Document:

Exhibit 10.2

 

Relationship Agreement

 

EXECUTION VERSION

BROOKFIELD ASSET MANAGEMENT INC.

 

TERRAFORM POWER, INC.

 

TERRAFORM POWER, LLC

 

- and -

 

TERRAFORM POWER OPERATING, LLC

 

RELATIONSHIP AGREEMENT

 

October 16, 2017

 

TABLE OF CONTENTS

 

	
 

	
 

	
Page

	
ARTICLE 1 INTERPRETATION

	
 

	
1

	
 

	
1.1.

	
Definitions

	
 

	
1

	
 

	
1.2.

	
Headings and Table of Contents

	
 

	
3

	
 

	
1.3.

	
Interpretation

	
 

	
3

	
 

	
1.4.

	
Invalidity of Provisions

	
 

	
4

	
 

	
1.5.

	
Entire Agreement

	
 

	
4

	
 

	
1.6.

	
Waiver, Amendment

	
 

	
4

	
 

	
1.7.

	
Mutual Waiver of Jury Trial

	
 

	
4

	
 

	
1.8.

	
Consent to Jurisdiction and Service of Process

	
 

	
4

	
 

	
1.9.

	
Governing Law

	
 

	
5

	
 

	
1.10.

	
Conflicts Committee

	
 

	
5

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 2 RELATIONSHIP

	
 

	
5

	
 

	
2.1.

	
Primary Vehicle

	
 

	
5

	
 

	
2.2.

	
No Exclusivity and Limitations on Acquisition Opportunities

	
 

	
5

	
 

	
2.3.

	
TERP Acknowledgement

	
 

	
7

	
 

	
2.4.

	
Reporting

	
 

	
7

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 3 RIGHT OF FIRST OFFER

	
 

	
7

	
 

	
3.1.

	
TERP’s Right of First Offer

	
 

	
7

	
 

	
3.2.

	
Notice of Transaction Related to ROFO Assets

	
 

	
7

	
 

	
3.3.

	
Negotiations with Third Parties

	
 

	
7

	
 

	
3.4.

	
Brookfield Group Approvals

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 4 REPRESENTATIONS AND WARRANTIES

	
 

	
8

	
 

	
4.1.

	
Representations and Warranties of Brookfield

	
 

	
8

	
 

	
4.2.

	
Representations and Warranties of TERP, TERP LLC and TERP Operating

	
 

	
8

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 5 TERMINATION

	
 

	
9

	
 

	
5.1.

	
Term

	
 

	
9

	
 

	
5.2.

	
Termination

	
 

	
9

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 6 RESOLUTION OF DISPUTES AND ARBITRATION

	
 

	
9

	
 

	
6.1.

	
Dispute

	
 

	
9

	
 

	
6.2.

	
Arbitration

	
 

	
9

	
 

	
6.3.

	
Confidentiality

	
 

	
10

	
 

	
6.4.

	
Continued Performance

	
 

	
10

	
 

	
6.5.

	
Urgent Relief

	
 

	
10

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 7 GENERAL PROVISIONS

	
 

	
10

	
 

	
7.1.

	
Assignment

	
 

	
10

	
 

	
7.2.

	
Confidentiality

	
 

	
10

	
 

	
7.3.

	
Enurement

	
 

	
11

	
 

	
7.4.

	
Notices

	
 

	
11

	
 

	
7.5.

	
Further Assurances

	
 

	
11

	
 

	
7.6.

	
Counterparts

	
 

	
12

	
 

i

 

RELATIONSHIP AGREEMENT

 

THIS RELATIONSHIP AGREEMENT is made as of October 16, 2017 among BROOKFIELD ASSET MANAGEMENT INC., a corporation existing under the laws of the Province of Ontario (“Brookfield”), TERRAFORM POWER, INC., a Delaware corporation, (“TERP”), TERRAFORM POWER, LLC, a Delaware limited liability company (“TERP LLC”) and TERRAFORM POWER OPERATING, LLC a Delaware limited liability company (“TERP Operating”).

 

RECITALS:

 

WHEREAS, members of the TERP Group directly or indirectly hold interests in renewable power generating operations consisting of operating wind and solar assets, and will acquire, from time to time, additional interests in operating wind and solar renewable power generating operations in specified geographies;

 

WHEREAS, TERP, TERP LLC and TERP Operating and certain of their Subsidiaries, and Brookfield and certain Affiliates thereof, concurrently with entry into this Agreement, have entered into a Master Services Agreement and certain Other Sponsorship Agreements pursuant to which various entities in the Brookfield Group agree to provide certain services, a credit line and other support specified therein to the TERP Group, certain of which would enable the implementation of the purposes of this Agreement; and

 

AND WHEREAS TERP, TERP LLC and TERP Operating and Brookfield wish to enter into this Agreement to govern certain aspects of the relationship between them and other members of the TERP Group and the Brookfield Group and view this Agreement as a key component of the overall relationship between the TERP Group and the Brookfield Group contemplated by the Sponsorship Agreements and the Brookfield Group’s ownership interests in the TERP Group.

 

NOW THEREFORE in consideration of the premises, mutual covenants and agreements contained in this Agreement and the Other Sponsorship Agreements and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree, each with the others, 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 “AAA” has the meaning ascribed thereto in Section 6.2.1;

 

1.1.2 “AAA National Roster” means the roster of arbitration professionals maintained by the AAA;

 

1.1.3 “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 (provided that the members of the TERP Group shall not be Affiliates of the Brookfield Group (or vice versa) for purposes of this Agreement);

 

1.1.4 “Agreement” means this Relationship 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;

 

1.1.5 “Arbitration” has the meaning ascribed thereto in Section 6.2.1;

 

1.1.6 “Arbitrator” has the meaning ascribed thereto in Section 6.2.3;

 

1.1.7 “Brookfield” has the meaning ascribed thereto in the preamble;

 

1.1.8 “Brookfield Fund” has the meaning ascribed thereto in Section 2.2.3;

 

1.1.9 “Brookfield Group” means Brookfield and its Affiliates, other than any member of the TERP Group;

 

1.1.10 “BEP” means Brookfield Renewable Partners LP;

 

1

 

1.1.11 “Business Day” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in the Province of Ontario or the State of New York;

 

1.1.12 “Confidential Information” has the meaning ascribed thereto in Section 7.2;

 

1.1.13 “Conflicts Committee” means the committee of the board of directors of TERP Inc. designated as the “Conflicts Committee”;

 

1.1.14 “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 general partner of B) or by virtue of beneficial ownership of or control over a majority of the voting interests in B; and, for certainty and without limitation, if A owns or has control over shares or other securities 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;

 

1.1.15 “Dispute” has the meaning ascribed thereto in Section 6.1;

 

1.1.16 “Governing Body” means (i) with respect to a corporation or limited company, the board of directors of such corporation or limited company, (ii) with respect to a limited liability company, the manager(s) or managing partner(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 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) 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 “IDR Terms” means non-voting membership interest conferring the right to Brookfield to receive certain incentive distribution payments pursuant to the terms set out in the Second Amended and Restated Limited Liability Company Agreement of TERP LLC dated as of the date of this Agreement;

 

1.1.18 “Master Services Agreement” means the master services agreement between Brookfield and certain subsidiaries thereof and TERP, TERP LLC and TERP Operating, dated as of the date of this Agreement;

 

1.1.19 “Operating Renewable Assets” means operating solar and/or wind assets (each such asset individually an “Operating Renewable Asset”);

 

1.1.20 “Other Sponsorship Agreements” means (a) the Master Services Agreement, (b) the Sponsor Line Agreement and (c) the IDR Terms.

 

1.1.21 “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;

 

1.1.22 “ROFO Asset” (and collectively the “ROFO Assets”) means (i) the projects listed in Schedule A of this Agreement; and (ii) all future operating solar and wind projects located within the Territory developed by Persons sponsored by or under the control of Brookfield;

 

1.1.23 “Rules” has the meaning ascribed thereto in Section 6.2.1;

 

1.1.24 “Sponsor Line Agreement” means the Sponsor Line Agreement, dated as of the date of this Agreement between an Affiliate of Brookfield and TERP;

 

1.1.25 “Sponsorship Agreements” means this Agreement and the Other Sponsorship Agreements;

 

2

 

1.1.26 “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;

 

1.1.27 “Term” has the meaning ascribed thereto in Section 5.1;

 

1.1.28 “TERP” has the meaning ascribed thereto in the preamble;

 

1.1.29 “TERP Group” means TERP and any direct or indirect Subsidiary of TERP, TERP LLC and/or TERP Operating;

 

1.1.30 “TERP LLC” has the meaning ascribed thereto in the preamble;

 

1.1.31 “TERP Operating” has the meaning ascribed thereto in the preamble;

 

1.1.32 “Territory” means Canada, the United States of America, Mexico, Germany, France, England, Scotland, Wales and Northern Ireland, Ireland, Spain, Portugal, Andorra and Gibraltar, Italy, Denmark, Norway and Sweden;

 

1.1.33 “Third Party” means any Person other than a party or an Affiliate of a party (provided that the TERP Group and the Brookfield Group shall be considered Third Parties with respect to each other for purposes of this Agreement);

 

1.1.34 “Transaction Notice” has the meaning ascribed thereto in Section 3.2;

 

1.1.35 “Transaction Notice Response” has the meaning ascribed thereto in Section 3.2; and

 

1.1.36 “Transfer” means any direct or indirect sale, offer to sell or disposition; provided, that this definition shall not include any (a) merger with or into, or sale of all or substantially all of Brookfield’s or BEP’s assets to a Third Party, (b) grants of security interests, mortgages, liens, assignments, pledges, hypothecations or encumbrances in favor of a Third Party lender, or (c) direct or indirect sale, offer to sell or disposition involving any ROFO Asset being sold, offered or disposed of to a member of the Brookfield Group other than pursuant to a bona fide sale process; provided further, that the terms of any such transfer described in (c) will not result in TERP being unable to offer to acquire such ROFO Asset from Brookfield in accordance with the terms of this Agreement if and when Brookfield elects to sell, offer to sell or dispose of such ROFO Asset to a Third Party.

 

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

 

3

 

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.   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.

 

1.5.   Entire Agreement

 

The Sponsorship Agreements constitute the entire agreement between the parties pertaining to the subject matter therein. 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 or the Other Sponsorship Agreements. 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 respective directors, officers, employees or agents, to any other party to this Agreement or its respective directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of the Sponsorship Agreements, 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.

 

1.6.   Waiver, Amendment

 

Except as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unless 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.

 

1.7.   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, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

1.8.   Consent to Jurisdiction and Service of Process

 

EACH OF THE PARTIES HERETO EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE PERSONAL 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 PROCEEDING RELATING TO OR

 

4

 

ARISING (A) IN CONNECTION WITH INTERPRETATION OR ENFORCEMENT OF THE ARBITRATION PROVISION IN ARTICLE 6 HERETO, (B) ENFORCEMENT, MODIFICATION, CORRECTION, INTERPRETATION OR VACATION OF ANY ARBITRATION DECISION MADE PURSUANT TO ARTICLE 6 HEREOF, (C) FOR THE PURPOSE OF OBTAINING PRELIMINARY INJUNCTIVE RELIEF IN RELATION TO ANY MATTER UNDER 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 EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THE MATTERS SET FORTH ABOVE IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND HEREBY OR THEREBY FURTHER EXPRESSLY, 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.

 

1.9.   Governing Law

 

This Agreement, including rules of interpretation and defined terms incorporated herein by reference, and all claims, disputes, proceedings or similar matters arising out of this Agreement (whether sounding in contract, tort or otherwise) shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

1.10.   Conflicts Committee

 

The Conflicts Committee, in accordance with the terms of its charter, has a role in certain matters that relate to the relationship between members of the Brookfield Group and members of the TERP Group. The parties to this Agreement acknowledge that actions taken under this Agreement that require the approval of the Conflicts Committee will only be taken after such approval has been provided.

 

ARTICLE 2

RELATIONSHIP

 

2.1.   Primary Vehicle

 

Subject to the other terms in this Article 2, the parties agree that, during the Term, the TERP Group will serve as the primary vehicle through which the Brookfield Group will acquire Operating Renewable Assets within the Territory.

 

2.2.   No Exclusivity and Limitations on Acquisition Opportunities

 

2.2.1 Each of TERP, TERP LLC and TERP Operating acknowledge and agree that nothing in this Article 2 shall require the Brookfield Group or any member of the Brookfield Group to allocate any minimum level of dedicated resources for the pursuit of Operating Renewable Asset acquisition opportunities other than as contemplated in the Master Services Agreement, Article 3 of this Agreement or as otherwise agreed in writing by a member of the Brookfield Group and a member of the TERP Group. Members of the Brookfield Group have established or advised, and may continue to establish or advise, other entities that rely on the diligence, skill and business contacts of the Brookfield Group’s professionals and the information and acquisition opportunities they generate during the normal course of their activities;

 

2.2.2 While the Brookfield Group may offer the acquisition opportunities contained in this Section 2.2.2 to the TERP Group, nothing in this Agreement shall require the Brookfield Group or any member of the Brookfield Group to offer the TERP Group or any member of the TERP Group the opportunity to acquire:

 

5

 

2.2.2.1 an integrated utility even if a significant component of such utility’s operations consist of Operating Renewable Assets in the Territory;

 

2.2.2.2 a non-renewable power generating operation or development such as a power generating operation that uses coal or natural gas;

 

2.2.2.3 a renewable power generating operation that is not an Operating Renewable Asset in the Territory, such as hydro operation or development, or any renewable power development whatsoever;

 

2.2.2.4 a portfolio, if a significant component of such portfolio’s operations consist of non-renewable power generation and/or renewable power generation that is not an Operating Renewable Asset(s) in the Territory and/or is a development; or

 

2.2.2.5 Operating Renewable Assets that comprise part of a broader enterprise, unless the primary purpose of such acquisition, as determined by Brookfield acting in good faith, is to acquire the underlying Operating Renewable Assets;

 

and if any assets described in this Section 2.2.2 are acquired by a member of the Brookfield Group and such assets include any Operating Renewable Assets in the Territory, Brookfield will (a) advise TERP’s Governing Body that it has acquired that asset, (b) inform TERP’s Governing Body of Brookfield’s plans with respect to that asset, and (c) consult with TERP about the feasibility of Transferring the component of that asset that is an Operating Renewable Assets in the Territory to a member of the TERP Group.

 

2.2.3 The members of the Brookfield Group carry on a diverse range of businesses worldwide, including the development, ownership and/or management of power, renewable power, transmission and other infrastructure assets, and investing and advising on investing in any of the foregoing or loans, debt instruments and other securities with underlying infrastructure collateral or exposure including Operating Renewable Assets, both as principal and through other public companies that are Affiliates of Brookfield, such as BEP, or through private investment vehicles and accounts established or managed by Affiliates of Brookfield (each a “Brookfield Fund”). Except as explicitly provided herein, nothing in this Agreement shall in any way limit or restrict members of the Brookfield Group from carrying on their respective business and in particular:

 

2.2.3.1 nothing shall limit or restrict the ability of the Brookfield Group from making any investment recommendation or taking any other action in connection with its public securities businesses;

 

2.2.3.2 nothing shall limit or restrict the ability of the Brookfield Group from making any investment recommendation or taking any action in connection with BEP, provided that, subject to the terms and conditions of this Agreement, acquisitions of Operating Renewable Assets in the Territory shall be offered to the TERP Group in lieu of BEP; and

 

2.2.3.3 nothing herein shall limit or restrict any member of the Brookfield Group from investing in any loans or debt securities outside of its public securities businesses or from taking any action in connection with any loan or debt security notwithstanding that the underlying collateral is comprised of or includes an Operating Renewable Asset provided that the original purpose of the investment was not to acquire a controlling interest in an Operating Renewable Asset.

 

2.2.4 Brookfield has established and manages a number of Brookfield Funds whose investment objectives include the acquisition of Operating Renewable Assets, including in the Territory, and may in the future establish similar funds. Nothing herein shall limit or restrict Brookfield from establishing or advising a Brookfield Fund or carrying out any investment, provided that, subject to Section 2.3, for any investment carried out by a Brookfield Fund that involves the acquisition of an Operating Renewable Asset in the Territory, the TERP Group, if a committed investor in such Brookfield Fund, will be offered the opportunity to take up Brookfield’s share of such acquisition;

 

2.2.5 In the event that the TERP Group declines any Operating Renewable Asset acquisition opportunity that Brookfield has made available, the Brookfield Group may pursue such acquisition for its own account, without restriction.

 

6

 

2.2.6 Nothing in this Agreement will restrict the Brookfield Group in connection with its lending, securities management, investment banking services, restructuring businesses or its construction businesses (where such construction is not undertaken with a view to owning the facilities upon completion of the project), including the acquisition or sale of any assets relating to such activities.

 

2.3.   TERP Acknowledgement

 

Each of TERP, TERP LLC and TERP Operating acknowledge and agree that Operating Renewable Asset acquisition opportunities that are offered to the TERP Group pursuant to this Agreement may be carried out through joint ventures, partnerships, investment funds or consortium arrangements in which the TERP Group will not be the sole participant. In addition to Third Party participants, one or more Brookfield Group members may also participate in such opportunities if (i) the TERP Group does not have the financial capacity, as determined in good faith by Brookfield, in consultation with the TERP Group, to acquire all or part of the opportunity, or (ii) the purpose of the investment, return characteristics or risk profile are not consistent with the TERP Group’s investment mandate, return characteristics or risk profile, as determined in good faith by Brookfield, in consultation with the TERP Group. In such cases, Brookfield may allocate participation in the investment opportunity available for Brookfield, all or in part, to one or more other members of the Brookfield Group rather than to the TERP Group. Any such allocation or joint participation with one or more member of the Brookfield Group will be made in good faith and after consulting with the TERP Group.

 

2.4.   Reporting

 

Subject to confidentiality obligations, Brookfield (or one or more members of the Brookfield Group on Brookfield’s behalf) shall provide a report to the TERP Group on a quarterly basis of all Operating Renewable Assets in the Territory acquired by the Brookfield Group that occurred during the quarter that were not offered to the TERP Group, including details of why such acquisition opportunities were not offered to the TERP Group.

 

ARTICLE 3

RIGHT OF FIRST OFFER

 

3.1.   TERP’s Right of First Offer

 

During the Term, Brookfield grants TERP a right of first offer on any proposed Transfer of any of the ROFO Assets.

 

3.2.   Notice of Transaction Related to ROFO Assets

 

When Brookfield determines it is considering the Transfer of any ROFO Asset, it agrees to deliver a written notice to TERP, which shall set forth in reasonable detail information about the proposed Transfer and the ROFO Asset (such notice, a “Transaction Notice”). Within twenty (20) Business Days of receipt of the Transaction Notice TERP must notify Brookfield (i) of a good faith minimum price it would pay to acquire the ROFO Asset that is the subject of the Transaction Notice (and, at its discretion, any material terms and conditions), or (ii) that it declines to exercise its right of first offer in respect of the proposal set out in the Transaction Notice (such notice, a “Transaction Notice Response”). Following Brookfield’s receipt of the Transaction Notice Response (or a failure to provide a Transaction Notice Response within the timeframe required in this Section 3.2), Brookfield may, in its discretion, commence a process to Transfer the ROFO Asset (or agree in writing to undertake such transaction) in accordance with the terms of Section 3.3 to a Third Party within the next one hundred eighty (180) days.

 

3.3.   Negotiations with Third Parties

 

Neither Brookfield nor any of its representatives, agents or members of the Brookfield Group shall solicit offers from, negotiate with or enter into any agreement with any Third Party for the Transfer of any ROFO Asset (or any portion thereof) until receipt of the Transaction Notice Response from TERP (or such time as the Transaction Notice Response should have been received in accordance with the timeframe required in Section 3.2). TERP agrees and acknowledges that from and after the time that the Transaction Notice Response is received (or should have been received in accordance with the timeframe required in Section 3.2) by Brookfield, (i) Brookfield and its Affiliates shall have the absolute right to solicit offers from, negotiate with (on an exclusive or non-exclusive basis) or enter into agreements with any Third Party to Transfer such ROFO Asset,

 

7

 

and (ii) Brookfield shall have no obligation to negotiate with TERP regarding, or offer TERP the opportunity to acquire any interest in, such ROFO Asset; provided that the final terms of the Transfer of any ROFO Asset to any Third Party be on pricing terms more favorable to Brookfield than those offered by TERP (if any) in its Transaction Notice Response.

 

3.4.   Brookfield Group Approvals

 

TERP acknowledges and agrees that, the Transfer of a ROFO Asset to TERP or any of its Affiliates may require the prior approval of, without limitation and as applicable, the independent directors of BEP, investors in certain Brookfield Funds or other partners of the Brookfield Group.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

4.1.   Representations and Warranties of Brookfield

 

Brookfield hereby represents and warrants that:

 

4.1.1 it is validly organized and existing under the relevant laws governing its formation and existence;

 

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

 

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

 

4.1.4 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not (a) contravene, breach or result in any default under its articles, by-laws, constituent documents or other organizational documents, or (b) contravene, breach or result in any default 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 (including without limitation, that certain Relationship Agreement, dated as of November 28, 2011, by and between Brookfield and certain subsidiaries thereof, BEP and certain members of the BEP Group (as defined therein)), except, in the case of clause (b), where such contravention, breach or default would not, individually or in the aggregate, be reasonably likely to have a material adverse effect on Brookfield or its ability to perform its obligations under this Agreement;

 

4.1.5 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

 

4.1.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms, subject to: (a) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally; and (b) 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.

 

4.2.   Representations and Warranties of TERP, TERP LLC and TERP Operating

 

Each of TERP, TERP LLC and TERP Operating hereby represents and warrants that:

 

4.2.1 it is validly organized and existing under the relevant laws governing its formation and existence;

 

4.2.2 it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder on behalf of the TERP Group;

 

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

 

4.2.4 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 (a) contravene, breach or result in any default under its organizational documents (or, if applicable, the organizational

 

8

 

documents of its managing member), or (b) contravene, breach or result in any default 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, in the case of clause (b), where such contravention, breach or default would not, individually or in the aggregate, be reasonably likely to have a material adverse effect on it;

 

4.2.5 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

 

4.2.6 this Agreement constitutes a valid and legally binding obligation of each of TERP, TERP LLC and TERP Operating enforceable against each of them 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 5

TERMINATION

 

5.1.   Term

 

The term of this Agreement (the “Term”) will begin on the date hereof and will continue in full force and effect until terminated in accordance with Section 5.2.

 

5.2.   Termination

 

The rights and obligations of the parties to this Agreement will terminate and no longer be of any effect concurrently with the termination of the Master Services Agreement in accordance with the terms of the Master Services Agreement.

 

ARTICLE 6

RESOLUTION OF DISPUTES AND ARBITRATION

 

6.1.   Dispute

 

Any dispute or disagreement of any kind or nature between the parties arising out of this Agreement (a “Dispute”) shall be resolved in accordance with this Article 6, to the extent permitted by applicable law.

 

6.2.   Arbitration

 

6.2.1 Any Dispute shall be submitted to arbitration (the “Arbitration”) by three Arbitrators pursuant to the procedure set forth in this Section 6.2 and pursuant to the then current Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”). If the provisions of this Section 6.2 are inconsistent with the provisions of the Rules and to the extent of such inconsistency, the provisions of this Section 6.2 shall prevail in any Arbitration.

 

6.2.2 Any party may make a demand for Arbitration by sending a notice in writing to any other party, setting forth the nature of the Dispute, the amount involved and the name of one arbitrator appointed by such party. The demand for Arbitration shall be made no later than thirty (30) days after the event giving rise to the Dispute.

 

6.2.3 Within thirty (30) days after any demand for Arbitration under Section 6.2.2, the other party shall send a responding statement, which shall contain the name of one arbitrator appointed by the responding party.

 

6.2.4 Within thirty (30) days of the appointment of the second arbitrator, the two party-appointed arbitrators shall appoint the third arbitrator, who shall act as the chair of the arbitration panel. The third arbitrator shall be appointed from the AAA National Roster (collectively with the two party-appointed arbitrators, the “Arbitrators”).

 

9

 

6.2.5 In connection with any Arbitration, the Arbitrators shall allow reasonable requests for (i) the production of documents relevant to the dispute and (ii) taking of depositions.

 

6.2.6 The seat of the arbitration will be New York and the language of the arbitration will be English. The Arbitration hearings shall be held in a location in New York specified in the demand for Arbitration and shall commence no later than thirty (30) days after the determination of the Arbitrator under Section 6.2.4.

 

6.2.7 Any monetary award may include interest but may not include punitive or exemplary damages.

 

6.2.8 The decision of the Arbitrators shall be made not later than sixty (60) days after its appointment. The decision of the Arbitrators shall be final without appeal and binding on the parties, and may be enforced in any court of competent jurisdiction.

 

6.2.9 Each party involved in the Dispute shall bear the costs and expenses of all lawyers, consultants, advisors, witnesses and employees retained by it in any Arbitration. The expenses of the Arbitrators shall be paid equally by the parties unless the Arbitrators otherwise provides in its award.

 

6.2.10 Notwithstanding any conflicting choice of law provisions in this Agreement or any applicable principles of conflicts of law, the arbitration provisions set forth herein, and any Arbitration conducted hereunder, shall be governed exclusively by the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

 

6.2.11 Judgment on the award rendered by the Arbitrators may be entered in any court having jurisdiction thereof.

 

6.3.   Confidentiality

 

All information disclosed by any party in relation to the resolution of Disputes pursuant to the terms hereof shall be subject to the provisions of Section 7.2 hereof and shall not be used for any purpose other than the resolution of a Dispute pursuant to the terms hereof.

 

6.4.   Continued Performance

 

During the conduct of Dispute resolution procedures pursuant to this Article 6, the parties shall continue to perform their respective obligations under this Agreement and no party shall exercise any other remedies to resolve a Dispute.

 

6.5.   Urgent Relief

 

Nothing in this Article 6 will prejudice the right of a party to seek urgent injunctive or declaratory relief from a court.

 

ARTICLE 7

GENERAL PROVISIONS

 

7.1.   Assignment

 

7.1.1 None of the rights or obligations hereunder shall be assignable or transferable by any party without the prior written consent of the other parties.

 

7.1.2 Any purported assignment of this Agreement in violation of this Section 7.1 shall be null and void.

 

7.2.   Confidentiality

 

Each of the parties hereby agrees that it will not at any time use, disclose or make available to any party, and will take reasonable steps to prevent such disclosure and restrain further disclosure by any other party, and will take reasonable steps to prevent such disclosure and restrain further disclosure by any other party, any information disclosed pursuant to this Agreement (the “Confidential Information”), except:

 

7.2.1 such use as may be expressly permitted in or necessary or advisable for the performance of this Agreement or any transaction contemplated herein provided that any Third Party to whom Confidential Information is disclosed in connection therewith shall be under an obligation of confidentiality to the disclosing party;

 

10

 

7.2.2 such disclosure as may be required in order to comply with any applicable law, including disclosure obligations of the TERP Group or the Brookfield Group;

 

7.2.3 such information as comes into the public domain independently where the person disclosing the same is not under an obligation of confidentiality if in respect to Brookfield’s Confidential Information, to Brookfield and if in respect to TERP’s Confidential Information, to TERP; and

 

7.2.4 such information as can be demonstrated by the party desiring to disclose such information, to have come into its possession independently of anything done under this Agreement.

 

7.3.   Enurement

 

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

 

7.4.   Notices

 

Any notice or other communication required or permitted to be given hereunder will be in writing and will be given by prepaid first-class mail, by e-mail, provided that the transmission by e-mail is promptly confirmed by telephone confirmation thereof, or by hand-delivery as hereinafter provided. Any such notice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance of postal service due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after the post-marked date thereof, or if sent by e-mail or other means of electronic communication, will be deemed to have been received on the Business Day following the sending, or if delivered by hand will be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of a general discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered by hand or sent by e-mail or other means of electronic communication and will be deemed to have been received in accordance with this section. Notices and other communications will be addressed as follows:

 

7.4.1 if to Brookfield:

 

Brookfield Asset Management Inc.

Suite 300, Brookfield Place

181 Bay Street, Box 762

Toronto, Ontario

M5J 2T3

Canada

   

Attention: Jennifer Mazin

 E-mail: jennifer.mazin@brookfield.com

 

7.4.2 if to TERP, TERP LLC or TERP Operating:

 

TerraForm Power, LLC

12500 Baltimore Avenue

Beltsville, MD 20705

United States of America

   

Attention: General Counsel

 E-mail: andrea.rocheleau@brookfieldrenewable.com

 

or to such other addresses or e-mail addresses as a party may from time to time notify the other in accordance with this Section 7.4.

 

7.5.   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 parties hereto may reasonably require from

 

11

 

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.

 

7.6.   Counterparts

 

This Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic format (i.e. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

[NEXT PAGE IS SIGNATURE PAGE]

 

12

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

 

	
 

	
BROOKFIELD ASSET MANAGEMENT INC.

	
 

	
 

	
 

	
 

	
By

	
/s/ A.J. Silber

	
 

	
 

	
Name: A.J. Silber

	
 

	
 

	
Title: Vice President, Legal Affairs

	 	 	 
	
 

	
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: Senior Vice President, General Counsel and Secretary

	 	 	 
	
 

	
TERRAFORM POWER OPERATING, LLC

	
 

	
 

	
 

	
 

	
By

	
/s/ Sebastian Deschler

	
 

	
 

	
Name: Sebastian Deschler

	
 

	
 

	
Title: Senior Vice President, General Counsel and Secretary

13

 

SCHEDULE A

 

ROFO Assets

 

	
Potential Pipeline of Operating Projects1

	 	 	 
	 	 	 	 	 
	
Asset

	
Country

	
Technology

	
Ownership2

	
Capacity (MW)

	
Comber

	
Canada

	
Wind

	
100%

	
                  166

	
Gosfield

	
Canada

	
Wind

	
100%

	
                    51

	
Prince I

	
Canada

	
Wind

	
100%

	
                    99

	
Prince II

	
Canada

	
Wind

	
100%

	
                    90

	
Ballymartin

	
Ireland

	
Wind

	
100%

	
                      7

	
Booltiagh 1

	
Ireland

	
Wind

	
100%

	
                    13

	
Booltiagh 2

	
Ireland

	
Wind

	
100%

	
                    12

	
Flughland

	
Ireland

	
Wind

	
100%

	
                      9

	
Garracummer

	
Ireland

	
Wind

	
100%

	
                    43

	
Gneeves

	
Ireland

	
Wind

	
100%

	
                      9

	
Kilgarvan

	
Ireland

	
Wind

	
100%

	
                    45

	
Kilgarvan 2

	
Ireland

	
Wind

	
100%

	
                    41

	
Knockawarriga

	
Ireland

	
Wind

	
100%

	
                    23

	
Lisheen 1

	
Ireland

	
Wind

	
100%

	
                    36

	
Lisheen 2

	
Ireland

	
Wind

	
100%

	
                    24

	
Mienvee

	
Ireland

	
Wind

	
100%

	
                      1

	
Smithstown

	
Ireland

	
Wind

	
100%

	
                      8

	
Sorne 1 & 2

	
Ireland

	
Wind

	
100%

	
                    23

	
Crockandun

	
Northern Ireland

	
Wind

	
100%

	
                    15

	
Owenreagh 1

	
Northern Ireland

	
Wind

	
50%

	
                      6

	
Owenreagh 2

	
Northern Ireland

	
Wind

	
50%

	
                      5

	
Seegroanan

	
Northern Ireland

	
Wind

	
100%

	
                    14

	
Lomba do Vale

	
Portugal

	
Wind

	
100%

	
                    21

	
Toutico

	
Portugal

	
Wind

	
100%

	
                  102

	
Granite

	
USA

	
Wind

	
90%

	
                    99

	
Tehachapi 2 (Alta VIII)

	
USA

	
Wind

	
100%

	
                  150

	
Tehachapi 3 (Coram)

	
USA

	
Wind

	
100%

	
                    22

	
Windstar

	
USA

	
Wind

	
100%

	
                  120

	 	 	 	 	 
	
Total

	
 

	
 

	
 

	
                1,254

	
1ROFO on certain projects subject to prior approval of Brookfield fund investors

	
 

	
2Ownership shown of Brookfield or Brookfield affiliated parties

	 	 

 

14

	
Potential Pipeline of Development Projects1

	 	 	 
	 	 	 	 	 
	
Asset

	
Country

	
Technology

	
Ownership2

	
Capacity (MW)

	
Eeyou Power (Chibougamau)

	
Canada

	
Wind

	
50%

	
                    201

	
Thunder Mountain

	
Canada

	
Wind

	
95%

	
                    320

	
Victor

	
Canada

	
Wind

	
100%

	
                      60

	
Eeyou Power (Nemaska)

	
Canada

	
Wind

	
50%

	
                    201

	
Coldwell

	
Canada

	
Wind

	
100%

	
                    100

	
Labonte / Mackay

	
Canada

	
Wind

	
100%

	
                    100

	
Spider Lakes

	
Canada

	
Wind

	
100%

	
                    230

	
Slievecallan

	
Ireland

	
Wind

	
100%

	
                      28

	
Ballyhoura

	
Ireland

	
Wind

	
100%

	
                      19

	
Craignagapple

	
Ireland

	
Wind

	
100%

	
                      18

	
Gronan

	
Ireland

	
Wind

	
100%

	
                        9

	
Knockawarriga II

	
Ireland

	
Wind

	
100%

	
                        8

	
Seegronan II

	
Ireland

	
Wind

	
100%

	
                        7

	
Lisheen III

	
Ireland

	
Wind

	
100%

	
                      24

	
Milk Hill

	
Ireland

	
Wind

	
n/a3

	
                      20

	
Oatfield & Seefin

	
Ireland

	
Wind

	
n/a3

	
                      25

	
Slaghbooly

	
Ireland

	
Wind

	
100%

	
                      33

	
Ballynagilly

	
Ireland

	
Wind

	
n/a3

	
                      20

	
Beltonanean Road

	
Ireland

	
Wind

	
n/a3

	
                      14

	
Penbreck

	
Scotland

	
Wind

	
100%

	
                      18

	
Shennanton

	
Scotland

	
Wind

	
100%

	
                      20

	
Tralorg

	
Scotland

	
Wind

	
100%

	
                      20

	
Altercannoch

	
Scotland

	
Wind

	
100%

	
                      16

	
Kennoxhead

	
Scotland

	
Wind

	
100%

	
                      65

	
Knockscae

	
Scotland

	
Wind

	
100%

	
                      25

	
Polquhairn

	
Scotland

	
Wind

	
100%

	
                      21

	
Bachan Burn

	
Scotland

	
Wind

	
100%

	
                      51

	
Meikle Hill

	
Scotland

	
Wind

	
100%

	
                      14

	
Barmolloch

	
Scotland

	
Wind

	
100%

	
                      44

	
Larbrax

	
Scotland

	
Wind

	
100%

	
                      20

	
Armadale

	
Scotland

	
Wind

	
100%

	
                      37

	
Braelangwell

	
Scotland

	
Wind

	
100%

	
                      48

	
Beardslee

	
USA

	
Solar

	
100%

	
                      22

	
Ingham’s

	
USA

	
Solar

	
100%

	
                        8

	
Kingman 2

	
USA

	
Wind

	
100%

	
                      10

	 	 	 	 	 
	
Asset

	
Country

	
Technology

	
Ownership2

	
Capacity (MW)

	
Meherrin

	
USA

	
Solar

	
100%

	
60

	
Mesa

	
USA

	
Wind

	
100%

	
                      30

	
Otter Creek

	
USA

	
Solar

	
100%

	
                      60

	
Snowflake

	
USA

	
Wind

	
100%

	
                    130

	
Mulqueeney

	
USA

	
Wind

	
100%

	
                      80

	 	 	 	 	 
	
Total

	
 

	
 

	
 

	
                  2,236

	
1ROFO on certain projects subject to prior approval of Brookfield fund investors

	
 

	
2Ownership shown of Brookfield or Brookfield affiliated parties

	 	 
	
3Brookfield option to acquire

	 	 	 	 

  

15Exhibit 10.3

 

Governance Agreement

 

EXECUTION VERSION

 

GOVERNANCE AGREEMENT

 

among

 

TERRAFORM POWER, INC.,

 

ORION US HOLDINGS 1 L.P.

 

and

 

EACH MEMBER OF THE SPONSOR GROUP PARTY HERETO

 

Dated as of October 16, 2017

 

TABLE OF CONTENTS

 

	
 

	
 

	
Page

	
ARTICLE I

 DEFINITIONS

	
Section 1.1.

	
Certain Defined Terms

	
 

	
1

	
 

	
Section 1.2.

	
Other Definitional Provisions

	
 

	
4

	
 

	
ARTICLE II

 CORPORATE GOVERNANCE

	
Section 2.1.

	
Agreement to Vote

	
 

	
4

	
 

	
Section 2.2.

	
Officers

	
 

	
4

	
 

	
Section 2.3.

	
Committees

	
 

	
5

	
 

	
Section 2.4.

	
Notice of Transfer

	
 

	
5

	
 

	
Section 2.5.

	
Observer to the Board

	
 

	
5

	
 

	
ARTICLE III

 EFFECTIVENESS AND TERMINATION

	
Section 3.1.

	
Effectiveness

	
 

	
6

	
 

	
Section 3.2.

	
Termination

	
 

	
6

	
 

	
ARTICLE IV

 MISCELLANEOUS

	
Section 4.1.

	
Amendments and Modifications

	
 

	
6

	
 

	
Section 4.2.

	
Waivers, Delays or Omissions

	
 

	
6

	
 

	
Section 4.3.

	
Successors, Assigns and Transferees

	
 

	
6

	
 

	
Section 4.4.

	
Notices

	
 

	
7

	
 

	
Section 4.5.

	
Entire Agreement

	
 

	
8

	
 

	
Section 4.6.

	
Governing Law

	
 

	
8

	
 

	
Section 4.7.

	
Submission to Jurisdiction

	
 

	
8

	
 

	
Section 4.8.

	
Waiver of Jury Trial

	
 

	
8

	
 

	
Section 4.9.

	
Severability

	
 

	
9

	
 

	
Section 4.10.

	
No Third-Party Beneficiaries

	
 

	
9

	
 

	
Section 4.11.

	
Enforcement

	
 

	
9

	
 

	
Section 4.12.

	
Titles and Subtitles

	
 

	
9

	
 

	
Section 4.13.

	
Counterparts

	
 

	
9

	
 

i

 

GOVERNANCE AGREEMENT

 

GOVERNANCE AGREEMENT, dated as of October 16, 2017 (this “Agreement”), among TerraForm Power, Inc., a Delaware corporation (the “Company”), Orion US Holdings 1, L.P., a Delaware limited partnership (“Orion”) and each other member of the Sponsor Group that becomes party to this Agreement from time to time pursuant to Section 4.3 of this Agreement (a “Joining BAM Affiliate” and together with Orion, the “Sponsor Parties” and each individually a “Sponsor Party”). Each of the Company and each Sponsor Party is referred to herein as a “Party”, and together as the “Parties”.

 

RECITALS

 

WHEREAS, the Company, Sponsor and BRE TERP Holdings Inc., a wholly owned subsidiary of Sponsor (“Merger Sub”), have entered into that certain Merger and Sponsorship Transaction Agreement, dated as of March 6, 2017 (the “Sponsorship Transaction Agreement”), pursuant to which, among other things, Merger Sub will merge with and into the Company (the “Merger”) as of the effective time of the Merger (the “Effective Time”);

 

WHEREAS, in connection with the consummation of the transactions set forth in the Sponsorship Transaction Agreement, the Company, Brookfield Asset Management Inc., a corporation existing under the laws of Ontario (“Brookfield”), and certain Affiliates of Brookfield have entered into certain ancillary agreements, including a Master Services Agreement, dated as of the date hereof (the “MSA”), pursuant to which certain Affiliates of Brookfield will provide certain services to the Company and its subsidiaries commencing at the Effective Time; and

 

WHEREAS, the Parties desire to establish herein certain rights and obligations with respect to the governance of the Company and the relationship between the Sponsor Group (as defined below) and the Company at and following the Effective Time.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:

 

ARTICLE I

 DEFINITIONS

 

Section 1.1. Certain Defined Terms.

 

As used herein, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any 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.

 

“Agreement” has the meaning assigned to such term in the preamble.

 

“Beneficial owner” or “beneficially own” has the meaning given such term in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, and a Person’s beneficial ownership of Voting Securities shall be calculated in accordance with the provisions of such rules; provided, however, that for purposes of determining beneficial ownership, (i) a Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person, whether within sixty (60) days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities, (ii) no Person shall be deemed beneficially to own any security solely as a result of this Agreement and (iii) Sponsor shall be deemed not to be the beneficial owner of any security solely due to its right to receive shares of Common Stock pursuant to Section 6.17 of the Sponsorship Transaction Agreement so long as such shares of Common Stock have not been issued to Sponsor.

 

“Board” means the board of directors of the Company.

 

“Brookfield” has the meaning assigned to such term in the recitals.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day which is a statutory or civic holiday in the Province of Ontario or the State of New York.

 

“Bylaws” means the bylaws of the Company, as amended and restated as of the date hereof, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and the terms of the Charter.

 

1

 

“Charter” means the certificate of incorporation of the Company, as amended and restated as of the date hereof, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

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

 

“Company” has the meaning assigned to such term in the preamble.

 

“Conflicts Committee” means the committee of the Board designated as the “Conflicts Committee.”

 

“Control” or “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Controlled Affiliate” means, with respect to any Person, any other Person controlled by such Person. For purposes of this definition, “controlled by” means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Controlled Company Exemption” with respect to the Company means that the Company qualifies for the “controlled company” exemption under applicable Stock Exchange Rules based on the Sponsor Group’s beneficial ownership of Voting Securities.

 

“Director” means any member of the Board.

 

“Effective Time” has the meaning assigned to such term in the recitals.

 

“Election Meeting” means each annual or special meeting of stockholders of the Company at which Directors are to be elected.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934.

 

“Governance Committee” means the committee of the Board designated as the “Corporate Governance and Nominations Committee.”

 

“Governmental Authority” means any (i) international, national, multinational, federal, provincial, 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 any independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of electricity, (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.

 

“Independent” means, with respect to any person that serves as a Director or is nominated or designated to serve as a Director at any time, the satisfaction by such person of the requirements to be “independent” under the Stock Exchange Rules and any applicable rules and regulations of the Securities and Exchange Commission (or any successor agency).

 

“Independent Directors” means the Non-Sponsor Independent Directors and the Sponsor Independent Directors.

 

“Joining BAM Affiliate” has the meaning assigned to such term in the preamble.

 

“Law” means any (i) law, constitution, treaty, statute, code, ordinance, principle of common and civil law and equity, rule, regulation and municipal bylaw whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgment, order, writ, injunction, decision and award of any Governmental Authority, and (iii) policy, practice and guideline of any Governmental Authority which, although not actually having the force of law, is considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable”, with respect to such Law and in the context

 

2

 

that refers to one or more Persons, means such Law that applies to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanates from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

 

“Merger” has the meaning assigned to such term in the recitals.

 

“MSA” has the meaning assigned to such term in the recitals.

 

“Non-Sponsor Independent Directors” means the Directors who are Independent and are (i) designated initially pursuant to Section 2(b)(ii) of Article SIX of the Charter and serve as Directors as of the Effective Time, (ii) following the Effective Time, designated and recommended by the Directors who are Independent (other than any Sponsor Independent Directors) pursuant to Section 3 of Article SIX of the Charter and elected to the Board in accordance with Section 3 of Article SIX of the Charter or (iii) appointed by the Directors described in clause (i) or (ii) of this definition to fill a vacancy on the Board that such Directors are entitled to fill in accordance with Section 3 of Article NINE of the Charter.

 

“Orion” has the meaning ascribed to such term in the preamble.

 

“Party” has the meaning assigned to such term in the preamble.

 

“Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, association or other unincorporated organization or other entity, including any government or any agency or political subdivision thereof.

 

“Representative” means, with respect to a Person, the officers, directors, managers, employees, agents, accountants, lawyers, advisors, bankers and other representatives of such Person.

 

“SEC” means the U.S. Securities and Exchange Commission (or any successor agency).

 

“Sponsor” has the meaning set forth in Section 4.3(e).

 

“Sponsor Directors” means Directors who are (i) designated initially pursuant to Section 2(b)(i) of Article SIX of the Charter and serve as Directors as of the Effective Time, (ii) following the Effective Time, designated by the Sponsor to the Governance Committee pursuant to Section 3 of Article SIX of the Charter for its recommendation to the Board for election by the holders of shares of Common Stock and elected by the holders of shares of Common Stock to serve as Directors or (iii) appointed by the Directors described in clause (i) or (ii) to fill a vacancy on the Board that such Directors are entitled to fill pursuant to Section 3 of Article NINE of the Charter.

 

“Sponsor Group” means Brookfield and its Controlled Affiliates (other than the Company and its Controlled Affiliates).

 

“Sponsor Independent Directors” means Directors who are Independent and are (i) designated by the Sponsor to the Governance Committee for its recommendation to the Board for election by the holders of shares of Common Stock or (ii) appointed by Sponsor Directors to fill a vacancy on the Board that the Sponsor Directors are entitled to fill pursuant to Section 3 of Article NINE of the Charter.

 

“Sponsor Party” has the meaning assigned to such term in the recitals.

 

“Sponsorship Transaction Agreement” has the meaning assigned to such term in the recitals.

 

“Stock Exchange Rules” means the rules and regulations of The NASDAQ Stock Market LLC or, if the shares of Common Stock are listed on another primary securities exchange, of the securities exchange on which the shares of Common Stock are listed at such time.

 

“TERP Group” means the Company and its Controlled Affiliates.

 

“Voting Securities” means, at any time, (i) the Common Stock and (ii) shares of any other class of capital stock of the Company then entitled to vote generally in the election of Directors.

 

3

 

Section 1.2 Other Definitional Provisions.

 

(a) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified.

 

(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(c) References to a party to this Agreement include its successors and permitted assigns.

 

ARTICLE II

 CORPORATE GOVERNANCE

 

Section 2.1. Agreement to Vote.

 

(a) With respect to the election and removal of the Non-Sponsor Independent Directors, the Sponsor Parties shall cause all Voting Securities beneficially owned by any member of the Sponsor Group to be voted (or abstained from voting), in the same proportion as the Voting Securities that are voted (or abstained from voting) by stockholders other than any member of the Sponsor Group or any group (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) which includes any member of the Sponsor Group.

 

(b) The Sponsor Parties shall cause all Voting Securities beneficially owned by any member of the Sponsor Group to be present at any stockholder meeting.

 

Section 2.2. Officers.

 

(a) For so long as the MSA remains in effect:

 

(i) The Chief Executive Officer, the Chief Financial Officer and the General Counsel of the Company shall be designated by Sponsor for appointment by the Board (the “Sponsor Designated Officers”).

 

(ii) The Sponsor Designated Officers shall be employees of a member of the Sponsor Group and shall be compensated by a member of the Sponsor Group.

 

(iii) Unless otherwise provided pursuant to the MSA, all other officers of the Company shall be employed and compensated by the Company and will report, directly or indirectly, to one or more of the Sponsor Designated Officers.

 

(iv) The Sponsor Designated Officers shall be officers of the Company and shall devote their full professional time to the Company.

 

(b) Sponsor shall provide to the Board (including the Independent Directors) (i) information regarding the qualifications of Sponsor Designated Officers for their appointed role and (ii) all other information reasonably requested by any member of the Board in connection with the appointment of a Sponsor Designated Officer.

 

(c) For so long as the MSA remains in effect, Sponsor may remove any Sponsor Designated Officer at Sponsor’s discretion subject to advising the Conflicts Committee prior to such removal and provision to the Conflicts Committee of the rationale therefor. In addition to the foregoing, for so long as the MSA remains in effect, the Board may remove a Sponsor Designated Officer for cause after consulting in good faith with Sponsor with respect to such removal. Further, the Conflicts Committee may make a recommendation to Sponsor to replace any Sponsor Designated Officer at any time, if the Conflicts Committee believes that there may be reason to remove such Sponsor Designated Officer.

 

(d) The Sponsor Parties hereby acknowledge (and Sponsor agrees to cause the employer of each Sponsor Designated Officer to acknowledge to such Sponsor Designated Officer in writing upon request by the Conflicts Committee) that:

 

(i) each Sponsor Designated Officer shall be required to act in the best interests of the Company and its Controlled Affiliates and consistent with such Sponsor Designated Officer’s fiduciary duties to the Company and its Controlled Affiliates, notwithstanding any conflicting interests such Sponsor Designated Officer may have as an employee of a member of the Sponsor Group; and

 

4

 

(ii) that the client of the Sponsor Designated Officer acting as the General Counsel of the Company shall be the Company and its Controlled Affiliates, notwithstanding being an employee of any member of the Sponsor Group.

 

(e) The compensation of the Sponsor Designated Officers shall be determined by Brookfield and Sponsor, and Sponsor will explain the rationale therefor to the Board. The compensation of the Sponsor Designated Officers shall be disclosed to the committee of the Board designated as the “Compensation Committee” (or, if the Company does not have a Compensation Committee at such time, to the Governance Committee) and shall be subject to disclosure requirements under the rules and regulations of the SEC, the Stock Exchange Rules and other applicable law.

 

(f) Sponsor shall submit to the Board the name of each Sponsor Designated Officer to be designated by Sponsor pursuant to Section 2.2(a)(i), including in respect of the replacement of a Sponsor Designated Officer who has resigned or been removed (upon death or otherwise). If the Board determines that the service by such Sponsor Designated Officer would not violate applicable law or applicable Stock Exchange Rules, such Sponsor Designated Officer shall be appointed unless such appointment would violate the fiduciary duties of the members of the Board. If a proposed Sponsor Designated Officer is not appointed by the Board, Sponsor shall have the right to submit another name of a proposed Sponsor Designated Officer to the Board for appointment in accordance with the immediately preceding sentence, and shall have the right to continue so submitting names until such Sponsor Designated Officer is so appointed.

 

Section 2.3. Committees.

 

(a) The Company shall have a Conflicts Committee, and the Conflicts Committee shall comprise three (3) Non-Sponsor Independent Directors. Any amendments to the charter of the Conflicts Committee shall be approved by a majority of the Board and a majority of the Conflicts Committee.

 

(b) The Company shall have a Governance Committee, and the Governance Committee shall comprise three (3) directors. For so long as the Company qualifies for the Controlled Company Exemption, the Governance Committee will include at least one Sponsor Director and at least one Non-Sponsor Independent Director. After the date on which the Company does not qualify for the Controlled Company Exemption, the Governance Committee will comprise three (3) Independent Directors, at least one of whom will be a Non-Sponsor Independent Director. Any amendments to the charter of the Governance Committee shall be approved by a majority of the Board and a majority of the Governance Committee.

 

Section 2.4. Notice of Transfer. In connection with any purchase or other acquisition and transfer between or among members of the Sponsor Group pursuant to the exception in clause (C) of ARTICLE FOUR, Section 4(a)(i) of the Charter, Sponsor shall provide prior notice to the Company if such purchase or other acquisition and transfer is reasonably likely to require a prior authorization from the Federal Energy Regulatory Commission under Section 203 of the Federal Power Act. Sponsor shall also provide additional information regarding the nature of such purchase or other acquisition and transfer if reasonably requested by the Company.

 

Section 2.5. Observer to the Board. At any time during which there are no Sponsor Directors on the Board because holders of shares of Common Stock voted against all the individuals designated by the Sponsor to serve as a Director at an Election Meeting, then, for so long as the MSA is in effect, the Sponsor shall be entitled to designate one individual to attend, at the cost of the Sponsor, Board meetings as a non-voting observer and receive copies of materials provided to Directors with respect to a meeting or a written consent in lieu of a meeting; provided that (i) the Sponsor shall cause such individual to hold in confidence pursuant to, and in accordance with, the MSA all materials so provided and information obtained as a result of attending such meetings (which materials and information the Sponsor Parties agree are subject to the confidentiality provisions in the MSA); and (ii) a majority of Directors may exclude such observer from, or limit the right of such observer to attend, any meeting or portion thereof (or receive any materials related thereto) to the extent such majority determines (a) that such observer’s attendance or participation in a meeting or access to information could jeopardize attorney-client privilege, the work product doctrine or any other similarly protective privilege or doctrine, could result in the breach of confidentiality obligations of the Company or its subsidiaries to third parties, could result in a conflict of interest or could impair the due consideration by the Board of matters as to which the exclusion pertains or (b) that exclusion of such observer is necessary or appropriate in furtherance of discharging the Board’s fiduciary duties to the Company’s stockholders or is otherwise required by applicable law.

 

5

 

ARTICLE III

 EFFECTIVENESS AND TERMINATION

 

Section 3.1. Effectiveness. This Agreement shall take effect immediately upon the Effective Time and shall remain in effect until it is terminated pursuant to Section 3.2 of this Agreement.

 

Section 3.2. Termination. At such time that the MSA is no longer in effect, all provisions of this Agreement, other than this Article III and Article IV (except for Section 4.1, Section 4.2, Section 4.4, Section 4.6, Section 4.7, Section 4.8 and 4.10), shall terminate and be of no further force and effect.

 

ARTICLE IV

 MISCELLANEOUS

 

Section 4.1. Amendments and Modifications. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party. The approval by the Company of any such amendment, modification or supplement shall be subject to approval by a majority of the Board and a majority of the Conflicts Committee.

 

Section 4.2. Waivers, Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any Party, upon any breach, default or noncompliance by another Party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any Party hereto of any breach, default or noncompliance under this Agreement or any waiver on such Party’s part of any provisions or conditions of this Agreement, must be in writing and executed and delivered by a duly authorized officer on behalf of such Party and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law or otherwise afforded to any party, will be deemed cumulative with and not exclusive of any other remedy, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.

 

Section 4.3. Successors, Assigns and Transferees.

 

(a) This Agreement shall bind and inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

 

(b) Upon any sale, assignment or other transfer (in each case, directly or indirectly, by operation of law or otherwise) by a member of the Sponsor Group that is a Sponsor Party of legal and beneficial ownership of any Voting Securities held by it to a member of the Sponsor Group that is not then a Sponsor Party, the transferor Sponsor Party shall cause the transferee member of the Sponsor Group to become a party to this Agreement by executing and delivering to the Company a joinder to this Agreement substantially in the form of Exhibit A, which execution and delivery shall be a condition to the effectiveness of the transfer of such Voting Securities to the transferee member of the Sponsor Group. Any sale, assignment or other transfer (in each case, directly or indirectly, by operation of law or otherwise) of legal and beneficial ownership of Voting Securities by a Sponsor Party to a member of the Sponsor Group that is not then a Sponsor Party that does not include the execution and delivery to the Company of a joinder to this Agreement substantially in the form of Exhibit A prior to or concurrently with such sale, assignment or transfer shall be void ab initio and the Voting Securities transferred to such Person shall be deemed to be held or returned to the Sponsor Party that last held such Voting Securities.

 

(c) Upon the acquisition (directly or indirectly, by operation of law or otherwise) by any member of the Sponsor Group that is not then a Sponsor Party of legal and beneficial ownership of Voting Securities, each Sponsor Party shall cause such acquiring member of the Sponsor Group to become a party to this Agreement by executing and delivering to the Company a joinder to this Agreement substantially in the form of Exhibit A within a reasonable period of time following such acquisition (but in no event later than 10 Business Days thereafter).

 

(d) A Sponsor Party shall cease to be a party to this Agreement and shall automatically be released from all obligations hereunder in the event that such Sponsor Party ceases to (i) be the legal and beneficial owner any

 

6

 

Voting Securities and, in the case it ceases to own all such Voting Securities as a result of a sale, assignment or other transfer of some or all of such Voting Securities to a member of the Sponsor Group, conditioned upon the joinder to this Agreement by the transferee member of the Sponsor Group as set forth in Section 4.3(b) above or (ii) be a Controlled Affiliate of Brookfield.

 

(e) Except as set forth in clause (b) and (c) above, this Agreement shall not be assigned, by operation of law or otherwise, without the prior written consent of the Parties and any such assignment or attempted assignment without such consent shall be void.

 

(f) All Sponsor Parties to this Agreement at any time may, by written notice to the Company, designate any individual Sponsor Party among them as their representative for purposes of this Agreement and such representative shall be referred to as the “Sponsor.” The Sponsor designated as of the date of this Agreement is Orion.

 

Section 4.4. Notices. Any notice or other communication required or permitted to be given hereunder will be in writing and will be given by prepaid registered or certified mail, by e-mail or other means of electronic communication, provided that the e-mail is promptly confirmed by telephone confirmation thereof, or by hand delivery as hereinafter provided. Any such notice or other communication, if mailed by prepaid registered or certified mail at any time other than during a general discontinuance of postal service due to strike, lockout or otherwise, will be deemed to have been received three (3) Business Days after the postmarked date thereof, or if sent by e-mail or other means of electronic communication, will be deemed to have been received when sent, or if delivered by hand will be deemed to have been received upon actual receipt either by the individual designated below or by an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of a general discontinuance of postal service due to strike, lockout or otherwise, notices or other communications will be delivered by hand or sent by e-mail or other means of electronic communication and will be deemed to have been received in accordance with this section. Notices and other communications will be addressed as follows:

 

If to Sponsor:

		 	
 

c/o Brookfield Asset Management Inc.

181 Bay Street, Suite 300

Toronto, Ontario, M5J 2T3, Canada

		Attention:	
Jennifer Mazin

		Telephone:	
(416) 363-9491

		E-mail:	
jennifer.mazin@brookfieldrenewable.com

		 	
 

If to the Company:

		 	
 

TerraForm Power, Inc.

7550 Wisconsin Ave.

Bethesda, MD 20814

		Attention:	
General Counsel

		Telephone:	
(240) 762-7700

		E-mail:	
andrea.rocheleau@brookfieldrenewable.com

		 	
 

If to the Conflicts Committee:

		 	
 

TerraForm Power, Inc.

7550 Wisconsin Ave.

Bethesda, MD 20814

Attention:Members of the Conflicts Committee

		Telephone:	
(240) 762-7700

7

 

with a copy to (which shall not constitute notice):

		 	
 

TerraForm Power, Inc.

7550 Wisconsin Ave.Bethesda, MD 20814

Attention:General Counsel

		Telephone:	
(240) 762-7700

		E-mail:	
andrea.rocheleau@brookfieldrenewable.com

or to or to such other addresses or as a party may from time to time notify the other in accordance with this Section 4.4.

 

Section 4.5. Entire Agreement. This Agreement, the Sponsorship Transaction Agreement (including any exhibits thereto), the Company Disclosure Letter (as defined in the Sponsorship Transaction Agreement), the Ancillary Agreements (as defined in the Sponsorship Transaction Agreement), the Charter and the Bylaws constitute the entire agreement, and supersede all prior written agreements, arrangements, communications, understandings, representations and warranties both written and oral, among the Parties with respect to the subject matter hereof and thereof. Notwithstanding any oral agreement or course of action of the Parties or their Representatives to the contrary, no Party shall be under any legal obligation to enter into or complete the transactions contemplated hereby unless and until this Agreement shall have been executed and delivered by each of the Parties.

 

Section 4.6. Governing Law. This Agreement shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, 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.

 

Section 4.7. Submission to Jurisdiction. EACH OF THE PARTIES HERETO EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, TO THE EXTENT SUCH COURT DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURTS OR THAT SUCH COURTS ARE AN INCONVENIENT FORUM, OR THAT THE VENUE OF SUCH COURTS MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A DELAWARE COURT OF CHANCERY OR FEDERAL COURT. 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 IN SECTION 4.4 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.

 

Section 4.8. 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, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY

 

8

 

UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.8.

 

Section 4.9. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction.

 

Section 4.10. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

 

Section 4.11. Enforcement. THE PARTIES ACKNOWLEDGE AND 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 AND THAT MONETARY DAMAGES WOULD NOT BE AN ADEQUATE REMEDY THEREFOR. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OR THREATENED BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY COURT OF COMPETENT JURISDICTION, IN EACH CASE WITHOUT PROOF OF DAMAGES OR OTHERWISE (AND EACH PARTY HEREBY WAIVES ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY), THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. THE PARTIES AGREE NOT TO ASSERT THAT A REMEDY OF SPECIFIC ENFORCEMENT IS UNENFORCEABLE, INVALID, CONTRARY TO LAW OR INEQUITABLE FOR ANY REASON, NOR TO ASSERT THAT A REMEDY OF MONETARY DAMAGES WOULD PROVIDE AN ADEQUATE REMEDY.

 

Section 4.12. Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

Section 4.13. Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto and thereto, to the extent signed and delivered by facsimile or in electronic format (e.g., “pdf” or “tif”) 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.

 

[The remainder of this page is intentionally left blank]

 

9

 

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

 

	
 

	
TERRAFORM POWER, INC.

	
 

	
 

	
 

	
By:

	
/s/ Sebastian Deschler

	
 

	
 

	
Name:

	
Sebastian Deschler

	
 

	
 

	
Title:

	
Senior Vice President, General Counsel and Secretary

	 	 
	
 

	
ORION US HOLDINGS 1 L.P.

	
 

	
 

	
 

	
By:

	
/s/ Julian Deschatelets

	
 

	
 

	
Name:

	
Julian Deschatelets

	
 

	
 

	
Title:

	
Senior Vice President of its general partner Orion US GP LLC

10

 

EXHIBIT A

   

Form of Joinder

   

JOINDER AGREEMENT

 

This Joinder Agreement, dated as of                , (this “Joinder Agreement”) is a joinder to the Governance Agreement, dated [•], by and among TerraForm Power, Inc. (the “Company”), Orion US Holdings 1 L.P. (“Sponsor”) and the other parties party thereto from time to time (the “Governance Agreement”). Capitalized terms used but not defined herein shall have the meaning given to such terms in the Governance Agreement.

 

1. [Each of] [t]he undersigned, having received and reviewed a copy of the Governance Agreement, hereby agrees to be bound by the terms, conditions and other provisions of the Governance Agreement as though it is a “Sponsor Party” under the Governance Agreement, with all attendant rights, duties and obligations stated therein applicable to the “Sponsor Parties” in the same manner as if the undersigned were party to the Governance Agreement as of the date on which it was originally executed.

 

2. The undersigned represents and warrants to the Company that it is a Controlled Affiliate of Brookfield.

 

3. This Joinder Agreement shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, 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.

 

4. This Joinder Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. This Joinder Agreement and any signed agreement or instrument entered into in connection with this Joinder Agreement, and any amendments or waivers hereto and thereto, to the extent signed and delivered by facsimile or in electronic format (e.g., “pdf” or “tif”) 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.

 

[The remainder of this page is intentionally left blank]

 

11

 

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Joinder Agreement as of the date first written above.

 

	
 

	
[NEW PARTY]

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	 	 	 	 
	
 

	
[NEW PARTY]

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

 

AGREED AND ACKNOWLEDGED:

 

	
TERRAFORM POWER, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

 

	
ORION US HOLDINGS 1 L.P.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Name:

	
 

	
 

	
 

	
Title:

	
 

	
 

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]