May 27, 2024 Algonquin Power & Utilities Corp. Oakville, Ontario L6J 2X1 Canada and
Exhibit 99.3
EXECUTION VERSION
May 27, 2024
Algonquin Power & Utilities Corp.
000 Xxxxx Xxxx, Xxxxx 000
Oakville, Ontario L6J 2X1
Canada
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Liberty Development Energy Solutions B.V.
000 Xxxxx Xxxx, Xxxxx 000
Oakville, Ontario L6J 2X1
Canada
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Attention:
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Xxxxxxxxxxx Xxxxxxxxx
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Chief Executive Officer
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Copy:
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Xxxxxxxx Xxxxxxx
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Chief Legal Officer
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Xxxxxxx X. Xxxxxx
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Xxxxx Xxxxx-Xxx
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Xxxxxxx X. Xxxxxx
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Xxxxx Xxxx
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Xxxx, Gotshal & Xxxxxx LLP
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Dear Mr. Huskilson:
Reference is made to that certain transaction agreement (the “Transaction Agreement”) entered into on or about the date hereof by Atlantica Sustainable Infrastructure plc, a
public limited company incorporated in England and Wales (the “Company”) with California Buyer Limited, a private limited company incorporated in England and Wales (“Bidco”),
pursuant to which Bidco will acquire the entire issued and to be issued share capital of the Company by means of a court-sanctioned scheme of arrangement (the “Scheme of Arrangement”). Capitalized terms used
but not defined herein have the respective meanings given to them in the Transaction Agreement. As used herein and as the context permits, the term “AQN” shall mean Algonquin Power & Utilities Corp. and
its applicable subsidiaries.
In connection with the Scheme of Arrangement and the transactions contemplated by the Transaction Agreement, Algonquin Power & Utilities Corp. and the Company agree as follows:
| 1. |
The Company shall use commercially reasonable efforts to cooperate, as reasonably requested by AQN and at AQN’s sole cost and expense, with respect to (a) providing information to support to AQN in
determining the quantum of any Tax liability which becomes due to any Taxing Authority in connection with the disposition of Company Shares held by AQN, including but not limited to providing support to AQN in finalizing the Canadian
surplus study and excluded property analysis; (b) preparing and filing any Tax Return and amended Tax Return of AQN; and (c) any audit, examination, assessment, litigation or other proceeding of AQN initiated by or against any Taxing
Authority with respect to the disposition of Company Shares held by AQN. Such cooperation shall include the reasonable retention and (upon AQN’s request) the provision of records and information that are reasonably available and relevant to
any such audit, litigation or other proceeding related to taxation for the disposition of Company Shares held by AQN and making senior employees reasonably available (on reasonable notice and during normal business hours) to provide
additional information and explanation of any material provided by the Company or its Representatives, provided that the parties hereto acknowledge and agree that any information or documents
provided to AQN pursuant to this paragraph shall constitute Confidential Information under, and remain subject to the terms of, that certain Mutual Confidentiality Agreement entered into by and between the Company and AQN on February 1,
2019, and amended on April 3, 2023.
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| 2. |
The Company shall promptly and reasonably cooperate with AQN in obtaining a “recovery of invested capital certificate” from the SUNAT (the Peruvian tax authority) prior to the Closing in order for AQN to be
entitled to deduct its tax basis in the Company Shares in the calculation of the Peruvian indirect transfer capital gains tax. AQN will be responsible for all third-party costs associated with obtaining such certificate.
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| 4. |
AQN and the Company shall, and shall cause their respective Affiliates to, terminate each of the following agreements (the “Terminated Agreements”)
effective as of the Effective Time:
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| a. |
the Shareholders Agreement, dated March 5, 2018, by and among AQN, the Company and Abengoa-Algonquin Global Energy Solution B.V. (n/k/a Liberty Development Energy Solutions B.V.) (“Liberty”) (the “Shareholders Agreement”) which shall terminate in accordance with Clause 8.2(b)(i) therein;
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the Enhanced Cooperation Agreement, dated May 9, 2019, by and among AQN, the Company and Liberty (the “Enhanced Cooperation Agreement”);
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the ATM Plan Letter Agreement, dated August 3, 2021, by and between AQN and the Company;
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the Side Letter to ATM Plan Letter Agreement, dated November 8, 2021, by and among AQN, the Company and Liberty;
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the Right of First Offer Agreement, dated March 5, 2018, by and between AQN and the Company which shall terminate in accordance with Clause 5.2(a) therein; and
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the Right of First Offer Agreement, dated March 5, 2018, by and between the Company and Liberty which shall terminate in accordance with Clause 5.2(a) therein.
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For the avoidance of doubt, the termination of the Terminated Agreements is subject to and conditional upon the consummation of the Transaction.
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AQN’s and Liberty’s obligations under Article 4 of the Shareholders Agreement and Clauses 2 and 3 of the Enhanced Cooperation Agreement shall terminate upon the earliest of: (a) the expiration of the
Standstill Period (as defined in the Shareholders Agreement), (b) the termination of the Shareholders Agreement, (c) the termination of the Transaction Agreement and (d) the termination of the Voting and Transaction Support Agreement entered
into on or about the date hereof by and among Bidco, AQN and Liberty (AY Holdings), B.V. (the “Support Agreement”).
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| 6. |
The Company hereby irrevocably waives AQN’s and Liberty’s obligations under Clause 3 of the Enhanced Cooperation Agreement with respect to the exercise of voting rights attached to AQN’s AY Voting Securities
(as defined in the Enhanced Cooperation Agreement) solely in relation to the transactions contemplated by the Transaction Agreement, provided that, concurrently with (and as a condition to)
the execution of this letter agreement, AQN and Liberty shall have executed and delivered to the Company the Support Agreement.
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The Company shall, from time to time at AQN’s reasonable request and in any event on an annual basis up to the fifth (5th)
anniversary of the Closing Date, deliver to AQN a status report and other reasonably requested information relating to the development and/or construction of the Cedar I project located in Imperial County, California.
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The Company shall:
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| a. |
keep AQN reasonably informed, during the period between the dispatch of the Scheme Documentation to the Company Shareholders and the date of the Company Shareholder Meetings, of the number of valid proxy
votes received in respect of resolutions to be proposed at the Scheme Meeting and the Company GM (with the number of valid proxy votes for, against and withheld being separately identified); and
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| b. |
notify AQN promptly if the Company becomes aware of any concerns or issues raised by the Company Shareholders, any Persons interested (or who may become interested) in securities relating to the Company or
any Third Party which may have an impact on the Transaction or the matters contemplated therein, in each case, to the extent that such concerns or issues would reasonably have the effect of preventing, materially delaying or impeding the
consummation of the Transaction or the other transactions contemplated by the Transaction Agreement, and reasonably consult with, and consider in good faith the reasonable views and requests of, AQN in connection with addressing any such
concerns or issues.
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| 9. |
Each of the Company and AQN acknowledge and agree that (a) the transfer restrictions set out in the General Partnership Agreement between Algonquin Power Co. (“APCo”)
and Atlantica Yield Energy Solutions Canada Inc. (“AYES Canada”), dated as of May 9, 2019 (as amended, the “General Partnership Agreement”), do not apply to an
indirect change of control of any of the parties to the General Partnership Agreement and (b) (1) the transfer restrictions, including the right of first refusal set out in the Shareholder Agreement between AYES Canada, APCo, AYES
International UK Limited and the Company (f/k/a Atlantica Yield plc), dated as of May 24, 2019 (the “AYES Canada Shareholder Agreement”), do not apply to an indirect change of control of any of the
parties to the AYES Canada Shareholder Agreement, (2) the covenant of the Company set forth in Section 3.03(c) of the AYES Canada Shareholder Agreement shall not apply following Closing, and (3) Article 124 of the Company articles of
association, if and when adopted in connection with the Scheme of Arrangement, shall govern any exercise of the Exchange Options (as defined in the AYES Canada Shareholder Agreement). Each of the Company and AQN shall procure, prior to
Closing, that their relevant Subsidiary which is a party to the General Partnership Agreement and the AYES Canada Shareholder Agreement shall execute and deliver any necessary amendments to the General Partnership Agreement and the AYES
Canada Shareholder Agreement to effect this paragraph, as applicable. The Company and AQN acknowledge and agree except for the amendments set out in this paragraph 9, the General Partnership Agreement and the AYES Canada Shareholder
Agreement shall continue in full force and effect, including for the avoidance of doubt, following Closing.
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| 10. |
Each party hereto shall, and shall cause its Affiliates to, at the reasonable request of the other party hereto, furnish such other party such further information or assurances, execute and deliver such
additional documents, instruments and conveyances, and take such other actions and do such other things, as may be reasonably necessary or appropriate to carry out the provisions of this letter agreement and give effect to the transactions
contemplated hereby and pursuant to the Transaction Agreement.
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Except as expressly provided for in this letter agreement to the contrary, the provisions of Article 10 (other than Section 10.1) of the Shareholders Agreement shall apply to this letter agreement mutatis mutandis, provided that all notices and other
communications hereunder shall be addressed to each party hereto to the addresses or electronic mail addresses set forth on Schedule A hereto or to such other address or electronic mail address as such party may hereafter specify
for the purpose of providing notice to the other party hereto.
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This letter agreement is executed and delivered as a deed on the date set out above.
(Signature Page Follows)
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Very truly yours,
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Executed as a deed by
acting by two directors
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By:
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/s/ Xxxxxxxx Xxxxx |
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Name: Xxxxxxxx Xxxxx
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Title: Director
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By:
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/s/ Xxxxxxx Xxxxxxxxxx |
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Name: Xxxxxxx Xxxxxxxxxx
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Title: Director
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[Signature Page to Letter Agreement]
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ACKNOWLEDGED AND AGREED:
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Executed as a deed by
ALGONQUIN POWER & UTILITIES CORP.
acting by its duly authorized representative
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By:
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/s/ Xxxxxx Xxxxx |
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Name: Xxxxxx Xxxxx
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Title: Chief Financial Officer
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By:
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/s/ Xxxxxxxx Xxxxxxx |
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Name: Xxxxxxxx Xxxxxxx
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Title: Chief Legal Officer
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Executed as a deed by
LIBERTY DEVELOPMENT ENERGY SOLUTIONS B.V.
acting by its duly authorized representative
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By:
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/s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Title: Director A
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[Signature Page to Letter Agreement]
Schedule A
If to the Company, to:
Great West House, GW1, 17th floor
Great West Road, Brentford, United Kingdom TW8 9DF
Attention: Xxxxxxxx Xxxxx; Xxxxx Xxxxxxxxx
Email: xxxxxxxx.xxxxx@xxxxxxxxx.xxx
xxxxx.xxxxxxxxx@xxxxxxxxx.xxx
with a copy to (which shall not constitute notice):
Skadden, Arps, Slate, Xxxxxxx & Xxxx (UK) LLP
00 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx
Attention: Xxxxxxx Xxxxx; Xxxxx Xxxxx
Email: xxxxxxx.xxxxx@xxxxxxx.xxx; xxxxx.xxxxx@xxxxxxx.xxx
If to AQN or to Liberty, to:
Algonquin Power & Utilities Corp.
000 Xxxxx Xxxx, Xxxxx 000
Oakville, ON L6J 2X1
Attention: Chief Legal Officer
Email: Xxxxxxxx.Xxxxxxx@XXXXxxx.xxx
in all cases, with a copy to xxxxxxx@XXXXxxx.xxx
with a copy to (which shall not constitute notice):
Xxxx, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
New York, NY 10153
Attention: Xxxxxxx X. Xxxxxx; Xxxxx Xxxxx-Xxx; Xxxxxxx X. Xxxxxx; Xxxxx Xxxx
Tel: 000-000-0000
Email: Xxxxxxx.Xxxxxx@xxxx.xxx; Xxxxx.Xxxxx-Xxx@xxxx.xxx; Xxxxxxx.Xxxxxx@xxxx.xxx; Xxxxx.Xxxx@xxxx.xxx
