nn) hereof;
"Final Receipt" has the meaning ascribed thereto in Section 2.1(a);
"Financial Information" has the meaning ascribed thereto in Section 4.1(e)(i);
"Indemnified Parties" and "Indemnified Party" have the meaning ascribed thereto in Section 1(a) of Schedule A hereto;
"Indemnifier" has the meaning ascribed thereto in Section 2(a) of Schedule A hereto;
"Investment Company Act" has the meaning ascribed thereto in Section 8.1(j) hereof;
"Issuer Free Writing Prospectus" means any issuer free writing prospectus as defined in Rule 433 under the 1933 Act;
"July 2020 Marketing Materials" means the written documents that constitute the Template Version (as defined in NI 41-101) of Marketing Materials that have been approved by the Corporation and Scotia and are required to be filed with the Securities Commissions or other regulatory bodies in the Canadian Qualifying Jurisdictions in accordance with NI 44-102;
"knowledge of the Corporation" means to the best of the knowledge, information and belief of Arun Banskota, David Bronicheski and Christopher Jarratt, after due inquiry;
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"Material Adverse Effect" means any change, event or effect that is or would reasonably be expected to be materially adverse to: (i) the conditions (financial or otherwise), earnings, properties, assets, business, operations or results of operations of the Corporation and its subsidiaries, taken as a whole (which, for greater certainty, includes anything that would result in the Prospectuses containing a misrepresentation within the meaning of Applicable Securities Laws), or (ii) the ability of the Corporation to perform its obligations under, and consummate the transactions contemplated by, this Agreement;
"Material Contract" has the meaning ascribed thereto in Section 8.1(hh) hereof;
"NI 41-101" means National Instrument 41-101 General Prospectus Requirements adopted by the Securities Commissions;
"NI 44-101" means National Instrument 44-101 Short Form Prospectus Distributions adopted by the Securities Commissions;
"NI 44-102" means National Instrument 44-102 Shelf Distributions adopted by the Securities Commissions;
"NI 51-102" means National Instrument 51-102 Continuous Disclosure Obligations adopted by the Securities Commissions;
"Optional Securities" has the meaning ascribed thereto on the first page hereof;
"Passport System" means the system and procedures for prospectus filing and review under Multilateral Instrument 11-102 Passport System and National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions adopted by the Securities Commissions and its related memorandum of understanding;
"Permits" means all permits, consents, waivers, applications, authorizations, licences, certificates, approvals, registrations, franchises, rights, privileges and exemptions or the like issued or granted by any governmental authority or by any other third party, including, without limitation, any Permits pertaining to all applicable laws, regulations, standards, requirements, ordinances, policies, guidelines, orders, approvals, notices, directives, or parts thereof, pertaining to environmental or occupational health and safety matters;
"Prospectuses" means, collectively, the Base Prospectuses and the Prospectus Supplements, including the documents incorporated or deemed to be incorporated by reference therein, and any Prospectus Amendment;
"Prospectus Amendment" means the English and French language versions (unless the context otherwise indicates) of any amendment to the Prospectuses;
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"Prospectus Supplements" means, collectively, the Canadian Prospectus Supplement and the U.S. Prospectus Supplement;
"Purchase Price" has the meaning ascribed thereto on the second page hereof;
"Registration Statement" has the meaning ascribed thereto in Section 2.1(b);
"Representation Date" has the meaning ascribed thereto in Section 8.1;
"Sanctions" has the meaning ascribed thereto in Section 8.1(oo) hereof;
"Scotia" means Scotia Capital Inc.;
"Securities Commissions" mean, collectively, the securities commission or other securities regulatory authority in each of the Canadian Qualifying Jurisdictions;
"Supplementary Material" means any Prospectus Amendment and any supplemental or additional or ancillary material, information, evidence, return, report, application, statement or document prepared and filed by the Corporation with the Securities Commissions;
"Tax Act" means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time;
"TMX Group" has the meaning ascribed thereto in Section 19.2;
"United States" means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia;
"U.S. Base Prospectus" has the meaning ascribed thereto in Section 2.1(b) hereof;
"U.S. Preliminary Prospectus Supplement" has the meaning ascribed thereto on the first page hereof;
"U.S. Prospectus" means, collectively, the U.S. Base Prospectus and the U.S. Prospectus Supplement; and
"U.S. Prospectus Supplement" has the meaning ascribed thereto on the first page hereof.
Terms used herein which are defined in the Prospectuses and not otherwise defined herein shall have the meaning set forth in the Prospectuses unless the context requires otherwise.
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FILING OF PROSPECTUSES AND REGISTRATION STATEMENT
2.1 | The Corporation represents and warrants to and for the benefit of the Underwriters that: |
(c) | it has prepared and filed with the Securities Commissions, the Canadian Preliminary Prospectus Supplement; and |
(d) | it has prepared and filed with the SEC the U.S. Preliminary Prospectus Supplement. |
(a) | fulfill the Underwriters' obligations as underwriters; and |
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(b) | enable the Underwriters to responsibly execute the certificate in the Canadian Prospectus Supplement required to be executed by the Underwriters. |
2.4 | The Corporation, subject to Section 2.5 hereof, will comply with the requirements under Applicable Securities Laws, and will promptly notify the Lead Underwriters, and confirm the notice in writing, of: (a) the effectiveness as of the date hereof and up to and including the Closing Date of any post-effective amendment to the Prospectuses or the Registration Statement or the filing of any supplement or amendment thereto; (b) any request by Securities Commission or the SEC for any amendment or supplement to the Prospectuses or the Registration Statement or for additional information; (c) the receipt of any comments from the Securities Commission or the SEC beginning as of the date hereof and up to and including the Closing Date; and (d) the issuance by the Securities Commission or the SEC of any stop order or of any order preventing or suspending the use of the Prospectuses in respect of the Purchased Securities, of any notice of objection of the SEC to the use of the form of the Registration Statement or any post-effective amendment thereto, of the suspension of the qualification of the Purchased Securities for offering or sale in the Canadian Qualifying Jurisdictions or the United States, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Securities Commission or the SEC for additional information relating to the Purchased Securities. The Corporation will promptly cause: (a) each amendment or supplement to the Canadian Prospectus to be filed with the Securities Commissions as required pursuant to Canadian Securities Laws or, in the case of any document to be incorporated therein by reference, to be filed with the Securities Commissions as required pursuant to Canadian Securities Laws and within the time period prescribed; and (b) each amendment or supplement to the U.S. Prospectus to be filed with the SEC as required pursuant the 1933 Act. The Corporation will use its reasonable best efforts to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. |
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OVER-ALLOTMENT OPTION
DELIVERY OF THE PROSPECTUS SUPPLEMENTS AND RELATED DOCUMENTS
4.1 | The Corporation shall deliver or cause to be delivered to the Underwriters and the Underwriters' counsel the documents set out below at the respective times indicated: |
(b) | prior to or contemporaneously, as nearly as practicable, with the filing with the Securities Commissions or the SEC of the Prospectus Supplements: |
(i) | copies of the Canadian Prospectus Supplement in the English and French languages, signed as required by Canadian Securities Laws; |
(ii) | copies of the U.S. Prospectus Supplement; and |
(iii) | copies of any documents incorporated by reference therein which have not previously been delivered to the Underwriters or are not otherwise available on SEDAR or EDGAR, as applicable; |
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(e) | at the time of delivery of the French language version of the Canadian Prospectus Supplement to the Underwriters pursuant to this Section 4.1: |
(g) | on the date hereof, the Lead Underwriters shall have received a certificate of David Bronicheski, Chief Financial Officer of the Corporation, in form and substance reasonably satisfactory to the Lead Underwriters on behalf of the Underwriters, with respect to certain financial information included in or incorporated by reference in the Canadian Prospectus Supplement, the U.S. Prospectus Supplement and the Disclosure Documents. |
4.2 | The delivery to the Underwriters of the filed Prospectus Supplements shall constitute a representation and warranty to the Underwriters by the Corporation that: |
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4.3 | The Corporation hereby represents, warrants and covenants to the Underwriters as follows: |
(b) | on the date first filed the Base Prospectuses did and when and as supplemented by the Prospectus Supplements, will conform in all material respects with the applicable requirements of Applicable Securities Laws and will not, as of the filing date of the Prospectus Supplements, and as of the Time of Closing, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Corporation by or on behalf of any Underwriter through the Lead Underwriters specifically for inclusion in the Base Prospectuses or the Prospectus Supplements. |
(c) | at the respective times the Registration Statement and any post-effective amendments thereto became effective and at each Representation Date, the Registration Statement and any amendments thereto complied and will comply in all material respects with the applicable requirements of Applicable Securities Laws; the Registration Statement as of its filing date did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; |
provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Corporation by or on behalf of any Underwriter through the Lead Underwriters specifically for inclusion in the Base Prospectuses or the Prospectus Supplements.
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(d) | the Prospectuses, at the time each was or hereafter is filed with the applicable Securities Commissions, complied in all material respects with Applicable Securities Laws, and the Prospectuses delivered to the Underwriters for use in connection with the Offering will, at the time of such delivery, be identical to any electronically transmitted copies thereof filed with the SEC or the Securities Commissions or available on SEDAR or EDGAR; |
(f) | it has not and will not distribute during the term of this Agreement, any "marketing materials" in connection with the offering and sale of the Purchased Securities other than the Registration Statement, the Prospectuses and any Issuer Free Writing Prospectus reviewed and consented to by the Lead Underwriters, provided that the Underwriters, severally and not jointly, covenant with the Corporation not to take any action that would result in the Corporation being required to file with the Securities Commissions or the SEC any "marketing materials" that otherwise would not be required to be filed by the Corporation, but for the action of the Underwriters; |
(g) |
(h) |
(i) | it has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under Canadian Securities Laws, stabilization or manipulation of the price of the Firm Securities to facilitate the sale or resale of the Firm Securities, except for purchases by insiders of the Corporation in accordance with relief obtained or to be obtained by the Corporation from the requirements of OSC Rule 48-501 Trading during Distributions, Formal Bids and Share Exchange Transactions, and the Corporation has not taken and will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the 1934 Act, stabilization or manipulation of the price of the Firm Securities to facilitate the sale or resale of the Firm Securities; and |
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(j) | without the prior written consent of the Lead Underwriters, on behalf of the Underwriters, will not, and will not publicly disclose an intention to, for a period of 90 days after the Closing Date, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Common Shares or any securities convertible into or exercisable or exchangeable for Common Shares, except for (i) the issuance by the Corporation of Common Shares issued and sold pursuant to the Offering, including as a result of the exercise of the Over-Allotment Option; (ii) the issuance by the Corporation of the Common Shares upon the exercise of an option or warrant or the conversion of a security outstanding as of the date of this Agreement; (iii) the issuance by the Corporation of any Common Shares or options to acquire Common Shares or other award, right or grant pursuant to the Corporation's stock option plan, deferred share unit plan, performance and restricted share unit plan or employee share purchase plan existing as of the date of this Agreement and the issuance of Common Shares in connection with the exercise or vesting of any such options, awards rights or grants; (iv) the issuance by the Corporation of any Common Shares pursuant to its dividend reinvestment plan; or (v) up to 20,470,000 Common Shares to be issued and sold pursuant to the Concurrent Offering. |
COMMERCIAL COPIES OF PROSPECTUS SUPPLEMENTS
COVENANTS OF THE UNDERWRITERS
6.1 | Each Underwriter severally covenants with the Corporation that it shall: |
(a) | conduct its activities in attempting to sell the Purchased Securities, directly and through other registered dealers (or other dealers duly qualified in their respective jurisdictions) (the "Selling Firms") in compliance with all relevant laws and regulatory requirements; |
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(b) | not be liable to the Corporation under this Section 6.1 with respect to a default by another Underwriter (or another Selling Firm that is not an affiliate of such Underwriter); |
(c) | deliver one copy of the Canadian Prospectus to each Purchaser or prospective purchaser of Purchased Securities; |
NOTICE OF MATERIAL CHANGE
(i) | to render the Disclosure Documents, the Prospectuses, or any Supplementary Material misleading or untrue; |
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(ii) | would result in the Disclosure Documents, the Prospectuses, or any Supplementary Material not complying with Applicable Securities Laws; |
(iv) | would be material to a prospective purchaser of the Purchased Securities; |
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION
8.1 |
(a) | the Corporation is eligible to use the Shelf Procedures and each of the Securities Commissions has issued or is deemed to have issued a receipt for the Canadian Base Prospectus; |
(b) | the Corporation meets the general eligibility requirements for use of Form F-10 under the 1933 Act, and the rules and regulations of the SEC, has filed the Registration Statement in respect of the Firm Securities and has appointed an agent for service of process on Form F-X in connection with the filing of the Registration Statement. The Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Corporation, are contemplated or threatened by any of the Securities Commissions, and any request on the part of any of the Securities Commissions for additional information has been complied with; |
(c) | (i) at the time of filing the Registration Statement and (ii) as of the execution of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Corporation was not and is not an Ineligible Issuer (as defined in Rule 405 under the 1933 Act), without taking account of any determination by the SEC pursuant to Rule 405 under the 1933 Act that it is not necessary that the Corporation be considered an Ineligible Issuer; |
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(e) | there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived; |
(f) | this Agreement has been duly authorized, executed and delivered by the Corporation and constitutes a valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles; |
(g) | the attributes and characteristics of the share capital (including the Common Shares) of the Corporation conform in all material respects to the attributes and characteristics thereof described in the Registration Statement, the Prospectuses and the Disclosure Documents; |
(i) | Ernst & Young LLP, who have certified certain financial statements of the Corporation and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements included or incorporated by reference, or to be included or incorporated by reference in the Registration Statement, Prospectuses, the Disclosure Documents and any amendment to the Registration Statement or amendment to the Prospectuses, if any, are independent chartered accountants with respect to the Corporation within the meaning of Canadian Securities Laws and independent public accountants within the meaning of the 1933 Act and the 1934 Act. Ernst & Young, S.L., in its capacity as auditor of the financial and accounting information related to Atlantica included or incorporated by reference in the Registration Statement, Prospectuses, the Disclosure Documents, and any amendment to the Registration Statement or amendment to the Prospectuses, if any, are independent public accountants with respect to Atlantica within the meaning of the 1933 Act and the 1934 Act; |
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(k) | the Corporation has been duly organized and is validly existing as a corporation under the laws of Canada and has all requisite power and authority to own its properties and assets, and to carry on its undertaking, including issuing the Firm Securities, as contemplated hereby, and is qualified to own its properties and assets and to carry on its undertaking in all jurisdictions where it owns property and assets and carries on its activities and to enter into and perform its obligations under this Agreement. All necessary corporate action has been taken by the Corporation to authorize the delivery of the Prospectuses and the Disclosure Documents and the filing thereof, as the case may be, with the Securities Commissions or the SEC under Applicable Securities Laws; |
(l) | the Corporation is, and will at the Time of Closing and at the Option Closing Time be, a reporting issuer in each of the Canadian Qualifying Jurisdictions not in default of any requirement under Applicable Securities Laws. In particular, without limiting the foregoing, no material change relating to the Corporation has occurred with respect to which the requisite material change report has not been filed on a non-confidential basis with all relevant securities regulatory authorities (unless originally filed on a confidential basis and subsequently made non-confidential); |
(m) | the Corporation is qualified in accordance with the provisions of NI 44-101 and NI 44-102 to file a short form base shelf prospectus in each of the Canadian Qualifying Jurisdictions and the Final Receipt continues to be effective pursuant to NI 44-102; |
(n) | except as contemplated hereby and as otherwise disclosed in the Disclosure Documents and the Prospectuses, and for greater certainty, other than in respect of the Concurrent Offering, no person, firm or corporation, as of the date hereof, has any agreement or option with the Corporation, or any right or privilege (whether pre-emptive or contractual) capable of becoming an agreement or option with the Corporation, for the purchase, subscription or issuance of any Firm Securities; |
(o) | the Corporation has not withheld, and will not withhold, from the Underwriters any facts relating to the Corporation or to the Offering that would be material to a prospective purchaser of the Firm Securities; |
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(q) | except as otherwise disclosed in the Disclosure Documents and the Prospectuses, the Corporation, and, to the knowledge of the Corporation, each of the Algonquin Entities: (A) has conducted and is conducting its business in compliance with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on, except for noncompliance that would not individually or in the aggregate have a Material Adverse Effect; and (B) holds all necessary licenses, Permits, approvals, consents, certificates, registrations and authorizations (whether governmental, regulatory or otherwise) to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated (as now operated), and the same are validly existing and in good standing, and, except as disclosed in the Prospectuses and the Disclosure Documents, none of the same contains any term, provision, condition or limitation which has or may have a Material Adverse Effect; |
(r) | the authorized capital of the Corporation consists of an unlimited number of Common Shares and an unlimited number of preferred shares, issuable in one or more series; |
(t) | the execution and delivery of this Agreement by the Corporation, the fulfillment of the terms hereof by the Corporation, and the issuance, sale and delivery of the Firm Securities at the Time of Closing or at the Option Closing Time as applicable, do not and will not result in, and do not and will not create a state of facts which, after notice or lapse of time or both, will result in: |
(i) | a breach or violation of, and do not and will not conflict with, any of the terms, conditions or provisions of the articles, by-laws or other constating documents of the Corporation or the Algonquin Entities, or resolutions of their respective shareholders or directors (or any committee thereof); |
(ii) | a breach of or default under any indenture, agreement or instrument to which the Corporation or any of the Algonquin Entities is a party or by which the Corporation or any of the Algonquin Entities will be contractually bound at the Time of Closing or at the Option Closing Time, except for such breaches or defaults that would not individually or in the aggregate have a Material Adverse Effect; or |
(iii) | any violation of any statute, law, rule, regulation or judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or any of the Algonquin Entities, except for such violations that would not, individually or in the aggregate, result in a Material Adverse Effect; |
(u) | except as otherwise disclosed in the Prospectuses and the Disclosure Documents, there is no action, proceeding or investigation (whether or not purportedly on behalf of the Corporation, respectively), to the knowledge of the Corporation, pending or threatened against or affecting the Corporation or any of the Algonquin Entities, at law or in equity or before or by any federal, provincial, state, municipal or other governmental department, commission, board or agency, domestic or foreign, which could in any way, individually or in the aggregate, have a Material Adverse Effect or which questions the validity of the issuance of the Firm Securities or of any action taken or to be taken by the Corporation pursuant to or in connection with this Agreement; |
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(v) | each of the Algonquin Entities (i) has been duly incorporated or otherwise formed and organized, (ii) is validly existing under the laws of its jurisdiction of incorporation, formation or organization, (iii) has all requisite capacity and authority to own, lease and operate its property and assets and to carry on its business, and (iv) is in good standing in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification; |
(w) | all of the issued and outstanding Common Shares and other share capital of the Corporation have been duly authorized and validly issued and are fully paid and non-assessable. All of the issued and outstanding shares or equity interests of each of the Algonquin Entities have been duly authorized and validly issued, are fully paid and non-assessable and, except as otherwise disclosed in the Disclosure Documents and the Prospectuses, are owned by the Corporation, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except for any such security interests, mortgages, pledges, liens, encumbrances or claims that do not, individually or in the aggregate, have a Material Adverse Effect; |
(x) | the Purchased Securities have been duly authorized and, when issued, delivered and paid for in accordance with the terms of this Agreement, will be validly issued, fully paid and non‑assessable, and the issuance of the Purchased Securities will not be subject to any preemptive or similar rights; |
(z) | (i) other than (A) as disclosed to the Underwriters or their counsel or as set forth in the Registration Statement, the Disclosure Documents and the Prospectuses; (B) pursuant to indemnities granted in favor of the directors and officers of the Corporation and/or entities affiliated with the Corporation; (C) pursuant to guarantees and indemnities granted in favor of the Corporation and/or entities affiliated with the Corporation, which for greater certainty includes entities in which the Corporation holds, directly or indirectly, a 50% or greater interest; (D) guarantees or indemnities granted in connection with acquisitions of assets or development or construction of facilities by the Corporation or by entities affiliated with the Corporation, and debt or tax equity financings therefor, or (E) guarantees or indemnities granted in connection with any existing senior credit facility; and, (ii) except as entered into in the normal course of business, including with respect to normal course hedging, supply and purchase contracts, none of the Corporation, the Algonquin Companies, the Algonquin Trusts and, to the knowledge of the Corporation, the Algonquin Partnerships: (x) is a party to or bound by any material agreement of guarantee, indemnification, assumption, endorsement or similar commitment relating to the obligations, liabilities (contingent or otherwise) or indebtedness of any other person, firm or corporation; or (y) is subject to any such material agreement, commitment or indebtedness, nor is any of their respective assets or undertaking; |
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(aa) | to the knowledge of the Corporation, each of the Algonquin Entities has made all registrations or filings required by applicable laws to create or maintain its status as a corporation, partnership or trust, whichever the case may be; |
(dd) | except as otherwise set forth in the Prospectuses and the Disclosure Documents, or except as would not, individually or in the aggregate, have a Material Adverse Effect, all of the Facilities (and all buildings and other appurtenances related thereto) are insured against all loss from damages by hazards or risks normally insured against in accordance with industry practice, with reasonable deductibles; |
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(ee) | there has not been any reportable event (as defined in NI 51-102) with the auditors of the Corporation; |
(ff) | other than as disclosed in the Prospectuses and the Disclosure Documents, since January 1, 2019, the Corporation has not completed and has not announced any intention to complete any "significant acquisition" (as determined pursuant to NI 51-102); |
(kk) | no lender to the Corporation or any of its subsidiaries has reduced, or has given notice to the Corporation or any of its subsidiaries, or has commenced negotiations with the Corporation or any of its subsidiaries regarding the reduction of any material credit facility, material hedge facility or any other material commitment with the Corporation or any of its subsidiaries and, to the knowledge of the Corporation, each of the Corporation's lenders will be able to fulfill its obligations and other commitments to the Corporation or any of its subsidiaries; |
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(ll) | the Corporation and each of its subsidiaries (taken as a whole) maintains a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain accountability for assets; (iii) access to its assets is permitted only in accordance with management's general or specific authorization; (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to differences; and (v) material information relating to it is made known to those within the Corporation or such subsidiary responsible for the preparation of the financial statements during the period in which the financial statements have been prepared and that such material information is disclosed to the public within the time periods required by Applicable Securities Laws; except as disclosed in the Disclosure Documents and the Prospectuses, since the end of the Corporation's most recent audited fiscal year, there has been (i) no material weakness in the Corporation's internal control over financial reporting (whether or not remediated) and (ii) no change in the Corporation's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting; |
(mm) | the Corporation maintains "disclosure controls and procedures" (as such term is defined in Rule 13a-15(e) under the 1934 Act) that comply with the requirements of the 1934 Act; and such disclosure controls and procedures have been designed to ensure that material information relating to the Corporation and its subsidiaries is made known to the Corporation's principal executive officer and principal financial officer by others within those entities to allow timely decisions regarding disclosure; and such disclosure controls and procedures are effective to perform the functions for which they were established to the extent required by Rule 13a-15 under the 1934 Act; |
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(ss) | no Securities Commission or similar regulatory authority or the Exchange or the NYSE or the SEC has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation, and no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened; |
(tt) |
(vv) | the proceeds received by the Corporation will be used for the purposes described in the Prospectus Supplements. |
CONDITIONS OF CLOSING
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(i) | except as otherwise publicly disclosed, the Prospectuses are true and correct in all material respects and contain no misrepresentation; |
(v) | it has complied with all covenants, terms and conditions of this agreement on its part to be complied with or satisfied at or prior to the Time of Closing; |
(vi) | each of its representations and warranties contained herein is true and correct as of the Time of Closing; and |
(vii) | such other matters of a factual nature as the Underwriters and the Underwriters' counsel may request, acting reasonably. |
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9.2 |
CLOSING
10.2 | At the Time of Closing, the Corporation shall deliver to the Underwriters: |
(b) | such further deliverables as may be contemplated herein or as the Underwriters or the applicable Securities Commissions or the Exchange may reasonably require, |
against payment by the Underwriters of the purchase price for the Firm Securities by wire transfer.
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against payment by the Underwriters of the purchase price for the Optional Securities by wire transfer to the order of the Corporation in Canadian same day funds or by such other method as the Corporation and the Underwriters may agree upon. In addition, the Corporation shall contemporaneously pay to the Lead Underwriters, on behalf of the Underwriters, the Commission for their services in connection with the issue and sale of the Optional Securities by wire transfer to the order of the Lead Underwriters (or any one of them as the Lead Underwriters may jointly direct) in Canadian same day funds or by such other method as the Corporation and the Underwriters may agree upon.
INDEMNITY AND CONTRIBUTION
The Corporation will indemnify and hold harmless each of the Underwriters and their respective subsidiaries, directors, officers, employees and agents against all losses (excluding lost profit), claims, liabilities and expenses (including, without limitation, reasonable expenses of investigation and defending any claims or litigation as the same are incurred), upon the terms of the indemnity attached as Schedule A, whether or not the transaction herein contemplated shall be completed.
Moreover, the Corporation will indemnify and hold harmless the Underwriters against any documentary, stamp or similar issue tax, including any interest and penalties, on the creation, issue and sale of the Purchased Securities sold by it hereunder and on the execution and delivery of this Agreement. All payments to be made by the Corporation hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Corporation is compelled by law to deduct or withhold such taxes, duties or charges. In that event, the Corporation shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made.
TERMINATION RIGHTS
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(c) | the Corporation shall be in breach of, default under or non-compliance with any material representation, warranty, covenant, term or condition of this Agreement; |
The Underwriters shall notify the Corporation immediately of their knowledge of the existence of any of the circumstances set forth in this Section 12.1 (any such notice, a "Termination Condition Existence Notice"). If the Underwriters wish to exercise their termination rights under this Section 12.1, the Underwriters shall notify the Corporation of such termination within 48 hours after providing the Termination Condition Existence Notice, failing which the Underwriters will be deemed to have waived its right to rely on the circumstances set forth in the Termination Condition Existence Notice to terminate this Agreement.
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EXPENSES
Whether or not the transaction herein contemplated shall be completed, all expenses of or incidental to the creation, issue, delivery and marketing of the Offering and the Purchased Securities shall be borne by the Corporation, including, without limitation: printing costs, filing fees, costs of the Corporation's legal and accounting advisors in connection with the preparation of the Prospectuses, cost of the certificates and fees of the transfer agent. Notwithstanding the foregoing, the fees and disbursements of legal counsel for the Underwriters and all out of pocket expenses of the Underwriters shall be borne by the Underwriters, except that the Underwriters will be reimbursed by the Corporation for all of these fees, disbursements and expenses, to the extent they are reasonable, if the sale of the Purchased Securities is not completed due to any failure of the Corporation to comply with the terms of this Agreement. The expenses referred to herein shall be payable by the Corporation from time to time immediately upon receiving an invoice therefor.
AUTHORITY OF LEAD UNDERWRITERS
The Lead Underwriters are hereby authorized by each Underwriter to act on its behalf and the Corporation shall be entitled to and shall act on any notice given pursuant to this Agreement or any agreement entered into by or on behalf of the Underwriters by the Lead Underwriters, which represents and warrants that it has irrevocable authority to bind the Underwriters, except in respect of: (a) a notice of termination pursuant to Section 12.1, which notice may be given by any of the Underwriters; (b) any waiver pursuant to Section 12.4, which waiver must be signed by all of the Underwriters; or (c) any matter relating to the indemnity and contribution provisions set forth in Article 11 and Schedule A hereto. The Lead Underwriters shall consult with the other Underwriters concerning any matter in respect of which they act as representatives of the Underwriters.
SEVERAL OBLIGATIONS
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Scotia Capital Inc.(1) | 22.5% |
CIBC World Markets Inc.(1) | 21.5% |
TD Securities Inc. | 13.0% |
BMO Nesbitt Burns Inc. | 10.0% |
RBC Dominion Securities Inc. | 10.0% |
National Bank Financial Inc. | 10.0% |
Desjardins Securities Inc. | 3.0% |
Raymond James Ltd. | 3.0% |
Industrial Alliance Securities Inc. | 3.0% |
J.P. Morgan Securities Canada Inc. | 2.0% |
Wells Fargo Securities Canada, Ltd. | 2.0% |
TOTAL | 100.0% |
(1) Lead Underwriters |
If one or more of the Underwriters shall fail or refuse to purchase its applicable percentage of the Optional Securities at the Option Closing Time, and the number of Optional Securities not purchased is less than or equal to 10% of the aggregate number of Optional Securities agreed to be purchased by the Underwriters pursuant to this Agreement, each of the other Underwriters shall be obligated to purchase severally the Purchased Securities not taken up, on a pro rata basis or as they may otherwise agree as between themselves.
If one or more of the Underwriters shall fail or refuse to purchase its applicable percentage of the Optional Securities at the Option Closing Time, and the number of Optional Securities not purchased is greater than 10% of the aggregate number of Optional Securities agreed to be purchased by the Underwriters pursuant to this Agreement, those of the Underwriters who shall be willing and able to purchase their respective percentage of the Optional Securities shall have the right, but not the obligation, to purchase severally the Firm Securities not taken up, on a pro rata basis or as they may otherwise agree as between themselves. In the event that such right is not exercised, the Underwriter or Underwriters which are willing and able to purchase its or their respective percentage of the Optional Securities shall be relieved, without liability, of its or their obligations to purchase its or their respective percentage of the Optional Securities, on submission to the Corporation of reasonable evidence of its ability and willingness to fulfil its obligations under this Agreement at the Option Closing Time.
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Nothing in this Article 15 shall oblige the Corporation to sell to any or all of the Underwriters less than all of the aggregate amount of Purchased Securities or shall relieve any of the Underwriters in default hereunder from liability to the Corporation. After the Underwriters have made reasonable efforts to sell all the Purchased Securities at the offering price, the Underwriters may sell the Purchased Securities to the public at prices below the offering price.
NOTICE
Any notice or other communication to be given hereunder shall be addressed and sent as follows:
(a) | If to the Corporation, addressed and sent to: |
Algonquin Power & Utilities Corp.
Oakville, Ontario L6J 2X1
Attention: Ms. Jennifer Tindale
Telecopy: (905) 465-6123
Email: jennifer.tindale@APUCorp.com
with a copy to (which shall not constitute notice):
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Mr. John T. Gaffney
Telecopy: (212) 351-2626
Email: jgaffney@gibsondunn.com
and with a copy (which shall not constitute notice) to:
Blake, Cassels & Graydon LLP
Suite 4000
Commerce Court West
Toronto, Ontario M5L 1A9
Attention: Mr. John Wilkin
Telecopy: (416) 863-2785
Email: john.wilkin@blakes.com
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(b) | If to the Underwriters to: |
Scotia Capital Inc.
Toronto, Ontario M5W 2X6
Attention: Thomas I. Kurfurst
Telecopy: (416) 863-7117
Email: thomas.kurfurst@scotiabank.com
and to:
CIBC World Markets Inc.
Brookfield Place
161 Bay Street, 6th Floor
Toronto, Ontario
M5J 2S8
Attention: James Brooks
Email: james.brooks@cibc.com
with a copy to (which shall not constitute notice):
Bennett Jones LLP
Suite 3400
One First Canadian Place
Toronto, ON M5X 1A4
Attention: Mr. Norman F. Findlay
Telecopy: (416) 863-1716
Email: findlayn@bennettjones.com
or to such other address or fax number as any of the parties may designate by notice given to the others. Any such notice or other communication shall be in writing, and unless delivered personally to a responsible officer of the addressee, shall be given by courier service or telecopy or email, and shall be deemed to have been received, if given by telecopy or email, on the date of sending if during normal business hours on a Business Day and if not on the next Business Day and, if given by courier service, on the next Business Day following the sending thereof.
SURVIVAL OF WARRANTIES, REPRESENTATIONS, COVENANTS AND AGREEMENTS
All warranties, representations, covenants and agreements of the Corporation and the Underwriters contained herein or delivered pursuant hereto shall survive the purchase by the Underwriters of the Purchased Securities from the Corporation and shall continue in full force and effect for a period of three years notwithstanding any subsequent disposition by such Underwriters of the Purchased Securities and the Underwriters shall be entitled to rely on the representations and warranties of the Corporation contained herein or delivered pursuant hereto notwithstanding any investigations which the Underwriters may undertake.
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ARTICLE 18
ACCEPTANCE
NO ADVISORY OR FIDUCIARY RELATIONSHIP
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GENERAL
20.3 | Time shall be of the essence of this Agreement. |
[remainder of page intentionally left blank]
Yours very truly,
SCOTIA CAPITAL INC. | ||
By: | /s/ Thomas I. Kurfurst | |
Name: Thomas I. Kurfurst Title: Managing Director |
CIBC WORLD MARKETS INC. | ||
By: | /s/ James Brooks | |
Name: James Brooks Title: Managing Director |
TD SECURITIES INC. | ||
By: | /s/ John Kroeker | |
Name: John Kroeker Title: Managing Director |
BMO NESBITT BURNS INC. | ||
By: | /s/ Greg Petit | |
Name: Greg Petit Title: Managing Director |
RBC DOMINION SECURITIES INC. | ||
By: | /s/ Kyle Walker | |
Name: Kyle Walker Title: Managing Director |
[Signature page to the Underwriting Agreement]
NATIONAL BANK FINANCIAL INC. | ||
By: | /s/ Iain Watson | |
Name: Iain Watson Title: Managing Director |
DESJARDINS SECURITIES INC. | ||
By: | /s/ Andrew Kennedy | |
Name: Andrew Kennedy Title: Managing Director, Investment Banking |
RAYMOND JAMES LTD. | ||
By: | /s/ James A. Tower | |
Name: James A. Tower Title: Managing Director |
INDUSTRIAL ALLIANCE SECURITIES INC. | ||
By: | /s/ David Beatty | |
Name: David Beatty Title: Managing Director, Investment Banking |
J.P. MORGAN SECURITIES CANADA INC. | ||
By: | /s/ David Rawlings | |
Name: David Rawlings Title: Managing Director |
[Signature page to the Underwriting Agreement]
WELLS FARGO SECURITIES CANADA LTD. | ||
By: | /s/ Chase Robinson | |
Name: Chase Robinson Title: Director |
[Signature page to the Underwriting Agreement]
The foregoing accurately reflects the terms of the transaction which we are to enter into and such terms are agreed to.
DATED as of the 10th day of July, 2020.
ALGONQUIN POWER & UTILITIES CORP. | ||
By: | /s/ Christopher Jarratt | |
By: | /s/ Arun Banskota | |
[Signature page to the Underwriting Agreement]
SCHEDULE A
1. | Indemnity |
(a) | Indemnity |
Algonquin Power & Utilities Corp. hereby agrees to indemnify and hold harmless Scotia Capital Inc., CIBC World Markets Inc., TD Securities Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., National Bank Financial Inc., Desjardins Securities Inc., Raymond James Ltd., Industrial Alliance Securities Inc., J.P. Morgan Securities Canada Inc. and Wells Fargo Securities Canada, Ltd. (hereinafter referred to as the "Underwriters") and each of their respective directors, officers, employees, affiliates and agents and each person, if any, who controls any Underwriter within the meaning of section 15 of the 1933 Act, as amended, or section 20 of the 1934 Act and the successors and assigns of the foregoing persons (collectively, the "Indemnified Parties" or individually, the "Indemnified Party") from and against all liabilities, claims, losses (other than loss of profits), reasonable costs, damages and reasonable expenses (including, without limitation any legal fees or other expenses reasonably incurred by the Underwriters in connection with defending or investigating any such action or claim and securityholder or derivative actions, arbitration, proceedings or otherwise) (a "Claim") in any way caused by, or arising directly or indirectly from, or in consequence of:
A-2
(v) | any breach by the Corporation of its material representations, warranties, covenants or obligations to be complied with under the Agreement. |
This indemnity shall cease to be available to an Indemnified Party if: (i) a court of competent jurisdiction in a final judgment in which such Indemnified Party is named as a party determines that the Claim in respect of which indemnification is sought is a result of or arises out of the gross negligence or willful misconduct of such Underwriter or Underwriters (provided that, for greater certainty, the Corporation and any such Underwriter or Underwriters agree that they do not intend that any failure by such Underwriter or Underwriters to conduct such reasonable investigation as necessary to provide any Underwriters or Underwriters with reasonable grounds for believing the Prospectuses, any Supplementary Material, including any documents incorporated by reference, the Issuer Free Writing Prospectus or any Prospectus Amendments or supplements thereto, contained no misrepresentation shall constitute "gross negligence" or "willful misconduct" for purposes of this Section 1 or otherwise disentitle the Underwriters from indemnification hereunder); or (ii) a copy of the Prospectuses (as then amended or supplemented, if the Corporation shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of the Underwriters to a person asserting any such losses, claims, damages or liabilities, but only (x) if required by law so to have been delivered by the Underwriters to such person, at or prior to the written confirmation of the sale of the Purchased Securities to such person, and (y) if the Prospectuses (as so amended or supplemented) delivered by the Underwriters a reasonable amount of time in advance of such confirmation would have cured the defect giving rise to such losses, claims, damages or liabilities. In such event, such Underwriter or Underwriters shall reimburse any funds advanced by the Corporation to such Underwriter or Underwriters pursuant to the indemnification contained in this Schedule A in respect of such Claim and thereafter this indemnity shall cease to apply to such Underwriter or Underwriters in respect of such Claim.
A-3
(b) | Notification of Claims |
If any Claim is asserted against any Indemnified Party, such Indemnified Party will notify the Corporation as soon as possible of the nature of such Claim (but the omission so to notify the Corporation of any potential Claim shall not relieve the Corporation from any liability which it may have to any Indemnified Party and any omission so to notify the Corporation of any actual Claim shall affect the Corporation's liability only to the extent that it is prejudiced as a proximate result of that failure). Subject to subsection 1(d), the Corporation shall be entitled to participate in and, to the extent that it shall wish, to assume the defense of any suit brought to enforce such Claim; provided, however, that the defense shall be conducted through legal counsel acceptable to such Indemnified Party, acting reasonably, that no settlement of any such Claim or admission of liability may be made by the Corporation or such Indemnified Party without the prior written consent of the other parties, acting reasonably, and the Corporation shall not be liable for any settlement of any such Claim unless it has consented in writing to such settlement. The Corporation shall not settle any Claim, or compromise a consent to any judgment unless such settlement, compromise or judgment (i) includes an unconditional release of such Indemnified Party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of such Indemnified Party.
(c) | Right of Indemnity in Favour of Others |
With respect to any Indemnified Party who is not a party to the Agreement, the Indemnified Parties who are party to the Agreement shall obtain and hold the rights and benefits of this Section in trust for and on behalf of such Indemnified Party.
(d) | Retaining Counsel |
In any Claim, the Indemnified Party shall have the right to retain other counsel to act on its behalf, provided that the reasonable fees and disbursements of such counsel shall be paid by such Indemnified Party unless (i) the Corporation fails to assume the defense of such suit on behalf of such Indemnified Party within 10 days of receiving written notice of such suit; (ii) the Corporation and such Indemnified Party shall have mutually agreed to the retention of the other counsel; or (iii) the named parties to any such Claim (including any added third or impleaded party) include such Indemnified Party and the Corporation and such Indemnified Party shall have been advised by counsel that the representation of all parties by the same counsel would be inappropriate due to the actual or potential differing interests between them, including the potential availability of one or more legal defenses to such Indemnified Party which are different from or in addition to those available to the other parties or the potential for a conflict to exist between the Corporation and such Indemnified Party. In no event shall the Corporation be liable to pay the fees and disbursements of more than one firm of separate counsel for all Indemnified Parties and, in addition, one firm of local counsel in each applicable jurisdiction.
2. | Contribution |
(a) | Contribution by the Corporation |
In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 1 of this Schedule A is unavailable, in whole or in part, for any reason to an Indemnified Party in respect of any Claim, the Corporation (the "Indemnifier") and the applicable Underwriter or Underwriters shall contribute to the amount paid or payable (or, if such indemnity is unavailable only in respect of a portion of the amount so paid or payable, such portion of the amount so paid or payable) by the Corporation as a result of such Claim in such proportion as is appropriate to reflect the relative benefits received by the Corporation on the one hand and the applicable Underwriter or Underwriters on the other hand from the offering of the Purchased Securities; or if this allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Corporation on the one hand and the applicable Underwriter or Underwriters on the other hand in connection with the information, statement, omission, misrepresentation, order, inquiry, investigation or other matter or thing referred to in Section 1 of this Schedule A which resulted in such Claim, as well as any other relevant equitable considerations.
A-4
The relative benefits received by the Corporation on the one hand and the applicable Underwriter or Underwriters on the other hand shall be deemed to be in the same proportion as the total proceeds (net of the fee payable to the applicable Underwriter or Underwriters but before deducting any expenses (to the extent that such expenses are payable by the Corporation pursuant to Section 3 of this Schedule A)) received by the Corporation from the issue and sale of the Purchased Securities bears to the fee received by the applicable Underwriter or Underwriters, in each case, as set out in the table on the face page of the Prospectuses. The relative fault of the Corporation on the one hand and of the applicable Underwriter or Underwriters on the other shall be determined by reference to, among other things, whether the information, statement, omission, misrepresentation, order, inquiry, investigation or other matter or thing referred to in Section 1 of this Schedule A which resulted in such Claim relates to information supplied by or steps or actions taken or done by or on behalf of the Corporation or to information supplied by or steps or actions taken or done by or on behalf of the applicable Underwriter or Underwriters and the relative intent, knowledge, access to information and opportunity to correct or prevent such statement, omission, misrepresentation, order, inquiry, investigation or other matter or thing referred to in Section 1 of this Schedule A. The amount paid or payable by an Indemnified Party as a result of the Claim referred to above shall include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such Claim, whether or not resulting in any such action, suit, proceeding or claim. The Corporation and the applicable Underwriter or Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 2 were determined by any method of allocation which does not take into account the equitable considerations referred to immediately above.
A person who is engaged in any fraud, fraudulent misrepresentation or gross negligence shall not, to the extent that a court of competent jurisdiction in a final judgment determines that the Claim was caused by that activity, be entitled to claim contribution therefor from any person who has not also been determined by a court of competent jurisdiction in a final judgment to have engaged in that fraud, fraudulent misrepresentation or gross negligence.
(b) | Right of Contribution in Addition to Other Rights |
The rights to contribution provided in this Section 2 shall be in addition to and not in derogation of any other right to contribution which the applicable Underwriter or Underwriters may have by statute or otherwise at law.
(c) | Calculation of Contribution |
In the event that a court of competent jurisdiction in a final judgment determines that an Indemnifier is entitled to contribution from the applicable Underwriter or Underwriters under the provisions of any statute or at law, the Indemnifier shall be limited to contribution in an amount not exceeding the lesser of:
A-5
(d) | Notice of Claim for Contribution |
Notification to the Corporation of a Claim pursuant to subsection 1(b) of this Schedule A shall be deemed to also constitute notice to the Corporation that a claim for contribution by the applicable Underwriter or Underwriters may arise and omission to so notify shall have similar effect.
(e) | Right of Contribution in Favour of Others |
The Corporation hereby acknowledges and agrees that, with respect to paragraphs 1 and 2 of this Schedule A, each of the Underwriters are contracting on their own behalf and as agents for their affiliates, subsidiaries, directors, officers, employees, agents and control persons (collectively, the "Beneficiaries"). In this regard the applicable Underwriter or Underwriters shall act as trustees for the Beneficiaries of the Corporation's covenants under paragraphs 1 and 2 of this Schedule A with respect to the Beneficiaries and accept these trusts and shall hold and enforce the covenants on behalf of the Beneficiaries.
3. | Severability |
If any provision of Section 1 or 2 of this Schedule A is determined to be void or unenforceable in whole or in part, it shall be deemed not to affect or impair the validity of any other provision of the Agreement and such void or unenforceable provision shall be severable from the Agreement.
OPINION MATTERS
2. | Liberty Utilities (Canada) Corp. is a corporation incorporated and existing under the Canada Business Corporations Act and has all requisite corporate power and capacity to conduct its business. |
3. | Liberty Utilities (Canada) GP Inc. is a corporation incorporated and existing under the Business Corporations Act (Ontario) and has all requisite corporate power and capacity to conduct its business, including to act as the general partner of Liberty Utilities (Canada) LP ("Liberty Canada LP"), and to own, lease and operate its properties and assets. |
4. | Liberty Canada LP is a limited partnership duly formed and existing under the laws of the Province of Ontario pursuant to a limited partnership agreement dated August 22, 2018 (the "Limited Partnership Agreement") and has the full right, power and authority to carry on its business, and to own, lease and operate its property and assets in accordance with the Limited Partnership Agreement. |
5. | Each of Algonquin Power Co., Algonquin Power Trust and Algonquin Power Operating Trust, respectively: |
(a) | is a trust duly formed, organized and validly existing under its governing jurisdiction; |
(b) | has made all registrations or filings required by applicable laws to create or maintain its status as a trust; and |
(c) | has the full power and capacity to carry on its business. |
6. | All necessary corporate action has been taken by the Corporation to authorize (i) the execution and delivery of the Canadian Prospectus and the filling of the Canadian Base Prospectus and the Canadian Prospectus Supplement with the Securities Commissions, and (ii) the filing of the U.S. Base Prospectus and U.S. Prospectus Supplement with the SEC and the delivery of the U.S. Prospectus. |
7. | The Corporation has the corporate power to enter into and deliver this Agreement and to perform its obligations hereunder and to carry out the transactions contemplated hereby, and this Agreement has been duly authorized, executed and, to the extent delivery is a matter governed by applicable law in the Province of Ontario, delivered by the Corporation. |
8. | The execution and delivery by the Corporation of, and the performance by the Corporation of its obligations under this Agreement and the issuance of the Purchased Securities in accordance with the provisions of this Agreement, do not and will not create a state of facts which, after notice or lapse of time or both, will result in a breach of or default under, and do not and will not conflict with and do not and will not contravene: (i) any provisions of the articles, by-laws or resolutions of the shareholders or directors (or any committee thereof) of the Corporation, (ii) applicable law in the Province of Ontario applicable to the Offering, or (iii) any of the agreements or instruments described in Exhibit I hereto. |
B-2
9. | The authorized capital of the Corporation consists of an unlimited number of Common Shares and an unlimited number of preferred shares issuable in series. |
10. | The attributes and characteristics of the Purchased Securities conform in all material respects with descriptions thereof in the Disclosure Documents. |
11. | The Purchased Securities have been duly authorized and reserved for issuance and, upon payment of the Purchase Price therefor, will be validly issued and outstanding as fully paid and non-assessable Common Shares in the capital of the Corporation. |
14. | AST Trust Company (Canada) has been duly appointed as transfer agent and registrar for the Common Shares; |
15. | Each of the Canadian Base Prospectus and the Canadian Prospectus Supplement (other than the financial statements, financial schedules and other financial or statistical data included in the Canadian Base Prospectus and the Canadian Prospectus Supplement, as to which we express no opinion) appears on its face, in respect of the Canadian Base Prospectus, at the time the Final Receipt was issued therefor and, in respect of the Canadian Prospectus Supplement, at the time it was filed, to have complied as to form in all material respects with the requirements of Canadian Securities Laws. |
17. | As of the date hereof, the statements under the caption "Enforcement of Certain Civil Liabilities" in the Disclosure Documents, insofar as such statements constitute summaries of legal matters, legal proceedings, laws or regulations (or the interpretation or administration of laws or regulations by any relevant government authorities), are accurate in all material respects. |
18. | As of the date hereof, the statements under the caption "Certain Canadian Federal Income Tax Considerations" in the Disclosure Documents are an accurate summary of the principal Canadian federal income tax considerations generally applicable to a holder who acquires Purchased Securities as beneficial owner pursuant to the Offering, subject to the assumptions, limitations, conditions, qualifications and restrictions set out therein. |
B-3
19. | Provided that, as of the date hereof, the Corporation is a "public corporation" for purposes of the Tax Act or the Purchased Securities are listed on a "designated stock exchange" for purposes of the Tax Act (which currently includes the Exchange and the NYSE), the Purchased Securities, if issued on such date, would be on such date qualified investments under the Tax Act for a trust governed by a registered retirement savings plan, registered retirement income fund, registered disability savings plan, tax-free savings account, registered education savings plan or deferred profit sharing plan. |
In connection with such opinions, counsel to the Corporation may rely on or arrange delivery of the opinions of local counsel acceptable to counsel to the Underwriters, Bennett Jones LLP, acting reasonably, as to the qualification for distribution of the Purchased Securities and as to other matters governed by the laws of jurisdictions other than the Province of Ontario in which they are qualified to practice and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of officers of the Corporation and others.
1. | Trust indenture between Algonquin Power Co. and BNY Trust Company of Canada dated July 25, 2011 providing for the issuance of senior unsecured debentures, as supplemented from time to time, including by the Fifth Supplemental Trust Indenture dated January 29, 2019 providing for the issuance of $300,000,000 4.60% senior unsecured debentures due January 29, 2029. |
2. | Trust indenture dated as of March 1, 2016, between Algonquin Power & Utilities Corp. and CST Trust Company, as trustee, providing for the creation and issuance of up to $1,150,000,000 principal amount of debentures in connection with the $1.15 billion aggregate principal amount of 5.00% convertible unsecured subordinated debenture offering, as supplemented by a supplemental trust indenture dated January 31, 2017. |