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SEC Filings
10-K
TERRAFORM POWER, INC. filed this Form 10-K on 07/21/2017
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In addition, as a result of the announcement and pendency of the Brookfield sponsorship, current and prospective employees could experience uncertainty about their future with the Company. These uncertainties may impair our ability to retain, recruit or motivate key personnel, and may negatively impact the productivity of current employees.

The Merger Agreement contains provisions that limit our ability to take certain actions prior to the consummation of the Merger without the consent of Brookfield. These provisions include limitations on our ability to pursue strategic transactions, undertake project acquisitions and undertake certain significant financing transactions, even if such actions would prove beneficial. These limitations may materially and adversely affect our business, financial condition and results of operations and prevent us from taking advantage of otherwise beneficial opportunities.

Our executive officers and directors may have interests that are different from, or in addition to, those of our stockholders generally.

Our executive officers and directors may have interests in the Sponsorship Transaction that are different from, or are in addition to, those of our stockholders generally. These interests include direct or indirect ownership of our common stock and restricted stock units and for executive officers, change of control and severance agreements. In addition, certain of our directors and executive officers are also directors or executive officers of TerraForm Global, Inc., which has also entered into a merger agreement with affiliates of Brookfield.

The successful consummation of the Sponsorship Transaction may result in significant employee departures, including turnover of our executive officers and members of our senior management.

If the Sponsorship Transaction is consummated, we may experience departures of a significant number of employees as a result of actual or perceived uncertainty of our employees about their future with the Company, as a result of strategic operating decisions by Brookfield or other factors related to the completion of the Sponsorship Transaction. In addition, we expect to experience changes to our executive officers and senior management. The governance agreements to be entered into between the Company and Brookfield in connection with the Sponsorship Transaction provide Brookfield the ability to indirectly appoint our Chief Executive Officer, Chief Financial Officer and General Counsel, and Brookfield will directly set the compensation of these officers. There is no assurance that we will be able to retain the other core members of our senior management team following the completion of the Sponsorship Transaction.

If we consummate the Sponsorship Transaction, we will be a “controlled company,” controlled by Brookfield, whose interest in our business may be different from ours or other holders of our Class A common stock.

Following the completion of the Sponsorship Transaction, Brookfield and its affiliates will own an approximate 51% interest in the Company. The Merger Agreement and other agreements to be entered into in connection with the Sponsorship Transaction provide Brookfield and its affiliates with certain economic and management rights which are different from other holders of our Class A common stock. At the effective time of the merger, SunEdison will transfer certain IDRs currently held by SunEdison to an affiliate of Brookfield pursuant to an Incentive Distribution Rights Transfer Agreement, Terra LLC will enter into an amended and restated limited liability company agreement (the “New TERP LLC Agreement”) and Brookfield, the Company and certain of their respective affiliates will enter into a Master Services Agreement (the Merger MSA). Pursuant to the terms of the New TERP LLC Agreement, cash distributions from Terra LLC will be allocated between the holders of the Class A Units in Terra LLC and the holders of the IDRs according to a fixed formula. In addition, pursuant to the terms of the Merger MSA, Brookfield and its affiliates will be entitled to certain fixed and variable management fees for services performed for the Company. As a result of these economic rights, Brookfield and/or its affiliates may have interests in our business that are different from our interests or the interests of the other holders of our Class A common stock.

Brookfield and its affiliates currently own interests in, manage and control, and may in the future own or acquire interests in, manage and/or control, other yield focused publicly listed and private electric power businesses that own clean energy assets, primarily hydroelectric facilities and wind assets, and other public and private businesses that own and invest in other real property and infrastructure assets. Affiliates of Brookfield have also agreed to acquire a 100% interest in TerraForm Global, Inc. pursuant to a pending merger agreement. Brookfield and its affiliates, including the chief executive officer, chief financial officer and general counsel of the Company, who would be employees of Brookfield or its affiliates following the consummation of the Merger, may have conflicts or potential conflicts, including resulting from the operation by Brookfield and its affiliates of their other businesses, including their other yield focused electric power businesses, including with respect to project dropdowns, and Brookfield’s attention to and management of our business may be negatively affected by Brookfield and its affiliates' ownership and/or management of other power businesses and other public and private businesses that they own, control or manage.



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