Document:

Exhibit 4.1

 

ATLANTIC POWER CORPORATION

 

AND

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

AND

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

SEVENTH SUPPLEMENTAL INDENTURE

 

TO TRUST INDENTURE DATED DECEMBER 17, 2009

 

PROVIDING FOR THE ISSUE OF SERIES E CONVERTIBLE UNSECURED

SUBORDINATED DEBENTURES

 

DATED AS OF JANUARY 29, 2018

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1   INTERPRETATION 
    	
2
    
	
1.1
    	
Interpretation
    	
2
    
	
1.2
    	
Additional Definitions
    	
2
    
	
1.3
    	
Headings Etc.
    	
4
    
	
1.4
    	
Day not a Business Day
    	
4
    
	
1.5
    	
Applicable Law
    	
4
    
	
1.6
    	
Monetary References
    	
4
    
	
1.7
    	
Invalidity/Severability
    	
4
    
	
1.8
    	
Time of Essence
    	
5
    
	
1.9
    	
Language
    	
5
    
	
1.10
    	
Successors and Assigns
    	
5
    
	
1.11
    	
Benefits of   Supplemental Indenture
    	
5
    
	
ARTICLE 2   TERMS OF SERIES E DEBENTURES
    	
5
    
	
2.1
    	
Terms of Series E   Debentures
    	
5
    
	
2.2
    	
Delivery
    	
17
    
	
2.3
    	
Legends and   Certification
    	
17
    
	
ARTICLE 3   CONFIRMATION OF TRUST INDENTURE
    	
18
    
	
3.1
    	
Confirmation of Trust   Indenture
    	
18
    
	
ARTICLE 4   ADDITIONAL MATTERS
    	
18
    
	
4.1
    	
Acceptance of Trust
    	
18
    
	
4.2
    	
Restriction on Certain   Actions
    	
18
    
	
ARTICLE 5   EXECUTION AND FORMAL DATE
    	
19
    
	
5.1
    	
Execution
    	
19
    
	
5.2
    	
Formal Date
    	
19
    
	
ARTICLE 6 MISCELLANEOUS
    	
19
    
	
6.1
    	
The Debenture Trustee
    	
19
    
	
6.2
    	
Representations of the   Company
    	
19
    
	
SCHEDULE “A” FORM OF SERIES E DEBENTURES
    	
 
    
	
SCHEDULE “B” FORM OF REDEMPTION NOTICE
    	
 
    
	
SCHEDULE “C” FORM OF MATURITY NOTICE
    	
 
    
	
SCHEDULE “D” FORM OF NOTICE OF   CONVERSION
    	
 
    
	
SCHEDULE “E”   FORM OF NOTICE OF PUT EXERCISE
    	
 
    

 

i

 

ATLANTIC POWER CORPORATION
 6.00% SERIES E CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES DUE 2025

 

SEVENTH SUPPLEMENTAL INDENTURE

 

This Seventh Supplemental Indenture is made as of the 29th day of January, 2018.

 

BETWEEN:

 

ATLANTIC POWER CORPORATION, a corporation continued under the laws of the Province of British Columbia

 

(the “Company”)

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company authorized to carry on business in all of the provinces and territories of Canada

 

(the “Canadian Trustee”)

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A., a trust company authorized to carry on business in the United States

 

(the “U.S. Trustee”)

 

WHEREAS:

 

A.                                    By a trust indenture made as of December 17, 2009 between the Company and the Canadian Trustee (the “Original Indenture”), provision was made for the issuance of Debentures (as defined below) in one or more series, unlimited as to aggregate principal amount but issuable only upon and subject to the conditions and limitations therein set forth;

 

B.                                    The Company, the Canadian Trustee and the U.S. Trustee entered into a fourth supplemental indenture dated as of November 29, 2012 (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Trust Indenture”) to provide for the appointment of the U.S. Trustee as an additional trustee of any such series of Debentures to be created and issued thereafter pursuant to the terms of the Trust Indenture;

 

C.                                    Pursuant to an underwriting agreement dated January 23, 2018 among the Company, RBC Dominion Securities Inc., National Bank Financial Inc., TD Securities Inc., BMO

 

 

Nesbitt Burns Inc., Industrial Alliance Securities Inc., CIBC World Markets Inc., Scotia Capital Inc. and MUFG Securities (Canada), Ltd., the Company has agreed to create and issue pursuant to the Trust Indenture and this seventh supplemental indenture to the Trust Indenture (the “Supplemental Indenture”), a series of debentures in aggregate principal amount of up to C$115,000,000 to be designated as the “6.00% Series E Convertible Unsecured Subordinated Debentures due 2025” (the “Series E Debentures”);

 

D.                                    When certified by the Debenture Trustee (as defined below) and issued as provided in this Supplemental Indenture, all necessary steps in relation to the Company will have been duly enacted, passed and/or confirmed and other proceedings taken and conditions complied with to make the creation and issue of the Series E Debentures proposed to be issued hereunder legal, valid and binding on the Company in accordance with the laws relating to the Company;

 

E.                                     This Supplemental Indenture is hereinafter sometimes referred to as the “Seventh Supplemental Indenture”; and

 

F.                                      The foregoing recitals are made as representations and statements of fact by the Company and not by the Debenture Trustee;

 

NOW THEREFORE it is hereby covenanted, agreed and declared as follows:

 

ARTICLE 1
 INTERPRETATION

 

1.1                               Interpretation

 

This Seventh Supplemental Indenture is supplemental to the Trust Indenture and shall be read in conjunction therewith.  Except only insofar as the Trust Indenture may be inconsistent with the express provisions of this Seventh Supplemental Indenture, in which case the terms of this Seventh Supplemental Indenture shall govern and supersede those contained in the Trust Indenture only to the extent of such inconsistency, this Seventh Supplemental Indenture shall henceforth have effect so far as practicable as if all the provisions of the Trust Indenture and this Seventh Supplemental Indenture were contained in one instrument.  The expressions used in this Seventh Supplemental Indenture and in the Series E Debentures that are defined in the Trust Indenture shall, except as otherwise provided herein, have the respective meanings ascribed to them in the Trust Indenture and the interpretation provisions of Section 1.3 of the Trust Indenture shall apply to the Seventh Supplemental Indenture mutatis mutandis.  Unless otherwise stated, any reference in this Seventh Supplemental Indenture to an Article, Section or Schedule shall be interpreted as a reference to the stated Article, Section of or Schedule to, this Seventh Supplemental Indenture.

 

1.2                               Additional Definitions

 

In this Seventh Supplemental Indenture and in the Series E Debentures, unless there is something in the subject matter or context inconsistent therewith, the expressions following shall have the following meanings, namely:

 

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“2018 Offering” means the public offering under a Canadian prospectus supplement dated January 23, 2018 to the Canadian short form base shelf prospectus dated December 19, 2017 and a U.S. prospectus supplement dated January 23, 2018 to a U.S. shelf prospectus dated December 19, 2017 of up to C$115,000,000 million aggregate principal amount of Series E Debentures.

 

“Applicable Period” means for each regular cash dividend or distribution, the period announced by the Company, in respect of which such dividend or distribution is payable.  As of the date hereof, the Applicable Period is one month.  If, however, the Company announces a regular quarterly, semi-annual or annual dividend or distribution, then the Applicable Period will be deemed to be the related quarterly, semi-annual or annual period.

 

“Change of Control” will be deemed to occur upon the occurrence of any of the following events:

 

(i)                  the acquisition by any Person or group of Persons acting jointly or in concert (within the meaning of NI 62-104 as at the date hereof) of ownership of, or voting control or direction over, 50% or more of the Common Shares; or

 

(ii)               the sale or other transfer of all or substantially all of the consolidated assets of the Company;

 

and a “Change of Control” will not include a sale, merger, reorganization or similar transaction if the previous holders of the Common Shares hold at least 50% of the voting control or direction in such merged, reorganized or other continuing entity;

 

“Current Market Price” means the daily volume weighted average price of the Common Shares on the TSX, averaged for the 20 consecutive trading days ending 5 trading days preceding the date of applicable event (or, if not listed thereon, on such stock exchange on which Common Shares are listed or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market) or, if there is no market, fair value as determined by an independent financial advisor.

 

“Debenture Trustee” means the Canadian Trustee or the U.S. Trustee, or both (the Canadian Trustee and the U.S. Trustee may share the rights, powers, duties and obligations conferred or imposed upon them by the Trust Indenture, except where explicitly noted or where the Trust Indenture Act mandates the U.S. Trustee to act).

 

“Initial Dividend Threshold” means C$0.005 per Common Share in respect of a monthly Applicable Period, and proportionately adjusted in the case of an Applicable Period that is not one month (which would be C$0.015 per Common Share for a quarterly dividend or distribution, C$0.03 per Common Share for a semi-annual dividend or distribution or C$0.06 per Common Share for an annual dividend or distribution).

 

“Maturity Date” means January 31, 2025.

 

“NI 62-104” means National Instrument 62-104 — Take-Over Bids and Issuer Bids.

 

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“NYSE” means the New York Stock Exchange.

 

“Trust Indenture Act” means the United States Trust Indenture Act of 1939, as amended.

 

1.3                               Headings Etc.

 

The division of this Seventh Supplemental Indenture into Articles and Sections, the provision of a Table of Contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Seventh Supplemental Indenture or of the Series E Debentures.

 

1.4                               Day not a Business Day

 

In the event that any day on which any action required to be taken hereunder is not a Business Day, then such action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day.

 

1.5                               Applicable Law

 

This Seventh Supplemental Indenture and the Series E Debentures shall be construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and shall be treated in all respects as Ontario contracts; provided that the rights, protections, duties, obligations and immunities of the U.S. Trustee hereunder shall be governed by and construed under the laws of the State of New York.  The Company hereby irrevocably attorns to the jurisdiction of the courts of the Province of Ontario.  This Seventh Supplemental Indenture shall also incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act, which, for greater certainty, shall include the provisions of section 315 of the Trust Indenture Act (except for the optional provision of section 315b of the Trust Indenture Act allowing a trustee to withhold notice of a default).  If any provision of this Seventh Supplemental Indenture or the Series E Debentures limits, qualifies or conflicts with another provision hereof that is required to be included in this Seventh Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision of the Trust Indenture Act shall prevail but only to the extent of such limitation, qualification or conflict.  For greater certainty, notwithstanding the foregoing, the exercise, performance or discharge by the Canadian Trustee of any of its rights, powers, duties or responsibilities hereunder shall be construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable thereto.

 

1.6                               Monetary References

 

Whenever any amounts of money are referred to herein, such amounts shall be deemed to be in lawful money of Canada unless otherwise expressed.

 

1.7                               Invalidity/Severability

 

In case any provision in this Supplemental Indenture or in the Series E Debentures shall be invalid, illegal, prohibited or unenforceable, such provision shall be deemed to be severed herefrom or therefrom and shall be ineffective only to the extent of such prohibition or

 

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unenforceability.  The validity, legality and enforceability of the remaining provisions shall not in any way be affected, prejudiced or impaired thereby.

 

1.8                               Time of Essence

 

Time shall be of the essence of this Supplemental Indenture.

 

1.9                               Language

 

Each of the parties hereto hereby acknowledges that it has consented to and requested that this Supplemental Indenture and all documents relating thereto, including, without limiting the generality of the foregoing, the form of Debenture attached hereto as Schedule “A”, be drawn up in the English language only.

 

Les parties aux présents reconnaissent avoir accepté et demandé que le présent acte de fiducie et tous les documents s’y rapportant, y compris, sans restreindre la portée générale de ce qui précède, le formulaire de débenture joint aux présents à titre d’annexe  “A”, soient rédigés en langue anglaise seulement.

 

1.10                        Successors and Assigns

 

All covenants and agreements in this Supplemental Indenture by the Company shall bind its respective successors and assigns, whether expressed or not. All covenants and agreements in this Supplemental Indenture by the Debenture Trustee shall bind its successors, whether expressed or not.

 

1.11                        Benefits of Supplemental Indenture

 

Nothing in this Seventh Supplemental Indenture or in the Series E Debentures, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any paying agent, the holders of Series E Debentures, the Senior Creditors (to the extent provided in Article 5 of the Trust Indenture only), and (to the extent provided in Section 8.11 of the Trust Indenture) the holders of Common Shares, any benefit or any legal or equitable right, remedy or claim under this Seventh Supplemental Indenture.

 

ARTICLE 2
 TERMS OF SERIES E DEBENTURES

 

2.1                               Terms of Series E Debentures

 

(a)                                 The Series E Debentures, being the fifth series of Debentures authorized under the Trust Indenture, as supplemented by this Seventh Supplemental Indenture, for issue, are limited to an aggregate principal amount of not more than C$115,000,000 and shall be designated as “6.00% Series E Convertible Unsecured Subordinated Debentures due 2025”.

 

(b)                                 The Series E Debentures shall be dated as of the date hereof and shall mature on the Maturity Date. The Series E Debentures shall bear interest from the date of

 

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issue at the rate of 6.00% per annum, payable semi-annually in arrears on the last day of July and January in each year (each, an “Interest Payment Date”) computed on the basis of a 360-day year composed of twelve 30-day months.  The first such payment will fall due on July 31, 2018 or the earlier date of redemption or conversion and the last such payment (representing interest payable from and including the last Interest Payment Date to, but excluding, the Maturity Date or the earlier date of redemption or conversion of the Series E Debentures) will fall due on the Maturity Date or the earlier date of redemption or conversion, as applicable, payable after as well as before maturity and after as well as before default, with interest on amounts in default at the same rate, compounded semi-annually, computed on the basis of a 360-day year composed of twelve 30-day months.  For certainty, such first interest payment will include interest accrued and unpaid from and including January 29, 2018 up to, but excluding, July 31, 2018, which will be equal to C$30.3333 for each C$1,000 principal amount of the Series E Debentures (or C$3,033,333.33 on a total principal amount of C$100 million).

 

(c)                                        The Series E Debentures will be redeemable at the option of the Company in accordance with the terms of Article 4 of the Trust Indenture, provided that the Series E Debentures will not be redeemable prior to January 31, 2021 (except in certain limited circumstances following a Change of Control as defined in the Trust Indenture).  On or after January 31, 2021 and prior to January 31, 2023, the Series E Debentures may be redeemed by the Company, in whole at any time or in part from time to time, on notice as provided for in Section 4.3 of the Trust Indenture, provided that the Current Market Price on the date on which notice of redemption is provided is not less than 125% of the Conversion Price at the time notice of redemption is given. On or after January 31, 2023 and prior to the Maturity Date, the Series E Debentures may be redeemed by the Company, in whole or in part from time to time, on notice as provided for in Section 4.3 of the Trust Indenture.  In each such circumstance the Series E Debentures will be redeemable at a price equal to their principal amount plus accrued and unpaid interest up to but excluding the Redemption Date.  The Redemption Notice for the Series E Debentures shall be substantially in the form of Schedule “B”.  In connection with the redemption of the Series E Debentures, the Company may, at its option and subject to the provisions of Section 4.6 of the Trust Indenture and subject to regulatory approval, elect to satisfy its obligation to pay all or a portion of the aggregate Redemption Price of the Series E Debentures to be redeemed by issuing and delivering to the holders of such Series E Debentures, such number of Freely Tradeable Common Shares as is obtained by dividing the principal amount of the Series E Debentures which are to be redeemed by 95% of the Current Market Price on the Redemption Date. If the Company elects to exercise such option, it shall so specify and provide details in the Redemption Notice.

 

(d)                                 The Series E Debentures will be subordinated to the Senior Indebtedness in accordance with the provisions of Article 5 of the Trust Indenture.  In accordance with Section 2.12 of the Trust Indenture, the Series E Debentures and each other series of Debentures issued under the Original Indenture (as supplemented) and

 

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the Trust Indenture or under indentures supplemental to the Original Indenture (as supplemented) and the Trust Indenture, will rank pari passu with each other (regardless of their actual date or terms of issue) and, except as prescribed by law, with all other present and future subordinated indebtedness and unsecured indebtedness of the Company, other than Senior Indebtedness.

 

(e)                                  Upon and subject to the provisions and conditions of Article 6 of the Trust Indenture, the holder of each Series E Debenture shall have the right, at such holder’s option, at any time prior to the close of business on the earlier of: (i) the Business Day immediately preceding the Maturity Date; and (ii) the last Business Day immediately preceding the Redemption Date specified by the Company for redemption of the Series E Debentures by notice to the holders of Series E Debentures in accordance with Section 2.1(c) of this Supplemental Indenture and Section 4.3 of the Trust Indenture (the earlier of which will be the “Time of Expiry” for the purposes of Article 6 of the Trust Indenture in respect of the Series E Debentures), to convert the whole or, in the case of a Series E Debenture of a denomination in excess of C$1,000, any part which is C$1,000 or an integral multiple thereof, of the principal amount of such Series E Debenture into Common Shares at the Conversion Price in effect on the Date of Conversion.  To the extent a redemption is a redemption in part only of the Series E Debentures, such right to convert, if not exercised prior to the applicable Time of Expiry, shall survive as to any Series E Debentures not redeemed or converted and be applicable to the next succeeding Time of Expiry.

 

(f)                                   The Conversion Price in effect on the date hereof for each Common Share to be issued upon the conversion of Series E Debentures shall be equal to C$4.20 per Common Share being a conversion ratio of approximately 238.0952 Common Shares for each C$1,000 principal amount of Series E Debentures so converted. No adjustment to the Conversion Price will be made for dividends or distributions payable on Common Shares issuable upon conversion or for interest accrued or accruing on Series E Debentures surrendered for conversion.  Holders converting their Series E Debentures will receive interest which has accrued but not been paid from and including the date of the most recent Interest Payment Date on which interest was paid in full in accordance with this Supplemental Indenture to, but not including, the Date of Conversion (or, if conversion occurs prior to the first Interest Payment Date, from and including January 29, 2018 up to, but excluding, the Date of Conversion).  The Conversion Price applicable to, and the Common Shares, securities or other property receivable on the conversion of, the Series E Debentures is subject to adjustment pursuant to the provisions of paragraphs (a), (b), (c), (d) and (i) of Section 6.5 of the Trust Indenture and, in addition, from time to time, as set forth below:

 

(i)                                     If any issuer bid (other than a normal course issuer bid made through the facilities of the TSX or the NYSE) made by the Company or any of its Subsidiaries for all or any portion of Common Shares shall expire, then, if the issuer bid shall require the payment to shareholders of consideration per Common Share having a fair market value (determined as provided

 

7

 

below) that exceeds the Current Market Price per Common Share on the last date (the “Expiration Date”) tenders could have been made pursuant to such issuer bid (as it may be amended) (the last time at which such tenders could have been made on the Expiration Date is hereinafter sometimes called the “Expiration Time”), the Conversion Price in respect of the Series E Debentures shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately preceding the close of business on the Expiration Date by a fraction of which (A) the denominator shall be the sum of (I) the fair market value of the aggregate consideration (the fair market value as determined by the Directors, subject to TSX or NYSE approval, if applicable, which determination shall be conclusive) payable to shareholders based on the acceptance (up to any maximum specified in the terms of the issuer bid) of all Common Shares validly tendered and not withdrawn as of the Expiration Time (the Common Shares deemed so accepted, up to any such maximum, being referred to as the “Purchased Common Shares”), and (II) the product of the number of Common Shares outstanding (less any Purchased Common Shares and excluding any Common Shares held in the treasury of the Company) at the Expiration Time and the Current Market Price per Common Share on the Expiration Date; and (B) the numerator of which shall be the product of the number of Common Shares outstanding (including Purchased Common Shares but excluding any Common Shares held in the treasury of the Company) at the Expiration Time multiplied by the Current Market Price per Common Share on the Expiration Date, such adjustment to be effective immediately preceding the opening of business on the day following the Expiration Date.  In the event that the Company is obligated to purchase Common Shares pursuant to any such issuer bid, but the Company is permanently prevented by applicable law from effecting any or all such purchases or any or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect based upon the number of Common Shares actually purchased, if any.

 

For purposes of this Section 2.1(f), the term “issuer bid” shall mean an issuer bid (other than an issuer bid which is exempt from the requirements of Part 2 of NI 62-104) under Applicable Securities Legislation or a take-over bid (other than a take-over bid which is exempt from the requirements of Part 2 of NI 62-104) under Applicable Securities Legislation by a Subsidiary of the Company for the Common Shares and all references to “purchases” of Common Shares in issuer bids (and all similar references) shall mean and include the purchase of Common Shares in issuer bids and all references to “tendered Common Shares” (and all similar references) shall mean and include Common Shares tendered in issuer bids.

 

(ii)                                  If and whenever at any time prior to the Time of Expiry the Company shall fix a record date for the payment of a regular cash dividend or

 

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distribution to the holders of all or substantially all of the outstanding Common Shares in respect of any Applicable Period that exceeds the Initial Dividend Threshold, the Conversion Price in respect of the Series E Debentures shall be adjusted immediately after such record date so that it shall be equal to the price determined by multiplying the Conversion Price in effect on such record date by a fraction, of which the denominator shall be the Current Market Price per Common Share on such record date and of which the numerator shall be the Current Market Price per Common Share on such record date minus the amount in cash per Common Share distributed to holders of Common Shares in excess of the Initial Dividend Threshold.  Such adjustment shall be made successively whenever such a record date is fixed.  To the extent that any such cash dividend or distribution is not paid, the Conversion Price shall be re-adjusted to the Conversion Price which would then be in effect if such record had not been fixed.

 

The Initial Dividend Threshold will be adjusted in the same manner as the Conversion Price set forth under this Section 2.1(f) or Section 6.5 of the Trust Indenture, provided that no adjustment will be made to the Initial Dividend Threshold for any adjustment made to the Conversion Price under this clause (ii) of Section 2.1(f).

 

(iii)                               In any case in which this Section 2.1(f) shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event, issuing to the holder of any Series E Debenture converted after such record date and before the occurrence of such event the additional Common Shares or other securities or property issuable upon such conversion by reason of the adjustment required by such event before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder an appropriate instrument evidencing such holder’s right to receive such additional Common Shares or other securities or property upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Common Shares or other securities or property declared in favour of holders of record of Common Shares on and after the Date of Conversion or such later date as such holder would, but for the provisions of this Section 2.1(f), have become the holder of record of such additional Common Shares pursuant to Section 6.4(b) of the Trust Indenture.

 

(iv)                              The adjustments provided for in this Section 2.1(f) are cumulative and shall apply to successive subdivisions, redivisions, reductions, combinations, consolidations, dividends, distributions, issues or other events resulting in any adjustment under the provisions of this Section 2.1(f) or Section 6.5 of the Trust Indenture, provided that, notwithstanding any other provision of this Section 2.1(f), no adjustment of the Conversion Price shall be required unless such adjustment would require an increase

 

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or decrease of at least 1% in the Conversion Price then in effect; provided however, that any adjustments which by reason of this Section 2.1(f)(iv) are not required to be made shall be carried forward and taken into account in any subsequent adjustment hereunder or under Section 6.5 of the Trust Indenture.

 

(v)                                 In the event of any question arising with respect to the adjustments provided in this Section 2.1(f), such question shall be conclusively determined by a firm of chartered accountants appointed by the Company and acceptable to the Debenture Trustee (who may be the auditors of the Company); such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company, the Debenture Trustee, and the holders of Series E Debentures.

 

(vi)                              In case the Company shall take any action, or any event shall occur, affecting the Common Shares other than action described in this Section 2.1(f) or Section 6.5 of the Trust Indenture, which in the opinion of the Directors, would materially affect the rights of Debentureholders, the Conversion Price and the Common Shares or other securities or property issuable or deliverable upon a conversion of Debentures, as applicable, shall be adjusted in such manner and at such time, by action of the Directors, subject to, as required, the prior written consent of the TSX (or, if the Debentures are not listed thereon, such other exchange on which the Debentures are then listed), as the Directors, in their sole discretion may determine to be equitable in the circumstances.  Failure of the Directors to make such an adjustment shall be conclusive evidence that they have determined that it is equitable to make no adjustment in the circumstances.

 

(vii)                           Subject to, as required, the prior written consent of the TSX (or, if the Series E Debentures are not listed thereon, such other exchange on which the Series E Debentures are then listed), no adjustment in the Conversion Price shall be made in respect of any event described in paragraphs (a), (b) and (c) of Section 6.5 of the Trust Indenture or clauses (i) and (ii) of this Section 2.1(f), other than the events described in clauses (i) and (ii) of Section 6.5(a) of the Trust Indenture, if the holders of the Series E Debentures are entitled to participate in such event on the same terms mutatis mutandis as though and with the same effect as if they had converted their Series E Debentures prior to the effective date or record date, as the case may be, of such event.

 

(viii)                        Except as stated above in this Section 2.1(f), no adjustment will be made in the Conversion Price for any Series E Debentures as a result of the issuance of Common Shares at less than the Current Market Price for such Common Shares on the date of issuance.

 

(g)                                                          The Series E Debentures shall be issued in denominations of C$1,000 and integral multiples of C$1,000 and the Debenture Trustee is hereby appointed as registrar and transfer agent for the Series E Debentures.  Each Series E Debenture and the

 

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certificate of the Debenture Trustee endorsed thereon shall be issued in substantially the form set out in Schedule “A”, with such insertions, omissions, substitutions or other variations as shall be required or permitted by the Trust Indenture and this Supplemental Indenture, and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of the Trust Indenture and this Supplemental Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto or with any rules or regulations of any securities exchange or securities regulatory authority or to conform with general usage, all as may be determined by the Directors or an Authorized Officer executing such Series E Debenture in accordance with Section 2.7 of the Trust Indenture, as conclusively evidenced by his or her execution of a Series E Debenture.  Each Series E Debenture shall additionally bear such distinguishing letters and numbers as the Debenture Trustee shall approve.  Notwithstanding the foregoing, a Series E Debenture may be in such other form or forms as may, from time to time, be approved by a resolution of the Directors or as specified in a Certificate.  The Series E Debentures may be engraved, lithographed, printed, mimeographed or typewritten or partly in one form and partly in another.

 

The Series E Debentures shall be issued as one or more Global Debentures and the Global Debentures will be registered in the name of the Depository which, as of the date hereof, shall be CDS (or any nominee of the Depository).  No Beneficial Holder will receive definitive certificates representing its interest in Debentures except as provided in Section 3.2 of the Trust Indenture.  A Global Debenture may be exchanged for Debentures in registered form that are not Global Debentures, or transferred to and registered in the name of a Person other than the Depository for such Global Debentures or a nominee thereof as provided in Section 3.2 of the Trust Indenture.

 

(h)                                                         Upon and subject to the provisions and conditions of Article 10 of the Trust Indenture, and provided no Event of Default has occurred and is continuing, the Company may elect, from time to time, to raise funds to satisfy all or part of an Interest Obligation on the Series E Debentures on any Interest Payment Date (including, for greater certainty, following conversion or upon maturity or redemption) by delivering Common Shares to an agent, including the Debenture Trustee, for sale through the facilities of a registered broker/dealer.

 

(i)                                                             Subject to Applicable Securities Legislation and any required regulatory approval, upon the occurrence of a Change of Control and subject to the provisions and conditions of this Section 2.1(i) and Article 5 of the Trust Indenture, Debentureholders have a right to require the Company to purchase all of their Series E Debentures.  The terms and conditions of such right are set forth below.

 

(i)                                     Upon the occurrence of a Change of Control, each holder of Series E Debentures shall have the right (the “Put Right”) to require the Company to purchase, on the date (the “Put Date”) which is 30 days following the date upon which the Debenture Trustee delivers a Change of Control Notice (as defined below) to the holders of Series E Debentures, all or any

 

11

 

part of such holder’s Series E Debentures at a price equal to 100% of the principal amount thereof (the “Put Price”) plus accrued and unpaid interest, if any, on such Series E Debenture up to, but excluding, the Put Date (collectively, the “Total Put Price”).

 

(ii)                                  The Company will, as soon as practicable, and in any event no later than two Business Days after the occurrence of a Change of Control, give written notice to the Debenture Trustee of the Change of Control.  The Debenture Trustee will, as soon as practicable thereafter, and in any event no later than four Business Days after receiving notice from the Company of the Change of Control, provide written notice to the holders of Series E Debentures of the Change of Control (a “Change of Control Notice”).  The Change of Control Notice shall include a description of the Change of Control, details of the Debentureholders’ Put Right under the terms of the Trust Indenture and this Supplemental Indenture (including identifying the Put Date), a statement that each holder will be entitled to withdraw his election to require the Company to purchase if the Debenture Trustee receives, no later than the close of business on the third Business Day immediately preceding the Put Date, a facsimile transmission or letter setting forth the name of such holder, the principal amount of the Series E Debentures tendered for purchase and a statement that such holder is withdrawing his election to have the Series E Debentures purchased and a description of the rights of the Company to redeem untendered Series E Debentures in accordance with Section 2.1(i)(iv) hereof.

 

(iii)                               To exercise the Put Right the Debentureholder must deliver to the Debenture Trustee, not less than five Business Days prior to the Put Date, written notice of the holder’s exercise of such right in the form attached as Schedule “E”.

 

(iv)                              If 90% or more in aggregate principal amount of Series E Debentures outstanding on the date the Company provides notice of a Change of Control to the Debenture Trustee have been tendered for purchase pursuant to the Put Right on the Put Date, the Company shall have the right, upon written notice provided to the Debenture Trustee within 10 days following the Put Date, to redeem all the remaining outstanding Series E Debentures effective as of the Put Date at the Total Put Price (the “90% Redemption Right”).

 

(v)                                 Upon receipt of notice that the Company shall exercise the 90% Redemption Right and acquire the remaining Series E Debentures, the Debenture Trustee shall as soon as reasonably practicable provide written notice to all Debentureholders that did not previously exercise the Put Right that:

 

(A)                               the Company has exercised the 90% Redemption Right and will purchase all outstanding Series E Debentures effective as of the Put Date at the Total Put Price, including a calculation of such holder’s Total Put Price;

 

12

 

(B)                               each holder must transfer their Series E Debentures to the Debenture Trustee on the same terms as those holders that exercised the Put Right and must send their respective Series E Debentures, duly endorsed for transfer, to the Debenture Trustee within 10 days after the sending of such notice and the Depository shall make notations on the Global Debenture of the principal amount thereof so transferred; and

 

(C)                               the rights of such holder under the terms of the Series E Debentures, the Trust Indenture and this Supplemental Indenture shall cease to be effective as of the Put Date provided the Company has paid the Total Put Price to, or to the order of, the Debenture Trustee and thereafter the Series E Debentures shall not be considered to be outstanding and the holder shall not have any right except to receive such holder’s Total Put Price upon surrender and delivery of such holder’s Series E Debentures in accordance with the Trust Indenture and this Supplemental Indenture.

 

(vi)                              The Company shall, on or before 11:00 a.m. (Toronto time) on the Business Day immediately prior to the Put Date, deposit with the Debenture Trustee or any paying agent to the order of the Debenture Trustee, such sums of money as may be sufficient to pay the aggregate Total Put Price of the Series E Debentures to be purchased or redeemed by the Company on the Put Date, provided the Company may elect to satisfy this requirement by providing the Debenture Trustee with a certified cheque or wire transfer for such amounts required under this Section 2.1(i)(vi).  The Company shall also deposit with the Debenture Trustee a sum of money sufficient to pay any charges or expenses that may be incurred by the Debenture Trustee in connection with such purchase and/or redemption, as the case may be.  Every such deposit shall be irrevocable.  From the sums so deposited, the Debenture Trustee shall pay or cause to be paid to the holders of such Series E Debentures, the Total Put Price to which they are entitled (less any tax required by law to be deducted in respect of accrued and unpaid interest) on the Company’s purchase or redemption.

 

(vii)                           In the event that one or more of such Series E Debentures being purchased in accordance with this Section 2.1(i) becomes subject to purchase in part only, upon surrender of such Series E Debentures for payment of the Total Put Price, the Depository shall make notations on the Global Debenture of the principal amount thereof so purchased.

 

(viii)                        Series E Debentures for which holders have exercised the Put Right and Series E Debentures which the Company has elected to redeem in accordance with the 90% Redemption Right shall become due and payable at the Total Put Price on the Put Date, in the same manner and with the same effect as if it were the date of maturity specified in such Series E Debentures, anything therein or herein to the contrary notwithstanding,

 

13

 

and from and after such Put Date, if the money necessary to purchase or redeem the Series E Debentures shall have been deposited as provided in this Section 2.1(i) and affidavits or other proofs satisfactory to the Debenture Trustee as to the publication and/or mailing of such notices shall have been lodged with it, interest on the Series E Debentures shall cease.  If any question shall arise as to whether any notice has been given as above provided and such deposit made, such question shall be decided by the Debenture Trustee whose decision shall be final and binding upon all parties in interest.

 

(ix)                              In case the holder of any Series E Debenture to be purchased or redeemed in accordance with this Section 2.1(i) shall fail on or before the Put Date to surrender such holder’s Series E Debenture or shall not within such time accept payment of the money payable; or give such receipt therefor, if any, as the Debenture Trustee may require, such monies may be set aside in trust, either in the deposit department of the Debenture Trustee or in a chartered bank, and such setting aside shall for all purposes be deemed a payment to the Debentureholder of the sum so set aside and, to that extent, the Series E Debenture shall thereafter not be considered as outstanding hereunder and the Debentureholder shall have no other right except to receive payment of the monies so paid and deposited, upon surrender and delivery up of such holder’s Series E Debenture, of the Total Put Price.  In the event that any money required to be deposited hereunder with the Debenture Trustee or any depository or paying agent on account of the Total Put Price shall remain so deposited for a period of six years from the Put Date, then such monies shall at the end of such period be paid over or delivered over by the Debenture Trustee or such depository or paying agent to the Company and the Debenture Trustee shall not be responsible to Debentureholders for any amounts owing to them.

 

(x)                                 Subject to the provisions above related to Series E Debentures purchased in part, all Series E Debentures redeemed and paid under this Section 2.1(i) shall forthwith be delivered to the Debenture Trustee and cancelled and no Series E Debentures shall be issued in substitution therefor.

 

(j)                                                            In addition to the requirements of Section 2.1(i) in respect of a Change of Control, the following provisions shall apply in respect of the occurrence of a Cash Change of Control:

 

(i)                                     In the event of the occurrence of a Cash Change of Control, then subject to regulatory approval, during the period (the “Cash Change of Control Conversion Period”) beginning 10 trading days before the anticipated effective date of the Change of Control (the “Effective Date”) and ending on the date that is 30 days after the Change of Control Notice is delivered or mailed to holders of Series E Debentures in accordance with Section 2.1(i), holders of Series E Debentures will be entitled to convert their

 

14

 

Series E Debentures, in whole or in part, and receive, in addition to the number of Common Shares (or cash or other property or securities in substitution therefor) that such holders are entitled to receive upon such conversion in accordance with the provisions and conditions of Section 2.1(e) of this Seventh Supplemental Indenture, as adjusted by Article 6 of the Trust Indenture and Section 2.1(f) hereof, an additional number of Common Shares (or cash or other property or securities in substitution therefor) per C$1,000 principal amount of Series E Debentures converted as set forth below (the “Make Whole Premium”).

 

(ii)                                  The number of additional Common Shares (or cash or other property or securities in substitution therefor) per C$1,000 principal amount of Series E Debentures constituting the Make Whole Premium (the “Make Whole Premium Shares”) shall be determined by reference to the table following subsection (iii) below, based on the actual Effective Date and the price (the “Stock Price”) paid per Common Share in the transaction constituting the Change of Control. If holders of Common Shares receive only cash in the transaction constituting the Change of Control, the Stock Price shall be the cash amount paid per Common Share. Otherwise, the Stock Price shall be equal to the Current Market Price of the Common Shares immediately preceding the actual Effective Date of such transaction. Notwithstanding the foregoing, in no circumstances can the effective Conversion Price (calculated by dividing C$1,000 by the number of Common Shares issuable upon conversion, including the maximum number of Make Whole Premium Shares hereunder) be less than the maximum permitted discounted price permitted by the TSX at the time of announcement of the 2018 Offering (estimated by the Company to be C$2.5242), prior to any adjustments that may be made to the Stock Price to correspond to an adjustment to the Conversion Price under the Trust Indenture or this Seventh Supplemental Indenture.

 

(iii)                               The following table shows the number of Make Whole Premium Shares for each hypothetical Stock Price and Effective Date set forth below, expressed as additional Common Shares per C$1,000 principal amount of the Series E Debentures. For the avoidance of doubt, the Company shall not be obliged to pay the Make Whole Premium otherwise than by issuance of Common Shares (or cash or other property or securities in substitution therefor) upon conversion of the Series E Debentures in accordance with the provisions and conditions of Sections 2.1(e) and 2.1(f) of this Seventh Supplemental Indenture and Article 6 of the Trust Indenture. If the Stock Price or Effective Date are not set forth on the table then: (i) if the actual Stock Price on the Effective Date is between two Stock Prices on the table or the Effective Date is between two Effective Dates on the table, the number of Make Whole Premium Shares will be determined by a straight-line interpolation between the amounts set forth for the two Stock Prices and the two Effective Dates on the table based on a 365-day year, as applicable, (ii) if the Stock Price on the Effective Date

 

15

 

exceeds C$9.00 per Common Share, subject to adjustment as set forth herein, the number of Make Whole Premium Shares to be issued will be zero, and (iii) if the Stock Price on the Effective Date is less than C$2.97 per Common Share, subject to adjustment as set forth herein, the number of Make Whole Premium Shares to be issued will be zero.

 

Make Whole Premium Upon a Cash Change of Control
 (Number of Additional Common Shares per C$1,000 Series E Debenture)

 

	
 
    	
 
    	
Stock Price (C$)
    	
 
    
	
Effective Date
    	
 
    	
Cdn$2.97
    	
 
    	
Cdn$3.00
    	
 
    	
Cdn$3.25
    	
 
    	
Cdn$3.50
    	
 
    	
Cdn$3.75
    	
 
    	
Cdn$4.00
    	
 
    	
Cdn$4.25
    	
 
    	
Cdn$4.50
    	
 
    
	
January 29, 2018
    	
 
    	
98.6051
    	
 
    	
96.3233
    	
 
    	
79.7138
    	
 
    	
66.5743
    	
 
    	
56.1147
    	
 
    	
47.7500
    	
 
    	
41.0306
    	
 
    	
35.6067
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2019
    	
 
    	
98.6051
    	
 
    	
95.2381
    	
 
    	
74.4646
    	
 
    	
60.8657
    	
 
    	
50.0720
    	
 
    	
41.4725
    	
 
    	
34.6118
    	
 
    	
29.1289
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2020
    	
 
    	
98.6051
    	
 
    	
95.2381
    	
 
    	
69.8985
    	
 
    	
55.6886
    	
 
    	
44.4560
    	
 
    	
35.5125
    	
 
    	
28.3412
    	
 
    	
22.5756
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2021
    	
 
    	
98.6051
    	
 
    	
95.2381
    	
 
    	
69.5971
    	
 
    	
50.0686
    	
 
    	
38.5040
    	
 
    	
29.5475
    	
 
    	
22.4682
    	
 
    	
16.6289
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2022
    	
 
    	
98.6051
    	
 
    	
95.2381
    	
 
    	
69.5971
    	
 
    	
47.6191
    	
 
    	
30.8933
    	
 
    	
21.6725
    	
 
    	
15.2824
    	
 
    	
10.7867
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2023
    	
 
    	
98.6051
    	
 
    	
95.2381
    	
 
    	
69.5971
    	
 
    	
47.6191
    	
 
    	
28.5715
    	
 
    	
11.9048
    	
 
    	
1.4541
    	
 
    	
0.0000
    	
 
    

 

	
 
    	
 
    	
Stock Price (C$)
    	
 
    
	
Effective Date
    	
 
    	
Cdn$4.75
    	
 
    	
Cdn$5.00
    	
 
    	
Cdn$5.50
    	
 
    	
Cdn$6.00
    	
 
    	
Cdn$6.50
    	
 
    	
Cdn$7.00
    	
 
    	
Cdn$8.00
    	
 
    	
Cdn$9.00
    	
 
    
	
January 29, 2018
    	
 
    	
31.2147
    	
 
    	
27.6360
    	
 
    	
22.2873
    	
 
    	
18.5850
    	
 
    	
15.9185
    	
 
    	
13.9114
    	
 
    	
11.0563
    	
 
    	
9.0811
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2019
    	
 
    	
24.7600
    	
 
    	
21.2920
    	
 
    	
16.3509
    	
 
    	
13.2050
    	
 
    	
11.1154
    	
 
    	
9.6414
    	
 
    	
7.6175
    	
 
    	
6.0889
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2020
    	
 
    	
17.9853
    	
 
    	
14.4060
    	
 
    	
9.7073
    	
 
    	
7.2683
    	
 
    	
5.9862
    	
 
    	
5.2229
    	
 
    	
4.2750
    	
 
    	
3.6267
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2021
    	
 
    	
11.5895
    	
 
    	
7.0700
    	
 
    	
0.0909
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2022
    	
 
    	
7.3642
    	
 
    	
4.4400
    	
 
    	
0.0273
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
January 31, 2023
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    

 

(iv)                              The Stock Prices set forth in the first row of each table above will be adjusted as of any date on which the Conversion Price of the Series E Debentures is adjusted. The adjusted Stock Prices will equal the Stock Prices applicable immediately preceding such adjustment multiplied by a fraction, the denominator of which is the Conversion Price immediately preceding the adjustment giving rise to the Stock Price adjustment and the numerator of which is the Conversion Price as so adjusted. The number of additional Make Whole Premium Shares set forth in the table above will be adjusted in the same manner as the number of conversion shares issuable upon an adjustment of the Conversion Price as set forth in Section 2.1(f) of this Supplemental Indenture, other than as a result of an

 

16

 

adjustment of the Conversion Price by adding the Make Whole Premium as described above.

 

(v)                                 Notwithstanding the foregoing, if the Date of Conversion of any Series E Debentures occurs during the period beginning on the 10th trading day prior to the Effective Date and ending at the close of business on the actual Effective Date, the holders of such Series E Debentures shall, on conversion of their Series E Debentures, only be entitled to receive that number of Make Whole Premium Shares (as may be adjusted pursuant to Section 2.1(f) of this Supplemental Indenture) on the Business Day immediately following the actual Effective Date and, for greater certainty, only if the Change of Control occurs.

 

(vi)                              The Make Whole Premium Shares shall be deemed to have been issued to a holder of Series E Debentures who exercises conversion rights on or prior to the Effective Date upon conversion of Series E Debentures on the Business Day immediately following the Effective Date. Section 2.1(f) of this Supplemental Indenture shall apply to such conversion and, for greater certainty, the former holders of Series E Debentures in respect of which the Make Whole Premium Shares are issuable shall be entitled to receive and shall accept, in lieu of the Make Whole Premium Shares, the number of shares or other securities or cash or other property of the Company or of the Person or other entity resulting from the transaction that constitutes the Cash Change of Control that such holders would have been entitled to receive if such holders had been the registered holders of the applicable number of Make Whole Premium Shares on the Effective Date.

 

(vii)                           Except as otherwise provided in Section 2.1(i), all other provisions of this Seventh Supplemental Indenture and the Trust Indenture applicable to a conversion of Series E Debentures shall apply to a conversion of Series E Debentures during the Cash Change of Control Conversion Period.

 

(k)                                                         The Debenture Trustee shall be provided with the documents and instruments referred to in Sections 2.5(b), (c) and (d) of the Trust Indenture with respect to the Series E Debentures prior to the issuance of the Series E Debentures.

 

2.2                               Delivery

 

The Series E Debentures shall be executed by the Company and delivered to the Debenture Trustee accompanied by the documentation contemplated in Section 2.5 of the Trust Indenture.

 

2.3                               Legends and Certification

 

The Series E Debentures shall contain the legend as set out in Schedule “A” and the Debenture Trustee’s certificate of authentication shall be in the form annexed to that Schedule “A”.

 

17

 

ARTICLE 3
 CONFIRMATION OF TRUST INDENTURE

 

3.1                               Confirmation of Trust Indenture

 

The Trust Indenture, as supplemented by a first supplemental indenture dated as of October 20, 2010 between the Company and the Canadian Trustee, as further supplemented by a second supplemental indenture dated as of July 5, 2012 between the Company and the Canadian Trustee, as further supplemented by a third supplemental indenture dated as of August 17, 2012 between the Company and the Canadian Trustee, as further supplemented by the Fourth Supplemental Indenture, as further supplemented by the fifth supplemental indenture dated as of December 11, 2012 between the Company, the Canadian Trustee and the U.S. Trustee, as further supplemented by the sixth supplemental indenture dated as of March 22, 2013 between the Company and the Canadian Trustee and as further supplemented by this Seventh Supplemental Indenture, shall be and continue in full force and effect and is hereby confirmed.

 

ARTICLE 4
 ADDITIONAL MATTERS

 

4.1                               Acceptance of Trust

 

The Debenture Trustee hereby accepts the trusts in this Supplemental Indenture and in the Trust Indenture declared and provided for and agrees to perform the same upon the terms and conditions herein set forth and to hold all rights, privileges and benefits conferred hereby and by law in trust for the various persons who shall from time to time be Debentureholders, subject to all the terms and conditions herein set forth.

 

4.2                               Restriction on Certain Actions

 

The Company shall not, directly or indirectly (through a Subsidiary or otherwise) undertake or announce any rights offering, issuance of securities, subdivision of the Common Shares, dividend or other distribution on the Common Shares or any other securities, capital reorganization, reclassification or any similar type of transaction in which:

 

(a)                                                         the number of securities to be issued;

 

(b)                                                         the price at which securities are to be issued, converted or exchanged; or

 

(c)                                                          any property or cash that is to be distributed or allocated,

 

is in whole or in part based upon, determined in reference to, related to or a function of, directly or indirectly, (i) the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right, or (ii) the Current Market Price determined in connection with the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right.

 

18

 

ARTICLE 5
 EXECUTION AND FORMAL DATE

 

5.1                               Execution

 

This Seventh Supplemental Indenture may be simultaneously executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument.

 

5.2                               Formal Date

 

For the purpose of convenience this Seventh Supplemental Indenture may be referred to as bearing the formal date of January 29, 2018 irrespective of the actual date of execution hereof.

 

ARTICLE 6
 MISCELLANEOUS

 

6.1                               The Debenture Trustee

 

Neither the Canadian Trustee nor the U.S. Trustee shall be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Seventh Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company.

 

6.2                               Representations of the Company

 

The Company represents and warrants to the Canadian Trustee and the U.S. Trustee that it has full authority to enter into this Seventh Supplemental Indenture upon the terms and conditions hereof and that the individual executing this Seventh Supplemental Indenture on its behalf has the requisite authority to bind the Company to this Seventh Supplemental Indenture, and that this Seventh Supplemental Indenture constitutes a binding obligation of the Company enforceable in accordance with its terms, subject to exceptions as to applicable bankruptcy, insolvency and similar laws and the availability of equitable remedies.

 

[Remainder of page intentionally left blank.  Signature page follows.]

 

19

 

IN WITNESS WHEREOF the parties hereto have executed this Seventh Supplemental Indenture by the hands of their proper officers.

 

	
 
    	
ATLANTIC POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Terrence Ronan
    
	
 
    	
 
    	
Name: 
    	
Terrence Ronan 
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer
    

 

	
 
    	
COMPUTERSHARE TRUST COMPANY OF   CANADA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Yana Nedyalkova
    
	
 
    	
 
    	
Name: 
    	
Yana Nedyalkova
    
	
 
    	
 
    	
Title:
    	
Corporate Trust Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Raji Sivalingam
    
	
 
    	
 
    	
Name: 
    	
Raji Sivalingam
    
	
 
    	
 
    	
Title:
    	
Associate Trust Officer
    

 

	
 
    	
COMPUTERSHARE TRUST COMPANY,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert H. Major
    
	
 
    	
 
    	
Name: 
    	
Robert H. Major
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

Seventh Supplemental Indenture

 

 

SCHEDULE “A”

 

TO THE SEVENTH SUPPLEMENTAL INDENTURE
 TO THE TRUST INDENTURE DATED DECEMBER 17, 2009 BETWEEN

 

ATLANTIC POWER CORPORATION

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

Form of Debenture

 

 

SCHEDULE “A”

 

FORM OF GLOBAL DEBENTURE

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO ATLANTIC POWER CORPORATION (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.

 

Certificate No. ·

 

	
CUSIP No.
    	
04878QAT0
    	
C·
    
	
ISIN No.
    	
CA 04878QAT00
    	
 
    

 

ATLANTIC POWER CORPORATION
 (A corporation continued under and governed by the laws of the Province of British Columbia)

 

6.00% SERIES E CONVERTIBLE UNSECURED 
 SUBORDINATED DEBENTURE DUE 2025
 (“Series E Debenture”)

 

ATLANTIC POWER CORPORATION (the “Company”) for value received hereby acknowledges itself indebted and, subject to the provisions of the trust indenture (the “Original Indenture”) dated as of December 17, 2009 between the Company and Computershare Trust Company of Canada (the “Canadian Trustee”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) dated as of November 29, 2012 between the Company, the Canadian Trustee and Computershare Trust Company, N.A. (the “U.S. Trustee”), as further supplemented by the seventh supplemental indenture (the “Supplemental Indenture”) dated as of January 29, 2018 between the Company, the Canadian Trustee and the U.S. Trustee, promises to pay to the registered holder hereof on January 31, 2025 or on such earlier date as the principal amount hereof may become due in accordance with the provisions of the Indenture and the Supplemental Indenture (any such date, the “Maturity Date”) the principal sum of · dollars in lawful money of Canada (C$·) on presentation and surrender of this Series E Debenture at the principal offices of the Canadian Trustee in Toronto, Ontario in accordance with the terms of the Indenture and the Supplemental Indenture and, subject as hereinafter provided, to pay interest on the principal amount hereof from the date hereof, or from the last Interest Payment Date to which 

 

 

interest shall have been paid or made available for payment hereon, whichever is later, at the rate of 6.00% per annum, in like money, in arrears semi-annually (less any withholding tax required or permitted by law to be deducted) on the last day of July and January in each year commencing on July 31, 2018 and the last payment (representing interest payable from the last Interest Payment Date to, but excluding, the Maturity Date or the earlier date of redemption) to fall due on the Maturity Date or redemption date, as applicable, and, should the Company at any time make default in the payment of any principal, premium or interest, to pay interest on the amount in default at the same rate, in like money and on the same dates.  For certainty, the first interest payment will include interest accrued from January 29, 2018 to, but excluding, July 31, 2018, which will be equal to C$30.3333 for each C$1,000 principal amount of the Series E Debentures.

 

Reference is hereby expressly made to the Indenture and the Supplemental Indenture for a description of the terms and conditions upon which the Series E Debentures are or are to be issued and held and the rights and remedies of the holders of the Series E Debentures and of the Company and of the Debenture Trustee, all to the same effect as if the provisions of the Indenture and the Supplemental Indenture were herein set forth, and to all of which provisions the holder of this Series E Debenture by acceptance hereof assents.  To the extent that the terms and conditions stated in this Series E Debenture conflict with the terms and conditions of the Indenture and the Supplemental Indenture, the Indenture and the Supplemental Indenture shall prevail.  All capitalized terms used herein have the meaning ascribed thereto in the Indenture and the Supplemental Indenture unless otherwise indicated.

 

Interest hereon shall be payable by electronic transfer of funds to the registered holder hereof or such other means provided in the Indenture and the Supplemental Indenture and, subject to the provisions of the Indenture and the Supplemental Indenture, the sending of such electronic transfer of funds shall, to the extent of the sum represented thereby (plus the amount of any tax withheld), satisfy and discharge all liability for interest on this Series E Debenture.

 

This Series E Debenture is one of the Debentures of the Company issued or issuable in one or more series under the provisions of the Indenture.  The Series E Debentures authorized for issue are limited to an aggregate principal amount of up to one hundred fifteen million dollars in lawful money of Canada (C$115,000,000). The Series E Debentures are issuable only in denominations of C$1,000 and integral multiples thereof.  Upon compliance with the provisions of the Indenture and the Supplemental Indenture, Debentures of any denomination may be exchanged for an equal aggregate principal amount of Debentures in any other authorized denomination or denominations.

 

Any part, being C$1,000 or an integral multiple thereof, of the principal of this Series E Debenture, provided that the principal amount of this Series E Debenture is in a denomination in excess of C$1,000, is convertible, at the option of the holder hereof, upon surrender of this Series E Debenture at the principal offices of the Debenture Trustee in the City of Toronto, Ontario or in the City of Golden, Colorado at any time prior to the close of business on the last Business Day immediately preceding the Maturity Date or, if this Series E Debenture is called for redemption on or prior to such date, then up to but not after the close of business on the last Business Day immediately preceding the date specified for redemption of this Series E Debenture, into Common Shares (without adjustment for interest accrued hereon or for 

 

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dividends, distributions or interest payments on the Common Shares issuable upon conversion) at a conversion price of C$4.20 per Common Share (the “Conversion Price”), being a conversion ratio of approximately 238.0952 for each C$1,000 principal amount of Debentures so converted, all subject to the terms and conditions and in the manner set forth in the Indenture and the Supplemental Indenture. The Indenture and the Supplemental Indenture make provision for the adjustment of the Conversion Price in the events therein specified, including the delivery of additional Common Shares (or cash or other property or securities in substitution therefor) for a limited time following a Cash Change of Control.  No fractional Common Shares will be issued on any conversion but in lieu thereof, the Company will satisfy such fractional interest by a cash payment equal to the market price of such fractional interest determined in accordance with the Indenture.  No adjustment to the Conversion Price will be made for dividends or distributions payable on Common Shares issuable upon conversion or for interest accrued or accruing on Series E Debentures surrendered for conversion.  Holders converting their Series E Debentures will receive interest which has accrued and is unpaid in respect thereof from the most recent Interest Payment Date to which interest has been paid to, but not including, the Date of Conversion (or, if conversion occurs prior to the first Interest Payment Date, from and including January 29, 2018 to, but not including, the Date of Conversion).

 

This Series E Debenture may be redeemed at the option of the Company on the terms and conditions set out in the Indenture and the Supplemental Indenture at the Redemption Price therein and herein set out provided that this Series E Debenture is not redeemable prior to January 31, 2021 (except in certain limited circumstances following a Change of Control). On or after January 31, 2021 and prior to January 31, 2023, this Series E Debenture is redeemable at the option of the Company provided that the Current Market Price on the date on which notice of redemption is provided is at least 125% of the Conversion Price at the time the Redemption Notice is given.  On or after January 31, 2023 and prior to the Final Maturity Date, the Series E Debentures may be redeemed at any time by the Company.  In each such circumstance, the Series E Debentures will be redeemable at a price equal to their principal amount plus accrued and unpaid interest up to, but not including, the Redemption Date.  In connection with the redemption of the Series E Debentures, the Company may, at its option and subject to regulatory approval, elect to satisfy its obligation to pay all or a portion of the aggregate principal amount of the Series E Debentures due upon redemption of the Series E Debentures by issuing and delivering to the holders of such Series E Debentures, such number of Freely Tradeable Common Shares as is obtained by dividing the principal amount of the Series E Debentures which are to be redeemed by 95% of the Current Market Price on the Redemption Date. If the Company elects to exercise such option, it shall so specify and provide details in the Redemption Notice.

 

Upon the occurrence of a Change of Control, each holder of Series E Debentures may subject to the terms and provisions of Section 2.1(i) of the Supplemental Indenture and Article 5 of the Indenture require the Company to purchase the whole or any part of such holder’s Series E Debentures at a price equal to 100% of the principal amount of such Series E Debentures plus accrued and unpaid interest up to, but excluding, the date the Series E Debentures are so repurchased (the “Put Right”).  The Company shall satisfy such purchase price by payment in cash.  If 90% or more of the principal amount of all Series E Debentures outstanding on the date the Company provides notice of a Change of Control to the Debenture 

 

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Trustee have been tendered for purchase pursuant to the Put Right, the Company has the right to redeem all the remaining outstanding Series E Debentures on the same date and at the same price.

 

If an Offer for outstanding Debentures of a series (other than Debentures held by or on behalf of the Offeror, Associates or Affiliates of the Offeror or anyone acting jointly or in concert with the Offeror) is made and 90% or more of the outstanding principal amount of the Debentures is taken up and paid for by the Offeror, the Offeror will be entitled to acquire the Debentures of those holders who did not accept the offer on the same terms as the Offeror acquired the first 90% of the principal amount of the Debentures.

 

The Company may, on notice as provided in the Indenture and the Supplemental Indenture, at its option and subject to any applicable regulatory approval, elect to satisfy the obligation to repay all or any portion of the principal amount of this Series E Debenture due on the Maturity Date by the issue of that number of Freely Tradeable Common Shares obtained by dividing the principal amount of the outstanding Series E Debentures which have matured by 95% of the Current Market Price on the Maturity Date.

 

The Company shall not, directly or indirectly (through a Subsidiary or otherwise) undertake or announce any rights offering, issuance of securities, subdivision of the Common Shares, dividend or other distribution on the Common Shares or any other securities, capital reorganization, reclassification or any similar type of transaction in which:

 

(a)                                                         the number of securities to be issued;

 

(b)                                                         the price at which securities are to be issued, converted or exchanged; or

 

(c)                                                          any property or cash that is to be distributed or allocated,

 

is in whole or in part based upon, determined in reference to, related to or a function of, directly or indirectly, (i) the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right, or (ii) the Current Market Price determined in connection with the exercise or potential exercise of the Common Share Redemption Right or the Common Share Repayment Right.

 

The indebtedness evidenced by this Series E Debenture, and by all other Series E Debentures now or hereafter certified and delivered under the Indenture, is a direct unsecured obligation of the Company, and is subordinated in right of payment, to the extent and in the manner provided in the Indenture and the Supplemental Indenture, to the prior payment in full of all Senior Indebtedness, whether outstanding at the date of the Supplemental Indenture or thereafter created, incurred, assumed or guaranteed.

 

The principal hereof may become or be declared due and payable before the stated maturity in the events, in the manner, with the effect and at the times provided in the Indenture and the Supplemental Indenture.

 

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Any payment of money to any holder of Debentures will be reduced by the amount of applicable withholding taxes, if any.  The Indenture and the Supplemental Indenture contain provisions making binding upon all holders of Debentures outstanding thereunder (or in certain circumstances specific series of Debentures) resolutions passed at meetings of such holders held in accordance with such provisions and instruments signed by the holders of a specified majority of Debentures outstanding (or specific series), which resolutions or instruments may have the effect of amending the terms of this Series E Debenture or the Indenture or the Supplemental Indenture.

 

This Series E Debenture may only be transferred, upon compliance with the conditions prescribed in the Indenture and the Supplemental Indenture, in one of the registers to be kept at the principal offices of the Debenture Trustee in Toronto, Ontario or in Golden, Colorado and in such other place or places and/or by such other registrars (if any) as the Company with the approval of the Debenture Trustee may designate.  No transfer of this Series E Debenture shall be valid unless made on the register by the registered holder hereof and upon compliance with such reasonable requirements as the Debenture Trustee and/or other registrar may prescribe and upon surrender of this Series E Debenture for cancellation.  Thereupon a new Series E Debenture or Series E Debentures in the same aggregate principal amount shall be issued to the transferee in exchange hereof.

 

This Series E Debenture shall not become obligatory for any purpose until it shall have been certified by the Debenture Trustee under the Indenture and the Supplemental Indenture.

 

The Indenture, Supplemental Indenture and this Series E Debenture shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated in all respects as Ontario contracts; provided that the rights, protections, duties, obligations and immunities of the U.S. Trustee hereunder shall be governed by and construed under the laws of the State of New York.  The Indenture, Supplemental Indenture and this Series E Debenture shall also incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act, which, for greater certainty, shall include the provisions of section 315 of the Trust Indenture Act (except for the optional provision of section 315b of the Trust Indenture Act allowing a trustee to withhold notice of a default).  If any provision of the Indenture, the Supplemental Indenture or this Series E Debenture limits, qualifies or conflicts with another provision hereof that is required to be included in the Indenture, the Supplemental Indenture or this Series E Debenture by any of the provisions of the Trust Indenture Act, such required provision of the Trust Indenture Act shall prevail but only to the extent of such limitation, qualification or conflict.  For greater certainty, notwithstanding the foregoing, the exercise, performance or discharge by the Canadian Trustee of any of its rights, power, duties or responsibilities hereunder shall be construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable thereto.

 

Capitalized words or expressions used in this Series E Debenture shall, unless otherwise defined herein, have the meaning ascribed thereto in the Indenture and the Supplemental Indenture.  In the event that the terms and conditions stated in this Series E 

 

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Debenture conflict, or are inconsistent, with the terms and conditions of the Indenture and the Supplemental Indenture, the Indenture and Supplemental Indenture, as applicable, shall prevail and take priority.

 

[The remainder of this page has been intentionally left blank.]

 

6

 

IN WITNESS WHEREOF ATLANTIC POWER CORPORATION has caused this Series E Debenture to be signed by its authorized signatories as of the · day of ·, 2018.

 

	
 
    	
ATLANTIC POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

7

 

DEBENTURE TRUSTEE’S CERTIFICATE

 

This Series E Debenture is one of the 6.00% Series E Convertible Unsecured Subordinated Debentures due 2025 referred to in the Indenture and the Supplemental Indenture within mentioned.

 

	
 
    	
COMPUTERSHARE TRUST COMPANY OF CANADA
    
	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Authorized Officer)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    

 

 

REGISTRATION PANEL

 

(No writing hereon except by the Debenture Trustee or other registrar)

 

	
Date of Registration
    	
 
    	
In Whose Name Registered
    	
 
    	
Signature of Bond Trustee or 
   Registrar
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ·, whose address, if applicable, is set forth below, this Series E Debenture (or C$· principal amount hereof*) of ATLANTIC POWER CORPORATION standing in the name(s) of the undersigned in the register maintained by or on behalf of ATLANTIC POWER CORPORATION with respect to such Series E Debenture and does hereby irrevocably authorize and direct the Debenture Trustee to transfer such Series E Debenture in such register, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    
	
Address of Transferee:
    	
 
    	
 
    
	
 
    	
(Street Address, City, Province and Postal   Code)
    
					

 

(*) If less than the full principal amount of the within Series E Debenture is to be transferred, indicate in the space provided the principal amount (which must be C$1,000 or an integral multiple thereof, unless you hold a Series E Debenture in a non-integral multiple of C$1,000, in which case such Series E Debenture is transferable only in its entirety) to be transferred.

 

	
 
    	
 
    
	
 
    	
Signature of transferring registered holder
    

 

 

EXHIBIT “1”
 TO CDS GLOBAL DEBENTURE
 ATLANTIC POWER CORPORATION

 

6.00% SERIES E CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES DUE 2025

 

	
Initial Principal Amount:
    	
C$·
    	
CUSIP No. 04878QAT0
    
	
CDN$
    	
 
    	
 
    
	
 
    	
 
    	
ISIN No. CA 04878QAT00
    

 

	
Signature of the Debenture Trustee:
    	
 
    	
 
    

 

ADJUSTMENTS

 

	
Date
    	
 
    	
Amount of 
   Increase
    	
 
    	
Amount of 
   Decrease
    	
 
    	
New Principal 
   Amount
    	
 
    	
Authorization
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

SCHEDULE “B”

 

TO THE SEVENTH SUPPLEMENTAL INDENTURE 
 TO THE TRUST INDENTURE DATED DECEMBER 17, 2009 BETWEEN

 

ATLANTIC POWER CORPORATION

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

Form of Redemption Notice

 

 

SCHEDULE “B”

 

FORM OF REDEMPTION NOTICE

 

To:                             Holders of 6.00% Series E Convertible Unsecured Subordinated Debentures due 2025 (the “Debentures”) of Atlantic Power Corporation (the “Company”) (CUSIP No. 04878QAT0 / ISIN No. CA 04878QAT00)

 

Note:                  All capitalized terms used herein have the meaning ascribed thereto in the Indenture and the Supplemental Indenture mentioned below, unless otherwise indicated.

 

Notice is hereby given pursuant to Section 4.3 of the trust indenture (the “Original Indenture”) dated as of December 17, 2009 between the Company and Computershare Trust Company of Canada (the “Canadian Trustee”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) dated as of November 29, 2012 between the Company, the Canadian Trustee and Computershare Trust Company, N.A. (the “U.S. Trustee”), as further supplemented by the seventh supplemental indenture (the “Supplemental Indenture”) dated as of January 29, 2018 between the Company, the Canadian Trustee and the U.S. Trustee, that the aggregate principal amount of C$· of the C$· of Debentures outstanding will be redeemed as of ·, 20· (the “Redemption Date”), upon payment of a redemption amount of C$· for each C$1,000 principal amount of Debentures, being equal to the aggregate of (i) C$· (the “Redemption Price”), and (ii) accrued and unpaid interest on such redeemed Debentures to but excluding the Redemption Date, in each case less any withholding taxes required to be deducted (collectively, the “Total Redemption Price”).

 

The Total Redemption Price will be payable upon presentation and surrender of the Debentures called for redemption at the following corporate trust office:

 

Computershare Trust Company of Canada
 100 University Ave., 9th Floor
 Toronto, Ontario, M5J 2Y1
 Attention:  Trust Officer, Corporate Trust

 

The interest upon the principal amount of Debentures called for redemption shall cease to be payable from and after the Redemption Date, unless payment of the Redemption Price shall not be made on presentation for surrender of such Debentures at the above-mentioned corporate trust office on or after the Redemption Date or prior to the setting aside of the Redemption Price pursuant to the Indenture and the Supplemental Indenture.

 

	
DATED:
    	
 
    	
 
    

 

	
 
    	
ATLANTIC POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

SCHEDULE “C”

 

 TO THE SEVENTH SUPPLEMENTAL INDENTURE 
 TO THE TRUST INDENTURE DATED DECEMBER 17, 2009 BETWEEN

 

ATLANTIC POWER CORPORATION

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

Form of Maturity Notice

 

 

SCHEDULE “C”

 

FORM OF MATURITY NOTICE

 

TO:                                                                               Holders of 6.00% Series E Convertible Unsecured Subordinated Debentures due 2025 (the “Debentures”) of Atlantic Power Corporation (the “Company”) (CUSIP No. 04878QAT0 / ISIN No. CA04878QAT00)

 

AND TO:                                                 Computershare Trust Company of Canada, as Canadian Trustee

 

AND TO:                                                 Computershare Trust Company, N.A., as U.S. Trustee

 

NOTE:                                                              All capitalized terms used herein have the meaning ascribed thereto in the Indenture and the Supplemental Indenture mentioned below, unless otherwise indicated.

 

Notice is hereby given pursuant to the trust indenture (the “Original Indenture”) dated as of December 17, 2009 between the Company and Computershare Trust Company of Canada (the “Canadian Trustee”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) dated as of November 29, 2012 between the Company, the Canadian Trustee and Computershare Trust Company, N.A. (the “U.S. Trustee”), as further supplemented by the seventh supplemental indenture (the “Supplemental Indenture”) dated as of January 29, 2018 between the Company, the Canadian Trustee and the U.S. Trustee, that the Debentures are due and payable as of January 31, 2025 (the “Maturity Date”) and the Company hereby advises the holders of Debentures that it will deliver to holders of Debentures a cash payment upon presentation and surrender of the Debentures representing any principal amount and all accrued and unpaid interest to the Maturity Date, to which the holder is entitled.

 

	
DATED:
    	
 
    	
 
    

 

	
 
    	
ATLANTIC POWER CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Per:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
				

 

 

SCHEDULE “D”

 

 TO THE SEVENTH SUPPLEMENTAL INDENTURE 
 TO THE TRUST INDENTURE DATED DECEMBER 17, 2009 BETWEEN

 

ATLANTIC POWER CORPORATION

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

Form of Notice of Conversion

 

 

SCHEDULE “D”

 

FORM OF NOTICE OF CONVERSION

 

TO:                           ATLANTIC POWER CORPORATION

 

Note:                  All capitalized terms used herein have the meaning ascribed thereto in the Indenture and the Supplemental Indenture mentioned below, unless otherwise indicated.

 

The undersigned registered holder of 6.00% Series E Convertible Unsecured Subordinated Debentures due 2025 (the “Debentures”) in the principal amount of C$· irrevocably elects to convert such Debentures (or C$· principal amount thereof*) in accordance with the terms of the trust indenture (the “Original Indenture”) dated as of December 17, 2009 between the Company and Computershare Trust Company of Canada (the “Canadian Trustee”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) dated as of November 29, 2012 between the Company, the Canadian Trustee and Computershare Trust Company, N.A. (the “U.S. Trustee”), as further supplemented by the seventh supplemental indenture (the “Supplemental Indenture”) dated as of January 29, 2018 between the Company, the Canadian Trustee and the U.S. Trustee, and tenders herewith the Debentures, and, if applicable, directs that the Common Shares of the Company (or cash or other property or securities in substitution therefor, if applicable) issuable upon a conversion (net of applicable withholding taxes, if any) be issued and delivered to the person indicated below.  (If Common Shares are to be issued in the name of a person other than the holder, all requisite transfer taxes must be tendered by the undersigned.)

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Signature of Registered Holder)
    

 

(*) If less than the full principal amount of the Debentures, indicate in the space provided the principal amount (which must be C$1,000 or integral multiples thereof).

 

(Print name in which Common Shares are to be issued, delivered and registered)

 

	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(City, Province and Postal Code)
    	
 
    
	
 
    	
 
    	
 
    
	
Name of guarantor:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Authorized signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

 

SCHEDULE “E”

 

 TO THE SEVENTH SUPPLEMENTAL INDENTURE 
 TO THE TRUST INDENTURE DATED DECEMBER 17, 2009 BETWEEN

 

ATLANTIC POWER CORPORATION

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

- and -

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

Form of Notice of Put Exercise

 

 

SCHEDULE “E”

 

FORM OF NOTICE OF PUT EXERCISE

 

(Change of Control)

 

PUT EXERCISE

 

TO:                           ATLANTIC POWER CORPORATION (the “Company”)

 

Note:                  All capitalized terms used herein have the meaning ascribed thereto in the Indenture and the Supplemental Indenture mentioned below, unless otherwise indicated.

 

The undersigned registered holder of 6.00% Series E Convertible Unsecured Subordinated Debentures due 2025 (the “Debentures”) in the principal amount of C$· irrevocably elects to put such Debentures (or C$· principal amount thereof*) to the Company to be purchased by the Company on · (the “Put Date”) in accordance with the terms of the trust indenture (the “Original Indenture”) dated as of December 17, 2009 between the Company and Computershare Trust Company of Canada (the “Canadian Trustee”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture” and, together with the Original Indenture, the “Indenture”) dated as of November 29, 2012 between the Company, the Canadian Trustee and Computershare Trust Company, N.A. (the “U.S. Trustee”), as further supplemented by the seventh supplemental indenture (the “Supplemental Indenture”) dated as of January 29, 2018 between the Company, the Canadian Trustee and the U.S. Trustee, at a price of C$· for each C$1,000 principal amount of Debentures plus all accrued and unpaid interest thereon (net of applicable withholding tax, if any) to, but excluding, the Put Date (collectively, the “Total Put Price”) and tenders herewith the Debentures.

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(Signature of Registered Holder)
    

 

*                                         If less than the full principal amount of the Debentures, indicate in the space provided the principal amount (which must be C$1,000 or integral multiples thereof).

 

The total Put Price (after deduction of applicable taxes) will be payable upon presentation and surrender of the Debentures with this form on or after the Put Date at the following corporate trust office:

 

Computershare Trust Company of Canada
  100 University Ave., 9th Floor
 Toronto, Ontario M5J 2Y1

 

The interest upon the principal amount of Debentures put to the Company shall cease to be payable from and after the Put Date unless payment of the Total Put Price shall not be made on presentation for surrender of such Debentures at the above mentioned corporate trust office on or

 

 

after the Put Date or prior to the setting aside of the Total Put Price pursuant to the Indenture and the Supplemental Indenture.

 

2Exhibit

FORM (1-Year Vesting)

PREFERRED APARTMENT COMMUNITIES, INC. 
2018 CLASS B UNIT  
AWARD AGREEMENT
This 2018 Class B Unit Award Agreement ("Agreement") made and entered into as of January 29, 2018, but effective as of the Effective Date, among Preferred Apartment Communities, Inc., a Maryland corporation (the "Company"), its subsidiary, Preferred Apartment Communities Operating Partnership, L.P., a Delaware limited partnership and the entity through which the Company conducts substantially all of its operations (the "Partnership"), and the person identified below as the grantee (the "Grantee").
Recitals
 
A.    Grantee is an [officer of the Company and provides services to the Partnership] [employee of an affiliate of the Company that provides services to the Company and the Partnership].
B.    The Compensation Committee (the "Committee") of the Board of Directors of the Company (the "Board") approved this award (the "Award") pursuant to the Sixth Amended and Restated Agreement of Limited Partnership of the Partnership dated as of June 3, 2016, as amended, restated and supplemented from time to time hereafter (the "Partnership Agreement"), to provide [officers of the Company] [employees of affiliates of the Company that provides services to the Company and the Partnership],  including the Grantee, in connection with their service, with the incentive compensation described in this Agreement, and thereby provide additional incentive for them to promote the progress and success of the business of the Company and its affiliates, including the Partnership. This Award was approved by the Committee pursuant to authority delegated to it by the Board as set forth in the Partnership Agreement to make grants of Class B Units (as defined in the Partnership Agreement).
C.    This Agreement evidences an award of Class B Units that have been authorized for issuance under the Partnership Agreement.
D.    Effective as of the Effective Date, the Committee has made an award to the Grantee of the number of Class B Units (the "Awarded Class B Units") set forth in Schedule A [in lieu of any reimbursement for annual cash compensation for 2018 and the number of Awarded Class B Units was determined based on the anticipated reimbursement amount of annual cash compensation otherwise payable for the benefit of Grantee] [as compensation for services to be indirectly rendered to the Company and the Partnership in 2018].
E.    Grantee has agreed to accept the Awarded Class B Units in lieu of receiving any annual cash compensation for 2018 for services to be rendered for the benefit of the Company and/or the Partnership.
NOW, THEREFORE, the Company, the Partnership and the Grantee agree as follows:
1.    Administration.  This Award shall be administered by the Committee which has the powers and authority as delegated by the Board.
2.    Definitions.  Capitalized terms used herein without definitions shall have the meanings given to those terms in the Partnership Agreement.  In addition, as used herein:
"Accounting Firm" has the meaning set forth in Section 8(n).
"Additional Valuation Date" means the last day of each calendar quarter following the Initial Valuation Date.
"Average Capital Account Balance" has the meaning provided in the Partnership Agreement.

"Awarded Class B Units" has the meaning set forth in the Recitals.
"Baseline Value" means (a) the Initial Baseline Value until the Initial Valuation Date; and (b) thereafter, the Market Capitalization as of the immediately prior Valuation Date.
"Capital Account" has the meaning provided in the Partnership Agreement.
"Change of Control" means:
(i)    Individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board of Directors;
(ii)    Approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case unless, following such reorganization, merger or consolidation, (A) more than sixty percent (60%) of the combined voting power of the then outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company's outstanding voting securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their beneficial ownership, immediately prior to such reorganization, merger or consolidation, of the Company's outstanding voting securities, and (B) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation;
(iii)    Approval by the stockholders of the Company of (A) a complete liquidation or dissolution of the Company or (B) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which following such sale or other disposition (x) more than sixty percent (60%) of the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company's outstanding voting securities entitled to vote generally in the election of directors immediately prior to such sale or other disposition in substantially the same proportion as their beneficial ownership, immediately prior to such sale or other disposition, of the Company's outstanding voting securities, and (y) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board of Directors of the Company providing for such sale or other disposition of assets of the Company;
(iv)    The Sixth Amended and Restated Management Agreement among the Company, the Partnership and Preferred Apartment Advisors, LLC dated June 3, 2016 (as the same may be amended or modified) is terminated for any reason or no reason; or
(v)    The Company's Common Stock no longer being listed on the NYSE or other national U.S. stock exchange.
"Class B Units" means the Class B Units authorized pursuant to the Partnership Agreement.

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"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's common stock, par value $0.01 per share, either currently existing or authorized hereafter.
"Continuous Service" means the continuous service to [the Company as an officer] [Preferred Apartment Advisors, LLC as an employee], without interruption or termination.  Continuous Service shall not be considered interrupted in the case of:  (A) any approved leave of absence; or (B) any change in status as long as the individual remains [an officer of the Company] [an employee of Preferred Apartment Advisors, LLC] [an employee of NMP Advisors, LLC] [an employee of Preferred Capital Securities, LLC] [an employee of Preferred Residential Management, LLC] [an employee of Preferred Campus Management, LLC].  An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.
"Determination" has the meaning set forth in Section 8(n).
"Disability" means, with respect to the Grantee, a "permanent and total disability" as defined in Section 22(e)(3) of the Code.
"Earned Class B Units" means those Vested Class B Units that have been determined by the Committee to have been earned on a Valuation Date based on the extent to which the Market Capitalization Goal Percentage has been achieved as set forth in Section 3(c) or have otherwise been earned under Section 4.
"Effective Date" means the close of business on January 2, 2018.
"Ending Common Stock Price" means, as of a particular date, the volume weighted average of the closing per share prices of the Common Stock reported by NYSE (or other national U.S. stock exchange) for the five (5) consecutive trading days ending on (and including) such date; provided, however, that if such date is the date upon which a Change of Control occurs, the Ending Common Stock Price as of such date shall be equal to the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Change of Control for one share of Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excise Tax" has the meaning set forth in Section 8(n).
"Excise Tax Gross-Up Payment" has the meaning set forth in Section 8(n).
"Family Member" has the meaning set forth in Section 7.
"Forfeited Units" means the aggregate number of Class B Units and RSUs that were granted to all grantees effective as of the Effective Date that have been forfeited as of a particular date.
"Forfeited Units Percentage" means the percentage calculated by following quotient: (A) the Total Award Units less the Forfeited Units; divided by (B) the Total Award Units.
"Initial Baseline Value" means the Market Capitalization on the Effective Date.
"Initial Valuation Date" means the earlier of (A) January 2, 2019, or (B) the date upon which a Change of Control shall occur.
"Market Capitalization" means the product of (A) the total number of shares of Common Stock issued and outstanding on the Effective Date as reported by the Company's transfer agent, as adjusted for stock splits, stock dividends, reverse stock splits, recapitalizations and the like that have occurred since the Effective Date, and (B) the Ending Common Stock Price as of the Valuation Date.

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"Market Capitalization Goal Percentage" means, as of a particular Valuation Date, the percentage calculated by following quotient: (A) the Market Capitalization on the Valuation Date less the Baseline Value; divided by (B) the Target Increase.
"Partial Service Factor" means a factor carried out to the sixth decimal to be used in calculating the Earned Class B Units pursuant to Section 4 in the event of a Qualified Termination of the Grantee's Continuous Service, determined by dividing the number of calendar days that have elapsed since the Effective Date to and including the date of the Grantee's Qualified Termination by 365.
"Partnership Units" or "Units" has the meaning provided in the Partnership Agreement.
"Payment" has the meaning set forth in Section 8(n).
"Person" means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, other entity or "group" (as defined in the Exchange Act).
"Plan" means the 2011 Stock Incentive Plan of the Company, as amended.
"Qualified Termination" has the meaning set forth in Section 4(b).
"RSUs" means Restricted Stock Units that have been authorized for issuance under the Plan.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation from Service" means "separation from service" from the Company (within the meaning of Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h)).
"Target Increase" means $4,573,016 multiplied by the Forfeited Units Percentage.
"Total Award Units" means the total number of Class B Units and RSUs granted as of the Effective Date as set forth in Schedule A.
"Transfer" has the meaning set forth in Section 7.
"Valuation Date" means each of (i) the Initial Valuation Date; (ii) the last business day of each calendar quarter after the Initial Valuation Date until all Awarded Class B Units have either become Earned Class B Units or have been forfeited pursuant to Section 4 of this Agreement and (iii) the date of a Change of Control if any of the Awarded Class B Units have not yet become Earned Class B Units for any reason.
"Vested Class B Units" means those Awarded Class B Units that have fully vested in accordance with the time-based vesting conditions of Section 3(d) or have vested on an accelerated basis under Section 4.
3.    Award.
(a)    The Grantee is granted as of the Effective Date, the number of Class B Units set forth on Schedule A which are subject to forfeiture provided in this Section 3 and Section 4.  The Class B Units will be forfeited unless within ten (10) business days from January 29, 2018 the Grantee executes and delivers a fully executed copy of this Agreement and such other documents that the Company and/or the Partnership reasonably request in order to comply with all applicable legal requirements, including, without limitation, federal and state securities laws.   
(b)    Awarded Class B Units may become Vested Class B Units and Vested Class B Units may become Earned Class B Units in the amounts and upon the conditions set forth in this Section 3 and in Section 4, provided that, except as otherwise expressly set forth in this Agreement, the Continuous Service of the Grantee continues through and on each applicable vesting date.  

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(c)    As soon as practicable following each Valuation Date, but as of the applicable Valuation Date, the Committee will determine:  
(i)    the Market Capitalization Goal Percentage; 
(ii)    the number of Earned Class B Units to which the Grantee is entitled as of the applicable Valuation Date by multiplying the Market Capitalization Goal Percentage by the number of Vested Class B Units (with the resulting number being rounded to the nearest whole Class B Unit or, in the case of 0.5 of a Class B Unit, up to the next whole Class B Unit) and reducing that product by the aggregate number of Earned Class B Units to which the Grantee was entitled prior to the current Valuation Date; and
(iii)    the Committee shall cause the Partnership to credit the Capital Account (as defined in the Partnership Agreement) attributable to all newly Earned Class B Units with an amount equal to the Average Capital Account Balance under the Partnership Agreement on the Valuation Date.
(d)    If the aggregate number of Earned Class B Units under this Agreement is less than the number of Awarded Class B Units under this Agreement after any such determination, then the Committee will repeat the process in Section 3(c) on each subsequent Valuation Date until all Vested Class B Units have either become Earned Class B Units or have been forfeited pursuant to Section 4 of this Agreement.
(e)     All of the Awarded Class B Units shall become Vested Class B Units on the Initial Valuation Date, provided that the Continuous Service of the Grantee continues through the Initial Valuation Date.
4.    Termination of Grantee's Employment; Death and Disability; Change of Control.
(a)If the Grantee ceases to be an [officer of the Company][ employee of Preferred Apartment Advisors, LLC] [employee of New Market Properties Advisors, LLC] [employee of Preferred Capital Securities, LLC] [employee of Preferred Residential Management, LLC] [employee of Preferred Campus Management, LLC], the provisions of Sections 4(b) through Section 4(e) shall govern the treatment of the Grantee's Awarded Class B Units exclusively.  If a Change of Control occurs, Section 4(c) shall govern the treatment of the Grantee's Awarded Class B Units exclusively, notwithstanding the other provisions of this Agreement.
(b)In the event of termination of the Grantee's Continuous Service before the Initial Valuation Date by Grantee's death or Disability (each a "Qualified Termination"), the Grantee will not forfeit the Awarded Class B Units upon such termination, but the following provisions of this Section 4(b) shall modify the treatment of the Awarded Class B Units:
(i)the calculations provided in Section 3(c) shall be performed as of each Valuation Date as if the Qualified Termination had not occurred;  
(ii)the Grantee's Awarded Class B Units shall be multiplied by the Partial Service Factor (with the resulting number being rounded to the nearest whole Class B Unit or, in the case of 0.5 of a Class B Unit, up to the next whole Class B Unit), and such adjusted number of Awarded Class B Units shall be deemed the Grantee's Awarded Class B Units for all purposes under this Agreement, and , as of the Initial Valuation Date, shall become Vested Class B Units and shall no longer be subject to forfeiture pursuant to Section 3(e); and
(iii)the number of Earned Class B Units calculated pursuant to Section 3(c) shall be determined using the number of Awarded Class B Units as adjusted pursuant to  Section 4(b)(ii); 
(c)If the calculations provided in Section 3(c) are triggered by a Change of Control prior to the Initial Valuation Date, the Grantee's Awarded Class B Units shall become Vested Class B Units immediately and automatically as of the date of the Change of Control.

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(d)Notwithstanding the foregoing, in the event any payment to be made hereunder after giving effect to this Section 4 is determined to constitute "nonqualified deferred compensation" subject to Section 409A of the Code, then, to the extent the Grantee is a "specified employee" under Section 409A of the Code subject to the six-month delay thereunder, any such payments to be made during the six-month period commencing on the Grantee's "separation from service" (as defined in Section 409A of the Code) shall be delayed until the expiration of such six-month period.
(e)Upon termination of Continuous Service before the Initial Valuation Date other than a Qualified Termination or a termination that is related to a Change of Control, all Awarded Class B Units shall, without payment of any consideration by the Partnership, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Awarded Class B Units; provided, however, that the Committee may determine, in its sole discretion, that all or any portion of the Awarded Class B Units or the Vested Class B Units otherwise forfeited, shall become Earned Class B Units pursuant to Section 3(c) of this Agreement and shall not be forfeited by Grantee.
(f)Upon termination of Continuous Service after the Initial Valuation Date, other than in the event of Change of Control, any Vested Class B Units that have not become Earned Class B Units pursuant to Section 3(c) shall, without payment of any consideration by the Partnership, automatically and without notice be forfeited and be and become null and void, and neither the Grantee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Vested Class B Units; provided, however, that the Committee may determine, in its sole discretion, that all or any portion of the Awarded Class B Units or the Vested Class B Units otherwise forfeited, shall become Earned Class B Units pursuant to Section 3(c) of this Agreement and shall not be forfeited by Grantee.
5.    Conditions for Award Recipients. The Grantee shall have no rights with respect to this Agreement (and the Award evidenced hereby) unless he or she shall have accepted this Agreement prior to the close of business on the date described in Section 3(a) by (a)  signing and delivering to the Partnership a copy of this Agreement and (b) unless the Grantee is already a Limited Partner (as defined in the Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a counterpart signature page to the Partnership Agreement (attached as Exhibit A). Upon acceptance of this Agreement by the Grantee, the Partnership Agreement shall be amended to reflect the issuance to the Grantee of the Class B Units so accepted. Thereupon, the Grantee shall have all the rights of a Limited Partner of the Partnership with respect to the number of Class B Units, as set forth in the Partnership Agreement, subject, however, to the restrictions and conditions specified herein. Class B Units constitute and shall be treated for all purposes as the property of the Grantee, subject to the terms of this Agreement and the Partnership Agreement.
6.    Distributions.
(a)The holders of Awarded Class B Units and Vested Class B Units shall not be entitled to receive distributions from the Partnership until they become Earned Class B Units.
(b)All distributions paid with respect to Earned Class B Units shall be fully vested and non-forfeitable when declared.
7.    Restrictions on Transfer.
(a)Except as otherwise permitted by the Committee in its sole discretion, none of the Awarded Class B Units, Earned Class B Units, Vested Class B Units or Partnership Units into which Earned Class B Units have been converted shall be sold, assigned, transferred, pledged, hypothecated, given away or in any other manner disposed or encumbered, whether voluntarily or by operation of law (each such action a "Transfer"); provided that Earned Class B Units and Vested Class B Units may be Transferred to 

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the Grantee's Family Members (as defined below) by gift, bequest or domestic relations order; and provided further that the transferee agrees in writing with the Company and the Partnership to be bound by all the terms and conditions of this Agreement and that subsequent transfers shall be prohibited except those in accordance with this Section 7.  Additionally, all such Transfers must be in compliance with all applicable securities laws (including, without limitation, the Securities Act) and the applicable terms and conditions of the Partnership Agreement. In connection with any such Transfer, the Partnership may require the Grantee to provide an opinion of counsel, satisfactory to the Partnership, that such Transfer is in compliance with all federal and state securities laws (including, without limitation, the Securities Act).  Any attempted Transfer not in accordance with the terms and conditions of this Section 7 shall be null and void, and neither the Partnership nor the Company shall reflect on its records any change in record ownership of any Earned Class B Units or Vested Class B Units as a result of any such Transfer, shall otherwise refuse to recognize any such Transfer and shall not in any way give effect to any such Transfer.  Except as provided in this Section 7, this Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  
(b)For purposes of this Agreement, "Family Member" of a Grantee, means the Grantee's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant of the Grantee), a trust in which one or more of these persons (or the Grantee) own more than 50 percent of the beneficial interests, and a partnership or limited liability company in which one or more of these persons (or the Grantee) own more than 50 percent of the voting interests.
9.    Miscellaneous.
(a)Amendments. This Agreement may be amended or modified only with the consent of the Company and the Partnership acting through the Committee; provided that any such amendment or modification which materially adversely affects the rights of the Grantee hereunder must be consented to by the Grantee to be effective as against him or her. Notwithstanding the foregoing, this Agreement may be amended in writing signed only by the Company and the Partnership to correct any errors or ambiguities in this Agreement and/or to make such changes that do not materially adversely affect the Grantee's rights hereunder. This grant shall in no way affect the Grantee's participation or benefits under any other plan or benefit program maintained or provided by the Company or the Partnership or any of their subsidiaries or affiliates.
(b) Committee Determinations.  The Committee will make the determinations and certifications required by this Award as promptly as reasonably practicable following the occurrence of the event or events necessitating such determinations or certifications. In the event of a Change of Control, the Committee will make such determinations within a period of time that enables the Company to make any payments due hereunder not later than the date of consummation of the Change of Control.
(c) Status of Class B Units. The Class B Units are equity interests in the Partnership. The number of shares of Common Stock reserved for issuance underlying outstanding Awarded Class B Units will be determined by the Committee in light of all applicable circumstances, including calculations made or to be made under Section 3, vesting, capital account allocations and/or balances under the Partnership Agreement, and the exchange ratio in effect between Partnership Units and shares of Common Stock. The Company will have the right at its option, as set forth in the Partnership Agreement, to issue shares of Common Stock in exchange for Partnership Units in accordance with the Partnership Agreement, subject to certain limitations set forth in the Partnership Agreement, and such shares of Common Stock, if issued, will be issued under the Plan. The Grantee acknowledges that the Grantee will have no right to approve or disapprove such determination by the Committee.

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(d)Legend.  The records of the Partnership evidencing the Class B Units shall bear an appropriate legend, as determined by the Partnership in its sole discretion, to the effect that such Class B Units are subject to restrictions as set forth herein and in the Partnership Agreement.
(e)Compliance With Law.  The Partnership and the Grantee will make reasonable efforts to comply with all applicable securities laws. In addition, notwithstanding any provision of this Agreement to the contrary, no Awarded Class B Units will become Earned Class B Units at a time that such vesting would result in a violation of any such law.
(f)Grantee Representations; Registration.
(i)The Grantee hereby represents and warrants that (A) he or she understands that he or she is responsible for consulting his or her own tax advisor with respect to the application of the U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which the Grantee is or by reason of this Award may become subject, to his or her particular situation; (B) the Grantee has not received or relied upon business or tax advice from the Company, the Partnership or any of their respective employees, agents, consultants or advisors, in their capacity as such; (C) the Grantee provides services to the Partnership on a regular basis and in such capacity has access to such information, and has such experience of and involvement in the business and operations of the Partnership, as the Grantee believes to be necessary and appropriate to make an informed decision to accept this Award; (D) Class B Units are subject to substantial risks; (E) the Grantee has been furnished with, and has reviewed and understands, information relating to this Award; (F) the Grantee has been afforded the opportunity to obtain such additional information as he or she deemed necessary before accepting this Award; and (G) the Grantee has had an opportunity to ask questions of representatives of the Partnership and the Company, or persons acting on their behalf, concerning this Award.
(ii)The Grantee hereby acknowledges that: (A) there is no public market for  Class  B Units or Partnership Units into which Earned Class B Units will be converted and neither the Partnership nor the Company has any obligation or intention to create such a market; (B) sales of Class B Units and Partnership Units are subject to restrictions under the Securities Act and applicable state securities laws; (C) because of the restrictions on transfer or assignment of Class B Units and Partnership Units set forth in the Partnership Agreement and in this Agreement, the Grantee may have to bear the economic risk of his or her ownership of the Class B Units covered by this Award for an indefinite period of time; (D) shares of Common Stock issued under the Plan in exchange for Partnership Units, if any, are expected to be covered by a Registration Statement on Form S-8 (or a successor form under applicable rules and regulations of the Securities and Exchange Commission) under the Securities Act, to the extent that the Grantee is eligible to receive such shares under the Plan at the time of such issuance and such registration Statement is then effective under the Securities Act; (E) resales of shares of Common Stock issued under the Plan in exchange for Partnership Units, if any, shall only be made in compliance with all applicable restrictions (including in certain cases "blackout periods" forbidding sales of Company securities) set forth in the then applicable Company employee manual or insider trading policy and in compliance with the registration requirements of the Securities Act or pursuant to an applicable exemption therefrom.
(g)Section 83(b) Election.  The Grantee hereby agrees to make an election to include the Awarded Class B Units in gross income in the year in which the Awarded Class B Units are issued pursuant to Section 83(b) of the Code substantially in the form attached as Exhibit B and to supply the necessary information in accordance with the regulations promulgated thereunder. The Grantee agrees to file such election (or to permit the Partnership to file such election on the Grantee's behalf) within thirty (30) days after the Effective Date with the IRS Service Center where the Grantee files his or her personal income tax returns, and to file a copy of such election with the Grantee's U.S. federal income tax return for the taxable year in which the Awarded Class B Units are issued to the Grantee. So long as the Grantee holds any 

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Awarded Class B Units, the Grantee shall disclose to the Partnership in writing such information as may be reasonably requested with respect to ownership of Class B Units as the Partnership may deem reasonably necessary to ascertain and to establish compliance with provisions of the Code applicable to the Partnership or to comply with requirements of any other appropriate taxing authority.
(h)Tax Consequences.  The Grantee acknowledges that (i) neither the Company nor the Partnership has made any representations or given any advice with respect to the tax consequences of acquiring, holding, selling or converting Partnership Units or making any tax election (including the election pursuant to Section 83(b) of the Code) with respect to the Class B Units and (ii) the Grantee is relying upon the advice of his or her own tax advisor in determining such tax consequences.
(i)Severability.  If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not so held invalid, and each such other provision shall to the full extent consistent with law continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.
(j)Governing Law.  This Agreement is made under, and will be construed in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflict of laws of such state.
(k)No Obligation to Continue Position as an Employee, Consultant or Advisor.  Neither the Company nor any affiliate is obligated by or as a result of this Agreement to continue to have the Grantee as an employee, consultant or advisor and this Agreement shall not interfere in any way with the right of the Company or any affiliate to terminate the Grantee's employment at any time.
(l)Notices.  Any notice to be given to the Company shall be addressed to the Secretary of the Company at 3284 Northside Parkway NW, Suite 150, Atlanta, Georgia 30327 and any notice to be given to the Grantee shall be addressed to the Grantee at the Grantee's address as it appears on the records of the Company, or at such other address as the Company or the Grantee may hereafter designate in writing to the other.
(m)Withholding and Taxes.  No later than the date as of which an amount first becomes includible in the gross income of the Grantee for income tax purposes or subject to the Federal Insurance Contributions Act withholding with respect to this Award, the Grantee will pay to the Company or, if appropriate, any of its affiliates, or make arrangements satisfactory to the Committee regarding the payment of any United States federal, state or local or foreign taxes of any kind required by law to be withheld with respect to such amount; provided, however, that if any Class B Units or Partnership Units are withheld (or returned), the number of Class B Units or Partnership Units so withheld (or returned) shall be limited to the number which have a fair market value on the date of withholding equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The obligations of the Company under this Agreement will be conditional on such payment or arrangements, and the Company and its affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Grantee.
(n)Excise Tax Gross-Up Payment.  
(i)    In the event it shall be determined that any payment or distribution to Grantee or for Grantee's benefit which is in the nature of compensation and is contingent on a change in the ownership or effective control of the Company or the ownership of a substantial portion of the assets of the Company (within the meaning of Section 280G(b)(2) of the Code), paid or payable pursuant to this Agreement (a "Payment"), would be subject (in whole or in part) to the excise tax 

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imposed by Section 4999 of the Code (together with any interest or penalties imposed with respect to such excise tax, the "Excise Tax"), then Grantee shall be entitled to receive an additional payment (the "Excise Tax Gross-Up Payment") in an amount such that, after payment by Grantee of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes and Excise Tax imposed upon the Excise Tax Gross-Up Payment, Grantee retains an amount of the Excise Tax Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  The Company’s obligation to make Excise Tax Gross-Up Payments under this Section 8(n) shall not be conditioned upon Grantee's Separation from Service. For purposes of determining the amount of any Excise Tax Gross-Up Payment, Grantee shall be considered to pay federal income tax at Grantee's actual marginal rate of federal income taxation in the calendar year in which the Excise Tax Gross-Up Payment is to be made, and state and local income taxes at Grantee's actual marginal rate of taxation in the state and locality of Grantee's residence on the date on which the Excise Tax Gross-Up Payment is calculated, for purposes of this Section 8(n), net of Grantee's actual reduction in federal income taxes which could be obtained from deduction of such state and local taxes, and taking into consideration the phase-out of Grantee's itemized deductions under federal income tax law.
(ii)     All determinations required to be made under this Section 8(n), including whether and when an Excise Tax Gross-Up Payment is required, the amount of such Excise Tax Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by such nationally recognized accounting firm as may be selected by the Board as constituted immediately prior to the change in control transaction (the "Accounting Firm"), provided, that the Accounting Firm’s determination shall be made based upon "substantial authority" within the meaning of Section 6662 of the Code. The Accounting Firm shall provide its determination (the "Determination"), together with detailed supporting calculations and documentation, to Grantee and the Company within 15 business days following the date of termination if applicable, or such other time as requested by you (provided that Grantee reasonably believes that any of the Payments may be subject to the Excise Tax) or the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Excise Tax Gross-Up Payment, as determined pursuant to this Section 8(n), shall be paid by the Company to you no later than the later of (i) 15 business days following the receipt of the Accounting Firm’s Determination or (ii) 15 business days preceding the date the Excise Tax becomes payable; provided, however, that in no event shall any such Excise Tax Gross-Up Payment or any payment of any income or other taxes to be paid by the Company under this Section 8(n) be made later than the end of Grantee's taxable year next following Grantee's taxable year in which Grantee remits the related taxes. Any costs and expenses incurred by the Company on behalf of Grantee under this Section 8(n) due to any tax contest, audit or litigation will be paid by the Company by the end of Grantee's taxable year following Grantee's taxable year in which the taxes that are the subject of the tax contest, audit or litigation are remitted to the taxing authority, or where as a result of such tax contest, audit or litigation no taxes are remitted, the end of Grantee's taxable year following Grantee's taxable year in which the audit is completed or there is a final and non-appealable settlement or other resolution of the contest or litigation.
(iii)    Grantee shall immediately notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Excise Tax Gross-Up Payment. Grantee shall not pay such claim prior to the expiration of the 30-day period following the date on which Grantee gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Grantee in writing prior to the expiration of such period that the Company desires to contest such claim, Grantee shall give the Company all information reasonably requested by the Company relating to such claim, cooperate with the Company and take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, and permit the Company to participate in and control any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs 

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and expenses incurred in connection with such contest, and shall indemnify and hold Grantee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and contest.
(o)Headings.  The headings of paragraphs of this Agreement are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.
(p)Counterparts.  This Agreement may be executed in multiple counterparts with the same effect as if each of the signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument.
(q)Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and any successors to the Company and the Partnership, on the one hand, and any successors to the Grantee, on the other hand, by will or the laws of descent and distribution, but this Agreement shall not otherwise be assignable or otherwise subject to hypothecation by the Grantee.
(r)Section 409A.  This Agreement shall be construed, administered and interpreted in accordance with a good faith interpretation of Section 409A of the Code, to the extent applicable.  Any provision of this Agreement that is inconsistent with applicable provisions of Section 409A of the Code, or that may result in penalties under Section 409A of the Code, shall be amended, with the reasonable cooperation of the Grantee and the Company and the Partnership, to the extent necessary to exempt this Agreement from, or bring it into compliance with, Section 409A of the Code.
[signature page follows]

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be effective as of the Effective Date.
 
	
				
	 
	PREFERRED APARTMENT COMMUNITIES, INC., a Maryland corporation

	 
	 
	 

	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

	 
	 
	 

	 
	 
	 

	 
	PREFERRED APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership

	 
	 

	 
	 
	By:
	Preferred Apartment Communities, Inc., a Maryland corporation, its general partner

	 
	 
	 
	 

	 
	By:
	 

	 
	Name:
	 

	 
	Title:
	 

	 
	 
	 

	 
	 
	 

	 
	GRANTEE

	 
	 
	 

	 
	 

	 
	Name:
	 

[Signature Page to 2018 Class B Unit Award Agreement (_______________________)]

EXHIBIT A
 
FORM OF LIMITED PARTNER SIGNATURE PAGE
 
The Grantee, desiring to become one of the within named Limited Partners of Preferred Apartment Communities Operating Partnership, L.P., hereby accepts all of the terms and conditions of and becomes a party to, the Sixth Amended and Restated Agreement of Limited Partnership, dated as of June 3, 2016, of Preferred Apartment Communities Operating Partnership, L.P. as amended through this date (the "Partnership Agreement"). The Grantee agrees that this signature page may be attached to any counterpart of the Partnership Agreement.
 
	
			
	 
	Signature Line for Limited Partner:

	 
	 

	 
	 

	 
	 

	 
	Name:
	 

	 
	 
	 

	 
	Date:
	 

	 
	 

	 
	Address of Limited Partner:

 
EXHIBIT B
 
ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF 
PROPERTY PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE
 
The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:
 
1.      The name, address and taxpayer identification number of the undersigned are:
 
Name:                                                                                                             (the "Taxpayer")
 
Address:
 
Social Security No./Taxpayer Identification No.:       -      -
 
2.                    Description of property with respect to which the election is being made:  Class B Units ("Class B Units") in Preferred Apartment Communities Operating Partnership, L.P. (the "Partnership").
 
3.                    The date on which the Class B Units were issued is                , 2018.  The taxable year to which this election relates is calendar year 2018.
 
4.             Nature of restrictions to which the Class B Units are subject:
 
(a)                    With limited exceptions, until the Class B Units vest, the Taxpayer may not transfer in any manner any portion of the Class B Units without the consent of the Partnership.
 
(b)                   The Taxpayer's Class B Units are subject to forfeiture until they vest in accordance with the provisions in the applicable Award Agreement and Partnership Agreement.
 
5.                   The fair market value at time of issue (determined without regard to any restrictions other than restrictions which by their terms will never lapse) of the Class B Units with respect to which this election is being made was $         per Class B Unit.
 
6.       The amount paid by the Taxpayer for the Class B Units was $0.00 per Class B Unit.
 
 
7.       A copy of this statement has been furnished to the Partnership and Preferred Apartment Communities, Inc.

 
	
				
	Dated:
	 
	 
	 

	 
	 

	 
	 

	 
	Name:

 
SCHEDULE A TO 2018 Class B UNIT 
AWARD AGREEMENT
 
Award Date:  January 2, 2018
 
Name of Grantee:
 
Number of Awarded Class B Units to Grantee:

Aggregate Number of Class B Units on Award Date:

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