AGQPF Algonquin Power and Utilities Corporation (PK)

The information contained in this Preliminary Prospectus Supplement is not complete and may be changed. This Preliminary Prospectus Supplement and the accompanying Base Shelf Prospectus are not an offer to sell and are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 16, 2021

 

A copy of this preliminary prospectus supplement has been filed with the securities regulatory authorities in each of the provinces of Canada but has not yet become final for the purposes of the sale of securities. Information contained in this preliminary prospectus supplement may not be complete and may have to be amended.

 

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

 

This prospectus supplement (this “Prospectus Supplement”), together with the short form base shelf prospectus dated April 3, 2020 to which it relates, as amended or supplemented (the “Base Shelf Prospectus”), and each document incorporated or deemed to be incorporated by reference in the Base Shelf Prospectus or this Prospectus Supplement (collectively, this “Prospectus”) constitutes a public offering of these securities only in those jurisdictions where they may lawfully be offered for sale and therein only by persons permitted to sell such securities.

 

Information has been incorporated by reference in this Prospectus Supplement from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Vice President, Investor Relations of the Corporation at 354 Davis Road, Oakville, Ontario, L6J 2X1, email: InvestorRelations@APUCorp.com, telephone (905) 465-4500, and are also available electronically at www.sedar.com.

 

PRELIMINARY PROSPECTUS SUPPLEMENT

 

To a Short Form Base Shelf Prospectus dated April 3, 2020

 

ALGONQUIN POWER & UTILITIES CORP.

 

U.S.$900,000,000

18,000,000 Equity Units

(Initially Consisting of 18,000,000 Corporate Units)

Algonquin Power & Utilities Corp. (the “Corporation” or “Algonquin”) is hereby qualifying the distribution (the “Offering”) of 18,000,000 equity units (“Equity Units”). Each Equity Unit will have a stated amount of $50 and initially will be in the form of a Corporate Unit (“Corporate Unit”) initially consisting of (i) a purchase contract (a “Purchase Contract”) issued by the Corporation to purchase common shares of the Corporation (“Common Shares”) and (ii) a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of the Corporation’s 2021     % remarketable senior notes due 2026 (the “Notes”).

 

The terms and offering price of the Equity Units were determined by negotiation between Algonquin and J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, BMO Capital Markets Corp. and Morgan Stanley & Co. LLC, as representatives (collectively, the “Representatives”) to the several underwriters (collectively, the “Underwriters”) named in Schedule A to a certain underwriting agreement dated June     , 2021 (the “Underwriting Agreement”) between the Corporation and the Representatives. See “Underwriting.” The closing of the Offering is expected to occur on or about June     , 2021, or such later date(s) as the Corporation and the Underwriters may agree.

 

 

 

The following table sets forth the maximum number of Corporate Units that the Corporation may issue pursuant to the Over-Allotment Option:

 

A purchaser who acquires Corporate Units forming part of the Underwriters’ Over-Allotment Option acquires those Corporate Units under this Prospectus Supplement, regardless of whether the over-allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.

 

The Corporation’s outstanding Common Shares are listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) under the symbol “AQN.” On June 15, 2021, the last closing prices of the Common Shares prior to the announcement of the Offering were C$19.59 per Common Share on the TSX and $16.08 per Common Share on the NYSE.

 

Each Purchase Contract will obligate you to purchase from Algonquin, on June 15, 2024 (or if such day is not a business day, on the following business day), for a price of $50 in cash, the following number of Common Shares, subject to antidilution adjustments:

 

 

 

 

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Joint Book-Running Managers

 

Financial Advisor to Algonquin Power & Utilities Corp.

 

 

Pursuant to each Purchase Contract, Algonquin will pay you quarterly contract adjustment payments at a rate of      % per year on the stated amount of $50 per Equity Unit, or $      per year, subject to the Corporation’s right to defer these payments, as described in this Prospectus Supplement. No deferral period will extend beyond the Purchase Contract Settlement Date (as defined under “Description of the Equity Units—General”). The contract adjustment payments are payable quarterly on March 15, June 15, September 15 and December 15 of each year (except that if such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing on September 15, 2021. The contract adjustment payments will be subordinated to all of the Corporation’s existing and future “Priority Indebtedness” (as defined under “Description of the Equity Units—Ranking”), and will be structurally subordinated to all liabilities of the Corporation’s subsidiaries.

 

The Notes will initially bear interest at a rate of     % per year. The Notes will rank on a parity in right of payment with all of the Corporation’s other unsecured and unsubordinated indebtedness from time to time outstanding. In addition, the Notes will be structurally subordinated to all liabilities of the Corporation’s subsidiaries.

 

The Notes, including your ownership interest in the Notes, will immediately upon issuance (and without further action required by you), be pledged to the Corporation to secure your obligation under the related Purchase Contract(s).

 

In the event the Corporation elects to conduct an optional remarketing of the Notes and such optional remarketing is successful, the pledged Notes (and your related ownership interest in the Notes) will be replaced by a portfolio of U.S. Treasury securities (which is referred to herein as the “Treasury Portfolio”, as such term is further defined under “Description of the Equity Units—General”) or, in certain circumstances, cash. If there is a successful optional remarketing of the Notes and, at such time, you hold Corporate Units, your related ownership interest in the Treasury Portfolio purchased with the proceeds from the remarketing (or, in certain circumstances, cash) will be used to satisfy your payment obligation under the Purchase Contract.

 

At any time prior to a successful remarketing of the Notes, other than during prescribed blackout periods, you may, at your option, create Treasury Units (“Treasury Units”) from your Corporate Units by substituting U.S. Treasury securities (previously owned or purchased by you in the open market, at your sole expense) for your pledged ownership interest in the Notes.  See “Description of the Equity Units—Creating Treasury Units by Substituting a Treasury Security for a Note”.

 

Unless there has been a successful optional remarketing, the Notes will be remarketed in 2024 as described in this Prospectus Supplement. Following any successful remarketing of the Notes, the interest rate on the Notes will be reset, interest will be payable on a semi-annual basis and the Corporation will cease to have the ability to redeem the Notes at its option. See “Description of the Purchase Contracts—Remarketing.” If there is a successful final remarketing of the Notes and, at such time, you hold Corporate Units, the proceeds from the remarketing will be used to satisfy your payment obligation under the Purchase Contract, unless you have elected to settle with separate cash.

 

Subject to applicable laws, the Underwriters may, in connection with the Offering, effect transactions intended to stabilize or maintain the market price of the Corporate Units at levels other than those which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. The Underwriters propose to offer the Corporate Units initially at the offering price specified above. After the Underwriters have made reasonable efforts to sell all of the Corporate Units offered by this Prospectus Supplement at such price, the Underwriters may reduce the offering price to investors from time to time in order to sell any of the Corporate Units remaining unsold. Any such reduction in the offering price shall not affect the purchase price to be paid to the Corporation. See “Underwriting.”

 

This Offering is made by a Canadian issuer that is permitted, under the multijurisdictional disclosure system adopted by the United States (the “U.S.”) and Canada, to prepare this Prospectus Supplement in accordance with Canadian disclosure requirements. Purchasers of Corporate Units should be aware that such requirements are different from those of the U.S.

 

The Underwriters expect to deliver the Corporate Units on or about June     , 2021 in book-entry form through The Depository Trust Company and its direct and indirect participants (each, a “Participant”), including Euroclear Bank S.A./N.V. and Clearstream Banking S.A.

 

The Underwriters, as principals, conditionally offer the Corporate Units in the U.S. and Canada, subject to prior sale, if, as and when issued and sold by the Corporation and accepted by the Underwriters in accordance with the conditions contained in the Underwriting Agreement and referred to under “Underwriting” and subject to the approval of certain legal matters on behalf of the Corporation by Blake, Cassels & Graydon LLP, as to Canadian matters, and Gibson, Dunn & Crutcher LLP, as to U.S. matters, and on behalf of the Underwriters by Bennett Jones LLP, as to Canadian matters and Cravath, Swaine & Moore LLP, as to U.S. matters.

 

There is currently no market through which the Corporate Units, the Purchase Contracts or the Notes may be sold and purchasers may not be able to resell the Corporate Units, the Purchase Contracts or the Notes purchased under this Prospectus Supplement and the Base Shelf Prospectus to which it relates. This may affect the pricing of the Corporate Units, the Purchase Contracts or the Notes in the secondary market, the transparency and availability of trading prices, the liquidity of the Corporate Units, the Purchase Contracts or the Notes and the extent of issuer regulation. See “Risk Factors.” The Corporation intends to apply to list the Corporate Units on the NYSE. If the application is approved, the Corporation expects trading on the NYSE to begin within 30 days of the date of initial issuance of the Corporate Units, but there is no guarantee that such listing will be approved. Prior to this Offering, there has been no public market for the Corporate Units.

 

An investment in the Equity Units is subject to certain risks. Prospective purchasers should therefore carefully consider the disclosure with respect to the Corporation included and incorporated by reference in this Prospectus Supplement. See “Risk Factors.”

 

Owning the Equity Units may subject you to tax consequences both in the United States and in Canada. Such consequences for purchasers who are resident in, or citizens of, the United States or who are residents in Canada may not be described fully herein or in the Base Shelf Prospectus. Purchasers of the Equity Units should read the tax discussion contained under “Material Canadian Federal Income Tax Considerations” and “Material United States Federal Income Tax Considerations” in this Prospectus Supplement and consult their own tax advisor.

 

The enforcement by investors of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that the Corporation is incorporated under the laws of Canada, that most of its officers and directors are residents of Canada and that a substantial portion of the assets of the Corporation and said persons are located outside the U.S. See “Enforcement of Certain Civil Liabilities” in this Prospectus Supplement and in the Base Shelf Prospectus.

 

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) NOR ANY STATE OR CANADIAN SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED THE EQUITY UNITS OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

 

J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, BMO Capital Markets Corp. and Morgan Stanley & Co. LLC are affiliates of financial institutions which are lenders to the Corporation and/or certain subsidiary entities of the Corporation. Consequently, the Corporation may be considered a connected issuer to each of the foregoing Underwriters for purposes of applicable Canadian securities laws. See “Relationship Between the Corporation and Certain Underwriters.”

 

Melissa Stapleton Barnes, Masheed Saidi, D. Randy Laney and Dilek Samil, directors of the Corporation, all reside outside of Canada. Each of Ms. Barnes, Ms. Saidi, Mr. Laney and Ms. Samil has appointed Algonquin Power & Utilities Corp., 354 Davis Road, Oakville, Ontario, L6J 2X1 as his or her agent for service of process in Canada. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process. See “Enforcement of Certain Civil Liabilities.”

 

The registered and head office of the Corporation is located at 354 Davis Road, Oakville, Ontario, L6J 2X1.

TABLE OF CONTENTS

 

Prospectus Supplement

 

TABLE OF CONTENTS

 

Base Shelf Prospectus

 

	Page
CURRENCY	1
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS AND FORWARD-LOOKING INFORMATION	1
WHERE YOU CAN FIND MORE INFORMATION	3
PRESENTATION OF FINANCIAL INFORMATION	3
DOCUMENTS INCORPORATED BY REFERENCE	3
DESCRIPTION OF THE BUSINESS	5
DESCRIPTION OF DEBT SECURITIES	6
DESCRIPTION OF SUBSCRIPTION RECEIPTS	8
DESCRIPTION OF EQUITY SECURITIES	9
DESCRIPTION OF THE WARRANTS	10
DESCRIPTION OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASE OR EQUITY UNITS	11
DESCRIPTION OF THE UNITS	11
BOOK-ENTRY ONLY SECURITIES	12

	Page
CONSOLIDATED CAPITALIZATION	13
TRADING PRICES AND VOLUMES	13
EARNINGS-COVERAGE RATIOS	13
PRIOR SALES	13
USE OF PROCEEDS	13
PLAN OF DISTRIBUTION	13
RISK FACTORS	14
INTERESTS OF EXPERTS	15
AUDITOR, TRANSFER AGENT AND REGISTRAR	15
ENFORCEMENT OF CERTAIN CIVIL LIABILITIES	16
DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT	16

IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING BASE SHELF PROSPECTUS

 

This document consists of two parts. The first part is this Prospectus Supplement, which describes the specific terms of the Equity Units and also adds to and updates certain information contained in the Base Shelf Prospectus and the documents incorporated by reference therein. The second part, the Base Shelf Prospectus, gives more general information, some of which may not apply to the Equity Units offered hereunder. Defined terms or abbreviations used in this Prospectus Supplement that are not defined herein have the meanings ascribed thereto in the Base Shelf Prospectus.

 

If the description of the Equity Units varies between this Prospectus Supplement and the Base Shelf Prospectus, you should rely on the information in this Prospectus Supplement.

 

Investors should rely only on the information contained in or incorporated by reference in this Prospectus Supplement and the Base Shelf Prospectus. The Corporation is not, and the Underwriters are not, making an offer to sell the Equity Units in any jurisdiction where the offer or sale is not permitted. Investors should not assume that the information appearing in this Prospectus Supplement, the Base Shelf Prospectus or any documents incorporated by reference in this Prospectus is accurate as of any date other than the date on the front of those documents, as the Corporation’s business, operating results, financial condition and prospects may have changed since that date.

 

Unless the context otherwise requires, all references in the Base Shelf Prospectus and this Prospectus Supplement to “the Corporation,” “Algonquin,” “we” and “us” refer to Algonquin Power & Utilities Corp., the direct or indirect subsidiary entities of Algonquin Power & Utilities Corp. and partnership and trust interests held by Algonquin Power & Utilities Corp. and its subsidiary entities.

 

CURRENCY

 

In this Prospectus Supplement, unless otherwise specified or the context requires otherwise, all dollar amounts are expressed in U.S. dollars. References to “dollars,” “$” or “U.S.$” are to lawful currency of the United States of America. References to “Canadian dollars” or “C$” are to lawful currency of Canada.

 

The following table sets forth, for each of the periods indicated, the period end exchange rate, the average exchange rate and the high and low exchange rates of one Canadian dollar in exchange for U.S. dollars, based on the daily exchange rate for the years ended December 31, 2018, 2019 and 2020 and for the three months ended March 31, 2021 and 2020, in each case as reported by the Bank of Canada.

 

 

The daily exchange rate on June 15, 2021, as reported by the Bank of Canada for the conversion of Canadian dollars into U.S. dollars, was C$1.00 = U.S.$0.8205.

 

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS AND FORWARD-LOOKING INFORMATION

 

This Prospectus Supplement, including the documents incorporated by reference herein, may contain statements that constitute “forward-looking information” within the meaning of applicable securities laws in each of the provinces of Canada and the respective policies, regulations and rules under such laws and/or  “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information”). The words “anticipates,” “believes,” “budget,” “could,” “estimates,” “expects,” “forecasts,” “intends,” “may,” “might,” “plans,” “projects,” “schedule,” “should,” “will,” “would” and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Specific forward-looking information contained or incorporated by reference in this Prospectus Supplement includes, but is not limited to, statements relating to: expected future growth, earnings (including Adjusted Net Earnings (as defined in the Corporation’s most recent annual Management’s Discussion and Analysis (“MD&A”) per Common Share) and results of operations; liquidity, capital resources and operational requirements; rate reviews, including resulting decisions and rates and expected impacts and timing; sources of funding, including adequacy and availability of credit facilities, debt maturation and future borrowings; expectations regarding the impact of the 2019 novel coronavirus ("COVID-19") on the Corporation's business, operations, financial condition, cash flows and results of operations; expectations regarding credit ratings and the maintenance thereof; statements relating to renewable energy credits expected to be generated and sold; tax credits expected to be available and/or received, including production tax credits and investment tax credits; the expected timeline for regulatory approvals and permits; the expected approval timing and cost of various transactions; the estimated impact of the extreme winter storm conditions experienced in Texas and parts of the central U.S. in February 2021 (the “Midwest Extreme Weather Event”) and the related Market Disruption Event (as defined in the Corporation’s most recent interim MD&A) on the Corporation, its operations, its facilities and its financial results, the Corporation’s response to the Midwest Extreme Weather Event, the expected future recovery from customers of substantially all incremental commodity costs incurred with the Midwest Extreme Weather Event, and the expectation that the Corporation will have sufficient liquidity to fund such costs in the interim; the expected reduction in C02e emissions due to the retirement of the Asbury coal facility; statements regarding the Corporation’s sustainability and environmental, social and governance goals; expectations and plans with respect to current and planned capital projects; expectations with respect to revenues pursuant to power purchase agreements and energy production hedges; ongoing and planned acquisitions, projects and initiatives, including expectations regarding costs, financing, results, ownership structures, power purchase agreements, regulatory matters, in-service dates and completion dates; expectations regarding the Corporation’s corporate development activities and the results thereof, including the expected business mix between the Regulated Services Group and Renewable Energy Group; expectations regarding the Corporation’s development pipeline; the potential impacts of interconnection study results on the Neosho Ridge Wind Facility, and the expected timing for the next interconnection study results; expectations regarding regulatory hearings, motions, filings, proceedings and approvals; expectations regarding the resumption of normal collection procedures; expectations regarding the cost of operations, capital spending and maintenance, and the variability of those costs; expected future generation of the Corporation’s energy facilities; expectations regarding legal proceedings and the outcomes thereof; expected demand for renewable sources of power; expected demand for renewable sources of power; expected capacity of and energy sales from new energy projects; business plans for the Corporation’s subsidiaries and joint ventures; expected future capital investments, including expected timing, investment plans, sources of funds and impacts; expectations regarding generation availability, capacity and production; expectations regarding the outcome of existing or potential legal and contractual claims and disputes; expectations regarding the ability to access the capital market on reasonable terms; strategy and goals; expectations regarding the impacts of a failed restructuring by the subsidiary of Abengoa S.A. (“Abengoa”) that holds the interest in Abengoa-Algonquin Global Energy Solutions; expectations regarding the timing for completion of, and apportionment of liability for, the blade remediation work at the Sugar Creek and Maverick Creek Wind Facilities; expense reductions; expected future base rates; contractual obligations and other commercial commitments; environmental liabilities; dividends to shareholders; expectations regarding the maturity and redemption of the Corporation’s outstanding subordinated notes; expectations regarding the impact of tax reforms; credit ratings; anticipated growth and emerging opportunities in the Corporation’s target markets; anticipated customer benefits, the future impact on the Corporation of actual or proposed laws, regulations and rules; the number of issued and outstanding Common Shares upon completion of the Offering; accounting estimates; interest rates; currency exchange rates; commodity prices; the timing for closing of pending acquisitions, including the acquisitions of New York American Water Company and the acquisition of a 51% interest in the West Raymond Wind Facility; the expected use of proceeds; the anticipated listing of the Corporate Units on the NYSE; expectations regarding remarketing and the impacts thereof; and the anticipated tax treatment of the Corporate Units.  All forward-looking information is given pursuant to the “safe harbour” provisions of applicable securities legislation.

 

The forecasts and projections that make up the forward-looking information contained in this Prospectus Supplement, including the documents incorporated by reference herein, are based on certain factors or assumptions which include, but are not limited to: the receipt of applicable regulatory approvals and requested rate decisions; the absence of material adverse regulatory decisions being received and the expectation of regulatory stability; the absence of any material equipment breakdown or failure; availability of financing (including tax equity financing and self-monetization transactions for U.S. federal tax credits) on commercially reasonable terms and the stability of credit ratings of the Corporation and its subsidiaries; the absence of unexpected material liabilities or uninsured losses; the continued availability of commodity supplies and stability of commodity prices; the absence of sustained interest rate increases or significant currency exchange rate fluctuations; the absence of significant operational, financial or supply chain disruptions or liability due to natural disasters, diseases or other force majeure events; the continued ability to maintain systems and facilities to ensure their continued performance; the absence of a severe and prolonged downturn in general economic, credit, social and market conditions; the successful and timely development and construction of new projects; the closing of pending acquisitions substantially in accordance with the expected timing for such acquisitions; the absence of material capital project or financing cost overruns; sufficient liquidity and capital resources; the continuation of long-term weather patterns and trends; the absence of significant counterparty defaults; the continued competitiveness of electricity pricing when compared with alternative sources of energy; the realization of the anticipated benefits of the Corporation’s acquisitions and joint ventures; the absence of a change in applicable laws, political conditions, public policies and directions by governments, materially negatively affecting the Corporation; the ability to obtain and maintain licenses and permits; maintenance of adequate insurance coverage; the absence of a material decrease in market energy prices; the absence of material disputes with taxation authorities or changes to applicable tax laws; continued maintenance of information technology infrastructure and the absence of a material breach of cybersecurity; favourable relations with external stakeholders; and favourable labour relations. Given the continued uncertainty and evolving circumstances surrounding the COVID-19 pandemic and related response from governments, regulatory authorities, businesses and customers, there is more uncertainty associated with the Corporation's assumptions and expectations as compared to periods prior to the onset of COVID-19.

 

The forward-looking information in this Prospectus Supplement, including the documents incorporated by reference, is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Factors which could cause results or events to differ materially from current expectations include, but are not limited to: changes in general economic, credit, social and market conditions; changes in customer energy usage patterns and energy demand; global climate change; the incurrence of environmental liabilities; natural disasters, diseases, pandemics and other force majeure events; critical equipment breakdown or failure; the failure of information technology infrastructure and cybersecurity; physical security breach; the loss of key personnel and/or labour disruptions; seasonal fluctuations and variability in weather conditions and natural resource availability; reductions in demand for electricity, gas and water due to developments in technology; reliance on transmission systems owned and operated by third parties; issues arising with respect to land use rights and access to the Corporation’s facilities; terrorist attacks; fluctuations in commodity prices; capital expenditures; reliance on subsidiaries; the incurrence of an uninsured loss; a credit rating downgrade; an increase in financing costs or limits on access to credit and capital markets; sustained increases in interest rates; currency exchange rate fluctuations; restricted financial flexibility due to covenants in existing credit agreements; an inability to refinance maturing debt on commercially reasonable terms; disputes with taxation authorities or changes to applicable tax laws; failure to identify, acquire, develop or timely place in service projects to maximize the value of production tax credit qualified equipment; requirement for greater than expected contributions to post-employment benefit plans; default by a counterparty; inaccurate assumptions, judgments and/or estimates with respect to asset retirement obligations; failure to maintain required regulatory authorizations; changes to health and safety laws, regulations or permit requirements; failure to comply with and/or changes to environmental laws, regulations and other standards; changes in laws and regulations; compliance with foreign laws or regulations; failure of compliance programs; failure to identify attractive acquisition or development candidates necessary to pursue the Corporation’s growth strategy; delays and cost overruns in the design and construction of projects, including as a result of COVID-19; loss of key customers; failure to realize the anticipated benefits of acquisitions or joint ventures, including Atlantica Sustainable Infrastructure plc (formerly Atlantica Yield plc) (“Atlantica”) or the Corporation’s joint venture with Abengoa acting in a manner contrary to the Corporation’s interests; a drop in the market value of Atlantica’s ordinary shares; facilities being condemned or otherwise taken by governmental entities; increased external stakeholder activism adverse to the Corporation’s interests; risks related to remarketing; fluctuations in the price and liquidity of the Common Shares and the Corporation’s other securities; and the severity and duration of the COVID-19 pandemic and its collateral consequences, including the disruption of economic activity, volatility in capital and credit markets and legislative and regulatory responses. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Some of these and other factors are discussed in more detail in the section of this Prospectus Supplement entitled “Risk Factors,” in the Corporation’s Annual Information Form dated March 4, 2021 for the year ended December 31, 2020 (the “AIF”) under the heading “Enterprise Risk Factors” and in the Corporation’s most recent annual and interim MD&A under the heading “Enterprise Risk Management”.

 

Forward-looking information contained in this Prospectus Supplement, including the documents incorporated by reference, is made as of the date of this Prospectus Supplement, the Base Shelf Prospectus or the documents incorporated by reference, as applicable, and based on the plans, beliefs, estimates, projections, expectations, opinions and assumptions of management on such date. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. While subsequent events and developments may cause the Corporation’s views to change, the Corporation disclaims any obligation to update any forward-looking information or to explain any material difference between subsequent actual events and such forward-looking information, except to the extent required by applicable law. All forward-looking information contained or incorporated by reference in this Prospectus Supplement is qualified by these cautionary statements.

 

PRESENTATION OF FINANCIAL INFORMATION

 

Unless otherwise indicated, all financial information included and incorporated by reference in this Prospectus Supplement has been prepared in accordance with Generally Accepted Accounting Principles in the United States.

 

NON-GAAP MEASURES

 

The term “Adjusted Net Earnings” is used in this Prospectus Supplement and is not a recognized measure under U.S. GAAP. “Adjusted Net Earnings” is a non-GAAP measure used by many investors to compare net earnings from operations without the effects of certain volatile primarily non-cash items that generally have no current economic impact or items such as acquisition expenses or certain litigation expenses that are viewed as not directly related to a company’s operating performance. The Corporation uses “Adjusted Net Earnings” to assess its performance without the effects of (as applicable): gains or losses on foreign exchange, foreign exchange forward contracts, interest rate swaps, acquisition costs, one-time costs of arranging tax equity financing, certain litigation expenses and write down of intangibles and property, plant and equipment, earnings or loss from discontinued operations, unrealized mark-to-market revaluation impacts (other than those realized in connection with the sales of development assets), costs related to management succession and executive retirement, costs related to prior period adjustments due to the Tax Cuts and Jobs Act (“U.S. Tax Reform”), costs related to condemnation proceedings, financial impacts from the Market Disruption Event on the Corporation’s Senate Wind Facility, changes in value of investments carried at fair value, and other typically non-recurring or unusual items as these are not reflective of the performance of the underlying business of the Corporation. The non-cash accounting charge related to the revaluation of U.S. deferred income tax assets and liabilities as a result of implementation of the effects of U.S. Tax Reform is adjusted as it is also considered a non-recurring item not reflective of the performance of the underlying business of the Corporation. The Corporation believes that analysis and presentation of net earnings or loss on this basis will enhance an investor’s understanding of the operating performance of its businesses. “Adjusted Net Earnings” is not intended to be representative of net earnings or loss determined in accordance with U.S. GAAP, and can be impacted positively or negatively by these items.

 

There is no standardized measure of “Adjusted Net Earnings” and the Corporation’s method of calculating this measure may differ from methods used by other companies and therefore may not be comparable to similar measures presented by other companies. Schedule “A” hereto contains a reconciliation of “Adjusted Net Earnings” to net earnings attributable to shareholders, the most directly comparable U.S. GAAP measure, for the year ended December 31, 2015 and each subsequent year through the year ended December 31, 2020. For further information regarding the term “Adjusted Net Earnings” and other non-GAAP financial measures used by the Corporation and referred to in the documents incorporated by reference herein, including an explanation, calculation and analysis and, as applicable, a reconciliation to the most directly comparable U.S. GAAP measure, see “Non-GAAP Financial Measures” in the Corporation’s most recent interim MD&A.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

This Prospectus Supplement is deemed to be incorporated by reference in the Base Shelf Prospectus solely for the purposes of the Offering. Other documents are also incorporated or deemed to be incorporated by reference in the Base Shelf Prospectus and reference should be made to the Base Shelf Prospectus for full particulars. Copies of the documents incorporated by reference herein and in the Base Shelf Prospectus may be obtained on request without charge from the Vice President, Investor Relations of the Corporation at 354 Davis Road, Oakville, Ontario, L6J 2X1, email: InvestorRelations@APUCorp.com, telephone (905) 465-4500, and are also available electronically on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

 

As of the date hereof, the following documents of the Corporation, filed with the securities commissions or similar authorities in each of the provinces of Canada and filed with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”), are specifically incorporated by reference in and form an integral part of this Prospectus:

 

 

 

 

 

 

 

Any documents of the Corporation of the type referred to above, including all annual information forms, all information circulars, all annual and interim financial statements and MD&A relating thereto, all material change reports (excluding confidential material change reports), news releases containing financial information for financial periods more recent than the most recent annual or interim financial statements, and any business acquisition reports, as well as all prospectus supplements disclosing additional or updated information relating to the Offering subsequently filed by the Corporation with a securities commission or similar authority in Canada after the date of this Prospectus Supplement and prior to the termination of the Offering hereunder shall be deemed to be incorporated by reference in this Prospectus (except that any description of the Corporation’s credit ratings in any such document shall not be deemed to be incorporated by reference into this Prospectus Supplement).

 

Documents or information in an annual report on Form 40-F filed by the Corporation with the SEC under the U.S. Exchange Act from the date of this Prospectus Supplement and prior to the termination or completion of the Offering shall be deemed to be incorporated by reference into this Prospectus Supplement and be deemed exhibits to the registration statement of which this Prospectus Supplement forms a part. In addition, any other report on Form 6-K and the exhibits thereto filed or furnished by the Corporation with the SEC under the U.S. Exchange Act from the date of this Prospectus Supplement and prior to the termination or completion of the Offering shall be deemed to be incorporated by reference into this Prospectus Supplement or as exhibits to the registration statement, as applicable, but only if and to the extent expressly so provided in such reports. Further, prior to the termination or completion of the Offering the Corporation may incorporate by reference into this Prospectus Supplement information from documents that it files with or furnishes to the SEC pursuant to Section 13(a) or 15(d) of the U.S. Exchange Act, if and to the extent expressly provided therein. The Corporation’s current reports on Form 6-K and annual reports on Form 40-F are available from the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system at www.sec.gov.

 

Any statement contained in this Prospectus Supplement or in any other document (or part thereof) incorporated or deemed to be incorporated by reference in this Prospectus Supplement shall be deemed to be modified or superseded for the purposes of this Prospectus Supplement to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference in this Prospectus Supplement modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus Supplement.

 

MARKETING MATERIALS

 

Before the filing of the final prospectus supplement in respect of the Offering, the Corporation and the Underwriters held road shows that potential investors in each of the provinces of Canada were able to attend. The Corporation and the Underwriters provided marketing materials to those potential investors in connection with those road shows.

 

In doing so, the Corporation and the Underwriters relied on a provision in applicable Canadian securities legislation that allows issuers in certain U.S. cross-border offerings to not have to file marketing materials relating to those road shows on SEDAR or include or incorporate those marketing materials in the final prospectus supplement in respect of the Offering. To rely on the exemption, the Corporation and the Underwriters must give contractual rights to Canadian investors in the event the marketing materials contain a misrepresentation.

 

Accordingly, the Underwriters signing the certificate contained in the final prospectus supplement in respect of the Offering, and the Corporation, in signing the certificate contained in the Base Shelf Prospectus, have agreed that in the event the marketing materials relating to those road shows contain a misrepresentation (as defined in securities legislation in each of the provinces of Canada), a purchaser resident in a province of Canada who was provided with those marketing materials in connection with the road shows and who purchases the Equity Units under the Prospectus Supplement during the period of distribution shall have, without regard to whether the purchaser relied on the misrepresentation, rights against the Corporation and each such Underwriter with respect to the misrepresentation which are equivalent to the rights under the securities legislation of the jurisdiction in Canada where the purchaser is resident, subject to the defences, limitations and other terms of that legislation, as if the misrepresentation was contained in this prospectus.

 

However, this contractual right does not apply (i) to the extent that the contents of the marketing materials relating to the road shows have been modified or superseded by a statement in this prospectus; and (ii) to any “comparables” as such term is defined in National Instrument 41-101 – General Prospectus Requirements.

 

WHERE YOU CAN FIND MORE INFORMATION

 

The Corporation has filed with the SEC, under the U.S. Securities Act of 1933 (the “U.S. Securities Act”), as amended, a registration statement on Form F-10 with respect to the Equity Units. This Prospectus Supplement, which forms part of the registration statement, does not contain all of the information set forth in the registration statement, certain items of which are contained in the exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to the Corporation and the Offering, reference is made to the registration statement and to the schedules and exhibits filed therewith. Statements included in this Prospectus Supplement or the documents incorporated by reference herein about the contents of any contract, agreement or other document referred to are not necessarily complete, and in each instance, prospective investors should refer to the copy of the document filed as an exhibit to the registration statement for a complete description of the matter involved. Each such statement is qualified in its entirety by such reference.

 

The Corporation will provide to each person to whom this Prospectus Supplement is delivered, without charge, upon request to the Vice President, Investor Relations of the Corporation at 354 Davis Road, Oakville, Ontario, L6J 2X1, Email: InvestorRelations@APUCorp.com, Telephone: (905) 465-4500, copies of the documents incorporated by reference in this Prospectus Supplement and the Base Shelf Prospectus. The Corporation does not incorporate by reference in this Prospectus Supplement or the Base Shelf Prospectus any of the information on, or accessible through, its website.

 

The Corporation files certain reports with, and furnishes other information to, each of the SEC and certain securities commissions or similar regulatory authorities of Canada. Under the multijurisdictional disclosure system adopted by the United States and Canada, such reports and other information may be prepared in accordance with the disclosure requirements of the securities regulatory authorities in the applicable provinces of Canada, which requirements are different from those of the United States. As a foreign private issuer, the Corporation is exempt from the rules under the U.S. Exchange Act prescribing the furnishing and content of proxy statements, and the Corporation’s officers and directors are exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the U.S. Exchange Act. The Corporation’s reports and other information filed or furnished with or to the SEC are available from the SEC’s EDGAR system at www.sec.gov as well as from commercial document retrieval services. The Corporation’s Canadian filings are available on SEDAR at www.sedar.com. Unless specifically incorporated by reference herein or in the Base Shelf Prospectus, documents filed or furnished by the Corporation on SEDAR or EDGAR are neither incorporated in nor part of this Prospectus Supplement or the Base Shelf Prospectus.

 

BUSINESS OF THE CORPORATION

 

General

 

Algonquin Power & Utilities Corp. was originally incorporated under the Canada Business Corporations Act on August 1, 1988 as Traduction Militech Translation Inc. Pursuant to articles of amendment dated August 20, 1990 and January 24, 2007, the Corporation amended its articles to change its name to Société Hydrogenique Incorporée – Hydrogenics Corporation and Hydrogenics Corporation – Corporation Hydrogenique, respectively. Pursuant to a certificate and articles of arrangement dated October 27, 2009, the Corporation, among other things, created a new class of common shares, transferred its existing operations to a newly formed independent corporation, exchanged new common shares for all of the trust units of Algonquin Power Co. and changed its name to Algonquin Power & Utilities Corp. The head and registered office of the Corporation is located at 354 Davis Road, Oakville, Ontario, L6J 2X1.

 

The Corporation’s operations are organized across two primary business units consisting of: the Regulated Services Group, which primarily owns and operates a portfolio of regulated assets in the United States, Canada, Chile and Bermuda; and the Renewable Energy Group, which primarily owns and operates a diversified portfolio of renewable generation assets. The Corporation also undertakes development activities for both business units, working with a global reach to identify, develop, acquire, or invest in renewable power generating facilities, regulated utilities and other complementary infrastructure projects.

 

Regulated Services Group

 

The Regulated Services Group operates a diversified portfolio of regulated utility systems throughout the United States, Canada, Chile and Bermuda serving approximately 1,089,000 customer connections. The Regulated Services Group owns approximately $9.2 billion of regulated utility assets and seeks to provide safe, high quality and reliable services to its customers and to deliver stable and predictable earnings to the Corporation.  In addition to encouraging and supporting organic growth within its service territories, the Regulated Services Group seeks to deliver continued growth in earnings through accretive acquisitions of additional utility systems.

 

Renewable Energy Group

 

The Renewable Energy Group generates and sells electrical energy produced by its diverse portfolio of renewable power generation and clean power generation facilities primarily located across the United States and Canada.  The Renewable Energy Group seeks to deliver continuing growth through development of new greenfield power generation projects and accretive acquisitions of additional electric energy generation facilities.

 

The Renewable Energy Group directly owns and operates hydroelectric, wind, solar, and thermal facilities with a combined gross generating capacity of approximately 2.3 GW.

 

In addition to directly owned and operated assets, the Renewable Energy Group has investments in generating assets with approximately 1.1 GW of net generating capacity, which includes the Corporation’s approximate 44.2% indirect beneficial interest in Atlantica, a NASDAQ-listed company that acquires, owns and manages a diversified international portfolio of contracted renewable energy, power generation, electric transmission and water assets. The Corporation reports its investment in Atlantica under the Renewable Energy Group.

 

See “Description of the Business” in the AIF and “Overview and Business Strategy” in the Corporation’s most recent interim MD&A.

 

Track Record of Predictable Earnings and Growth

 

From the year ended December 31, 2015 to the year ended December 31, 2020 (inclusive), the Corporation’s Adjusted Net Earnings per share increased at a compound annual rate of 12.2%. Additionally, the Corporation’s annual Common Share dividend increased at a compound annual rate of 10% from the year ended December 31, 2010 to the year ended December 31, 2020 (inclusive). As of December 31, 2020, the Common Shares achieved a total shareholder return on the TSX for the prior 5 and 10-year periods of approximately 141% and approximately 562%, respectively.

ESG Commitments

 

In October 2020, the Corporation released its 2020 Sustainability Report (the “Sustainability Report”), which sets out the Corporation’s specific environmental, social and governance (“ESG”) goals. In furtherance of these ESG goals, the Corporation, among other things, published its initial report based on the Task Force on Climate-Related Financial Disclosures in December 2020 and has been included in the Bloomberg Gender Equality Index for 2020 and 2021. The Sustainability Report also includes emissions data for the Corporation and third party verification of 2019 emissions. The Corporation does not incorporate by reference the Sustainability Report or any other information on, or accessible through, its website in this Prospectus Supplement or the Base Shelf Prospectus, unless expressly provided herein or therein.

 

RECENT DEVELOPMENTS

 

Apple Valley Condemnation Proceedings

 

Liberty Utilities (Apple Valley Ranchos Water) Corp (“Liberty Apple Valley”) is the subject of a condemnation lawsuit filed by the Town of Apple Valley (the “Town”).  On May 7, 2021, the Court issued a Tentative Statement of Decision denying the Town’s attempt to take the Apple Valley water system by eminent domain.  The ruling confirms that Liberty Apple Valley’s continued ownership and operation of the water system is in the best interest of the community.  The Corporation expects that the Court will issue a Final Statement of Decision in August 2021.  Upon entry of a Final Statement of Decision consistent with the Tentative Statement of Decision, the Town’s lawsuit would be dismissed and the Town would be required to compensate Liberty Apple Valley for its litigation expenses.  The Court’s ruling is subject to appeal by the Town.

 

Altavista Solar Facility

 

On June 1, 2021, the Corporation achieved full commercial operations at its 80 MW Altavista Solar Facility, located in Campbell County, Virginia. The majority of output from the Altavista Solar Facility is being sold to Facebook Operations, LLC, a wholly-owned subsidiary of Facebook, Inc., pursuant to a power purchase agreement. In the first half of 2021, the Corporation exercised its option and acquired the remaining 50% interest in the project that it did not previously own.

RISK FACTORS

 

An investment in the Equity Units is subject to certain risks. In addition to the risks described herein, reference is made to the section in the AIF entitled “Enterprise Risk Factors” and to the section in the most recent annual and interim MD&A entitled “Enterprise Risk Management” and to the risks disclosed in other documents incorporated by reference herein. Such risk factors could have a materially adverse effect on the future results of operations, business prospects or financial condition of the Corporation, and could cause actual events to differ materially from those described in forward-looking information. Additional risks and uncertainties not presently known to the Corporation, or which the Corporation currently deems to be immaterial, may also have an adverse effect upon the Corporation.

 

Risks Relating to the Offering

 

Discretion in the Use of Proceeds

 

Management of the Corporation will have discretion concerning the use of proceeds of the Offering as well as the timing of their expenditures. As a result, investors will be relying on the judgment of management as to the application of the proceeds of the Offering. Management may use the net proceeds of the Offering in ways that an investor may not consider desirable. The results and effectiveness of the application of the proceeds are uncertain. If the proceeds are not applied effectively, the Corporation’s results of operations may suffer.

 

Future Sales or Issuances of Securities

 

Following the expiration of the 45-day “lock-up” period described under “Underwriting”, the Corporation may sell additional Common Shares or other securities in subsequent offerings, including pursuant to its at-the-market equity program (the “ATM Program”), under which the Corporation is authorized to sell Common Shares having an aggregate sale price of up to U.S.$500,000,000. The Corporation may also issue additional securities to finance future activities. The Corporation cannot predict the size of future issuances of securities or the effect, if any, that future issuances and sales of securities will have on the market price of the Common Shares. Sales or issuances of substantial numbers of Common Shares, or the perception that such sales could occur, may adversely affect prevailing market prices of the Common Shares. With any additional sale or issuance of Common Shares, investors will suffer dilution to their voting power and the Corporation may experience dilution in its earnings per share.

Risks Relating to the Equity Units

 

You assume the risk that the market value of the Common Shares may decline.

 

The number of Common Shares that you will receive upon the settlement of a Purchase Contract is not fixed but instead will depend on the average VWAP of the Common Shares for the trading days during the 20 consecutive scheduled trading-day period ending on the second scheduled trading day immediately preceding the Purchase Contract Settlement Date (subject to adjustment as described herein if a market disruption event occurs), which is referred to herein as the applicable market value. The Corporation cannot assure you that the market value of the Common Shares you receive on the Purchase Contract Settlement Date will be equal to or greater than the effective price per Common Share you paid for Common Shares. If the applicable market value of the Common Shares is less than the reference price of $     , the market value of the Common Shares issued to you pursuant to each Purchase Contract on the Purchase Contract Settlement Date (assuming that the market value on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares) will be less than the effective price per Common Share you paid for the Common Shares. Accordingly, you assume the risk that the market value of the Common Shares may decline, and that the decline could be substantial.

 

In addition, because the number of Common Shares delivered to you on the Purchase Contract Settlement Date will be based upon the applicable market value, which is in turn calculated on the basis of the average of the VWAP per Common Share for the trading days during the 20 consecutive scheduled trading-day period ending on the second scheduled trading day immediately preceding the Purchase Contract Settlement Date (subject to adjustment as described herein if a market disruption event occurs), the Common Shares you receive on the Purchase Contract Settlement Date may be worth less than the Common Shares you would have received had the applicable market value been equal to the VWAP per Common Share on the Purchase Contract Settlement Date or the average VWAP of the Common Shares over a different period of days.

 

The opportunity for equity appreciation provided by an investment in the Equity Units is less than that provided by a direct investment in Common Shares.

 

Your opportunity for equity appreciation afforded by investing in the Equity Units is less than your opportunity for equity appreciation if you directly invested in Common Shares. This opportunity is less because the market value of the Common Shares to be received by you pursuant to the Purchase Contract on the Purchase Contract Settlement Date (assuming that the market value on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares) will only exceed the effective price per Common Share you paid for Common Shares if the applicable market value of the Common Shares exceeds the threshold appreciation price (which represents an appreciation of approximately      % over the reference price). If the applicable market value of the Common Shares exceeds the reference price but does not exceed the threshold appreciation price, you will realize no equity appreciation of the Common Shares for the period during which you own the Purchase Contract. Furthermore, if the applicable market value of the Common Shares equals or exceeds the threshold appreciation price, you would receive on the purchase contract settlement date only approximately     % of the value of the Common Shares you could have purchased with $50.00 at the last reported sale price of the Common Shares on the NYSE on __, 2021.

 

The trading prices for the Corporate Units and Treasury Units are expected to be affected by, among other things, the trading prices of the Common Shares, the general level of interest rates and the Corporation’s credit quality.

 

The trading prices of Corporate Units, which the Corporation intends to apply to list on the NYSE, and Treasury Units in the secondary market are expected to be affected by, among other things, the trading prices of the Common Shares, the general level of interest rates and the Corporation’s credit quality. It is impossible to predict whether the price of the Common Shares or interest rates will rise or fall. The price of the Common Shares could be subject to wide fluctuations in the future in response to many events or factors, including those discussed in the risk factors herein and in the Corporation’s AIF under the heading “Enterprise Risk Factors” and annual and interim MD&A under the heading “Enterprise Risk Management”, as well as under “Cautionary Statement on Forward-Looking Statements and Forward-Looking Information” in this prospectus supplement, many of which events and factors are beyond the Corporation’s control. For example, the Corporation’s operating results and prospects and economic, financial and other factors will affect trading prices of the Common Shares. In addition, market conditions can affect the capital markets generally, thereby affecting the price of the Common Shares. These conditions may include the level of, and fluctuations in, the trading prices of stocks generally. Fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of the Common Shares underlying the Purchase Contracts and of the other components of the Equity Units. Any such arbitrage could, in turn, affect the trading prices of the Corporate Units, Treasury Units, the Notes and the Common Shares.

 

If you hold Corporate Units or Treasury Units, you will not be entitled to any rights with respect to the Common Shares, but you will be subject to all changes made with respect to the Common Shares.

 

If you hold Corporate Units or Treasury Units, you will not be entitled to any rights with respect to the Common Shares, such as voting rights and rights to receive dividends or other distributions on the Common Shares. However, you will be subject to all changes affecting the Common Shares. You will only be entitled to rights with respect to the Common Shares if and when the Corporation delivers Common Shares in exchange for Corporate Units or Treasury Units on the Purchase Contract Settlement Date, or on the settlement date for any early settlement, as the case may be, and the applicable record date, if any, for the exercise of those rights or the receipt of those dividends or distributions occurs after that date.

 

The delivery of make-whole shares upon a fundamental change early settlement may not adequately compensate you.

 

If a fundamental change (as defined below under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change”) occurs prior to the 20^th business day preceding the Purchase Contract Settlement Date and you exercise your fundamental change early settlement right, you will be entitled to receive additional value in respect of make-whole Common Shares unless the share price (as defined under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” below), is below $      per Common Share or in excess of $      per Common Share (in each case, subject to adjustment). A description of how the number of make-whole shares will be determined is set forth under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change—Calculation of Make-Whole Shares.” Although the make-whole shares are designed to compensate you for the lost value of your Equity Units as a result of the fundamental change, this feature may not adequately compensate you for such loss.

 

In addition, in the event that a holder seeks to exercise its fundamental change early settlement right and a registration statement is required to be effective in connection with the exercise of such right but no such registration statement is then effective or a blackout period is continuing, the holder’s exercise of such right will be void unless and until the registration statement is effective. For so long as there is a material business transaction or development that has not yet been publicly disclosed (but in no event for a period longer than 90 days), the Corporation will not be required to file such registration statement or provide such a prospectus, and the fundamental change early settlement right will not be available, until the Corporation has publicly disclosed such transaction or development, provided that the Corporation will use commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so.

 

The Equity Units provide limited Fixed Settlement Rate adjustments, and an event could occur that adversely affects the value of the Equity Units or the Common Shares but that does not result in an adjustment to the Fixed Settlement Rates.

 

The number of Common Shares that you are entitled to receive on the Purchase Contract Settlement Date, or as a result of early settlement of a Purchase Contract, is subject to adjustment for certain events arising from stock splits and combinations, stock dividends, certain cash dividends and certain other events. The Corporation will not adjust the number of Common Shares that you are to receive on the Purchase Contract Settlement Date, or as a result of early settlement of a Purchase Contract, for other events, including without limitation issuances and purchases of Common Shares in connection with dividend reinvestment plans, employee stock option grants, ordinary quarterly dividends, offerings of Common Shares by the Corporation for cash or in connection with an acquisition, third-party tender and exchange offers and share issuances pursuant to options and other convertible securities outstanding on the date the Corporation issues the Equity Units. See “Description of the Purchase Contracts—Anti-dilution Adjustments.” The Corporation cannot assure you that an event that adversely affects the value of the Equity Units or Common Shares, but does not result in an adjustment to the Settlement Rate (as defined under “Description of the Purchase Contracts—Purchase of Common Shares”), will not occur. Further, other than during the 45 day “lock-up” period as described under “Underwriting,” the Corporation is not restricted from issuing additional Common Shares during the term of the Purchase Contracts, including pursuant to its ATM Program, and has no obligation to consider your interests for any reason. If the Corporation issues additional Common Shares, those issuances may materially and adversely affect the price of the Common Shares and, because of the relationship of the number of Common Shares that holders are to receive on the Purchase Contract Settlement Date to the price of the Common Shares, those issuances may adversely affect the trading prices of the Equity Units.

 

The secondary market for the Corporate Units, Treasury Units or the Notes may be illiquid.

 

It is not possible to predict how Corporate Units, Treasury Units or the Notes will trade or whether a market for them will be liquid or illiquid. There is currently no market for the Corporate Units, Treasury Units or the Notes. The Corporation intends to apply to list the Corporate Units on the NYSE and expects trading to commence within 30 days of the date of initial issuance of the Corporate Units, although there is no guarantee that the Corporate Units will be approved for listing. The Corporation will not list the Treasury Units or the Notes on any exchange or quotation system. The Corporation cannot assure you as to the liquidity of any market that may develop for the Corporate Units, the Treasury Units or the Notes, your ability to sell these securities or whether a trading market, if one develops, will continue. In addition, in the event a sufficient number of holders of Equity Units were to convert their Treasury Units to Corporate Units or their Corporate Units to Treasury Units, as the case may be, the liquidity of Corporate Units or Treasury Units could be adversely affected. The Corporation cannot assure you that the Corporate Units, if approved for listing, will not be de-listed from the NYSE or that trading in the Corporate Units will not be suspended as a result of holders’ elections to create Treasury Units, which could cause the number of Corporate Units to fall below the requirement for listing securities on the NYSE.

 

Your rights under the pledged securities will be subject to the Corporation’s security interest and your rights under the Equity Units and the Notes may be affected by a bankruptcy, insolvency arrangement or similar proceeding.

 

Although you will be the beneficial owner of the undivided beneficial ownership interests in the Notes, Treasury Securities or Applicable Ownership Interests in the portion of the Treasury Portfolio described in the first bullet under “Summary—The Offering—What is the Treasury Portfolio?” as applicable, those securities will be pledged to the Corporation through the Collateral Agent to secure your obligations under the related Purchase Contracts. Your rights to any pledged securities will be subject to the Corporation’s security interest. Further, certain Canadian federal and provincial laws governing insolvency, preferences, fraudulent conveyances, transfers at under value, and/or oppression may void or otherwise restrict the Corporation’s ability to issue Common Shares under a Purchase Contract on the basis that such action would amount to a preference, fraudulent conveyance, transfer at under value and/or oppressive conduct. Additionally, notwithstanding the automatic termination of the Purchase Contracts in the event that the Corporation becomes the subject of proceedings taken under and pursuant to the Companies’ Creditors Arrangement Act (Canada) or the Bankruptcy and Insolvency Act (Canada) or any corporate arrangement, winding up, reorganization, receivership or similar proceedings commenced in a court of competent jurisdiction (any such proceedings hereinafter referred to as an “Insolvency Proceeding”), your rights under the Equity Units, Notes (including the right to receive payment of any amounts owing to you thereunder) and/or any Purchase Contract to purchase Common Shares may be impaired, delayed, stayed, compromised or otherwise restricted. This could be the case regardless of whether a holder of the Notes has settled early its obligations under the Purchase Contracts and holds its Notes separately from Equity Units, or continues to hold a beneficial ownership interest in the Notes as part of its Equity Units. The powers of the court under Insolvency Proceedings have generally been interpreted and exercised broadly and remedially so as to preserve the enterprise value of a restructuring entity and protect such entity and its assets from actions taken by creditors and other parties. In the event that the Corporation becomes the subject of an Insolvency Proceeding, the possibility exists that a holder’s ability to terminate its obligations under the Purchase Contract to purchase Common Shares may be impaired, delayed, stayed, compromised or otherwise restricted, notwithstanding the termination provisions of the Purchase Contracts. In such circumstances, the Common Shares that a holder may receive in respect of its Equity Units may have only nominal value.

 

Upon a successful remarketing of the Notes, the terms of your Notes will be modified even if you elect not to participate in the remarketing.

 

When the Corporation attempts to remarket the Notes, the remarketing agent will agree to use its commercially reasonable efforts to sell the Notes included in the remarketing. Following any successful remarketing of the Notes, the interest rate on the Notes will be reset, interest will be payable on a semi-annual basis and the Corporation will cease to have the ability to redeem the Notes at its option, all as described under “Description of the Purchase Contracts—Remarketing.” If the remarketing is successful, the modified terms will apply to all the Notes, even if they were not included in the remarketing. However, holders of the Notes must elect to participate in the remarketing before knowing what the modified terms of the Notes will be. Whenever the Corporation remarkets the Notes, it will notify holders of Corporate Units, Treasury Units and separate Notes of such remarketing. You may determine that the revised terms of the Notes you receive are not as favorable to you as you would deem appropriate, and the modified terms may be less favorable to you than the initial terms of the Notes. For example, the interest rate on the Notes may be reduced in connection with the remarketing.

 

The Purchase Contract and Pledge Agreement will not be qualified under the United States Trust Indenture Act and the obligations of the Purchase Contract Agent are limited.

 

The Purchase Contract and Pledge Agreement among the Corporation, the Purchase Contract Agent and the Collateral Agent will not be qualified as an indenture under the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the Purchase Contract Agent and Collateral Agent will not be required to qualify as a trustee under the Trust Indenture Act. You will not have the benefit of the protection of the Trust Indenture Act with respect to the Purchase Contract and Pledge Agreement, the Purchase Contracts or the Purchase Contract Agent. The Notes constituting a part of the Corporate Units will be issued pursuant to an indenture that has been qualified under the Trust Indenture Act. Accordingly, if you hold Corporate Units, you will have the benefit of the protections of the Trust Indenture Act only to the extent applicable to the ownership interests in the Notes included in the Corporate Units. The protections generally afforded the holder of a security issued under an indenture that has been qualified under the Trust Indenture Act include:

 

 

 

 

The trading price of the Corporate Units or any separate Notes may not fully reflect the value of their accrued but unpaid interest.

 

The Corporate Units and any separate Notes may trade at a price or prices that does not fully reflect the value of accrued but unpaid interest on the Notes.

 

You may not be able to exercise your rights to settle a Purchase Contract prior to the Purchase Contract Settlement Date unless a registration statement under the U.S. Securities Act is in effect and a Canadian prospectus is available covering the Common Shares and other securities, if any, deliverable upon early settlement of a Purchase Contract.

 

The early settlement rights under the Purchase Contracts are subject to the conditions that (i) if required under U.S. federal securities laws, the Corporation has a registration statement under the U.S. Securities Act in effect and an available prospectus covering the Common Shares and other securities, if any, deliverable upon settlement of a Purchase Contract, and (ii) if required under Canadian securities laws, an appropriate final Canadian prospectus be filed for the same purpose. Although the Corporation has agreed that, if such a U.S. registration statement and prospectus and/or Canadian prospectus is required, the Corporation will use its commercially reasonable efforts to, as applicable, (1) have a registration statement in effect covering those Common Shares and other securities, if any, to be delivered in respect of the Purchase Contracts being settled and provide a prospectus in connection therewith, and/or (2) to prepare, file, receive a receipt for and deliver a final Canadian prospectus, any failure or inability to maintain an effective U.S. registration statement or to have available such a prospectus covering the Common Shares, including as a result of pending corporate events or announcements that prevent the delivery of a current prospectus, may prevent or delay an early settlement of the Purchase Contract, subject to certain exceptions. In the event that a holder seeks to exercise its early settlement right and a U.S. registration statement is required to be effective and/or a final Canadian prospectus is required to be filed in connection with the exercise of such right but no such U.S. registration statement is then effective and/or no such final Canadian prospectus is then filed, the holder’s exercise of such right will be void unless and until such a U.S. registration statement is effective and/or such a final Canadian prospectus is filed.

 

The contract adjustment payments are subordinated to the Corporation’s existing and future Priority Indebtedness.

 

The Corporation’s obligations under the contract adjustment payments will be subordinated in right of payment to all of the Corporation’s current and future Priority Indebtedness (as defined under “Description of the Equity Units—Ranking”), including the Notes. This means that the Corporation will not be permitted to make any contract adjustment payments if it defaults on a payment of principal of, premium, if any, or interest on any such Priority Indebtedness or there shall occur an event of default under such Priority Indebtedness and it does not cure the default within the applicable grace period, if the holders of the Priority Indebtedness have the right to accelerate the maturity of such indebtedness or if the terms of such Priority Indebtedness otherwise restrict the Corporation from making payments to junior creditors. See “Description of the Equity Units—Ranking.”

 

As of March 31, 2021, the Corporation on a consolidated basis had approximately $6.4 billion of outstanding indebtedness (excluding undrawn letters of credit), of which approximately $1.3 billion was Priority Indebtedness of the Corporation on a standalone basis (excluding undrawn letters of credit).  All such indebtedness will effectively rank senior to the Corporation’s obligations under the contract adjustment payments. Furthermore, the Indenture does not contain any provision limiting the Corporation’s ability to incur indebtedness generally. The Corporation may incur substantial additional indebtedness in the future.

 

The Notes and the contract adjustment payments are structurally subordinated to any existing or future preferred shares, indebtedness, guarantees and other liabilities of the Corporation’s subsidiaries.

 

The Notes and the contract adjustment payments will be obligations exclusively of Algonquin and will not be guaranteed by any of its subsidiaries, and, as a result, payment of principal of, premium, if any, and interest on the Notes, and payment of contract adjustment payments, will be structurally subordinated to any indebtedness and other liabilities of the Corporation’s subsidiaries.

 

As of March 31, 2021, the Corporation’s subsidiaries had approximately $4.8 billion of outstanding indebtedness (excluding undrawn letters of credit).  All such indebtedness will effectively rank senior to the Corporation’s obligations under the Notes and the contract adjustment payments. Furthermore, the Indenture does not contain any provision limiting the ability of the Corporation’s subsidiaries to incur indebtedness. The Corporation’s subsidiaries may incur substantial additional indebtedness in the future.

 

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Equity Units.

 

The Corporation expects that many investors in, and potential purchasers of, the Equity Units will employ, or seek to employ, an arbitrage strategy with respect to the Equity Units. Investors would typically implement such a strategy by selling short the Common Shares underlying the Equity Units and dynamically adjusting their short position while continuing to hold the Equity Units. Investors may also implement this type of strategy by entering into swaps on the Common Shares in lieu of or in addition to short selling the Common Shares. Additionally, fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of the Common Shares underlying the Equity Units and of the other components of the Equity Units. Any such arbitrage could, in turn, affect the trading prices of the Equity Units, the Notes and the Common Shares.

 

The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain actions, and may in the future adopt additional rules and take other actions, that may impact those engaging in short selling activity involving equity securities (including Common Shares). Such rules and actions include Rule 201 of SEC Regulation SHO under the U.S. Exchange Act, the adoption by the Financial Industry Regulatory Authority, Inc. and the national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide circuit breakers that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Any governmental or regulatory action that restricts the ability of investors in, or potential purchasers of, the Equity Units to effect short sales of Common Shares, borrow Common Shares or enter into swaps on Common Shares could adversely affect the trading price and the liquidity of the Equity Units.

 

The Corporation may defer contract adjustment payments under the Purchase Contracts, and this may have an adverse effect on the trading price of the Equity Units.

 

The Corporation may at its option defer the payment of all or part of the contract adjustment payments under the Purchase Contracts. If the Corporation exercises its right to defer contract adjustment payments, the market price of the Equity Units is likely to be adversely affected. As a result of the existence of the Corporation’s deferral rights, the market price of the Equity Units may be more volatile than would otherwise be the case. In addition, there is a risk that the Corporation may not be able to pay such deferred contract adjustment payments (including compounded contract adjustment payments thereon) in the future. If the Corporation makes such a deferral you may be required to continue to recognize income for U.S. federal income tax purposes in respect of the Purchase Contracts in advance of your receipt of any corresponding cash payments.

 

The Corporation intends to withhold tax on the contract adjustment payments.

 

The Canadian federal income tax considerations applicable to the acquisition, ownership and disposition of Equity Units, and Common Shares issuable by the Corporation on the settlement of a Purchase Contract, are complex and subject to some uncertainty, both for Resident Holders and Non-Resident Holders (as defined under “Material Canadian Federal Income Tax Considerations”).  Without limiting the foregoing, Non-Resident Holders are advised that the Corporation intends to withhold tax on contract adjustment payments on the basis that they are deemed dividends under the Income Tax Act (Canada) (the “Tax Act”), at a rate of 25%, subject to reduction under the provisions of any applicable income tax treaty or convention. Similarly, the Corporation intends to withhold tax (at a rate of 25%, subject to reduction under the provisions of any applicable income tax treaty or convention) on the fair market value of any make-whole shares issued to a Non-Resident Holder pursuant to the exercise of the holder’s fundamental change early settlement right, and to that end will have the authority to cause the sale on behalf of such Non-Resident Holder of such number of such make-whole shares as may be necessary to fund such withholding tax and any related transaction costs. Both Resident Holders and Non-Resident Holders should consult their own tax advisors for tax advice having regard to their particular circumstances.  See “Material Canadian Federal Income Tax Considerations.”

 

Other U.S. tax treatments of the Notes are possible.

 

The Corporation intends to treat the Notes as “variable rate debt instruments” that are subject to applicable U.S. Treasury regulations that apply to “reset bonds.” Under this treatment, except as described above, a U.S. holder (as defined in “Material United States Federal Income Tax Considerations”) will be required to take into account  interest payments on the Notes at the time the interest is paid or accrued in accordance with such holder’s regular method of tax accounting. However, because there are no U.S. Treasury regulations, rulings or other authorities that address the U.S. federal income tax treatment of debt instruments that are substantially similar to the Notes, alternative characterizations of the Notes are possible. For example, the Notes could be treated as “contingent payment debt instruments” for U.S. federal income tax purposes. In that event, a U.S. holder would generally be required to (1) accrue interest income based on a projected payment schedule and comparable yield, which may be higher than the stated interest rate on the Notes, regardless of such holder’s regular method of tax accounting, and (2) treat any gain recognized on a sale, exchange, redemption or other taxable disposition of a Note as ordinary income. See “Material United States Federal Income Tax Considerations—The Notes—Possible Alternative Characterizations.”

 

The U.S. federal income tax consequences of the purchase, ownership and disposition of the Equity Units are not entirely clear.

 

The IRS has issued a ruling addressing the treatment of units similar to the Equity Units. In that ruling, the IRS concluded that, for U.S. federal income tax purposes, an interest in a unit comprising a note and a purchase contract would be treated as a separate interest in such note and a separate interest in such purchase contract. The IRS concluded that the notes issued as part of such unit were treated as debt for U.S. federal income tax purposes. However, the terms of the Equity Units differ in some respects from the terms of the units addressed by the IRS in the ruling, and there is no statutory, judicial or administrative authority directly addressing the treatment of instruments with substantially identical terms as the Equity Units. Accordingly, no assurance can be given that the conclusions in the ruling apply to the Equity Units. As a result, the U.S. federal income tax consequences of the ownership and disposition of the Equity Units are not entirely clear. In addition, the Corporation cannot assure you that the IRS or a court will agree with the characterization of the Notes as indebtedness for U.S. federal income tax purposes. You should consult with your tax advisors regarding the tax consequences of an investment in the Equity Units. See “Material United States Federal Income Tax Considerations.”

 

Under certain circumstances, a U.S. holder may be treated as receiving a taxable distribution on the Common Shares for U.S. tax purposes even though such holder does not receive any actual distribution.

 

For U.S. federal income tax purposes, a U.S. holder (as defined in “Material United States Federal Income Tax Considerations”) may be treated as receiving a constructive distribution from the Corporation with respect to the Purchase Contract for U.S. federal income tax purposes if (1) the Fixed Settlement Rates (as defined under “Description of the Purchase Contracts—Purchase of Common Shares”) are adjusted (or fail to be adjusted) and, as a result of the adjustment (or failure to adjust), such holder’s proportionate interest in the Corporation’s assets or earnings and profits is increased, and (2) the adjustment (or failure to adjust) is not made pursuant to a bona fide, reasonable anti-dilution formula. For example, if the Fixed Settlement Rates are adjusted as a result of a distribution that is taxable to the holders of Common Shares, such as a cash dividend, a U.S. holder will be deemed to have received a “constructive distribution” of the Corporation’s Common Shares. Thus, under certain circumstances, an adjustment to the Fixed Settlement Rates might give rise to a taxable deemed distribution to such holder even though such holder does not actually receive any cash or other property in connection with such adjustment. See “Material United States Federal Income Tax Considerations – Purchase Contracts – Adjustment to Settlement Rate.”

 

If required, the Corporation will report contract adjustment payments as ordinary income to U.S. holders for U.S. federal income tax purposes.

 

To the extent the Corporation is required to file information returns with respect to contract adjustment payments, the Corporation intends to report contract adjustment payments as taxable ordinary income to a U.S. holder (as defined under “Material United States Federal Income Tax Considerations”) for U.S. federal income tax purposes when received or accrued, in accordance with the U.S. holder’s regular method of tax accounting. See “Material United States Federal Income Tax Considerations – Purchase Contracts – Contract Adjustment Payments”. Persons considering the purchase of Equity Units should consult their tax advisors concerning the possible alternative characterization and tax treatment of Equity Units and the contract adjustment payments.

 

Investors in the Equity Units located outside of Canada may have difficulties enforcing civil liabilities.

 

The Corporation is incorporated under the laws of Canada and its registered and head office is in Canada. Most of the Corporation’s directors and officers, and some of the experts named in this Prospectus Supplement, are residents of Canada or otherwise reside outside of the United States, and a substantial portion of their assets, and a substantial portion of the Corporation’s assets, are located outside the U.S. The Corporation will agree, in accordance with the terms of the Indenture and the Purchase Contract and Pledge Agreement to accept service of process in any suit, action or proceeding with respect to the Indenture, the Notes, the Purchase Contract and Pledge Agreement or the Purchase Contracts, brought in any federal or state court located in New York City by an agent designated for such purpose, and to submit to the jurisdiction of such courts in connection with such suits, actions or proceedings. Nevertheless, it may be difficult for holders of Notes or Purchase Contracts to effect service of process within the United States upon directors, officers and experts who are not residents of the United States or to realize in the United States upon judgments of courts of the United States predicated upon civil liability under U.S. federal or state securities laws or other laws of the United States. The Corporation has been advised by its Canadian counsel, Blake, Cassels & Graydon LLP, that a judgment of a U.S. court predicated solely upon civil liability under U.S. federal securities laws would probably be enforceable in Canada if the United States court in which the judgment was obtained has a basis for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes. The Corporation has also been advised by Blake, Cassels & Graydon LLP, however, that there is a substantial doubt whether an action could be brought in Canada in the first instance on the basis of liability predicated solely upon U.S. federal securities laws.

 

Securities regulators or purchasers who purchase Notes in the remarketing could take the position that holders of Equity Units who participate in the remarketing have liability under Canadian securities law as “selling security holders.”

 

Under Canadian securities law, if a Canadian prospectus contains a misrepresentation, a purchaser who purchased a security offered under such prospectus has, without regard to whether the purchaser relied on the misrepresentation, a right of action for damages or for rescission against both the issuer and any “selling security holder” selling its securities pursuant to such prospectus.

 

In the context of a prospectus offering, a selling security holder in Canada subject to such liability is generally (i) a person or company who holds a sufficient number of voting rights to affect materially the control of an issuer and in any event a person or company who holds more than 20% of the voting rights of an issuer, and (ii) named in the applicable prospectus. However, there is no definition of “selling security holder” under Canadian securities law. Consequently, Canadian securities regulators or purchasers who purchase Notes in the remarketing under a Canadian prospectus could take the position that holders of Equity Units who participate in the remarketing are selling security holders even though such holders will not be involved in any way in the remarketing process, will not participate in the preparation of any Canadian prospectus used in connection with the remarketing and will not, as holders of Equity Units, have special knowledge regarding the Corporation.

 

If Canadian securities regulators or purchasers who purchase Notes in the remarketing under a Canadian prospectus take the position that holders of Equity Units who participate in the remarketing are selling security holders, it is possible that such holders could have liability described above in the event that a Canadian prospectus delivered in connection with the remarketing contains a misrepresentation.

 

The Corporation is a holding company.

 

The Corporation is a holding company and depends on dividends and other distributions from its subsidiaries. The Corporation conducts substantially all its operations through subsidiaries, and those subsidiaries generate substantially all of its operating income and cash flow. As a result, distributions or advances from those subsidiaries are the principal source of funds necessary to meet the debt service obligations of the Corporation. Contractual provisions or laws, as well as the subsidiaries’ financial condition and operating requirements, may limit the ability of the Corporation to obtain cash from its subsidiaries that it requires to pay its debt service obligations, including any payments required to be made under the Equity Units.

 

Credit ratings applied to the Notes and/or the Equity Units may affect the market price or value and the liquidity of the Securities.

 

The credit ratings applied to the Notes and/or the Equity Units are an assessment by the Rating Agencies of the Corporation’s ability to pay its obligations. The credit ratings are based on certain assumptions about the future performance and capital structure of the Corporation that may or may not reflect the actual performance or capital structure of the Corporation. Changes in credit ratings of the Notes and/or the Equity Units may affect the market price or value and the liquidity of the securities. There is no assurance that any credit rating assigned to the Notes and/or the Equity Units will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant Rating Agency.

 

If the Common Shares cease to be listed on the NYSE or another U.S. exchange, the Common Shares issuable upon exercise of the Purchase Contracts may not be immediately eligible for resale on the TSX.

 

The Common Shares are currently listed on both the NYSE and on the TSX. We expect that all Equity Units will be held by DTC on behalf of the beneficial owners thereof and, so long as the Common Shares remain listed on the NYSE at the time of the exercise of a Purchase Contract, that the Common Shares issued upon exercise will be delivered to DTC for the account of the beneficial owner exercising the relevant Purchase Contract. See “Certain Provisions of the Purchase Contract and Pledge Agreement – Book-Entry System”. Transactions in the Common Shares on the TSX settle by electronic book-entry through Canada’s national securities depositary, CDS Clearing and Depository Services Inc., or CDS. If, at the time the Purchase Contacts are settled, the Common Shares are no longer listed on the NYSE or on another U.S. securities exchange, in order to be eligible for sale on the TSX, the Common Shares, if any, that you receive upon settlement may first need to be transferred and held through an institution that clears and settles securities trades through CDS’s services, which is referred to herein as a CDS participant. You may experience delays in transferring any such Common Shares received upon settlement to a CDS participant, which could impact your ability to timely execute and settle trades in the Common Shares over the TSX. The Corporation expects that, in such circumstances, once beneficial interests in Common Shares issued upon settlement are transferred and held through a CDS participant, they will be eligible for resale on the TSX, however, neither the Corporation, the initial purchasers, nor the Purchase Contract Agent assumes any responsibility for the book-entry systems and procedures of DTC or CDS. Moreover, DTC and CDS may change or eliminate the procedures currently in place to allow for transfers between their respective book-entry systems. Accordingly, in the event that, at the time the Purchase Contacts are settled, the Common Shares are no longer listed on the NYSE or on another U.S. securities exchange, you may not be able to resell any Common Shares you receive upon settlement of the Notes on the TSX in a timely manner, if at all.

 

If the Common Shares cease to be listed on the NYSE or another U.S. exchange, you will be subject to risks associated with fluctuations in currency exchange rates.

 

The Common Shares currently trade on both the NYSE and the TSX. Trades of the Common Shares on the TSX settle, and are reported, in Canadian dollars. If, at the relevant time, the Common Shares are not listed on the NYSE or on certain other U.S. exchanges but continue to be listed on the TSX, the trading price of the Common Shares on the TSX will be used for determining various amounts in respect of the Purchase Contracts.  In those circumstances, the “VWAP”, “closing price” and the “current market price” of the Common Shares will be translated into U.S. dollars using the “prevailing exchange rate” (as such terms are defined in “Description of the Purchase Contracts”). These prices for the Common Shares are used, among other things, to determine the number of Common Shares the Corporation is required to deliver upon exercise of the Purchase Contracts. Accordingly, if, at the time the Purchase Contacts are settled, the Common Shares are not listed on the NYSE, the Nasdaq Global Market or the Nasdaq Global Select Market, a devaluation of the U.S. dollar against the Canadian dollar will generally result in less valuable consideration (measured in U.S. dollars) becoming due upon settlement of the Purchase Contracts. Furthermore, in the event the Common Shares are not listed on the NYSE or another U.S. exchange at the time the Purchase Contacts are settled, and you wish to sell those Common Shares, you may not be able to effect those sales in your preferred currency and may incur losses upon exchanging the cash you receive into that currency.

 

In addition, the closing price and current market price of the Common Shares, which will be translated at the prevailing exchange rate if, at the relevant time, the Common Shares are not listed on NYSE, the Nasdaq Global Market or the Nasdaq Global Select Market but continue to be listed on the TSX, are used to calculate adjustments to the Fixed Settlement Rates, including in connection with distributions made on the Common Shares or the occurrence of a fundamental change. Changes in the prevailing exchange rates could reduce, or eliminate entirely, the amount of any upwards adjustment to the Fixed Settlement Rates that would otherwise have been required under these provisions.

 

Historically, currency exchange rates have fluctuated significantly, and they may continue to fluctuate significantly in the future. The amount and timing of these fluctuations are beyond the Corporation’s control and can significantly harm the value of your investment in the Units, including upon exercise of the Purchase Contracts.

 

USE OF PROCEEDS

 

The net proceeds to the Corporation from the Offering will be approximately $     million after payment of the underwriting commission of approximately $     million but before deducting expenses of the Offering (and assuming that the Over-Allotment Option is not exercised). The expenses of the Offering are estimated to be approximately $      million and will be paid from the general funds of the Corporation.

 

The Corporation expects to use the net proceeds of the Offering to finance or refinance investments in renewable energy generation projects or facilities or other clean energy technologies and investments, in each case that fall into one of the categories below (“Eligible Green Investments”), in accordance with the Corporation’s Green Financing Framework.

 

However, the Eligible Green Investments outlined above will exclude any investment in fossil fuel energy efficiency or development of new hydroelectric facilities with a capacity exceeding 25MW. Eligible Green Investments may include minority equity participations.

 

Management of Proceeds

 

The net proceeds will be deposited to the Corporation’s general account and earmarked for allocation to Eligible Green Investments. The Corporation’s intention is full allocation to Eligible Green Investments within 36 months. Pending allocation to Eligible Green Investments, proceeds may be temporarily invested in cash or short term investment instruments or used to repay existing debt (i.e. credit facilities).

 

CONSOLIDATED CAPITALIZATION

 

As of June 15, 2021, the Corporation had an aggregate of 617,522,454 Common Shares outstanding. Other than (i) the issuance of the Equity Units pursuant to the Offering, and (ii) the issuance of Common Shares pursuant to the Corporation’s ATM Program as disclosed below under “Prior Sales”, there have been no material changes in the consolidated capitalization of the Corporation since March 31, 2021, the end of the most recent interim reporting period for the Corporation, which have not been disclosed in the Base Shelf Prospectus or this Prospectus Supplement or in the documents incorporated by reference therein or herein.

EARNINGS COVERAGE RATIOS

 

The following consolidated earnings coverage ratios are calculated for the 12 month periods ended March 31, 2021 and December 31, 2020. The ratios give effect to the issuance of $900,000,000 principal amount of Notes forming part of the Equity Units offered pursuant to this Prospectus Supplement. The Corporation’s borrowing cost requirements after giving effect to the issue of the Notes amounted to $     million and $      million for the 12 months ended March 31, 2021 and the 12 months ended December 31, 2020, respectively. The Corporation’s earnings before interest and income tax for the 12 months ended March 31, 2021 and 12 months ended December 31, 2020 were $961.8 million and $1,020.6 million, respectively, which is      times and       times, respectively, the Corporation’s aggregate borrowing cost requirements for those periods.

 

DESCRIPTION OF THE EQUITY UNITS

 

In this Description of the Equity Units, “Algonquin” and the “Corporation” refer only to Algonquin Power & Utilities Corp. and any successor obligor, and not to any of its subsidiaries.

 

The following is a summary of some of the terms of the Equity Units. This summary, together with the summaries of the terms of the Purchase Contracts, the Purchase Contract and Pledge Agreement and the Notes set forth under the captions “Description of the Purchase Contracts,” “Certain Provisions of the Purchase Contract and Pledge Agreement” and “Description of the Remarketable Notes” in this prospectus supplement, contain a description of the material terms of the Equity Units, but are only summaries and are not complete. This summary is subject to and is qualified by reference to all the provisions of the Purchase Contract and Pledge Agreement, the base indenture (as defined under “Description of the Remarketable Notes”), the first supplemental indenture (as defined under “Description of the Remarketable Notes”), the Notes and the form of remarketing agreement, which is an exhibit to the Purchase Contract and Pledge Agreement, including the definitions of certain terms used therein, which have been or will be filed and incorporated by reference as exhibits to the registration statement of which this prospectus supplement and the accompanying base prospectus form a part. All references to “cash” in these summaries refer to U.S. dollars and all payments in respect of the Equity Units, the Purchase Contracts and the Notes by the Corporation or holders thereof shall be made in U.S. dollars.

 

General

 

The Corporation will issue the Equity Units under the Purchase Contract and Pledge Agreement between the Corporation and The Bank of New York Mellon Trust Company, N.A., as Purchase Contract Agent, Collateral Agent, Custodial Agent and securities intermediary. The Equity Units may be either Corporate Units or Treasury Units. The Equity Units will initially consist of 18,000,000 Corporate Units (or 20,700,000 Corporate Units if the underwriters exercise their Over-Allotment Option in full), each with a stated amount of $50.

 

Each Corporate Unit offered will consist of:

 

 

 

 

and either:

 

 

 

“Applicable Ownership Interest” means, with respect to the Treasury Portfolio,

 

 

 

If U.S. Treasury securities (or principal or interest strips thereof) that are to be included in the Treasury Portfolio in connection with a successful optional remarketing have a yield that is less than zero, the Treasury Portfolio will consist of an amount in cash equal to the aggregate principal amount at maturity of the U.S. Treasury securities described in clauses (1) and (2) above. If the provisions set forth in this paragraph apply, references to “Treasury Security” and “U.S. Treasury Securities (or principal or interest strips thereof)” in connection with the Treasury Portfolio will, thereafter, be deemed to be references to such amount of cash.

 

So long as the Equity Units are in the form of Corporate Units, the related undivided beneficial ownership interest in the Note or the Applicable Ownership Interest in the Treasury Portfolio described in clause (1) of the definition of “Applicable Ownership Interest” above (or $50 in cash, if the immediately preceding paragraph applies), as the case may be, will be pledged to the Corporation through the Collateral Agent to secure the holders’ obligations to purchase Common Shares under the related Purchase Contracts.

 

Creating Treasury Units by Substituting a Treasury Security for a Note

 

Each holder of 20 Corporate Units may create, at any time other than after a successful remarketing or during a blackout period (as defined below), 20 Treasury Units by substituting for a Note a zero-coupon U.S. Treasury security (for example, CUSIP No. 9128207H4) with a principal amount at maturity equal to $1,000 and maturing on or prior to June 15, 2024 (a “Treasury Security”). This substitution would create 20 Treasury Units and the Note would be released from the pledge under the Purchase Contract and Pledge Agreement and delivered to the holder and would be tradable and transferable separately from the Treasury Units. Because Treasury Securities and Notes are issued in integral multiples of $1,000, holders of Corporate Units may make the substitution only in integral multiples of 20 Corporate Units. After a successful remarketing, holders may not create Treasury Units from Corporate Units or recreate Corporate Units from Treasury Units.

 

Each Treasury Unit will consist of:

 

 

 

 

 

The term “blackout period” means the period (1) if the Corporation elects to conduct an optional remarketing, from 4:00 p.m., New York City time, on the second business day (as defined below) immediately preceding the first day of the optional remarketing period until the settlement date of such optional remarketing or the date the Corporation announces that such remarketing was unsuccessful and (2) after 4:00 p.m., New York City time, on the second business day immediately preceding the first day of the final remarketing period.

 

The term “business day” means any day that is not a Saturday or Sunday or a day on which banking institutions in The City of New York are authorized or required by law or executive order to close or a day on which the corporate trust office of the Purchase Contract Agent is closed for business.

 

The Treasury Unit holder’s beneficial ownership interest in the Treasury Security will be pledged to the Corporation through the Collateral Agent to secure the holder’s obligation to purchase Common Shares under the related Purchase Contracts.

 

To create 20 Treasury Units, a holder is required to:

 

 

 

Upon receiving instructions from the Purchase Contract Agent and receipt of the Treasury Security, the Collateral Agent will release the related Note from the pledge and deliver it to the Purchase Contract Agent on behalf of the holder, free and clear of the Corporation’s security interest. The Purchase Contract Agent then will (in accordance with instructions provided for in the aforementioned notice from the holders):

 

 

 

 

The Treasury Security will be substituted for the Note and will be pledged to the Corporation through the Collateral Agent to secure the holder’s obligation to purchase Common Shares under the related Purchase Contracts. The Note thereafter will be transferable separately from the Treasury Units.

 

Holders who create Treasury Units will be responsible for any taxes, governmental charges or other fees or expenses (including, without limitation, fees and expenses payable to the Collateral Agent) attributable to such collateral substitution. See “Certain Provisions of the Purchase Contract and Pledge Agreement—Miscellaneous.”

 

Recreating Corporate Units

 

Each holder of 20 Treasury Units will have the right, at any time, other than during a blackout period or after a successful remarketing, to substitute for the related Treasury Security held by the Collateral Agent a Note having a principal amount equal to $1,000. This substitution would recreate 20 Corporate Units and the applicable Treasury Security would be released from the pledge under the Purchase Contract and Pledge Agreement and delivered to the holder and would be transferable separately from the Corporate Units. Because Treasury Securities and Notes are issued in integral multiples of $1,000, holders of Treasury Units may make this substitution only in integral multiples of 20 Treasury Units. After a successful remarketing, holders may not recreate Corporate Units from Treasury Units.

 

To recreate 20 Corporate Units, a holder is required to:

 

 

Upon receiving instructions from the Purchase Contract Agent and receipt of the Note having a principal amount of $1,000, the Collateral Agent will promptly release the related Treasury Security from the pledge and promptly instruct the securities intermediary to transfer such Treasury Security to the Purchase Contract Agent for distribution to the holder, free and clear of the Corporation’s security interest. The Purchase Contract Agent then will:

 

 

 

 

The $1,000 principal amount Note will be substituted for the Treasury Security and will be pledged to the Corporation through the Collateral Agent to secure the holder’s obligation to purchase Common Shares under the related Purchase Contracts. The Treasury Security thereafter will be transferable separately from the Corporate Units.

 

Holders who recreate Corporate Units will be responsible for any taxes, governmental charges or other fees or expenses (including, without limitation, fees and expenses payable to the Collateral Agent) attributable to the collateral substitution. See “Certain Provisions of the Purchase Contract and Pledge Agreement—Miscellaneous.”

 

Payments on the Equity Units

 

Holders of Corporate Units and Treasury Units will receive quarterly contract adjustment payments payable by the Corporation at the rate of     % per year on the stated amount of $50 per Equity Unit. The Corporation will make all contract adjustment payments on the Corporate Units and the Treasury Units quarterly in arrears on March 15, June 15, September 15 and December 15 of each year (except that if any such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing September 15, 2021. Unless the Purchase Contracts have been terminated (as described under “Description of the Purchase Contracts—Termination” below), the Corporation will make such contract adjustment payments until the earliest of the Purchase Contract Settlement Date, the fundamental change early settlement date (in the case of a fundamental change early settlement, as described under “Description of the Purchase Contracts—Early Settlement Upon a Fundamental Change” below) and the most recent contract adjustment payment date on or before any other early settlement with respect to the related Purchase Contracts (in the case of an early settlement as described under “Description of the Purchase Contracts—Early Settlement” below). If the Purchase Contracts have been terminated, the Corporation’s obligation to pay the contract adjustment payments, including any accrued and unpaid contract adjustment payments and deferred contract adjustment payments (including compounded contract adjustment payments thereon), will cease. In addition, holders of Corporate Units will receive quarterly cash distributions consisting of their pro rata share of interest payments on the Notes (or distributions on the Applicable Ownership Interest in the Treasury Portfolio, as applicable), equivalent to the rate of     % per year. There will be no interest payments in respect of the Treasury Securities that are a component of the Treasury Units, but to the extent that such holders of Treasury Units continue to hold the Notes that were delivered to them when they created the Treasury Units, such holders will continue to be entitled to receive the scheduled interest payments on their separate Notes for as long as they hold the Notes.

 

The Corporation has the right to defer payment of quarterly contract adjustment payments as described under “Description of the Purchase Contracts—Contract Adjustment Payments”.

 

Listing

 

The Corporation intends to apply to list the Corporate Units on the NYSE and expects trading to commence within 30 days of the initial issuance of the Corporate Units. Except in connection with early settlement, fundamental change early settlement, a termination event or settlement on the Purchase Contract Settlement Date with separate cash, unless and until substitution has been made as described in “—Creating Treasury Units by Substituting a Treasury Security for a Note” or “—Recreating Corporate Units,” neither the Note or Applicable Ownership Interest in the Treasury Portfolio component of a Corporate Unit nor the Treasury Security component of a Treasury Unit will trade separately from Corporate Units or Treasury Units. The Note or Applicable Ownership Interest in the Treasury Portfolio component will trade as a unit with the Purchase Contract component of the Corporate Units, and the Treasury Security component will trade as a unit with the Purchase Contract component of the Treasury Units. The Corporation will not list the Treasury Units or the Notes on any exchange or quotation system.

 

Ranking

 

The Notes, which are included in the Equity Units, will rank on a parity in right of payment with all of the Corporation’s other unsecured and unsubordinated indebtedness from time to time outstanding. The Notes will be issued under the base indenture and the first supplemental indenture (each as defined under “Description of the Remarketable Notes—Ranking”).

 

In addition, the Corporation’s obligations with respect to contract adjustment payments will be subordinate in right of payment to its existing and future Priority Indebtedness, including the Notes.

 

“Priority Indebtedness” means the principal, premium, interest and any other payment in respect of any of the following:

 

 

 

 

 

 

However, “Priority Indebtedness” will not include trade accounts payable, accrued liabilities arising in the ordinary course of business (to the extent not listed above), indebtedness to the Corporation’s subsidiaries, and any other indebtedness that effectively by its terms, or expressly provides that it, ranks on parity with, or junior to, the Corporation’s obligations with respect to contract adjustment payments.

 

The Notes and the Corporation’s obligations with respect to contract adjustment payments will be structurally subordinated to existing or future preferred shares and indebtedness, guarantees and other liabilities, including trade payables, of its subsidiaries.

 

The Corporation’s subsidiaries are separate and distinct legal entities from the Corporation. The Corporation’s subsidiaries have no obligation to pay any amounts due on the Notes or the Purchase Contracts or to provide the Corporation with funds to meet its respective payment obligations on the Notes or the Purchase Contracts. Any payment of dividends, loans or advances by the Corporation’s subsidiaries to it could be subject to regulatory, statutory or contractual restrictions and will be contingent upon the subsidiaries’ earnings and business considerations. See “Trading Prices and Volumes.” The Corporation’s right to receive any assets of any of its subsidiaries upon their bankruptcy, liquidation or similar reorganization, and therefore the right of the holders of the Notes or Purchase Contracts to participate in those assets, will be structurally subordinated to the claims of that subsidiary’s creditors, including trade creditors. Even if the Corporation is a creditor of any of its subsidiaries, its rights as a creditor would be subordinate to any security interest in the assets of its subsidiaries and any indebtedness of its subsidiaries senior to that held by the Corporation.

 

Voting and Certain Other Rights

 

Prior to the delivery of Common Shares under each Purchase Contract, such Purchase Contract shall not entitle the holder of the Corporate Units or Treasury Units to any rights of a holder of Common Shares, including, without limitation, the right to vote or receive any dividends or other payments or distributions or to consent to or to receive notice as a shareholder or other rights in respect of Common Shares.

 

Agreed U.S. Federal Income Tax Treatment

 

Each beneficial owner of an Equity Unit, by purchasing a Corporate Unit, will be deemed to have agreed (unless otherwise required by any taxing authority or a change in applicable law after the initial issuance of the Equity Units) (1) to be treated as the owner of each of the Purchase Contract, the related Note and the Applicable Ownership Interests in the Treasury Portfolio or Treasury Security, as the case may be, for U.S. federal, state and local income tax purposes, (2) to treat the Note as indebtedness for all U.S. federal, state and local tax purposes, and (3) to allocate, as of the issue date, 100% of the purchase price paid for the Corporate Units to its ownership interest in the Notes and 0% to each Purchase Contract, which will establish its initial tax basis in each Purchase Contract as $0 and the beneficial owner’s initial tax basis in the Note as $50. This position will be binding on each beneficial owner of each Equity Unit, but not on the IRS. See “Material United States Federal Income Tax Considerations.”

 

Agreed Canadian Federal Income Tax Treatment

 

A Holder’s (as defined under “Material Canadian Federal Income Tax Considerations”) acquisition of an Equity Unit will be treated as an acquisition of a Note and the Purchase Contract constituting the Equity Unit. The purchase price of each Equity Unit is required to be allocated between the Note and the rights of the Holder under the Purchase Contract in order to determine the respective cost of those properties for tax purposes. The Corporation has determined that 100% of the issue price of an Equity Unit is allocable to the Note and 0% is allocable to the Purchase Contract. By purchasing the Equity Units, each Holder agrees to this allocation; however, there can be no assurance that this allocation will be accepted by the Canada Revenue Agency (the “CRA”).

 

See “Material Canadian Federal Income Tax Considerations.”

 

Repurchase of the Equity Units

 

The Corporation may purchase from time to time any of the Equity Units that are then outstanding by tender, in the open market, by private agreement or otherwise, subject to compliance with applicable law.

 

DESCRIPTION OF THE PURCHASE CONTRACTS

 

In this Description of the Purchase Contracts, “Algonquin” and the “Corporation” refer only to Algonquin Power & Utilities Corp. and any successor obligor, and not to any of its subsidiaries.

 

The following is a summary of some of the terms of the Purchase Contracts. The Purchase Contracts will be issued pursuant to the Purchase Contract and Pledge Agreement among the Corporation, the Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the securities intermediary. The summaries of the Purchase Contracts and the Purchase Contract and Pledge Agreement contain a description of the material terms of the contracts but are only summaries and are not complete. This summary is subject to and is qualified by reference to all the provisions of the Purchase Contract and Pledge Agreement, the base indenture (as defined under “Description of the Remarketable Notes”), the first supplemental indenture (as defined under “Description of the Remarketable Notes”), the Notes and the form of remarketing agreement, including the definitions of certain terms used therein, which have been or will be filed and incorporated by reference as an exhibit to the registration statement of which this prospectus supplement and the accompanying base prospectus form a part.

 

Purchase of Common Shares

 

Each Purchase Contract that is a component of a Corporate Unit or a Treasury Unit will obligate its holder to purchase, and the Corporation to issue and deliver, on the Purchase Contract Settlement Date, for $50 in cash a number of Common Shares equal to the Settlement Rate (together with cash, if applicable, in lieu of any fractional Common Shares in the manner described below), in each case, unless the Purchase Contract terminates prior to that date or is settled early at the holder’s option.

 

The number of Common Shares issuable upon settlement of each Purchase Contract on the Purchase Contract Settlement Date (the “Settlement Rate”) will be determined as follows, subject to adjustment as described under “—Anti-dilution Adjustments” below:

 

 

Accordingly, if the applicable market value of the Common Shares is greater than the threshold appreciation price, the aggregate market value of the Common Shares issued upon settlement of each Purchase Contract will be higher than the stated amount of $50 (the “stated amount”), assuming that the market price of the Common Shares on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares. If the applicable market value is the same as the threshold appreciation price, the aggregate market value of the Common Shares issued upon settlement will be equal to the stated amount, assuming that the market price of the Common Shares on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares.

 

 

Accordingly, if the applicable market value of the Common Shares is less than the threshold appreciation price, but greater than the reference price, the aggregate market value of the Common Shares issued upon settlement of each Purchase Contract will be equal to the stated amount, assuming that the market price of the Common Shares on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares.

 

 

Accordingly, if the applicable market value of the Common Shares is less than the reference price, the aggregate market value of the Common Shares issued upon settlement of each Purchase Contract will be less than the stated amount, assuming that the market price on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares. If the market price of the Common Shares is the same as the reference price, the aggregate market value of the Common Shares will be equal to the stated amount, assuming that the market price of the Common Shares on the Purchase Contract Settlement Date is the same as the applicable market value of the Common Shares.

 

The threshold appreciation price is equal to $50 divided by the Minimum Settlement Rate (such quotient rounded to the nearest $0.01), which is $      and represents appreciation of approximately      % over the reference price.

 

The Minimum Settlement Rate and the Maximum Settlement Rate are referred to herein as the “Fixed Settlement Rates.”

 

If you elect to settle your Purchase Contract early in the manner described under “—Early Settlement,” the number of Common Shares issuable upon settlement of such Purchase Contract will be     , the Minimum Settlement Rate, subject to adjustment as described under “—Anti-dilution Adjustments.” If you elect to settle your Purchase Contract early upon a fundamental change, the number of Common Shares issuable upon settlement will be determined as described under “—Early Settlement Upon a Fundamental Change.”

 

The “applicable market value” means, as determined by the Corporation, the average volume-weighted average price, or VWAP, of the Common Shares for the trading days during the 20 consecutive scheduled trading-day period ending on the second scheduled trading day immediately preceding the Purchase Contract Settlement Date (the “market value averaging period”) as expressed in U.S. dollars.

 

The “VWAP” of the Common Shares means, for the relevant trading day:

The VWAP for any trading day will be expressed in U.S. dollars and, if expressed in a different currency for such trading day as determined above, will be translated by Corporation or its designee to U.S. dollars at the “prevailing exchange rate” (as defined below) on such trading day. The VWAP will be determined by the Corporation or its designee, except to the extent otherwise specified in this definition.

The “principal exchange” means the exchange or quotation system used at the relevant time for the purposes of calculating the VWAP of the Common Shares or that would be used for purposes of such calculation but for the unavailability of such VWAP.

“Prevailing exchange rate” means, for purposes of translating, as of any date, any amount in Canadian dollars or any other non-U.S. currency to U.S. dollars, the spot mid-rate of exchange between such currencies prevailing as of 4:00 p.m., New York City time, on such date, as displayed on, or derived from, Bloomberg page “BFIX” (or, if such page is not available, its equivalent successor page) in respect of such currencies. If such rate cannot be determined as provided in the immediately preceding sentence on such date (which, for the purpose of this definition, will be deemed to be the “affected day”), then the prevailing exchange rate for such date will be determined mutatis mutandis but with respect to the immediately preceding day on which such rate can be so determined; provided, however, that, if such immediately preceding day is before the fifth day before such affected day, or, if such rate cannot be so determined, then the prevailing exchange rate will be determined in such other manner as prescribed in good faith by the Corporation or its designee. The prevailing exchange rate will be determined by the Corporation or its designee, except to the extent otherwise specified in this definition.

 

A “trading day” means, for purposes of determining a VWAP or closing price, a day (i) on which the principal exchange is scheduled to be open for business and (ii) on which there has not occurred or does not exist a market disruption event. If the Common Shares are not so listed or admitted for trading, “trading day” means a “business day.”

 

A “scheduled trading day” means a day that is scheduled to be a trading day on the principal exchange.  If the Common Shares are not so listed or admitted for trading, “scheduled trading day” means a “business day.”

 

A “market disruption event” means any of the following events:

 

 

 

 

If a market disruption event occurs on any scheduled trading day during the market value averaging period, the Corporation will notify holders on the calendar day on which such event occurs.

 

If 20 trading days for the Common Shares have not occurred during the market value averaging period, all remaining trading days will be deemed to occur on the second scheduled trading day immediately prior to the Purchase Contract Settlement Date and the VWAP of the Common Shares for each of the remaining trading days will be the VWAP of the Common Shares on that second scheduled trading day or, if such day is not a trading day, the closing price as of such day.

 

The “closing price” per Common Share means, on any date of determination, the closing sale price or, if no closing sale price is reported, the last reported sale price of the Common Shares on the principal exchange, or if the Common Shares are not listed on a securities exchange, the average of the last quoted bid and ask prices for the Common Shares in the over-the-counter market as reported by OTC Markets Group Inc. or similar organization, or, if those bid and ask prices are not available, the market value of the Common Shares on that date as determined by an independent investment banking firm that is nationally recognized in the United States retained by the Corporation for this purpose. The closing price for any trading day will be expressed in U.S. dollars and, if expressed in a different currency for such trading day, will be translated by the Corporation or its designee to U.S. dollars at the prevailing exchange rate on such trading day. The closing price will be determined by the Corporation or its designee, except to the extent otherwise specified in this definition.

 

The Corporation will not issue any fractional Common Shares upon settlement of a Purchase Contract. Instead of a fractional Common Share, the holder will receive an amount of cash equal to the percentage of a whole Common Share represented by such fractional Common Share multiplied by the closing price of the Common Shares on the trading day immediately preceding the Purchase Contract Settlement Date (or the trading day immediately preceding the relevant settlement date, in the case of early settlement). If, however, a holder surrenders for settlement at one time more than one Purchase Contract, then the number of Common Shares issuable pursuant to such Purchase Contracts will be computed based upon the aggregate number of Purchase Contracts surrendered.

 

Unless:

 

 

 

 

then, on the Purchase Contract Settlement Date,

 

 

 

 

 

The relevant Common Shares will then be issued and delivered to the holder or the holder’s designee on the Purchase Contract Settlement Date. The Corporation will pay all share transfer and similar taxes attributable to the initial issuance and delivery of the Common Shares pursuant to the Purchase Contracts, unless any such tax is due because the holder requests such Common Shares to be issued in a name other than such holder’s name.

 

Prior to the settlement of a Purchase Contract, the Common Shares underlying each Purchase Contract will not be outstanding, and the holder of the Purchase Contract will not have any voting rights, rights to dividends or other distributions or other rights of a holder of Common Shares by virtue of holding such Purchase Contract.

 

By purchasing a Corporate Unit or a Treasury Unit, a holder will be deemed to have, among other things:

 

 

 

 

 

Remarketing

 

The Corporation has agreed to enter into a remarketing agreement with one or more remarketing agents, the “remarketing agent,” no later than 20 days prior to the first day of the final remarketing period or, if the Corporation elects to conduct an optional remarketing, no later than 20 days prior to the first day of the optional remarketing period.

 

During a blackout period that relates to each remarketing period:

 

 

 

 

Each of an “optional remarketing” and a “final remarketing” is referred to herein as a “remarketing.” In a remarketing, the Notes that are a part of Corporate Units (except, in the case of a final remarketing, where the holder has elected to settle the Purchase Contract through payment of separate cash) and any separate Notes whose holders have elected to participate in the remarketing, as described under “Description of the Remarketable Notes—Remarketing of the Notes That Are Not Included in Corporate Units,” will be remarketed.

 

Following any successful remarketing of the Notes:

 

 

 

 

All such modifications will take effect only if the remarketing is successful, without the consent of holders, on the optional remarketing settlement date or the Purchase Contract Settlement Date, as the case may be, and will apply to all Notes, whether or not included in the remarketing. All other terms of the Notes will remain unchanged.

 

In order to remarket the Notes, the remarketing agent, in consultation with the Corporation, may reset the interest rate on the Notes (either upward or downward) in order to produce the required price in the remarketing, as discussed under “—Optional Remarketing” and “—Final Remarketing” below.

 

The Corporation will use commercially reasonable efforts to ensure that, if required by applicable law in the United States and/or Canada, a registration statement (including a prospectus), and/or prospectus in Canada, with regard to the full amount of the Notes to be remarketed will be effective under the applicable securities laws in a form that may be used by the remarketing agent in connection with the remarketing (unless a registration statement and/or prospectus is not required under the applicable laws and regulations that are in effect at that time or unless the Corporation conducts any remarketing in accordance with an exemption under applicable securities laws).

 

The Corporation will separately pay a fee to the remarketing agent for its services as remarketing agent. Holders whose Notes are remarketed will not be responsible for the payment of any remarketing fee in connection with the remarketing.

 

Optional Remarketing

 

Unless a termination event has occurred, the Corporation may elect, at its option, to engage the remarketing agent pursuant to the terms of the remarketing agreement, to remarket the Notes over a period selected by the Corporation that begins on or after March 13, 2024 (the second business day immediately preceding the last interest payment date prior to the Purchase Contract Settlement Date) and ends any time on or before May 30, 2024 (the eighth calendar day immediately preceding the first day of the final remarketing period). This period is referred to herein as the “optional remarketing period,” a remarketing that occurs during the optional remarketing period as an “optional remarketing” and the date the Notes are priced in an optional remarketing as the “optional remarketing date.” In any optional remarketing, the aggregate principal amount of the Notes that are a part of Corporate Units and any separate Notes whose holders have elected to participate in the optional remarketing, as described under “Description of the Remarketable Notes—Remarketing of the Notes That Are Not Included in Corporate Units,” will be remarketed. If the Corporation elects to conduct an optional remarketing, the remarketing agent will use its commercially reasonable efforts to obtain a price for the Notes that results in proceeds of at least 100% of the aggregate of the Treasury Portfolio purchase price (as defined below) and the separate Notes purchase price (as defined below). To obtain that price, the remarketing agent may, in consultation with the Corporation, reset the interest rate, as described under “Description of the Remarketable Notes—Interest Rate Reset.” The Corporation will request that the depository notify its participants holding Corporate Units, Treasury Units and separate Notes of its election to conduct an optional remarketing no later than five business days prior to the date the Corporation begins the optional remarketing.

 

An optional remarketing on any remarketing date will be considered successful if the remarketing agent is able to remarket the Notes for a price of at least 100% of the Treasury Portfolio purchase price and the separate Notes purchase price.

 

Following a successful optional remarketing of the Notes, on the optional remarketing settlement date (as defined below), the portion of the remarketing proceeds equal to the Treasury Portfolio purchase price will, except as described below, be used to purchase the Treasury Portfolio and the remaining proceeds attributable to the Notes underlying the Corporate Units will be remitted to the Purchase Contract Agent for distribution pro rata to the holders of such Corporate Units. The portion of the proceeds attributable to the separate Notes sold in the remarketing will be remitted to the Custodial Agent for distribution on the optional remarketing settlement date pro rata to the holders of such separate Notes.

 

If the Corporation elects to conduct an optional remarketing and the remarketing is successful:

 

 

 

 

 

 

If the Corporation does not elect to conduct an optional remarketing during the optional remarketing period or no optional remarketing succeeds for any reason, the Notes will continue to be a component of the Corporate Units or will continue to be held separately and the remarketing agent will use its commercially reasonable efforts to remarket the Notes during the final remarketing period.

 

For the purposes of a successful optional remarketing, “Treasury Portfolio purchase price” means the lowest aggregate ask-side price quoted by a primary U.S. government securities dealer in New York City to the quotation agent selected by the Corporation between 9:00 a.m. and 4:00 p.m., New York City time, on the optional remarketing date for the purchase of the Treasury Portfolio for settlement on the optional remarketing settlement date; provided that if the Treasury Portfolio consists of cash, “Treasury Portfolio purchase price” means the amount of such cash.

 

Following a successful optional remarketing and receipt of the proceeds, the Collateral Agent will purchase, at the Treasury Portfolio purchase price, a Treasury Portfolio consisting of:

 

 

 

If U.S. Treasury securities (or principal or interest strips thereof) that are to be included in the Treasury Portfolio in connection with a successful optional remarketing have a yield that is less than zero, the Treasury Portfolio will consist of an amount in cash equal to the aggregate principal amount at maturity of the U.S. Treasury securities described in the bullet points above. If the provisions set forth in this paragraph apply, references in this prospectus supplement to a “Treasury Security” and “U.S. Treasury securities (or principal or interest strips thereof)” in connection with the Treasury Portfolio will, thereafter, be deemed to be references to such amount in cash.

 

The applicable undivided beneficial ownership interests in the Treasury Portfolio will be substituted for the undivided beneficial ownership interests in Notes that are components of the Corporate Units and the portion of the Treasury Portfolio described in the first bullet above will be pledged to the Corporation through the Collateral Agent to secure the Corporate Unit holders’ obligation under the Purchase Contracts. On the Purchase Contract Settlement Date, for each Corporate Unit, $50 of the proceeds from the Treasury Portfolio will automatically be applied to satisfy the Corporate Unit holder’s obligation to purchase Common Shares under the Purchase Contract. In addition, proceeds from the portion of the Treasury Portfolio described in the second bullet above, which will equal the interest payment (assuming no reset of the interest rate) that would have been paid on the Notes that were components of the Corporate Units at the time of remarketing, will be paid on the Purchase Contract Settlement Date to the holders of the Corporate Units.

 

If the Corporation elects to remarket the Notes during the optional remarketing period and a successful remarketing has not occurred on or prior to May 30, 2024 (the last day of the optional remarketing period), the Corporation will cause a notice of the failed remarketing to be published no later than 9:00 a.m., New York City time, on the business day immediately following the last date of the optional remarketing period. This notice will be validly published by a timely press release to an appropriate Canadian and U.S. news agency and by furnishing such information with the SEC in a Form 6-K and file such information with Canadian securities regulators on SEDAR. The Corporation will similarly cause a notice of a successful remarketing of the Notes to be published by press release and furnish such information with the SEC in a Form 6-K and file such information with Canadian securities regulators on SEDAR no later than 9:00 a.m., New York City time, on the business day immediately following the date of such successful remarketing.

 

On each business day during any optional remarketing period, the Corporation has the right in its sole and absolute discretion to determine whether or not an optional remarketing will be attempted. At any time and from time to time during the optional remarketing period prior to the announcement of a successful optional remarketing, the Corporation has the right to postpone any optional remarketing in its sole and absolute discretion.

 

Final Remarketing

 

Unless a termination event or a successful optional remarketing has previously occurred, the Corporation will remarket the Notes during the five-business day period ending on, and including, June 13, 2024 (the second business day immediately preceding the Purchase Contract Settlement Date). This period is referred to herein as the “final remarketing period,” the remarketing during this period as the “final remarketing” and the date the Notes are priced in the final marketing is referred to herein as the “final remarketing date.” In the final remarketing, the aggregate principal amount of the Notes that are a part of Corporate Units (except where the holder has elected to settle the Purchase Contract through payment of separate cash) and any separate Notes whose holders have elected to participate in the final remarketing will be remarketed. The remarketing agent will use its commercially reasonable efforts to obtain a price for the Notes to be remarketed that results in proceeds of at least 100% of the principal amount of all the Notes offered in the remarketing. To obtain that price, the remarketing agent, in consultation with the Corporation, may reset the interest rate on the Notes as described under “Description of the Remarketable Notes—Interest Rate Reset.” The Corporation will request that the depository notify its participants holding Corporate Units, Treasury Units and separate Notes of the final remarketing no later than seven days prior to the first day of the final remarketing period. In such notice, the Corporation will set forth the dates of the final remarketing period, applicable procedures for holders of separate Notes to participate in the final remarketing, the applicable procedures for holders of Corporate Units to create Treasury Units and for holders of Treasury Units to recreate Corporate Units, the applicable procedures for holders of Corporate Units to settle their Purchase Contracts early and any other applicable procedures, including the procedures that must be followed by a holder of separate Notes in the case of a failed remarketing if a holder of separate Notes wishes to exercise its right to put its Notes to the Corporation as described below and under “Description of the Remarketable Notes—Put Option upon Failed Remarketing.” The Corporation has the right to postpone the final remarketing in its sole and absolute discretion on any day prior to the last three business days of the final remarketing period.

 

A remarketing during the final remarketing period will be considered successful if the remarketing agent is able to remarket the Notes for a price of at least 100% of the aggregate principal amount of all the Notes offered in the remarketing.

 

If the final remarketing is successful:

 

 

 

 

 

 

Unless a termination event has occurred, a holder has effected an early settlement or a fundamental change early settlement, or there has been a successful optional remarketing, each Corporate Unit holder has the option at any time on or after the date the Corporation gives notice of a final remarketing to notify the Purchase Contract Agent in writing at any time prior to 4:00 p.m., New York City time, on the second business day immediately prior to the first day of the final remarketing period of its intention to settle the related Purchase Contracts on the Purchase Contract Settlement Date with separate cash and to provide that cash on or prior to the business day immediately prior to the first day of the final remarketing period, as described under “—Notice to Settle with Cash.” The Notes of any holder of Corporate Units who has not given this notice or failed to deliver the cash will be remarketed during the final remarketing period. In addition, holders of Notes that do not underlie Corporate Units may elect to participate in the remarketing as described under “Description of the Remarketable Notes—Remarketing of Notes That Are Not Included in Corporate Units.”

 

If, in spite of using its commercially reasonable efforts, the remarketing agent cannot remarket the Notes during the final remarketing period at a price equal to or greater than 100% of the aggregate principal amount of the Notes offered in the remarketing, a condition precedent set forth in the remarketing agreement has not been fulfilled or a successful remarketing has not occurred for any other reason, in each case resulting in a “failed remarketing,” holders of all Notes will have the right to put their Notes to the Corporation for an amount equal to the principal amount of their Notes (the “put price”). The conditions precedent in the remarketing agreement will include, but not be limited to, the timely filing with the SEC and applicable Canadian securities regulators of all material related to the remarketing required to be filed by the Corporation, the truth and correctness of certain representations and warranties made by the Corporation in the remarketing agreement, the furnishing of certain officer’s certificates to the remarketing agent, and the receipt by the remarketing agent of customary “comfort letters” from the Corporation’s auditors and opinions of counsel.

 

A holder of Corporate Units will be deemed to have automatically exercised this put right with respect to the Notes underlying such Corporate Units unless the holder has provided a written notice to the Purchase Contract Agent of its intention to settle the Purchase Contract with separate cash as described below under “—Notice to Settle with Cash” prior to 4:00 p.m., New York City time, on the second business day immediately prior to the Purchase Contract Settlement Date, and on or prior to the business day immediately preceding the Purchase Contract Settlement Date has delivered the $50 in cash per Purchase Contract. Settlement with separate cash may only be effected in integral multiples of 20 Corporate Units. If a holder of Corporate Units elects to settle with separate cash, upon receipt of the required cash payment, the related Notes underlying the Corporate Units will be released from the pledge under the Purchase Contract and Pledge Agreement and delivered promptly to the Purchase Contract Agent for delivery to the holder. The holder of the Corporate Units will then receive the applicable number of Common Shares on the Purchase Contract Settlement Date. The cash received by the Collateral Agent upon this settlement with separate cash may, upon the Corporation’s written direction, be invested in permitted investments, as defined in the Purchase Contract and Pledge Agreement, and the portion of the proceeds equal to the aggregate purchase price of all Purchase Contracts of such holders will be paid to the Corporation on the Purchase Contract Settlement Date. Permitted investments may include investments for which the Collateral Agent or its affiliates serve as manager, investment advisor, administrator, shareholder, servicing agent and/or custodian or sub-custodian and for which the Collateral Agent may receive fees. Any excess funds received by the Collateral Agent in respect of any such permitted investments over the aggregate purchase price remitted to the Corporation in satisfaction of the obligations of the holders under the Purchase Contracts will be distributed to the Purchase Contract Agent for ratable payment to the applicable holders who settled with separate cash. If a failed remarketing has occurred, unless a holder of Corporate Units has elected to settle the related Purchase Contracts with separate cash and delivered the separate cash on or prior to the business day immediately preceding the Purchase Contract Settlement Date, the holder will be deemed to have elected to apply the put price against the holder’s obligations to pay the aggregate purchase price for the Common Shares to be issued under the related Purchase Contracts, thereby satisfying the obligations in full, and the Corporation will deliver to the holder Common Shares pursuant to the related Purchase Contracts.

 

If a successful final remarketing has not occurred on or prior to June 13, 2024 (the last day of the final remarketing period), the Corporation will cause a notice of the failed remarketing of the Notes to be published no later than 9:00 a.m., New York City time, on the business day immediately following the last date of the final remarketing period. This notice will be validly published by a timely press release to an appropriate Canadian and U.S. news agency and by furnishing such information with the SEC in a Form 6-K and file such information with Canadian securities regulators on SEDAR.

 

Early Settlement

 

Subject to the conditions described below, a holder of Corporate Units or Treasury Units may settle the related Purchase Contracts at any time prior to 4:00 p.m., New York City time, on the second business day immediately preceding the Purchase Contract Settlement Date, other than during a blackout period in the case of Corporate Units. An early settlement may be made only in integral multiples of 20 Corporate Units or 20 Treasury Units; however, if the Treasury Portfolio has replaced the Notes as a component of the Corporate Units following a successful optional remarketing, holders of Corporate Units may settle early only in integral multiples of       Corporate Units. In order to settle Purchase Contracts early, a holder of Equity Units must deliver to the Purchase Contract Agent at the corporate trust office of the Purchase Contract Agent or its agent, in each case, in the continental United States of America, (1) a completed “Election to Settle Early” form, along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form and (2) a cash payment in immediately available funds in an amount equal to:

 

 

 

So long as you hold Equity Units as a beneficial interest in a global security certificate deposited with the depository, procedures for early settlement will also be governed by applicable depository procedures and standing arrangements between the depository and the Purchase Contract Agent or the Corporation.

 

The early settlement right is also subject to the conditions that (i) if required under U.S. federal securities laws, the Corporation has a registration statement under the U.S. Securities Act in effect and an available prospectus covering the Common Shares and other securities, if any, deliverable upon settlement of a Purchase Contract, and (ii) if required under Canadian securities laws, an appropriate final Canadian prospectus be filed for the same purpose. The Corporation has agreed that, if such a U.S. registration statement and prospectus or Canadian prospectus is required, the Corporation will use its commercially reasonable efforts to, as applicable, (1) have a registration statement in effect covering those Common Shares and other securities, if any, to be delivered in respect of the Purchase Contracts being settled and provide a prospectus in connection therewith, and/or (2) prepare, file, receive a receipt for and deliver a final Canadian prospectus, in each case in a form that may be used in connection with the early settlement right (it being understood that if there is a material business transaction or development that has not yet been publicly disclosed, the Corporation will not be required to file such registration statement or provide such a prospectus or prepare, file or deliver such a final Canadian prospectus, and the early settlement right will not be available, until the Corporation has publicly disclosed such transaction or development, provided that the Corporation will use commercially reasonable efforts to make such disclosure as soon as it is commercially reasonable to do so). In the event that a holder seeks to exercise its early settlement right and a registration statement is required to be effective, or a final Canadian prospectus is required to be delivered, in connection with the exercise of such right but no such registration statement is then effective or no such prospectus has been delivered, the holder’s exercise of such right will be void unless and until such a registration statement is effective or such a prospectus is delivered. For the avoidance of doubt, if exercise is so voided, the holder shall continue to be entitled to contract adjustment payments in respect of the relevant Purchase Contracts.

 

Upon early settlement, except as described below in “—Early Settlement Upon a Fundamental Change,” the Corporation will sell, and the holder will be entitled to buy, the Minimum Settlement Rate of      Common Shares (or in the case of an early settlement following a reorganization event, such number of exchange property units, as described under “—Reorganization Events” below) for each Purchase Contract being settled (regardless of the market price of the Common Shares on the date of early settlement), subject to adjustment under the circumstances described under “—Anti-dilution Adjustments” below. The Corporation will cause, on the second business day after the applicable early settlement date, (1) the Common Shares to be issued and (2) the related Notes or Applicable Ownership Interests in the Treasury Portfolio or Treasury Securities, as the case may be, underlying the Equity Units and securing such Purchase Contracts to be released from the pledge under the Purchase Contract and Pledge Agreement, and delivered to the Purchase Contract Agent for delivery to the holder. Upon early settlement, the holder will be entitled to receive any accrued and unpaid contract adjustment payments (including any accrued and unpaid deferred contract adjustment payments and compounded contract adjustment payments thereon) to, but excluding, the contract adjustment payment date immediately preceding the early settlement date. The holder’s right to receive future contract adjustment payments will also terminate.

 

If the Purchase Contract Agent receives a completed “Election to Settle Early” form (along with the Corporate Unit or Treasury Unit certificate, if they are in certificated form) and payment of $50 for each Purchase Contract being settled (and, if required, an amount equal to the contract adjustment payments payable on the next contract adjustment payment date) prior to 4:00 p.m., New York City time, on any business day and all conditions to early settlement have been satisfied, then that day will be considered the early settlement date. If the Purchase Contract Agent receives the foregoing at or after 4:00 p.m., New York City time, on any business day or at any time on a day that is not a business day, then the next business day will be considered the early settlement date.

 

Early Settlement Upon a Fundamental Change

 

If a “fundamental change” (as defined below) occurs prior to the 20th business day preceding the Purchase Contract Settlement Date, then, following the fundamental change, each holder of a Purchase Contract, subject to certain conditions described in this prospectus supplement, will have the right to accelerate and settle the Purchase Contract early on the fundamental change early settlement date (as defined below) at the Settlement Rate determined as if the applicable market value equaled the share price (as defined below), plus an additional make-whole amount of Common Shares (such additional make-whole amount of Common Shares being hereafter referred to as the “make-whole shares”). This right is referred to herein as the “fundamental change early settlement right.”

 

The Corporation will provide each of the holders and the Purchase Contract Agent with a notice of the completion of a fundamental change within 10 business days after the effective date of a fundamental change. The notice will specify (1) a date (subject to postponement as described below, the “fundamental change early settlement date”), which will be at least 10 days after the date of the notice but no later than the earlier of 20 days after the date of such notice and one business day prior to the Purchase Contract Settlement Date, on which date the Corporation will deliver Common Shares to holders who exercise the fundamental change early settlement right, (2) the date by which holders must exercise the fundamental change early settlement right, (3) the applicable Settlement Rate and number of make-whole shares, (4) the amount and kind (per Common Share) of the cash, securities and other consideration receivable by the holder upon settlement and (5) the amount of accrued and unpaid contract adjustment payments (including any deferred contract adjustment payments and compounded contract adjustment payments thereon), if any, that will be paid upon settlement to holders exercising the fundamental change early settlement right. To exercise the fundamental change early settlement right, you must deliver to the Purchase Contract Agent at the corporate trust office of the Purchase Contract Agent or its agent, in each case, in the continental United States of America, during the period beginning on the date the Corporation delivers notice that a fundamental change has occurred and ending at 4:00 p.m., New York City time, on the second business day immediately preceding the fundamental change early settlement date (such period, subject to extension as described below, the “fundamental change exercise period”), the certificate evidencing your Corporate Units or Treasury Units if they are held in certificated form, and payment of $50 for each Purchase Contract being settled in immediately available funds.

 

A “fundamental change” will be deemed to have occurred if any of the following occurs: