Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 23, 2014

 

 

TERRAFORM POWER, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware

(State or other jurisdiction

of incorporation)

 

001-36542

(Commission

File Number)

 

46-4780940

(IRS Employer

Identification No.)

12500 Baltimore Avenue, Beltsville, Maryland

(Address of principal executive offices, including zip code)

(443) 909-7200

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01 Entry into a Material Definitive Agreement.

Agreements with SunEdison, Inc., its Affiliates and Third Parties

In connection with the initial public offering by TerraForm Power, Inc. (the “Company”) of its Class A common stock covered by the Registration Statement on Form S-1 (File No. 333-196345) (the “Registration Statement”), the Company, as the sole managing member, entered into that certain Amended and Restated Limited Liability Company Agreement of TerraForm Power, LLC (“Terra LLC”), dated as of July 23, 2014 (the “Terra LLC Agreement”) with SunEdison Holdings Corporation (“SunEdison Holdings”), as the other member of Terra LLC at that time. R/C US Solar Investment Partnership, L.P. (“Riverstone”) became a party to the Terra LLC agreement upon receipt of the Terra LLC Class B1 units pursuant to a distribution by Silver Ridge Power, LLC (“Silver Ridge”), as described below.

In addition, the Company entered into the following agreements in connection with the consummation of the Company’s initial public offering of its Class A common stock: (i) the Management Services Agreement, dated as of July 23, 2014 (the “MSA”), by and among the Company and SunEdison, Inc. (“SunEdison”); (ii) the Repowering Services ROFR Agreement, dated as of July 23, 2014 (the “Repowering ROFR Services Agreement”), by and among the Company, Terra LLC, TerraForm Power Operating, LLC, a wholly-owned subsidiary of Terra LLC (“Terra Operating”), and SunEdison; (iii) the Exchange Agreement, dated as of July 23, 2014 (the “SunEdison Exchange Agreement”), by and among the Company, Terra LLC and SunEdison; (iv) the Exchange Agreement, dated as of July 23, 2014 (the “Riverstone Exchange Agreement”), by and among the Company, Terra LLC and Riverstone; (v) the Registration Rights Agreement, dated as of July 23, 2014 (the “SunEdison Registration Rights Agreement”), by and among the Company and SunEdison, (vi) the Registration Rights Agreement, dated as of July 23, 2014 (the “Riverstone Registration Rights Agreement”), by and among the Company and Riverstone; and (vii) the Mt. Signal Contribution Agreement, dated as of July 23, 2014 (the “Contribution Agreement”), by and among the Company, Terra LLC and Silver Ridge. The Terra LLC Agreement, the MSA, the Repowering ROFR Services Agreement, the SunEdison Exchange Agreement, the Riverstone Exchange Agreement, the SunEdison Registration Rights Agreement, the Riverstone Registration Rights Agreement and the Contribution Agreement are filed herewith as Exhibits 4.1, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7, respectively, and are incorporated by reference herein. The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements filed as exhibits to the Registration Statement and as described therein.

In addition, Terra LLC entered into the following agreements in connection with the consummation of the Company’s initial public offering of its Class A common stock: (i) the Project Support Agreement, dated as of July 23, 2014 (the “Project Support Agreement”), by and among Terra LLC and SunEdison; (ii) the Letter Agreement Regarding the Priced Call Right Assets, dated as of July 23, 2014 (the “Letter Agreement”), by and among Terra LLC and SunEdison; and (iii) the Interest Payment Agreement, dated as of July 23, 2014 (the “Interest Payment Agreement”), by and among Terra LLC, Terra Operating LLC, SunEdison and SunEdison Holdings. The Project Support Agreement, the Letter Agreement and the Interest Payment Agreement are filed herewith as Exhibits 10.8, 10.9 and 10.10, respectively, and are incorporated by reference herein. The terms of these agreements are substantially the same as the terms set forth in the forms of such agreements filed as exhibits to the Registration Statement and as described therein.

New Credit Agreement

On July 23, 2014, Terra Operating entered into a new $440.0 million senior secured credit facility, consisting of a $140 million revolving credit facility (the “Revolver”) which remained undrawn at the completion of the Company’s initial public offering, and a $300 million senior secured term loan facility which was fully drawn at the completion of the Company’s initial public offering (the “Term Loan,” and together with the Revolver, the “Credit Facilities”) with Goldman Sachs Bank USA (“GS Bank”), as Administrative Agent and Collateral Agent, GS Bank, Barclays Bank PLC, Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A., as Joint Lead Arrangers, Joint Bookrunners and Co-Syndication Agents, and Santander Bank, N.A., as Documentation Agent (the “Credit Agreement”). The Credit Facilities are guaranteed by Terra LLC and certain of its domestic subsidiaries. Borrowings under the Credit Facilities are secured by first priority security interests in (i) substantially all of Terra Operating’s and each guarantor’s assets and (ii) 100% of the capital stock of each of Terra Operating’s domestic subsidiaries and 65% of the capital stock of Terra Operating’s foreign subsidiaries, but are not secured by the capital stock of non-recourse subsidiaries.

 

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All outstanding amounts under the Credit Facilities bear interest at a rate per annum equal to, at Terra Operating’s option, either (a) a base rate plus 2.75% or (b) a reserve adjusted eurodollar rate plus 3.75%. For the Term Loan, the base rate is subject to a “floor” of 2.00% and the reserve adjusted eurodollar rate is subject to a “floor” of 1.00%. The Term Loan matures on July 23, 2019 and the Revolver matures on July 23, 2017. The outstanding principal amount of the Term Loan is payable in equal quarterly amounts of 1.00% per annum, with the remaining balance payable on the maturity date. The Revolver does not require amortization with respect to outstanding borrowings.

The Credit Agreement contains covenants that, without prior consent of the lenders, limit certain of Terra Operating’s, Terra LLC’s and certain of Terra Operating’s subsidiaries activities, including those relating to: financial statements and other reports (including notices of default and annual budgets); existence; payment of taxes and claims; maintenance of properties; insurance; books and records; inspections; lenders meetings; compliance with laws; environmental matters; subsidiaries; additional material real estate assets; interest rate protection; cash management systems; ratings; and energy regulatory status. Additionally, Terra Operating must satisfy a maximum leverage ratio of 5.00:1.00 and minimum debt service coverage ratio of 1.75:1.00 that is tested quarterly. The Credit Facilities also contains customary events of default and related cure provisions. The foregoing summary of the Credit Facilities is qualified in its entirety by reference to the Credit Agreement, a copy of which are attached hereto as Exhibit 10.11 and incorporated by reference herein.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.

The disclosures under Item 1.01 of this Current Report on Form 8-K relating to the Credit Agreement are also responsive to Item 2.03 of this report and are incorporated by reference into this Item 2.03.

 

Item 3.02 Unregistered Sales of Equity Securities.

On July 23, 2014, the Company, pursuant to two private placements (the “Private Placements”) sold and issued (i) 1,800,000 shares of its Class A common stock at the initial public offering price of $25.00 per share to Altai Capital Master Fund, Ltd. (“Altai”) pursuant to the Common Stock Purchase Agreement, dated as of July 3, 2014 (the “Altai Private Placement Agreement”), between the Company and Altai, and (ii) 800,000 shares of its Class A common stock at the initial public offering price of $25.00 per share to EverStream Opportunities Fund I, LLC (“EverStream”) pursuant to the Common Stock Purchase Agreement, dated as of July 3, 2014 (the “EverStream Private Placement Agreement”), between the Company and EverStream, for aggregate gross proceeds of $65.0 million. In addition, on July 23, 2014, Terra LLC issued 5,840,000 Class B units (and the Company issued a corresponding number of shares of Class B common stock) and 5,840,000 Class B1 units (and the Company issued a corresponding number of shares of Class B1 common stock) to Silver Ridge as consideration for the contribution to the Company of a solar power project. Such securities were issued pursuant to the Contribution Agreement and were valued based on the initial public offering price of $25.00 per share. The Private Placements and issuance to Silver Ridge closed concurrently with the closing of the Company’s initial public offering of shares of its Class A common stock. The sales and issuances of the units and shares were made in reliance on Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder. Each of Altai, EverStream and Silver Ridge represented that it is an “accredited investor,” as defined under Rule 501 promulgated under the Securities Act, with access to information about the Company sufficient to evaluate the investment.

The foregoing description regarding the Private Placements is qualified in its entirety by reference to the Altai Private Placement Agreement and the EverStream Private Placement Agreement, copies of which were filed as exhibits to the Registration Statement, and are incorporated herein by reference. The foregoing description of the issuance to Silver Ridge is qualified in its entirety by reference to the Contribution Agreement, a copy of which is attached hereto as Exhibit 10.7, and is incorporated herein by reference.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

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On July 23, 2014, the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) and the Company’s Second Amended and Restated Bylaws (the “Bylaws”) became effective. A description of the Company’s capital stock, giving effect to the adoption of the Charter and the Bylaws, is described in the Registration Statement. The Charter and the Bylaws are filed herewith as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.

 

Item 8.01 Other Events.

On July 23, 2014, the Company completed its initial public offering by issuing 23,074,750 shares of its Class A common stock at a price to the public of $25.00 per share. The Company received proceeds from the initial public offering, net of underwriting discounts and commissions and a structuring fee, of approximately $533.5 million. The Company also received gross proceeds of $65.0 million from the sale of Class A common stock in the Private Placements. The Company used $436.2 million of the net proceeds from the offering and the Private Placements to acquire newly-issued Class A units of Terra LLC directly from Terra LLC, and used all remaining net proceeds to purchase Class B units (and Class B common stock) from SunEdison at a price equal to the price per share in this offering, less underwriting discounts and commissions and a pro rata portion of the structuring fee, which securities were immediately cancelled contemporaneously with Terra LLC issuing additional Class A units to the Company.

Terra LLC used the net proceeds of $436.2 million, together with borrowings under the Term Loan, to repay all outstanding indebtedness (including accrued interest) under its bridge facility, to pay fees and expenses related to the Credit Facilities and to repay $47.0 million of project-level indebtedness. In addition, Terra LLC will use $86.0 million of the net proceeds to pay for the acquisition and related milestone payments of certain projects included in the Company’s initial portfolio from SunEdison. The $194.4 million of net proceeds remaining with Terra LLC after the foregoing will be used for general corporate purposes, which may include future acquisitions of solar assets from SunEdison or from unaffiliated third parties.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

The Exhibit Index attached to this Form 8-K is incorporated herein by reference.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

TerraForm Power, Inc.
By:   /s/ Sebastian Deschler
 

Sebastian Deschler

Senior Vice President, General Counsel and Secretary

July 25, 2014

 

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EXHIBIT INDEX

 

Exhibit No.

  

Document

  3.1    Amended and Restated Certificate of Incorporation of TerraForm Power, Inc., dated as of July 23, 2014.
  3.2    Amended and Restated Bylaws of TerraForm Power, Inc., dated as of July 23, 2014.
  4.1    Amended and Restated Operating Agreement of TerraForm Power, LLC, dated as of July 23, 2014.
10.1    Management Services Agreement by and between TerraForm Power, Inc. and SunEdison, Inc, dated as of July 23, 2014.
10.2    Repowering Services ROFR Agreement by and between TerraForm Power, Inc., TerraForm Power, LLC, TerraForm Power Operating, LLC and SunEdison, Inc., dated as of July 23, 2014.
10.3    Exchange Agreement by and among TerraForm Power, Inc., TerraForm Power, LLC and SunEdison, Inc., dated as of July 23, 2014.
10.4    Exchange Agreement by and among TerraForm Power, Inc., TerraForm Power, LLC and R/C US Solar Investment Partnership, L.P., dated as of July 23, 2014.
10.5    Registration Rights Agreement by and between TerraForm Power, Inc. and SunEdison, Inc., dated as of July 23, 2014.
10.6    Registration Rights Agreement by and between TerraForm Power, Inc. and R/C US Solar Investment Partnership, L.P., dated as of July 23, 2014.
10.7    Mt. Signal Contribution Agreement, dated as of July 23, 2014, by and among TerraForm Power, Inc., TerraForm Power, LLC and Silver Ridge Power, LLC
10.8    Project Support Agreement by and between TerraForm Power, LLC and SunEdison, Inc., dated as of July 23, 2014.
10.9    Letter Agreement Regarding the Priced Call Right Assets, between TerraForm Power, Inc. and SunEdison, Inc., dated as of July 23, 2014.
10.10    Interest Payment Agreement by and between TerraForm Power, LLC, TerraForm Power Operating, LLC, SunEdison, Inc. and SunEdison Holdings Corporation, dated as of July 23, 2014.
10.11    Credit and Guaranty Agreement, dated as of July 23, 2014, by and among TerraForm Power Operating, LLC, as borrower, TerraForm Power, LLC, as a guarantor, certain subsidiaries of TerraForm Power Operating, LLC, as guarantors, various lenders signatory thereto, Goldman Sachs Bank USA, as administrative agent and collateral agent, Goldman Sachs Bank USA, Barclays Bank PLC, Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A., as joint lead arrangers, joint bookrunners and co-syndication agents, and Santander Bank, N.A., as documentation agent.
EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

TERRAFORM POWER, INC.

ARTICLE ONE

The name of the Corporation is TerraForm Power, Inc.

ARTICLE TWO

The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE THREE

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

ARTICLE FOUR

Section 1. Authorized Shares. The total number of shares of capital stock which the Corporation has authority to issue is 1,300,000,000 shares, consisting of:

(a) 50,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”);

(b) 850,000,000 shares of Class A Common Stock, par value $0.01 per share (“Class A Common Stock”);

(c) 140,000,000 shares of Class B Common Stock, par value $0.01 per share (“Class B Common Stock”); and

(d) 260,000,000 shares of Class B1 Common Stock, par value $0.01 per share (“Class B1 Common Stock” and, together with the Class A Common Stock and the Class B Common Stock, the “Common Stock”).

(e) Split of Class A Common Stock. Immediately upon the filing of this Certificate (the “Effective Time”), each one (1) share (and each fractional share) of Class A Common Stock issued and outstanding at the Effective Time shall automatically be reclassified as and subdivided into 127.1624 validly issued, fully paid and non-assessable shares of Class A Common Stock, without any action by the holder thereof or by the Corporation (the “Class A Stock Split”). No fractional shares shall be issued in connection with the Class A Stock Split and, in lieu thereof, any holder who would hold a fractional share of Class A Common Stock shall be entitled to receive cash for such holder’s fractional share based upon the initial public offering price of the Corporation’s Class A Common Stock.


(f) Split of Class B Common Stock. Immediately upon the Effective Time, each one (1) share of Class B Common Stock issued and outstanding at the Effective Time shall automatically be reclassified as and subdivided into 262.8376 validly issued, fully paid and non-assessable shares of Class B Common Stock, without any action by the holder thereof or by the Corporation (the “Class B Stock Split”). No fractional shares shall be issued in connection with the Class B Stock Split and, in lieu thereof, any holder who would hold a fractional share of Class B Common Stock shall be entitled to receive cash for such holder’s fractional share equal to the fair value thereof based upon the initial public offering price of the Corporation’s Class A Common Stock.

(g) Surrender and Issuance of New Certificates After the Class A Stock Split and the Class B Stock Split. Following the effectiveness of the Class A Stock Split and the Class B Stock Split, each certificate that previously represented shares of Class A Common Stock (“Old Class A Certificates”) or Class B Common Stock (“Old Class B Certificates”) shall thereafter represent the number of shares of Class A Common Stock or Class B Common Stock, respectively, into which the shares previously represented by such certificate were reclassified and subdivided pursuant to the Class A Stock Split or the Class B Stock Split, as the case may be. Upon surrender at the office of the Corporation or its transfer agent of an Old Class A Certificate or Old Class B Certificate in such holder’s name, or upon notifying the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executing an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, will be entitled to receive, as soon as practicable after the applicable Class A Stock Split, Class B Stock Split and such surrender or such agreement and indemnification in the case of a lost certificate, a book-entry interest or interests representing or, at the election of such holder, a certificate or certificates evidencing, the number of shares of Class A Common Stock or Class B Common Stock represented by such certificate following the Class A Stock Split or the Class B Stock Split, as the case may be, in such name or names and such denomination or denominations as such holder has specified.

(h) No Charge to Holders. The issuance of book-entry interests or certificates for shares of Class A Common Stock or Class B Common Stock following the Class A Stock Split and Class B Stock Split shall be made without charge to the holders of such shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such Class A Stock Split or Class B Stock Split. The Corporation shall take all such actions as are necessary in order to insure that the shares of Class A Common Stock and Class B Common Stock issued in the Class A Stock Split and the Class B Stock Split are validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof.

Section 2. Preferred Stock. The Preferred Stock may be issued from time to time and in one or more series. The board of directors of the Corporation (the “Board of Directors”) is expressly authorized to determine by resolution or resolutions the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, of any wholly unissued series of Preferred Stock, to fix the number of shares of any series of Preferred Stock and within the

 

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limitations or restrictions stated in any resolution or resolutions of the Board of Directors to increase or decrease (but not below the number of shares of any such series of Preferred Stock, then outstanding) the number of shares of any such series of Preferred Stock. In the event that the number of shares of any series of Preferred Stock shall be so decreased, the shares of such series shall resume the status of shares of Preferred Stock undesignated as to series. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations and restrictions thereof, may differ from those of any other series at any time outstanding and may be made dependent upon facts ascertainable outside the resolutions or resolutions providing for the issue of such Preferred Stock, adopted by the affirmative vote of at least a majority of the total number of directors, provided that the manner in which such facts shall operate upon the powers, preferences and rights of, and the qualifications, limitations and restrictions thereof, if any, is clearly and expressly set forth in the resolution or resolutions providing for the issue of such series of Preferred Stock adopted by the affirmative vote of at least a majority of the total number of directors.

Section 3. Common Stock.

(a) Voting Rights. Except as otherwise provided by the DGCL or this Certificate, and subject to the rights of holders of any series of Preferred Stock, all of the voting power of the stockholders of the Corporation shall be vested in the holders of the Common Stock. Except as otherwise provided by the DGCL or this Certificate, holders of Class A Common Stock, Class B Common Stock and Class B1 Common Stock shall vote together as a single class on all matters presented to the stockholders of the Corporation for their approval or vote. Each holder of Class A Common Stock and Class B1 Common Stock shall be entitled to one vote for each share held as of the applicable date by such holder on all matters voted upon by the stockholders of the Corporation. Each holder of Class B Common Stock shall be entitled to 10 votes for each share held by such holder as of the applicable date on all matters voted upon by the stockholders of the Corporation.

(b) Dividends and Other Distributions.

(i) Subject to the rights of holders of any series of Preferred Stock, the holders of Class A Common Stock shall share ratably in all dividends as may from time to time be declared by the Board of Directors in respect of the Class A Common Stock out of the assets of the Corporation legally available for the payment thereof at such times and in such amounts as the Board of Directors in its discretion shall determine.

(ii) Except as provided in clause (b)(iii) below with respect to stock dividends, dividends and other distributions of cash or property may not be declared or paid on the Class B Common Stock or Class B1 Common Stock.

(iii) In no event will any stock dividends, stock splits, reverse stock splits, combinations of stock, reclassifications or recapitalizations be declared or made on any Class A Common Stock, Class B Common Stock or Class B1 Common Stock as the case may be, unless contemporaneously therewith, the shares of Class A Common Stock, Class B Common Stock or Class B1 Common Stock, respectively, at the time outstanding are treated in the same proportion and the same manner. Stock dividends with respect to Class B Common Stock and Class B1 Common Stock may only be paid with Class B Common Stock or Class B1 Common Stock, respectively.

 

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(c) Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock shall be entitled, and after the payment or the provision for payment of the par value of the shares of Class A Common Stock, Class B Common Stock and Class B1 Common Stock, the holders of all outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares held by each such stockholder. Except as otherwise provided in this Article FOUR, the holders of shares of Class B Common Stock and Class B1 Common Stock shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(d) Redemption and Retirement of Class B Common Stock and Class B1 Common Stock. In the event that, pursuant to agreements to exchange Class B units or Class B1 units in TerraForm Power, LLC (“Terra LLC”) and corresponding shares of Class B Common Stock or Class B1 common stock, as applicable, for shares of Class A Common Stock (each such agreement, an “Exchange Agreement”) in accordance with the Amended & Restated Operating Agreement of Terra LLC as in effect from time to time, a party exchanges a Class B unit or Class B1 unit of Terra LLC for a share of Class A Common Stock, an equivalent number of outstanding shares of Class B Common Stock or Class B1 Common Stock, as applicable, shall, unless such redemption is prohibited by applicable law, simultaneously with the closing of such exchange, be automatically redeemed, without any action required by the holder of such shares of Class B Common Stock or Class B1 Common Stock or the Corporation, a price per share equal to its per share par value. After any such automatic redemption of Class B Common Stock or Class B1 Common Stock, such shares of Class B Common Stock or Class B1 Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class B Common Stock, Class B1 Common Stock or other series of stock of the Corporation be retired.

(e) Class B Designation Rights. The holder(s) of a majority of the outstanding shares of Class B Common Stock (the “Class B Majority”) shall be entitled to elect up to two directors to the Board of Directors (the “Class B Designation Rights”), which directors shall be in addition to any other directors, officers or other affiliates of such holder(s) who (a) may be serving as directors upon the completion of the Corporation’s initial public offering of Class A Common Stock (b) are subsequently appointed by the Board of Directors to fill any newly created directorships or other vacancies on the Board of Directors or (c) are elected to the Board of Directors by the stockholders of the Corporation. The Class B Majority shall have the right to remove and replace any Designated Director (as defined below) at any time and for any reason, and to fill any vacancies otherwise relating to such director positions. The Class B Designation Rights shall terminate as of the Trigger Date (as defined below), unless required to be terminated earlier pursuant to applicable law or the rules of the national securities exchange on which any securities of the Corporation are listed. Any Designated Director in office at the time of termination of the Class B Designation Rights shall continue to hold office until the next annual meeting of stockholders of the Corporation and until his or her successor is duly elected and

 

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qualified or until his or her earlier death, resignation or removal. As used herein, “Designated Directors” means the directors elected to the Board of Directors pursuant to the Class B Designation Rights, provided that a director shall be deemed to be a Designated Director only if specifically identified as such in writing by the Class B Majority at the time of his or her election to the Board of Directors or at any time thereafter.

(f) Reclassification of Class C Common Stock. Immediately after the Class A Stock Split and Class B Stock Split are effective, each one (1) share of the Corporation’s Class C common stock, par value $0.01 per share (the “Class C Common Stock”), issued and outstanding immediately following the Class A Stock Split and the Class B Stock Split shall automatically be reclassified as and and converted into 85.8661 validly issued, fully paid and non-assessable shares of Class A Common Stock, without any action by the holder thereof or by the Corporation (the “Class C Reclassification”). No fractional shares shall be issued in connection with the Class C Reclassification and, in lieu thereof, any holder who would hold a fractional share of Class A Common Stock shall be entitled to receive cash for such holder’s fractional share based upon the initial public offering price of the Corporation’s Class A Common Stock.

(g) Surrender and Issuance of New Certificates. After the Class C Reclassification. each certificate that prior to the Class C Reclassification represented shares of Class C Common Stock (“Old Class C Certificates”) shall thereafter represent that number of shares of Class A Common Stock into which the shares of Class C Common Stock represented by the Old Class C Certificate shall have been reclassified as a result of the Class C Reclassification Upon surrender at the office of the Corporation or its transfer agent of Old Class C Certificate in such holder’s name, or upon notifying the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executing an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, will be entitled to receive, as soon as practicable after the Class C Reclassification and such surrender or such agreement and indemnification in the case of a lost certificate, a book-entry interest or interests representing or, at the election of such holder, a certificate or certificates evidencing, the number of shares of Class A Common Stock into which the shares represented the Old Series C Certificate was reclassified pursuant the Class C Reclassification, in such name or names and such denomination or denominations as such holder has specified.

(h) No Charge to Holders. The issuance of book-entry interests or certificates for shares of Class A Common Stock upon the Class C Reclassification shall be made without charge to the holders of such shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such Class C Reclassification and the related issuance of shares of Class A Common Stock. Upon the Class C Reclassification, the Corporation shall take all such actions as are necessary in order to insure that the shares of Class A Common Stock issued in the Class C Reclassification shall be validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof.

Section 4. Restrictions on Transfer.

(a) Restricted Transfers. (i) Except through a Secondary Market Transaction or pursuant to prior authorization obtained from the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act, no person shall purchase or otherwise acquire (whether

 

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through the conversion or exchange of securities convertible into shares of Class A Common Stock, Class B1 Common Stock or otherwise), and no stockholder of the Corporation shall transfer to any person, shares of Class A Common Stock or Class B1 Common Stock such that, after giving effect to such purchase, acquisition or other transfer, the transferee, together with its FERC Affiliates, would beneficially own, control and/or hold power to vote sufficient Common Stock to exercise Utility Control without the prior written consent of the Board of Directors, and (ii) other than pursuant to Section 3(d) of this Article FOUR, no shares of Class B Common Stock may be transferred to any person other than SunEdison, Inc., a Delaware corporation (“SunEdison”), and its Affiliated Companies (as defined below), provided that a pledge of such shares under applicable financing arrangements shall not be deemed a transfer, and (iii) other than pursuant to Section 3(d) of this Article FOUR, no shares of Class B1 Common Stock may be transferred to any person without the prior written consent of the Board of Directors (such purchase, acquisition or other transfer in clause (i), (ii) or (iii), a “Restricted Transfer”). Notwithstanding the foregoing, with respect to any shares of Class B Common Stock or Class B1 Common Stock initially issued to Silver Ridge Power, LLC, the distribution or transfer of such shares shall not be deemed a Restricted Transfer so long as such distribution or transfer is in furtherance of, and ultimately results in, the distribution or transfer of such shares of Class B Common Stock to SunEdison or its Affiliated Companies and such shares of Class B1 Common Stock to R/C US Solar Investment Partnership, L.P.

(b) Purported Transfer in Violation of Restrictions. Unless the written approval of the Board of Directors is obtained with respect to a Restricted Transfer (provided the Board of Directors shall not be permitted to approve a Restricted Transfer specified in clause (ii) of Section 4(a) of this Article FOUR), such purported Restricted Transfer shall be null and void ab initio and shall not be effective to transfer record, beneficial, legal or any other ownership of such Common Stock, the purported transferee shall not be entitled to any rights as a stockholder of the Corporation with respect to the Class A Common Stock, Class B Common Stock or Class B1 Common Stock purported to be purchased, acquired or transferred in the Restricted Transfer (including, without limitation, the right to vote or to receive dividends with respect thereto), and all rights as a stockholder of the Corporation with respect to the Class A Common Stock, Class B Common Stock or Class B1 Common Stock purported to have been transferred shall remain in the purported transferor.

(c) Certain Definitions. For purposes of this Section 4 of Article FOUR:

FERC Affiliate” with respect to any person means any other person that would be considered an affiliate of such person for purposes of Section 203 of the Federal Power Act and the rules, regulations and precedents of the Federal Energy Regulatory Commission thereunder.

Secondary Market Transaction” means a purchase or sale of Class A Common Stock or Class B1 Common Stock by a third-party investor (i) occurring while the Class A Common Stock is publicly-traded on a national securities exchange, (ii) to which neither the Corporation nor any of its subsidiaries is a party, (iii) over which neither the Corporation nor any of its subsidiaries has control, and (iv) of which neither the Corporation nor any of its subsidiaries have prior notice. A Secondary Market Transaction does not include, among other things, any purchase or sale of the Class A Common Stock in connection with the initial issuance or offering of Class A Common Stock in the Corporation’s initial public offering (including the underwriters’ option to purchase additional shares) or any reacquisition of Class A Common Stock by the Corporation.

 

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Utility Control” means the power to direct or cause the direction of the management and policies of the Corporation and shall be deemed to exist if a person and its FERC Affiliates in the aggregate directly and/or indirectly own, control and/or hold with power to vote shares of Common Stock representing 10% or more of the outstanding voting power of the Corporation. The calculation of the outstanding voting power of the Corporation held by a person is expressed in the following formula:

Outstanding Voting Power of a Person in the Corporation = (AP + (Bp * 10) + B1p) / (ATotal + (BTotal * 10) + B1Total)

WHERE:

AP = the number of shares of Class A Common Stock owned, controlled and/or held with power to vote by such person and its FERC Affiliates.

BP = the number of shares of Class B Common Stock owned, controlled and/or held with power to vote by such person and its FERC Affiliates.

B1P = the number of shares of Class B1 Common Stock owned, controlled and/or held with power to vote by such person and its FERC Affiliates.

ATotal = the total number of shares of Class A Common Stock outstanding.

BTotal = the total number of shares of Class B Common Stock outstanding.

B1Total = the total number of shares of Class B1 Common Stock outstanding.

ARTICLE FIVE

The Corporation is to have perpetual existence.

ARTICLE SIX

Except as provided by this Certificate and any duly authorized certificate of designation of any series of Preferred Stock, each director shall be elected by the vote of a plurality of the votes cast by the holders of the then outstanding shares of the Corporation’s capital stock entitled to vote on the election of directors voting as a single class and represented in person or by proxy at any meeting for the election of directors at which a quorum is present.

ARTICLE SEVEN

Section 1. Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate or the Bylaws of the Corporation (as amended and restated, the “Bylaws”), the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

 

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Section 2. Number of Directors. Subject to the Class B Designation Rights and any rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the Board of Directors shall have no more than sixteen (16) nor less than three (3) members, with the exact number of directors constituting the full board to be determined from time to time by the affirmative vote of a majority of the total number of directors then in office, provided the number of directors constituting the full board shall automatically be increased (if necessary) to accommodate any director appointed pursuant to the Class B Designation Rights. Subject to the Class B Designation Rights and the rights of the holders of any series of Preferred Stock, newly created directorships resulting from an increase in the size of the Board of Directors may be filled by the affirmative vote of a majority of the total number of directors then in office, although less than quorum, at any meeting of the Board of Directors. Each director shall hold office until the next annual meeting of stockholders of the Corporation and until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. If any director (other than a director appointed pursuant to the Class B Designation Rights) who at the time of his or her most recent election or appointment to a term on the Board of Directors was an employee of the Corporation, SunEdison or any of their respective subsidiaries ceases to be an employee of the Corporation, SunEdison or any of their respective subsidiaries during such term as director, such director shall no longer be qualified to be a director and shall immediately cease to be a director without any further action unless otherwise determined by the Board of Directors. Nothing in this Certificate shall preclude a director from serving consecutive terms. Elections of directors need not be by written ballot unless the Bylaws shall so provide.

Section 3. Chairman of the Board. Prior to the Trigger Date, the Chairman of the Board of Directors (if a Chairman is desired) shall be elected by the stockholders at the annual meeting or any special meeting called for that purpose and shall perform such duties and have such other powers as set forth in the Bylaws or as may be assigned to the Chairman, from time to time, by the Board of Directors. The Chairman shall be chosen from among the directors serving in office. Any vacancy in the position of Chairman of the Board of Directors may be filled by the affirmative vote of a majority of the total number of directors then in office at any meeting of the Board of Directors, until the next annual meeting or special meeting called for the purpose of electing the Chairman, whereupon the Chairman shall be elected by the stockholders. From and after the Trigger Date, the Chairman of the Board of Directors (if a Chairman is desired) shall be appointed in accordance with the Bylaws.

ARTICLE EIGHT

In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws by the affirmative vote of a majority of the total number of directors then in office in addition to any other vote otherwise required by law.

 

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ARTICLE NINE

Section 1. Indemnification; Limitation of Liability.

(a) To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended, and except as otherwise provided in the Bylaws, (i) no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages arising from a breach of fiduciary duty owed to the Corporation or its stockholders; and (ii) the Corporation shall indemnify and advance expenses to its officers and directors.

(b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation in respect of any act, omission or condition existing or event or circumstance occurring prior to the time of such repeal or modification.

ARTICLE TEN

Section 1. Removal of Directors. Subject to the Class B Designation Rights and the rights, if any, of the holders of any series of Preferred Stock to elect and remove directors (with or without cause) and fill the vacancies thereby created (as specified in any duly authorized certificate of designation of any series of Preferred Stock), one or more or all directors may be removed from office with or without cause at any time by the vote of the holders of a majority of the combined voting power of all of the then outstanding shares of the Corporation eligible to be cast in the election of directors generally voting as a single class. Notwithstanding the foregoing, (a) if the holders of any class or series of capital stock are entitled by the provisions of this Certificate (including any duly authorized certificate of designation of any series of Preferred Stock) to elect one or more directors, such director or directors so elected may be removed without cause only by the vote of the holders of a majority of the outstanding shares of that class or series entitled to vote and (b) the Designated Directors may be removed with or without cause only by the Class B Majority until the termination of the Class B Designation Rights in accordance with Section 3(e) of Article FOUR.

Section 2. Vacancies in the Board of Directors. Subject to the rights of the holders of any series of Preferred Stock to remove directors and fill the vacancies thereby created (as specified in any duly authorized certificate of designation of any series of Preferred Stock) and subject to Section 3(e) of Article FOUR and Section 2 of Article SEVEN, vacancies occurring on the Board of Directors for any reason may be filled by vote of a majority of the remaining members of the Board of Directors, although less than a quorum, at any meeting of the Board of Directors. A person so elected by the Board of Directors to fill a vacancy shall hold office until the next annual meeting of stockholders of the Corporation and until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal.

ARTICLE ELEVEN

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws.

 

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ARTICLE TWELVE

From and after the date (the “Trigger Date”) on which SunEdison and its Affiliated Companies cease to own in the aggregate shares of Common Stock representing at least a majority of the combined voting power of the Common Stock, any action required or permitted to be taken by the Corporation’s stockholders may be effected only at a duly called annual or special meeting of the Corporation’s stockholders and the power of stockholders to consent in writing without a meeting is specifically denied. Prior to the Trigger Date, any action which is required or permitted to be taken by the Corporation’s stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of the Corporation’s stock entitled to vote thereon were present and voted. The foregoing is subject to the rights of holders of any series of Preferred Stock to act by written consent as specified in any duly authorized certificate of designation of any series of Preferred Stock. Except as otherwise required by law, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office.

ARTICLE THIRTEEN

Section 1. Competition and Corporate Opportunities. To the extent provided in the following paragraphs, the Corporation renounces any interest or expectancy of the Corporation or any of its Affiliated Companies in, or in being offered an opportunity to participate in, any Dual Opportunity presented to SunEdison or its Affiliated Companies or any Dual Role Person.

(a) In the event that either (i) SunEdison and its Affiliated Companies or (ii) any Dual Role Person, acquire knowledge of a potential transaction or matter which may be a Dual Opportunity, neither the Corporation nor any of its Affiliated Companies shall, to the fullest extent permitted by law, have any expectancy in such Dual Opportunity. Neither SunEdison and its Affiliated Companies nor any Dual Role Person shall have a duty to communicate or offer to the Corporation or any of its Affiliated Companies, or refrain from engaging directly or indirectly in, any Dual Opportunity, and may pursue or acquire such Dual Opportunity for themselves or direct such Dual Opportunity to another Person.

(b) Any Dual Role Person (i) shall have no duty to communicate or offer to the Corporation or any of its Affiliated Companies any Dual Opportunity that such Dual Role Person has communicated or offered to either SunEdison or its Affiliated Companies or any Power Generation Business of which such Dual Role Person is an employee, agent, representative, officer or director, (ii) shall not be prohibited from communicating or offering any Dual Opportunity to either SunEdison or its Affiliated Companies or any Power Generation Business of which such Dual Role Person is an employee, agent, representative, officer or director, and (iii) shall not be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder, director or officer of the Corporation, as the case may be, resulting from (x) the failure to communicate or offer to the Corporation or any of its Affiliated Companies any Dual Opportunity that such Dual Role Person has communicated or offered to either SunEdison or its Affiliated Companies or any Power Generation Business of which such Dual Role Person is an

 

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employee, agent, representative, officer or director, or (y) the communication or offer to either SunEdison or its Affiliated Companies or any Power Generation Business of which such Dual Role Person is an employee, agent, representative, officer or director of any Dual Opportunity, in each case, so long as the Dual Opportunity was not expressly offered in writing to the Dual Role Person solely in his or her capacity as a director or officer of the Corporation.

Section 2. Certain Matters Deemed not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this Article THIRTEEN, the Corporation renounces any interest or expectancy of the Corporation or any of its Affiliated Companies in, or in being offered an opportunity to participate in, any business opportunity that (i) the Corporation is not financially able or contractually permitted or legally able to undertake, (ii) is not in the Corporation’s line of business, (iii) is of no practical advantage to the Corporation, and (iv) in which the Corporation has no interest or reasonable expectancy. Moreover, nothing in this Article THIRTEEN shall amend or modify in any respect any written contractual agreement between SunEdison or its Affiliated Companies, on the one hand, and the Corporation or any of its Affiliated Companies, on the other hand.

Section 3. Certain Definitions. For purposes of Section 4 of Article FOUR, Article TWELVE, this Article THIRTEEN and Article FIFTEEN:

Affiliated Company” means (i) with respect to the Corporation, any Person controlled by the Corporation, (ii) with respect to SunEdison, any Person controlled by SunEdison, other than the Corporation and any Person controlled by the Corporation. For purposes of this definition, “controlled by” means the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

Dual Opportunity” means any potential transaction or matter within the same or similar business activities or related lines of business as those in which the Corporation or any of its Affiliated Companies may engage, and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, participates or which may be a corporate opportunity (a “Corporate Opportunity”) for the Corporation or any of its Affiliated Companies, on the one hand, and for (i) SunEdison and its Affiliated Companies or (ii) any Dual Role Person who received such Corporate Opportunity outside of his or her capacity as a director or officer of the Corporation, on the other hand, provided that a Dual Opportunity shall not include a Restricted Opportunity.

Dual Role Person” means (i) any individual who is an officer or director of both the Corporation and SunEdison or (ii) any individual who is a director of the Corporation and is otherwise an employee, officer or a director of a Power Generation Business.

Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

Power Generation Business” means any business engaged in designing, developing, providing services to, managing, owning or investing in power generation facilities.

 

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Restricted Opportunity” means a Corporate Opportunity offered in writing to a Dual Role Person solely in such Dual Role Person’s capacity as a director, officer or employee of the Corporation or any of its Affiliated Companies.

Section 4. Termination. The provisions of this Article THIRTEEN shall have no further force or effect with respect to SunEdison and its Affiliated Companies at such time as (i) the Corporation and SunEdison are no longer affiliates of each other and (ii) none of the directors and/or officers of SunEdison serve as directors and/or officers of the Corporation and its Affiliated Companies; provided, however, that any such termination shall not terminate the effect of such provisions with respect to any agreement, arrangement or other understanding between the Corporation or an Affiliated Company thereof, on the one hand, and SunEdison or an Affiliated Company thereof, on the other hand, that was entered into before such time or any transaction entered into in the performance of such agreement, arrangement or other understanding, whether entered into before or after such time.

Section 5. Deemed Notice. Any person or entity purchasing or otherwise acquiring or obtaining any interest in any capital stock of the Corporation shall be deemed to have notice and to have consented to the provisions of this Article THIRTEEN.

Section 6. Severability. The invalidity or unenforceability of any particular provision, or part of any provision, of this Article THIRTEEN shall not affect the other provisions or parts hereof, and this Article THIRTEEN shall be construed in all respects as if such invalid or unenforceable provisions or parts were omitted.

ARTICLE FOURTEEN

Notwithstanding any other provisions of this Certificate or any provisions of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of the capital stock required by law or this Certificate (including any duly authorized certificate of designation of any series of Preferred Stock), the affirmative vote of the holders of at least 66 23% of the combined voting power of all of the then outstanding shares of the Corporation eligible to be cast in the election of directors generally voting as a single class shall be required to alter, amend or repeal Section 2 of ARTICLE FOUR hereof, Section 3 of ARTICLE SEVEN, ARTICLE EIGHT hereof, ARTICLE NINE hereof, Section 2 of ARTICLE TEN hereof, ARTICLES TWELVE and THIRTEEN hereof, this ARTICLE FOURTEEN, or ARTICLE FIFTEEN hereof or any provision thereof or hereof.

ARTICLE FIFTEEN

The Corporation hereby elects not to be governed by Section 203 of the DGCL until such time as SunEdison and its Affiliated Companies give public notice that they cease to beneficially own at least 5% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors voting together as a single class, whereupon the Corporation shall, upon such public notice, immediately and automatically, without further action on the part of the Corporation or any holder of stock of the Corporation become governed by Section 203 of the DGCL.

 

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ARTICLE SIXTEEN

The Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL, this Certificate (as may be amended, altered, changed or repealed) or the Bylaws or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article SIXTEEN shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article SIXTEEN (including, without limitation, each portion of any sentence of this Article SIXTEEN containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in any shares of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE SIXTEEN.

* * * * * *

 

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

BYLAWS

OF

TERRAFORM POWER, INC.

A Delaware Corporation

(Amended and Restated as of July 23, 2014)

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of TerraForm Power, Inc. (the “Corporation”) in the State of Delaware shall be located at 1209 Orange Street, Wilmington, DE 19801. The name of the Corporation’s registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the Corporation may be changed from time to time by action of the board of directors.

Section 2. Other Offices. The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Annual Meeting. An annual meeting of the stockholders shall be held at such date and time specified by the Board of Directors for the purpose of electing directors and conducting such other proper business as may come before the annual meeting. At the annual meeting, stockholders shall elect directors and transact such other business as properly may be brought before the annual meeting pursuant to Section 10 of this ARTICLE II.

Section 2. Special Meetings. Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of the stockholders may only be called in the manner provided in the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”).

Section 3. Place of Meetings. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the Corporation. If for any reason any annual meeting shall not be held during any year, the business thereof may be transacted at any special meeting of the stockholders.

Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written, printed or electronic notice stating the place, date, time and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote on the record date, determined in accordance with the provisions of Section 3 of ARTICLE VI hereof. If mailed, such notice shall be deemed to be delivered when deposited in


the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation. An affidavit of the secretary or an assistant secretary or of the transfer agent of the Corporation that the notice required by this Section 4 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Whenever the giving of any notice to stockholders is required by applicable law, the Certificate of Incorporation or these Bylaws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened, and thereafter does not vote or otherwise participate in the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any waiver of notice unless so required by applicable law, the Certificate of Incorporation or these Bylaws.

Section 5. Stockholders List. The officer having charge of the stock ledger of the Corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, the stockholder’s agent or attorney, at the stockholder’s expense, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting, (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list shall be provided with the notice of the meeting or (ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

Section 6. Quorum. The holders of a majority in voting power of the outstanding shares of capital stock entitled to vote at the meeting of stockholders, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by the Delaware General Corporation Law (“DGCL”) or by the Certificate of Incorporation. If a quorum is not present, the holders of a majority in voting power of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a specified item of business requires a vote by the holders of a class or series of shares of capital stock (if the Corporation shall then have outstanding shares of more than one class or series) voting as a class or series, the holders of a majority of the shares of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business, except as otherwise provided by the DGCL or by the Certificate of Incorporation.

Section 7. Adjourned Meetings. Subject to the last sentence of this Section 7, when a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have

 

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been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority in voting power of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless (i) by express provisions of an applicable law, the rules and regulations of any stock exchange applicable to the Corporation, or of the Certificate of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (ii) the subject matter is the election of directors, in which case the Certificate of Incorporation shall govern and control the approval of such subject matter.

Section 9. Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.

Section 10. Business Brought Before a Meeting of the Stockholders.

(A) Annual Meetings.

(1) At an annual meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be considered and only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations and other business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) brought before the meeting by or at the direction of the Board of Directors or (c) otherwise properly brought before the meeting by a stockholder who (i) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (A) of this Section 10 is delivered to the secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the annual meeting of stockholders, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in paragraph (A) of this Section 10. For nominations or other business to be properly

 

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brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing and in proper form to the secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days before or delayed more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding anything in this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by paragraph (A) of this Section 10 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(2) A stockholder’s notice providing for the nomination of a person or persons for election as a director or directors of the Corporation shall set forth (a) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (and for purposes of clauses (ii) through (ix) below, including any interests described therein held by any affiliates or associates (each within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of these Bylaws) of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)) (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) (provided that a person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such person has a right to acquire beneficial ownership at any time in the future) and owned of record by such stockholder or beneficial owner, (iii) the class or series, if any, and number of options, warrants,

 

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puts, calls, convertible securities, stock appreciation rights, or similar rights, obligations or commitments with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares or other securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares or other securities of the Corporation, whether or not such instrument, right, obligation or commitment shall be subject to in the underlying class or series of shares or other securities of the Corporation (each a “Derivative Security”), which are, directly or indirectly, beneficially owned by such stockholder or beneficial owner, (iv) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such stockholder or beneficial owner, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of capital stock or other securities of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or beneficial owner with respect to any class or series of capital stock or other securities of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of any class or series of capital stock or other securities of the Corporation, (v) a description of any other direct or indirect opportunity to profit or share in any profit (including any performance-based fees) derived from any increase or decrease in the value of shares or other securities of the Corporation, (vi) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner has a right to vote any shares or other securities of the Corporation, (vii) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the Corporation, (viii) any proportionate interest in shares of the Corporation or Derivative Securities held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, if any, (ix) a description of all agreements, arrangements, and understandings between such stockholder or beneficial owner and any other person(s) (including their name(s)) in connection with or related to the ownership or voting of capital stock of the Corporation or Derivative Securities, (x) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (xi) a statement as to whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to elect such stockholder’s nominees and/or otherwise to solicit proxies from the stockholders in support of such nomination and (xii) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (b) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (ii) a description of all direct and indirect compensation and other material agreements, arrangements and understandings during the past three years, and any other material

 

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relationships, between or among such stockholder or beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (iii) a completed and signed questionnaire regarding the background and qualifications of such person to serve as a director, a copy of which may be obtained upon request to the Secretary of the Corporation, (iv) all information with respect to such person that would be required to be set forth in a stockholder’s notice pursuant to this Section 10 if such person were a stockholder or beneficial owner, on whose behalf the nomination was made, submitting a notice providing for the nomination of a person or persons for election as a director or directors of the Corporation in accordance with this Section 10, and (v) such additional information that the Corporation may reasonably request to determine the eligibility or qualifications of such person to serve as a director or an independent director of the Corporation, or that could be material to a reasonable stockholder’s understanding of the qualifications and/or independence, or lack thereof, of such nominee as a director.

(3) A stockholder’s notice regarding business proposed to be brought before a meeting of stockholders other than the nomination of persons for election to the Board of Directors shall set forth (a) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is made, the information called for by clauses (a)(ii) through (a)(ix) of the immediately preceding paragraph (2) (including any interests described therein held by any affiliates or associates of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)), (b) a brief description of (i) the business desired to be brought before such meeting, (ii) the reasons for conducting such business at the meeting and (iii) any material interest of such stockholder or beneficial owner in such business, including a description of all agreements, arrangements and understandings between such stockholder or beneficial owner and any other person(s) (including the name(s) of such other person(s)) in connection with or related to the proposal of such business by the stockholder, (c) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the nomination is made, (i) a statement as to whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to approve the proposal and/or otherwise to solicit proxies from stockholders in support of such proposal and (ii) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be

 

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made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (d) if the matter such stockholder proposes to bring before any meeting of stockholders involves an amendment to the Corporation’s Bylaws, the specific wording of such proposed amendment, (e) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business and (f) such additional information that the Corporation may reasonably request regarding such stockholder or beneficial owner, if any, and/or the business that such stockholder proposes to bring before the meeting. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

(4) Notwithstanding anything in these Bylaws to the contrary, only such persons who are nominated in accordance with the procedures set forth in paragraph (A) of this Section 10 shall be eligible to be elected at an annual meeting to serve as directors and no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 10. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not properly made or any business was not properly brought before the meeting, as the case may be, in accordance with the provisions of this Section 10; if he or she should so determine, he or she shall so declare to the meeting and any such nomination not properly made or any business not properly brought before the meeting, as the case may be, shall not be transacted.

(B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (a) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (B) of this Section 10 is delivered to the Corporation’s secretary and on the record date for the determination of stockholders entitled to vote at the special meeting, (b) is entitled to vote at the meeting and upon such election, and (c) complies with the notice procedures set forth in the third sentence of paragraph (B) of this Section 10. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 10 shall be delivered to the Corporation’s secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to

 

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such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

(C) General.

(1) Only such persons who are nominated in accordance with the procedures set forth in this Section 10 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 10. Notwithstanding the foregoing provisions of this Section 10, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

(2) For purposes of this section, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Section 10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 10.

(4) Nothing in this section shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any series of preferred stock or the rights of SunEdison, Inc., a Delaware corporation (“SunEdison”), to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

Section 11. Voting Procedures and Inspectors of Election at Meetings of Stockholders. The Board of Directors, in advance of any meeting of stockholders, may, and shall if required by applicable law, appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board of Directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may, and shall if required by applicable law, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count

 

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all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise provided by the Board of Directors, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

Section 12. Conduct of Meetings; Organization. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. The chairman of the Board of Directors shall preside at all meetings of the stockholders. If the chairman of the board is not present at a meeting of the stockholders, the vice chairman shall preside at such meeting. If neither the chairman nor the vice chairman of the board is present at a meeting of the stockholders, the chief executive officer or the president (if the president is a director and is not also the chairman of the board) shall preside at such meeting, and, if the chief executive officer or the president is not present at such meeting, a majority of the directors present at such meeting shall elect one of their members to so preside. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding officer at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding officer should so determine, such person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary, or in his or her absence, one of the assistant secretaries, shall act as secretary of the meeting. In case none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting, respectively, shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board of Directors, and in case the Board of Directors has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

Section 13. Order of Business. The order of business at all meetings of stockholders shall be as determined by the person presiding over the meeting.

 

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ARTICLE III

DIRECTORS

Section 1. General Powers. Except as provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to such powers as are herein and in the Certificate of Incorporation expressly conferred upon it, the Board of Directors shall have and may exercise all the powers of the Corporation, subject to the provisions of the laws of Delaware, the Certificate of Incorporation and these Bylaws.

Section 2. Number, Election and Term of Office. The number of directors which constitute the entire Board of Directors of the Corporation shall be such number as is specified in, and the directors shall be elected and shall hold office only in the manner provided in, the Certificate of Incorporation.

Section 3. Resignation. Any director may resign at any time upon oral, written or electronic notice to the Corporation. Such resignation shall take effect at the time therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.

Section 4. Vacancies. Vacancies and newly created directorships resulting from any increase in the total number of directors may be filled only in the manner provided in the Certificate of Incorporation.

Section 5. Nominations. Subject to the provisions contained in the Certificate of Incorporation, only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in these Bylaws, who is entitled to vote generally in the election of directors at the meeting and who shall have complied with the notice procedures set forth in Section 10 of ARTICLE II. The person presiding over the meeting of the stockholders shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this section, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. A stockholder seeking to nominate a person to serve as a director must also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this section.

Section 6. Annual Meetings. The annual meeting of the Board of Directors shall be held without other notice than these Bylaws immediately after, and at the same place as, the annual meeting of stockholders. Prior to the date (the “Trigger Date”) that SunEdison ceases to

 

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beneficially own in the aggregate (directly or indirectly) shares of Common Stock (as defined in the Certificate of Incorporation) representing at least a majority of the voting power of the Common Stock, the chairman of the Board of Directors (or his or her designee) shall have the right to establish the agenda for the annual meeting of the Board of Directors and to adjourn the annual meeting of the Board of Directors.

Section 7. Other Meetings and Notices. Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board of Directors. Prior to the Trigger Date, the chairman of the Board of Directors (or his or her designee) shall have the right to establish the agenda for each regular meeting of the Board of Directors. Special meetings of the Board of Directors may be called (i) prior to the Trigger Date, only by the chairman of the Board of Directors or, only if the position of chairman is vacant, by a majority of the total number of directors then in office, and (ii) from and after the Trigger Date, by the chairman of the Board of Directors, by the chief executive officer of the Corporation or by a majority of the total number of directors then in office, in each case on at least 24 hours’ notice to each director, either personally, by telephone, by mail, by telecopy or by other means of electronic transmission (notice by mail shall be deemed delivered three days after deposit in the U.S. mail), which notice shall specify the business to be transacted and/or the matters to be voted upon at such special meeting. Prior to the Trigger Date, only those matters set forth in the notice of special meeting may be brought before a special meeting or voted upon at such meeting, unless the chairman of the Board of Directors otherwise determines. Prior to the Trigger Date, the chairman of the Board of Directors (or his or her designee) shall have the right to adjourn special meetings of the Board of Directors.

Section 8. Quorum, Required Vote and Adjournment. A majority of the total number of directors shall constitute a quorum for the transaction of business. Unless by express provision of an applicable law, the Certificate of Incorporation or these Bylaws a different vote is required, the vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting. At least 24 hours’ notice of any adjourned meeting of the Board of Directors shall be given to each director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 7 of this ARTICLE III other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

Section 9. Committees. The Board of Directors may, by resolution passed by a majority of the total number of directors then in office, designate one or more committees, each committee to consist of one or more of the directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending, or repealing the Bylaws of the Corporation. The Board of Directors may

 

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designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request. Each committee designated by the Board of Directors shall be formed and function in compliance with applicable law and the rules and regulations of any national securities exchange on which any securities of the Corporation are listed.

Section 10. Committee Rules. Subject to applicable law, the rules and regulations of any national securities exchange on which any securities of the Corporation are listed and these Bylaws, each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

Section 11. Communications Equipment. Members of the Board of Directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear and speak with each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting.

Section 12. Waiver of Notice. Any member of the Board of Directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened and does not thereafter vote or otherwise participate in the meeting.

Section 13. Action by Written Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all of the members of the Board of Directors or the relevant committee thereof, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

ARTICLE IV

OFFICERS

Section 1. Number. Subject to the provisions contained in the Certificate of Incorporation, the officers of the Corporation shall be elected by the Board of Directors and shall consist of a chairman of the board, a vice chairman of the board, a chief executive officer, a

 

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president, one or more vice-presidents, a secretary, a chief financial officer and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors. Any number of offices may be held by the same person, except that neither the chief executive officer nor the president shall also hold the office of secretary. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of chief executive officer and secretary shall be filled as expeditiously as possible.

Section 2. Election and Term of Office. Subject to the provisions contained in the Certificate of Incorporation, the officers of the Corporation shall be elected by the Board of Directors. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

Section 3. Removal. Subject to the provisions contained in the Certificate of Incorporation, any officer or agent elected by the Board of Directors may be removed by the Board of Directors at its discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

Section 4. Vacancies. Subject to the provisions contained in the Certificate of Incorporation, any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors.

Section 5. Compensation. Subject to applicable law and the rules and regulations of any national securities exchange on which any securities of the Corporation are listed, the compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a Director of the Corporation.

Section 6. Chairman of the Board and Vice Chairman of the Board. Except as provided in the Certificate of Incorporation, the Board of Directors shall elect, by the affirmative vote of a majority of the total number of directors then in office, a chairman of the Board of Directors and a vice chairman of the Board of Directors. The chairman of the board shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or provided in these Bylaws. If the chairman of the Board of Directors is not present at a meeting of the stockholders or the Board of Directors, the vice chairman shall preside at such meeting. If neither the chairman nor the vice chairman is present at a meeting of the stockholders or the Board of Directors, the chief executive officer or the president (if the president is a director and is not also the chairman of the Board of Directors) shall preside at such meeting, and, if the chief executive officer or the president is not present at such meeting, a majority of the directors present at such meeting shall elect one of their members to so preside. The vice chairman shall be permitted to attend all meetings of standing committees of the Board of Directors on an ex officio basis.

Section 7. Chief Executive Officer. The chief executive officer shall have the powers and perform the duties incident to that position. Subject to the powers of the Board of Directors,

 

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the chief executive officer shall be in the general and active charge of the entire business and affairs of the Corporation, and shall be its chief policy making officer. The chief executive officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or provided in these Bylaws. The chief executive officer is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chief executive officer shall perform all the duties and responsibilities and exercise all the powers of the president.

Section 8. The President. The president of the Corporation shall, subject to the powers of the Board of Directors and the chief executive officer, have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees. The president shall see that all orders and resolutions of the Board of Directors are carried into effect. The president is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chief executive officer, the Board of Directors or as may be provided in these Bylaws.

Section 9. Vice Presidents. The vice president, or if there shall be more than one, the vice presidents in the order determined by the Board of Directors, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice presidents shall also perform such other duties and have such other powers as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe. The vice presidents may also be designated as executive vice presidents or senior vice presidents, as the Board of Directors may from time to time prescribe.

Section 10. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the Board of Directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the chairman of the board’s supervision, the secretary shall give, or cause to be given, all notices required to be given by these Bylaws or by law; shall have such powers and perform such duties as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the Corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, any of the assistant secretaries, shall in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors, the chief executive officer, the president, or the secretary may, from time to time, prescribe.

 

14


Section 11. The Chief Financial Officer. The chief financial officer shall have the custody of the corporate funds and securities; shall keep full and accurate all books and accounts of the Corporation as shall be necessary or desirable in accordance with applicable law or generally accepted accounting principles; shall deposit all monies and other valuable effects in the name and to the credit of the Corporation as may be ordered by the chief executive officer or the Board of Directors; shall cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; shall render to the Board of Directors, at its regular meeting or when the Board of Directors so requires, an account of the Corporation; and shall have such powers and perform such duties as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe. If required by the Board of Directors, the chief financial officer shall give the Corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of chief financial officer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the chief financial officer belonging to the Corporation.

Section 12. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.

Section 13. Absence or Disability of Officers. In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it.

ARTICLE V

INDEMNIFICATION

Section 1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or a subsidiary of the Corporation or, while a director, officer or employee of the Corporation or a subsidiary of the Corporation, is or was serving at the request of the Corporation or a subsidiary of the Corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other entity or enterprise, including service with respect to an employee benefit plan (an “indemnitee”), shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in

 

15


connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee, partner, member, manager, trustee, fiduciary or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this ARTICLE V with respect to proceedings to enforce rights to indemnification or advance of expenses, the Corporation shall not indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee except to the extent such proceeding (or part thereof) was authorized in writing by the Board of Directors of the Corporation. The right to indemnification conferred in this Section 1 of this ARTICLE V shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advance of expenses”); provided, however, that an advance of expenses incurred by an indemnitee in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 of this ARTICLE V or otherwise.

Section 2. Procedure for Indemnification. Any indemnification of an indemnitee or advance of expenses under Section 1 of this ARTICLE V shall be made promptly, and in any event within thirty days (or, in the case of an advance of expenses, twenty days), upon the written request of the indemnitee. If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by this ARTICLE V shall be enforceable by the indemnitee in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification or advance of expenses, in whole or in part, in any such action shall also be indemnified by the Corporation.

Section 3. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the Corporation or a subsidiary of the Corporation or was serving at the request of the Corporation or a subsidiary of the Corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation, partnership, joint venture, limited liability company, trust or other entity or enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the DGCL.

Section 4. Amendment or Repeal. Any repeal or modification of the foregoing provisions of this ARTICLE V shall not adversely affect any right or protection hereunder of any indemnitee in respect of any act, omission or condition existing or event or circumstance occurring prior to the time of such repeal or modification.

Section 5. Non-Exclusivity of Rights. The rights to indemnification and to the advance of expenses conferred in this ARTICLE V and in the Certificate of Incorporation shall not be exclusive of or restrict any other right which any person may have or hereafter acquire hereunder or under any statute, by-law, agreement (including any indemnification agreement between the Corporation and any director or officer), vote of stockholders or disinterested directors or otherwise.

 

16


Section 6. Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any director, officer or employee who was or is serving at its request as a director, officer, employee or agent of another entity shall be reduced by any amount such director, officer or employee may collect as indemnification or advancement of expenses from such other entity.

Section 7. Other Indemnification and Prepayment of Expenses. This ARTICLE V shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than directors or officers with the same or lesser scope and effect as provided herein when and as authorized by appropriate corporate action.

Section 8. Merger or Consolidation. For purposes of this ARTICLE V, references to the “Corporation” shall include, in addition to the corporation resulting from or surviving a consolidation or merger with the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger with the Corporation which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers or employees, so that any person who is or was a director or officer of such constituent corporation or a wholly owned subsidiary of such constituent corporation or, while a director, officer or employee of such constituent corporation or a wholly owned subsidiary of such constituent corporation is or was serving at the request of such constituent corporation or a wholly owned subsidiary of such constituent corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other entity or enterprise, including service with respect to an employee benefit plan, shall stand in the same position under this ARTICLE V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

Section 9. Severability. If any provision of this ARTICLE V shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

ARTICLE VI

CERTIFICATES OF STOCK

Section 1. General. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by the chief executive officer, president or vice president and the secretary or an assistant secretary of the Corporation, certifying the number of shares owned by such holder in the Corporation, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation). If a certificate is countersigned by a transfer agent or a registrar, the required signatures may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or

 

17


signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the Corporation. Shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder’s attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates and record the transaction on its books. Each such new certificate will be registered in such name as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate. Upon the receipt of proper transfer instructions from the registered owner of uncertificated shares, if any, such uncertificated shares shall be cancelled, issuance of new equivalent uncertificated or certificated shares shall be made to the stockholder entitled thereto and the transaction shall recorded upon the books and records of the Corporation. The Board of Directors may appoint one or more transfer agents or registrars or both in connection with the transfer of any class or series of securities of the Corporation.

Section 2. Lost Certificates. The Corporation may issue (i) a new certificate or certificates of stock or (ii) uncertificated shares in place of any certificate or certificates previously issued by the Corporation, as applicable, in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 3. Fixing a Record Date for Stockholder Meetings. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business of the next day preceding the day on which notice is first given. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

18


Section 4. Fixing a Record Date for Consents of Stockholders in Lieu of Meeting. Prior to the Trigger Date, in order that the Corporation may determine the stockholders entitled to consent to any corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 10 days after the date on which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholder are recorded. If no record date has been fixed by the Board of Directors and prior action of the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be the close of business of the day on which the Board of Directors adopts the resolution taking such prior action.

Section 5. Fixing a Record Date for Other Purposes. In order that the Corporation may determine: (i) the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights; or (ii) the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days nor less than 10 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6. Registered Stockholders. Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

Section 7. Subscriptions for Stock. Unless otherwise provided for in any subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the Board of Directors. Any call made by the Board of Directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due the Corporation.

 

19


ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, in accordance with applicable law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created.

Section 2. Checks, Drafts or Orders. All checks, drafts or other orders for the payment of money by or to the Corporation and all notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall be determined by resolution of the Board of Directors or a duly authorized committee thereof.

Section 3. Contracts. In addition to the powers otherwise granted to officers pursuant to ARTICLE IV hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, of the Corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

Section 4. Loans. Subject to compliance with applicable law (including, if applicable, Section 13(k) of the Exchange Act), the Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer or employee who is a director of the Corporation or its subsidiaries, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation and would not violate applicable law. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation, subject to applicable law. Nothing in this Section 4 shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.

Section 5. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

Section 6. Corporate Seal. The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Notwithstanding the foregoing, no seal shall be required by virtue of this Section.

 

20


Section 7. Voting Securities Owned By Corporation. Voting securities in any other company held by the Corporation shall be voted by the chief executive officer, the president or a vice president, unless the Board of Directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

Section 8. Inspection of Books and Records. The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation.

Section 9. Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors.

Section 10. Section Headings. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 11. Inconsistent Provisions. In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL, the Exchange Act or any regulation thereunder, or any other applicable law or regulation, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

Section 12. Notices. Except as provided in Section 4 of ARTICLE II hereof and Section 7 of ARTICLE III hereof, all notices referred to herein shall be in writing, shall be delivered personally, by first class mail, postage prepaid, or by telecopy or other means of electronic transmission, and shall be deemed to have been given when so delivered or mailed to the Corporation at its principal executive offices and to any stockholder at such holder’s address as it appears in the stock records of the Corporation (unless otherwise specified in a written notice to the Corporation by such holder) or, in the case of telecopy, electronic mail or other electronic transmission, when directed to a number or an electronic mail address to which the stockholder has consented to receive notice or as otherwise specified in the DGCL.

Section 13. Certificate of Incorporation. Unless the context requires otherwise, references in these Bylaws to the Certificate of Incorporation (as it may be amended and restated from time to time) shall also be deemed to include any duly authorized certificate of designation relating to any series of Preferred Stock of the Corporation that may be outstanding from time to time.

 

21


ARTICLE VIII

AMENDMENTS

These Bylaws may be made, amended, altered, changed, added to or repealed as set forth in ARTICLE EIGHT of the Certificate of Incorporation.

*    *    *    *    *

 

22

EX-4.1

Exhibit 4.1

 

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

TerraForm Power, LLC

Dated and effective as of

July 23, 2014

 

 

 

THE LIMITED LIABILITY COMPANY INTERESTS IN TERRAFORM POWER, LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.


TABLE OF CONTENTS

 

            Page  
ARTICLE I DEFINITIONS      1   

Section 1.1

    

Definitions

     1   

Section 1.2

    

Other Definitions

     10   

Section 1.3

    

Construction

     10   
ARTICLE II ORGANIZATIONAL AND OTHER MATTERS      11   

Section 2.1

    

Formation

     11   

Section 2.2

    

Name

     11   

Section 2.3

    

Limited Liability

     11   

Section 2.4

    

Registered Office; Registered Agent; Principal Office in the United States; Other Offices

     11   

Section 2.5

    

Purpose; Powers

     11   

Section 2.6

    

Existing and Good Standing; Foreign Qualification

     11   

Section 2.7

    

Term

     12   

Section 2.8

    

No State Law Partnership

     12   

Section 2.9

    

Admission

     12   
ARTICLE III MEMBERS; CAPITALIZATION      12   

Section 3.1

    

Members; Units

     12   

Section 3.2

    

Class A Common Stock Sale; Exchanges; Authorization and Issuance of Additional Units

     13   

Section 3.3

    

Capital Account

     16   

Section 3.4

    

No Withdrawal

     18   

Section 3.5

    

Loans From Members

     19   

Section 3.6

    

No Right of Partition

     19   

Section 3.7

    

Non-Certification of Units and IDRs; Legend; Units are Securities

     19   

Section 3.8

    

Reset of Incentive Distribution Rights; Issuance of Class B1 Units in Connection with Reset of Incentive Distribution Rights

     20   

Section 3.9

    

Transferability of IDRs

     22   

Section 3.10

    

Lock-Up of Class B Units

     22   

Section 3.11

    

Outside Activities of the Members

     22   
ARTICLE IV DISTRIBUTIONS      23   

Section 4.1

    

Determination of Distributions

     23   

Section 4.2

    

Successors

     24   

Section 4.3

    

Withholding

     24   

Section 4.4

    

Limitation

     24   

Section 4.5

    

Adjustments

     24   

Section 4.6

    

Tax Adjustments

     25   

Section 4.7

    

Interest Payment Agreement. Notwithstanding any other provision of this Agreement, none of SunEdison or its Affiliates shall have any rights, at any time, through distributions under this Agreement or otherwise, to reimbursement of any payments made by SunEdison or its Affiliates under the terms of the Interest Payment Agreement.

     25   
ARTICLE V ALLOCATIONS      25   

Section 5.1

    

Allocations for Capital Account Purposes

     25   

Section 5.2

    

Allocations for Tax Purposes

     27   

Section 5.3

    

Members’ Tax Reporting

     28   

Section 5.4

    

Certain Costs and Expenses

     28   


ARTICLE VI MANAGEMENT      29   

Section 6.1

    

Managing Member; Delegation of Authority and Duties

     29   

Section 6.2

    

Officers

     29   

Section 6.3

    

Liability of Members

     30   

Section 6.4

    

Indemnification by the Company

     31   

Section 6.5

    

Liability of Indemnitees

     32   

Section 6.6

    

Investment Representations of Members

     32   

ARTICLE VII WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS; ADMISSION OF NEW MEMBERS

     33   

Section 7.1

    

Member Withdrawal

     33   

Section 7.2

    

Dissolution

     33   

Section 7.3

    

Transfer by Members

     34   

Section 7.4

    

Admission or Substitution of New Members

     34   

Section 7.5

    

Additional Requirements

     35   

Section 7.6

    

Bankruptcy

     35   

Section 7.7

    

[Reserved]

     35   

Section 7.8

    

[Reserved]

     35   

ARTICLE VIII BOOKS AND RECORDS; FINANCIAL STATEMENTS AND OTHER INFORMATION; TAX MATTERS

     36   

Section 8.1

    

Books and Records

     36   

Section 8.2

    

Information

     36   

Section 8.3

    

Fiscal Year

     36   

Section 8.4

    

Certain Tax Matters

     36   
ARTICLE IX MISCELLANEOUS      37   

Section 9.1

    

Separate Agreements; Schedules

     37   

Section 9.2

    

Governing Law; Disputes

     37   

Section 9.3

    

Parties in Interest

     38   

Section 9.4

    

Amendments and Waivers

     38   

Section 9.5

    

Notices

     39   

Section 9.6

    

Counterparts

     39   

Section 9.7

    

Power of Attorney

     39   

Section 9.8

    

Entire Agreement

     40   

Section 9.9

    

Remedies

     40   

Section 9.10

    

Severability

     40   

Section 9.11

    

Creditors

     40   

Section 9.12

    

Waiver

     40   

Section 9.13

    

Further Action

     40   

Section 9.14

    

Delivery by Facsimile or Email

     40   


AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

TerraForm Power, LLC

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of TerraForm Power, LLC, a Delaware limited liability company (the “Company”), dated and effective as of July 23, 2014 (the “Effective Date”), is made by and among the Members (as defined herein).

WHEREAS, as of February 14, 2014, SunEdison Holdings Corporation (“SunEdison Holdings”), a Delaware corporation and the stockholder of TerraForm Power, Inc., a Delaware corporation (“Terra, Inc.”), formed TerraForm Power, LLC under the Act by executing the Limited Liability Agreement of TerraForm Power, LLC, which was amended and restated on March 24, 2014 (as amended and restated, the “Prior Agreement”) and filing a Certificate of Formation with the Office of the Secretary of State of the State of Delaware, at which time SunEdison Holdings was issued one Unit (the “Existing Units”);

WHEREAS, SunEdison Holdings desires to amend and restate the Prior Agreement in connection with Terra, Inc.’s initial public offering to provide, for among other things, the designation of Terra, Inc. as the Managing Member of the Company and to create additional classes of limited liability interests of the Company.

NOW, THEREFORE, in consideration of the premises and the covenants and provisions hereinafter contained, the Members hereby adopt the following:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

As used in this Agreement, the following terms have the following meanings:

AAA” has the meaning set forth in Section 9.2(b).

Act” means the Delaware Limited Liability Company Act, as amended.

Additional Member” means any Person that has been admitted to the Company as a Member pursuant to Section 7.4 by virtue of having received its Membership Interest from the Company and not from any other Member or Assignee.

Adjusted Capital Account” means the Capital Account maintained for each Member as of the end of each Fiscal Year of the Company, (a) increased by any amounts that such Member is obligated to restore under the standards set by Treasury Regulations Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such Fiscal Year, are reasonably expected to be allocated to such Member in subsequent years under Section 706(d) of the Code and Treasury Regulations Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such Fiscal Year, are reasonably expected to be made to such Member in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Member’s Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 5.1(b)(i) or Section 5.1(b)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The “Adjusted Capital Account” of a Member in respect of a Unit shall be the amount that such Adjusted Capital Account would be if such Unit were the only interest in the Company held by such Member from and after the date on which such Unit was first issued.


Adjusted Property” means any property the Carrying Value of which has been adjusted pursuant to Section 3.3(c)(i) or Section 3.3(c)(ii).

Affiliate” means, with respect to any Person, any Person directly or indirectly through one or more intermediaries, Controlling, Controlled by or under common Control with such Person.

Aggregate Quantity of IDR Reset Class B1 Securities” has the meaning set forth in Section 3.8(a).

Aggregate Quantity of IDR Reset Class B1 Units” has the meaning set forth in Section 3.8(a).

Aggregate Quantity of IDR Reset Shares of Class B1 Common Stock” has the meaning set forth in Section 3.8(a).

Agreed Value” of any Contributed Property means the Fair Market Value of such property or other consideration at the time of contribution as determined by the Managing Member. The Managing Member shall use such method as it determines to be appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Company in a single transaction or series of related transactions among each separate property on a basis proportional to the Fair Market Value of each Contributed Property.

Agreement” has the meaning set forth in the preamble of this Agreement.

As Delivered CAFD” means, with respect to any of the Contributed Construction Projects or Substitute Project, the CAFD projected, as of such project’s COD, to be generated by such project in the 12 months after such project’s COD taking into account, among other things, the project finance structure, the as-built system size and the production level as agreed to between Terra, Inc. and SunEdison.

Assignee” means any Transferee to which a Member or another Assignee has Transferred all or a portion of its interest in the Company in accordance with the terms of this Agreement, but that is not admitted to the Company as a Member.

Automatic Conversion” has the meaning set forth in Section 3.2(f).

Bankruptcy” means, with respect to any Person, (a) if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (b) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within 90 days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated. The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.

Book-Tax Disparity” means, with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date.

Business Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of New York shall not be regarded as a Business Day.

 

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CAFD” means net cash provided by (used in) operating activities of the Company (i) plus or minus changes in assets and liabilities as reflected (or to be reflected) on Terra, Inc.’s statements of cash flows, (ii) minus deposits into (or plus withdrawals from) restricted cash accounts required by project financing arrangements to the extent they decrease (or increase) cash provided by operating activities, (iii) minus cash distributions paid to non-controlling interests in the Company’s projects, if any, (iv) minus scheduled project-level and other debt service payments and repayments in accordance with the related borrowing arrangements, to the extent they are paid from operating cash flows during a period, (v) minus non-expansionary capital expenditures, if any, to the extent they are paid from operating cash flows during a period, (vi) plus cash contributions from SunEdison pursuant to the Interest Payment Agreement, (vii) plus operating costs and expenses paid by SunEdison pursuant to the Management Services Agreement to the extent such costs or expenses exceed the fee payable by the Company pursuant to such agreement but otherwise reduce the Company’s net cash provided by operating activities and (viii) plus or minus operating items as necessary to present the cash flows the Company deems representative of its core business operations, with the approval of the audit committee of Terra, Inc.

CAFD Forbearance Threshold” means $34,840,000.

Capital Account” means the capital account maintained for a Member pursuant to Section 3.3 of this Agreement.

Capital Contribution” means, with respect to any Member, the amount of any cash or cash equivalents or the Fair Market Value of other property contributed or deemed to be contributed to the Company by such Member with respect to any Unit or other Equity Securities issued by the Company (net of liabilities assumed by the Company or to which such property is subject).

Carrying Value” means (a) with respect to a Contributed Property, subject to the following sentence, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Members’ Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Company property, subject to the following sentence and Section 3.3(b)(iv), the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Section 3.3(c)(i) and Section 3.3(c)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Company properties, as deemed appropriate by the Managing Member.

Certificate” means the Certificate of Formation of the Company, as filed with the Secretary of State of the State of Delaware.

Chosen Courts” has the meaning set forth in Section 9.2(c).

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of Terra, Inc.

Class A Common Stock Sale” means the sale or issuance by Terra, Inc. of one or more shares of Class A Common Stock for cash to a third party in an arms-length transaction, including in connection with the IPO, other than upon the exercise of an option or right to acquire Class A Common Stock or the conversion or exchange of securities convertible into or exchange for Class A Common Stock.

Class A Member” means a holder of Class A Units as relates to the ownership of such Units, executing this Agreement as a Class A Member or hereafter admitted to the Company as a Class A Member as provided in this Agreement, but does not include any Person who has ceased to be a Member; provided, that the holder of the Existing Units shall be deemed to be a Class B Member and shall appear on the Schedule of Members as a Class B Member.

Class A Unit” means a Unit representing a fractional part of the equity interest in the Company having the rights and obligations specified with respect to the Class A Units in this Agreement.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of Terra, Inc.

 

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Class B Member” means a holder of Class B Units as relates to the ownership of such Units, executing this Agreement as a Class B Member or hereafter admitted to the Company as a Class B Member as provided in this Agreement, but does not include any Person who has ceased to be a Member.

Class B Exchange Agreement” means the Class B Exchange Agreement, dated on or about the date hereof among the Managing Member, the Company and the Persons from time to time party thereto, as it may be amended or supplemented from time to time.

Class B Unit” means a Unit representing a fractional part of the equity interest in the Company having the rights and obligations specified with respect to the Class B Units in this Agreement.

Class B1 Common Stock” means the Class B1 common stock, par value $0.01 per share, of Terra, Inc.

Class B1 Member” means a holder of Class B1 Units as relates to the ownership of such Units, executing this Agreement as a Class B1 Member or hereafter admitted to the Company as a Class B1 Member as provided in this Agreement, but does not include any Person who has ceased to be a Member.

Class B1 Exchange Agreement” means the Class B1 Exchange Agreement, dated on or about the date hereof among the Managing Member, the Company and the Persons from time to time party thereto, as it may be amended or supplemented from time to time.

Class B1 Unit” means a Unit representing a fractional part of the equity interest in the Company having the rights and obligations specified with respect to the Class B1 Units in this Agreement.

Code” means the Internal Revenue Code of 1986, as amended.

Company” has the meaning set forth in the preamble of this Agreement.

Company Group” means collectively the Company and its Subsidiaries.

Company Group Member” means a member of the Company Group.

Company Minimum Gain” has the meaning set forth for the term “partnership minimum gain” in Treasury Regulations Section 1.704-2(d).

Completed CAFD Contribution Amount” means the As Delivered CAFD with respect to the Contributed Construction Projects and any Substitute Projects contributed by SunEdison to the Company.

Contributed Construction Projects” means, collectively, the 15.5 megawatt solar power project known as Lindsay located in Canada (“Lindsay”), the 18.7 megawatt solar power project known as Marsh Hill located in Canada (“Marsh Hill”), the 81.9 megawatt solar power project known as Regulus located in the USA (“Regulus”), the 26.0 megawatt solar power project known as the North Carolina Portfolio located in the USA (the “North Carolina Portfolio”), the 16.1 megawatt solar power project known as Crucis Farm located in the U.K. (“Crucis Farm”), a 37.9 megawatt portion of the portfolio of solar power projects known as the DG 2014 located in the United States (“U.S. Projects 2014”) and a 4.2 megawatt portion of the portfolio of solar power projects known as California Public Institutions (“California Public Institutions”) located in the United States and each of which is under construction as of the date of this Agreement.

Control” (including the correlative terms “Controlled by” and “Controlling”) means, when used with reference to any Person, the possession, directly or indirectly, of the power to direct, or to cause the direction of, the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

Controlled Affiliate” of any Person means any other Person controlled by such Person. As used in this definition, “controlled by” shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise).

 

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Contributed Property” means any property contributed to the Company by a Member.

Credit Agreement” means the credit facility by and among SunEdison, as borrower, and Wells Fargo Bank, National Association, as administrative agent, Goldman Sachs Bank USA and Deutsche Bank Securities Inc., as joint lead arrangers and joint syndication agents, Goldman Sachs Bank USA, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC and Macquarie Capital (USA) Inc., as joint bookrunners, and the lenders identified in the credit agreement.

Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement, commercial paper facilities, note purchase agreements, security agreements, mortgages, debentures and indentures) or other forms of indebtedness, in each case, with banks, other institutional lenders or trustees or any other Persons, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, notes or other borrowings in each case, as amended, restated, modified, renewed, refunded, restructured, increased, supplemented, replaced or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time (whether upon or after termination or otherwise).

Disqualified Person” means (a) any federal, state or local government (including any political subdivision, agency or instrumentality thereof), (b) any organization described in Section 501(c) of the Code and exempt from tax under Section 501(a) of the Code, (c) any entity referred to in Section 54(j)(4) of the Code, (d) any Person described in Section 50(d)(1) of the Code, (e) any Person who is not a “United States Person” as defined in Section 7701(a)(30) of the Code (other than a foreign partnership or foreign passthrough entity), unless (with respect to the Company or any Subsidiary of the Company) such Person is a foreign person or entity that is subject to U.S. federal income tax on more than fifty percent (50%) of the gross income for the taxable year derived by such Person from the Company or such Subsidiary and thus qualifies for the exception of section 168(h)(2)(B) of the Code, or (f) any partnership or other “pass-through entity” (within the meaning of Section 1603(g)(4) of the American Recovery and Reinvestment Tax Act of 2009, as amended, including a single-member disregarded entity and a foreign partnership or foreign pass-through entity, but excluding a “real estate investment trust” as defined in section 856(a) of the Code and a cooperative organization described in section 1381(a) of the Code, neither of which shall constitute a pass-through entity for purposes of this clause (f)) any direct or indirect partner (or other holder of an equity or profits interest) of which is described in clauses (a) through (e) above unless such person owns such direct or indirect interest in the partnership or pass-through entity through a “taxable C corporation”, as that term is used in the Section 1603 Program Guidance; provided, that if and to the extent the definition of “disqualified person” under Section 1603(g) of the American Recovery and Reinvestment Tax Act of 2009, as amended, is amended after the date hereof, the definition of “Disqualified Person” hereunder shall be interpreted to conform to such amendment and any guidance issued by the U.S. Treasury Department with respect thereto.

Distribution Forbearance Period” means the period beginning on the IPO Closing Date and ending on the later of (a) March 31, 2015 or (b) the date that the Completed CAFD Contribution Amount exceeds the CAFD Forbearance Threshold.

Economic Risk of Loss” has the meaning set forth in Section 5.1(b)(vi).

Effective Date” has the meaning set forth in the preamble of this Agreement.

Equity Securities” means, as applicable, (i) any capital stock, limited liability company or membership interests, partnership interests, or other equity interest, (ii) any securities directly or indirectly convertible into or exchangeable for any capital stock, limited liability company or membership interests, partnership interests, or other equity interest or containing any profit participation features, (iii) any rights or options directly or indirectly to subscribe for or to purchase any capital stock, limited liability company or membership interests, partnership interest, other equity interest or securities containing any profit participation features or to subscribe for or to purchase any securities directly or indirectly convertible into or exchangeable for any capital stock, limited liability company or membership interests, partnership interest, other equity interests or securities containing any profit participation features, (iv) any equity appreciation rights, phantom equity rights or other similar rights, or (v) any Equity Securities issued or issuable with respect to the securities referred to in clauses (i) through (iv) above in connection with a combination, recapitalization, merger, consolidation or other reorganization.

 

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Estimated Incremental Quarterly Tax Amount” has the meaning set forth in Section 4.6.

Exchange” means the exchange of Class B Units (and corresponding shares of Class B Common Stock) or Class B1 Units (and corresponding shares of Class B1 Common Stock) for Class A Common Stock pursuant to this Agreement and any Exchange Agreement.

Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder as in effect from time to time.

Exchange Agreement” means, as applicable, the Class B Exchange Agreement and/or the Class B1 Exchange Agreement.

Exchange Election” has the meaning set forth in Section 3.2(c).

Exchange Shares” has the meaning set forth in Section 3.2(c)(v).

Exchanging Member” means a Member Transferring Class B Units (and corresponding shares of Class B Common Stock) or Class B1 Units (and corresponding shares of Class B1 Common Stock) as contemplated in Section 3.2(c).

Existing Units” has the meaning set forth in the preamble of this Agreement.

Fair Market Value” means, with respect to any assets or securities, the fair market value for such assets or securities as determined in good faith by the Managing Member in its sole discretion.

First Target Distribution” means 150% of the Minimum Quarterly Distribution, subject to adjustment in accordance with Sections 3.8, Section 4.5 and Section 4.6.

Fiscal Year” means the fiscal year of the Company which shall end on December 31 of each calendar year unless, for United States federal income tax purposes, another fiscal year is required. The Company shall have the same fiscal year for United States federal income tax purposes and for accounting purposes.

GAAP” means accounting principles generally accepted in the United States of America, consistently applied and maintained throughout the applicable periods.

Greenshoe Shares” has the meaning set forth in Section 3.2(b)(ii).

HSR Act” has the meaning set forth in Section 7.2.

IDR” means a non-voting Membership Interest that will confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to IDR (and no other rights otherwise available to or other obligations of a holder of a Membership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an IDR shall not be entitled to vote such IDR on any matter except as may otherwise be required by law.

IDR Reset Class B1 Common Stock” has the meaning set forth in Section 3.8(a).

IDR Reset Class B1 Securities” has the meaning set forth in Section 3.8(a).

IDR Reset Class B1 Units” has the meaning set forth in Section 3.8(a).

IDR Reset Election” has the meaning set forth in Section 3.8(a).

Income” means individual items of Company income and gain determined in accordance with the definitions of Net Income and Net Loss.

 

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Incremental Income Taxes” has the meaning set forth in Section 4.6.

Indemnitees” means (a) any Person who is or was a member, partner, shareholder, director, officer, fiduciary or trustee of the Company or any Affiliate of the Company, (b) any Person who is or was serving at the request of the Managing Member as an officer, director, member, partner, fiduciary or trustee of another Person, in each case, acting in such capacity (provided that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services) and (c) any Person the Managing Member designates as an “Indemnitee” for purposes of this Agreement.

Independent Conflicts Committee” means a committee of the board of directors of Terra, Inc. consisting entirely of independent directors.

Interest Payment Agreement” means the Interest Payment Agreement dated as of the date hereof by and between SunEdison, SunEdison Holdings, the Company and TerraForm Power Operating, LLC.

IPO” means the initial public offering and sale of Class A Common Stock (as contemplated by Terra, Inc.’s Registration Statement on Form S-1 (Registration No. 333-189148).

IPO Closing Date” means the closing date of the sale of shares of Class A Common Stock in the IPO.

Loss” means individual items of Company loss and deduction determined in accordance with the definitions of Net Income and Net Loss.

Managing Member” means, initially, Terra, Inc. and any assignee to which the managing member of the Company Transfers all Units held by such managing member of the Company that is admitted to the Company as the managing member of the Company, in its capacity as the managing member of the Company.

Management Services Agreement” means the Management Services Agreement dated as of the date hereof by and between SunEdison, SunEdison Holdings, Terra, Inc., the Company and TerraForm Power Operating, LLC.

Member” means each Person listed on the Schedule of Members on the date hereof (including the Managing Member) and each other Person who is hereafter admitted as a Member in accordance with the terms of this Agreement and the Act. Any reference in this Agreement to any Member shall include such Member’s Successors in Interest to the extent such Successors in Interest have become Substituted Members in accordance with the provisions of this Agreement.

Member Nonrecourse Debt” has the meaning set forth for the term “partner nonrecourse debt” in Treasury Regulations Section 1.704-2(b)(4).

Member Nonrecourse Debt Minimum Gain” has the meaning set forth for the term “partner nonrecourse debt minimum gain” in Treasury Regulations Section 1.704-2(i)(2).

Member Nonrecourse Deduction” has the meaning set forth for the term “partner nonrecourse deduction” in Treasury Regulation Section 1.704-2(i)(1).

Membership Interests” means, collectively, the limited liability company interests of the Members in the Company as represented by Units and IDRs.

Membership Interest Certificate” has the meaning set forth in Section 3.7.

Minimum Quarterly Distribution” means $0.2257 per Unit per Quarter (or with respect to the Quarter that includes the IPO Closing Date, it means the product of such amount multiplied by a fraction, the numerator of which is the number of days in such Quarter after the IPO Closing Date and the denominator of which is the total number of days in such Quarter)), subject to adjustment in accordance with Sections 3.8, Section 4.5 and Section 4.6.

 

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National Securities Exchange” means an exchange registered under Section 6(a) of the Exchange Act and any successor to such statute.

Net Income” means, for any taxable year, the excess, if any, of the Company’s items of income and gain for such taxable year over the Company’s items of loss and deduction for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 3.3(b) and shall not include any items specially allocated under Section 5.1(b).

Net Loss” means, for any taxable year, the excess, if any, of the Company’s items of loss and deduction for such taxable year over the Company’s items of income and gain for such taxable year. The items included in the calculation of Net Loss shall be determined in accordance with Section 3.3 and shall not include any items specially allocated under Section 5.1(b).

Nonrecourse Deductions” means any and all items of loss, deduction, or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulations Section 1.704-2(b), are attributable to a Nonrecourse Liability.

Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.752-1(a)(2).

Offer Notice” has the meaning set forth in Section 3.9(b).

Officer” means each Person designated as an officer of the Company pursuant to and in accordance with the provisions of Section 6.2, subject to any resolution of the Managing Member appointing such Person as an officer of the Company or relating to such appointment.

Percentage Interest” means, with respect to any Member as of any date of determination, the product obtained by multiplying 100% by the quotient obtained by dividing the number of Units held by such Member by the total number of all outstanding Units.

Person” means any individual, partnership, corporation, limited liability company, trust or other entity, including any governmental entity.

Prior Agreement” has the meaning set forth in the recitals hereof.

Proceeding” has the meaning set forth in Section 6.4(a).

Project Support Agreement” means the Project Support Agreement dated as of the date hereof by and between SunEdison and the Company.

Quarter” means, unless the context requires otherwise, a fiscal Quarter of the Company, or, with respect to the fiscal quarter of the Company that includes the IPO Closing Date, the portion of such fiscal quarter after the IPO Closing Date.

Required Allocations” has the meaning set forth in Section 5.1(b)(ix)(A).

Reset MQD” has the meaning set forth in Section 3.8(e).

Reset Notice” has the meaning set forth in Section 3.8(b).

ROFR Election Period” has the meaning set forth in Section 3.9(b).

Schedule of Members” has the meaning set forth in Section 3.1(b).

Second Target Distribution” means 175% of the Minimum Quarterly Distribution, subject to adjustment in accordance with Sections 3.8, Section 4.5 and Section 4.6.

 

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Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder as in effect from time to time.

Subordination Period” means the period beginning on the IPO Closing Date and extending until the date of the first to occur of the following dates:

(a) the first Business Day upon which each of the following tests has been met, which will be a minimum three-year period ending no earlier than the beginning of the period for which a distribution is paid for the third Quarter of 2017: (1) distributions of CAFD on each of the outstanding Class A Units, Class B Units and Class B1 Units equaled or exceeded the annualized Minimum Quarterly Distribution for each of three non-overlapping four Quarter periods immediately preceding that date; (2) the CAFD generated during each of three non-overlapping four-Quarter periods immediately preceding that date equaled or exceeded the sum of the annualized Minimum Quarterly Distribution on all of the outstanding Class A, Class B and Class B1 Units during those periods on a fully diluted basis; and (3) there are no arrearages in payment of the Minimum Quarterly Distribution on the Class A Units or Class B1 Units; or

(b) the first Business Day upon which each of the following tests has been met: (1) distributions of CAFD on each of the outstanding Class A Units, Class B Units and Class B1 Units equaled or exceeded 200% of the annualized Minimum Quarterly Distribution for the four-Quarter period immediately preceding that date; (2) the CAFD generated during the four-Quarter period immediately preceding that date equaled or exceeded the sum of (A) 200% of the annualized Minimum Quarterly Distribution on all of the outstanding Class A Units, Class B Units and Class B1 Units and (B) the corresponding distributions on the IDRs during such four Quarter period; and (3) there are no arrearages in payment of the Minimum Quarterly Distributions on the Class A Units and Class B1 Units.

Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof that is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall control the management of any such limited liability company, partnership, association or other business entity. For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.

Substitute Project” means a solar power project that is not an Identified Call Right Asset (as defined in the Project Support Agreement) or an Unidentified Call Right Project (as defined in the Project Support Agreement), that SunEdison, subsequent to determining one or more of the Construction Projects is not reasonably expected to achieve a commercial operation date, contributes to the Company as a capital contribution without receiving any additional economic interest in the Company.

Substituted Member” means a Person who is admitted as a Member to the Company pursuant to Section 7.5 with all the rights of a Member and who is shown as a Member on the Schedule of Members.

Successor in Interest” means any (i) trustee, custodian, receiver or other Person acting in any Bankruptcy or reorganization proceeding with respect to, (ii) assignee for the benefit of the creditors of, or (iii) trustee or receiver, or current or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of.

SunEdison” means SunEdison, Inc. a Delaware corporation.

 

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Target Distributions” means each of the Minimum Quarterly Distribution, the First Target Distribution, Second Target Distribution and Third Target Distribution.

Tax Matters Member” has the meaning set forth in Section 8.4(d).

Terra, Inc.” has the meaning set forth in the preamble of this Agreement.

Terra, Inc. Charter” means that certain amended and restated certificate of incorporation of Terra, Inc. as filed with the Secretary of State of the State of Delaware on July 23, 2014 and as further amended from time to time in accordance with its terms.

Terra, LLC Unitholders” has the meaning set forth in Section 3.2(b).

Third Target Distribution” means 200% of the Minimum Quarterly Distribution, subject to adjustment in accordance with Sections 3.8, Section 4.5 and Section 4.6.

Transfer” means sell, assign, convey, contribute, distribute, give, or otherwise transfer, whether directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, or any act of the foregoing, including any Transfer upon foreclosure of any pledge, encumbrance, hypothecation or mortgage. The terms “Transferee,” “Transferor,” “Transferred,” “Transferring Member,” “Transferor Member,” “Transferring Holder” and other forms of the word “Transfer” shall have the correlative meanings.

Transferring Holder” has the meaning set forth in Section 3.9(b).

Treasury Regulations” means the regulations, including temporary regulations, promulgated by the United States Treasury Department under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Units” means the Class A Units, the Class B Units , the Class B1 Units and any other series of limited liability company interests in the Company denominated as “Units” that is established in accordance with this Agreement, which shall constitute limited liability company interests in the Company as provided in this Agreement and under the Act, entitling the holders thereof to the relative rights, title and interests in the profits, losses, deductions and credits of the Company at any particular time as set forth in this Agreement, and any and all other benefits to which a holder thereof may be entitled as a Member as provided in this Agreement, together with the obligations of such Member to comply with all terms and provisions of this Agreement.

Unrealized Gain” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Fair Market Value of such property as of such date (as determined under Section 3.3(c)) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 3.3(c) as of such date).

Unrealized Loss” attributable to any item of Company property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 3.3(c) as of such date) over (b) the Fair Market Value of such property as of such date (as determined under Section 3.3(c)).

Section 1.2 Other Definitions. Other terms defined herein have the meanings so given them.

Section 1.3 Construction. Whenever the context requires, the gender of all words used in this Agreement includes the masculine, feminine, and neuter. All references to Articles and Sections refer to articles and sections of this Agreement, all references to “including” shall be construed as meaning “including without limitation” and all references to Exhibits are to Exhibits attached to this Agreement, each of which is made a part for all purposes.

 

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ARTICLE II

ORGANIZATIONAL AND OTHER MATTERS

Section 2.1 Formation. The Company was formed as a Delaware limited liability company on February 14, 2014 under the Act by executing the Limited Liability Agreement of TerraForm Power, LLC, which was amended and restated on March 24, 2014. The Members agree to continue the Company as a limited liability company under the Act, upon the terms and subject to the conditions set forth in this Agreement. The rights, powers, duties, obligations and liabilities of the Members shall be determined pursuant to the Act and this Agreement. This Agreement is the “limited liability company agreement” of the Company within the meaning of Section 18-101(7) of the Act. To the extent that this Agreement is inconsistent in any respect with the Act, this Agreement shall, to the extent permitted by the Act, control.

Section 2.2 Name. The name of the Company is “TerraForm Power, LLC” and the business of the Company shall be conducted under that name, or under any other name adopted by the Managing Member in accordance with the Act. Subject to the Act, the Managing Member may change the name of the Company (and amend this Agreement to reflect such change) at any time and from time to time without the consent of any other Person. Prompt notification of any such change shall be given to all Members.

Section 2.3 Limited Liability. The debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company, and a Member shall not be obligated personally for any of such debts, obligations or liabilities solely by reason of being a Member.

Section 2.4 Registered Office; Registered Agent; Principal Office in the United States; Other Offices. The registered office of the Company in the State of Delaware shall be the initial registered office designated in the Certificate or such other office (which need not be a place of business of the Company) as the Managing Member may designate from time to time in the manner provided by law. The registered agent of the Company in the State of Delaware shall be the initial registered agent designated in the Certificate or such other Person or Persons as the Managing Member may designate from time to time in the manner provided by law. The registered office of the Company in the United States shall be at the place specified in the Certificate, or such other place(s) as the Managing Member may designate from time to time. The Company may have such other offices as the Managing Member may determine appropriate.

Section 2.5 Purpose; Powers. The Company may carry on any lawful business, purpose or activity permitted by the Act. The Company may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing. Subject to the provisions of this Agreement and except as prohibited by the Act, (i) the Company may, with the approval of the Managing Member, enter into and perform any and all documents, agreements and instruments, all without any further act, vote or approval of any Member and (ii) the Managing Member may authorize any Person (including any Member or Officer) to enter into and perform any document on behalf of the Company.

Section 2.6 Existing and Good Standing; Foreign Qualification. The Managing Member may take all action which may be necessary or appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under the laws of the State of Delaware (and of each other jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged) and (ii) for the maintenance, preservation and operation of the business of the Company in accordance with the provisions of this Agreement and applicable laws and regulations. The Managing Member may file or cause to be filed for recordation in the office of the appropriate authorities of the State of Delaware, and in the proper office or offices in each other jurisdiction in which the Company is formed or qualified, such certificates (including certificates of limited liability companies and fictitious name certificates) and other documents as are required by the applicable statutes, rules or regulations of any such jurisdiction or as are required to reflect the identity of the Members and the amounts of their respective capital contributions. Each Member shall execute, acknowledge, swear to and deliver all certificates and other instruments conforming to this Agreement that are necessary or appropriate to qualify, or, as appropriate, to continue or terminate such qualification of, the Company as a foreign limited liability company in all such jurisdictions in which the Company may conduct business.

 

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Section 2.7 Term. The Company commenced on the date the Certificate was filed with the Secretary of State of the State of Delaware, and shall continue in existence until it is liquidated or dissolved in accordance with this Agreement and the Act.

Section 2.8 No State Law Partnership.

(a) The Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture, and that no Member or Officer shall be a partner or joint venturer of any other Member or Officer by virtue of this Agreement, for any purposes other than as is set forth in the following sentence of this Section 2.8(a), and this Agreement shall not be construed to the contrary. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state or local income tax purposes, as of the date Terra, Inc. first becomes a Member, and each Member, Assignee and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment. Neither the Company nor any Member shall take any action inconsistent with such treatment.

(b) So long as the Company is treated as a partnership for federal income tax purposes, to ensure that Units are not traded on an established securities market within the meaning of Treasury Regulations Section 1.7704-1(b) or readily tradable on a secondary market or the substantial equivalent thereof within the meaning of Regulations Section 1.7704-1(c), notwithstanding anything to the contrary contained herein, (i) the Company shall not participate in the establishment of any such market or the inclusion of its Units thereon, and (ii) the Company shall not recognize any Transfer made on any such market by: (A) redeeming the Transferor Member (in the case of a redemption or repurchase by the Company); or (B) admitting the Transferee as a Member or otherwise recognizing any rights of the Transferee, such as a right of the Transferee to receive Company distributions (directly or indirectly) or to acquire an interest in the capital or profits of the Company.

Section 2.9 Admission. Terra, Inc. is hereby designated as the Managing Member of the Company upon its execution of a counterpart signature page to this Agreement and each Member of the Company immediately prior to the effectiveness of this Agreement (including SunEdison Holdings) shall continue as a Member hereunder.

ARTICLE III

MEMBERS; CAPITALIZATION

Section 3.1 Members; Units.

(a) Limited Liability Company Interests. Interests in the Company shall be represented by Units, or such other Equity Securities in the Company, or such other Company securities, in each case as the Managing Member may establish in its sole discretion in accordance with the terms hereof. As of the Effective Date, the Units are comprised of three Classes: “Class A Units,” “Class B Units” and “Class B1 Units.”

(b) Schedule of Units; Schedule of Members. The Company shall maintain a schedule setting forth (i) the name and address of each Member, (ii) the number of Units (by Class) and/or percentage of IDRs owned of record by such Member, (iii) the aggregate number of outstanding Units by Class (including rights, options or warrants convertible into or exchangeable or exercisable for Units), and (iv) the aggregate amount of cash Capital Contributions that have been made by each of the Members and the Fair Market Value of any property other than cash contributed by each of the Members with respect to such Units (including, if applicable, a description and the amount of any liability assumed by the Company or to which contributed property is subject) (such schedule, the “Schedule of Members”). The Schedule of Members shall be the definitive record of ownership of each Unit or other Equity Security in the Company and all relevant information with respect to each Member. The Company shall be entitled to recognize the exclusive right of a Person registered on its records as the owner of Units or other Equity Securities in the Company for all purposes and shall not be bound to recognize any equitable or other claim to or interest in Units or other Equity Securities in the Company on the part of any other Person, whether or not it shall have express or other notice thereof, except as otherwise provided by the Act.

(c) Reclassification of Existing Units. The Existing Units shall automatically be reclassified into 65,709,400 Class B Units on the Effective Date.

 

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(d) Class A Units. Class A Units shall only be issuable to Terra, Inc. The Schedule of Members sets forth the identity of all Class A Members and the number of Class A Units held by each Class A Member. The Class A Units shall rank pari passu with, and have all the same rights (including the rights to share in Net Income and Net Loss or items thereof and distributions made in accordance with Article IV and Section 7.2(c)) and be subject to all of the same obligations, as the Class B Units.

(e) Class B Units. The Schedule of Members sets forth the identity of all Class B Members and the number of Class B Units held by each Class B Member. Unless the Company otherwise consents, Class B Units shall only be issuable to SunEdison and Controlled Affiliates of SunEdison from and after the Effective Date. Upon the Exchange contemplated in any Exchange Election, the Class B Units covered by such Exchange Election shall be exchanged for Exchange Shares pursuant to the Class B Exchange Agreement and this Agreement and, in connection with such Exchange, cancelled. The Class B Units shall rank pari passu with, and have all the same rights (including the rights to share in Net Income and Net Loss or items thereof and distributions made in accordance with Article IV) and be subject to all of the same obligations, as the Class A Units. In no event may Class B Units be Transferred unless the Transferor also Transfers to the same Transferee an equal number of shares of Class B Common Stock.

(f) Class B1 Units. The Schedule of Members sets forth the identity of all Class B1 Members and the number of Class B1 Units held by each Class B1 Members. Upon the Exchange contemplated in any Exchange Election, the Class B1 Units covered by such Exchange Election shall be exchanged for Exchange Shares pursuant to the Class B1 Exchange Agreement and this Agreement and, in connection with such Exchange, cancelled. The Class B1 Units shall rank pari passu with, and have all the same rights (including the rights to share in Net Income and Net Loss or items thereof and distributions made in accordance with Article IV) and be subject to all of the same obligations, as the Class A Units. In no event may Class B1 Units be Transferred unless the Transferor also Transfers to the same Transferee an equal number of shares of Class B1 Common Stock.

(g) Disqualified Persons. Each Class B1 Member hereby represents, warrants and acknowledges to the Company that such Class B1 Member is not a Disqualified Person. Each Class B1 Member hereby agrees that (a) such Class B1 Member shall not become a Disqualified Person and (b) such Class B1 Member shall deliver to the Company, on the last day of each calendar quarter, a Section 1603 Certification in the form set forth in Exhibit B.

Section 3.2 Class A Common Stock Sale; Exchanges; Authorization and Issuance of Additional Units.

(a) General.

(i) A Class B Member may not Transfer, directly or indirectly, all or any portion of its Class B Units except in connection with (i) a Class A Common Stock Sale, (ii) a Transfer (subject to the provisions of Section 7.3 and Section 7.4) of such Units in accordance with the procedures set forth in Section 3.2(c) or (iii) unless the Managing Member determines in good faith that a proposed Transfer would violate Section 7.4(c), a Transfer of Class B Units held by such Class B Member to one or more Controlled Affiliates; provided, however, that SunEdison and its Controlled Affiliates may pledge its Class B or B1 Units in accordance with Section 7.3 of this Agreement. No Transfer of any Class B Units by a Class B Member to a Controlled Affiliate shall effect a release of the Transferring Class B Member’s obligations under this Agreement to the Class A Members, and as a condition to such Transfer, each such Controlled Affiliate shall expressly assume in writing all of the obligations of the Transferring Class B Member, whether arising prior to, on or after the date of Transfer, to the Class A Members.

(ii) Without the Company’s written consent which may be subject to any conditions the Company, in its sole discretion, deems appropriate, a Class B1 Member may not Transfer, directly or indirectly, all or any portion of its Class B1 Units except (subject to the provisions of Section 7.3 and Section 7.4) in connection with a Transfer of such Class B1 Units in accordance with the procedures set forth in Section 3.2(c).

 

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(b) Class A Common Stock Sale.

(i) In connection with any Class A Common Stock Sale, either (A) the Managing Member shall cause the Company to use the related net cash proceeds from such sale (upon the receipt thereof from Terra, Inc.) to issue Class A Units to Terra, Inc., in an amount equal to the number of shares of Class A Common Stock related to such Class A Common Stock Sale or (B) Terra, Inc., subject to the agreement of the applicable Member, shall purchase Class B Units or Class B1 Units directly from a Member (in which case a corresponding number of shares Class B Common Stock or Class B1 Common Stock, as applicable, held by such Member would be surrendered by such Member to Terra, Inc.), and such Class B Units or Class B1 Units purchased by Terra, Inc. would then immediately convert to Class A Units upon the consummation of such purchase and be delivered to Terra, Inc. Upon the receipt of the shares of Class B Common Stock or Class B1 Common Stock, as applicable, specified in this Section 3.2(b)(i), Terra, Inc. shall cause such shares to be cancelled. The determination of how to apply the net cash proceeds received by the Company from any Class A Common Stock Sale shall be made in the Managing Member’s sole discretion. For the avoidance of doubt, the provisions of this Section 3.2(b)(i) do not provide the Company or Terra, Inc. the right to purchase Class B Units or Class B1 Units from a Member or require a Member to sell Class B Units or Class B1 Units to either the Company or to Terra, Inc. without such Member, in their sole discretion, agreeing to the terms of any such purchase and sale.

(ii) Notwithstanding the last sentence of Section 3.1(b)(i) of this Agreement, the Company, Terra, Inc. and SunEdison agree that in connection with the IPO, to the extent the underwriters exercise all or a portion of their option to purchase up to 3,009,750 additional shares of Class A Common Stock (the “Greenshoe Shares”), SunEdison agrees to sell to Terra, Inc. and Terra, Inc. agrees to purchase, in exchange for net proceeds received from the underwriters with respect to such shares, in the manner set forth in Section 3.2(b)(i), a number of Class B Units (and a corresponding number of shares of Class B Common Stock ) equal to the number of Greenshoe Shares purchased by the underwriters.

(iii) The Company, the Class A Member and the participating Members shall bear their own expenses in connection with the consummation of any Class A Common Stock Sale, except that the Company shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Class A Common Stock Sale.

(c) Exchanges. Subject to the provisions of Section 7.4, each Class B Unit and each Class B1 Unit together with a corresponding number of shares of Class B Common Stock or Class B1 Common Stock, as applicable, will be exchangeable for a share of Class A Common Stock, subject to equitable adjustments for stock splits, stock dividends and reclassifications in accordance with the terms of the applicable Exchange Agreement. An Exchanging Class B Member or Exchanging Class B1 Member shall deliver to the Company and the Managing Member the written election of exchange (an “Exchange Election”) as contemplated by Section 2.1(b) of the applicable Exchange Agreement. In connection with any Exchange, the Exchanging Member shall surrender Class B Units or Class B1 Units and a corresponding number of shares of Class B Common Stock or Class B1 Common Stock to the Company and:

(i) Terra, Inc. will issue and contribute a corresponding number of shares of Class A Common Stock (the “Exchange Shares”) to the Company for delivery to the Exchanging Member;

(ii) the Company will issue a corresponding number of additional Class A Units to Terra, Inc.;

(iii) the Company will cancel the surrendered Class B Units or Class B1 Units;

(iv) Terra, Inc. will cancel the corresponding shares of Class B Common Stock or Class B1 Common Stock; and

(v) the Company will deliver the Exchange Shares to the Exchanging Member.

 

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(d) Authorization and Issuance of Additional Units.

(i) Subject to the limitations on issuing additional Units set forth in this Agreement (including Section 7.4), the requirements set forth in the Exchange Agreements and any applicable listing exchange requirements, the Managing Member may issue additional Classes of Units, other Equity Securities in the Company or other Company securities from time to time with such rights, obligations, powers, designations, preferences and other terms, which may be different from, including senior to, any then existing or future Classes of Units, other Equity Securities in the Company or other Company securities, as the Managing Member shall determine from time to time, in its sole discretion, without the vote or consent of any other Member or any other Person, including (i) the right of such Units, other Equity Securities in the Company or other Company securities to share in Net Income and Net Loss or items thereof, (ii) the right of such Units, other Equity Securities in the Company or other Company securities to share in Company distributions, (iii) the rights of such Units, other Equity Securities or other Company securities upon dissolution and liquidation of the Company, (iv) whether, and the terms and conditions upon which, the Company may or shall be required to redeem such Units, other Equity Securities in the Company or other Company securities (including sinking fund provisions), (v) whether such Units, other Equity Securities in the Company or other Company securities are issued with the privilege of conversion or exchange and, if so, the terms and conditions of such conversion or exchange, (vi) the terms and conditions upon which such Units, other Equity Securities in the Company or other Company securities will be issued, evidenced by certificates or assigned or transferred, (vii) the terms and conditions of the issuance of such Units, other Equity Securities in the Company or other Company securities (including, without limitation, the amount and form of consideration, if any, to be received by the Company in respect thereof, the Managing Member being expressly authorized, in its sole discretion, to cause the Company to issue Units, other Equity Securities in the Company or other Company securities for less than Fair Market Value), and (viii) the right, if any, of the holder of such Units, other Equity Securities in the Company or other Company securities to vote on Company matters, including matters relating to the relative designations, preferences, rights, powers and duties of such Units, other Equity Securities in the Company or other Company securities. The Managing Member, without the vote or consent of any other Member or any other Person but subject to Sections 3.1(d) and 3.1(e) and any applicable listing exchange requirements, is authorized (i) to issue any Units, other Equity Securities in the Company or other Company securities of any such newly established Class, and (ii) to amend this Agreement to reflect the creation of any such new series, the issuance of Units, other Equity Securities in the Company or other Company securities of such series, and the admission of any Person as a Member which has received Units or other Equity Securities of any such Class, in accordance with this Section 3.2, Section 7.3 and Section 9.4. Except as expressly provided in this Agreement to the contrary, any reference to “Units” shall include the Class A Units, the Class B Units and any other series of Units that may be established in accordance with this Agreement.

(ii) If Terra, Inc. issues another class or series of equity securities (other than Class A Common Stock, Class B Common Stock or Class B1 Common Stock), the Company shall authorize and issue in accordance with Section 3.2(d)(i) of this Agreement, and Terra, Inc. will use the net proceeds therefrom to purchase, an equal number of membership interests with designations, preferences and other rights and terms that are substantially the same as those of Terra, Inc.’s newly-issued equity securities.

(iii) If Terra, Inc. issues shares of Class A Common Stock (other than in a Class A Common Stock Sale), the Company shall authorize and issue, and Terra, Inc. will use the net proceeds therefrom to purchase, an equal number of Class A Units. In the event Terra, Inc. issues shares of Class A Common Stock that are subject to forfeiture or cancellation (e.g. restricted stock), the corresponding Class A Unit will be issued subject to similar forfeiture or cancellation provisions.

(iv) If Terra, Inc. issues shares of Class B Common Stock, the Company shall authorize and issue to the purchaser of such shares of Class B Common Stock an equal number of Class B Units, and Terra, Inc. will transfer the net proceeds therefrom to the Company.

(v) If Terra, Inc. issues shares of Class B1 Common Stock, the Company shall authorize and issue to the purchaser of such shares of Class B1 Common Stock an equal number of Class B1 Units, and Terra, Inc. will transfer the net proceeds therefrom to the Company.

(vi) In the event Terra, Inc. elects to redeem any shares of its Class A Common Stock or any other class or series of its equity securities except shares of its Class B Common Stock or Class B1 Common Stock for cash, the Company will, immediately prior to such redemption, redeem an equal number of Class A Units or any other Units of the corresponding classes or series, upon the same terms and for the same price as the shares of Class A Common Stock or other equity securities of Terra, Inc. so redeemed.

 

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(e) In no event will any unit distribution, unit splits, reverse unit splits, combinations of units, reclassifications or recapitalizations be declared or made on any Class A Units, Class B Units or Class B1 Units, as the case may be, unless contemporaneously therewith, the Class A Units, Class B Units or Class B1 Units, at the time outstanding, are treated in the same proportion and the same manner.

(f) Automatic Conversion. If, for any reason, a Class B1 Member becomes a Disqualified Person, each Class B1 Unit held by such Class B1 Member (together with each corresponding share of Class B1 Common Stock held by such Class B1 Member) shall be automatically converted into a share of Class A Common Stock (subject to equitable adjustments for stock splits, stock dividends and reclassifications in accordance with the terms of the Class B1 Exchange Agreement) without any action on the part of such Class B1 Member, immediately upon the event or circumstance that results in such Class B1 Member becoming a Disqualified Person (each such conversion, an “Automatic Conversion”). Upon an Automatic Conversion, the Class B1 Member whose Class B1 Units and corresponding shares of Class B1 Common Stock are converted shall have no further rights as a Member under this Agreement, including any rights to receive distributions from the Company pursuant to this Agreement (including pursuant to Article IV). Each Class B1 Member agrees that, if such Class B1 Member becomes a Disqualified Person, (i) any distributions received by such Class B1 Member on or after the date of an Automatic Conversion shall be repaid to the Company within 3 Business Days of the Company’s request, (ii) such Class B1 Member shall not be entitled to receive any dividends from Terra, Inc. until such Class B1 Member surrenders and delivers the applicable Class B1 Units to the Company (and delivers the applicable corresponding shares of Class B1 Common Stock to Terra, Inc.) and (iii) such Class B1 Member will not be entitled to either a distribution in respect of the Class B1 Units held by such Class B1 Member or a dividend on shares of Class A Common Stock into which such Class B1 Units (together with each corresponding share of Class B1 Common Stock held by such Class B1 Member) are converted for the Quarter in which the Automatic Conversion took place, and such Class B1 Member will repay to the Company the amount of any distribution received in respect of Class B1 Units held by such Class B1 Member during a Quarter for which such Class B1 Member also received a dividend on shares of Class A Common Stock into which such Class B1 Units (together with corresponding shares of Class B1 Common Stock) had been converted pursuant to an Automatic Conversion. Effective immediately upon an Automatic Conversion, without any action on the part of the Company, the Managing Member or any other Member, the Class B1 Units and shares of Class B1 common stock held by a Class B1 Member who becomes a Disqualified Person shall represent only the right to receive shares of Class A Common Stock in accordance with the terms of this Section 3.2(f) and such Class B1 Member will forfeit its limited liability company interest in the Company, including any economic interest such Class B1 Member may have in the Company. An Automatic Conversion pursuant to this Section 3.2(f) shall constitute an Exchange under this Agreement.

(g) Lender Foreclosure. Upon in the event that the lenders identified in the Credit Facilities exercise their right to foreclose on securities pledged pursuant to Section 7.3 of this Agreement, to the extent such securities constitute Class B Units or Class B1 Units, such Class B Units or Class B1 Units (together with a corresponding number of shares of Class B Common Stock or Class B1 Common Stock) shall be automatically converted into shares of Class A Common Stock (subject to equitable adjustments for stock splits, stock dividends and reclassifications in accordance with the terms of the Class B or B1 Exchange Agreement, as applicable) without any action on the part of SunEdison, its Controlled Affiliates, the lenders, the Company, the Managing Member or any other Member, immediately upon the foreclosure.

Section 3.3 Capital Account.

(a) The Managing Member shall maintain for each Member owning Units a separate Capital Account with respect to such Units in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of all Capital Contributions made to the Company with respect to such Units pursuant to this Agreement and (ii) all items of Company income and gain (including, without

 

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limitation, income and gain exempt from tax) computed in accordance with Section 3.3(b) and allocated with respect to such Units pursuant to Section 5.1, and decreased by (x) the amount of cash or Fair Market Value of all actual and deemed distributions of cash or property made with respect to such Units pursuant to this Agreement and (y) all items of Company deduction and loss computed in accordance with Section 3.3(b) and allocated with respect to such Units pursuant to Section 5.1. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event the Managing Member shall determine that it is prudent to modify the manner in which the Capital Accounts or any adjustments thereto (including, without limitation, adjustments relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Members) are computed in order to comply with such Treasury Regulations, the Managing Member, without the consent of any other Person, may make such modification, notwithstanding the terms of this Agreement; provided that it is not likely to have a material effect on the amounts distributed or distributable to any Person pursuant to Article VII hereof upon the dissolution of the Company. The Managing Member, without the consent of any other Person, also shall (i) make any adjustments, notwithstanding the terms of this Agreement, that are necessary or appropriate to maintain equality among the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications, notwithstanding the terms of this Agreement, in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b).

(b) For purposes of computing the amount of any item of income, gain, loss or deduction, which is to be allocated pursuant to Article V and is to be reflected in the Members’ Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose); provided, that:

(i) Solely for purposes of this Section 3.3, the Company shall be treated as owning directly its proportionate share (as determined by the Managing Member) of all property owned by any partnership, limited liability company, unincorporated business or other entity or arrangement that is classified as a partnership or disregarded entity for federal income tax purposes, of which the Company is, directly or indirectly, a partner (in the case of a partnership) or owner (in the case of a disregarded entity).

(ii) Except as otherwise provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and deduction shall be made without regard to any election under Section 754 of the Code which may be made by the Company and, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalized for federal income tax purposes. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(iii) Any income, gain or loss attributable to the taxable disposition of any Company property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Company’s Carrying Value with respect to such property as of such date.

(iv) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property shall be determined in the manner described in Treasury Regulations Section 1.704-1(b)(2)(iv)(g)(3) as if the adjusted basis of such property on the date it was acquired by the Company were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 3.3(c) to the Carrying Value of any Adjusted Property that is subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined in the manner described in Treasury Regulations Sections 1.704-1(b)(2)(iv)(g)(3) and 1.704-3(a)(6)(i) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment;

 

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provided, however, that, if the asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery or amortization deductions shall be determined using any method that the Managing Member may adopt.

(c) If a Member Transfers an interest in the Company to a new or existing Member, the Transferee Member shall succeed to that portion of the Transferor’s Capital Account that is attributable to the Transferred interest. Any reference in this Agreement to a Capital Contribution of, or Distribution to, a Member that has succeeded any other Member shall include any Capital Contributions or Distributions previously made by or to the former Member on account of the interest of such former Member Transferred to such successor Member. In addition, the following shall apply:

(i) In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed Property, the Capital Account of all Members and the Carrying Value of each Company property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance and had been allocated to the Members at such time pursuant to Section 5.1 in the same manner as a corresponding item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and Fair Market Value of all Company assets (including, without limitation, cash or cash equivalents) immediately prior to the issuance of additional Units shall be determined by the Managing Member using such method of valuation as it may adopt; provided, however, that the Managing Member, in arriving at such valuation, must take fully into account the Fair Market Value of the Units of all Members at such time. The Managing Member shall allocate such aggregate value among the assets of the Company (in such manner as it determines) to arrive at a Fair Market Value for individual properties.

(ii) In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution to a Member of any Company property (other than a distribution of cash that is not in redemption or retirement of a Unit), the Capital Accounts of all Members and the Carrying Value of all Company property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property, as if such Unrealized Gain or Unrealized Loss had been recognized in a sale of such property immediately prior to such distribution for an amount equal to its Fair Market Value, and had been allocated to the Members, at such time, pursuant to Section 5.1 in the same manner as a corresponding item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and Fair Market Value of all Company assets (including, without limitation, cash or cash equivalents) immediately prior to a distribution shall (A) in the case of an actual distribution that is not made pursuant to Article VII or in the case of a deemed distribution, be determined and allocated in the same manner as that provided in Section 3.3(c) or (B) in the case of a liquidating distribution pursuant to Article VII, be determined and allocated by the Person winding up the Company pursuant to Section 7.2(c) using such method of valuation as it may adopt.

(iii) The Managing Member may make the adjustments described in this Section 3.4(d) in the manner set forth herein if the Managing Member determines that such adjustments are necessary or useful to effectuate the intended economic arrangement among the Members, including Members who received Units in connection with the performance of services to or for the benefit of the Company.

(d) Notwithstanding anything expressed or implied to the contrary in this Agreement, in the event the Managing Member shall determine, in its sole and absolute discretion, that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to effectuate the intended economic sharing arrangement of the Members, the Managing Member may make such modification, notwithstanding any other provision hereof, without the consent of any other Person.

Section 3.4 No Withdrawal. No Person shall be entitled to withdraw any part of such Person’s Capital Contributions or Capital Account or to receive any distribution from the Company, except as expressly provided herein.

 

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Section 3.5 Loans From Members. Loans by Members to the Company shall not be considered Capital Contributions. If any Member shall loan funds to the Company, then the making of such loans shall not result in any increase in the Capital Account balance of such Member. The amount of any such loans shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such loans are made.

Section 3.6 No Right of Partition. To the fullest extent permitted by law, no Member shall have the right to seek or obtain partition by court decree or operation of law of any property of the Company or any of its Subsidiaries or the right to own or use particular or individual assets of the Company or any of its Subsidiaries, or, except as expressly contemplated by this Agreement, be entitled to distributions of specific assets of the Company or any of its Subsidiaries.

Section 3.7 Non-Certification of Units and IDRs; Legend; Units are Securities.

(a) Units shall be issued in non-certificated form; provided that the Managing Member may cause the Company to issue certificates to a Member representing the Units or IDRs held by such Member.

(b) If the Managing Member determines that the Company shall issue certificates representing Units or IDRs to any Member, the following provisions of this Section 3.7 shall apply:

(i) The Company shall issue one or more certificates in the name of such Person in such form as it may approve, subject to Section 3.7(b)(ii) (a “Membership Interest Certificate”), which shall evidence the ownership of the Units or IDRs represented thereby. Each such Membership Interest Certificate shall be denominated in terms of the number of Units or percentage of IDRs evidenced by such Membership Interest Certificate and shall be signed by the Managing Member or an Officer on behalf of the Company.

(ii) Each Membership Interest Certificate shall bear a legend substantially in the following form:

THIS CERTIFICATE EVIDENCES A [INCENTIVE DISTRIBUTION RIGHT/UNIT] REPRESENTING AN INTEREST IN TERRAFORM POWER, LLC AND SHALL CONSTITUTE A “SECURITY” WITHIN THE MEANING OF, AND SHALL BE GOVERNED BY, (I) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE (INCLUDING SECTION 8-102(A)(15) THEREOF) AS IN EFFECT FROM TIME TO TIME IN THE STATE OF DELAWARE, AND (II) THE CORRESPONDING PROVISIONS OF THE UNIFORM COMMERCIAL CODE OF ANY OTHER APPLICABLE JURISDICTION THAT NOW OR HEREAFTER SUBSTANTIALLY INCLUDES THE 1994 REVISIONS TO ARTICLE 8 THEREOF AS ADOPTED BY THE AMERICAN LAW INSTITUTE AND THE NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS AND APPROVED BY THE AMERICAN BAR ASSOCIATION ON FEBRUARY 14, 1995.

THE LIMITED LIABILITY COMPANY INTERESTS IN TERRAFORM POWER, LLC HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS, THIS

 

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SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT AND ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

THE INTERESTS IN TERRAFORM POWER, LLC REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF TERRAFORM POWER, LLC, DATED AS OF JULY 23, 2014, BY AND AMONG EACH OF THE MEMBERS FROM TIME TO TIME PARTY THERETO, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

(iii) Each Unit and IDR shall constitute a “security” within the meaning of, and shall be governed by, (i) Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.

(iv) The Company shall issue a new Membership Interest Certificate in place of any Membership Interest Certificate previously issued if the holder of the Units or IDRs represented by such Membership Interest Certificate, as reflected on the books and records of the Company:

(A) makes proof by affidavit, in form and substance satisfactory to the Company, that such previously issued Membership Interest Certificate has been lost, stolen or destroyed;

(B) requests the issuance of a new Membership Interest Certificate before the Company has notice that such previously issued Membership Interest Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;

(C) if requested by the Company, delivers to the Company such security, in form and substance satisfactory to the Company, as the Managing Member may direct, to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the previously issued Membership Interest Certificate; and

(D) satisfies any other reasonable requirements imposed by the Company.

(v) Upon a Member’s Transfer in accordance with the provisions of this Agreement of any or all Units represented by a Membership Interest Certificate, the Transferee of such Units shall deliver such Membership Interest Certificate, duly endorsed for Transfer by the Transferee, to the Company for cancellation, and the Company shall thereupon issue a new Membership Interest Certificate to such Transferee for the number of Units or percentage of IDRs being Transferred and, if applicable, cause to be issued to such Transferring Member a new Membership Interest Certificate for the number of Units or percentage of IDRs that were represented by the canceled Membership Interest Certificate and that are not being Transferred.

Section 3.8 Reset of Incentive Distribution Rights; Issuance of Class B1 Units in Connection with Reset of Incentive Distribution Rights.

(a) Subject to the provisions of this Section 3.8, the holder of the IDRs (or, if there is more than one holder of the IDRs, the holders of a majority in interest of the IDRs) shall have the right, exercisable at its option at any time the Company has made distributions in excess of the Third Target Distribution Level for each of the four

 

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most recently completed Quarters, to make an election (the “IDR Reset Election”) to cause the Target Distributions to be reset in accordance with the provisions of Section 3.8(e) and, in connection therewith, the holder or holders of the IDRs will become entitled to receive their respective proportionate share of a number of Class B1 Units (the “IDR Reset Class B1 Units”) derived by dividing (i) the average aggregate amount of cash distributions made by the Company for the two full Quarters immediately preceding the giving of the Reset Notice (as defined in Section 3.8(b)) in respect of the IDRs by (ii) the average of the aggregated amount of the cash distributions made by the Company in respect of each Class A Unit, Class B1 Unit and Class B Unit for the two full Quarters immediately preceding the giving of the Reset Notice (the number of Class B1 Units determined by such quotient is referred to herein as the “Aggregate Quantity of IDR Reset Class B1 Units”). In addition to the Aggregate Quantity of IDR Reset Class B1 Units, the holder or holders of IDRs will become entitled to receive a number of Shares of Class B1 Common Stock (the “IDR Reset Class B1 Common Stock” and together with the IDR Reset Class B1 Units the “IDR Reset Class B1 Securities”) equal to the number of Class B1 Units they are entitled to receive as calculated pursuant to the preceding sentence (such shares are referred to as the “Aggregate Quantity of IDR Reset Shares of Class B1 Common Stock” and together with the Aggregate Quantity of IDR Reset Class B1 Units the “Aggregate Quantity of IDR Reset Class B1 Securities”). The making of the IDR Reset Election in the manner specified in Section 3.8(b) shall cause each of the Target Distributions to be reset in accordance with the provisions of Section 3.8(e) and, in connection therewith, the holder or holders of the IDRs will become entitled to receive IDR Reset Class B1 Securities on the basis specified above, without any further approval required by the Managing Member or the Members, at the time specified in Section 3.8(c) unless the IDR Reset Election is rescinded pursuant to Section 3.8(d).

(b) To exercise the right specified in Section 3.8(a), the holder of the IDRs (or, if there is more than one holder of the IDRs, the holders of a majority in interest of the IDRs) shall deliver a written notice (the “Reset Notice”) to the Company. Within 10 Business Days after the receipt by the Company of such Reset Notice, the Company shall deliver a written notice to the holder or holders of the IDRs of the Company’s determination of the aggregate number of IDR Reset Class B1 Securities that each holder of IDRs will be entitled to receive.

(c) The holder or holders of the IDRs will be entitled to receive the Aggregate Quantity of IDR Reset Class B1 Securities on the fifteenth Business Day after receipt by the Company of the Reset Notice; provided, however, that the issuance of IDR Reset Class B1 Securities to the holder or holders of the IDRs shall not occur prior to the approval of the listing or admission for trading, by the principal National Securities Exchange upon which the shares of Class A Common Stock are then listed or admitted for trading if any such approval is required pursuant to the rules and regulations of such National Securities Exchange, of such shares of Class A Common Stock into which such IDR Reset Class B1 Securities are exchangeable.

(d) If the principal National Securities Exchange upon which shares of the Class A Common Stock are then traded has not approved the listing or admission for trading of the Class A Common Stock to be issued pursuant to this Section 3.8 on or before the 30th calendar day following the Company’s receipt of the Reset Notice and such approval is required by the rules and regulations of such National Securities Exchange, then the holder of the IDRs (or, if there is more than one holder of the IDRs, the holders of a majority in interest of the IDRs) shall have the right to either rescind the IDR Reset Election or elect to receive other Membership Interests having such terms as the Manager and the board of directors of Terra, Inc. may approve, with the approval of an Independent Conflicts Committee, that will provide (i) the same economic value, in the aggregate, as the Aggregate Quantity of IDR Reset Class B1 Securities would have had at the time of the Company’s receipt of the Reset Notice, as determined by the Managing Member (acceptable to the holder of the IDRs (or, if there is more than one holder of the IDRs, the holders of a majority in interest of the IDRs), and (ii) for the subsequent conversion (on terms acceptable to the National Securities Exchange upon which the shares of the Class A Common Stock are then traded) of such Membership Interests into Units within not more than 12 months following the Company’s receipt of the Reset Notice upon the satisfaction of one or more conditions that are reasonably acceptable to the holder of the IDRs (or, if there is more than one holder of the IDRs, the holders of a majority in interest of the IDRs).

(e) The Target Distributions shall be adjusted at the time of the issuance of Class B1 Units or other Units pursuant to this Section 3.8 such that (i) the Minimum Quarterly Distribution shall be reset to equal the average cash distribution amount per Class A Unit, Class B Unit and Class B1 for the two Quarters immediately prior to the Company’s receipt of the Reset Notice (the “Reset MQD”), (ii) the First Target Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second Target Distribution shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset MQD.

 

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Section 3.9 Transferability of IDRs.

(a) The IDRs will be initially issued to SunEdison Holdings (or SunEdison or a Controlled Affiliate of SunEdison designated by SunEdison), no holder of IDRs shall Transfer any interest in such holder’s IDRs other than to SunEdison or a Controlled Affiliate of SunEdison until such time as SunEdison has satisfied it’s $175.0 million projected CAFD commitment to the Company in accordance with the terms of the Project Support Agreement; provided, however, the provisions of this Section 3.9 shall not prohibit SunEdison (or its Controlled Affiliates) from pledging any IDRs or other Company securities held by any of them to lenders as security under its Credit Facilities; provided, further, that the pledgee of such IDRs may not foreclose on such pledged IDRs until such time as SunEdison has satisfied it’s $175.0 million projected CAFD commitment to the Company in accordance with the terms of the Project Support Agreement.

(b) Except for a Transfer to SunEdison or a Controlled Affiliate of SunEdison, at least 30 Business Days prior to making any Transfer of any IDRs, the Transferring Holder (the “Transferring Holder”) shall give written notice (an “Offer Notice”) to the Company. The Offer Notice shall disclose in reasonable detail the amount of IDRs to be Transferred, the price of the IDRs being Transferred, the other terms and conditions of the Transfer and the identity, background and ownership (if applicable) of the proposed Transferee(s), and the Offer Notice shall constitute a binding offer to sell the such IDRs described therein to the Company on the terms and conditions provided in this Section 3.10(b). The Company may elect to purchase all (but not less than all) of the IDRs to be Transferred upon the same terms and conditions as those set forth in the Offer Notice by giving written notice of such election to the Transferring Holder within 20 Business Days after the Offer Notice has been given to the Company (the “ROFR Election Period”). If the Company has not elected to purchase all of the IDRs specified in the Offer Notice, the Transferring Holder may Transfer the IDRs specified in the Offer Notice to the Transferee(s) specified therein at a price and on terms no more favorable to the Transferee(s) thereof than specified in the Offer Notice during the 30-day period immediately following the ROFR Election Period. Any IDRs not Transferred within such 30-day period shall be subject to the provisions of this Section 3.10(b) upon subsequent Transfer. If the Company has elected to purchase IDRs from the Transferring Holder hereunder, the Transfer of such shares shall be consummated as soon as practical after the election notice(s) have been given to the Transferring Holder, but in any event within 30 days after the expiration of the ROFR Election Period. The purchase price specified in any Offer Notice shall be payable solely in cash at the closing of the transaction. In no event may any IDRs be issued or transferred to a Disqualified Person.

Section 3.10 Lock-Up of Class B Units. Until the earlier of (i) the date three years from the completion of the IPO or (ii) the date preceded by four Quarters with respect to which the Company made distributions in excess of the Third Target Distribution, SunEdison (together with its Controlled Affiliates) shall continue to own a number of Class B Units equal to 25% of the total number of Class B Units outstanding upon closing of this IPO held by SunEdison (together with its Controlled Affiliates). Any proposed Transfer of Class B Units (or shares of Class B Common Stock) violation of this Section 3.10 shall be prohibited; provided, however, the provisions of this Section 3.10 shall not prohibit SunEdison (or its Controlled Affiliates) from pledging any Class B Units or Class B1 Units, shares of Class B Common Stock or shares of Class B1 Common Stock or other Company securities held by any of them to lenders as security under its Credit Facilities; provided, further, that the pledgee of such Class B Units may not foreclose on such pledged Class B Units if as a result, SunEdison (together with its Controlled Affiliates) would cease to own (including shares that had been pledged but not foreclosed upon) the amount of Class B Units required by the first sentence of this Section 3.10.

Section 3.11 Outside Activities of the Members. Any Member or any of their respective Affiliates shall be entitled to have business interests and engage in business activities in addition to those relating to the Company, including business interests and activities in direct competition with the Company or any of its Subsidiaries or any Person in which the Company or any of its Subsidiaries has an ownership interest. Neither the Company nor any of the other Members shall have any rights by virtue of this Agreement in any business ventures of any other Member.

 

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ARTICLE IV

DISTRIBUTIONS

Section 4.1 Determination of Distributions. Except as provided in Section 4.1(a)-(c), distributions shall be made to the Members pro rata in accordance with their Percentage Interests when and in such amounts as determined by the Managing Member in accordance with the terms of this Agreement; provided, however that in the event the Company issues Class A Units or securities convertible or exchangeable for Class A Units for less than Fair Market Value, the amount distributed on account of Class B Units and Class B1 Units relative to Class A Units shall be equitably adjusted by the Managing Member.

(a) Distributions During the Subordination Period. Distributions of cash for any Quarter ending before the end of the Subordination Period shall be made in the following manner:

(i) first, to all Class A Members and Class B1 Members, pro rata, until the Company distributes for each Class A Unit and Class B1 Unit an amount equal to the Minimum Quarterly Distribution for that Quarter and any arrearages in payment of the Minimum Quarterly Distribution on such Units for any prior Quarters;

(ii) second, subject to Section 4.1(c), to all Class B Members, pro rata, until the Company distributes for each Class B Unit an amount equal to the Minimum Quarterly Distribution for that Quarter;

(iii) third, to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, until each Member receives a total amount equal to the First Target Distribution per Unit for that Quarter;

(iv) fourth, 85.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 15.0% to the holders of the IDRs, until each Class A Member, Class B1 Member and, subject to Section 4.1(c), Class B Member receives a total amount equal to the Second Target Distribution per Unit for that Quarter;

(v) fifth, 75.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 25.0% to the holders of the IDRs, until each Class A Member, Class B1 Member and, subject to Section 4.1(c), Class B Member receives a total amount equal to the Third Target Distribution per Unit for that Quarter; and

(vi) thereafter, 50.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 50.0% to the holders of the IDRs.

(b) Distributions After the Subordination Period. Distributions of cash for any Quarter ending after the end of the Subordination Period, shall be be made in the following manner:

(i) first, to all Class A Members, Class B1 Members and Class B Members, pro rata, until the Company distributes for each Unit an amount equal to the Minimum Quarterly Distribution for that Quarter, subject to Section 4.1(c);

(ii) second, 85.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 15.0% to the holders of the IDRs, until each Class A Member, Class B1 Member and, subject to Section 4.1(c), Class B Member receives a total amount equal to the Second Target Distribution per Unit for that Quarter;

(iii) third, 75.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 25.0% to the holders of the IDRs, until each Class A Member, Class B1 Member and, subject to Section 4.1(c), Class B Member receives a total amount equal to the Third Target Distribution per Unit for that Quarter; and

(iv) thereafter, 50.0% to all Class A Members, Class B1 Members and, subject to Section 4.1(c), Class B Members, pro rata, and 50.0% to the holders of the IDRs.

 

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(c) Distribution Forbearance. Notwithstanding the foregoing, during the Distribution Forbearance Period distributions to the Class B Members shall be limited as follows:

(i) the Class B Members will not, under any circumstances, be entitled to receive any distributions with respect to the third and fourth Quarter of 2014 (i.e., distributions declared on or prior to March 31, 2015); and

(ii) thereafter, when any distribution is made to the Class A Members and Class B1 Members, the Class B Members will be entitled to receive, on a per Unit basis, an amount equal to the product of:

(A) the per Unit amount of the distribution to the Class A Members and Class B1 Members, multiplied by

(B) the As Delivered CAFD with respect to the Contributed Construction Projects contributed by SunEdison to the Company plus the Completed CAFD Contribution Amount, divided by the CAFD Forbearance Threshold.

Any distributions forgone by the Class B Members pursuant to this Section 4.1(c) will not be distributed to the other Members and will not constitute an arrearage on the Class B Units. After the date on which the Distribution Forbearance Period ends, distributions will be made to the Class B Members in accordance with Section 4.1(a) and Section 4.1(b), above.

(d) Limitation on IDR Distributions. Notwithstanding the foregoing provisions of Section 4.1, no distributions in respect of IDRs shall be made unless the CAFD since the closing of IPO to the date of determination exceeds the amount of cash distributed as of the date of the determination.

Section 4.2 Successors. For purposes of determining the amount of distributions under Section 4.1, each Member shall be treated as having made the Capital Contributions and as having received the distributions made to or received by its predecessors in respect of any of such Member’s Units.

Section 4.3 Withholding. Notwithstanding any other provision of this Agreement, the Managing Member is authorized to take any action that may be required to cause the Company to comply with any withholding requirements established under the Code or any other federal, state or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Company is required or elects to withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income to any Member (including by reason of Section 1446 of the Code), the Managing Member may treat the amount withheld as a distribution of cash pursuant to this Article IV in the amount of such withholding from such Member. Each Member hereby agrees, to the maximum extent permitted by law, to indemnify and hold harmless the Company and the other Members from and against any liability, claim or expense (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to any tax withholdings made or required to be made on behalf of or with respect to such Member. In the event the Company is liquidated and a liability or claim is asserted against, or expense borne by, the Company or any Member for tax withholdings made or required to be made, such person shall have the right to be reimbursed from the Member on whose behalf such tax withholding was made or required to be made

Section 4.4 Limitation. Notwithstanding any other provision of this Agreement, the Company, and the Managing Member on behalf of the Company, shall not be required to make a distribution (a) if such distribution to any Member or Assignee would violate the Act or other applicable law, or (b) in any form other than cash.

Section 4.5 Adjustments. The Target Distributions, arrearages with respect to Class A Units and Class B1 Units shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Membership Interests. The Target Distributions shall also be subject to adjustment pursuant to Section 3.8 and Section 4.6

 

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Section 4.6 Tax Adjustments. If legislation is enacted or the official interpretation of existing legislation is modified by a governmental authority, which after giving effect to such enactment or modification, results in a Company Group Member becoming subject to federal, state or local or non-U.S. income or withholding taxes in excess of the amount of such taxes due from the Company Group Member prior to such enactment or modification (including, for the avoidance of doubt, any increase in the rate of such taxation applicable to the Company Group Member), then the holders of a majority in interest of the IDRs may request the Independent Conflicts Committee to consider the appropriateness of adjusting the Target Distribution, and upon the approval of the Independent Conflicts Committee, the Managing Member may reduce the Target Distributions by the amount of income or withholding taxes that are payable by reason of any such new legislation or interpretation (the “Incremental Income Taxes”), or any portion thereof selected by the Managing Member, in the manner provided in this Section 4.6. If the Managing Member elects to reduce the Target Distributions for any Quarter with respect to all or a portion of any Incremental Income Taxes for such Quarter, the Managing Member shall estimate for such Quarter the Company Group’s aggregate liability (the “Estimated Incremental Quarterly Tax Amount”) for all (or the relevant portion of) such Incremental Income Taxes. For each Quarter in which the Managing Member elects, pursuant to this Section 4.6, to reduce the Target Distributions, the adjusted Target Distribution Amount shall be the amount obtained by multiplying (a) the Target Distribution amount determined prior to the application of this Section 4.6 times (b) the quotient obtained by dividing (i) CAFD with respect to such Quarter by (ii) the sum of CAFD plus the Estimated Incremental Quarterly Tax Amount for such Quarter (as determined by the Managing Member). To the extent the Estimated Incremental Quarterly Tax Amount for a given Quarter differs from the actual liability for Incremental Income Taxes (or the relevant portion thereof) for such Quarter, the Managing Member may, to the extent determined by the Managing Member, take such differences into account in distributions with respect to subsequent Quarters.

Section 4.7 Interest Payment Agreement. Notwithstanding any other provision of this Agreement, none of SunEdison or its Affiliates shall have any rights, at any time, through distributions under this Agreement or otherwise, to reimbursement of any payments made by SunEdison or its Affiliates under the terms of the Interest Payment Agreement.

ARTICLE V

ALLOCATIONS

Section 5.1 Allocations for Capital Account Purposes.

(a) Except as otherwise provided in this Agreement, Net Income and Net Losses (and, to the extent necessary, individual items of income, gain or loss or deduction of the Company) shall be allocated in a manner such that the Capital Account of each Member after giving effect to the special allocations set forth in Section 5.1(b) is, as nearly as possible, equal (proportionately) to (i) the distributions that would be made pursuant to Section 7.2 if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Carrying Value, all Company liabilities were satisfied (limited with respect to each non-recourse liability to the Carrying Value of the assets securing such liability) and the net assets of the Company were distributed to the Members pursuant to this Agreement, minus (ii) such Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

(b) Special Allocations. Notwithstanding any other provision of this Section 5.1, the following special allocations shall be made for such taxable period:

(i) Company Minimum Gain Chargeback. Notwithstanding any other provision of this Section 5.1, if there is a net decrease in Company Minimum Gain during any Company taxable period, each Member shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts determined according to Treasury Regulations Sections 1.704-2(f) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 5.1(b), each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this

 

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Section 5.1(b) with respect to such taxable period (other than an allocation pursuant to Section 5.1(b)(iii) and Section 5.1(b)(vi)). This Section 5.1(b)(i) is intended to comply with the Company Minimum Gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Chargeback of Member Nonrecourse Debt Minimum Gain. Notwithstanding the other provisions of this Section 5.1 (other than Section 5.1(b)(i)), except as provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Company taxable period, any Member with a share of Member Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be allocated items of Company income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts determined according to Treasury Regulations Sections 1.704-2(i)(4), or any successor provisions. For purposes of this Section 5.1(b), each Member’s Adjusted Capital Account balance shall be determined, and the allocation of income and gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 5.1(b), other than Section 5.1(b)(i) and other than an allocation pursuant to Section 5.1(b)(v) and (b)(vi), with respect to such taxable period. This Section 5.1(b)(ii) is intended to comply with the chargeback of items of income and gain requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

(iii) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible, unless such deficit balance is otherwise eliminated pursuant to Section 5.1(b)(i) or Section 5.1(b)(ii). This Section 5.1(b)(iii) is intended to qualify and be construed as a “qualified income offset” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(iv) Gross Income Allocations. In the event any Member has a deficit balance in its Capital Account at the end of any Company taxable period in excess of the sum of (A) the amount such Member is required to restore pursuant to the provisions of this Agreement and (B) the amount such Member is deemed obligated to restore pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5), such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 5.1(b)(iv) shall be made only if and to the extent that such Member would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 5.1 have been tentatively made as if this Section 5.1(b)(iv) were not in this Agreement.

(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be allocated to the Members in accordance with their respective Percentage Interests. If the Managing Member determines that the Company’s Nonrecourse Deductions should be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the Managing Member is authorized, upon notice to the other Members, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.

(vi) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any taxable period shall be allocated 100% to the Member that bears the “Economic Risk of Loss” (as defined in the Treasury Regulations) with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations Section 1.704-2(i). If more than one Member bears the Economic Risk of Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions attributable thereto shall be allocated between or among such Members in accordance with the ratios in which they share such Economic Risk of Loss.

 

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(vii) Nonrecourse Liabilities. Nonrecourse Liabilities of the Company described in Treasury Regulations Section 1.752-3(a)(3) shall be allocated to the Members in accordance with their respective Percentage Interests.

(viii) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.

(ix) Curative Allocation.

(A) The allocations set forth in Section 5.1(b)(i) through 5.1(b)(viii) (the “Required Allocations”) are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Required Allocations shall be offset either with other Required Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 5.1(b)(ix)(A). Therefore, notwithstanding any other provision of this Article V (other than the Required Allocations), the Managing Member shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Required Allocations were not part of this Agreement and all Company items were allocated pursuant to the economic agreement among the Members.

(B) The Managing Member shall, with respect to each taxable period, (1) apply the provisions of Section 5.1(b)(ix)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 5.1(b)(ix)(A) among the Members in a manner that is likely to minimize such economic distortions.

(x) Deficit Capital Accounts. No Member shall be required to pay to the Company, to any other Member or to any third party any deficit balance which may exist from time to time in the Member’s Capital Account.

Section 5.2 Allocations for Tax Purposes.

(a) The income, gains, losses and deductions of the Company shall be allocated for federal, state and local income tax purposes among the Members in accordance with the allocation of such income, gains, losses and deductions among the Members for purposes of computing their Capital Accounts; except that if any such allocation is not permitted by the Code or other applicable law, then the Company’s subsequent income, gains, losses and deductions for tax purposes shall be allocated among the Members so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.

(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or an Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Members as follows:

(i) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Members in the manner provided under Section 704(c) of the Code that takes into account the variation between the Agreed Value of such property and its adjusted basis at the time of contribution.

(ii) In the case of an Adjusted Property, such items shall (A) first, be allocated among the Members in a manner consistent with the principles of Section 704(c) of the Code to take into account the

 

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Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Section 3.3(c)(i) or Section 3.3(c)(ii), and (B) second, in the event such property was originally a Contributed Property, be allocated among the Members in a manner consistent with Section 5.2(b)(i)).

(iii) In order to eliminate Book-Tax Disparities, the Managing Member shall cause the Company to use the “remedial method” as defined in Treasury Regulations Section 1.704-3(d), unless the Independent Conflicts Committee consents to the use of another method described in Treasury Regulations Section 1.704-3.

(c) For purposes of determining the items of Company income, gain, loss, deduction, or credit allocable to any Member with respect to any period, such items shall be determined on a daily, monthly, or other basis, as determined by the Managing Member using any permissible method under Code Section 706 and the Treasury Regulations promulgated thereunder.

(d) Tax credits, tax credit recapture and any items related thereto shall be allocated to the Members according to their interests in such items as reasonably determined by the Managing Member taking into account the principles of Treasury Regulations Sections 1.704-1(b)(4)(ii) and 1.704-1T(b)(4)(xi).

(e) Allocations pursuant to this Section 5.2 are solely for the purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Income, Loss, distributions or other Company items pursuant to any provision of this Agreement.

(f) For the proper administration of the Company, the Managing Member shall (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; (iii) without the consent of any other Person being required, correct or amend the provisions of this Agreement as appropriate to reflect Treasury Regulations under Section 704(b) or Section 704(c) of the Code; and (iv) adopt and employ such methods for (A) the maintenance of capital accounts for book and tax purposes, (B) the determination and allocation of adjustments under Sections 734 and 743 of the Code, (C) the determination and allocation of taxable income, tax loss and items thereof under this Agreement and pursuant to the Code, (D) the determination of the identities and tax classification of Members, (E) the provision of tax information and reports to the Members, (F) the adoption of reasonable conventions and methods for the valuation of assets and the determination of tax basis, (G) the allocation of asset values and tax basis, (H) the adoption and maintenance of accounting methods, (I) the recognition of the Transfer of Units and (J) tax compliance and other tax-related requirements, including without limitation, the use of computer software, in each case, as it determines in its sole discretion are necessary and appropriate to execute the provisions of this Agreement and to comply with federal, state and local tax law. The Managing Member may adopt such conventions and make such allocations as provided in this Section 5.2(f) without the consent of a Member only if such conventions or allocations would not have a material adverse effect on such affected Member, and if such allocations are consistent with the principles of Section 704 of the Code.

Section 5.3 Members’ Tax Reporting. The Members acknowledge and are aware of the income tax consequences of the allocations made pursuant to this Article V and, except as may otherwise be required by applicable law or regulatory requirements, hereby agree to be bound by the provisions of this Article V in reporting their shares of Company income, gain, loss, deduction and credit for federal, state and local income tax purposes.

Section 5.4 Certain Costs and Expenses. The Company shall (i) pay, or cause to be paid, all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the activities of the Company, and (ii) reimburse the Managing Member for any costs, fees or expenses incurred by it in connection with serving as the Managing Member. To the extent that the Managing Member determines in its sole discretion that such expenses are related to the business and affairs of the Managing Member that are conducted through the Company and/or its subsidiaries (including expenses that relate to the business and affairs of the Company and/or its subsidiaries and that also relate to other activities of the Managing Member), the Managing Member may cause the Company to pay or bear all expenses of the Managing Member, including, without suggesting any limitation of any kind, costs of securities

 

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offerings not borne directly by Members, board of directors compensation and meeting costs, cost of periodic reports to its stockholders, litigation costs and damages arising from litigation, accounting and legal costs and franchise taxes, provided that the Company shall not pay or bear any income tax obligations of the Managing Member.

ARTICLE VI

MANAGEMENT

Section 6.1 Managing Member; Delegation of Authority and Duties.

(a) Authority of Managing Member. The business, property and affairs of the Company shall be managed under the sole, absolute and exclusive direction of the Managing Member, which may from time to time delegate authority to Officers or to others to act on behalf of the Company. Without limiting the foregoing provisions of this Section 6.1(a), the Managing Member shall have the sole power to manage or cause the management of the Company, including the power and authority to effectuate the sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Company) or the merger, consolidation, reorganization or other combination of the Company with or into another entity.

(b) Other Members. No Member who is not also a Managing Member, in his or her or its capacity as such, shall participate in or have any control over the business of the Company. Except as expressly provided herein, the Units, other Equity Securities in the Company, or the fact of a Member’s admission as a member of the Company do not confer any rights upon the Members to participate in the management of the affairs of the Company. Except as expressly provided herein, no Member who is not also a Managing Member shall have any right to vote on any matter involving the Company, including with respect to any merger, consolidation, combination or conversion of the Company, or any other matter that a Member might otherwise have the ability to vote or consent with respect to under the Act, at law, in equity or otherwise. The conduct, control and management of the Company shall be vested exclusively in the Managing Member. In all matters relating to or arising out of the conduct of the operation of the Company, the decision of the Managing Member shall be the decision of the Company. Except as required by law or expressly provided in Section 6.1(c) or by separate agreement with the Company, no Member who is not also a Managing Member (and acting in such capacity) shall take any part in the management or control of the operation or business of the Company in its capacity as a Member, nor shall any Member who is not also a Managing Member (and acting in such capacity) have any right, authority or power to act for or on behalf of or bind the Company in his or her or its capacity as a Member in any respect or assume any obligation or responsibility of the Company or of any other Member.

(c) Delegation by Managing Member. The Company may employ one or more Members from time to time, and such Members, in their capacity as employees or agents of the Company (and not, for clarity, in their capacity as Members of the Company), may take part in the control and management of the business of the Company to the extent such authority and power to act for or on behalf of the Company has been delegated to them by the Managing Member. To the fullest extent permitted by law, the Managing Member shall have the power and authority to delegate to one or more other Persons the Managing Member’s rights and powers to manage and control the business and affairs of the Company, including to delegate to agents and employees of a Member or the Company (including Officers), and to delegate by a management agreement or another agreement with, or otherwise to, other Persons. The Managing Member may authorize any Person (including any Member or Officer) to enter into and perform any document on behalf of the Company.

Section 6.2 Officers.

(a) Designation and Appointment. The Managing Member may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business, including employees, agents and other Persons (any of whom may be a Member) who may be designated as Officers of the Company, with such titles as and to the extent authorized by the Managing Member. Any number of offices may be held by the same Person. In its discretion, the Managing Member may choose not to fill any office for any period as it may deem

 

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advisable. Officers need not be residents of the State of Delaware or Members. Any Officers so designated shall have such authority and perform such duties as the Managing Member may from time to time delegate to them. The Managing Member may assign titles to particular Officers. Each Officer shall hold office until his successor shall be duly designated and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. The salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Managing Member. Designation of an Officer shall not of itself create any employment or, except as provided in Section 6.4, contractual rights.

(b) Resignation and Removal. Any Officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the Managing Member. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. All employees, agents and Officers shall be subject to the supervision and direction of the Managing Member and may be removed, with or without cause, from such office by the Managing Member and the authority, duties or responsibilities of any employee, agent or Officer of the Company may be suspended by or altered the Managing Member from time to time, in each case in the sole discretion of the Managing Member.

(c) Officers as Agents. The Officers, to the extent of their powers, authority and duties set forth in this Agreement or an Employment Agreement or otherwise vested in them by the Managing Member, are agents of the Company for the purposes of the Company’s business and the actions of the Officers taken in accordance with such powers shall bind the Company.

Section 6.3 Liability of Members.

(a) No Personal Liability. Except as otherwise required by applicable law and as expressly set forth in this Agreement, no Member shall have any personal liability whatsoever in such Person’s capacity as a Member, whether to the Company, to any of the other Members, to the creditors of the Company or to any other third party, for the debts, liabilities, commitments or any other obligations of the Company or for any losses of the Company. Except as otherwise required by the Act, each Member shall be liable only to make such Member’s Capital Contribution to the Company, if applicable, and the other payments provided for expressly herein.

(b) Return of Distributions. In accordance with the Act and the laws of the State of Delaware, a Member may, under certain circumstances, be required to return amounts previously distributed to such Member. It is the intent of the Members that no distribution to any Member pursuant to Article IV shall be deemed a return of money or other property paid or distributed in violation of the Act. The payment of any such money or distribution of any such property to a Member shall be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and, to the fullest extent permitted by law, any Member receiving any such money or property shall not be required to return any such money or property to the Company or any other Person. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of any other Member.

(c) No Duties. Notwithstanding any other provision of this Agreement or any duty otherwise existing at law, in equity or otherwise, the parties hereby agree that the Members (including without limitation, the Managing Member), shall, to the maximum extent permitted by law, including Section 18-1101(c) of the Act, owe no duties (including fiduciary duties) to the Company, the other Members or any other Person who is a party to or otherwise bound by this Agreement; provided, however, that nothing contained in this Section 6.3(c) shall eliminate the implied contractual covenant of good faith and fair dealing. To the extent that, at law or in equity, any Member (including without limitation, the Managing Member) has duties (including fiduciary duties) and liabilities relating thereto to the Company, to another Member or to another Person who is a party to or otherwise bound by this Agreement, the Members (including without limitation, the Managing Member) acting under this Agreement will not be liable to the Company, to any such other Member or to any such other Person who is a party to or otherwise bound by this Agreement, for their good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities relating thereto of any Member (including without limitation, the Managing Member) otherwise existing at law, in equity or otherwise, are agreed by the parties hereto to replace to that extent such other duties and liabilities of the Members (including without limitation, the Managing Member) relating thereto. The Managing Member may consult with legal counsel,

 

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accountants and financial or other advisors and any act or omission suffered or taken by the Managing Member on behalf of the Company or in furtherance of the interests of the Company in good faith in reliance upon and in accordance with the advice of such counsel, accountants or financial or other advisors will be full justification for any such act or omission, and the Managing Member will be fully protected in so acting or omitting to act so long as such counsel or accountants or financial or other advisors were selected with reasonable care. Notwithstanding any other provision of this Agreement or otherwise applicable provision of law or equity, whenever in this Agreement the Managing Member is permitted or required to make a decision (i) in its “sole discretion” or “discretion” or under a grant of similar authority or latitude, the Managing Member shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest of or factors affecting the Company or the other Members, or (ii) in its “good faith” or under another expressed standard, the Managing Member shall act under such express standard and shall not be subject to any other or different standards.

Section 6.4 Indemnification by the Company.

(a) To the fullest extent permitted by applicable law (as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company to provide prior to such amendment)) but subject to the limitations expressly provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the Company from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties (including excise and similar taxes and punitive damages), interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its acting in the capacity that gave rise to its status as an Indemnitee (a “Proceeding”); provided, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 6.4, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. Any indemnification pursuant to this Section 6.4 shall be made only out of the assets of the Company, it being agreed that the Managing Member shall not be personally liable for such indemnification and shall have no obligation to contribute or loan any monies or property to the Company to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 6.4(a) in defending any Proceeding shall, from time to time, be advanced by the Company prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Company of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 6.4.

(c) The rights provided by this Section 6.4 shall be deemed contract rights and shall be in addition to any other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of the Membership Interests, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

(d) The Company may purchase and maintain insurance on behalf of the Company and its Subsidiaries and such other Persons as the Managing Member shall determine, against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Company’s activities or such Person’s activities on behalf of the Company, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

(e) For purposes of this Section 6.4, the Company shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Company also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 6.4(a); and action taken or omitted by it with respect to any employee benefit

 

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plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in the best interests of the Company.

(f) In no event may an Indemnitee subject the Members to personal liability by reason of the indemnification provisions set forth in this Agreement.

(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.4 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

(h) The provisions of this Section 6.4 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 6.4 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Company, nor the obligations of the Company to indemnify any such Indemnitee under and in accordance with the provisions of this Section 6.4 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. It is expressly acknowledged that the indemnification provided in this Section 6.4 could involve indemnification for negligence or under theories of strict liability. Notwithstanding the foregoing, no Indemnitee shall be entitled to any indemnity or advancement of expenses in connection with any Proceeding brought (i) by such Indemnified Person against the Company (other than to enforce the rights of such Indemnitee pursuant to this Section 6.4), any Member or any Officer, or (ii) by or in the right of the Company, without the prior written consent of the Managing Member.

Section 6.5 Liability of Indemnitees.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Company, the Members or any other Persons who have acquired interests in the Company, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and nonappealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal.

(b) The Managing Member may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents, and the Managing Member shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Managing Member in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Company or to the Members, the Managing Member and any other Indemnitee acting in connection with the Company’s business or affairs shall not be liable to the Company or to any Member for its good faith reliance on the provisions of this Agreement.

(d) Any amendment, modification or repeal of this Section 6.5 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 6.5 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

Section 6.6 Investment Representations of Members. Each Member hereby represents, warrants and acknowledges to the Company that: (a) such Member has such knowledge and experience in financial and business matters that such Member is capable of evaluating the merits and risks of an investment in the Company and is making an informed investment decision with respect thereto; (b) such Member is acquiring interests in the

 

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Company for investment only and not with a view to, or for resale in connection with, any distribution to the public or public offering thereof; and (c) the execution, delivery and performance of this Agreement have been duly authorized by such Member.

ARTICLE VII

WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;

ADMISSION OF NEW MEMBERS

Section 7.1 Member Withdrawal. No Member shall have the power or right to withdraw or otherwise resign or be expelled from the Company prior to the dissolution and winding up of the Company except pursuant to a Transfer permitted under this Agreement.

Section 7.2 Dissolution.

(a) Events. The Company shall be dissolved and its affairs shall be wound up on the first to occur of (i) the determination of the Managing Member, (ii) the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act or (iii) the termination of the legal existence of the last remaining Member or the occurrence of any other event which terminates the continued membership of the last remaining Member in the Company unless the Company is continued without dissolution in a manner permitted by the Act. In the event of a dissolution pursuant to clause (i) of the immediately preceding sentence, the relative economic rights of each Class of Units immediately prior to such dissolution shall be preserved to the greatest extent practicable with respect to distributions made to Members pursuant to Section 7.2(c) below in connection with the winding up of the Company, taking into consideration tax and other legal constraints that may adversely affect one or more parties hereto and subject to compliance with applicable laws and regulations, unless, with respect to any Class of Units, holders of not less than 90% of the Units of such Class consent in writing to a treatment other than as described above.

(b) Actions Upon Dissolution. When the Company is dissolved, the business and property of the Company shall be wound up and liquidated by the Managing Member or, in the event of the unavailability of the Managing Member or if the Managing Member shall so determine, such Member or other liquidating trustee as shall be named by the Managing Member.

(c) Priority. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to Section 7.2 to minimize any losses otherwise attendant upon such winding up. Upon dissolution of the Company, the assets of the Company shall be applied in the following manner and order of priority: (i) to creditors, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (including all contingent, conditional or unmatured claims), whether by payment or the making of reasonable provision for payment thereof; and (ii) the balance shall be distributed to the holders of Class A Units, Class B Units, Class B1 Units and any other Membership Interests in accordance with Section 4.1.

(d) Cancellation of Certificate. The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for in this Agreement and (ii) the Certificate shall have been canceled in the manner required by the Act.

(e) Return of Capital. The liquidators of the Company shall not be personally liable for the return of Capital Contributions or any portion thereof to the Members (it being understood that any such return shall be made solely from Company assets).

(f) Hart Scott Rodino. Notwithstanding any other provision in this Agreement, in the event the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), is applicable to any Member by reason of the fact that any assets of the Company will be distributed to such Member in connection with the dissolution of the Company, the distribution of any assets of the Company shall not be consummated until such time as the applicable waiting periods (and extensions thereof) under the HSR Act have expired or otherwise been terminated with respect to each such Member.

 

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Section 7.3 Transfer by Members. No Member may Transfer all or any portion of its Units or other interests or rights in the Company except as provided in Section 3.2(a), Section 3.9 and Section 7.4; provided, however, that, subject to the provisions of Section 3.10 and Section 3.9, the restrictions in this Agreement shall not prohibit or restrict SunEdison (or its Controlled Affiliates) from (i) pledging any of Class B Units or Class B1 Units, shares of Class B Common Stock or Class B1 Common Stock, IDRs or other Company securities held by any of them to lenders as security under its Credit Facilities, or (ii) transferring any or all of the pledged Class B Units or Class B1 Units, shares of Class B Common Stock or Class B1 Common Stock or other Company securities described in clause (ii) of this paragraph in the event of foreclosure on such pledged securities. In connection with any Transfer, the Transferor shall Transfer an equivalent number of shares of Class B Common Stock (in the case of a Transfer of Class B Units) or Class B1 Common Stock (in the case of a Transfer of Class B1 Units) to the Transferee, in accordance with the terms of the Terra, Inc. Charter. Any purported Transfer of all or a portion of a Member’s Units or other interests in the Company not complying with this Section 7.3 and Section 7.4 shall be void and shall not create any obligation on the part of the Company or the other Members to recognize that Transfer or to deal with the Person to which the Transfer purportedly was made. Notwithstanding anything to the contrary herein, the Class A Units shall not be Transferable, except to a Transferring Class A Member’s Successor in Interest.

Section 7.4 Admission or Substitution of New Members.

(a) Admission. Without the consent of any other Person, the Managing Member shall have the right to admit as a Substituted Member or an Additional Member, any Person who acquires an interest in the Company, or any part thereof, from a Member or from the Company. Concurrently with the admission of a Substituted Member or an Additional Member, the Managing Member shall forthwith (i) amend the Schedule of Members to reflect the name and address of such Substituted Member or Additional Member and to eliminate or modify, as applicable, the name and address of the Transferring Member with regard to the Transferred Units and (ii) cause any necessary papers to be filed and recorded and notice to be given wherever and to the extent required showing the substitution of a Transferee as a Substituted Member in place of the Transferring Member, or the admission of an Additional Member, in each case, at the expense, including payment of any professional and filing fees incurred, of such Substituted Member or Additional Member.

(b) Conditions and Limitations. The admission of any Person as a Substituted Member or an Additional Member shall be conditioned upon such Person’s written acceptance and adoption of all the terms and provisions of this Agreement by execution and delivery of the Adoption Agreement in the form attached hereto as Exhibit A or such other written instrument(s) in form and substance satisfactory to the Managing Member on behalf of the Company.

(c) Prohibited Transfers. Notwithstanding any contrary provision in this Agreement, unless each of the Members agrees otherwise in writing, in no event may any Transfer of a Unit or other interest in the Company be made by any Member or Assignee if:

(i) such Transfer is made to any Person who lacks the legal right, power or capacity to own such Unit or other interest in the Company;

(ii) except as otherwise provided pursuant to an Exchange Agreement, such Transfer (which solely for purposes of this Section 7.4(c) shall include the issuance of Units upon the exercise of an option or warrant to acquire such Unit) would not be within (or would cause the Company to fail to qualify for) one or more of the safe harbors described in paragraphs (e), (f), (g), (h) or (j) of Treasury Regulations Section 1.7704-1 or otherwise would pose a material risk that the Company could be treated as a “publicly traded partnership” within the meaning of Section 7704 of the Code and the regulations promulgated thereunder;

(iii) such Transfer would require the registration of such Transferred Unit or other interest in the Company or of any Class of Unit or other interest in the Company pursuant to any applicable United States federal or state securities laws (including, without limitation, the Securities Act or the Exchange Act) or other non-U.S. securities laws (including Canadian provincial or territorial securities laws) or would constitute a non-exempt distribution pursuant to applicable provincial or state securities laws;

 

34


(iv) such Transfer would cause any portion of the assets of the Company to become “plan assets” of any “benefit plan investor” within the meaning of regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations as modified by Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended from time to time;

(v) to the extent requested by the Managing Member, the Company does not receive such legal and/or tax opinions and written instruments (including, without limitation, copies of any instruments of Transfer and such Assignee’s consent to be bound by this Agreement as an Assignee) that are in a form satisfactory to the Managing Member, as determined in the Managing Member’s sole discretion; or

(vi) such Transfer (including any Transfers of the equity interests of a direct or indirect holder of a Membership Interest that is classified as a partnership or disregarded entity for U.S. federal income tax purposes) would cause any Membership Interest to be treated as being owned by a Disqualified Person.

In addition, notwithstanding any contrary provision in this Agreement, to the extent the Managing Member shall determine that interests in the Company do not meet or will not meet the requirements of Treasury Regulation section 1.7704-1(h) or could cause the Company to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code, the Managing Member may impose such restrictions on the Transfer of Units or other interests in the Company as the Managing Member may determine to be necessary or advisable so that the Company is not treated as a publicly traded partnership taxable as a corporation under Section 7704 of the Code.

Any purported Transfer in violation of Section 7.3 or this Section 7.4(c) shall be null and void ab initio and shall not be effective to transfer record, beneficial, legal or any other ownership of such Unit or other interest in the Company, the purported transferee shall not be entitled to any rights as a Member with respect to the Unit or other interest in the Company purported to be purchased, acquired or transferred in the Transfer (including, without limitation, the right to vote or to receive dividends with respect thereto), and all rights as a holder of the Unit or other interest in the Company purported to have been transferred shall remain in the purported transferor.

(d) Effect of Transfer to Substituted Member. Following the Transfer of any Unit or other interest in the Company that is permitted under Sections 7.3 and 7.4, the Transferee of such Unit or other interest in the Company shall be treated as having made all of the Capital Contributions in respect of, and received all of the distributions received in respect of, such Unit or other interest in the Company, shall succeed to the Capital Account balance associated with such Unit or other interest in the Company, shall receive allocations and distributions under Article IV and Article V in respect of such Unit or other interest in the Company and otherwise shall become a Substituted Member entitled to all the rights of a Member with respect to such Unit or other interest in the Company.

Section 7.5 Additional Requirements. Notwithstanding any contrary provision in this Agreement, for the avoidance of doubt, the Managing Member may impose such vesting requirements, forfeiture provisions, Transfer restrictions, minimum retained ownership requirements or other similar provisions with respect to any interests in the Company that are outstanding as of the date of this Agreement or are created hereafter, with the written consent of the holder of such interests in the Company. Such requirements, provisions and restrictions need not be uniform among holders of interests in the Company and may be waived or released by the Managing Member in its sole discretion with respect to all or a portion of the interests in the Company owned by any one or more Members or Assignees at any time and from time to time, and such actions or omissions by the Managing Member shall not constitute the breach of this Agreement or of any duty hereunder or otherwise existing at law, in equity or otherwise.

Section 7.6 Bankruptcy. Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall not cause such Member to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.

Section 7.7 [Reserved].

Section 7.8 [Reserved].

 

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ARTICLE VIII

BOOKS AND RECORDS; FINANCIAL STATEMENTS AND

OTHER INFORMATION; TAX MATTERS

Section 8.1 Books and Records. The Company shall keep at its principal executive office (i) correct and complete books and records of account (which, in the case of financial records, shall be kept in accordance with GAAP), (ii) minutes of the proceedings of meetings of the Members, (iii) a current list of the directors and officers of the Company and its Subsidiaries and their respective residence addresses, (iv) a record containing the names and addresses of all Members, (v) a record of the total number of Units held by each Member, if any, and the dates when they respectively became the owners of record thereof and (vi) a record of the percentage of IDRs held by each Member, if any, and the dates when they respectively became the holder of record thereof. Any of the foregoing books, minutes or records may be in written form or in any other form capable of being converted into written form within a reasonable time. Except as expressly set forth in this Agreement, notwithstanding the rights set forth in Section 18-305 of the Act, no Member shall have the right to obtain information from the Company.

Section 8.2 Information.

(a) The Members shall be supplied at the Company’s expense with all other Company information reasonably necessary to enable each Member to prepare its federal, state, and local income tax returns on a timely basis.

(b) All determinations, valuations and other matters of judgment required to be made for ordinary course accounting purposes under this Agreement shall be made by the Managing Member and shall be conclusive and binding on all Members, their Successors in Interest and any other Person who is a party to or otherwise bound by this Agreement, and to the fullest extent permitted by law or as otherwise provided in this Agreement, no such Person shall have the right to an accounting or an appraisal of the assets of the Company or any successor thereto.

Section 8.3 Fiscal Year. The Fiscal Year of the Company shall end on December 31st unless otherwise determined by the Managing Member in its sole discretion in accordance with Section 706 of the Code.

Section 8.4 Certain Tax Matters.

(a) Preparation of Returns. The Managing Member shall cause to be prepared all federal, state and local tax returns of the Company for each year for which such returns are required to be filed and shall cause such returns to be timely filed. The Managing Member shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Company and the accounting methods and conventions under the tax laws of the United States of America, the several states and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. Except as specifically provided otherwise in this Agreement, the Managing Member may cause the Company to make or refrain from making any and all elections permitted by such tax laws. As promptly as practicable after the end of each Fiscal Year, the Managing Member shall cause the Company to provide to each Member a Schedule K-1 for such Fiscal Year. Additionally, the Managing Member shall cause the Company to provide on a timely basis to each Member, to the extent commercially reasonable and available to the Company without undue cost, any information reasonably required by the Member to prepare, or in connection with an audit of, such Member’s income tax returns.

(b) Consistent Treatment. Each Member agrees that it shall not, except as otherwise required by applicable law or regulatory requirements, (i) treat, on its individual income tax returns, any item of income, gain, loss, deduction or credit relating to its interest in the Company in a manner inconsistent with the treatment of such item by the Company as reflected on the Form K-1 or other information statement furnished by the Company to such Member for use in preparing its income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment.

(c) Duties of the Tax Matters Member. In respect of an income tax audit of any tax return of the Company, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Company, or any administrative or judicial proceedings arising

 

36


out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (i) the Managing Member shall direct the Tax Matters Member to act for, and such action shall be final and binding upon, the Company and all Members except to the extent a Member shall properly elect to be excluded from such proceeding pursuant to the Code, (ii) all expenses incurred by the Tax Matters Member in connection therewith (including attorneys’, accountants’ and other experts’ fees and disbursements) shall be expenses of, and payable by, the Company, (iii) no Member shall have the right to (A) participate in the audit of any Company tax return, (B) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit (other than items which are not partnership items within the meaning of Code Section 6231(a)(4) or which cease to be partnership items under Code Section 6231(b)) reflected on any tax return of the Company, (C) participate in any administrative or judicial proceedings conducted by the Company or the Tax Matters Member arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (D) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Company or the Tax Matters Member or with respect to any such amended return or claim for refund filed by the Company or the Tax Matters Member or in any such administrative or judicial proceedings conducted by the Company or the Tax Matters Member and (iv) the Tax Matters Member shall keep the Members reasonably apprised of the status of any such proceeding. Notwithstanding the previous sentence, if a petition for a readjustment to any partnership item included in a final partnership administrative adjustment is filed with a District Court or the Court of Claims and the IRS has elected to assess income tax against a Member with respect to that final partnership administrative adjustment (rather than suspending assessments until the District Court or Court of Claims proceedings become final), such Member shall be permitted to file a claim for refund within such period of time as to avoid application of any statute of limitations which would otherwise prevent the Member from having any claim based on the final outcome of that review.

(d) Tax Matters Member. The Company and each Member hereby designate the Managing Member as the “tax matters partner” for purposes of Code Section 6231(a)(7) (the “Tax Matters Member”).

(e) Certain Filings. Upon the Transfer of an interest in the Company (within the meaning of the Code), a sale of Company assets or a liquidation of the Company, the Members shall provide the Managing Member with information and shall make tax filings as reasonably requested by the Managing Member and required under applicable law.

(f) Section 754 Election. The Managing Member shall cause the Company to make and to maintain and keep in effect at all times, in accordance with Sections 734, 743 and 754 of the Code and applicable Treasury Regulations and comparable state law provisions, an election to adjust basis in the event (i) any Class B Unit or Class B1 Unit is Transferred in accordance with this Agreement or the applicable Exchange Agreement,(ii) any Company property is distributed to any Member (iii) such Managing Member otherwise determines to make such an election.

ARTICLE IX

MISCELLANEOUS

Section 9.1 Separate Agreements; Schedules. Notwithstanding any other provision of this Agreement, including Section 9.4, or of any other binding agreement between the Company and any Member, the Managing Member may, or may cause the Company to, without the approval of any other Member or other Person, enter into separate agreements with individual Members with respect to any matter, which have the effect of establishing rights under, or altering, supplementing or amending the terms of, this Agreement or any such separate agreement. The parties hereto agree that any terms contained in any such separate agreement shall govern with respect to such Member(s) party thereto notwithstanding the provisions of this Agreement. The Managing Member may from time to time execute and deliver to the Members schedules which set forth information contained in the books and records of the Company and any other matters deemed appropriate by the Managing Member. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever.

Section 9.2 Governing Law; Disputes. (a) THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

 

37


(b) Any dispute, controversy or claim solely arising out of, relating to or in connection with the rights or obligations of the Class A Member vis-à-vis any of the Class B Members or Class B1 Members shall be finally settled by arbitration. The arbitration shall take place in Wilmington, Delaware and be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) then in effect (except as they may be modified by mutual agreement of the Class A Member and the affected Class B Member or Class B1 Member). The arbitration shall be conducted by three neutral, impartial and independent arbitrators, who shall be appointed by the AAA, at least one of whom shall be a retired judge or a senior partner at one of the nationally recognized Delaware-based law firms. The arbitration award shall be final and binding on the parties. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets. The costs of the arbitration shall be borne by the Company. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings. Notwithstanding the foregoing, the parties hereto may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate and/or seeking temporary or preliminary relief in aid of an arbitration hereunder.

(c) Each party agrees that it shall bring any action, suit, demand or proceeding (including counterclaims) in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby, exclusively in the United States District Court for the District of Delaware or any Delaware State court, in each case, sitting in the City of Wilmington, Delaware (the “Chosen Courts”), and solely in connection with claims arising under this Agreement or the transactions contemplated hereby (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action, suit, demand or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party and (iv) agrees that service of process upon such party in any such action, suit, demand or proceeding shall be effective if notice is given in accordance with Section 9.5.

(d) EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, DEMAND OR PROCEEDING (INCLUDING COUNTERCLAIMS) ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 9.3 Parties in Interest. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective Successors in Interest; provided that no Person claiming by, through or under a Member (whether as such Member’s Successor in Interest or otherwise), as distinct from such Member itself, shall have any rights as, or in respect to, a Member (including the right to approve or vote on any matter or to notice thereof), and nothing in this Agreement (express or implied) is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

Section 9.4 Amendments and Waivers. This Agreement may be amended, supplemented, waived or modified by the written consent of the Managing Member in its sole discretion without the approval of any other Member or other Person; provided that except as otherwise provided herein (including, without limitation, in Section 3.2), no amendment may (i) modify the limited liability of any Member, or increase the liabilities or obligations of any Member, in each case, without the consent of each such affected Member; or (ii) materially and adversely affect the rights of a holder of Class A Units, Class B Units or Class B1 Units, in their capacity as holders of Class A Units, Class B Units or Class B1 Units, in relation to other classes of Equity Securities of the Company, without the consent of the holders of a majority of such classes of Units; and provided, further that so long as the Managing Member is Terra, Inc., any such amendment, supplement or waiver must be approved by a majority of Terra, Inc.’s independent directors (as determined in accordance with the applicable listing rules of the exchange on which Terra, Inc.’s common stock is listed as of the time of such amendment, supplement or waiver). Notwithstanding the foregoing, the Managing Member may, without the written consent of any other Member or any other Person, amend, supplement, waive or modify any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to: (1) reflect any amendment, supplement, waiver or modification that the Managing Member determines to be necessary or appropriate in connection with the creation, authorization or issuance of any Class of Units or other Equity Securities in the Company or other Company securities in accordance with this Agreement; (2) reflect the admission, substitution, withdrawal or removal of Members in accordance with this Agreement; (3) reflect a change in the name of the Company, the location of the principal place of business of the Company, the registered agent of the Company or the registered office of the Company; (4) reflect a change in the Fiscal Year or taxable year of the Company and any other changes that the Managing Member determines to be necessary or appropriate as a result of a change in the

 

38


Fiscal Year or taxable year of the Company, including a change in the dates on which distributions are to be made by the Company; or (5) cure any ambiguity, mistake, defect or inconsistency; provided further, that the books and records of the Company (including the Schedule of Members) shall be deemed amended from time to time to reflect the admission of a new Member, the withdrawal or resignation of a Member, the adjustment of the Units or other interests in the Company resulting from any issuance, Transfer or other disposition of Units or other interests in the Company, in each case that is made in accordance with the provisions hereof. If an amendment has been approved in accordance with this Agreement, such amendment shall be adopted and effective with respect to all Members. Upon obtaining such approvals as may be required by this Agreement, and without further action or execution on the part of any other Member or other Person, any amendment to this Agreement may be implemented and reflected in a writing executed solely by the Managing Member and the other Members shall be deemed a party to and bound by such amendment.

No failure or delay by any party in exercising any right, power or privilege hereunder (other than a failure or delay beyond a period of time specified herein) shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 9.5 Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing and shall be given to any Member at such Member’s address or facsimile number shown in the Company’s books and records, or, if given to the Company, at the following address:

TerraForm Power, LLC

12500 Baltimore Avenue

Beltsville, Maryland 20705

Attn: General Counsel

Facsimile: (240) 264-8100

With a copy (which shall not constitute notice to the Company) to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

Attn: Dennis M. Myers, P.C.

Facsimile: (312) 862-2200

Each proper notice shall be effective upon any of the following: (a) personal delivery to the recipient, (b) when sent by facsimile to the recipient (with confirmation of receipt), (c) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) three Business Days after being deposited in the mails (first class or airmail postage prepaid).

Section 9.6 Counterparts. This Agreement may be executed simultaneously in two or more separate counterparts, any one of which need not contain the signatures of more than one party, but each of which shall be an original and all of which together shall constitute one and the same agreement binding on all the parties hereto.

Section 9.7 Power of Attorney. Each Member hereby irrevocably appoints the Managing Member as such Member’s true and lawful representative and attorney in fact, each acting alone, in such Member’s name, place and stead, (a) to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or which may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Company shall determine to do business, or any political subdivision or agency thereof and (b) to execute, implement and continue the valid and subsisting existence of the Company or to qualify and continue the Company as a foreign limited liability company in all jurisdictions in which the Company may conduct business. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent withdrawal from the Company of any Member for any reason and shall survive and shall not be affected by the disability, incapacity, bankruptcy or dissolution of such Member. No power of attorney granted in this Agreement shall revoke any previously granted power of attorney.

 

39


Section 9.8 Entire Agreement. This Agreement, the Exchange Agreements and the other documents and agreements referred to herein or entered into concurrently herewith embody the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein; provided that such other agreements and documents shall not be deemed to be a part of, a modification of or an amendment to this Agreement. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter, including the Original LLC Agreement.

Section 9.9 Remedies. Each Member shall have all rights and remedies set forth in this Agreement and all rights and remedies that such Person has been granted at any time under any other agreement or contract and all of the rights that such Person has under any applicable law. Any Person having any rights under any provision of this Agreement or any other agreements contemplated hereby shall be entitled to enforce such rights specifically (without posting a bond or other security) to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by applicable law.

Section 9.10 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 9.11 Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company or any of its Affiliates, and no creditor who makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time as a result of making the loan any direct or indirect interest in Company profits, losses, distributions, capital or property other than as a secured creditor.

Section 9.12 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 9.13 Further Action. The parties agree to execute and deliver all documents, provide all information and take or refrain from taking such actions as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 9.14 Delivery by Facsimile or Email. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or email with scan or facsimile attachment, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or email as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

 

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IN WITNESS WHEREOF, the parties have executed this Second Amended and Restated Limited Liability Company Agreement.

 

MANAGING MEMBER
TERRAFORM POWER, INC.
By:  

/s/ Sebastian Deschler

  Name:   Sebastian Deschler
  Title:   Senior Vice President, General Counsel and Secretary
OTHER MEMBERS
SUNEDISON HOLDINGS CORPORATION
  By:  

/s/ Martin Truong

    Name:   Martin Truong
    Title:   Secretary

[Signature Page to A&R Terra, LLC Agreement]


EXHIBIT A

Adoption Agreement

This Adoption Agreement is executed by the undersigned pursuant to the Amended and Restated Limited Liability Company Agreement of TerraForm Power, LLC (the “Company”), dated as of July 23, 2014, as amended, restated or supplemented from time to time, a copy of which is attached hereto and is incorporated herein by reference (the “Agreement”). By the execution of this Adoption Agreement, the undersigned agrees as follows:

1. Acknowledgment. The undersigned acknowledges that he/she is acquiring [            ] Class [B/B1] Units of the Company as a Class [B/B1] Member, subject to the terms and conditions of the Agreement (including the Exhibits thereto), as amended from time to time. Capitalized terms used herein without definition are defined in the Agreement and are used herein with the same meanings set forth therein.

2. Agreement. The undersigned hereby joins in, and agrees to be bound by, subject to, and enjoy the benefit of the applicable rights set forth in, the Agreement (including the Exhibits thereto), as amended from time to time, with the same force and effect as if he/she were originally a party thereto.

3. Notice. Any notice required or permitted by the Agreement shall be given to the undersigned at the address listed below.

EXECUTED AND DATED on this      day of         , 20    .

 

 

[Name]
Notice Address:  

 

 

 

Facsimile:  

 


EXHIBIT B

Schedule of Members

 

Name

 

Address

 

Class and Number

of Units or

Percentage of

Incentive Distribution Rights

 

Certificate No.

(if applicable)

 

Transferee, Address, Number
of Units, Certificate

Nos. (if applicable)

TerraForm Power, Inc.  

12500 Baltimore Avenue, Beltsville, Maryland

20705

  30,652,336 Class A Units   N/A   N/A
SunEdison Holdings Corporation   13736 Riverport Drive, Suite 180, Maryland Heights, MO 63043   64,526,654 Class B Units; 100% of Incentive Distribution Rights   N/A   N/A
R/C US Solar Investment Partnership, L.P.   c/o Riverstone Holdings LLC, 712 Fifth Avenue, 36th Avenue, New York, NY, 10019   5,840,000 Class B1 Units   N/A   N/A
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       

 

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EX-10.1

Exhibit 10.1

TERRAFORM POWER, INC.,

TERRAFORM POWER, LLC

and

TERRAFORM POWER OPERATING, LLC

and

SUNEDISON, INC.

as Manager

 

 

MANAGEMENT SERVICES AGREEMENT

 

 


TABLE OF CONTENTS

 

            Page  

ARTICLE 1 INTERPRETATION

     1   

1.1

    

Definitions

     1   

1.2

    

Headings and Table of Contents

     7   

1.3

    

Interpretation

     7   

1.4

    

Service Recipients Third Party Beneficiaries

     8   

1.5

    

Actions by the Manager or the Service Recipients

     8   

ARTICLE 2 APPOINTMENT OF THE MANAGER

     8   

2.1

    

Appointment and Acceptance

     8   

2.2

    

Other Service Recipients

     8   

2.3

    

Subcontracting and Other Arrangements

     9   

2.4

    

Assumption of O&M and Asset Management Contracts

     9   

ARTICLE 3 SERVICES AND POWERS OF THE MANAGER

     9   

3.1

    

Services

     9   

3.2

    

Supervision of Manager’s Activities

     11   

3.3

    

Restrictions on the Manager

     11   

3.4

    

Errors and Omissions Insurance

     12   

3.5

    

Retention of Third-Party Project Asset Manager

     12   

ARTICLE 4 RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

     12   

4.1

    

Independent Contractor, No Partnership or Joint Venture

     12   

ARTICLE 5 MANAGEMENT AND EMPLOYEES

     13   

5.1

    

Management and Employees

     13   

ARTICLE 6 INFORMATION AND RECORDS

     13   

6.1

    

Books and Records

     13   

6.2

    

Examination of Records by the Service Recipients

     14   

6.3

    

Access to Information by Manager Group

     14   

6.4

    

Access to Information by Service Recipients

     14   

6.5

    

Additional Information

     15   

ARTICLE 7 FEES AND EXPENSES

     15   

7.1

    

Base Management Fee

     15   

7.2

    

Computation and Payment of Quarterly Base Management Fee Amount

     15   

 

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7.3

    

Expenses

     16   

7.4

    

Governmental Charges

     17   

7.5

    

Computation and Payment of Expenses and Governmental Charges

     17   

ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF THE MANAGER AND THE SERVICE RECIPIENTS

     17   

8.1

    

Representations and Warranties of the Manager

     17   

8.2

    

Representations and Warranties of the Service Recipients

     18   

ARTICLE 9 LIABILITY AND INDEMNIFICATION

     19   

9.1

    

Indemnity

     19   

9.2

    

Limitation of Liability

     20   

9.3

    

Benefit to all Manager Indemnified Parties

     21   

ARTICLE 10 TERM AND TERMINATION

     21   

10.1

    

Term

     21   

10.2

    

Termination by the Service Recipients

     21   

10.3

    

Termination by the Manager

     22   

10.4

    

Survival Upon Termination

     23   

10.5

    

Action Upon Termination

     23   

10.6

    

Release of Money or other Property Upon Written Request

     23   

ARTICLE 11 NON-COMPETE

     24   

11.1

    

Non-Compete

     24   

11.2

    

Non-Solicitation

     25   

11.3

    

Survival

     25   

ARTICLE 12 REFERRAL FEE

     25   

12.1

    

Referral Fee

     25   

12.2

    

Referral Fee Payment

     26   

ARTICLE 13 GENERAL PROVISIONS

     26   

13.1

    

Amendment, Waiver

     26   

13.2

    

Assignment

     27   

13.3

    

Failure to Pay When Due

     27   

13.4

    

Invalidity of Provisions

     27   

13.5

    

Entire Agreement

     27   

13.6

    

Mutual Waiver of Jury Trial

     28   

13.7

    

Consent to Jurisdiction and Service of Process

     28   

13.8

    

Governing Law

     29   

13.9

    

Enurement

     29   

13.10

    

Notices

     29   

13.11

    

Further Assurances

     30   

13.12

    

Counterparts

     30   

 

ii


MANAGEMENT SERVICES AGREEMENT

THIS AGREEMENT is made as of July 23, 2014, by and among TerraForm Power, Inc., a Delaware corporation (“Terra”), TerraForm Power, LLC, a Delaware limited liability company (“Terra LLC”), TerraForm Power TerraOperating, LLC, a Delaware limited liability company (“Terra Operating”), and SunEdison, Inc., a Delaware corporation (the “Manager”). This Agreement shall become effective immediately prior to the consummation of the initial public offering of Terra’s Class A Common Stock on the date first above written.

RECITALS:

A. Terra, Terra LLC and Terra Operating directly and indirectly, as applicable, hold interests in the Service Recipients (as defined below).

B. Terra, Terra LLC and Terra Operating wish to engage the Manager to provide or arrange for other Service Providers (as defined below) to provide the services set forth in this Agreement to the Service Recipients, subject to the supervision of such services by the Independent Committee (as defined below) and the terms and conditions of this Agreement, and the Manager wishes to accept such engagement.

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

 

  1.1 Definitions

In this Agreement, except where the context otherwise requires, the following terms will have the following meanings:

1.1.1 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person.

1.1.2 “Acquired Assets” means any renewable generation and infrastructure asset acquired after the date hereof by any member of the Terra Group, including, but not limited, to any assets acquired pursuant to the Project Contribution Agreement or otherwise agreed upon by the Manager and Terra.

1.1.3 “Agreement” means this Management Services Agreement, and “herein,” “hereof,” “hereby,” “hereunder” and similar expressions refer to this Agreement and include every instrument supplemental or ancillary to this Agreement and, except where the context otherwise requires, not to any particular article or section thereof.


1.1.4 “Asset Management Agreements” means any project-level asset management or administrative support agreements entered or to be entered into between any member of the Terra Group and any member of the Manager’s Group or any third party.

1.1.5 “Base Management Fee” means,

for the calendar year 2014, zero;

for the calendar year 2015, an amount equal to 2.5% of Terra’s Cash Available for Distribution; provided that, to the extent such amount exceeds the Base Management Fee Cap, the Base Management Fee for the year shall be an amount equal to the Base Management Fee Cap for such calendar year;

for the calendar year 2016, an amount equal to 2.5% of Terra’s Cash Available for Distribution; provided that, to the extent such amount exceeds the Base Management Fee Cap, the Base Management Fee for the year shall be an amount equal to the Base Management Fee Cap for such calendar year;

for the calendar year 2017, an amount equal to 2.5% of Terra’s Cash Available for Distribution; provided that, to the extent such amount exceeds the Base Management Fee Cap, the Base Management Fee for the year shall be an amount equal to the Base Management Fee Cap for such calendar year; and

for the calendar year 2018, an amount equal to the Manager Group’s actual cost in providing services pursuant to the terms of this Agreement.

The Base Management Fee may be increased or decreased from time to time by an agreed upon amount resulting from the amendment of the scope of the Services pursuant to Section 13.1.1 hereof.

1.1.6 “Base Management Fee Cap” means $4,000,000 for the 2015 calendar year; $7,000,000 for the 2016 calendar year and $9,000,000 for the 2017 calendar year.

1.1.7 “Business” means the business carried on from time to time by the Terra Group.

1.1.8 “Business Day” means every day except a Saturday or Sunday, or a legal holiday in the City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

1.1.9 “Cash Available for Distribution” means net cash provided by (used in) operating activities (i) plus or minus changes in assets and liabilities as reflected on Terra’s statements of cash flows, (ii) minus deposits into (or plus withdrawals from) restricted cash accounts required by project financing arrangements to the extent they decrease (or increase) cash provided by operating activities, (iii) minus cash distributions paid to noncontrolling interests, if any, (iv) minus scheduled project-level and other debt service payments and repayments in accordance with the related borrowing arrangements, to the extent they are paid from operating cash flows during a period, (v) minus non-expansionary capital expenditures, if

 

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any, to the extent they are paid from operating cash flows during a period, and (vi) plus or minus other operating items as necessary to present the cash flows Terra deems representative of its core business operations, with the approval of Terra’s audit committee.

1.1.10 “Claims” has the meaning assigned thereto in Section 9.1.1 hereof.

1.1.11 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controls another Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example the status of A being the managing member of B) or by virtue of beneficial ownership of or control over a majority of the voting or economic interests in B; and, for certainty and without limitation, if A owns or has control over shares to which are attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B or A is the general partner of B, a limited partnership, then in each case A Controls B for this purpose, and the term “Controlled” has the corresponding meaning.

1.1.12 “Current Quarter Payment” has the meaning assigned thereto in Section 7.1.1 hereof.

1.1.13 “Dedicated Personnel” has the meaning assigned thereto in Section 5.1.1 hereof.

1.1.14 “Expense Statement” has the meaning assigned thereto in Section 7.5 hereof.

1.1.15 “GAAP” means generally accepted accounting principles in the United States, and otherwise applicable local accounting principles, used by Terra in preparing its financial statements from time to time; provided that, at any time after adoption of IFRS by Terra for its financial statements and reports for all financial reporting purposes, all references to GAAP hereunder shall be to IFRS.

1.1.16 “Governing Body” means (i) with respect to a corporation, the board of directors of such corporation, (ii) with respect to a limited liability company, the manager(s) or managing member(s) of such limited liability company, (iii) with respect to a limited partnership, the board, committee or other body of the general partner of such partnership that serves a similar function or the general partner itself (or if any such general partner is itself a limited partnership, the board, committee or other body of such general partner’s general partner that serves a similar function or such general partner’s partner) and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in the case of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such body has delegated any power or authority, including any officer and managing director.

1.1.17 “Governing Instruments” means (i) the certificate of incorporation and bylaws in the case of a corporation, (ii) the articles of formation and operating agreement in the case of a limited liability company (iii) the partnership agreement in the case of a partnership, and (iv) any other similar governing document under which an entity was organized, formed or created and/or operates.

 

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1.1.18 “Governmental Authority” means any (i) international, national, multinational, federal, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency or instrumentality, domestic or foreign, including ISO/RTOs, (ii) self-regulatory organization or stock exchange, (iii) subdivision, agent, commission, board, or authority of any of the foregoing, or (iv) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

1.1.19 “Governmental Charges” has the meaning assigned thereto in Section 7.4 hereof.

1.1.20 “IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board.

1.1.21 “Independent Committee” means a committee of the Governing Body of Terra, established in accordance with Terra’s Governing Instruments, made up of directors that are “independent” of the Manager and its Affiliates. For purposes of this definition, “independent” means a person who satisfies the independence requirements of the rules and regulations of the applicable stock exchange, the U.S. Securities and Exchange Commission and Terra’s Governing Instruments.

1.1.22 “Interest Payment Agreement” means the Interest Payment Agreement dated on or about the date hereof by and among Terra LLC, Terra Operating, SunEdison Holdings Corporation and Manager, providing for the payment by Manager, either to the applicable lender or as a capital contribution, of amounts equal to the interest due with respect to term loans made under Terra Operating’s credit agreement.

1.1.23 “Interest Rate” means, for any day, the rate of interest equal to the overnight U.S. dollar London interbank offered rate on such day.

1.1.24 “ISO/RTO” means an independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of energy in any jurisdiction in which the Terra Group owns assets or operates.

1.1.25 “Laws” means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common law and equity, rules, regulations and municipal bylaws whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, and awards of any Governmental Authority, and (iii) policies, practices and guidelines of any Governmental Authority which, although not actually having the force of law, are considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable,” with respect to such Laws and in the context that refers to one or more Persons, means such Laws that apply to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

 

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1.1.26 “Liabilities” has the meaning assigned thereto in Section 9.1.1 hereof.

1.1.27 “Manager Change in Control” shall mean any of the following: (i) any subsidiary of the Manager that owns the stock in Terra no longer being a Subsidiary of the Manager, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Manager to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Group”), together with any affiliates thereof; (ii) the commencement of the liquidation or dissolution of the Manager that occurs following the approval by the holders of capital stock of the Manager of any plan or proposal for such liquidation or dissolution of the Manager; (iii) any Person or Group shall become the beneficial owner (within the meaning of Section 13(d) of the Exchange Act), directly or indirectly, of shares representing more than 50% of the aggregate voting power of the issued and outstanding stock entitled to vote in the election of directors, managers or trustees (the “Voting Stock”) of the Manager and such Person or Group actually has the power to vote such shares in any such election; (iv) the replacement of a majority of the Board of Directors of the Manager over a two-year period from the directors who constituted the Board of Directors of the Manager at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Manager then still in office who were members of such Board of Directors at the beginning of such period; or (v) a merger or consolidation of the Manager with another entity in which holders of the Common Stock of the Manager immediately prior to the consummation of the transaction hold, directly or indirectly, immediately following the consummation of the transaction, 50% or less of the common equity interest in the surviving corporation in such transaction.

1.1.28 “Manager Group” means the Manager and its Affiliates (other than any member of the Terra Group) and any other Service Providers.

1.1.29 “Manager Indemnified Parties” has the meaning assigned thereto in Section 9.1.1 hereof.

1.1.30 “Manager” has the meaning assigned thereto in the preamble.

1.1.31 “Non-Competition Period” means the period of time from the effective date of this Agreement until the later of (a) the seventh anniversary of the date of this Agreement or (b) six months after the date on which the Manager ceases to beneficially own capital stock representing more than 50% of the voting power of all the capital stock issued by Terra outstanding on such date.

1.1.32 “O&M Agreements” means any project-level operation and maintenance agreements entered or to be entered into between any member of the Terra Group and any member of the Manager’s Group or any other third party.

1.1.33 “Operational and Other Services” means any services provided by any member of the Manager Group to any member of the Terra Group, including financial advisory, operations and maintenance, marketing, agency, development, operating management and other services, including services provided under any Operating and Administrative Agreement.

 

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1.1.34 “Operating and Administrative Agreements” means the O&M Agreements and Asset Management Agreements in effect on the date hereof between certain members of the Terra Group and Affiliates of the Manager for such Terra Group members’ operating, project-level asset management and administrative needs and, with respect to any Acquired Assets, any operations and administrative agreements between any of the Acquired Assets and Affiliates of the Manager for such asset’s operating, project-level asset management and administrative needs in effect as of the date of acquisition of the Acquired Asset by a member of the Terra Group; for greater certainty, none of the Operating and Administrative Agreements are, or shall be, amended or terminated, or otherwise altered, by this Agreement.

1.1.35 “Permit” means any consent, license, approval, registration, permit or other authorization granted by any Governmental Authority.

1.1.36 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimited liability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or Governmental Agency, authority or entity however designated or constituted and pronouns have a similarly extended meaning.

1.1.37 “Project Contribution Agreement” means the Project Contribution Agreement between the Manager and Terra dated on or about the date hereof that provides Terra a right to purchase certain assets of the Manager.

1.1.38 “Quarter” means a calendar quarter ending on the last day of March, June, September or December.

1.1.39 “Referral Fee” has the meaning assigned thereto in Section 12.1 hereof.

1.1.40 “Service Providers” means the Manager, any member of the Manager Group and any other entity or individual that the Manager has arranged to provide the Services to any Service Recipient in accordance with Section 2.3 hereof.

1.1.41 “Service Recipient” means Terra, Terra LLC, Terra Operating and the Subsidiaries listed on Schedule I hereto, as well as any other direct and indirect Subsidiary of Terra, Terra LLC, Terra Operating, as applicable, acquired or formed after the date hereof that receives Services from a Service Provider pursuant to this Agreement.

1.1.42 “Services” has the meaning assigned thereto in Section 3.1 hereof.

1.1.43 “Shared Personnel” has the meaning assigned thereto in Section 5.1.1 hereof.

1.1.44 “Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by such Person, (ii) any trust in which such Person holds all of the beneficial interests or (iii) any partnership, limited liability company or similar entity in which such Person holds all of the interests other than the interests of any general partner, managing member or similar Person.

 

6


1.1.45 “Terra” has the meaning assigned thereto in the preamble.

1.1.46 “Terra Group” means Terra, Terra LLC, Terra Operating and their direct and indirect Subsidiaries.

1.1.47 “Terra LLC” has the meaning assigned thereto in the preamble.

1.1.48 “Terra Operating” has the meaning assigned thereto in the preamble.

1.1.49 “Third Party Claim” has the meaning assigned thereto in Section 9.1.3 hereof.

1.1.50 “Transaction Fees” means fees paid or payable by the Service Recipients, which are on market terms, with respect to financial advisory services ordinarily carried out by investment banks in the context of mergers and acquisitions transactions.

 

  1.2 Headings and Table of Contents

The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.

 

  1.3 Interpretation

In this Agreement, unless the context otherwise requires:

1.3.1 words importing the singular shall include the plural and vice versa, words importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;

1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;

1.3.3 references to any Person include such Person’s successors and permitted assigns;

1.3.4 any reference to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;

 

7


1.3.5 any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;

1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day; and

1.3.7 except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.

 

  1.4 Service Recipients Third Party Beneficiaries

The Manager agrees that each of the Service Recipients, including the Service Recipients listed on Schedule I hereto and any other Service Recipient formed or acquired after the date of this Agreement in accordance with Section 2.2 hereof, shall be, and is hereby, named as express third-party beneficiary of this Agreement entitled to all the benefits conferred under this Agreement.

 

  1.5 Actions by the Manager or the Service Recipients

Unless the context requires otherwise, where the consent of or a determination is required by the Manager or Service Recipient hereunder, the parties shall be entitled to conclusively rely upon it having been given or taken, as applicable, if, the Manager or such Service Recipient, as applicable, has communicated the same in writing.

ARTICLE 2

APPOINTMENT OF THE MANAGER

 

  2.1 Appointment and Acceptance

2.1.1 Subject to and in accordance with the terms, conditions and limitations in this Agreement, Terra, Terra LLC and Terra Operating hereby appoint the Manager to provide or arrange for other Service Providers to provide the Services to the Service Recipients. This appointment will be subject to the express terms of this Agreement and to the supervision of the Manager and all other Service Providers by the Independent Committee.

2.1.2 The Manager hereby accepts the appointment provided for in Section 2.1.1 and agrees to act in such capacity and to provide or arrange for other Service Providers to provide the Services to the Service Recipients upon the terms, conditions and limitations in this Agreement.

 

  2.2 Other Service Recipients

The parties acknowledge that any Subsidiary of Terra, Terra LLC or Terra Operating formed or acquired in the future that is not a Service Recipient on the date hereof may become a

 

8


Service Recipient under this Agreement. In the event that any such addition results in an amendment of the scope of the Services, such amendment shall be effectuated as provided by Section 13.1.1 hereof.

 

  2.3 Subcontracting and Other Arrangements

The Manager may subcontract to any other Service Provider or any of its other Affiliates, or arrange for the provision of any or all of the Services to be provided by it under this Agreement by any other Service Provider or any other of its Affiliates, and each of Terra, Terra LLC and Terra Operating hereby consents to any such subcontracting or arrangement; provided that the Manager shall remain responsible to the Service Recipients for any Services provided by such other Service Provider or Affiliate and provided further that any Service Provider that is not an Affiliate of the Manager shall be reasonably acceptable to the Independent Committee.

 

  2.4 Assumption of O&M and Asset Management Contracts

2.4.1 After the date of this Agreement, Terra shall, and shall cause the other members of the Terra Group to, use its commercially reasonable efforts to have Manager or a member of the Manager Group act as the primary operating and maintenance and asset management counter-party for the Terra Group solar projects; and the Manger agrees to, and shall cause the other applicable members of the Manager Group to enter into the relevant Asset Management Agreements and O&M Agreements on terms and conditions that are market standard and otherwise reasonably acceptable to the Independent Committee. The amounts to be paid by members of the Terra Group in respect of such services shall not exceed the fair market value of such services (determined as the price that would be applicable between an unrelated provider and recipient).

2.4.2 The provisions of Section 2.4.1 notwithstanding, (i) in circumstances where in the good-faith determination of a senior executive officer of Terra, the engagement of a member of the Manger Group to provide prime operating and maintenance services or prime asset management services would be commercially unreasonable or (ii) with respect to projects located in markets were the Manager Group does not provide operating and maintenance or asset management services, members of the Terra Group may engage third party providers with respect to such services.

ARTICLE 3

SERVICES AND POWERS OF THE MANAGER

 

  3.1 Services

The Manager will provide, or arrange for the provision by other Service Providers of the following services (the “Services”) to the Service Recipients, provided, however, that in the event the Service Recipients are able to, or otherwise elect to, provide any or all of the below mentioned Services itself then neither Manager nor any other Service Provider shall provide such Services:

3.1.1 causing or supervising the carrying out of all day to day management, secretarial, accounting, banking, treasury, administrative, liaison, representative, regulatory and reporting functions and obligations;

 

9


3.1.2 identifying, evaluating and recommending to the Terra Group acquisitions or dispositions from time to time and, where requested to do so, assisting in negotiating the terms of such acquisitions or dispositions;

3.1.3 developing and implementing the business strategy of the Service Recipients, including potential new markets to enter;

3.1.4 establishing and maintaining or supervising the establishment and maintenance of books and records;

3.1.5 recommending and, where requested to do so, assisting in the raising of funds whether by way of debt, equity or otherwise, including the preparation, review or distribution of any prospectus or offering memorandum in respect thereof and assisting with communications support in connection therewith;

3.1.6 recommending to the members of the Terra Group suitable candidates to serve on the Governing Bodies of the Terra Group;

3.1.7 making recommendations with respect to the exercise of any voting rights to which the Service Recipients are entitled in respect of its Subsidiaries;

3.1.8 making recommendations with respect to the payment of dividends by the Service Recipients or any other distributions by the Service Recipients, including distributions by Terra to its stockholders;

3.1.9 monitoring and/or oversight of the applicable Service Recipient’s accountants, legal counsel and other accounting, financial or legal advisors and technical, commercial, marketing and other independent experts and managing litigation in which a Service Recipient is sued or commencing litigation after consulting with, and subject to the approval of, the relevant Governing Body;

3.1.10 attending to all matters necessary for any reorganization, bankruptcy proceedings, dissolution or winding up of a Service Recipient, subject to approval by the relevant Governing Body;

3.1.11 supervising the timely calculation and payment of taxes payable, and the filing of all tax returns, by each Service Recipient;

3.1.12 causing or supervising the preparation of the Service Recipients’ annual combined financial statements and quarterly interim financial statements and, as applicable, local statutory accounts (i) to be prepared in accordance with GAAP and audited at least to such extent and with such frequency as may be required by law, regulation or in order to comply with any debt covenants; and (ii) to be submitted to the Governing Body of each Service Recipient for its prior approval;

 

10


3.1.13 making recommendations in relation to and effecting the entry into insurance of each Service Recipient’s assets, together with other insurances against other risks, including directors and officers insurance, as the relevant Service Provider and the relevant Governing Body may from time to time agree;

3.1.14 arranging for individuals to carry out the functions of the principal executive, accounting and financial officers for Terra only for purposes of applicable securities laws and the regulations of any stock exchange on which the Securities of Terra are listed and subject to the approval of Terra’s Governing Body;

3.1.15 providing individuals to act as senior officers of the Service Recipients as agreed from time to time, subject to the approval of the relevant Governing Body;

3.1.16 advising the Service Recipients regarding the maintenance of compliance with applicable Laws and other obligations; and

3.1.17 providing all such other services as may from time to time be agreed with the Service Recipients that are reasonably related to the Service Recipient’s day to day operations.

 

  3.2 Supervision of Manager’s Activities

The Manager and all other Service Providers shall, at all times, be subject to the supervision of the Independent Committee, and shall only provide or arrange for the provision of such Services as the Independent Committee may request from time to time.

 

  3.3 Restrictions on the Manager

3.3.1 The Manager shall, and shall cause any other Service Provider to, refrain from taking any action that is not in compliance with or would violate any Laws or that otherwise would not be permitted by the Governing Instruments of the Service Recipients, and shall ensure that all Services are performed in good faith in the interest of the Service Recipient. If the Manager or any Service Provider is instructed to take any action that is not in such compliance by a Service Recipient’s Governing Body, such person will promptly notify such Governing Body of its judgment that such action would not comply with or violate any such Laws or otherwise would not be permitted by such Governing Instrument.

3.3.2 In performing its duties under this Agreement, each member of the Manager Group shall be entitled to rely in good faith on qualified experts, professionals and other agents (including on accountants, appraisers, consultants, legal counsel and other professional advisors) and shall be permitted to rely in good faith upon the direction of a Service Recipient’s Governing Body to evidence any approvals or authorizations that are required under this Agreement. All references in this Agreement to the Service Recipients or Governing Body for the purposes of instructions, approvals and requests to the Manager will refer to the Governing Body.

 

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3.3.3 Except as approved by the Independent Committee, the Manager shall, and shall cause any other Service Provider to, keep any funds of any Service Recipient in segregated accounts kept in the name of the relevant Service Provider.

3.3.4 Notwithstanding any other provision of this Agreement, Manager shall, and shall cause all other Service Providers to, at all times comply with Terra’s Conflict of Interest Policy. In particular, it shall ensure that the Independent Committee approve in advance (i) the terms of any transaction of any Service Recipient with any member of the Manager’s Group, (ii) the disposition of assets by any Service Recipient (other than the disposition of non-material assets in the normal course of business), and (iii) the commencement of any voluntary case under any bankruptcy or other debtor relief laws, or the consent to an order for relief in any involuntary case under any such law, or the appointment of any receiver or other custodian for all or substantially all of the property, by or of any member of the Terra Group.

 

  3.4 Errors and Omissions Insurance

The Manager shall, and shall cause any other Service Provider to, at all times during the term of this Agreement maintain “errors and omissions” insurance coverage and other insurance coverage which is customarily carried by Persons performing functions that are similar to those performed by the Service Providers under this Agreement, with reputable insurance companies and in an amount which is comparable to that which is customarily maintained by such other Persons. In each case, the relevant Service Recipients shall be included as additional insured or loss payees under the relevant policies.

 

  3.5 Retention of Third-Party Project Asset Manager

In the event (a) required by a project lender or other provider of project financing associated with the applicable project or (b) the Independent Committee determines it would be beneficial to Terra; Terra may request that the Manager retain one or more independent third-party project asset managers reasonably acceptable to Terra. The cost and expense incurred as a result of the retention of such third-party project asset managers shall be paid for by the relevant Service Recipient, subject to the second sentence of Section 2.4.1 above.

ARTICLE 4

RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

 

  4.1 Independent Contractor, No Partnership or Joint Venture

The parties acknowledge that the Manager is providing or arranging for the provision of the Services hereunder as an independent contractor and that the Service Recipients and the Manager are not partners or joint venturers with or agents of each other, and nothing herein will be construed so as to make them partners, joint venturers or agents or impose any liability as such on any of them as a result of this Agreement; provided however that nothing herein will be construed so as to prohibit the Service Recipients and the Manager from embarking upon an investment together as partners, joint venturers or in any other manner whatsoever.

 

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ARTICLE 5

MANAGEMENT AND EMPLOYEES

 

  5.1 Management and Employees

5.1.1 The Manager shall arrange, or shall arrange for another member of the Manager Group to arrange, for such qualified personnel and support staff to be dedicated to carrying out the Services. Except as agreed to between the Manager and Terra, such personnel and support staff shall devote their full time to the provision of the Services to the Service Recipients. The Manager and Terra agree that the letter agreement dated as of the date hereof regarding “Terra Personnel” identifies those personnel who the Manager will dedicate to carrying out the Services under the caption “Dedicated Personnel” (the “Dedicated Personnel”) and identifies those personnel who the Manager will provide on a shared basis under the caption “Shared Personnel” (the “Shared Personnel”). The list of Dedicated Personnel and Shared Personnel shall be reviewed by the parties at least annually, provided that modifications or additions to the list of Dedicated Personnel or Shared Personnel require the mutual agreement of the Manager and the Independent Committee. Other than with respect to the named executive officers of Terra, as defined by U.S. securities law, whose employment shall only be terminated with the approval of the Independent Committee, regardless of any other provision of this Agreement, Terra hereby agrees that the Manager, in its sole discretion, may terminate the employment of any one or more persons serving as (i) Dedicated Personnel following notice to and consultation with Terra, or (ii) Shared Personnel without any consultation of or prior notice to Terra.

5.1.2 Each of Terra, Terra LLC and Terra Operating shall, and shall cause each of the other Service Recipients to do all things reasonably necessary on its part as requested by any member of the Manager Group consistent with the terms of this Agreement to enable the members of the Manager Group to fulfill their obligations, covenants and responsibilities and to exercise their rights pursuant to this Agreement, including making available to the Manager Group, and granting the Manager Group access to, the employees and contractors of the Service Recipients as any member of the Manager Group may from time to time reasonably request.

5.1.3 The Manager covenants and agrees to exercise, and to cause the other Service Providers to exercise, the power and to discharge and to cause the other Service Providers to discharge, the duties conferred under this Agreement honestly and in good faith, and shall exercise, and shall cause the other Service Providers to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

ARTICLE 6

INFORMATION AND RECORDS

 

  6.1 Books and Records

The Manager shall, or shall cause any other Service Provider to, as applicable, maintain proper books, records and documents on behalf of each Service Recipient, in which complete, true and correct entries, in conformity in all material respects with GAAP and all requirements of applicable Laws, will be made.

 

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  6.2 Examination of Records by the Service Recipients

Upon reasonable prior notice by the Service Recipients to the relevant member of the Manager Group, the relevant member of the Manager Group will make available to the Service Recipients and their authorized representatives, for examination during normal business hours on any Business Day, all books, records and documents required to be maintained under Section 6.1 hereof. In addition, the Manager Group will make available to the Service Recipients or their authorized representatives, including any members of the Independent Committee, such financial and operating data in respect of the performance of the Services under this Agreement as may be in existence and as the Service Recipients or their authorized representatives will from time to time reasonably request, including for the purposes of conducting any audit in respect of expenses of the Service Recipients or other matters necessary or advisable to be audited in order to conduct an audit of the financial affairs of the Service Recipients. Any examination of records will be conducted in a manner which will not unduly interfere with the conduct of the Service Recipients’ activities or of the Manager Group’s business in the ordinary course.

 

  6.3 Access to Information by Manager Group

6.3.1 Each of Terra, Terra LLC and Terra Operating shall, and shall cause the other Service Recipients to:

6.3.1.1 grant, or cause to be granted, to the Manager Group full access to all documentation and information reasonably necessary in order for the Manager Group to perform its obligations, covenants and responsibilities pursuant to the terms hereof and to enable the Manager Group to provide the Services; and

6.3.1.2 provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Manager Group, and promptly notify the appropriate member of the Manager Group of any material facts or information of which the Service Recipients are aware, including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the Terra Group before any Governmental Authority, that may affect the performance of the obligations, covenants or responsibilities of the Manager Group pursuant to this Agreement, including maintenance of proper financial records.

 

  6.4 Access to Information by Service Recipients

6.4.1 The Manager shall, and shall cause the other members of the Manager Group and any other Service Provider to:

6.4.1.1 grant, or cause to be granted, to the Terra Group full access to all documentation and information reasonably necessary in order for the Terra Group to conduct their business; and

6.4.1.2 provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Terra Group, including the Independent Committee, and promptly notify the appropriate Service Recipient of any material facts or information of which the Manager Group is aware,

 

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including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the Manger Group before any Governmental Authority, that may affect the Terra Group, including maintenance of proper financial records.

 

  6.5 Additional Information

The parties acknowledge and agree that conducting the activities and providing the Services contemplated herein may have the incidental effect of providing additional information which may be utilized with respect to, or may augment the value of, business interests and related assets in which any of the Service Providers or any of its Affiliates has an interest and that, subject to compliance with this Agreement, none of the Service Providers or any of their respective Affiliates will be liable to account to the Service Recipients with respect to such activities or results; provided, however, that the relevant Service Provider will not (and will cause its Affiliates not to), in making any use of such additional information, do so in any manner that would cause or result in a breach of any confidentiality provision of agreements to which any Service Recipient is (or may become) a party or is (or may become) bound.

ARTICLE 7

FEES AND EXPENSES

 

  7.1 Base Management Fee

7.1.1 Terra LLC, on behalf of the Service Recipients, hereby agrees to pay, during the term of this Agreement, the Base Management Fee. For the avoidance of doubt, the parties hereto agree that the Base Management Fee for the calendar year 2014 is zero and, as a result, neither Terra LLC nor any of the Service Recipients shall be obligated to make payment in respect of services provided by Manager during such year. The Base Management Fee, prorated for the relevant time period, shall be paid quarterly in arrears. To the extent the sum of the part of the Base Management Fee payable for a particular quarter (the “Current Quarter Payment”) plus the amount of Base Management Fee paid with respect to prior quarters during the applicable calendar year would exceed the Base Management Fee Cap, the amount of the Current Quarter Payment shall be limited to the maximum amount that could be paid without such sum exceeding the Base Management Fee Cap.

7.1.2 The Base Management Fee will not be reduced by operation of this Agreement by the amount of any fees that are paid or payable by any member of the Terra Group to any member of the Manager Group pursuant to any Operating and Administrative Agreements.

 

  7.2 Computation and Payment of Quarterly Base Management Fee Amount

7.2.1 The Manager will compute the part of the Base Management Fee payable for each Quarter as soon as practicable following the end of the Quarter with respect to which such payment is due, but in any event no later than 30 days following the end of such Quarter. A copy of the computations made will thereafter promptly be delivered to Terra LLC. As soon as practicable following delivery of the computation of the part of the Base Management Fee for any Quarter, but in no event later than the 45th day following the end of such Quarter, Terra LLC shall remit the corresponding payment for the corresponding Quarter to the Manager.

 

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  7.3 Expenses

7.3.1 The Manager acknowledges and agrees that the Service Recipients will not be required to reimburse any member of the Manager Group for the salaries and other remuneration of the management, personnel or support staff of the Manager Group who provide the Services to such Service Recipients or overhead for such persons.

7.3.2 The Manager acknowledges and agrees that the Service Recipients will not be required to reimburse the Manager for out-of-pocket fees, costs and expenses, including those of any third party, incurred by the Manager or any member of the Manager Group in connection with the provision of the Services. Expenses are expected to include, among other things:

7.3.2.1 fees, costs and expenses as a result of Terra becoming and continuing to be a publicly traded entity, including, but not limited to, costs associated with annual, quarterly and current reports, independent auditor fees, governance and compliance, registrar and transfer agent fees, exchange listing fees, tax return preparation and distribution, legal fees, independent director compensation and directors and officers liability insurance premiums;

7.3.2.2 non-project level operating expenses and non-project level operating expenses capital expenditures incurred in connection with the provisions of the Services, including those related to information technology systems and enterprise resource planning systems;

7.3.2.3 fees, costs and expenses relating to any debt or equity financing of any member of the Terra Group which fails to be completed for any reason;

7.3.2.4 fees, costs and expenses incurred in connection with the general administration of any Service Recipient;

7.3.2.5 taxes, licenses and other statutory fees or penalties levied against or in respect of a Service Recipient in respect of Services;

7.3.2.6 amounts paid by the relevant member of the Manager Group under indemnification, contribution or similar arrangements;

7.3.2.7 fees, costs and expenses relating to financial reporting, regulatory filings and investor relations and the fees, costs and expenses of agents, advisors and other Persons who provide Services to a Service Recipient;

7.3.2.8 any other fees, costs and expenses incurred by the relevant member of the Manager Group that are reasonably necessary for the performance by the relevant member of the Manager Group of its duties and functions under this Agreement or any Operating and Administrative Agreement;

 

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7.3.2.9 fees, expenses and costs, including Transaction Fees, incurred in connection with the investigation, acquisition, holding or disposal of any asset or business (including with respect to any Acquired Assets) that is made or that is proposed to be made by the Service Recipients to the extent any such transaction fails to be completed for whatever reason; provided that, where the acquisition or proposed acquisition involves a joint acquisition that is made alongside one or more other Persons, the Manager shall allocate such fees, expenses and costs in proportion to the notional amount of the acquisition made (or that would have been made in the case of an unconsummated acquisition) among members of the Terra Group and such other Persons;

7.3.2.10 fees, expenses and costs associated with obtaining and maintaining reasonable and customary insurance.

 

  7.4 Governmental Charges

Without limiting Section 7.3 above, Terra LLC, on behalf of the Service Recipients, shall pay or reimburse the relevant member of the Manager Group for all sales taxes, use taxes, value added taxes, withholding taxes or other similar taxes, customs duties or other governmental charges (“Governmental Charges”) that are levied or imposed by any Governmental Authority by reason of this Agreement, any Operating and Administrative Agreement or any other agreement contemplated by this Agreement, or the fees or other amounts payable hereunder or thereunder, except (i) for any income taxes, corporation taxes, capital taxes or other similar taxes payable by any Service Provider which are personal to such Service Provider and (ii) to the extent such Governmental Charges relate to the provision of Services by Manager or any other Service Provider pursuant to this Agreement. Any failure by the Manager Group to collect monies on account of these Governmental Charges shall not constitute a waiver of the right to do so.

 

  7.5 Computation and Payment of Expenses and Governmental Charges

From time to time the Manager shall, or shall cause the other Service Providers to, prepare statements (each an “Expense Statement”) documenting the Governmental Charges to be reimbursed pursuant to this Article 7 and shall deliver such statements, together with reasonable backup documentation, to the relevant Service Recipient. All Governmental Charges reimbursable pursuant to this Article 7 shall be reimbursed by the relevant Service Recipient no later than the date which is 30 days after receipt of a correct and complete Expense Statement. The provisions of this Section 7.5 shall survive the termination of this Agreement.

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

OF THE MANAGER AND THE SERVICE RECIPIENTS

 

  8.1 Representations and Warranties of the Manager

The Manager hereby represents and warrants to the Service Recipients that:

8.1.1 it is validly organized and existing under the laws of the State of Delaware;

 

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8.1.2 it, or any another Service Provider, as applicable, holds, and shall hold, such Permits as are necessary to perform its obligations hereunder and is not aware of, or shall inform the Service Recipients promptly upon knowledge of, any reason why such Permits might be cancelled;

8.1.3 it has the power, capacity and authority to enter into this Agreement and to perform its obligations hereunder;

8.1.4 it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

8.1.5 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which it or any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Manager, any Services to be provided hereunder, or any Service Recipients;

8.1.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

8.1.7 this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

  8.2 Representations and Warranties of the Service Recipients

Terra, Terra LLC and Terra Operating, each hereby represents and warrants, on its behalf and on behalf of each of the other Service Recipients, to the Manager that:

8.2.1 it (and, if applicable, its managing member) is validly organized and existing under the Laws governing its formation and organization;

8.2.2 it, or the relevant Service Recipient, holds such Permits necessary to own and operate the projects and entities that it directly or indirectly owns or operates from time to time and is not aware of any reason why such Permits might be cancelled;

8.2.3 it (or, as applicable, its managing member on its behalf) has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;

 

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8.2.4 it (or, as applicable, its managing member) has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

8.2.5 the execution and delivery of this Agreement by it (or, as applicable, its managing member on its behalf) and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments (or, if applicable, the Governing Instruments of its managing member), or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Service Recipients as a whole;

8.2.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it (or, as applicable, its managing member on its behalf) of this Agreement; and

8.2.7 this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

ARTICLE 9

LIABILITY AND INDEMNIFICATION

 

  9.1 Indemnity

9.1.1 Terra, Terra LLC and Terra Operating hereby jointly and severally agree, to the fullest extent permitted by applicable Laws, to indemnify and hold harmless, and to cause each other Service Recipient to indemnify and hold harmless, each member of the Manager Group, any of its Affiliates (other than any member of the Terra Group) and any directors, officers, agents, members, partners, stockholders and employees and other representatives of each of the foregoing (each, a “Manager Indemnified Party”) from and against any claims, liabilities, losses, damages, costs or expenses (including legal fees) (“Liabilities”) incurred by them or threatened in connection with any and all actions, suits, investigations, proceedings or claims of any kind whatsoever, whether arising under statute or action of a Governmental Authority or otherwise or in connection with the business, investments and activities of the Service Recipients or in respect of or arising from this Agreement or the Services provided hereunder (“Claims”), including any Claims arising on account of the Governmental Charges contemplated by Section 7.4 that are capitalized on the Service Recipients’ financial statements hereof; provided that no Manager Indemnified Party shall be so indemnified with respect to any Claim to the extent that such Claim results from a Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence or, in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

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9.1.2 If any action, suit, investigation, proceeding or claim is made or brought by any third party with respect to which a Service Recipient is obligated to provide indemnification under this Agreement (a “Third Party Claim”), the Manager Indemnified Party will have the right to employ its own counsel in connection therewith, and the reasonable fees and expenses of such counsel, as well as the reasonable costs (excluding an amount reimbursed to such Manager Indemnified Party for the time spent in connection therewith) and out-of-pocket expenses incurred in connection therewith will be paid by the Service Recipient in such case, as incurred but subject to recoupment by the Service Recipient to the extent it ultimately is not liable to pay indemnification hereunder.

9.1.3 The Manager Indemnified Party and the Service Recipients agree that, promptly after the receipt of notice of the commencement of any Third Party Claim, the Manager Indemnified Party will notify the Service Recipient and the Independent Committee in writing of the commencement of such Third Party Claim (provided that any accidental failure to provide any such notice will only prejudice the right of any such Manager Indemnified Party hereunder to the extent it actually affects the Relevant Service Recipient’s defense against the relevant Third Party Claim) and, throughout the course of such Third Party Claim, such Manager Indemnified Party will provide copies of all relevant documentation to such Service Recipient and the Independent Committee, and to keep the Service Recipient and the Independent Committee apprised of the progress thereof, and to discuss with the Service Recipient all significant actions proposed, and to not settle any Third Party Claim without the approval of the Independent Committee.

9.1.4 The parties hereto expressly acknowledge and agree that the right to indemnity provided in this Section 9.1 shall be in addition to and not in derogation of any other liability which the Manager Indemnifying Party in any particular case may have or of any other right to indemnity or contribution which any Manager Indemnified Party may have by statute or otherwise at law.

9.1.5 The indemnity provided in this Section 9.1 shall survive the completion of Services rendered under, or any termination or purported termination of, this Agreement.

 

  9.2 Limitation of Liability

9.2.1 The Manager assumes no responsibility under this Agreement other than to render the Services in good faith and otherwise in accordance with this Agreement, and will not be responsible for any action of a Service Recipient’s Governing Body in following or declining to follow any advice or recommendations of the relevant Service Provider.

9.2.2 The Service Recipients hereby agree that no Manager Indemnified Party will be liable to a Service Recipient, a Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient for any Liabilities that may occur as a result of any acts or omissions by the Manager Indemnified Party pursuant to or in accordance with this Agreement, except to the extent that such Liabilities result from the Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence, or in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

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9.2.3 The maximum amount of the aggregate liability of the Manager Indemnified Parties pursuant to this Agreement will be equal to (i) until the end of 2016, an amount of $11 million, representing the aggregate of the Base Management Fee Cap for 2015 and 2016, and (ii) thereafter, the Base Management Fees paid pursuant to this Agreement in the two most recent calendar years by the Service Recipients pursuant to Article 7.

9.2.4 For the avoidance of doubt, the provisions of this Section 9.2 shall survive the completion of the Services rendered under, or any termination or purported termination of, this Agreement.

 

  9.3 Benefit to all Manager Indemnified Parties

9.3.1 Terra, Terra LLC and Terra Operating on behalf of themselves and the other Service Recipients, hereby constitute the Manager as trustee for each of the Manager Indemnified Parties of the covenants of the Service Recipients under this Article 9 with respect to such Manager Indemnified Parties and the Manager hereby accepts such trust and agrees to hold and enforce such covenants on behalf of the Manager Indemnified Parties.

9.3.2 The Manager hereby constitutes the Service Recipients as trustees for each Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient, of the covenants of the Manager under this Article 9 with respect to such parties and the Service Recipients hereby accept such trust and agree to hold and enforce such covenants on behalf of such parties.

ARTICLE 10

TERM AND TERMINATION

 

  10.1 Term

This Agreement shall continue in full force and effect until terminated in accordance with Section 10.2, Section 10.3 or Section 13.1 hereof.

 

  10.2 Termination by the Service Recipients

10.2.1 Terra on behalf of the Service Recipients may, subject to Section 10.2.2, terminate this Agreement effective upon 30 days’ prior written notice of termination to the Manager without payment of any termination fee:

10.2.1.1 if the Manager defaults in the performance or observance of any material term, condition or covenant contained in this Agreement in a manner that results in material harm to the Service Recipients and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period;

10.2.1.2 if the Manager engages in any act of fraud, misappropriation of funds or embezzlement against any Service Recipient that results in material harm to the Service Recipients;

 

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10.2.1.3 if the Manager is grossly negligent in the performance of its obligations under this Agreement and such gross negligence results in material harm to the Service Recipients;

10.2.1.4 if the Manager, Terra, Terra LLC or Terra Operating makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency;

10.2.1.5 upon the earlier to occur of (i) the fifth year anniversary of the date of this Agreement and (iii) the end of any twelve month period ending on the last day of calendar quarter during which the Service Recipients generated cash available for distribution in excess of $350 million;

10.2.1.6 upon such date that the Manager and its Affiliates no longer beneficially own capital stock representing more than 50% of the voting power of all the capital stock issued by Terra outstanding on such date; or

10.2.1.7 upon the date that a Manager Change of Control occurs.

10.2.2 This Agreement may only be terminated pursuant to Section 10.2.1 above by Terra with the prior approval of a majority of the members of the Independent Committee.

10.2.3 This Agreement may also be terminated by Terra pursuant to Section 13.1.1 hereof with the prior approval of a majority of the members of the Independent Committee.

10.2.4 Each of Terra, Terra LLC and Terra Operating hereby agrees and confirms that this Agreement may not be terminated due solely to the poor performance or underperformance of any of their Subsidiaries or the Business or any investment made by any member of the Terra Group on the recommendation of any member of the Manager Group, provided that no provision of this Agreement shall limit the right of the relevant Service Recipient to terminate any Operating and Administrative Agreements in accordance with the provisions thereof.

 

  10.3 Termination by the Manager

10.3.1 The Manager may terminate this Agreement effective upon 180 days’ prior written notice of termination to the Service Recipients without payment of any termination fee if:

10.3.1.1 any Service Recipient defaults in the performance or observance of any material term, condition or covenant contained in this Agreement in a manner that results in material harm to the Manager and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period; or

 

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10.3.1.2 any Service Recipient makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.

 

  10.4 Survival Upon Termination

If this Agreement is terminated pursuant to this Article 10 or Article 13, such termination will be without any further liability or obligation of any party hereto, except as provided in Section 6.4, Article 9, Section 10.5 and Section 10.6 hereof. The provisions Article 11 of this Agreement shall survive termination of this agreement for the period of set forth therein.

 

  10.5 Action Upon Termination

10.5.1 From and after the effective date of the termination of this Agreement, the Manager shall not be entitled to receive the Base Management Fee for further Services under this Agreement, but will be paid all compensation accruing to and including the date of termination (including such day).

10.5.2 Upon any termination of this Agreement, the Manager shall forthwith:

10.5.2.1 after deducting any accrued compensation and reimbursements for any Expenses to which it is then entitled, pay over to the Service Recipients all money collected and held for the account of the Service Recipients pursuant to this Agreement;

10.5.2.2 deliver to the Service Recipients’ Governing Bodies a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Governing Bodies with respect to the Service Recipients; and

10.5.2.3 deliver to the Service Recipients’ Governing Bodies all property and documents of the Service Recipients then in the custody of the Manager Group.

 

  10.6 Release of Money or other Property Upon Written Request

Without limiting Section 3.3 hereof, the Manager hereby agrees that any money or other property of the Service Recipients or their Subsidiaries held by the Manager Group under this Agreement shall be held by the relevant member of the Manager Group as custodian for such Person, and the relevant member of the Manager Group’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by such Person. Upon the receipt by the relevant member of the Manager Group of a written request signed by a duly

 

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authorized representative of a Service Recipient requesting the relevant member of the Manager Group to release to the Service Recipient any money or other property then held by the relevant member of the Manager Group for the account of such Service Recipient under this Agreement, the relevant member of the Manager Group shall release such money or other property to the Service Recipient within a reasonable period of time, but in no event later than 5 Business Days following such request. The relevant member of the Manager Group shall not be liable to any Service Recipient, a Service Recipient’s Governing Body or any other Person for any acts performed or omissions to act by a Service Recipient in connection with the money or other property released to the Service Recipient in accordance with the second sentence of this Section 10.6. Each Service Recipient shall indemnify and hold harmless the relevant member of the Manager Group, any of its Affiliates (other than any member of the Terra Group) and any directors, officers, agents, members, partners, shareholders and employees and other representatives of each of the foregoing from and against any and all Liabilities which arise in connection with the relevant member of the Manager Group’s release of such money or other property to the Service Recipient in accordance with the terms of this Section 10.6. Indemnification pursuant to this provision shall be in addition to any right of such Persons to indemnification under Section 10.1 hereof. For the avoidance of doubt, the provisions of this Section 10.6 shall survive termination of this Agreement. The Service Recipients hereby constitute the Manager as trustee for each Person entitled to indemnification pursuant to this Section 10.6 of the covenants of the Service Recipients under this Section 10.6 with respect to such Persons and the Manager hereby accepts such trust and agrees to hold and enforce such covenants on behalf of such Persons.

ARTICLE 11

NON-COMPETE

 

  11.1 Non-Compete

During the Non-Competition Period, each of Terra, Terra LLC and Terra Operating agrees that it and its Affiliates will not, and will not agree to, directly or indirectly:

11.1.1 engage in, provide financing for or arrange any solar power project development activity;

11.1.2 acquire, purchase, obtain or invest in any equity or other ownership interest of any other person engaged in the business of developing or constructing solar power projects (such business, the “Solar Development or Construction Business”), except to the extent (i) in connection with such acquisition, purchase or investment the Manager or a member of the Manager Group is permitted to acquire, purchase or invest in, as applicable, at fair market value, all or the relevant part of such Solar Development or Construction Business, or (ii) the relevant Service Recipient commits to, prior to such acquisition, purchase or investment, divest and transfer to an unrelated third party such Solar Development or Construction Business within six months after the completion of such acquisition, purchase or investment;

11.1.3 except as permitted hereunder, engage in any commercial activities, negotiations, planning, exploratory or strategic discussions or other similar activities that relate to, or are otherwise designed to facilitate, finance, induce or otherwise assist any person in the development or construction of any solar power project;

 

24


11.1.4 prior to the date on which (i) control over the relevant solar power project site has been obtained by the relevant Person, including through the execution of appropriate purchase option, lease option or similar agreements; (ii) a power purchase agreement or other energy off-take agreement has been secured for such project by the relevant Person; and (iii) construction of such project has commenced (such date, the “Construction Start Date”), make any payment to any Person to facilitate, finance, induce or otherwise assist the construction of a solar power project without the consent of the Manager; or

11.1.5 other than with respect to asset management services for solar power generation projects in which Terra or any of Terra’s Subsidiaries or Affiliates has a material ownership interest (but subject to Section 2.4), engage in the business of providing operating and maintenance services or asset management services for solar power generation projects or assets.

11.1.6 Notwithstanding anything to the contrary in the foregoing Section 11.1, Terra and its Subsidiaries and Affiliates shall be able to negotiate, structure, sign definitive legal agreements, make milestone payments and finance the acquisition of solar development projects provided (i) Terra does not make any payments in connection with such project before the Construction Start Date, or (ii) SunEdison or its Subsidiaries or Affiliates were aware of and elected not to proceed with such solar development project.

 

  11.2 Non-Solicitation

During the Non-Competition Period, each of the parties hereto agree that it shall not, and each shall cause its Affiliates not to, (a) solicit or induce (or attempt to solicit or induce) any employees of another party to the agreement to terminate his or her employment with such other party or. Notwithstanding the foregoing, Terra may freely employ any of the Dedicated Personnel, and (i) general advertisements in newspapers and similar media of general circulation and (ii) use of recruiting firms that are not instructed to target a party’s employees shall not be a violation of clause (a) of the preceding sentence.

 

  11.3 Survival

For the avoidance of doubt, the provisions of this Article 11 shall remain in effect regardless of any termination of this Agreement pursuant to Article 10 or Article 13 of this Agreement.

ARTICLE 12

REFERRAL FEE

 

  12.1 Referral Fee

In the event Terra, Terra LLC, Terra Operating or any of the Service Recipients refer a solar power development project to Manager prior to Manager’s independent identification of such opportunity, and Manager thereafter develops such such solar power project, Manager agrees to pay to Terra, an amount equal to the $0.04 multiplied by the nameplate megawatt

 

25


capacity, determined as of the commercial operation date, of such solar power project (each such amount a “Referral Fee”); provided, however, that to the extent the aggregate Referral Fees for projects referred during a single calendar year exceed $30 million, the Manager shall not be required to pay, with respect to such referrals, any amount in excess of $30 million in the aggregate.

 

  12.2 Referral Fee Payment

Any Referral Fee with respect to a project shall be due and payable 30 days after end of the calendar quarter during which such project achieves its commercial operation date. Any Referral Fees due and payable shall:

12.2.1 First be offset against any due but unpaid Base Management Fee;

12.2.2 Secondly, any amount of unpaid Referral Fees remaining after application of Section 12.2.1, shall be offset against any of the cumulative costs and expenses incurred by members of the Manager Group to fund operating expenses in connection with the provision of Services;

12.2.3 Thirdly, any amount of unpaid Referral Fees remaining after application of Section 12.2.1 and Section 12.2.2, shall be offset against any amounts paid by Manager under the Interest Payment Agreement prior to the date such Referral Fee is due; and

12.2.4 Finally, any amount of unpaid Referral Fees remaining after application of Section 12.2.1, Section 12.2.2 or Section 12.2.3, shall be paid in cash.

ARTICLE 13

GENERAL PROVISIONS

 

  13.1 Amendment, Waiver

13.1.1 Terra is entitled to amend the scope of the Services, including by reducing the number of Service Recipients or the nature or description of the Services or otherwise, by providing 180 days’ prior written notice to the Manager; provided, however, that Terra may not increase the scope of the Services without the Manager’s prior written consent; and provided further, however, that prior to such modification, Terra and the Manager shall agree in writing to any modification of the Base Management Fee resulting from such change in scope. Subject to Section 10.2.3 hereof, in the event that Terra and the Manager are unable to agree on a modified Base Management Fee, Terra may terminate this Agreement after the end of such 180-day period by providing 30 days’ prior written notice to the Manager.

13.1.2 Except as expressly provided in this Agreement, no amendment or waiver of this Agreement, except pursuant to the first sentence of Section 13.1 above, will be binding unless the prior approval of a majority of the members of the Independent Committee is obtained and the amendment or waiver is executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. A party’s failure or delay in exercising any right under this

 

26


Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right.

 

  13.2 Assignment

13.2.1 This Agreement shall not be assigned by the Manager without the prior written consent of Terra, except (i) pursuant to Section 2.3 hereof or (ii) in the case of assignment to a Person that is the Manager’s successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement. In addition, provided that the Manager provides prior written notice to the Service Recipients for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer or assignment of the Manager’ rights under this Agreement, including any amounts payable to the Manager under this Agreement, to a bona fide lender as security.

13.2.2 This Agreement shall not be assigned by any of the Service Recipients without the prior written consent of the Manager, except in the case of assignment by any such Service Recipient to a Person that is its successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as such Service Recipient is bound under this Agreement.

13.2.3 Any purported assignment of this Agreement in violation of this Article 13 shall be null and void.

 

  13.3 Failure to Pay When Due

Any amount payable by any Service Recipient to any member of the Manager Group hereunder which is not remitted when so due will remain due (whether on demand or otherwise) and interest will accrue on such overdue amounts (both before and after judgment) at a rate per annum equal to the Interest Rate.

 

  13.4 Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.

 

  13.5 Entire Agreement

This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. There are no warranties, conditions, or representations

 

27


(including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, by any party to this Agreement or its directors, officers, employees or agents, to any other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into this Agreement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above.

For the avoidance of doubt, nothing in this Agreement should be construed or interpreted as an amendment, modification or termination of, or conflict with, any of the Operating and Administrative Agreements. Each such agreement, and all its terms, including payments to be made thereunder, shall survive the entry into this Agreement and shall terminate in accordance with its terms.

 

  13.6 Mutual Waiver of Jury Trial

AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

  13.7 Consent to Jurisdiction and Service of Process

EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE CITY AND COUNTY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH BELOW SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

28


  13.8 Governing Law

The internal law of the State of New York will govern and be used to construe this Agreement without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

  13.9 Enurement

This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

 

  13.10 Notices

Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications shall be sent to the addresses specified below, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any party may change such party’s address for receipt of notice by giving prior written notice of the change to the sending party as provided herein. Notices and other communications will be addressed as follows:

If to the Service Recipients:

TerraForm Power, Inc.

12500 Baltimore Avenue

Beltsville, MD 20705

Attn: General Counsel

Facsimile: (240) 264-8100

If to the Manager:

SunEdison, Inc.

501 Pearl Drive (City of O’Fallon)

St. Peters, Missouri 63376

Attn: General Counsel

Facsimile: (866) 773-0791

 

29


  13.11 Further Assurances

Each of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

 

  13.12 Counterparts

This Agreement may be signed in counterparts and each of such counterparts will constitute an original document and such counterparts, taken together, will constitute one and the same instrument.

(Signature pages follow)

 

30


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

TERRAFORM POWER, INC.
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   Senior Vice President, General Counsel and Secretary
TERRAFORM POWER, LLC
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   General Counsel
TERRAFORM POWER OPERATING, LLC
By: TerraForm Power, LLC, as sole member
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   General Counsel


SUNEDISON, INC., as Manager
By:  

/s/ Brian Wuebbels

Name:   Brian Wuebbels
Title:   Executive Vice President and Chief Financial Officer


Schedule I

Service Recipients

 

Name of Entity

  

Jurisdiction of

organization and

Qualification

TerraForm Power, LLC    State of Delaware
TerraForm Power Operating, LLC    State of Delaware
SunEdison Canada Yieldco, LLC    State of Delaware
SunEdison Canada YieldCo Lindsay, LLC    State of Delaware
Lindsay Solar Farm Inc.    Ontario
SunEdison Yieldco Chile HoldCo, LLC    State of Delaware
Amanecer Solar Holding SpA    Republic of Chile
Amanecer Solar SpA    Republic of Chile
SunEdison YieldCo ACQ1, LLC    State of Delaware
SunEdison YieldCo DG–VIII Holdings, LLC    State of Delaware
SunEdison PR DG, LLC    State of Delaware
SunE Solar VIII, LLC    State of Delaware
SunE WF CRS, LLC    State of Delaware
SunE Irvine Holdings, LLC    State of Delaware
SunE HB Holdings, LLC    State of Delaware
SunEdison Origination2, LLC    State of Delaware
SunE Solar VIII 2, LLC    State of Delaware
SunE GIL 1, LLC    State of Delaware
SunE GIL 2, LLC    State of Delaware
SunE GIL 3, LLC    State of Delaware
SunE Gresham WWTP, LLC    State of Delaware
SunE WF Bellingham, LLC    State of Delaware
SunE WF Framingham, LLC    State of Delaware
SunE KHL PSNJ, LLC    State of Delaware
SunE WF Dedham, LLC    State of Delaware
SunE DDR PSNJ, LLC    State of Delaware
SunE W-PR1, LLC    Puerto Rico
SunE WMT PR3, LLC    Puerto Rico
SunE Irvine, LLC    State of Delaware
SunE HB, LLC    State of Delaware
SunE OC PSNJ, LLC    State of Delaware
SunE GIL Holdings, LLC    State of Delaware
SunE KHL968 Orange, LLC    State of Delaware
SunE WF10217 West Hartford, LLC    State of Delaware
SunE KHL1004 Hillsboro, LLC    State of Delaware
SunEdison Yieldco UK HoldCo 3, LLC    State of Delaware

 

I-1


Name of Entity

  

Jurisdiction of

organization and

Qualification

SunE Green HoldCo 3 Ltd    United Kingdom
SunSave 10 Ltd (Fareham)    United Kingdom
SunSave 15 Ltd (WestWood)    United Kingdom
SunSave 20 Ltd (Knowlton)    United Kingdom
Norrington Solar Farm Ltd    United Kingdom
SunEdison Yieldco UK HoldCo 4, LLC    State of Delaware
SunE Green Holdings Germany GmbH    Germany
SunE Green HoldCo 4 Ltd    United Kingdom
Sunsave 6 Manston Ltd (Manston)    United Kingdom
Boyton Solar Park Ltd (Langunnett)    United Kingdom
KS SPV 24 Ltd (West Farm)    United Kingdom
SunEdison Yieldco UK HoldCo 2, LLC    State of Delaware
SunE Green HoldCo 2 Ltd    United Kingdom
SunE Project 1 Ltd (Crucis Farm)    United Kingdom
AEE renewables UK 31 Ltd (Says Court)    United Kingdom
SunEdison Yieldco DG Holdings, LLC    State of Delaware
SunE Solar Construction Holdings #2, LLC    State of Delaware
SunE Solar Construction #2, LLC    State of Delaware
SunE Hubbardston Solar, LLC    State of Delaware
SunE Solar Berlin I, LLC    State of Delaware
BWC Origination 12, LLC    State of Delaware
BWC Origination 2, LLC    State of Delaware
SunEdison Yieldco Origination Holdings, LLC    State of Delaware
SunEdison DG14 Holdings, LLC    State of Delaware
SunE Solar Mattapoisett I, LLC    State of Delaware
Tioga Solar La Paz, LLC    State of Delaware
SunEdison JJ Gurabo, LLC    Puerto Rico
SunE RBPC1, LLC    State of Delaware
SunE RBPC6, LLC    State of Delaware
SunE RBPC7, LLC    State of Delaware
SunE CRF10, LLC    State of Delaware
SunE RBPC3, LLC    State of Delaware
SunE RBPC4, LLC    State of Delaware
SunE CREST 1, LLC    State of Delaware
SunE CREST 2, LLC    State of Delaware

 

I-2


Name of Entity

  

Jurisdiction of

organization and

Qualification

SunE CREST 5, LLC    State of Delaware
SunE CREST 6, LLC    State of Delaware
SunE CREST 7, LLC    State of Delaware
SunE LPT1, LLC    State of Delaware
SunE Solar XV Holdco, LLC    State of Delaware
SunE Solar XV Lessor Parent, LLC    State of Delaware
SunE Solar XV Lessor, LLC    State of Delaware
SunE CRF8, LLC    State of Delaware
SunE CRF9, LLC    State of Delaware
SunE CRF12, LLC    State of Delaware
Treasure Valley Solar, LLC    State of Delaware
Belchertown Solar, LLC    State of Delaware
SunEdison Yieldco Nellis HoldCo, LLC    State of Delaware
NAFB LP Holdings, LLC    State of Delaware
MMA NAFB Power,LLC    State of Delaware
Solar Star NAFB, LC    State of Delaware
SunEdison NC Utility, LLC    State of Delaware
Bearpond Solar Center, LLC    North Carolina
SunE Dessie Managing Member, LLC    State of Delaware
SunE Dessie Equity Holdings, LLC    State of Delaware
Dessie Solar Center, LLC    North Carolina
Shankle Solar Center, LLC    North Carolina
Graham Solar Center, LLC    North Carolina
SunEdison YieldCo Regulus Holdings, LLC    State of Delaware
SunE Regulus Managing Member, LLC    State of Delaware
SunE Regulus Equity Holdings, LLC    State of Delaware
SunE Regulus Dev, LLC    State of Delaware
SunE Regulus Holdings II, LLC    State of Delaware
SunE Regulus Holdings, LLC    State of Delaware
Regulus Solar, LLC    State of Delaware
SunEdison YieldCo ACQ2, LLC    State of Delaware
CALRENEW-1, LLC    State of Delaware
SunEdison YieldCo ACQ3, LLC    State of Delaware
SunE Alamosa1 Holdings, LLC    State of Delaware
SunE Alamosa1, LLC    State of Delaware
OL’s SunE Alamosa1 Trust    State of Delaware

 

I-3


Name of Entity

  

Jurisdiction of

organization and

Qualification

SunEdison YieldCo ACQ9, LLC    State of Delaware
Atwell Island Holdings, LLC    State of Delaware
SPS Atwell Island, LLC    State of Delaware
SunEdison YieldCo ACQ4, LLC    State of Delaware
Yieldco SunEY US Holdco, LLC    State of Delaware
Nautilus Solar Silvermine, LLC    State of Delaware
Nautilus Solar I, LLC    State of Delaware
Nautilus Solar Funding II, LLC    State of Delaware
Nautilus Solar Power I, LLC    State of Delaware
Nautilus Solar Ocean City Two, LLC    State of Delaware
Nautilus Solar Funding IV, LLC    State of Delaware
Green Cove Management, LLC    Florida
Nautilus Solar WPU, LLC    State of Delaware
Nautilus Solar Lindenwold BOE, LLC    State of Delaware
Nautilus Solar SWBOE, LLC    State of Delaware
Nautilus Solar Solomon Schechter, LLC    State of Delaware
Nautilus Solar Dev Co, LLC    State of Delaware
Nautilus Solar Power III, LLC    State of Delaware
Nautilus Solar Power II, LLC    State of Delaware
Nautilus Solar Medford BOE, LLC    State of Delaware
Nautilus Solar Medford Lakes, LLC    State of Delaware
Nautilus Solar Wayne BOE, LLC    State of Delaware
Nautilus Solar Hazlet BOE, LLC    State of Delaware
Nautilus Solar Talbot County, LLC    State of Delaware
Nautilus Solar Frederick BOE, LLC    State of Delaware
Nautilus Sequoia I, LLC    State of Delaware
Solar PPA Partnership One, LLC    New York
Waldo Solar Energy Park of Gainesville, LLC    State of Delaware
Nautilus Solar Cresskill BOE, LLC    State of Delaware
Nautilus Solar KMBS, LLC    State of Delaware
Nautilus Solar St. Joseph’s LLC    State of Delaware
Nautilus Solar Liberty, LLC    State of Delaware
Nautilus Solar Ocean City One, LLC    State of Delaware
SS San Antonio West, LLC    California
Nautilus Solar Gibbstown, LLC    State of Delaware
SunEdison Yieldco ACQ5, LLC    State of Delaware
SunEdison Marsh Hill, LLC    State of Delaware
2413465 Ontario, Inc.    Ontario
Marsh Hill III LP    Ontario
SunEdison Yieldco, Enfinity Holdings, LLC    State of Delaware

 

I-4


Name of Entity

  

Jurisdiction of

organization and

Qualification

Enfinity SPV Holdings 2, LLC    State of Delaware
Enfinity Holdings WF, LLC    State of Delaware
Enfinity NorCal 1 FAA, LLC    California
Enfinity Colorado DHA 1, LLC    Colorado
Enfinity Arizona 2 Camp Verde USD, LLC    Arizona
Enfinity Arizona 3 Winslow USD. LLC    Arizona
Enfinity BNB Napoleon Solar, LLC    State of Delaware
Enfinity CentralVal 5 LUESD, LLC    California
SunEdison Yieldco, DGS Holdings, LLC    State of Delaware
SunE DGS Master Tenant, LLC    State of Delaware
SunE DGS Owner Holdco, LLC    State of Delaware
SunE Corcoran SP Owner, LLC    State of Delaware
SunE Solano SP Owner, LLC    State of Delaware
SunE Wasco SP Owner, LLC    State of Delaware
SunE Coalinga SH Owner, LLC    State of Delaware
SunE Pleasant Valley SP Owner, LLC    State of Delaware
SunEdison Yieldco ACQ7, LLC    State of Delaware
MA Operating Holdings, LLC    State of Delaware
Fall River Commerce Solar Holdings, LLC    State of Delaware
Fall River Innovation Solar Holdings, LLC    State of Delaware
South Street Solar Holdings, LLC    State of Delaware
Uxbridge Solar Holdings, LLC    State of Delaware
SunEdison YieldCo ACQ8, LLC    State of Delaware
SunEdison DG Operating Holdings-2, LLC    State of Delaware
SunEdison YieldCo ACQ6, LLC    State of Delaware
TerraForm Power Solar X Holdings, LLC    State of Delaware
SunE Solar X, LLC    State of Delaware
SunE J10 Holdings, LLC    State of Delaware
SE Solar Trust X    State of Delaware
TerraForm Power IVS I Holdings, LLC    State of Delaware
TerraForm Power IVS I Holdings II, LLC    State of Delaware
IVS I Services, LLC    State of Delaware

 

I-5


Name of Entity

  

Jurisdiction of

organization and

Qualification

Imperial Valley Solar 1 Holdings II, LLC    State of Delaware
Imperial Valley Solar 1 Holdings, LLC    State of Delaware
Imperial Valley Solar 1 Intermediate Holdings, LLC    State of Delaware
Imperial Valley Solar 1, LLC    State of Delaware
SunEdison Yieldco ACQ10, LLC    State of Delaware

 

I-6

EX-10.2

Exhibit 10.2

REPOWERING SERVICES

RIGHT OF FIRST REFUSAL AGREEMENT

THIS AGREEMENT is made as of the July 23, 2014, by and among TerraForm Power, Inc., a Delaware corporation (“Terra”), TerraForm Power, LLC, a Delaware limited liability company (“Terra LLC”), TerraForm Power Operating LLC, a Delaware limited liability company (“Terra Operating”), and SunEdison, Inc., a Delaware corporation (the “Manager”). This Agreement shall become effective immediately prior to the consummation of the initial public offering of Terra’s Class A Common Stock on the date first above written.

RECITALS:

A. Terra, Terra LLC and Terra Operating directly and indirectly, as applicable, hold interests in the Service Recipients (as defined below).

B. Terra, Terra LLC and Terra Operating wish to sell and grant the Manager a right of first refusal to provide certain services described in this Agreement to the Service Recipients from time to time, subject to the terms and conditions of this Agreement, and the Manager wishes to purchase and accept such right of first refusal to provide services to the Service Recipients.

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:

ARTICLE 1

INTERPRETATION

 

  1.1 Definitions

In this Agreement, except where the context otherwise requires, the following terms will have the following meanings:

1.1.1 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person.

1.1.2 “Agreement” means this Repowering Services Right of First Refusal Agreement, and “herein,” “hereof,” “hereby,” “hereunder” and similar expressions refer to this Agreement and include every instrument supplemental or ancillary to this Agreement and, except where the context otherwise requires, not to any particular article or section thereof.

1.1.3 “Business Day” means every day except a Saturday or Sunday, or a legal holiday in the City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.


1.1.4 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controls another Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example the status of A being the managing member of B) or by virtue of beneficial ownership of or control over a majority of the voting or economic interests in B; and, for certainty and without limitation, if A owns or has control over shares to which are attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B or A is the general partner of B, a limited partnership, then in each case A Controls B for this purpose, and the term “Controlled” has the corresponding meaning.

1.1.5 “Fair Market Value” means the aggregate amount of fees that would be paid by a willing and able owner, operator or manager of a solar energy project similar to the relevant Solar Energy Project and a willing and qualified provider of the relevant Services, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.

1.1.6 “Feed-in Tariff” means a performance-based incentive supporting renewable energy generation guaranteeing payments to a Service Recipient for total kWh produced, access to the grid and a long-term contract, and/or similar additional terms.

1.1.7 “Governmental Authority” means any (i) international, national, multinational, federal, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency or instrumentality, domestic or foreign, including ISO/RTOs, (ii) self-regulatory organization or stock exchange, (iii) subdivision, agent, commission, board, or authority of any of the foregoing, or (iv) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

1.1.8 “IFRS” means the International Financial Reporting Standards as issued by the International Accounting Standards Board.

1.1.9 “Independent Committee” has the meaning set forth in the Management Services Agreement.

1.1.10 “Laws” means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common law and equity, rules, regulations and municipal bylaws whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, and awards of any Governmental Authority, and (iii) policies, practices and guidelines of any Governmental Authority which, although not actually having the force of law, are considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable,” with respect to such Laws and in the context that refers to one or more Persons, means such Laws that apply to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

 

2


1.1.11 “Manager Group” means the Manager and its Affiliates (other than any member of the Terra Group) and any other Service Providers.

1.1.12 “Manager” has the meaning assigned thereto in the preamble.

1.1.13 “Management Services Agreement” means the Management Services Agreement by and among the parties hereto dated on or about the date hereof.

1.1.14 “O&M Agreement” means each Operations and Maintenance Agreement, or similar contract, entered into between a Service Recipient, on one hand, and a service provider, on the other other hand, for comprehensive preventive and corrective maintenance services, among other things, relating to a Solar Energy Project.

1.1.15 “Permit” means any consent, license, approval, registration, permit or other authorization granted by any Governmental Authority.

1.1.16 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimited liability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or Governmental Agency, authority or entity however designated or constituted and pronouns have a similarly extended meaning.

1.1.17 “Power Purchase Agreement” or “PPA” means each contract entered into between a Service Recipient, as seller, and a third-party purchaser for the generation, purchase and sale of electricity and/or renewable energy credits (RECs), and certain other commercial terms related thereto.

1.1.18 “Service Providers” means the Manager, or any member of the Manager Group that the Manager has arranged to provide the Services to any Service Recipient.

1.1.19 “Service Recipient” means Terra, Terra LLC, Terra Operating, as well as any other direct and indirect Subsidiary of Terra, Terra LLC, Terra Operating, as applicable, acquired or formed after the date hereof for the purpose of owning a Project and that receives Services from a Service Provider pursuant to this Agreement.

1.1.20 “Services” means, with respect to a Solar Energy Project, (i) re-powering the applicable Solar Energy Project, including without limitation services provided to analyze, design and replace or improve the Project through the modification of the Solar Energy System or the installation of new solar components, but excluding any maintenance; and (ii) providing such other services as may from time to time be reasonably requested by the Service Recipients relating to the foregoing.

1.1.21 “Solar Energy Project” or “Project” means a solar power generation project owned by any of the Service Recipients.

 

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1.1.22 “Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by such Person, (ii) any trust in which such Person holds all of the beneficial interests or (iii) any partnership, limited liability company or similar entity in which such Person holds all of the interests other than the interests of any general partner, managing member or similar Person.

1.1.23 “Terra” has the meaning assigned thereto in the preamble.

1.1.24 “Terra Group” means Terra, Terra LLC, Terra Operating and their direct and indirect Subsidiaries.

1.1.25 “Terra LLC” has the meaning assigned thereto in the preamble.

1.1.26 “Terra Operating” has the meaning assigned thereto in the preamble.

 

  1.2 Headings and Table of Contents

The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.

 

  1.3 Interpretation

In this Agreement, unless the context otherwise requires:

1.3.1 words importing the singular shall include the plural and vice versa, words importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;

1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;

1.3.3 references to any Person include such Person’s successors and permitted assigns;

1.3.4 any reference to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;

1.3.5 any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;

 

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1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day; and

1.3.7 except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.

ARTICLE 2

RIGHT OF FIRST REFUSAL

 

  2.1 Purchase of Right of First Refusal; Purchase Price

2.1.1 Terra, Terra LLC and Terra Operating each hereby sell to Manager and Manager hereby purchases from Terra, Terra LLC and Terra Operating, an exclusive right of first refusal to provide (or arrange for another Service Provider to provide) any or all of the Services to the Service Recipients from time to time during the term of this Agreement.

2.1.2 Concurrently with the execution and delivery of this Agreement, Manager shall pay each of Terra, Terra LLC and Terra Operating one hundred dollars ($100) as full consideration for the sale and grant of such right of first refusal to Manager.

 

  2.2 Terms of Right of First Refusal

2.2.1 During the term of this Agreement, and subject to the terms and conditions specified below, Manager has a right of first refusal each time a Service Recipient (the “Offering Service Recipient”) proposes to engage any Person to perform any Services in respect of a Project. Each time the Offering Service Recipient proposes to engage any Person to perform any Service, the Offering Service Recipient shall first offer Manager the right to perform (or arrange for another Service Provider to perform) such Service in accordance with this Section 2.2.

2.2.2 The Offering Service Recipient shall give written notice (the “Offering Service Recipient Notice”) to the Manager stating its bona fide intention to engage a Person to provide one or more Services and specifying the material terms and conditions, including a Fair Market Value fee to be paid to Manager (or other Service Provider, as applicable), upon which the Services would be provided. Upon request of the Manager, the relevant Offering Service Recipient shall provide a breakdown of the Fair Market Value fee for relevant parts of the Services and the supply of relevant components as would be standard in the relevant market.

2.2.3 The Offering Service Recipient Notice will constitute the Offering Service Recipient’s offer to Manager to provide (or arrange for another Service Provider to provide) the Services on the terms therein specified and shall be irrevocable for a period of fifteen (15) Business Days (the “ROFR Notice Period”).

2.2.4 Upon receipt of the Offering Service Recipient Notice, Manager shall have until the end of the ROFR Notice Period to agree to provide (or arrange for another Service Provider to provide) the Services or any separately broken out parts of the Services or supply of

 

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relevant components thereof as described in the Offering Service Recipient Notice by delivering a written notice (a “ROFR Notice”) to the Offering Service Recipient stating that it agrees to provide (or arrange for another Service Provider to provide) such Services or part thereof on the terms specified in the Offering Service Recipient Notice. Any ROFR Offer Notice so delivered shall be binding on Manager and irrevocable upon delivery. If Manager delivers a ROFR Offer Notice to the Offering Service Recipient in accordance with this Section 2.2.4, Manager and such Offering Service Recipient shall thereafter negotiate in good faith and use their commercially reasonable efforts to enter into all necessary agreements and other arrangements as soon as practicable thereafter. Notwithstanding the foregoing, if Manager delivers a ROFR Notice in accordance with this Section 2.2.4, except that it in good faith states therein that the proposed fee for such Services is not in its opinion consistent with Fair Market Value (a “Limited ROFR Notice”), then the ROFR Notice Period shall be extended by another fifteen (15) Business Days from the delivery of the Limited ROFR Notice, and the parties shall work in good faith during such extended ROFR Notice Period to mutually agree on a Fair Market Value of the fee to be paid by Manager for the provision of such Services. If the parties are unable to agree on the Fair Market Value within the extended ROFR Notice Period, then Manager shall be deemed not to have provided a ROFR Notice and the provisions of the following Section 2.2.5 shall apply.

2.2.5 If Manager fails to deliver a ROFR Offer Notice in accordance with Section 2.2.4, it shall be deemed to have waived all of its rights to provide (or arrange for another Service Provider to provide) the specific Services with respect such Offering Service Recipient Notice, and the Offering Service Recipient may, during the ninety (90) day period following the expiration of the ROFR Notice Period engage another Person to perform such Services on terms and conditions no more favorable to such Person than those specified in the Offering Service Recipient Notice. If the Offering Service Recipient does not engage a third party to perform the Services within such period or, if the Services are not commenced within six (6) months from the expiration of the ROFR Notice Period, Manager’s right of first refusal provided hereunder shall be deemed to be revived and the provision of such Services shall not be offered to any third party unless first re-offered to Manager in accordance with this Section 2.2.

2.2.6 Terra, Terra LLC and Terra Operating each hereby expressly agree to cause each other Service Recipient to comply with the terms of this Agreement, including, without limitation, this Section 2.2.

ARTICLE 3

RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

 

  3.1 Other Activities

No member of the Manager Group (and no Affiliate, director, officer, member, partner, shareholder or employee of any member of the Manager Group) shall be prohibited from engaging in other business activities or sponsoring, or providing services to, third parties that compete directly or indirectly with the Service Recipients, whether or not the Manager has exercised its right of first refusal hereunder. Nothing in this Agreement will prohibit the Manager from acquiring or operating power generation infrastructure assets that are contracted.

 

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  3.2 Independent Contractor, No Partnership or Joint Venture

The parties acknowledge that to the extent the Manager provides Services pursuant to this Agreement the Manager provides or arranges for the provision of the Services hereunder as an independent contractor and that the Service Recipients, on one hand, and the Manager, on the other hand, are not partners or joint venturers with each other, and nothing herein will be construed so as to make them partners or joint venturers or impose any liability as such on any of them as a result of this Agreement; provided however that nothing herein will be construed so as to prohibit the Service Recipients and the Manager from embarking upon an investment together as partners, joint venturers or in any other manner whatsoever.

ARTICLE 4

COOPERATION

 

  4.1 Access to Information by Manager Group; Additional Actions

Each of Terra, Terra LLC and Terra Operating shall, and shall cause the other Service Recipients to:

4.1.1 grant, or cause to be granted, to the Manager Group full access to all documentation and information reasonably necessary to enable Manager to provide the Services;

4.1.2 provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Manager Group, and promptly notify the appropriate member of the Manager Group of any material facts or information of which the Service Recipients are aware, including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the Terra Group before any Governmental Authority, that may affect Manager’s provision of Services; and

4.1.3 take all actions as may be reasonably necessary to effectuate the transactions and agreements described herein.

 

  4.2 Access to Information by Service Recipients; Additional Actions

The Manager shall, and shall cause the other members of the Manager Group to:

4.2.1 grant, or cause to be granted, to the Terra Group full access to all documentation and information reasonably necessary in order for the Terra Group to conduct their business;

4.2.2 provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Terra Group, and promptly notify the appropriate Service Recipient of any material facts or information of which the Manager Group is aware, including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the Manager Group before any Governmental Authority, that may affect the the Terra Group in connection with Manager’s provision of Services; and

4.2.3 take all actions as may be reasonably necessary to effectuate the transactions and agreements described herein.

 

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  4.3 Additional Information

The parties acknowledge and agree that conducting the activities and providing the Services contemplated herein may have the incidental effect of providing additional information which may be utilized with respect to, or may augment the value of, business interests and related assets in which any of the Service Providers or any of its Affiliates has an interest and that, subject to compliance with this Agreement, none of the Service Providers or any of their respective Affiliates will be liable to account to the Service Recipients with respect to such activities or results; provided, however, that the relevant Service Provider will not (and will cause its Affiliates not to), in making any use of such additional information, do so in any manner that the relevant Service Provider or its Affiliates knows, or ought reasonably to know, would cause or result in a breach of any confidentiality provision of agreements to which any Service Recipient is (or may become) a party or is (or may become) bound.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

OF THE MANAGER AND THE SERVICE RECIPIENTS

 

  5.1 Representations and Warranties of the Manager

The Manager hereby represents and warrants to the Service Recipients that:

5.1.1 it is validly organized and existing under the laws of the State of Delaware;

5.1.2 it, or any another Service Provider, as applicable, holds, or will timely hold, such Permits as are necessary to perform its obligations hereunder and is not aware of, or shall inform the Service Recipients promptly upon knowledge of, any reason why such Permits might be cancelled;

5.1.3 it has the power, capacity and authority to enter into this Agreement and to perform its obligations hereunder;

5.1.4 it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

5.1.5 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which it or any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Manager;

 

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5.1.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

5.1.7 this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

  5.2 Representations and Warranties of the Service Recipients

Terra, Terra LLC and Terra Operating, each hereby represents and warrants, on its behalf and on behalf of each of the other Service Recipients, to the Manager that:

5.2.1 it (and, if applicable, its managing member) is validly organized and existing under the Laws governing its formation and organization;

5.2.2 it, or the relevant Service Recipient, holds such Permits necessary to own and operate the projects and entities that it directly or indirectly owns or operates from time to time and is not aware of any reason why such Permits might be cancelled;

5.2.3 it (or, as applicable, its managing member on its behalf) has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;

5.2.4 it (or, as applicable, its managing member) has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

5.2.5 the execution and delivery of this Agreement by it (or, as applicable, its managing member on its behalf) and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments (or, if applicable, the Governing Instruments of its managing member), or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Service Recipients as a whole;

5.2.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it (or, as applicable, its managing member on its behalf) of this Agreement; and

5.2.7 this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general

 

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principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

ARTICLE 6

TERM AND TERMINATION

 

  6.1 Term and Termination

Unless earlier terminated by the mutual written consent of each of the parties hereto (with Terra acting through its Independent Committee), the term of this Agreement (the “Term”) shall commence on the date hereof and shall continue in effect through the date of expiration or termination of the Non-Competition Period, as defined in the Management Services Agreement, at which time this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination of this Agreement.

ARTICLE 7

GENERAL PROVISIONS

 

  7.1 Amendment, Waiver

The parties may amend this Agreement only by a written agreement signed by the parties and that identifies itself as an amendment to this Agreement, provided that, except as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unless the prior approval of the Board of Directors of Terra (acting through the Independent Committee) is obtained and the amendment or waiver is executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right.

 

  7.2 Assignment

7.2.1 This Agreement shall not be assigned by the Manager without the prior written consent of Terra (acting through the Independent Committee, as long as Manager Controls Terra), except in the case of assignment to a Person that is the Manager’s successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement. In addition, provided that the Manager provides prior written notice to the Service Recipients for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer or assignment of the Manager’ rights under this Agreement, including any amounts payable to the Manager under this Agreement, to a bona fide lender as security.

 

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7.2.2 This Agreement shall not be assigned by any of the Service Recipients without the prior written consent of the Manager, except in the case of assignment by any such Service Recipient to a Person that is its successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as such Service Recipient is bound under this Agreement.

7.2.3 Any purported assignment of this Agreement in violation of this Article 7 shall be null and void.

 

  7.3 Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.

 

  7.4 Entire Agreement

This Agreement and any agreements later entered into as a result of Manager exercising its right of first refusal constitute the entire agreement between the parties pertaining to the Services. There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, by any party to this Agreement or its directors, officers, employees or agents, to any other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into this Agreement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above.

 

  7.5 Mutual Waiver of Jury Trial

AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

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  7.6 Consent to Jurisdiction and Service of Process

EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE CITY AND COUNTY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH OF THE PARTIES HERETO FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH BELOW SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS PARAGRAPH. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS AGREEMENT, ANY RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY AND THEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION, SUIT OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

  7.7 No Consequential Damages

Notwithstanding anything to the contrary contained in this Agreement or provided for under any applicable law, no party hereto shall be liable to any other Person, either in contract or in tort, for any consequential, incidental, indirect, special or punitive damages of such other Person, including loss of future revenue, or income or profits, or any diminution of value or multiples of earnings damages relating to the breach or alleged breach hereof, whether or not the possibility of such damages has been disclosed to the other party in advance or could have been reasonably foreseen by such other party.

 

  7.8 Governing Law

The internal law of the State of New York will govern and be used to construe this Agreement without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

  7.9 Enurement

This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

 

  7.10 Notices

Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next Business Day,

 

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(iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications shall be sent to the addresses specified below, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any party may change such party’s address for receipt of notice by giving prior written notice of the change to the sending party as provided herein. Notices and other communications will be addressed as follows:

If to the Service Recipients:

TerraForm Power, Inc.

12500 Baltimore Avenue

Beltsville, Maryland 20705

Attention: General Counsel

Facsimile No.: (240) 264-8100

If to the Manager:

SunEdison, Inc.

501 Pearl Drive

St. Peters, MO 63376

Attention: General Counsel

Facsimile No.: (866) 773-0791

 

  7.11 Further Assurances

Each of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

 

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  7.12 Counterparts

This Agreement may be signed in counterparts and each of such counterparts will constitute an original document and such counterparts, taken together, will constitute one and the same instrument. PDF or other electronic transmissions of this Agreement shall constitute an original counterpart.

 

  7.13 Specific Performance

The parties agree that if a party materially breaches any provision of this Agreement or materially fails to perform any provision in accordance with its specific terms, irreparable damage could occur, no adequate remedy at Law may exist and damages would be difficult to determine, and that each arty shall be entitled to seek an injunction and/or specific performance of the terms of this Agreement, in addition to any other contractual remedy, at law, in equity, or otherwise, to which it may be entitled.

(Signature pages follow)

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

TERRAFORM POWER, INC.
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   Senior Vice President, General Counsel and Secretary
 
TERRAFORM POWER, LLC
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   General Counsel
TERRAFORM POWER OPERATING, LLC
By: TerraForm Power, LLC, as sole member
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   General Counsel


SUNEDISON, INC., as Manager
By:  

/s/ Brian Wuebbels

Name:   Brian Wuebbels
Title:   Executive Vice President and Chief
  Financial Officer

 

I-1

EX-10.3

Exhibit 10.3

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”), dated as of July 23, 2014, is made by and among TerraForm Power, Inc., a Delaware corporation (the “Corporation”), TerraForm Power, LLC, a Delaware limited liability company (“Terra LLC”), SunEdison, Inc. (“SunEdison”) and the other Persons from time to time party hereto in accordance with Section 4.1 hereof (collectively with SunEdison, the “Terra LLC Unitholders”).

WHEREAS, the parties hereto desire to provide for the exchange of certain Terra LLC Units and Class B or Class B1 Common Stock, as applicable, for shares of Class A Common Stock (each as defined herein), upon the election of a Terra LLC Unitholder, whereby (a) such Terra LLC Unitholder would surrender all or a portion of its Terra LLC Units and a corresponding number of shares of Class B or Class B1 Common Stock, as applicable, to Terra LLC, (b) the Corporation will issue and contribute a corresponding number of shares of Class A Common Stock to Terra LLC for delivery of such shares by Terra LLC to the exchanging Terra LLC Unitholder, (c) Terra LLC will issue a corresponding number of additional Class A Units (as defined herein) to the Corporation, (d) Terra LLC will cancel the surrendered Terra LLC Units and the Corporation will cancel the corresponding shares of Class B or Class B1 Common Stock, as applicable (each as defined herein), and (e) Terra LLC will deliver the shares of Class A Common Stock it receives from the Corporation to the exchanging Terra LLC Unitholder, in each case on the terms and subject to the conditions set forth herein.

WHEREAS, the parties hereto desire that the exchange of Terra LLC Units and the Class B or Class B1 Common Stock, as applicable, for shares of Class A Common Stock pursuant to this Agreement constitute a taxable sale or exchange, for federal income tax purposes, of Terra LLC Units by the applicable Terra LLC Unitholder in exchange for Class A Common Stock (in conjunction with the cancellation of Class B or Class B1 Common Stock, as applicable).

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

Section 1.1 Effective Time. This Agreement shall become effective immediately prior to the consummation of the initial public offering of the Class A Common Stock on the date first above written (the “Effective Time”).

Section 1.2 Definitions. Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Terra LLC Operating Agreement (as defined herein), and the following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

Applicable Securities Laws” means the Securities Act of 1933, as amended (the “Securities Act”), and any applicable securities laws of a state or foreign jurisdiction.

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of the Corporation.


Class A Units” means the Class A Units of Terra LLC, with such rights and privileges as set forth in the Terra LLC Operating Agreement.

Class B Common Stock” means the Class B common stock, par value $0.01 per share, of the Corporation.

Class B Units” means the Class B Units of Terra LLC, with such rights and privileges as set forth in the Terra LLC Operating Agreement.

Class B1 Common Stock” means the Class B1 common stock, par value $0.01 per share, of the Corporation.

Class B1 Units” means the Class B1 Units of Terra LLC, with such rights and privileges as set forth in the Terra LLC Operating Agreement.

Code” means the Internal Revenue Code of 1986, as amended.

Disqualified Person” means (a) any federal, state or local government (including any political subdivision, agency or instrumentality thereof), (b) any organization described in Section 501(c) of the Code and exempt from tax under Section 501(a) of the Code, (c) any entity referred to in Section 54(j)(4) of the Code, (d) any Person described in Section 50(d)(1) of the Code, (e) any Person who is not a “United States Person” as defined in Section 7701(a)(30) of the Code (other than a foreign partnership or foreign passthrough entity), unless (with respect to the Company or any Subsidiary of the Company) such Person is a foreign person or entity that is subject to U.S. federal income tax on more than fifty percent (50%) of the gross income for the taxable year derived by such Person from the Company or such Subsidiary and thus qualifies for the exception of section 168(h)(2)(B) of the Code, or (f) any partnership or other “pass-through entity” (within the meaning of Section 1603(g)(4) of the American Recovery and Reinvestment Tax Act of 2009, as amended, including a single-member disregarded entity and a foreign partnership or foreign pass-through entity, but excluding a “real estate investment trust” as defined in section 856(a) of the Code and a cooperative organization described in section 1381(a) of the Code, neither of which shall constitute a pass-through entity for purposes of this clause (f)) any direct or indirect partner (or other holder of an equity or profits interest) of which is described in clauses (a) through (e) above unless such person owns such direct or indirect interest in the partnership or pass-through entity through a “taxable C corporation”, as that term is used in the Section 1603 Program Guidance; provided, that if and to the extent the definition of “disqualified person” under Section 1603(g) of the American Recovery and Reinvestment Tax Act of 2009, as amended, is amended after the date hereof, the definition of “Disqualified Person” hereunder shall be interpreted to conform to such amendment and any guidance issued by the U.S. Treasury Department with respect thereto.

Effective Time” has the meaning set forth in Section 1.1 of this Agreement.

Election of Exchange” has the meaning set forth in Section 2.1(b) of this Agreement.

Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.

Exchange Date” has the meaning set forth in Section 2.1(b) of this Agreement.

 

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Exchange Rate” means the number of shares of Class A Common Stock for which a Terra LLC Unit is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate shall be 1, subject to adjustment pursuant to Section 2.2 of this Agreement.

Governmental Entity” means any supra-national, national, state, provincial or local governmental authority, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

IPO” means the closing of the initial public offering and sale by the Corporation of shares of Class A Common Stock.

Permitted Transferee” has the meaning given to such term in Section 4.1 of this Agreement.

Person” means any individual, partnership, corporation, limited liability company, trust or other entity, including any Governmental Entity.

Requisite Holders” means, as of the applicable determination date, each Terra LLC Unitholder, if any, who, together with its Affiliates and Permitted Transferees, beneficially owns at least a majority of the then outstanding Terra LLC Units (excluding any Terra LLC Units held by the Corporation or any of its subsidiaries).

Riverstone” means R/C US Solar Investment Partnership, L.P., a Delaware limited partnership.

Subsidiary” means, with respect to any Person, (i) a corporation a majority of whose capital stock with the general voting power under ordinary circumstances to vote in the election of directors of such corporation (irrespective of whether or not, at the time, any other class or classes of securities shall have, or might have, voting power by reason of the happening of any contingency) is, at the date of determination thereof, beneficially owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or (ii) any other Person (other than a corporation), including a joint venture, a general or limited partnership or a limited liability company, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, beneficially own at least a majority of the ownership interests entitled to vote in the election of directors, managers or trustees thereof (or other Persons performing such functions) or act as the general partner or managing member of such other Person.

Terra LLC Operating Agreement” means the Amended and Restated Operating Agreement of Terra LLC, dated on or about the date hereof, as such agreement may be amended from time to time in accordance with the terms thereof.

Terra LLC Unit” means each of the Class B and Class B1 Units of Terra LLC now or hereafter held by any Terra LLC Unitholder.

Terra LLC Unitholder” means SunEdison and any Permitted Transferee to whom SunEdison (or another Permitted Transferee) transfers some or all of the Terra LLC Units owned by such Person in accordance with the terms of the Terra LLC Operating Agreement (including Section 7.3 thereof).

 

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ARTICLE II

Section 2.1 Exchange of Terra LLC Units for Class A Common Stock.

(a) Subject to compliance with Applicable Securities Laws, each Terra LLC Unitholder shall be entitled at any time and from time to time, upon the terms and subject to the conditions hereof and the Terra LLC Operating Agreement, to surrender all or a portion of its Terra LLC Units to Terra LLC in exchange for the delivery by Terra LLC to the exchanging Terra LLC Unitholder of a number of shares of Class A Common Stock that is equal to the product of the number of Terra LLC Units surrendered multiplied by the Exchange Rate (each such exchange, an “Exchange”); provided that, (i) each Exchange shall be for a minimum of the lesser of 1,000 Terra LLC Units or all of the Terra LLC Units held by such Terra LLC Unitholder and (ii) such exchanging Terra LLC Unitholder must be the record holder of the number of shares of Class B or Class B1 Common Stock that is equal to the number of Terra LLC Units surrendered. In connection with such exchange, (A) a corresponding number of shares of Class B or Class B1 Common Stock, as applicable, held by the exchanging Terra LLC Unitholder must be surrendered to Terra LLC for delivery of such shares by Terra LLC to the Corporation for cancellation, (B) the Corporation will issue and contribute a corresponding number of shares of Class A Common Stock to Terra LLC for delivery of such shares by Terra LLC to the exchanging Terra LLC Unitholder, (C) Terra LLC will issue a corresponding number of additional Class A Units to the Corporation, (D) Terra LLC will cancel the surrendered Terra LLC Units and the Corporation will cancel the corresponding shares of Class B or Class B1 Common Stock, as applicable, and (E) Terra LLC will deliver the shares of Class A Common Stock it receives from the Corporation to the exchanging Terra LLC Unitholder.

(b) A Terra LLC Unitholder shall exercise its right to Exchange Terra LLC Units as set forth in Section 2.1(a) above by delivering to the Corporation and to Terra LLC a written election of exchange in respect of the Terra LLC Units to be Exchanged substantially in the form of Exhibit A hereto (an “Election of Exchange”), duly executed by such holder or such holder’s duly authorized representative, in each case delivered during normal business hours at the principal executive offices of the Corporation and of Terra LLC. An Election of Exchange may specify that the Exchange is to be contingent (including as to timing) upon the occurrence of any transaction or event, including the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering or otherwise) of shares of Class A Common Stock or any merger, consolidation or other business combination. Subject to (i) Section 2.4(b) of this Agreement, (ii) the payment by the applicable Terra LLC Unitholder of any amount required to be paid under Section 2.1(c) and (iii) the surrender to Terra LLC of the unit certificates, if any, and duly executed unit powers associated with the Terra LLC Units subject to the Exchange, the Exchange shall be deemed to have been effected on (A) the Business Day immediately following receipt of the applicable Election of Exchange or (B) such later date specified in or pursuant to the applicable Election of Exchange (such

 

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date specified in clause (A) or (B), as applicable, the “Exchange Date”), and as promptly as practicable following the applicable Exchange Date, the Corporation shall deliver or cause to be delivered at the offices of the then-acting registrar and transfer agent of the Class A Common Stock or, if there is no then-acting registrar and transfer agent of the Class A Common Stock, at the principal executive offices of Terra LLC, the number of shares of Class A Common Stock deliverable upon such Exchange. Terra LLC shall then deliver or cause to be delivered such shares of Class A Common Stock to the relevant exchanging Terra LLC Unitholder (or its designee). Notwithstanding anything herein to the contrary, any exchanging Terra LLC Unitholder may withdraw or amend an Election of Exchange, in whole or in part, prior to the effectiveness of the Exchange, at any time prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Exchange Date (or any such later time as may be required by applicable law) by delivery of a written notice of withdrawal to the Corporation and to Terra LLC, specifying (1) the number of Terra LLC Units being withdrawn, (2) the number of Terra LLC Units, if any, as to which the Election of Exchange remains in effect and (3) if such exchanging Terra LLC Unitholder so determines, a new Exchange Date or any other new or revised information permitted in an Election of Exchange. On the Exchange Date, all rights of the exchanging Terra LLC Unitholder as a holder of such Terra LLC Units shall cease and such Terra LLC Units shall be cancelled, and Terra LLC shall issue to the Corporation a number of Class A Units equal to the number of such Terra LLC Units cancelled. On the Exchange Date, the exchanging Terra LLC Unitholder shall be treated for all purposes as having become the record holder of the shares of Class A Common Stock to be exchanged for the cancelled Terra LLC Units. In connection with the Exchange, the Corporation shall automatically cancel shares of Class B or B1 Common Stock, as applicable, held by the exchanging Terra LLC Unitholder, immediately after such shares of common stock are transferred to Terra LLC, in an amount corresponding to the number of Terra LLC Units being exchanged in accordance with this Section 2.1. The Corporation shall take such actions as may be required to ensure the performance by Terra LLC of its obligations under this Section 2.1(b) and the foregoing Section 2.1(a).

(c) Terra LLC, the Corporation and the exchanging Terra LLC Unitholder shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that Terra LLC shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided, however, that if any shares of Class A Common Stock are to be delivered in a name other than that of the Terra LLC Unitholder that requested the Exchange, then such Terra LLC Unitholder and/or the person in whose name such shares are to be delivered shall pay to Terra LLC the amount of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Terra LLC that such tax has been paid or is not payable.

(d) Each of the Corporation and Terra LLC covenants and agrees that it will not take any action that would pose a material risk that Terra LLC could be treated as a “publicly traded partnership” for U.S. federal income tax purposes. Notwithstanding anything to the contrary herein, no Exchange shall be permitted (and, if attempted, shall be void ab initio) if, in the opinion of legal counsel or a qualified tax advisor to Terra

 

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LLC, such an Exchange would present a material risk that such Exchange would cause Terra LLC to cease to be classified as a partnership or to be classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code for U.S. federal income tax purposes.

(e) For the avoidance of doubt, and notwithstanding anything to the contrary herein, a Terra LLC Unitholder shall not be entitled to Exchange Terra LLC Units to the extent the Corporation or Terra LLC reasonably determines in good faith that such Exchange (i) would be prohibited by applicable law or regulation, including Applicable Securities Laws, or (ii) would not be permitted under any other agreement between such Terra LLC Unitholder and the Corporation or its subsidiaries (including the Terra LLC Operating Agreement).

(f) Notwithstanding anything to the contrary herein, no Terra LLC Unitholder may directly or indirectly, sell, exchange, assign, pledge, hypothecate, mortgage, gift, or otherwise transfer, dispose of or encumber, whether voluntary or involuntary or by operation of law (any of the foregoing, solely for purposes of this Section 2.1(f), a “transfer”) any of such Terra LLC Unitholder’s Terra LLC Units (including any transfers of the equity interests of a direct or indirect holder of Units that is classified as a partnership or disregarded entity for U.S. federal income tax purposes) so as to cause any of such Terra LLC Units to be treated as if they are owned by a Disqualified Person. Any such transfer, if attempted, shall be void ab initio and instead shall be deemed an election by such Terra LLC Unitholder, as of the date of such attempted transfer and without any further action by such Terra LLC Unitholder, to exercise its right to Exchange all of such Terra LLC Units as set forth in Section 2.1(a) above.

Section 2.2 Adjustment. The Exchange Rate shall be adjusted accordingly if there is: (a) any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Class A Units, Class B Units or Class B1 Units that is not accompanied by an identical subdivision or combination of the Class A Common Stock; (b) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Class A Units, Class B Units or Class B1 Units; (c) (1) any issuance of shares of (x) Class A Common Stock by the Corporation or (y) Class A Units to the Corporation that is not accompanied by (2) the issuance of an identical number of (x) Class A Units to the Corporation (in the case of clause (c)(1)(x)) or (y) shares of Class A Common Stock (in the case of clause (c)(1)(y)), as applicable; or (d) (1) any issuance of (x) shares of Class B or Class B1 Common Stock by the Corporation or (y) Class B or Class B1 Units to SunEdison or its Permitted Transferees that is not accompanied by (2) the issuance of an identical number of (x) Class B or Class B1 Units to SunEdison or to any Permitted Transferee of SunEdison (in the case of clause (d)(1)(x)) or (y) shares of Class B or Class B1 Common Stock to SunEdison or its Permitted Transferees (in the case of clause (d)(1)(y)). If there is (i) any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property or (ii) and any subdivision (by any split, distribution or dividend,

 

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reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction, then upon any subsequent Exchange, an exchanging Terra LLC Unitholder shall be entitled to receive the amount of such security, securities or other property that such exchanging Terra LLC Unitholder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any such subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property, this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect to such security or other property. This Agreement shall apply to the Class A Units, Class B Units or Class B1 Units held by the Corporation, SunEdison and SunEdison’s Permitted Transferees as of the date hereof, as well as any Class A Units, Class B Units and Class B1 Units hereafter acquired by the Corporation, SunEdison or any of SunEdison’s Permitted Transferees. This Agreement shall apply to, mutatis mutandis, and all references to “Class A Units,” “Class B Units” or “Class B1 Units” shall be deemed to include, any security, securities or other property of Terra LLC which may be issued in respect of, in exchange for or in substitution of Class A Units, Class B Units or Class B1 Units, as applicable, by reason of any distribution or dividend, split, reverse split, combination, reclassification, reorganization, recapitalization, merger, exchange (other than an Exchange) or other transaction.

Section 2.3 Class A Common Stock to be Issued.

(a) If any Exchange in accordance with this Agreement is to be effected in a manner that would require registration under Applicable Securities Laws and such required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Terra LLC Unitholder requesting the Exchange, the Corporation shall use its commercially reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. The Corporation shall use its commercially reasonable efforts to list the Class A Common Stock required to be delivered upon Exchange prior to such delivery upon each national securities exchange or inter-dealer quotation system upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.

(b) The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Common Stock as shall be deliverable upon any such Exchange; provided that nothing contained herein shall be construed to preclude Terra LLC from satisfying its obligations in respect of the Exchange of Terra LLC Units by delivery of Class A Common Stock which is held in the treasury of the Corporation, in a manner consistent with the requirements of Treasury Regulations Section 1.1032-3(c) so as to allow Terra LLC to make such exchange without recognizing any gain or loss on the transaction for federal income tax purposes.

 

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(c) Prior to the effective date of this Agreement, the Corporation and Terra LLC will take all such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions or dispositions of equity securities of the Corporation (including derivative securities with respect thereto) and any securities which may be deemed to be equity securities or derivative securities of the Corporation for such purposes that result from the transactions contemplated by this Agreement, by each Terra LLC Unitholder who may reasonably be expected to be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Corporation upon the registration of any class of equity security of the Corporation pursuant to Section 12 of the Exchange Act (with the authorizing resolutions specifying the name of each such Terra LLC Unitholder whose acquisition or disposition of securities is to be exempted and the number of securities that may be acquired and disposed of by each such person pursuant to this Agreement).

(d) If any Takeover Law (as defined below) or other similar law or regulation becomes or is deemed to become applicable to this Agreement or any of the transactions contemplated hereby, the Corporation or Terra LLC shall use their commercially reasonable efforts to render such law or regulation inapplicable to all of the foregoing.

(e) Each of the Corporation and Terra LLC covenants that all Class A Common Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable, will pass to the applicable exchanging Terra LLC Unitholder free and clear of any liens, security interests and other encumbrances other than any such liens, security interests or other encumbrances imposed by such exchanging Terra LLC Unitholder and will not be subject to any preemptive right of stockholders of the Corporation or to any right of first refusal or other right in favor of any person or entity.

(f) No Exchange shall impair the right of the exchanging Terra LLC Unitholder to receive any distributions payable on the Terra LLC Units so exchanged in respect of a record date that occurs prior to the Exchange Date for such Exchange. For the avoidance of doubt, no exchanging Terra LLC Unitholder shall be entitled to receive, in respect of a single record date, distributions or dividends both on Terra LLC Units exchanged by such holder and on Class A Common Stock received by such holder in such Exchange.

Each Terra LLC Unitholder acknowledges and agrees that the shares of Class A Common Stock to be issued upon the occurrence of an Exchange in a transaction not registered under the Securities Act will constitute “restricted securities” as defined by Rule 144 promulgated under the Securities Act, and may not be sold or transferred in the absence of an effective registration statement under the Securities Act and registration or qualification under other Applicable Securities Laws or an exemption from such registration or qualification and certificates (or account entries in the case of book-entry securities) evidencing shares of Class A Common Stock issued upon an Exchange may bear an appropriate legend.

 

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Section 2.4 Withholding; Certification of Non-Foreign Status; Section 1603 Certification.

(a) If the Corporation or Terra LLC shall be required to withhold any amounts by reason of any Federal, State, local or foreign tax rules or regulations in respect of any Exchange, the Corporation or Terra LLC, as the case may be, shall be entitled to take such action as it deems appropriate in order to ensure compliance with such withholding requirements, including at its option withholding shares of Class A Common Stock with a fair market value equal to the minimum amount of any taxes which the Corporation or Terra LLC, as the case may be, may be required to withhold with respect to such Exchange. To the extent that amounts (or property) are so withheld and paid over to the appropriate taxing authority, such withheld amounts (or property) shall be treated for all purposes of this Agreement as having been paid (or delivered) to the appropriate Terra LLC Unitholder.

(b) Notwithstanding anything to the contrary herein, each of Terra LLC and the Corporation may, at its own discretion, require as a condition to the effectiveness of an Exchange that an exchanging Terra LLC Unitholder deliver to Terra LLC or the Corporation, as the case may be, a certification of non-foreign status in accordance with Treasury Regulation Section 1.1445-2(b). In the event Terra LLC or the Corporation has required delivery of such certification but an exchanging Terra LLC Unitholder is unable to do so, Terra LLC shall nevertheless deliver or cause to be delivered to the exchanging Terra LLC Unitholder the Class A Common Stock in accordance with Section 2.1 of this Agreement, but subject to potential withholding as provided in Section 2.4(a).

(c) On the last day of each calendar quarter until the earlier of (a) such time as Terra LLC no longer is subject to potential liability for recapture of a grant pursuant to Section 1603 of the American Recovery and Reinvestment Tax Act of 2009, as amended, and (b) such time as which Riverstone no longer holds any Terra LLC Units, Riverstone shall deliver to the Corporation and Terra LLC a Section 1603 Certification in the form set forth in Exhibit C. Notwithstanding anything to the contrary herein, each of Terra LLC and the Corporation may, at its own discretion, require as a condition to the effectiveness of an Exchange that Riverstone shall have delivered to the Corporation and Terra LLC such a certificate for the applicable calendar quarter.

ARTICLE III

Section 3.1 Representations and Warranties of the Corporation and of Terra LLC. Each of the Corporation and Terra LLC represents and warrants that (i) it is a corporation or limited liability company duly incorporated or formed and is existing in good standing under the laws of the State of Delaware, (ii) it has all requisite corporate or limited liability company power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of the Corporation, to issue the Class A Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including, in the case of the Corporation, the issuance of the Class A Common Stock) have been duly authorized by all necessary corporate or limited liability company action on its part, including all

 

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actions necessary to ensure that the acquisition of shares of Class A Common Stock pursuant to the transactions contemplated hereby shall not be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of “anti-takeover laws and regulations” of any jurisdiction that may purport to be applicable to this Agreement or the transactions contemplated hereby (collectively, “Takeover Laws”), (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally, and (v) the execution, delivery and performance of this Agreement by it and the consummation by it of the transactions contemplated hereby will not (A) result in a violation of its Certificate of Incorporation or Bylaws or other organizational documents, (B) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which it is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to it or by which any property or asset of it is bound or affected, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations, that would not reasonably be expected to have a material adverse effect on it or its business, financial condition or results of operations.

Section 3.2 Representations and Warranties of the Terra LLC Unitholders. Each Terra LLC Unitholder, severally and not jointly, represents and warrants that (i) it is duly incorporated or formed and, to the extent such concept exists in its jurisdiction of organization or formation, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) the execution and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action on the part of such Terra LLC Unitholder, (iv) this Agreement constitutes a legal, valid and binding obligation of such Terra LLC Unitholder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally and (v) the execution, delivery and performance of this Agreement by such Terra LLC Unitholder and the consummation by such Terra LLC Unitholder of the transactions contemplated hereby will not (A) result in a violation of the Certificate of Incorporation or Bylaws or other organizational documents of such Terra LLC Unitholder or (B) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Terra LLC Unitholder is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to such Terra LLC Unitholder, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations, that would not in any material respect result in the unenforceability against such Terra LLC Unitholder of this Agreement.

 

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ARTICLE IV

Section 4.1 Additional Terra LLC Unitholders. To the extent a Terra LLC Unitholder (including SunEdison) validly transfers any or all of its Terra LLC Units to another person in a transaction in accordance with, and not in contravention of, the Terra LLC Operating Agreement, then such transferee (each, a “Permitted Transferee”) shall have the right to execute and deliver a joinder to this Agreement, in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Terra LLC Unitholder hereunder; provided, however, that such Permitted Transferee shall be subject to any restrictions on Exchange that would have applied to the transferor. To the extent Terra LLC issues Terra LLC Units in the future, then the holder of such Terra LLC Units shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Terra LLC Unitholder hereunder.

Section 4.2 Addresses and Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 4.2):

(a) If to the Corporation or to Terra LLC, to:

501 Pearl Drive (City of O’Fallon)

St. Peters, Missouri 63376

Attn: General Counsel

Facsimile: (866) 773-0791

(b) If to any Terra LLC Unitholder, to the address and other contact information set forth in the records of Terra LLC from time to time.

Section 4.3 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 4.4 Binding Effect; No Third Party Beneficiaries. This Agreement shall, from and after the Effective Time, be binding upon and inure to the benefit of all of the parties and their successors, executors, administrators, heirs, legal representatives and permitted assigns, including, without limitation and without the need for an express assignment, any Permitted Transferee, provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Terra LLC Units in violation of the terms of the Terra LLC Operating Agreement or applicable law. This Agreement shall not be assignable by the Corporation or Terra LLC without the prior written consent of SunEdison and the Requisite Holders. In the event the Corporation or Terra LLC or any of its successors or assigns (i) consolidates with or merges into any other person or entity and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person or entity, then and in either case, as a condition to such consolidation, merger or transfer, proper provisions shall be made such that the successors and assigns of the Corporation or Terra LLC, as the case may be, will assume its obligations set forth in this Agreement, and

 

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this Agreement shall be enforceable against such successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon anyone other than the parties and their respective successors and permitted assigns any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 4.5 Severability. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 4.6 Integration. This Agreement, together with the Terra LLC Operating Agreement, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

Section 4.7 Amendment. The provisions of this Agreement may be amended, supplemented, waived or modified only by the affirmative vote or written consent of each of the Corporation, Terra LLC, SunEdison and the Requisite Holders; provided, however, that no such amendment, supplement, waiver or modification shall (i) materially alter or change any rights or obligations of any Terra LLC Unitholders in a manner that is different or prejudicial relative to any other Terra LLC Unitholders, without the prior written consent of at least two-thirds (2/3) in interest of the Terra LLC Unitholders (based on the number of Terra LLC Units held by such holders) affected in such a different or prejudicial manner or (ii) alter, supplement or amend the Exchange Rate as adjusted from time to time pursuant to Section 2.2 hereof (or the adjustments provided therein) without the prior written consent of each affected Terra LLC Unitholder. Notwithstanding the foregoing, the Corporation, Terra LLC and SunEdison, without the consent of any Requisite Holders, may amend, supplement, waive or modify any term of this Agreement to cure any ambiguity, mistake, defect or inconsistency contained herein.

Section 4.8 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

Section 4.9 Arbitration; Submission to Jurisdiction; Waiver of Jury Trial.

(a) Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement or the transactions contemplated hereby (including the validity, scope and enforceability of this arbitration provision) shall be finally settled by arbitration. The arbitration shall take place in Wilmington, Delaware and be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) then in effect (except as they may be modified by mutual agreement of the Corporation, Terra LLC, SunEdison and the Requisite Holders). The

 

12


arbitration shall be conducted by three neutral, impartial and independent arbitrators, who shall be appointed by the AAA, at least one of whom shall be a retired judge or a senior partner at one of the nationally recognized Delaware-based law firms. The arbitration award shall be final and binding on the parties. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets. The costs of the arbitration shall be borne by the Corporation. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.

(b) Notwithstanding the provisions of paragraph (a), the parties hereto may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each party hereto (i) expressly consents to the application of paragraph (c) of this Section 4.9 to any such action or proceeding and (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate.

(c) EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR ANY DELAWARE STATE COURT, IN EACH CASE, SITTING IN THE CITY OF WILMINGTON, DELAWARE FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 4.9, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.

(d) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in the preceding paragraph of this Section 4.9 and such parties agree not to plead or claim the same, and agree that service of process upon such party in any such action, suit, demand or proceeding shall be effective if notice is given in accordance with Section 4.2.

Section 4.10 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or by e-mail delivery of a “.pdf” format data file) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 4.10.

 

13


Section 4.11 Tax Treatment. This Agreement shall be treated as part of the partnership agreement of Terra LLC as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder. Each party hereto agrees to report each Exchange for U.S. federal income tax purposes as a taxable sale or exchange of Class B or Class B1 Units by the applicable Terra LLC Unitholder in exchange for Class A Common Stock (in conjunction with the cancellation of Class B or Class B1 Common Stock, as applicable) and no party shall take a contrary position on any U.S. federal, state or local income tax return: (i) except as otherwise required by a “determination” as defined in Section 1313 of the Code, or (ii) unless such party provides a written opinion by a nationally recognized accounting or law firm, which opinion is reasonably satisfactory to both SunEdison and Terra LLC, that such Exchange should not be treated as a taxable sale or exchange for federal income tax purposes.

Section 4.12 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 4.13 Independent Nature of Terra LLC Unitholders’ Rights and Obligations. The obligations of each Terra LLC Unitholder hereunder are several and not joint with the obligations of any other Terra LLC Unitholder, and no Terra LLC Unitholder shall be responsible in any way for the performance of the obligations of any other Terra LLC Unitholder hereunder. The decision of each Terra LLC Unitholder to enter into to this Agreement has been made by such Terra LLC Unitholder independently of any other Terra LLC Unitholder. Nothing contained herein, and no action taken by any Terra LLC Unitholder pursuant hereto, shall be deemed to constitute an action of the Terra LLC Unitholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Terra LLC Unitholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges that the Terra LLC Unitholders are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.

Section 4.14 Applicable Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

 

TERRAFORM POWER, INC.
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   Senior Vice President, General Counsel and Secretary
 
TERRAFORM POWER, LLC
By:  

/s/ Sebastian Deschler

Name:   Sebastian Deschler
Title:   General Counsel
SUNEDISON, INC.
By:  

/s/ Brian Wuebbels

Name:   Brian Wuebbels
Title:   Executive Vice President and Chief Financial Officer
 

[Signature Page to Exchange Agreement]


EXHIBIT A

[FORM OF]

ELECTION OF EXCHANGE

TerraForm Power, Inc.

TerraForm Power, LLC

501 Pearl Drive (City of O’Fallon)

St. Peters, Missouri 63376

Attn: General Counsel

Reference is hereby made to the Exchange Agreement, dated as of July 23, 2014 (as amended, the “Exchange Agreement”), by and among TerraForm Power, Inc., a Delaware corporation, TerraForm Power, LLC, a Delaware limited liability company, SunEdison, Inc., a Delaware corporation, and the other Persons from time to time party thereto (as Terra LLC Unitholders). Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

The undersigned Terra LLC Unitholder hereby transfers to Terra LLC for cancellation, the number of Terra LLC Units set forth below in Exchange for shares of Class A Common Stock to be issued in its name as set forth below, as set forth in the Exchange Agreement. [The foregoing transfers shall be [effective as of                     ][and][conditioned upon satisfaction of the following conditions:     .]1

 

Legal Name of Terra LLC Unitholder:  

 

Address:  

 

Number of Terra LLC Units to be Exchanged:  

 

The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the Terra LLC Units subject to this Election of Exchange are being transferred free and clear of any pledge, lien, security interest, encumbrance, equities or claim; (iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Terra LLC Units subject to this Election of Exchange is required to be obtained by the

 

1 

Insert Exchange Date and/or contingency, if applicable.

 

Exhibit A-1


undersigned for the transfer of such Terra LLC Units; and (v) the undersigned is the record holder of shares of Class B or Class B1 Common Stock, as applicable, in an amount equal to at least the number of Terra LLC Units subject to this Election of Exchange and will retain ownership of such minimum number of shares of Class B or Class B1 Common Stock, as applicable, through the Exchange Date.

The undersigned hereby irrevocably constitutes and appoints any officer of the Corporation or Terra LLC as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to (i) transfer to Terra LLC (A) for cancellation by Terra LLC, the Terra LLC Units subject to this Election of Exchange and (B) for cancellation by the Corporation, the number of shares of Class B or Class B1 Common Stock, as applicable, equal to the number of Terra LLC Units subject to this Election and Exchange (which such common stock will be cancelled immediately thereafter by the Corporation) and (ii) deliver to the undersigned the shares of Class A Common Stock to be delivered in Exchange for such Terra LLC Units.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.

 

Name:  

 

Dated:  

 

 

Exhibit A-2


EXHIBIT B

[FORM OF]

JOINDER AGREEMENT

This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of [            ], 201[    ] (as amended, the “Exchange Agreement”), by and among TerraForm Power, Inc., a Delaware corporation, TerraForm Power, LLC, a Delaware limited liability company, SunEdison, Inc., a Delaware corporation, and the other Persons from time to time party thereto (as Terra LLC Unitholders). Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Exchange Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware. In the event of any conflict between this Joinder Agreement and the Exchange Agreement, the terms of this Joinder Agreement shall control.

The undersigned hereby joins and enters into the Exchange Agreement having acquired Terra LLC Units. By signing and returning this Joinder Agreement to the Corporation and to Terra LLC, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a holder of Terra LLC Units contained in the Exchange Agreement, with all attendant rights, duties and obligations of a Terra LLC Unitholder thereunder and (ii) makes each of the representations and warranties of a Terra LLC Unitholder set forth in Section 3.2 of the Exchange Agreement as fully as if such representations and warranties were set forth herein. The parties to the Exchange Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Exchange Agreement by the undersigned and, upon receipt of this Joinder Agreement by the Corporation and by Terra LLC, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Exchange Agreement.

 

Name:   

 

Address for Notices    With copies to:

 

  

 

 

  

 

 

  

 

Attention:  

 

  

 

 

Exhibit B-1


EXHIBIT C

[FORM OF]

SECTION 1603 CERTIFICATION

 

Exhibit C-1


Form of 1603 Certificate

GENERAL PARTNER CERTIFICATE

Dated as of [            ], 2014

The undersigned, an Authorized Person of [                    ], a Delaware limited liability company, the sole member of [                    ] and the general partner of [                    ], in connection with that certain legal opinion to be delivered by [Opinion Issuer] to [Riverstone Entity] dated as of the date hereof relating to the ownership of a [wind/solar] generation facility [to be constructed] in [location] (the “Project”), does hereby certify the following as of the date hereof:

Riverstone Entity Structure

[                    ] is the general partner of [                    ]. [                    ] is a Delaware limited liability company taxable as a corporation for U.S. federal income tax purposes.

The limited partners of [                    ] are as follows: [list of limited partners].

[                    ] Structure

[                    ] is the general partner of [                    ].

The limited partners of [                    ] are: [list of limited partners].

[                    ] is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.

[                    ] is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.

[                    ] is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.

[                    ] is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.

The general partner of [                    ] is [                    ]. The sole limited partner of [                    ] is [                    ]. The general partner of [                    ] is [                    ]. Each limited partner of [                    ] is an individual or an entity that is taxable as a corporation for U.S. federal income tax purposes and each limited partner is subject to U.S. tax on its distributive share of the income from the Project.

[                    ] Structure

The sole limited partner of [                    ] is [                    ], a Delaware limited partnership, which is taxable as a corporation for U.S. federal income tax purposes. [                    ] is the general partner of [                    ].

[                    ] Structure

Each limited partner of [                    ] is an individual, a trust established by an individual whose sole beneficiaries are individual family members or their estates, or an entity that is taxable as a corporation for U.S. federal income tax purposes and each limited partner is subject to U.S. tax on its distributive share of the income from the Project. [                    ] is the general partner of [                    ] and is taxable as a partnership for U.S. federal income tax purposes. [                    ] is the sole member of [                    ]. Each member of [                    ] is an

 

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individual or an entity that is taxable as a corporation for U.S. federal income tax purposes, and each member is subject to U.S. tax on its distributive share of the income from the Project.

[                    ] Structure

[                    ] is the general partner of [                    ]. [                    ] is the sole member of [                    ].

The sole limited partner of [                    ] is [                    ]. The general partner of [                    ] is [                    ], and the limited partners of [                    ] are [                    ] and [                    ].

The sole member of [                    ] is [                    ].

The general partner of [                    ] is [                    ], which is taxable as a partnership for U.S. federal income tax purposes. Each shareholder of [                    ] is an individual or an entity that is taxable as a corporation for U.S. federal income tax purposes, and each limited partner is subject to U.S. tax on its distributive share of the income from the Project.

Each limited partner of [                    ] is an individual or an entity this is taxable as a corporation for U.S. federal income tax purposes, and each limited partner is subject to U.S. tax on its distributive share of the income from the Project.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the date first above written.

 

[                                         ]
By:  

 

  [                                         ]
  Authorized Person

 

21

EX-10.4

Exhibit 10.4

Execution Version

CLASS BI EXCHANGE AGREEMENT

This CLASS B1 EXCHANGE AGREEMENT (this “Agreement”), dated as of July 23, 2014, is made by and among TerraForm Power, Inc., a Delaware corporation (the “Corporation”), TerraForm Power, LLC, a Delaware limited liability company (“Terra LLC”), R/C US Solar Investment Partnership, L.P., a Delaware limited partnership (“Riverstone”) and the other Persons from time to time party hereto in accordance with Section 4.1 hereof (collectively with Riverstone, the “Terra LLC Unitholders”).

WHEREAS, the parties hereto desire to provide for the exchange of Terra LLC Units and Class B1 Common Stock for shares of Class A Common Stock (each as defined herein) upon the election of a Terra LLC Unitholder, whereby (a) such Terra LLC Unitholder would surrender all or a portion of its Terra LLC Units and a corresponding number of shares of Class B1 Common Stock to Terra LLC, (b) the Corporation will issue and contribute a corresponding number of shares of Class A Common Stock to Terra LLC for delivery of such shares by Terra LLC to the exchanging Terra LLC Unitholder, (c) Terra LLC will issue a corresponding number of additional Class A Units (as defined herein) to the Corporation, (d) Terra LLC will cancel the surrendered Terra LLC Units and the Corporation will cancel the corresponding shares of Class B1 Common Stock, and (e) Terra LLC will deliver the shares of Class A Common Stock it receives from the Corporation to the exchanging Terra LLC Unitholder, in each case on the terms and subject to the conditions set forth herein; and

WHEREAS, the parties hereto desire that the exchange of Terra LLC Units and the Class B1 Common Stock for shares of Class A Common Stock pursuant to this Agreement constitute a taxable sale of Terra LLC Units by the applicable Terra LLC Unitholder to the Corporation in exchange for Class A Common Stock (in conjunction with the cancellation of Class B1 Common Stock).

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

Section 1.1 Effective Time. This Agreement shall become effective immediately prior to the consummation of the initial public offering of the Class A Common Stock on the date first above written (the “Effective Time”), subject to the earlier consummation of the Mt. Signal Transaction as defined in that certain Master Transaction Agreement, dated as of June 16, 2014, by and among Riverstone and the other Persons party thereto.

Section 1.2 Definitions. Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Terra LLC Operating Agreement (as defined herein), and the following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.


Applicable Securities Laws” means the Securities Act of 1933, as amended (the “Securities Act”), and any applicable securities laws of a state or foreign jurisdiction.

Class A Common Stock” means the Class A common stock, par value $0.01 per share, of the Corporation.

Class A Units” means the Class A Units of Terra LLC, with such rights and privileges as set forth in the Terra LLC Operating Agreement.

Class B1 Common Stock” means the Class B1 common stock, par value $0.01 per share, of the Corporation

Class B1 Units” means the Class B1 Units of Terra LLC, with such rights and privileges as set forth in the Terra LLC Operating Agreement.

Code” means the Internal Revenue Code of 1986, as amended.

Disqualified Person” means (a) any federal, state or local government (including any political subdivision, agency or instrumentality thereof), (b) any organization described in Section 501(c) of the Code and exempt from tax under Section 501(a) of the Code, (c) any entity referred to in Section 54(j)(4) of the Code, (d) any Person described in Section 50(d)(1) of the Code, (e) any Person who is not a “United States Person” as defined in Section 7701(a)(30) of the Code (other than a foreign partnership or foreign passthrough entity), unless (with respect to Terra LLC or any Subsidiary of Terra LLC) such Person is a foreign person or entity that is subject to U.S. federal income tax on more than fifty percent (50%) of the gross income for the taxable year derived by such Person from Terra LLC or such Subsidiary and thus qualifies for the exception of section 168(h)(2)(B) of the Code, or (f) any partnership or other “pass-through entity” (within the meaning of Section 1603(g)(4) of the American Recovery and Reinvestment Tax Act of 2009, as amended, including a single-member disregarded entity and a foreign partnership or foreign pass-through entity, but excluding a “real estate investment trust” as defined in section 856(a) of the Code and a cooperative organization described in section 1381(a) of the Code, neither of which shall constitute a pass-through entity for purposes of this clause (f)) any direct or indirect partner (or other holder of an equity or profits interest) of which is described in clauses (a) through (e) above unless such person owns such direct or indirect interest in the partnership or pass-through entity through a “taxable C corporation”, as that term is used in the Section 1603 Program Guidance; provided, that if and to the extent the definition of “disqualified person” under Section 1603(g) of the American Recovery and Reinvestment Tax Act of 2009, as amended, is amended after the date hereof, the definition of “Disqualified Person” hereunder shall be interpreted to conform to such amendment and any guidance issued by the U.S. Treasury Department with respect thereto.

Effective Time” has the meaning set forth in Section 1.1 of this Agreement.

Election of Exchange” has the meaning set forth in Section 2.1(b) of this Agreement.

Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.

 

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Exchange Date” has the meaning set forth in Section 2.1(b) of this Agreement.

Exchange Rate” means the number of shares of Class A Common Stock for which a Terra LLC Unit is entitled to be Exchanged. On the date of this Agreement, the Exchange Rate shall be 1, subject to adjustment pursuant to Section 2.2 of this Agreement.

Governmental Entity” means any supra-national, national, state, provincial or local governmental authority, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, or any political or other subdivision, department or branch of any of the foregoing.

IPO” means the closing of the initial public offering and sale by the Corporation of shares of Class A Common Stock.

Permitted Transferee” has the meaning given to such term in Section 4.1 of this Agreement.

Person” means any individual, partnership, corporation, limited liability company, trust or other entity, including any Governmental Entity.

Requisite Holders” means, as of the applicable determination date, each Terra LLC Unitholder, if any, who, together with its Affiliates and Permitted Transferees, beneficially owns at least a majority of the then outstanding Terra LLC Units (excluding any Terra LLC Units held by the Corporation or any of its subsidiaries).

Subsidiary” means, with respect to any Person, (i) a corporation a majority of whose capital stock with the general voting power under ordinary circumstances to vote in the election of directors of such corporation (irrespective of whether or not, at the time, any other class or classes of securities shall have, or might have, voting power by reason of the happening of any contingency) is, at the date of determination thereof, beneficially owned by such Person, by one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries thereof or (ii) any other Person (other than a corporation), including a joint venture, a general or limited partnership or a limited liability company, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, beneficially own at least a majority of the ownership interests entitled to vote in the election of directors, managers or trustees thereof (or other Persons performing such functions) or act as the general partner or managing member of such other Person.

Terra LLC Operating Agreement” means the Amended and Restated Operating Agreement of Terra LLC, dated on or about the date hereof, as such agreement may be amended from time to time in accordance with the terms thereof.

Terra LLC Unit” means each of the Class B1 Units now or hereafter held by any Terra LLC Unitholder.

 

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Terra LLC Unitholder” means Riverstone and any Permitted Transferee to whom Riverstone (or another Permitted Transferee) transfers some or all of the Terra LLC Units owned by such Person in accordance with the terms of the Terra LLC Operating Agreement.

ARTICLE II

Section 2.1 Exchange of Terra LLC Units for Class A Common Stock.

(a) Subject to compliance with Applicable Securities Laws, each Terra LLC Unitholder shall be entitled at any time and from time to time, upon the terms and subject to the conditions hereof and the Terra LLC Operating Agreement, to surrender all or a portion of its Terra LLC Units to Terra LLC in exchange for the delivery by Terra LLC to the exchanging Terra LLC Unitholder of a number of shares of Class A Common Stock that is equal to the product of the number of Terra LLC Units surrendered multiplied by the Exchange Rate (each such exchange, an “Exchange”); provided that, (i) each Exchange shall be for a minimum of the lesser of 1,000 Terra LLC Units or all of the Terra LLC Units held by such Terra LLC Unitholder and (ii) such exchanging Terra LLC Unitholder must be the record holder of the number of shares of Class B1 Common Stock that is equal to the number of Terra LLC Units surrendered. In connection with such exchange, (A) a corresponding number of shares of Class B1 Common Stock held by the exchanging Terra LLC Unitholder must be surrendered to Terra LLC for delivery of such shares by Terra LLC to the Corporation for cancellation, (B) the Corporation will issue and contribute a corresponding number of shares of Class A Common Stock to Terra LLC for delivery of such shares by Terra LLC to the exchanging Terra LLC Unitholder, (C) Terra LLC will issue a corresponding number of additional Class A Units to the Corporation, (D) Terra LLC will cancel the surrendered Terra LLC Units and the Corporation will cancel the corresponding shares of Class B1 Common Stock, and (E) Terra LLC will deliver the shares of Class A Common Stock it receives from the Corporation to the exchanging Terra LLC Unitholder.

(b) A Terra LLC Unitholder shall exercise its right to Exchange Terra LLC Units as set forth in Section 2.1(a) above by delivering to the Corporation and to Terra LLC a written election of exchange in respect of the Terra LLC Units to be Exchanged substantially in the form of Exhibit A hereto (an “Election of Exchange”), duly executed by such holder or such holder’s duly authorized representative, in each case delivered during normal business hours at the principal executive offices of the Corporation and of Terra LLC. An Election of Exchange may specify that the Exchange is to be contingent (including as to timing) upon the occurrence of any transaction or event, including the consummation of a purchase by another Person (whether in a tender or exchange offer, an underwritten offering or otherwise) of shares of Class A Common Stock or any merger, consolidation or other business combination. Subject to (i) Section 2.4(b) of this Agreement, (ii) the payment by the applicable Terra LLC Unitholder of any amount required to be paid under Section 2.1(c) and (iii) the surrender to Terra LLC of the unit

 

4


certificates, if any, and duly executed unit powers associated with the Terra LLC Units subject to the Exchange, the Exchange shall be deemed to have been effected on (A) the Business Day immediately following receipt of the applicable Election of Exchange or (B) such later date specified in or pursuant to the applicable Election of Exchange (such date specified in clause (A) or (B), as applicable, the “Exchange Date”), and as promptly as practicable following the applicable Exchange Date, the Corporation shall deliver or cause to be delivered at the offices of the then acting registrar and transfer agent of the Class A Common Stock, or, if there is no then acting registrar and transfer agent of the Class A Common Stock, at the principal executive offices of Terra LLC, the number of shares of Class A Common Stock deliverable upon such Exchange. Terra LLC shall then deliver or cause to be delivered such shares of Class A Common Stock to the relevant exchanging Terra LLC Unitholder (or its designee). Notwithstanding anything herein to the contrary, any exchanging Terra LLC Unitholder may withdraw or amend an Election of Exchange, in whole or in part, prior to the effectiveness of the Exchange, at any time prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the Exchange Date (or any such later time as may be required by applicable law) by delivery of a written notice of withdrawal to the Corporation and to Terra LLC, specifying (1) the number of Terra LLC Units being withdrawn, (2) the number of Terra LLC Units, if any, as to which the Election of Exchange remains in effect and (3) if such exchanging Terra LLC Unitholder so determines, a new Exchange Date or any other new or revised information permitted in an Election of Exchange. On the Exchange Date, all rights of the exchanging Terra LLC Unitholder as a holder of such Terra LLC Units shall cease and such Terra LLC Units shall be cancelled, and Terra LLC shall issue to the Corporation a number of Class A Units equal to the number of such Terra LLC Units cancelled On the Exchange Date, the exchanging Terra LLC Unitholder shall be treated for all purposes as having become the record holder of the shares of Class A Common Stock to be exchanged for the cancelled Terra LLC Units. In connection with the Exchange, the Corporation shall automatically cancel shares of Class B1 Common Stock held by the exchanging Terra LLC Unitholder, immediately after such shares of common stock are transferred to Terra LLC, in an amount corresponding to the number of Terra LLC Units being exchanged in accordance with this Section 2.1. The Corporation shall take such actions as may be required to ensure the performance by Terra LLC of its obligations under this Section 2.1(b) and the foregoing Section 2.1(a).

(c) Terra LLC, the Corporation and the exchanging Terra LLC Unitholder shall bear their own expenses in connection with the consummation of any Exchange, whether or not any such Exchange is ultimately consummated, except that Terra LLC shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, any Exchange; provided, however, that if any shares of Class A Common Stock are to be delivered in a name other than that of the Terra LLC Unitholder that requested the Exchange, then such Terra LLC Unitholder and/or the person in whose name such shares are to be delivered shall pay to Terra LLC the amount

 

5


of any transfer taxes, stamp taxes or duties, or other similar taxes in connection with, or arising by reason of, such Exchange or shall establish to the reasonable satisfaction of Terra LLC that such tax has been paid or is not payable.

(d) Each of the Corporation and Terra LLC covenants and agrees that it will not take any action that would pose a material risk that Terra LLC could be treated as a “publicly traded partnership” for U.S. federal income tax purposes. Notwithstanding anything to the contrary herein, no Exchange shall be permitted (and, if attempted, shall be void ab initio) if, in the opinion of legal counsel or a qualified tax advisor to Terra LLC, such an Exchange would present a material risk that such Exchange would cause Terra LLC to cease to be classified as a partnership or to be classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code for U.S. federal income tax purposes.

(e) For the avoidance of doubt, and notwithstanding anything to the contrary herein, a Terra LLC Unitholder shall not be entitled to Exchange Terra LLC Units to the extent the Corporation or Terra LLC reasonably determines in good faith that such Exchange (i) would be prohibited by applicable law or regulation, including Applicable Securities Laws, or (ii) would not be permitted under any other agreement between such Terra LLC Unitholder and the Corporation or its subsidiaries (including the Terra LLC Operating Agreement).

(f) Notwithstanding anything to the contrary herein, no Terra LLC Unitholder may directly or indirectly, sell, exchange, assign, pledge, hypothecate, mortgage, gift, or otherwise transfer, dispose of or encumber, whether voluntary or involuntary or by operation of law (any of the foregoing, solely for purposes of this Section 2.1(f), a “transfer”) any of such Terra LLC Unitholder’s Terra LLC Units (including any transfers of the equity interests of a direct or indirect holder of Units that is classified as a partnership or disregarded entity for U.S. federal income tax purposes) so as to cause any of such Terra LLC Units to be owned by a Disqualified Person. Any such transfer, if attempted, shall be void ab initio and instead shall be deemed an election by such Terra LLC Unitholder, as of the date of such attempted transfer and without any further action by such Terra LLC Unitholder, to exercise its right to Exchange all of such Terra LLC Units as set forth in Section 2.1(a) above.

Section 2.2 Adjustment. The Exchange Rate shall be adjusted accordingly if there is: (a) any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Class A Units or Class B1 Units that is not accompanied by an identical subdivision or combination of the Class A Common Stock; (b) any subdivision (by any stock split, stock dividend or distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse stock split, reclassification, reorganization, recapitalization or otherwise) of the Class A Common Stock that is not accompanied by an identical subdivision or combination of the Class A Units or Class B1 Units;

 

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(c) (1) any issuance of shares of (x) Class A Common Stock by the Corporation or (y) Class A Units to the Corporation that is not accompanied by (2) the issuance of an identical number of (x) Class A Units to the Corporation (in the case of clause (c)(1)(x)) or (y) shares of Class A Common Stock (in the case of clause (c)(1)(y)), as applicable; or (d) (1) any issuance of (x) shares of Class B1 Common Stock by the Corporation or (y) Class B1 Units to Riverstone or its Permitted Transferees that is not accompanied by (2) the issuance of an identical number of (x) Class B1 Units to Riverstone or to any Permitted Transferee of Riverstone (in the case of clause (d)(1)(x)) or (y) shares of Class B1 Common Stock to Riverstone or its Permitted Transferees (in the case of clause (d)(1)(y)). If there is (i) any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property or (ii) and any subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction, then upon any subsequent Exchange, an exchanging Terra LLC Unitholder shall be entitled to receive the amount of such security, securities or other property that such exchanging Terra LLC Unitholder would have received if such Exchange had occurred immediately prior to the effective date of such reclassification, reorganization, recapitalization or other similar transaction, taking into account any adjustment as a result of any such subdivision (by any split, distribution or dividend, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse split, reclassification, recapitalization or otherwise) of such security, securities or other property that occurs after the effective time of such reclassification, reorganization, recapitalization or other similar transaction. For the avoidance of doubt, if there is any reclassification, reorganization, recapitalization or other similar transaction in which the Class A Common Stock is converted or changed into another security, securities or other property, this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect to such security or other property. This Agreement shall apply to the Class A Units and Class B1 Units held by the Corporation, Riverstone and Riverstone’s Permitted Transferees as of the date hereof, as well as any Class A Units and Class B Units hereafter acquired by the Corporation, Riverstone or any of Riverstone’s Permitted Transferees. This Agreement shall apply to, mutatis mutandis, and all references to “Class A Units” and “Class B1 Units” shall be deemed to include, any security, securities or other property of Terra LLC which may be issued in respect of, in exchange for or in substitution of Class A Units or Class B1 Units, as applicable, by reason of any distribution or dividend, split, reverse split, combination, reclassification, reorganization, recapitalization, merger, exchange (other than an Exchange) or other transaction.

Section 2.3 Class A Common Stock to be Issued.

(a) If any Exchange in accordance with this Agreement is to be effected in a manner that would require registration under Applicable Securities Laws and such required registration has not become effective or otherwise is unavailable, upon the request and with the reasonable cooperation of the Terra LLC Unitholder requesting the Exchange, the Corporation shall use its commercially reasonable efforts to promptly facilitate such Exchange pursuant to any reasonably available exemption from such registration requirements. The Corporation shall use its commercially reasonable efforts

 

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to list the Class A Common Stock required to be delivered upon Exchange prior to such delivery upon each national securities exchange or inter-dealer quotation system upon which the outstanding Class A Common Stock may be listed or traded at the time of such delivery.

(b) The Corporation shall at all times reserve and keep available out of its authorized but unissued Class A Common Stock, solely for the purpose of issuance upon an Exchange, such number of shares of Class A Common Stock as shall be deliverable upon any such Exchange; provided that nothing contained herein shall be construed to preclude Terra LLC from satisfying its obligations in respect of the Exchange of Terra LLC Units by delivery of Class A Common Stock which is held in the treasury of the Corporation or Terra LLC or any of their subsidiaries.

(c) Prior to the effective date of this Agreement, the Corporation and Terra LLC will take all such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions or dispositions of equity securities of the Corporation (including derivative securities with respect thereto) and any securities which may be deemed to be equity securities or derivative securities of the Corporation for such purposes that result from the transactions contemplated by this Agreement, by each Terra LLC Unitholder who may reasonably be expected to be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Corporation upon the registration of any class of equity security of the Corporation pursuant to Section 12 of the Exchange Act (with the authorizing resolutions specifying the name of each such Terra LLC Unitholder whose acquisition or disposition of securities is to be exempted and the number of securities that may be acquired and disposed of by each such person pursuant to this Agreement).

(d) If any Takeover Law (as defined below) or other similar law or regulation becomes or is deemed to become applicable to this Agreement or any of the transactions contemplated hereby, the Corporation or Terra LLC shall use their commercially reasonable efforts to render such law or regulation inapplicable to all of the foregoing.

(e) Each of the Corporation and Terra LLC covenants that all Class A Common Stock issued upon an Exchange will, upon issuance, be validly issued, fully paid and non-assessable, will pass to the applicable exchanging Terra LLC Unitholder free and clear of any liens, security interests and other encumbrances other than any such liens, security interests or other encumbrances imposed by such exchanging Terra LLC Unitholder and will not be subject to any preemptive right of stockholders of the Corporation or to any right of first refusal or other right in favor of any person or entity.

(f) No Exchange shall impair the right of the exchanging Terra LLC Unitholder to receive any distributions payable on the Terra LLC Units so exchanged in

 

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respect of a record date that occurs prior to the Exchange Date for such Exchange. For the avoidance of doubt, no exchanging Terra LLC Unitholder shall be entitled to receive, in respect of a single record date, distributions or dividends both on Terra LLC Units exchanged by such holder and on Class A Common Stock received by such holder in such Exchange.

Each Terra LLC Unitholder acknowledges and agrees that the shares of Class A Common Stock to be issued upon the occurrence of an Exchange in a transaction not registered under the Securities Act will constitute “restricted securities” as defined by Rule 144 promulgated under the Securities Act, and may not be sold or transferred in the absence of an effective registration statement under the Securities Act and registration or qualification under other Applicable Securities Laws or an exemption from such registration or qualification and certificates (or account entries in the case of book-entry securities) evidencing shares of Class A Common Stock issued upon an Exchange may bear an appropriate legend.

Section 2.4 Withholding; Certification of Non-Foreign Status; Section 1603 Certification

(a) If the Corporation or Terra LLC shall be required to withhold any amounts by reason of any Federal, State, local or foreign tax rules or regulations in respect of any Exchange, the Corporation or Terra LLC, as the case may be, shall be entitled to take such action as it deems appropriate in order to ensure compliance with such withholding requirements, including, at its option, withholding shares of Class A Common Stock with a fair market value equal to the minimum amount of any taxes which the Corporation or Terra LLC, as the case may be, may be required to withhold with respect to such Exchange. To the extent that amounts (or property) are so withheld and paid over to the appropriate taxing authority, such withheld amounts (or property) shall be treated for all purposes of this Agreement as having been paid (or delivered) to the appropriate Terra LLC Unitholder.

(b) Notwithstanding anything to the contrary herein, each of Terra LLC and the Corporation may, at its own discretion, require as a condition to the effectiveness of an Exchange that an exchanging Terra LLC Unitholder deliver to Terra LLC or the Corporation, as the case may be, a certification of non-foreign status in accordance with Treasury Regulation Section 1.1445-2(b). In the event Terra LLC or the Corporation has required delivery of such certification but an exchanging Terra LLC Unitholder is unable to do so, Terra LLC shall nevertheless deliver or cause to be delivered to the exchanging Terra LLC Unitholder the Class A Common Stock in accordance with Section 2.1 of this Agreement, but subject to potential withholding as provided in Section 2.4(a).

(c) On the last day of each calendar quarter until the earlier of (a) such time as Terra LLC no longer is subject to potential liability for recapture of a grant pursuant to Section 1603 of the American Recovery and Reinvestment Tax Act of 2009, as amended, and (b) such time as which Riverstone no longer holds any Terra LLC Units, Riverstone shall deliver to the

 

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Corporation and Terra LLC a Section 1603 Certification in the form set forth in Exhibit C. Notwithstanding anything to the contrary herein, each of Terra LLC and the Corporation may, at its own discretion, require as a condition to the effectiveness of an Exchange that Riverstone shall have delivered to the Corporation and Terra LLC such a certificate for the applicable calendar quarter.

ARTICLE III

Section 3.1 Representations and Warranties of the Corporation and of Terra LLC. Each of the Corporation and Terra LLC represents and warrants that (i) it is a corporation or limited liability company duly incorporated or formed and is existing in good standing under the laws of the State of Delaware, (ii) it has all requisite corporate or limited liability company power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby and, in the case of the Corporation, to issue the Class A Common Stock in accordance with the terms hereof, (iii) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby (including, in the case of the Corporation, the issuance of the Class A Common Stock) have been duly authorized by all necessary corporate or limited liability company action on its part, including all actions necessary to ensure that the acquisition of shares of Class A Common Stock pursuant to the transactions contemplated hereby shall not be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of “anti-takeover laws and regulations” of any jurisdiction that may purport to be applicable to this Agreement or the transactions contemplated hereby (collectively, “Takeover Laws”), (iv) this Agreement constitutes a legal, valid and binding obligation of it enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally, and (v) the execution, delivery and performance of this Agreement by it and the consummation by it of the transactions contemplated hereby will not (A) result in a violation of its Certificate of Incorporation or Bylaws or other organizational documents, (B) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which it is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to it or by which any property or asset of it is bound or affected, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations that would not reasonably be expected to have a material adverse effect on it or its business, financial condition or results of operations.

Section 3.2 Representations and Warranties of the Terra LLC Unitholders. Each Terra LLC Unitholder, severally and not jointly, represents and warrants that (i) it is duly incorporated or formed and, to the extent such concept exists in its jurisdiction of organization or formation, is in good standing under the laws of such jurisdiction, (ii) it has all requisite legal capacity and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, (iii) the execution and delivery of this Agreement by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or other entity action

 

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on the part of such Terra LLC Unitholder, (iv) this Agreement constitutes a legal, valid and binding obligation of such Terra LLC Unitholder enforceable against it in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally and (v) the execution, delivery and performance of this Agreement by such Terra LLC Unitholder and the consummation by such Terra LLC Unitholder of the transactions contemplated hereby will not (A) result in a violation of the Certificate of Incorporation or Bylaws or other organizational documents of such Terra LLC Unitholder, (B) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Terra LLC Unitholder is a party, or (C) result in a violation of any law, rule, regulation, order, judgment or decree applicable to such Terra LLC Unitholder, except with respect to clauses (B) or (C) for any conflicts, defaults, accelerations, terminations, cancellations or violations that would not in any material respect result in the unenforceability against such Terra LLC Unitholder of this Agreement.

ARTICLE IV

Section 4.1 Additional Terra LLC Unitholders. To the extent a Terra LLC Unitholder (including Riverstone) validly transfers any or all of its Terra LLC Units to another person in a transaction in accordance with, and not in contravention of, the Terra LLC Operating Agreement, then such transferee (each, a “Permitted Transferee”) shall have the right to execute and deliver a joinder to this Agreement, in the form of Exhibit B hereto, whereupon such Permitted Transferee shall become a Terra LLC Unitholder hereunder; provided, however, that such Permitted Transferee shall be subject to any restrictions on Exchange that would have applied to the transferor. To the extent Terra LLC issues Terra LLC Units in the future, then the holder of such Terra LLC Units shall have the right to execute and deliver a joinder to this Agreement, substantially in the form of Exhibit B hereto, whereupon such holder shall become a Terra LLC Unitholder hereunder.

Section 4.2 Addresses and Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be as specified in a notice given in accordance with this Section 4.2):

(a) If to the Corporation or to Terra LLC, to:

501 Pearl Drive (City of O’Fallon)

St. Peters, Missouri 63376

Attn: General Counsel

Facsimile: [()]

(b) If to any Terra LLC Unitholder, to the address and other contact information set forth in the records of Terra LLC from time to time.

 

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Section 4.3 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 4.4 Binding Effect; No Third Party Beneficiaries. This Agreement shall, from and after the Effective Time, be binding upon and inure to the benefit of all of the parties and their successors, executors, administrators, heirs, legal representatives and permitted assigns, including, and without the need for an express assignment, any Permitted Transferee, provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Terra LLC Units in violation of the terms of the Terra LLC Operating Agreement or applicable law. In the event the Corporation or Terra LLC or any of its successors or assigns (i) consolidates with or merges into any other person or entity and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person or entity, then and in either case, as a condition to such consolidation, merger or transfer, proper provisions shall be made such that the successors and assigns of the Corporation or Terra LLC, as the case may be, will assume its obligations set forth in this Agreement, and this Agreement shall be enforceable against such successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon anyone other than the parties and their respective successors and permitted assigns any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 4.5 Severability. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions is not affected in any manner materially adverse to any party. Upon a determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 4.6 Integration. This Agreement, together with the Terra LLC Operating Agreement, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

Section 4.7 Amendment. The provisions of this Agreement may be amended, supplemented, waived or modified only by the affirmative vote or written consent of each of the Corporation, Terra LLC, Riverstone and the Requisite Holders; provided, however, that no such amendment, supplement, waiver or modification shall (i) materially alter or change any rights or obligations of any Terra LLC Unitholders in a manner that is different or prejudicial relative to any other Terra LLC Unitholders, without the prior written consent of at least two-thirds (2/3) in interest of the Terra LLC Unitholders (based on the number of Terra LLC Units held by such

 

12


holders) affected in such a different or prejudicial manner or (ii) alter, supplement or amend the Exchange Rate as adjusted from time to time pursuant to Section 2.2 hereof (or the adjustments provided therein) without the prior written consent of each affected Terra LLC Unitholder. Notwithstanding the foregoing, the Corporation, Terra LLC and Riverstone, without the consent of any Requisite Holders, may amend, supplement, waive or modify any term of this Agreement to cure any ambiguity, mistake, defect or inconsistency contained herein.

Section 4.8 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition.

Section 4.9 Arbitration; Submission to Jurisdiction; Waiver of Jury Trial.

(a) Any dispute, controversy or claim arising out of, relating to or in connection with this Agreement or the transactions contemplated hereby (including the validity, scope and enforceability of this arbitration provision) shall be finally settled by arbitration. The arbitration shall take place in Wilmington, Delaware and be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) then in effect (except as they may be modified by mutual agreement of the Corporation, Terra LLC and Riverstone). The arbitration shall be conducted by three neutral, impartial and independent arbitrators, who shall be appointed by the AAA, at least one of whom shall be a retired judge or a senior partner at one of the nationally recognized Delaware-based law firms. The arbitration award shall be final and binding on the parties. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets. The costs of the arbitration shall be borne by the Corporation. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.

(b) Notwithstanding the provisions of paragraph (a), the parties hereto may bring an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each party hereto (i) expressly consents to the application of paragraph (c) of this Section 4.9 to any such action or proceeding and (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate.

(c) EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE OR ANY DELAWARE STATE COURT, IN EACH CASE, SITTING IN THE CITY OF WILMINGTON, DELAWARE FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 4.9, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN

 

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ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties’ relationship with one another.

(d) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in the preceding paragraph of this Section 4.9 and such parties agree not to plead or claim the same, and agree that service of process upon such party in any such action, suit, demand or proceeding shall be effective if notice is given in accordance with Section 4.2.

Section 4.10 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission or by e-mail delivery of a “.pdf” format data file) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by telecopy, by e-mail delivery of a “.pdf” format data file or other electronic transmission service shall be considered original executed counterparts for purposes of this Section 4.10.

Section 4.11 Tax Treatment.

(a) This Agreement shall be treated as part of the partnership agreement of Terra LLC as described in Section 761(c) of the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations promulgated thereunder.

(b) Each party hereto agrees to report each Exchange for U.S. federal income tax purposes as a taxable sale of Class B1 Units by the applicable Terra LLC Unitholder to the Corporation in exchange for Class A Common Stock, and no party shall take a contrary position on any U.S. federal income tax return.

Section 4.12 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 4.13 Independent Nature of Terra LLC Unitholders’ Rights and Obligations. The obligations of each Terra LLC Unitholder hereunder are several and not joint with the obligations of any other Terra LLC Unitholder, and no Terra LLC Unitholder shall be responsible in any way for the performance of the obligations of any other Terra LLC Unitholder hereunder. The decision of each Terra LLC Unitholder to enter into to this Agreement has been made by such Terra LLC Unitholder independently of any other Terra LLC Unitholder. Nothing

 

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contained herein, and no action taken by any Terra LLC Unitholder pursuant hereto, shall be deemed to constitute an action of the Terra LLC Unitholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Terra LLC Unitholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated hereby and the Corporation acknowledges that the Terra LLC Unitholders are not acting in concert or as a group, and the Corporation will not assert any such claim, with respect to such obligations or the transactions contemplated hereby.

Section 4.14 Applicable Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above.

 

TERRAFORM POWER, INC.
By:   /s/ Carlos Domenech
 

 

Name:   Carlos Domenech
Title:   Authorized Representative
TERRAFORM POWER, LLC
By:   /s/ Carlos Domenech
 

 

Name:   Carlos Domenech
Title:   Authorized Representative
R/C US SOLAR INVESTMENT PARTNERSHIP, L.P.
By:   Riverstone/Carlyle Renewable Energy Grant GP, L.L.C., its general partner
By:  

R/C Renewable Energy GP II, LLC,

its sole member

By:  

/s/ Michael Hoffman

Name:   Michael Hoffman
Title:   Authorized Representative

 

[Signature Page to Exchange Agreement]


EXHIBIT A

[FORM OF]

ELECTION OF EXCHANGE

TerraForm Power, Inc.

TerraForm Power, LLC

501 Pearl Drive (City of O’Fallon)

St. Peters, Missouri 63376

Attn: General Counsel

Reference is hereby made to the Exchange Agreement, dated as of [], 2014 (as amended, the “Exchange Agreement”), by and among TerraForm Power, Inc., a Delaware corporation, TerraForm Power, LLC, a Delaware limited liability company, R/C US Solar Investment Partnership, L.P., a Delaware limited partnership, and the other Persons from time to time party thereto (as Terra LLC Unitholders). Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

The undersigned Terra LLC Unitholder hereby transfers to Terra LLC for cancellation, the number of Terra LLC Units set forth below in Exchange for shares of Class A Common Stock to be issued in its name as set forth below, as set forth in the Exchange Agreement. [The foregoing transfers shall be [effective as of                     ][and][conditioned upon satisfaction of the following conditions:     .]1

 

Legal Name of Terra LLC Unitholder:    

 

Address:    

 

Number of Terra LLC Units to be Exchanged:    

 

The undersigned hereby represents and warrants that (i) the undersigned has full legal capacity to execute and deliver this Election of Exchange and to perform the undersigned’s obligations hereunder; (ii) this Election of Exchange has been duly executed and delivered by the undersigned and is the legal, valid and binding obligation of the undersigned enforceable against it in accordance with the terms thereof or hereof, as the case may be, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and the availability of equitable remedies; (iii) the Terra LLC Units subject to this Election of Exchange are being transferred free and clear of any pledge, lien, security interest, encumbrance, equities or claim;

 

1  Insert Exchange Date and/or contingency, if applicable.

 

Exhibit A-1


(iv) no consent, approval, authorization, order, registration or qualification of any third party or with any court or governmental agency or body having jurisdiction over the undersigned or the Terra LLC Units subject to this Election of Exchange is required to be obtained by the undersigned for the transfer of such Terra LLC Units; and (v) the undersigned is the record holder of shares of Class B1 Common Stock in an amount equal to at least the number of Terra LLC Units subject to this Election of Exchange and will retain ownership of such minimum number of shares of Class B1 Common Stock through the Exchange Date.

The undersigned hereby irrevocably constitutes and appoints any officer of the Corporation or Terra LLC as the attorney of the undersigned, with full power of substitution and resubstitution in the premises, to do any and all things and to take any and all actions that may be necessary to (i) transfer to Terra LLC (A) for cancellation by Terra LLC, the Terra LLC Units subject to this Election of Exchange and (B) for cancellation by the Corporation, the number of shares of Class B1 Common Stock equal to the number of Terra LLC Units subject to this Election and Exchange (which such common stock will be cancelled immediately thereafter by the Corporation) and (ii) deliver to the undersigned the shares of Class A Common Stock to be delivered in Exchange for such Terra LLC Units.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Election of Exchange to be executed and delivered by the undersigned or by its duly authorized attorney.

 

Name:  

 

Dated:  

 

 

Exhibit A-2


EXHIBIT B

[FORM OF]

JOINDER AGREEMENT

This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange Agreement, dated as of [            ], 201[    ] (as amended, the “Exchange Agreement”), by and among TerraForm Power, Inc., a Delaware corporation, TerraForm Power, LLC, a Delaware limited liability company, R/C US Solar Investment Partnership, L.P., a Delaware limited partnership, and the other Persons from time to time party thereto (as Terra LLC Unitholders). Capitalized terms used but not defined in this Joinder Agreement shall have their meanings given to them in the Exchange Agreement. This Joinder Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware. In the event of any conflict between this Joinder Agreement and the Exchange Agreement, the terms of this Joinder Agreement shall control.

The undersigned hereby joins and enters into the Exchange Agreement having acquired Terra LLC Units. By signing and returning this Joinder Agreement to the Corporation and to Terra LLC, the undersigned (i) accepts and agrees to be bound by and subject to all of the terms and conditions of and agreements of a holder of Terra LLC Units contained in the Exchange Agreement, with all attendant rights, duties and obligations of a Terra LLC Unitholder thereunder and (ii) makes each of the representations and warranties of a Terra LLC Unitholder set forth in Section 3.2 of the Exchange Agreement as fully as if such representations and warranties were set forth herein. The parties to the Exchange Agreement shall treat the execution and delivery hereof by the undersigned as the execution and delivery of the Exchange Agreement by the undersigned and, upon receipt of this Joinder Agreement by the Corporation and by Terra LLC, the signature of the undersigned set forth below shall constitute a counterpart signature to the signature page of the Exchange Agreement.

 

Name:  

 

 
Address for Notices     With copies to:                      

 

   

 

 

   

 

 

   

 

Attention:  

 

   

 

 

Exhibit B-1


EXHIBIT C

[FORM OF]

SECTION 1603 CERTIFICATION

See attached.

 

Exhibit C-1


R/C US SOLAR INVESTMENT PARTNERSHIP, L.P.

GENERAL PARTNER CERTIFICATE

Dated as of [            ], 2014

The undersigned, an Authorized Person of Riverstone/Carlyle Renewable Energy Grant GP, L.L.C., a Delaware limited liability company (“Grant GP”), the general partner of R/C US Solar Investment Partnership, L.P. (“R/C US Solar”), does hereby certify the following as of the date hereof and relating to its indirect ownership interest in a 200 MW solar electrical generation facility to be constructed in Imperial County, California (the “Project”), through its membership interest in AES Solar Power, LLC, a Delaware limited liability company which indirectly owns 100 percent of the membership interests in Imperial Valley Solar 1, LLC, a Delaware limited liability company (the “Applicant”):

R/C US Solar Structure

 

  1. R/C US Solar is taxable as a partnership for U.S. federal income tax purposes.

 

  2. Grant GP is the general partner of R/C US Solar and is taxable as a corporation for U.S. federal income tax purposes.

 

  3. The limited partners of R/C US Solar are:

Riverstone/Carlyle Renewable and Alternative Energy Fund II-Solar, L.P. (“Fund II Solar”);

Riverstone/Carlyle Renewable and Alternative Energy Fund II-JPM Wind, L.P. (“Fund II-JPM Wind’’);

Riverstone Renewable Energy Coinvestment II (Cayman) PR Solar, L.P. (“Riverstone Coinvest); and

Carlyle US Solar Blocker, L.P. (“Carlyle Blocker”).

Fund II Solar Structure

 

  4. Fund II Solar is taxable as a partnership for U.S. federal income tax purposes.

 

  5. Riverstone/Carlyle Renewable Energy Partners II PR, L.P. (“PR GP”) is the general partner of Fund II Solar.

 

  6. The limited partners of Fund II Solar are:

R/C Solar Blocker II (TE), L.P. (“Blocker TE”);

R/C Solar Blocker II (TE1), L.P. (“Blocker TE1”);

R/C Solar Blocker II (Non-U.S.), L.P. (“Blocker Non-US”); and

R/C Solar Blocker II (T), L.P. (“Blocker T”).


  7. Blocker TE is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.

 

  8. Blocker TE1 is a Delaware limited partnership taxable as a corporation for U.S. federal income tax purposes.