13D Filing: Brookfield Asset Management Inc. and Terraform Power Inc. (TERP)

For so long as the MSA is in effect and the Issuer qualifies for the “controlled company” exemption under applicable securities exchange rules, Orion US LP will be entitled to designate four of the seven directors to be recommended by the Nominating Committee to the board of directors for inclusion in the slate of director nominees recommended by the board of directors for election to the board of directors at future annual stockholder meetings, and three of the seven directors included in the slate of director nominees recommended by the board of directors for election to the board of directors at such future annual stockholder meetings will be independent directors.  For so long as the MSA is in effect and from and after the date on which the Issuer no longer qualifies for the “controlled company” exemption under applicable securities exchange rules, (i) three of the directors on the board of directors will be independent and will be designated to the board of directors for inclusion in the slate of board of directors-recommended nominees by a majority of the non-sponsor independent directors then in office after consulting and considering in good faith the views of the entire board of directors, (ii) in addition to the three directors required to be independent directors pursuant to the previous paragraph, any directors required by the rules and regulations of Nasdaq to be independent directors will be independent directors and will be designated by Orion US LP to the Nominating Committee for inclusion in the slate of board-recommended nominees; and (iii) the remaining directors will be designated by Orion US LP to the Nominating Committee for inclusion in the slate of board-recommended nominees.

From and after the date on which the MSA is no longer in effect, Orion US LP will be entitled to designate the following number of directors for inclusion in the slate of board of directors-recommended nominees for election at each such election meeting: (i) four directors if the Sponsor Group beneficially owns more than 50% of the issued and outstanding Class A Shares; (ii) three directors if the Sponsor Group beneficially owns at least 38% but less than or equal to 50% of the issued and outstanding Class A Shares; (iii) two directors if the Sponsor Group beneficially owns at least 26% but less than 38% of the issued and outstanding Class A Shares; and (iv) one director if the Sponsor Group beneficially owns at least 14% of the issued and outstanding Class A Shares.

While the Governance Agreement is in effect, members of the Sponsor Group will vote with respect to the election and removal of certain independent directors all voting securities of the Issuer that they beneficially own in the same proportion as the voting securities that are voted by the Issuer’s stockholders that are not members of the Sponsor Group.

Additionally, pursuant to the Governance Agreement, Orion US LP is entitled to designate to the board of directors for appointment the individuals to serve as the chief executive officer, chief financial officer and general counsel of the Issuer.  On October 16, 2016, Orion US LP designated John Stinebaugh, Matthew Berger and Andrea Rocheleau as the chief executive officer, chief financial officer and general counsel, respectively, of the Issuer.

The foregoing descriptions of the Governance Agreement, the Charter and the Bylaws do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Governance Agreement, the Charter and the Bylaws, respectively, which are attached hereto as Exhibits 99.11, 99.12 and 99.13, respectively, and incorporated herein by reference.

The Reporting Persons regularly review the Issuer’s business, performance, condition (financial or otherwise), results of operations, operations, competitive position, share price and anticipated future developments and prospects, as well as general economic conditions and existing and anticipated market and industry conditions and trends affecting the Issuer.  The Reporting Persons regularly discuss such matters with the Issuer’s management and board of directors either directly or through board participation and may make suggestions concerning the business, assets, capitalization, financial condition, operations, governance, management, prospects, strategy, strategic transactions, financing strategies and alternatives, future plans of the Issuer and such other matters as the Reporting Persons may deem relevant to their investment in the Issuer.  Such reviews, discussions and suggestions may involve, and the Reporting Persons may, and reserve the right to, formulate and actively participate in any plans or proposals to take, one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D, including, without limitation, the purchase or sale of Class A Shares or other financial instruments of or related to the Issuer, business combinations or other extraordinary corporate transactions, sales or purchases of material assets, changes in the board of directors or management of the Issuer, changes to the Issuer’s business or corporate structure, shared service agreements, collaborations, joint ventures and other business arrangements between or involving the Reporting Persons and the Issuer. In addition, the Reporting Persons may, and reserve the right to, change their intentions with respect to the Issuer’s business or corporate structure at any time, as they deem appropriate.

Pursuant to the Sponsorship Arrangements, the Reporting Persons will provide strategic and investment management services to the Issuer and its subsidiaries, have granted the Issuer a right of first offer in respect of a pipeline of certain wind and solar assets and have agreed that the Issuer will serve as the primary vehicle through which Brookfield will acquire operating solar and/or wind projects in North America and Western Europe.  In their capacities as Service Providers and in fulfillment of their obligations under the Relationship Agreement, the Reporting Persons may formulate and actively participate in plans or proposals relating to one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D, including, without limitation, analyzing, arranging and discussing with third parties potential acquisitions, dispositions and financing transactions involving the Issuer or its affiliates; sales of material assets by the Reporting Persons or their affiliates to the Issuer and its affiliates; material changes to the capitalization of the Issuer, including, without limitation, sales of equity securities of the Issuer to the Reporting Persons; and other purchases of material assets by the Issuer and its affiliates from third parties.

Other than as set forth in the Amended Schedule 13D, the Reporting Persons have no plans or proposals which relate to, or would result in, any of the matters described in subsections (a) through (j) of Item 4 of Schedule 13D (although the Reporting Persons reserve the right to develop such plans or proposals, subject to compliance with applicable laws).