Form 8-K TERRAFORM GLOBAL, INC. For: Jun 02
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 2, 2016 (May 31, 2016)
______________________________________________________________
TerraForm Global, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________
Delaware | 001-37528 | 47-1919173 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
7550 Wisconsin Avenue, 9th Floor, Bethesda, Maryland 20814
(Address of principal executive offices, including zip code)
(240) 762-7700
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provision (see General Instruction A.2 below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On June 1, 2016, TerraForm Global, Inc. (the “Company”), acting in its capacity as sole managing member of TerraForm Global, LLC (“Global LLC”), adopted an amendment (the “Global LLC Agreement Amendment”) to the Fourth Amended and Restated Limited Liability Company Agreement of Global LLC, dated as of August 5, 2015 (as amended from time to time, the “Global LLC Agreement”).
Pursuant to the Global LLC Agreement Amendment, until the first annual meeting of the Company’s stockholders held after December 31, 2016, the Company delegated to an independent conflicts committee (the “LLC Conflicts Committee”) the exclusive power to exercise all of its rights, powers and authority as the sole managing member of Global LLC to manage and control the business and affairs of Global LLC and its controlled affiliates relating to or involving SunEdison, Inc. (“SunEdison”) and any of its affiliates (other than the Company and its controlled affiliates) (as more specifically defined in the Global LLC Agreement Amendment, the “Conflicts Matters”).
The Global LLC Agreement Amendment was approved and authorized by the Company’s Corporate Governance and Conflicts Committee (the “Conflicts Committee”), pursuant to the power and authority delegated to it by resolutions of the Board of Directors (the “Board”) of the Company dated March 25, 2016 authorizing the Conflicts Committee, in anticipation of and in connection with a bankruptcy filing by SunEdison, to evaluate and act affirmatively with respect to matters involving or substantially relating to SunEdison, including actions to protect the Company’s contractual and other rights and otherwise to preserve the value of the Company and its assets. The decision to delegate authority to the Conflicts Committee with respect to these SunEdison-related matters was taken by the Board in light of the obligation that material matters relating to SunEdison be approved by the Conflicts Committee. On June 1, 2016, the Board reaffirmed the power and authority delegated to the Conflicts Committee with respect to these SunEdison-related matters by ratifying the adoption of the Global LLC Agreement Amendment.
The current members of the LLC Conflicts Committee are Mr. John F. Stark, Mr. Chris Compton and Mr. Hanif “Wally” Dahya. New members may be appointed (i) by a majority of LLC Conflicts Committee members then in office or (ii) by the Company (in its capacity as managing member of Global LLC) with the approval of the holders of a majority of the outstanding shares of Class A common stock of the Company, excluding any such shares held, directly or indirectly, by SunEdison or any of its affiliates (“Independent Shareholder Approval”).
Each member of the LLC Conflicts Committee must satisfy, in the determination of the LLC Conflicts Committee, the NASDAQ Global Select Market standards for “independent directors” and nominations committee members.
The delegation of exclusive power and authority to the LLC Conflicts Committee under the Global LLC Agreement Amendment may not be revoked and the members of the LLC Conflicts Committee may not be removed, other than by a written instrument signed by the Company, acting in its capacity as managing member of Global LLC, with either (i) the written consent of a majority of the LLC Conflicts Committee members then in office, or (ii) Independent Shareholder Approval.
The foregoing summary of the amendment to the Global LLC Agreement is qualified in its entirety by reference to the Global LLC Agreement Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
On May 31, 2016, TerraForm Global Operating, LLC (“Operating”), a subsidiary of the Company received a notice of default (the “Default Notice”) from the trustee under the indenture, dated as of August 5, 2015 (the “Indenture”), governing Operating’s 9.75% senior notes due 2022 (the “Senior Notes”). Under the terms of the Indenture, the Company is required to timely file with the Securities and Exchange Commission (the “SEC”) or make publicly available annual and quarterly reports within the time periods (including any extensions thereof) specified in the SEC rules and regulations. Under the Indenture, Operating has 90 days from the date such notice of default is deemed to be duly given under the Indenture to cure the default by filing or making publicly available the Company’s annual report for the year ended December 31, 2015 (the “2015 Annual Report”). If Operating does not cure the default under the Indenture, the trustee under the Indenture or the holders of at least 25% of the notes under the Indenture may accelerate the Senior Notes, and the unpaid principal and accrued interest on the Senior Notes then outstanding would become immediately due and payable. The Default Notice does not result in an acceleration of the Senior Notes prior to the expiration of such cure period, nor does it result in a cross-default under the credit and guaranty agreement with Goldman Sachs Bank USA, as Administrative Agent and Lender, and certain other parties thereto (the “Revolver”). However, if an event of default under the Indenture were to occur, such event of default would result in a cross-default under the Revolver that would permit the lenders holding more than 50% of the aggregate exposure under the Revolver to accelerate the outstanding principal amount of loans and terminate the outstanding commitments under the Revolver. As of the date hereof, Operating has $760.4 million aggregate principal amount of Senior Notes outstanding. There can be no assurance that the Company will file or make available the 2015 Annual Report within the cure period under the Indenture. The Default Notice is furnished as Exhibit 99.1 to this Report.
As previously disclosed, on May 11, 2016, Operating received a letter on behalf of certain beneficial holders of the Senior Notes, which purported to constitute a notice of default with respect to the failure of Operating to comply with its obligations under the Indenture to timely furnish the 2015 Annual Report. On May 13, 2016, Operating sent a response to this letter, stating that the purported notice of default was untimely, and therefore ineffective, under the Indenture.
In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 7.01 of this Current Report on Form 8-K and the attached Default Notice shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report on Form 8-K and the attached Default Notice shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. | Description |
10.1 | Second Amendment to the Fourth Amended and Restated Limited Liability Company Agreement of TerraForm Global, LLC, dated as of June 1, 2016 |
99.1* | Notice of default letter regarding 9.75% senior notes due 2022, dated May 31, 2016 |
* Document furnished herewith
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TERRAFORM GLOBAL, INC. | ||||||
By: | /s/ Yana Kravtsova | |||||
Date: | June 2, 2016 | Name: | Yana Kravtsova | |||
Title | Senior Vice President, General Counsel and Secretary | |||||
Exhibit Index
Exhibit No. | Description |
10.1 | Second Amendment to the Fourth Amended and Restated Limited Liability Company Agreement of TerraForm Global, LLC, dated as of June 1, 2016 |
99.1* | Notice of default letter regarding 9.75% senior notes due 2022, dated May 31, 2016 |
* Document furnished herewith
-1- SECOND AMENDMENT TO FOURTH AMENDED & RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF TERRAFORM GLOBAL, LLC This Second Amendment (this “Amendment”) to the Fourth Amended and Restated Limited Liability Company Agreement of TerraForm Global, LLC (the “Company”), dated as of August 5, 2015 (as amended from time to time, the “LLC Agreement”), is entered into as of June 1, 2016 (the “Amendment Date”) by TerraForm Global, Inc., a Delaware corporation (“Terra, Inc.”), acting in its capacity as sole Managing Member of the Company. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the LLC Agreement. RECITALS WHEREAS, the Managing Member desires to amend the LLC Agreement to delegate all of the Managing Member’s rights, powers and authority with respect to Conflicts Matters (as defined below in this Amendment) to an independent conflicts committee, subject to the terms and conditions set forth in this Amendment; WHEREAS, pursuant to Section 9.4 (Amendments and Waivers) of the LLC Agreement, the Managing Member may in its sole discretion, without the approval of any other Member or other Person, so amend the LLC Agreement; WHEREAS, pursuant to Section 9.4 (Amendments and Waivers) of the LLC Agreement, without further action or execution on the part of any other Member or other Person, this Amendment may be executed solely by the Managing Member and the other Members shall be deemed a party to and bound by this Amendment as of the date of hereof; and WHEREAS, the Corporate Governance and Conflicts Committee of the Board of Directors of Terra, Inc. (the “CGCC”), exercising the power and authority delegated to it under the Resolutions of the Board of Directors of Terra, Inc. dated March 25, 2016 (the “Resolutions”) to evaluate and act affirmatively with respect to the SUNE Restructuring-Related Matters (as defined in the Resolutions), has unanimously approved and authorized the adoption, execution and delivery of this Amendment by the Managing Member; and WHEREAS, the approval of this Amendment by the CGCC satisfies the requirement set forth in Section 9.4 (Amendments and Waivers) of the LLC Agreement that this Amendment be approved by a majority of Terra, Inc.’s directors on the Independent Conflicts Committee. AMENDMENT NOW THEREFORE, the Managing Member hereby amends the LLC Agreement as follows:
-2- 1. Managing Member; Delegation of Authority and Duties. Section 6.1 (Managing Member; Delegation of Authority and Duties) of the LLC Agreement is supplemented by adding the following provision as Section 6.1(d): “(d) Delegation of Authority by Managing Member to Conflicts Committee. (i) In accordance with Section 6.1(c), to the fullest extent permitted by law, until the first annual meeting of the stockholders of Terra, Inc. held after December 31, 2016, the Managing Member hereby delegates to the LLC Conflicts Committee (as defined in Section 6.1(d)(iv) below) exclusive power to exercise all rights, powers and authority of the Managing Member to manage and control the business and affairs of the Company and its Controlled Affiliates relating to or involving SunEdison or any of its Affiliates (other than the Company and its Controlled Affiliates) (the “Conflicts Matters”), including to: a. enter into, terminate, modify, cancel, waive or amend any agreement, lease, license, evidence of indebtedness, mortgage, indenture, security agreement or other contract, whether written or oral, with or involving SunEdison or any of its Affiliates (other than the Company and its Controlled Affiliates) (each, a “SUNE Agreement”); b. exercise, enforce or waive any rights, powers, preferences or authority of the Company or any of its Controlled Affiliates under or in connection with any SUNE Agreement; c. initiate, pursue, defend, settle, release, waive or compromise any claim, action, suit, arbitration, proceeding, investigation, audit or inquiry, in each case, whether civil, criminal or administrative, in law or in equity, involving SunEdison, any of its Affiliates (other than the Company and its Controlled Affiliates) or any of its or their directors or officers (in their capacity as such), whether with respect to past, present or future acts or omissions; d. exercise, enforce or waive any rights, powers, preferences or authority under this Agreement, the Act or applicable law, or enter into any agreement or arrangement with any party, with respect to or in connection with the potential disposition by SunEdison of Equity Securities of the Managing Member, the Company or any other Controlling Affiliate of the Company (whether by stock or asset sale, merger,
-3- consolidation or other business combination), including the establishment of arrangements for access to confidential information about the Company and its Affiliates and the implementation of takeover defenses; e. amend, supplement, waive or modify this Agreement in any manner that impacts the rights or obligations of SunEdison or any of its Affiliates (other than the Company and its Controlled Affiliates) in their capacity as Members or holders of Equity Interests in the Company; and f. such other matters as the LLC Conflicts Committee may determine from time to time involve a conflict of interest between the interests of the Company or any of its Controlled Affiliates and the interests of SunEdison or any of its Affiliates (other than the Company and its Controlled Affiliates); provided, however, that “Conflicts Matters” shall not include the Managing Member’s rights, power and authority under clause (ii) of Section 6.1(d)(iii) below and clause (y) of Section 6.1(d)(iv) below to revoke, amend, supplement, waive or modify the delegation of exclusive rights, powers and authority with respect to Conflicts Matters to the LLC Conflicts Committee pursuant to this Section 6.1(d)(i) or to remove or appoint any member of the LLC Conflicts Committee, in each case with Independent Shareholder Approval. (ii) Until such time as such delegation of rights, powers and authority expires or is revoked by the Managing Member in accordance with the terms of this Agreement, (x) the LLC Conflicts Committee exclusively shall have all rights, powers and authority of the Managing Member under this Agreement and the Act with respect to the Conflicts Matters, and (y) no action by the Company or the Managing Member pursuant to this Agreement or the Act with respect to any Conflicts Matter shall be effective unless taken, approved or ratified by the LLC Conflicts Committee or any Person to whom the LLC Conflicts Committee shall have delegated the right, power and authority to take, approve or ratify such action in accordance with this Section 6.1(d). For the avoidance of doubt, the LLC Conflicts Committee shall have the exclusive power and authority to delegate to one or more other Persons (including Officers) the rights, powers and authority with respect to Conflicts Matters delegated to it by the Managing Member to the same extent as the Managing Member has the power and authority to delegate rights, powers and authority pursuant to Section 6.1(c). The LLC Conflicts Committee shall also be entitled to the benefit of all rights and powers of the Managing Member in connection with the exercise of the rights delegated hereunder.
-4- (iii) Notwithstanding any other provision of this Agreement (including Section 9.1 (Separate Agreements; Schedules) and Section 9.4 (Amendments and Waivers)), the delegation of exclusive rights, powers and authority with respect to Conflicts Matters by the Managing Member to the LLC Conflicts Committee pursuant to Section 6.1(d)(i) may not be revoked and the provisions of this Section 6.1(d) may not be amended, supplemented, waived or modified (including in connection with any merger, restructuring, plan of reorganization or liquidation, dissolution, winding-up or consolidation) and the members of the LLC Conflicts Committee may not be removed, except by a written instrument signed by the Managing Member acting with either (i) the prior written consent of a majority of the members of the LLC Conflicts Committee as of the time of such revocation, amendment, supplement, waiver or modification or removal or (ii) the prior approval of the holders (other than, directly or indirectly, SunEdison or any of its Affiliates) of a majority of the outstanding shares of Class A Common Stock (other than any such shares of Class A Common Stock held, directly or indirectly, by SunEdison or any of its Affiliates) (clause (ii) being the “Independent Shareholder Approval”). (iv) The term “LLC Conflicts Committee” shall mean a committee composed of (x) Mr. Jack Jenkins-Stark, Mr. Chris Compton and Mr. Hanif “Wally” Dahya, (y) any individual appointed to the LLC Conflicts Committee by the Managing Member with Independent Shareholder Approval of such individual and (z) any individual appointed to the LLC Conflicts Committee by a majority of the members of the LLC Conflicts Committee in office immediately prior to such appointment, in each case until their resignation or removal; provided that, except as otherwise determined by the affirmative vote of a majority of the members of the LLC Conflicts Committee under exceptional and limited circumstances, each member of the LLC Conflicts Committee must satisfy such independence requirements as, in the determination of the LLC Conflicts Committee, would satisfy the NASDAQ Global Select Market standards for “independent directors” and nominations committee members, if such standards were applicable to the LLC Conflicts Committee. (v) The LLC Conflicts Committee may establish its own rules of procedure from time to time by the affirmative vote of a majority of the members of the LLC Conflicts Committee and shall operate in accordance with such rules. Notwithstanding anything in this Agreement to the contrary, so long as the LLC Conflicts Committee has the same members as the Corporate Governance and Conflicts Committee of the board of directors of Terra, Inc. (the “CGCC”), any action or decision of the CGCC duly taken or made in accordance with Terra, Inc.’s certificate of incorporation, by-laws and charter of the CGCC shall be deemed to constitute an action or decision of the LLC Conflicts Committee if and to the extent it covers any Conflicts Matters. (vi) Notwithstanding any other provision of this Agreement (including Section 9.3 (Parties in Interest)), (x) the provisions of this Section 6.1(d) are intended to be for the benefit of, and shall be enforceable by, each member of
-5- the LLC Conflicts Committee in his or her capacity as such, and (y) the provisions of Section 6.1(d)(iii), Section 6.1(d)(iv)(y) and this Section 6.1(vi) are intended to be for the benefit of, and shall be enforceable by, the holders of Class A Common Stock (other than SunEdison or any of its Affiliates). The Managing Member hereby designates each member of the LLC Conflicts Committee as an “Indemnitee” for purposes of this Agreement and any act or omission taken in connection with its exercise of rights hereunder. 2. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without regard to conflict of laws principles. 3. Captions. The headings of the several sections and subsections of this Amendment are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Amendment. 4. Reference to the LLC Agreement. Any and all notices, requests, certificates and other documents or instruments executed and delivered concurrently with or after the execution and delivery of this Amendment may refer to the LLC Agreement without making specific reference to this Amendment, but all such references shall be deemed to include this Amendment, unless the context shall otherwise require. 5. Effectiveness of the LLC Agreement. Except as expressly provided herein, nothing in this Amendment shall be deemed to waive or modify any of the provisions of the LLC Agreement. In the event of any conflict between the LLC Agreement and this Amendment, this Amendment shall prevail.
-6- IN WITNESS WHEREOF, the Managing Member has executed this Amendment, effective as of the date first written above. TerraForm Global, Inc. By: /s/ Peter Blackmore___________ Name: Peter Blackmore Title: Chairman and Interim Chief Executive Officer
May 31, 2016 Certified Mail TerraForm Global Operating, LLC Attn: Chief Financial Officer 7550 Wisconsin Ave, 9th Floor Bethesda, MD 20814 Re: Notice of Default TerraForm Global Operating, LLC 9.75% Senior Notes due 2022 Dear Chief Financial Officer: U.S. Bank National Association serves as trustee (the “Trustee”) under that certain Indenture/Resolution pursuant to which the issuance of the above-captioned bonds (the “Bonds”) was authorized. Capitalized terms not otherwise defined in this letter shall have the meanings ascribed to such terms in the Indenture/Resolution or that certain agreement referenced in this letter. Notice is hereby given that you have failed to provide to the Trustee the following items: Item Agreement Section Due Date 10-K Indenture Dated August 5, 2015 4.03(a) (1) May 29, 2016 This letter shall constitute written notice of such failure to comply with the covenants described in the sections of the agreement(s) referenced above. This letter shall also constitute written notice that in the event that all of the covenant defaults are not remedied on or before the date which is 90 days from the date of this notice, the failure to comply with all of the covenants shall constitute an Event of Default pursuant to the agreement(s) referenced above. Extraordinary fees may be assessed until such non-compliance is remedied. The occurrence of an Event of Default under such agreement(s) may also constitute an immediate Event of Default under the Indenture/Resolution or other bond documents. Exhibit 99.1
Page 2 May 31, 2016 Please send all item(s) to the Trustee at Mandy Yell, U.S. Bank National Association, 60 Livingston Ave, St. Paul, Minnesota 55107 or by email in a non-alterable electronic format in their entirety and including all required signatures to [***] as soon as they become available and in any case prior to 90 days from the date of this notice. This notice is not, and should not be construed as, a waiver of any rights or remedies that the Trustee or the holders may have with respect to the matters described hereunder and nothing in this notice waives, releases, modifies, alters, amends or otherwise changes those rights as contained in the Indenture/Resolution or other bond documents. Please contact Mandy Yell at [***], [***], or your Account Manager Rick Prokosch at [***], [***], if you have any questions regarding this notice. Thank you for your attention to this matter. U.S. Bank National Association, as Trustee, By: /s/ Mandy Yell Name: Mandy Yell Title: Trust Review Analyst cc: Andrea Nicolas Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 Exhibit 99.1
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