TERRAFORM POWER, INC. Item 1.01 Entry into a Material Definitive Agreement.
Reorganization Agreement
On
The Reorganization Agreement provides for, among other things, the acquisition
by the BEP Entities of the Company's Class A common stock, par value
The Transaction (as defined below) is intended to be tax deferred for holders of
Public Shares. Tax deferral for holders of Public Shares electing to receive
BEPC Shares requires a favorable ruling from the
The acquisition of the Public Shares will be consummated through a series of transactions (the "Transaction"), including:
• the merger of the Company with and into Holdings, with Holdings surviving such
merger (the "Reincorporation Merger"), with (x) each Company stockholder who does not make an election to receive Holdings ClassC Shares (as defined below) (and, upon completion of the BEP Exchange (as defined below), BEP Units) receiving a number of Holding's Class B common stock, par value$0.01 (the "Holdings ClassB Shares "), equal to the number of Public Shares held by such stockholder, and (y) each Company stockholder who makes an election to receive Holdings ClassC Shares (and, upon completion of the BEP Exchange, BEP Units) receiving a number of Holding's Class C common stock, par value$0.01 (the "Holdings ClassC Shares "), equal to the number of Public Shares held by such stockholder; followed immediately by
• a series of binding share exchanges effected under New York Business
Corporation Law (the "NYBCL"), pursuant to which (x) BEPC will acquire each Holdings ClassB Share in exchange for the applicable Consideration described above (the "BEPC Exchange"), consisting of BEPC Shares and cash in lieu of fractional BEPC Shares, and (y) Acquisition Sub will acquire each Holdings ClassC Share in exchange for the applicable Consideration described above (the "BEP Exchange" and, together with the BEPC Exchange, the "Share Exchange"), consisting of BEP Units and cash in lieu of fractional BEP Units.
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All outstanding restricted stock units of the Company (the "Company RSUs") will
be converted into restricted stock units with respect to Holdings Class
The Company Entities and the BEP Entities each have made customary representations, warranties and covenants in the Reorganization Agreement, in each case generally subject to customary materiality qualifiers. The Company Entities and the BEP Entities have also agreed, subject to certain exceptions, to various other customary covenants and agreements, including agreements to conduct their respective businesses in the ordinary course during the period between the date of the Reorganization Agreement and the closing and, subject to certain exceptions, to refrain from certain actions during that time, including, (i) declaring and making dividends; (ii) acquiring assets if such acquisition would reasonably be expected to prevent, materially delay or materially impede the consummation of the Transaction; (iii) with respect to BEP and BEPC, authorizing or entering into a plan of complete or partial liquidation or dissolution and (iv) amending their organizational documents. The Company has also agreed to refrain from soliciting or responding to alternative proposals for a transaction, except that the Board, acting at the recommendation of the Special Committee, may change its recommendation to stockholders if it determines that a failure to do so would be reasonably likely to be inconsistent with its fiduciary duties, subject to a three business day notification period for the BEP Entities.
The consummation of the Transaction is conditioned on the satisfaction or waiver
(except with respect to the condition set forth in clause (i) below, which is
not waivable) of certain events, including, among other matters, (i) the
approval by each of (A) the holders of a majority of the Common Stock
outstanding and entitled to vote thereon and (B) the holders of a majority of
the Public Shares outstanding and entitled to vote thereon (collectively, the
"Requisite Company Stockholder Approvals"), (ii) the BEPC Shares and BEP Units
to be issued to the Company's stockholders in the Transaction having been
approved for listing on the
The Reorganization Agreement contains certain termination rights for both the
Company and BEP, including, by mutual consent of the Company and BEP; by either
the Company or BEP, if (i) the Transaction has not been consummated on or before
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The Reorganization Agreement provides that, on or prior to the closing date, the BEP Entities will, and will cause their applicable affiliates to, enter into various other agreements substantially in the forms attached to the Reorganization Agreement, including:
• a rights agreement between Brookfield Asset Management Inc. ("BAM") and
Wilmington Trust, National Association , as the rights agent (referred to in the Reorganization Agreement as the "Rights Agreement"), pursuant to which BAM will agree to satisfy the obligations of BEP and BEPC to exchange BEPC Shares for BEP Units where BEPC or BEP have not satisfied such exchange request by a holder of BEPC Shares, in each case, subject to the terms and conditions set forth in the Rights Agreement;
• certain subordinated credit agreements between a BEP and BEPC subsidiary in
order to allow for cash management among BEP and its subsidiaries following the closing;
• an equity commitment agreement by and among
Inc., a subsidiary of BEP ("Canada HoldCo"), BEP and BEPC, pursuant to which
(x) for 10 years following closing, Canada Holdco will agree to subscribe for
up to $1 billion of BEPC class C non-voting shares, in order to fund growth
capital investments and acquisitions or working capital and (y) until there are
no longer any BEPC Shares held by the public, BEP will agree not to declare or
pay any distribution on the BEP Units if BEPC does not have sufficient money or
other assets to enable BEPC to declare and pay an equivalent dividend on the
BEPC Shares; and
• amended articles of BEPC, which will include the rights, preferences and
privileges of the BEPC capital stock, including the BEPC Shares.
The foregoing summary of the Reorganization Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Reorganization Agreement, which is attached hereto as Exhibit 2.1 and referenced herein.
The Reorganization Agreement and the above description of the Reorganization Agreement have been included to provide investors and security holders with information regarding the terms of the Reorganization Agreement. They are not intended to provide any other factual information about the Company, the BEP Entities or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Reorganization Agreement were made only for purposes of the Reorganization Agreement and as of specific dates, were solely for the benefit of the parties to the Reorganization Agreement, and may be subject to limitations agreed upon by the parties, including being qualified by certain materiality thresholds and confidential disclosures. The representations, warranties and covenants contained in the Reorganization Agreement were made by each contracting party to the other for the purposes of allocating contractual risk between them with respect to the Transactions that differs from the risks applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company, the BEP Entities or any of their respective subsidiaries, affiliates or businesses. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Reorganization Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company, BEP or BEPC. Accordingly, investors should read the representations and warranties in the Reorganization Agreement not in isolation but only in conjunction with the other information about the Company, BEP and their respective subsidiaries that they include in reports, statements . . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description of Exhibit
2.1* Agreement and Plan of Reorganization, by and among TerraForm Power,
Inc. , Brookfield Renewable Partners L.P., Brookfield Renewable
Corporation, 2252876 Alberta ULC and TerraForm Power NY Holdings, Inc. ,
dated March 16, 2020 .
10.1 Voting Agreement, by and among TerraForm Power, Inc. , BBHC Orion Holdco
L.P. and Orion U.S. Holdings 1 L.P. , dated March 16, 2020 .
*The schedules and exhibits to the agreement have been omitted pursuant to Item
601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be
furnished to the
Additional Information and Where to Find It
This Current Report on Form 8-K is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be made with the
Investors and security holders will be able to obtain copies of the F-4,
including the proxy statement/prospectus, and other documents filed with the
Participants in Solicitation
The Company and its Directors and executive officers, BEPC and its Directors and executive officers, and BEP and its Directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of the Company common stock in respect of the transaction. Information about the Directors and executive officers of the Company is set forth on its website at www.terraformpower.com/. Information about the Directors and executive officers of BEP is set forth on its website at http://bep.brookfield.com/. Information about the Directors and executive officers of BEPC will be set forth on its preliminary Form F-1. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus regarding the transaction when it becomes available. You may obtain free copies of these documents as described in the preceding paragraph.
Non-solicitation
No securities regulatory authority has either approved or disapproved of the contents of this Current Report on Form 8-K. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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