Delaware
(State or other jurisdiction
of incorporation)
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001-36542
(Commission
File Number)
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46-4780940
(IRS Employer
Identification No.)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 |
Entry into a Material Definitive Agreement.
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Item 9.01 |
Financial Statement and Exhibits.
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Exhibit
|
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No.
|
Description
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10.1
|
Transition Services Agreement, dated August 7, 2017, between TerraForm Power, LLC and SunEdison, Inc.
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TERRAFORM POWER, INC.
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||
By:
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/s/ Sebastian Deschler | |
Name: Sebastian Deschler
Title: Senior Vice President, General Counsel and Secretary
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Exhibit
No.
|
Description
|
Transition Services Agreement, dated August 7, 2017, between TerraForm Power, LLC and SunEdison, Inc.
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Contents
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Page
|
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1.
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Definition and Interpretation
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3
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2.
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Transition Services and Reverse Transition Services
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7
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3.
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Limitations
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10
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4.
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IP Ownership and License
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11
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5.
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Third Party Limitations
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11
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6.
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Payment Procedures
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12
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7.
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Warranties and Obligations
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13
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8.
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Term and Termination
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14
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9.
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Liability and Indemnification
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15
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10.
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Confidentiality
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16
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11.
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Other Provisions
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17
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(1) |
SunEdison, Inc., a Delaware corporation (“
SUNE
”); and
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(2) |
TerraForm Power, LLC, a Delaware limited liability company (“
TerraForm
”).
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1. |
DEFINITION AND INTERPRETATION
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1.1 |
Definitions
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1.2 |
Singular, Plural, Gender
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1.3 |
References to Persons and Companies
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1.4 |
Schedules etc.
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1.5 |
Headings
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1.6 |
Information
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1.7 |
Modification etc. of Statutes
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(i) |
that statute or provision as from time to time modified, re-enacted or consolidated whether before or after the date of this Agreement; and
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(ii) |
any subordinate legislation made from time to time under that statute or statutory provision which is in force at the date of this Agreement.
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1.8 |
Non-limiting Effect of Words
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1.9 |
Parties
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1.10 |
Precedence
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(i) |
the Settlement Agreement;
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(ii) |
this Agreement;
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(iii) |
the Schedules to this Agreement; and
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(iv) |
any document or agreement other than those referred to in items (i)-(iii) above;
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1.11 |
Effective Date
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2. |
TRANSITION SERVICES AND REVERSE TRANSITION SERVICES
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2.1 |
Commencement of Services
.
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2.1.1 |
The Parties agree that this Agreement shall apply to and govern all Transition Services and Reverse Transition Services provided from and after February 1, 2017.
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2.2 |
Transition Services and Remuneration
.
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2.2.1 |
SUNE agrees to provide to TerraForm the Transition Services as set out in this Agreement for the Transition Services Fee in accordance with the terms and conditions of this Agreement. The Transition Services and the Transition Services Fee are set out in Schedule 1, provided that the Transition Services Fees for the period from February 1, 2017 through July 31, 2017 are set forth on Schedule 4. TerraForm acknowledges and agrees that: (i) SUNE utilizes the Transition Services for its own account and the current Transition Services Fees have been calculated based upon the current usage of each Transition Service by SUNE and TerraForm; (ii) SUNE has been, and will continue to, reduce the usage of each Transition Service for its own account; and (iii) SUNE may discontinue its use of some or all Transition Services for its own account during the term of this Agreement. SUNE will give TerraForm reasonable prior notice (but in no case less than 15 days’ prior notice) of the date on which SUNE’s usage of a given Transition Service for its own account will cease and, if TerraForm elects to continue receiving such Transition Service after such date, the Transition Service Fee for such Transition Service shall be equitably adjusted as mutually agreed by the Parties acting reasonably to reflect any increase or decrease in actual costs that result from SUNE no longer using the applicable Transition Service for its own account. In connection with evaluating any proposed adjustment, SUNE will promptly provide TerraForm with reasonable supporting documentation to confirm the actual costs to provide the Transition Services to TerraForm associated with performing such Transition Service. The Transition Services Fees reflect the utilization of the number of full time employee equivalents (“
FTEs
”) indicated for each Transition Service on Schedule 1 that are currently utilized by SUNE in performing the Transition Services for TerraForm. If TerraForm requests in writing (including by email) by an officer of TerraForm that additional FTEs be allocated to perform a given Transition Service at any time, the Transition Services Fee for such Transition Service will be equitably increased as mutually agreed by the Parties acting reasonably to reflect the utilization of such additional FTEs.
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2.2.2 |
The Parties may agree from time to time on any additional services to be provided by SUNE in addition to the Transition Services (the “
Additional Transition Services
”). Prior to the provision of any such Additional Transition Services, unless otherwise agreed in writing by the Parties, the Parties must first agree in writing as to: (i) the specific scope of the Additional Transition Services to be provided; (ii) the time within which those Additional Transition Services are to be provided; (iii) the estimated number of hours that will be devoted to the provision of those Additional Transition Services; (iv) the additional amount of Transition Service Fee payable to SUNE for the rendering of those Additional Transition Services, whether fixed fee or time based; (v) the specified billing and payment arrangements in respect of such Additional Transition Services; and (vi) the resources of TerraForm or any third parties which SUNE may require to assist in the provision of such additional services.
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2.2.3 |
If SUNE expects to incur costs after the date hereof that are in addition to the costs set forth on Schedule 1 because the provision of any Transition Service requires additional resources (including additional FTEs), SUNE shall provide an estimate to TerraForm of any such additional costs prior to incurring them, for TerraForm’s review and consent. If SUNE determines reasonably and in good faith that the decision of whether or not to incur such additional costs must be made on an expedited basis to address exigent circumstances, SUNE shall notify TerraForm of such expedited period (which SUNE will take reasonable efforts to ensure is not less than one (1) day). Until such time as TerraForm consents in writing (including by email) by an officer of TerraForm to such additional costs, or if TerraForm does not consent to such additional charges, SUNE shall continue to provide the Transition Services using existing resources (solely to the extent that SUNE will not incur additional costs), and any drop in the level of or standard of performance of the affected Transition Services resulting from the resource deficiency shall not be a breach of this Agreement, provided that SUNE shall use reasonable efforts to mitigate any such drop. Any dispute relating to any such additional charges to which TerraForm has agreed shall be subject to the dispute resolution procedures set forth in Section 11.11.
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2.3 |
Performance of Transition Services
.
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2.3.1 |
SUNE shall carry out the Transition Services with reasonable skill and diligence, and in a timely, workman-like and professional manner in accordance with applicable law, rule, regulation or court order and with a priority at least equal to the services that SUNE provides for itself.
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2.3.2 |
SUNE may delegate or sub-contract its duties under this Agreement to third-parties that are capable of performing such duties in accordance with Section 2.3.1; provided, however, that such delegation or subcontracting shall not relieve SUNE of its obligations under this Agreement, and SUNE is responsible for the actions or inactions of such contractors or subcontractors, just as SUNE is responsible in accordance with the terms of this Agreement for persons directly employed by SUNE.
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2.4 |
Reverse Transition Services and Remuneration
.
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2.4.1 |
TerraForm agrees to provide to SUNE the Reverse Transition Services as set out in this Agreement for the Reverse Transition Services Fee in accordance with the terms and conditions of this Agreement. The Reverse Transition Services and the Reverse Transition Services Fee are set out in Schedule 2.
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2.4.2 |
The Parties may agree from time to time on any additional services to be provided by TerraForm in addition to the Reverse Transition Services (the “
Additional Reverse Transition Services
”). Prior to the provision of any such Additional Reverse Transition Services, the Parties must first agree in writing as to: (i) the specific scope of the Additional Reverse Transition Services to be provided; (ii) the time within which those Additional Reverse Transition Services are to be provided; (iii) the estimated number of hours that will be devoted to the provision of those Additional Reverse Transition Services; (iv) the additional amount of Reverse Transition Service Fee payable to TerraForm for the rendering of those Additional Reverse Transition Services, whether fixed fee or time based; (v) the specified billing and payment arrangements in respect of such Additional Reverse Transition Services; and (vi) the resources of SUNE or any third parties which TerraForm may require to assist in the provision of such additional services.
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2.4.3 |
If TerraForm expects to incur costs after the date hereof that are in addition to the costs set forth on Schedule 2 because the provision of any Reverse Transition Service requires additional resources (including additional FTEs), TerraForm shall provide an estimate to SUNE of any such additional costs prior to incurring them, for SUNE’s review and consent. If TerraForm determines reasonably and in good faith that the decision of whether or not to incur such additional costs must be made on an expedited basis to address exigent circumstances, TerraForm shall notify SUNE of such expedited period (which TerraForm will take reasonable efforts to ensure is not less than one (1) day). Until such time as SUNE consents to such additional costs, or if SUNE does not consent to such additional costs in writing (including by email) by an officer of SUNE, TerraForm shall continue to provide the Reverse Transition Services using existing resources (solely to the extent that TerraForm will not incur additional costs), and any drop in the level of or standard of performance of the affected Reverse Transition Services resulting from the resource deficiency shall not be a breach of this Agreement, provided that TerraForm shall use reasonable efforts to mitigate any such drop. Any dispute relating to any such additional costs to which SUNE has agreed shall be subject to the dispute resolution procedures set forth in Section 11.11.
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2.5 |
Performance of Reverse Transition Services
.
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2.5.1 |
TerraForm shall carry out the Reverse Transition Services with reasonable skill and diligence, and in a timely, workman-like and professional manner in accordance with applicable law, rule, regulation or court order and with a priority at least equal to the services which TerraForm provides to itself.
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2.5.2 |
TerraForm may delegate or sub-contract its duties under this Agreement to third-parties that are capable of performing such duties in accordance with Section 2.5.1; provided, however, that such delegation or subcontracting shall not relieve TerraForm of its obligations under this Agreement, and TerraForm is responsible for the actions or inactions of such contractors or subcontractors, just as TerraForm is responsible in accordance with the terms of this Agreement for persons directly employed by TerraForm.
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2.6 |
Cooperation
.
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3. |
LIMITATIONS
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3.1 |
General Limitations
.
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3.1.1 |
Subject to Section 2.3.1 and Section 2.5.1, as applicable, Service Provider shall select the persons, equipment, and software that it will use to provide the Services.
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3.1.2 |
Except as otherwise provided in this Agreement: (i) each Service Provider shall bear its own costs of providing the Services and (ii) each Service Recipient shall bear its own costs of receiving the Services.
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3.2 |
Dependencies
.
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3.3 |
Interim Basis Only
.
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4. |
IP OWNERSHIP AND LICENSE
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4.1.1 |
Each Party retains the ownership and title to any and all of its intellectual property as of the Effective Date. This Agreement is not intended to, and shall not, transfer or license any intellectual property from one Party to the other, except for the limited license rights as expressly set forth in Section 4.1.2.
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4.1.2 |
Subject to obtaining any Third Party Consents to licensing Service Provider’s intellectual property to Service Recipient, Service Provider hereby grants to Service Recipient a license during the term of this Agreement on an irrevocable, non-exclusive, worldwide, royalty-free, fully paid-up, transferable basis to use the Service Provider’s intellectual property solely for, and only to the extent necessary for, the receipt of the Services which require such Service Provider’s intellectual property.
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4.1.3 |
Any intellectual property created or developed by or on behalf of Service Provider or its Affiliates in connection herewith shall be owned by Service Provider or its applicable Affiliates.
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4.1.4 |
Any intellectual property created or developed by Service Recipient in connection herewith shall be owned by Service Recipient.
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5. |
THIRD PARTY LIMITATIONS
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5.1 |
Third Party Agreements
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5.2 |
Third Party Consents
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5.2.1 |
Where a Third Party Consent is required in order to provide Services, Service Provider shall seek to obtain such required consent. Service Recipient shall use reasonable business efforts to assist in obtaining such Third Party Consent, at Service Recipient’s sole cost and expense.
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5.2.2 |
Service Recipient shall pay for any fees, costs or charges imposed by a third party for the provision of any such Third Party Consent.
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5.2.3 |
If any Third Party Consent is not obtained, or if Service Recipient does pay any fees, costs or charges imposed by a third party for the provision of a Third Party Consent, Service Provider shall have no obligation to provide, or cause to be provided, the affected Services, and the Transition Services Fees or Reverse Transition Service Fees, as applicable, shall be reduced accordingly.
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6. |
PAYMENT PROCEDURES
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6.1 |
Invoicing Procedure
.
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6.2 |
Payment Terms
.
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6.3 |
Disputed Invoices
.
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6.4 |
Taxes
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6.4.1 |
All amounts payable to Service Provider under this Agreement are exclusive of any applicable Tax. Accordingly, if any payment to Service Provider under this Agreement constitutes sales and use or similar taxes for the taxable service or supply of goods or services for Tax purposes (“
Sales Taxes
”), then in addition to that payment, Service Recipient (on behalf of the recipient of the relevant services or supply) shall pay to Service Provider, or if the reverse charge procedure applies, account for, any Sales Tax due, subject, unless the reverse charge procedure applies, to the provision of a valid Sales Tax invoice to the recipient of the relevant services under this Agreement. For the avoidance of doubt, Sales Taxes shall not include (i) any income, franchise, ad valorum, real and personal property, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, severance, withholding or similar tax or (ii) any Sales Taxes that are not payable for the provision of Services hereunder by the Service Provider.
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6.4.2 |
Where under the terms of this Agreement, one person is liable to indemnify or reimburse another person in respect of any costs, charges or expenses, the payment shall include an amount equal to any Tax thereon not otherwise recoverable by the other person (or the representative member of any Tax group of which it forms part), subject to that person (or representative member) using commercially reasonable efforts to recover such amount of Tax.
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6.5 |
Interest
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6.6 |
No Offset
.
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7. |
WARRANTIES AND OBLIGATIONS
|
7.1 |
Mutual Warranties
|
7.1.1 |
it is duly incorporated, formed or organized, as applicable, and validly existing under the laws of the jurisdiction of its incorporation, formation or organization;
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7.1.2 |
subject to the entry of the Approval Order by the Bankruptcy Court, it has the legal right and full power and authority to execute and deliver, and to exercise its rights and perform its obligations under, this Agreement and all the documents which are to be executed by it as envisaged by this Agreement, and no other proceedings on the part of such Party are necessary to approve its entry into and performance of this Agreement;
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7.1.3 |
nothing contained in this Agreement will result in a breach of any provision of its organizational documents or result in a breach of any material agreement, license or other instrument, order, judgment or decree of any court, governmental agency or regulatory body to which it is bound; and
|
7.1.4 |
each individual executing this Agreement on behalf of such Party has been duly authorized and empowered to execute and deliver this Agreement on behalf of such Party.
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8. |
TERM AND TERMINATION
|
8.1 |
Term
|
8.1.1 |
This Agreement shall be effective from the Effective Date and shall continue in full force and effect: (i) with respect to Transition Services being provided by SUNE pursuant to contractual arrangements between SUNE and SunEdison Semiconductor Limited (“
Semi
”), until September 30, 2017 (unless earlier terminated in accordance with Section 8.2), (ii) with respect to support services for Active Directory and network support services received by TerraForm from Semi: (a) if TerraForm reaches a definitive written agreement with Semi by September 30, 2017 pursuant to which Semi agrees to continue providing to TerraForm Active Directory and network support services until at least October 31, 2017, October 31, 2017, (b) otherwise, September 30, 2017, (iii) with respect to all other Transition Services, until October 31, 2017 (unless earlier terminated in accordance with Section 8.2) and (iv) with respect to the Reverse Transition Services, until terminated in accordance with Section 8.2.
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8.2 |
Termination
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8.2.1 |
This Agreement may be terminated by either Party if the other Party fails to perform or otherwise breaches a material provision of this Agreement and such failure or breach is not cured, to the reasonable satisfaction of the non-breaching Party, within thirty (30) days of written notice thereof. Failure to make proper and timely payments for Services shall be considered a material breach for purposes of this Section 8.2.1.
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8.2.2 |
A Service Recipient may terminate individual Services:
|
8.2.3 |
TerraForm may terminate this Agreement if:
|
8.3 |
Survival of Rights on Termination or Expiry
|
9. |
LIABILITY AND INDEMNIFICATION
|
10. |
CONFIDENTIALITY
|
10.1 |
Duty of Confidentiality
|
10.2 |
Exceptions
|
(i) |
the disclosure or use is required by any bankruptcy and/or insolvency proceedings, law, any regulatory body or any stock exchange;
|
(ii) |
the disclosure or use is required for the purpose of any judicial proceedings arising out of this Agreement or any other agreement entered into under or pursuant to this Agreement;
|
(iii) |
the disclosure is made to a tax authority in connection with the tax affairs of the disclosing Party;
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(iv) |
the disclosure is made to professional advisers, auditors, contractors, employees, officers, directors, governmental entities and non-governmental entities and bodies (to the extent the Services involve the preparation of filings, tax returns or other documents intended or required to be filed with such entities or bodies), or actual or potential bidders, investors, financiers or buyers of either Party on terms that such persons (other than governmental entities and non-governmental regulatory entities and bodies) undertake to comply with confidentiality obligations broadly equivalent to those set out in this Section 10, including, in particular, the lenders, together with their professional advisers, under the Amended and Restated Senior Secured Superpriority Debtor-in-Possession Credit Agreement dated April 28, 2017 under which SUNE is the borrower (as amended, restated, supplemented or otherwise modified from time to time, the “
Replacement
DIP Credit Agreement
”), subject to the confidentiality provisions set forth in the Replacement DIP Credit Agreement;
|
(v) |
the information is or becomes publicly available (other than by breach of this Agreement);
|
(vi) |
the other Party has given prior written approval to the disclosure or use;
|
(vii) |
the information is independently developed after the Effective Date;
|
(viii) |
the disclosure or use is made in connection with the rejection of any contracts or release of any claims related thereto by SUNE or its Debtor Affiliates in connection with the Chapter 11 Cases; or
|
(ix) |
the disclosure is required to enable a Party to meet any employee information or consultation obligations in accordance with applicable law;
|
10.3 |
Parties
|
11. |
OTHER PROVISIONS
|
11.1 |
Whole Agreement
|
11.1.1 |
This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.
|
11.1.2 |
Each Party acknowledges that it has not been induced to enter into this Agreement by any representation, warranty or undertaking not expressly incorporated into it.
|
11.1.3 |
Except as expressly set forth in this Agreement, neither Party makes any, and expressly disclaims any and all, representations or warranties whatsoever to the extent permissible by law, whether express, implied or statutory, with respect to the services, software or hardware provided hereunder, including warranties with respect to merchantability, or suitability or fitness for a particular purpose, title and non-infringement, and any warranties arising from course of dealing, course of performance or trade usage. Further, each Party agrees and acknowledges that its only right and remedy in relation to any representation, warranty or undertaking made or given in connection with this Agreement shall be for breach of the terms of this Agreement to the exclusion of all other rights and remedies (including those in tort or arising under statute).
|
11.2 |
Interpretation and Rules of Construction
|
11.3 |
Successors and Assigns; No Third Party Beneficiaries
|
11.4 |
Amendments
|
11.5 |
Notices
|
11.5.1 |
All notices hereunder (each, a “
Notice
”) shall be deemed given if in writing and delivered, if sent by electronic mail, courier, or registered or certified mail (return receipt requested) to the following addresses (or at such other addresses as shall be specified by like notice):
|
11.5.2 |
A Notice to SUNE shall be sent to the following address, or such other person or address as SUNE may notify to TerraForm from time to time:
|
Attn: |
General Counsel
|
Email: |
MTruong@sunedison.com
|
Attn: |
Jay M. Goffman and J. Eric Ivester
|
Email: |
jay.goffman@skadden.com
|
11.5.3 |
A Notice to TerraForm shall be sent to the following address, or such other person or address as TerraForm may notify to SUNE from time to time:
|
Email: |
sdeschler@terraform.com
|
Email: |
bdavidson@terraform.com
|
11.5.4 |
Any notice given by electronic delivery, courier or registered or certified mail shall be effective when received. A Party may update its notice addresses from time to time by delivery of notice to that effect in accordance with this Section 11.5.
|
11.6 |
Severability
|
11.7 |
Force Majeure
|
11.8 |
No Partnership
|
11.9 |
Governing Law; Jurisdiction; Waiver of Jury Trial
|
11.10 |
Counterparts
|
11.11 |
Dispute Resolution
|
11.12 |
Employee Waiver Letter
|
SIGNED for and on behalf of
|
||
SunEdison, Inc.
|
||
By:
|
/s/ John S. Dubel | |
Name:
|
John S. Dubel
|
|
Title:
|
CEO and CRO
|
|
SIGNED for and on behalf of
|
||
TerraForm Power, LLC
|
||
By:
|
/s/ Peter Blackmore | |
Name:
|
Peter Blackmore
|
|
Title:
|
Chairman and Interim Chief Executive Officer
|
|
1. |
John Dubel
|
2. |
Philip Gund
|
3. |
Salvatore LoBiondo
|
1. |
Peter Blackmore
|
2. |
Rebecca Cranna
|
3. |
Sebastian Deschler
|
· |
You would protect SunEdison’s confidential or proprietary information and not use or disclose said confidential or proprietary information to third parties, both during and after your employment with SunEdison (such commitment or any commitment with similar effect, the “Confidentiality Commitment”);
|
· |
For a period of time, you would not engage in or contribute your knowledge to any work or activity that involves a product, process, apparatus, service or development which is competitive with or similar to a product, process, apparatus, service or development on which you worked or with respect to which you had access to confidential or proprietary information while at SunEdison (such commitment, or any commitment similarly limiting your ability to engage in any activity that may be competitive with SunEdison, a “Non-Compete”);
|
· |
You would be required to disclose to SunEdison all ideas, inventions, or discoveries, which you may conceive or make, alone or with others, during your employment with SunEdison and for a period of time after your separation from SunEdison, that ideas, inventions, or discoveries would be presumed to have been conceived by SunEdison (such covenant, or any covenant with a similar effect the “Post Termination Extension of Ideas”); and
|
· |
You would not solicit, induce or attempt to solicit or induce SunEdison employees to leave or take any action to discourage or divert any SunEdison customers (or otherwise interfere with SunEdison’s continuing relationship with its customers) for a period of time following your employment termination with SunEdison (such commitment, or any commitment with a similar effect, a “Non-Solicit”).
|
· |
I agree on behalf of SunEdison that the Non-Compete shall no longer apply to you and is forever waived by SunEdison.
|
· |
I agree on behalf of SunEdison that the Confidentiality Commitment shall not apply to the extent -- and only to the extent -- necessary for the performance of your duties of employment to TerraForm Power, LLC. However, with respect to any employment except TerraForm Power, LLC, I would remind you that the Confidentiality Commitment is perpetual, is not waived, and your Confidentiality Commitment will continue forever.
|
· |
Your Non-Solicit and your Post Termination Extension of Ideas also both continue until they expire per the terms of those agreements.
|