Item 1.01.
Entry
into a Material Definitive Agreement.
Amended and Restated Pattern Development
1.0 Purchase Rights Agreement
On
June 16, 2017, Pattern Energy Group Inc. (the “
Company
”, “
we
” or “
us”
)
entered into the Amended and Restated Purchase Rights Agreement (the “
A&R 1.0 PRA
”) that amends and restates
that certain Purchase Rights Agreement, dated as of October 2, 2013, by and among Pattern Energy Group LP (“
Pattern Development
1.0
”), the Company, Pattern Energy Group Holdings LP (solely with respect to Article IV therein) and Pattern Energy GP
LLC
(the “
Original 1.0 PRA
”
),
which was
filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-36087) filed on October 2, 2013 (the “
Original
1.0 PRA 8-K
”) and is incorporated by reference herein
.
The A&R 1.0 PRA modifies certain terms
of the Original 1.0 PRA by, among other things, (a) expanding our first offer rights with respect to power generation or transmission
facilities or projects that Pattern Development 1.0 decides to sell (other than certain projects that have been designated for
transfer to Pattern Energy Group 2 LP (“
Pattern Development 2.0
” and together with Pattern Development 1.0,
“
Pattern Development
”)) (which we refer to as our “
1.0 Project Rights
”) by allowing us to
submit a Final Rights Project Offer (as defined therein) in the event Pattern Development 1.0 rejects a First Rights Project Offer
(as defined therein) or we decline to submit a First Rights Project Offer; (b) allowing us to assign our right to submit a Final
Rights Project Offer to Public Sector Pension Investment Board (“
PSP Investments
”) as contemplated by the Joint
Venture Agreement (as defined below); (c) amending the term of our 1.0 Project Rights so that such rights survive until either
(i) we deliver to Pattern Development 1.0 three First Rights Project Declinations (as defined therein) with respect to operational
or construction-ready projects (other than the Conejo Project (as defined therein)) for which no Final Rights Project Offer is
made or (ii) Pattern Development 1.0 is wound up in accordance with its governing documents; (d) specifying that, if Pattern Development
1.0 rejects our offer to acquire a project, such project can only be sold to a third party at a price that, in addition to being
greater than or equal to 105% of our offer price (which was an existing requirement under the Original 1.0 PRA), is also greater
than the Final Offer Price (as defined therein), if any and (e) setting forth a form of Purchase and Sale Agreement for acquisitions
of projects pursuant to the A&R 1.0 PRA.
The A&R 1.0 PRA was recommended by
the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board
of Directors, and was subsequently approved by our Board of Directors.
A copy of the A&R 1.0 PRA is attached
as Exhibit 10.1 hereto and is incorporated by reference herein. The foregoing descriptions of the Original 1.0 PRA and the A&R
1.0 PRA do not purport to be complete and are qualified in their entirety by reference to the Original 1.0 PRA 8-K and Exhibit
10.1 hereto, respectively.
Amended and Restated Pattern Development
2.0 Purchase Rights Agreement
On
June 16, 2017, we entered into the Amended and Restated Purchase Rights Agreement (the “
A&R 2.0 PRA
” and
together with the A&R 1.0 PRA, the “
A&R PRAs
”) that amends and restates that certain Purchase Rights
Agreement, dated as of December 8, 2016, by and among Pattern Development 2.0, the Company, Pattern Energy Group Holdings 2 LP
(“
PEGH 2
”) (solely with respect to Article III therein) and Pattern Energy Group Holdings GP 2 LLC (the “
Original
2.0 PRA
”), which was
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-36087)
filed on December 14, 2016 (the “
Original 2.0 PRA 8-K
”) and is incorporated by reference herein
.
The A&R 2.0 PRA modifies certain terms
of the Original 2.0 PRA by, among other things, (a) expanding our first offer rights with respect to power generation, storage
or transmission facilities or projects that Pattern Development 2.0 decides to sell (which we refer to as our “
2.0 Project
Rights
” and, together with the 1.0 Project Rights, the “
Project Rights
”) by allowing us to submit
a Final Rights Project Offer (as defined therein) in the event Pattern Development 2.0 rejects a First Rights Project Offer (as
defined therein) or we decline to submit a First Rights Project Offer; (b) allowing us to assign our right to submit a Final Rights
Project Offer to PSP Investments as contemplated by the Joint Venture Agreement; (c) modifying Pattern Development 2.0’s
right to transfer a project to, and PEGH 2’s or Pattern Development 2.0’s, as applicable, right to transfer a material
portion of the equity interests or all or substantially all of the assets of Pattern Development 2.0 (a “
PEG 2.0 Interest
”)
to a third party if Pattern Development 2.0 or PEGH 2, as applicable, rejects our offer to acquire the applicable project or PEG
2.0
Interest,
by, among other things, (i) increasing the “clearing price” at which the project or PEG 2.0 Interest can be sold to
110% (as opposed to 105%) of the applicable Project Offer Price or PEG 2 LP Offer Price (as such terms are defined therein), (ii)
in the case of a project, requiring that it be sold at a price greater than 100% of the Final Offer Price (as defined therein),
if any and (iii) obligating Pattern Development 2.0 or PEGH 2, as applicable, to, subject to certain exceptions, sell the applicable
project or PEG 2.0 Interest to us at a price equal to 96% of the Project Offer Price or PEG 2 LP Offer Price, as applicable, if
Pattern Development 2.0 or PEGH 2, as applicable, does not enter into a definitive agreement to sell such project or PEG 2.0 Interest
to a third party at a price equal to or greater than the clearing price within six months following its rejection of our offer
(or does not consummate such transaction within twelve months following its rejection of our offer); (d) amending the term of
our 2.0 Project Rights so that such rights survive until Pattern Development 2.0 is wound up in accordance with its governing
documents; (e) giving us the right to acquire any Early Stage Project or Mid-Stage Project (as such terms are defined therein)
that is abandoned by Pattern Development 2.0 at a price equal to Pattern Development 2.0’s cost basis in such project (as
well as, in the case of a Mid-Stage Project, an earn-out payment to be paid to Pattern Development 2.0 if we subsequently sell
such project to a third party) and requiring that Pattern Development 2.0 promptly sell (subject to our 2.0 Project Rights) any
Advanced Project (as defined therein) that it abandons; (f) setting forth a form of Purchase and Sale Agreement for acquisitions
of projects pursuant to the A&R 2.0 PRA and (g) providing us the option, if Pattern Development 2.0 rejects a development
project that is offered for sale by a third party, to acquire such project directly from such third party.
The A&R 2.0 PRA was recommended by
the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board
of Directors, and was subsequently approved by our Board of Directors.
A copy of the A&R 2.0 PRA is attached
as Exhibit 10.2 hereto and is incorporated by reference herein. The foregoing descriptions of the Original 2.0 PRA and the A&R
2.0 PRA do not purport to be complete and are qualified in their entirety by reference to the Original 2.0 PRA 8-K and Exhibit
10.2 hereto, respectively.
Second Amended and Restated Non-Competition
Agreement
On
June 16, 2017
, we entered into the Second Amended and Restated Non-Competition Agreement, by and among Pattern Development
1.0, the Company and Pattern Development 2.0 (the “
Second A&R Non-Competition Agreement
”), which further
amends and restates the Amended and Restated Non-Competition Agreement, dated as of December 8, 2016, by and among Pattern Development
1.0, the Company and Pattern Development 2.0 (the “
Original Non-Competition Agreement
”),
which
was filed
as Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-36087) filed on December 14, 2016
(the “
Original Non-Competition Agreement 8-K
”) and is incorporated by reference herein. The Second A&R Non-Competition
Agreement, among other things, grants Pattern Development 2.0 the exclusive right to pursue all power generation, storage or transmission
development projects in the US, Canada and Mexico that have not completed construction, other than (a) development activities related
to the expansion, improvement, enhancement, or protection of an existing power generation, transmission or storage facility that
we may, directly or indirectly, manage or majority own from time to time; (b) continued development by Pattern Development 1.0
of projects not transferred to Pattern Development 2.0; (c) development projects acquired by us or PSP Investments pursuant to
the A&R PRAs and (d) projects that have achieved or issued, or are likely to achieve or issue within thirty days of closing
an acquisition of such project, readiness for construction financing or issuance of full notice to proceed. The Second A&R
Non-Competition Agreement does not restrict us from acquiring any company or business that is principally engaged in the business
of owning and operating renewable energy facilities. However, if we desire to purchase a portfolio of projects that contains a
mix of development, construction and/or operating projects, we are required to reasonably cooperate with Pattern Development 2.0
to divide such portfolio so that Pattern Development 2.0 may acquire the development projects in such portfolio and we may acquire
the construction and operating projects in such portfolio. At any time that Tokyo, Japan-based Green Power Investment Corporation
(“
Green Power
”) is majority owned by either us, Pattern Development 1.0 or Pattern Development 2.0, the Second
A&R Non-Competition Agreement grants such majority owner exclusive development rights over power generation, storage or transmission
projects in Japan (subject to the same exceptions set forth above in clauses (a) through (d) and the above provisions regarding
operating businesses and the division of project portfolios). Pattern Development 1.0 currently owns a majority interest in Green
Power.
The Second A&R Non-Competition Agreement
shall terminate (a) with respect to Pattern Development 1.0, upon the termination of our collective purchase rights under the A&R
1.0 PRA and (b) with respect to Pattern Development 2.0, upon the termination of our collective purchase rights under the A&R
2.0 PRA or the earlier
wind-up
of Pattern Development 2.0 or the valid rejection by Pattern Development 2.0 of three or more First Rights Project Offers (as
defined in the A&R 2.0 PRA) representing a cumulative net capacity of at least 600 megawatts.
The Second A&R Non-Competition Agreement
was recommended by the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval
by our Board of Directors, and was subsequently approved by our Board of Directors.
A copy of the Second A&R Non-Competition
Agreement is attached as Exhibit 10.3 hereto and is incorporated by reference herein. The foregoing description of the Original
Non-Competition Agreement and the Second A&R Non-Competition Agreement do not purport to be complete and are qualified in their
entirety by reference to the Original Non-Competition Agreement 8-K and Exhibit 10.3 hereto, respectively.
Amended and Restated Multilateral
Management Services Agreement
On
June 16, 2017, we entered into the Amended and Restated Multilateral Management Services Agreement (the “
A&R MMSA
”)
that amended and restated that certain Multilateral Management Services Agreement, dated as of December 8, 2016, by and among the
Company, Pattern Development 1.0 and Pattern Development 2.0 (the “
Original MMSA
”), which was filed
as
Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-36087) filed on December 14, 2016
(the
“
Original MMSA 8-K
”)
and is incorporated by reference herein.
The A&R MMSA amends certain provisions
of the Original MMSA in order to, among other things, (a) allow Pattern Development 2.0 to, in the event of a failure by the service
provider to provide adequate resources and services as set forth therein, (i) in the case of a failure by Pattern Development 1.0,
take over the performance of the management services contemplated to be performed by Pattern Development 1.0 thereby, (ii) cause
the service provider to hire additional development personnel, (iii) in the case of a failure by us, suspend us from taking on
certain further developments or (iv) initiate a wind down of Pattern Development 2.0; (b) allow Pattern Development 2.0 to effect
a PEG 2 Transition (as defined therein) (whereby Pattern Development 2.0 can cause Pattern Development 1.0 to cause its employees
to become employees of Pattern Development 2.0), provided that Pattern Development 2.0 shall not exercise such right if we have
provided Pattern Development 2.0 with written notice that we intend to effect a PEG 1 Employee Reintegration (as defined therein
and described below) within six months, (c) amend the circumstances in which we can effect a PEG 1 Employee Reintegration (whereby
we can cause Pattern Development 1.0 to cause its employees to become our employees) by removing the December 31, 2017 expiration
date for such right and instead allowing us to effect a PEG 1 Employee Reintegration after the earliest to occur of (x) the date
that Pattern Development 1.0 provides us with written notice that it will complete a wind-down within six months, (y) June
16,
2020 and (z) a PEG 1 Services Failure (as defined therein)
; (d) allow us to effect a PEG 2 Employee Reintegration (as defined
therein) (whereby we can require Pattern Development 2.0 to cause its employees to become our employees) at any time after the
earliest to occur of (A) the date Pattern Development 2.0 notifies Pattern Development 1.0 it will exercise its right to cause
a PEG 2 Transition (as described above) but before such PEG 2 Transition occurs, (B) June
16,
2020, (C) a PEG 2 Services Failure (as defined therein) and (D) the initiation of a wind-up of Pattern Development 2.0
;
(e) provide us the exclusive right, but not the obligation, to provide services pursuant to the MOMAs and PAAs (each as defined
therein) for projects developed by Pattern Development 1.0 or Pattern Development 2.0 and (f) amend the term of the agreement such
that the A&R MMSA survives, with respect to each of Pattern Development 1.0 and Pattern Development 2.0, until a wind-up of
the applicable entity pursuant to its governing documents, unless terminated earlier pursuant to the terms of the A&R MMSA.
The A&R MMSA was recommended by the
Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board of
Directors, and was subsequently approved by our Board of Directors.
A copy of the A&R MMSA is attached
as Exhibit 10.4 hereto and is incorporated by reference herein. The foregoing description of the Original MMSA and A&R MMSA
do not purport to be complete and are qualified in their entirety by reference to the Original MMSA 8-K and Exhibit 10.4 hereto,
respectively.
Investment in PEGH 2
On June
16,
2017, we entered into the
Second Amended and Restated Agreement of Limited Partnership of PEGH 2, dated as of June 16, 2017,
by and among PEGH 2, the Class A Limited Partners set forth therein and the
Class
B Limited Partners set forth therein (the “
A&R PEGH 2 LPA
”). Pattern Development 2.0 is a wholly owned
subsidiary of PEGH 2. In July 2017, PEGH 2 is expected to receive funds pursuant to a capital call under the A&R PEGH 2 LPA
(the “
Initial PEGH 2 Capital Call
”) from new limited partners (including us) in PEGH 2 (the “
New PEGH
2 Investors
”) to, among other things, (a) redeem approximately 49% of the total ownership interests held by existing
limited partners in PEGH 2 (the “
Legacy PEGH 2 Investors
”), (b) acquire certain development assets from Pattern
Development 1.0, and (c) provide working capital for general business purposes. After the funding of the Initial PEGH2 Capital
Call (in which only the New PEGH 2 Investors will participate) and the consummation of the foregoing redemption of the Legacy
PEGH 2 Investors’ ownership interests, the Legacy PEGH 2 Investors will hold approximately 31% of the total ownership interests
in PEGH 2 (with the remaining approximately 69% of the total ownership interests in PEGH 2 being held by the New PEGH 2 Investors).
In connection with the Initial PEGH2 Capital Call, we anticipate making an initial capital contribution to PEGH 2 of approximately
$60,000,000 (equating to approximately 29% of the total Initial PEGH 2 Capital Call), in exchange for an approximately 20% ownership
interest in PEGH 2 (equating to approximately 29% of the 69% ownership interest in PEGH 2 held by the New PEGH 2 Investors immediately
after the Initial PEGH 2 Capital Call). Under the A&R PEGH 2 LPA, we have also committed to contribute up to an additional
approximately $240,000,000 to PEGH 2 in one or more subsequent rounds of financing, which could result in our ownership interest
in PEGH 2 increasing to up to approximately 29%. If we do not participate in such subsequent rounds of financing, our ownership
interest in PEGH 2 may be diluted on a
pro rata
basis based on fair market value. We also have certain rights under the
A&R PEGH 2 LPA to cause the dissolution of PEGH 2, including (a) at any time following the fifth anniversary of the date PEGH
2 issues its first capital call on or after June
16, 2017
and
(b) at any time following PEGH 2’s board of directors’ rejection of three or more of our First Rights Project Offers
or First Rights PEG 2 LP Offers (each as defined in the A&R 2.0 PRA) representing a cumulative net capacity of at least 600
megawatts.
The entry into the A&R PEGH 2 LPA was
recommended by the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval
by our Board of Directors, and was subsequently approved by our Board of Directors.
A copy of the A&R PEGH 2 LPA is attached
as Exhibit 10.5 hereto and is incorporated by reference herein. The foregoing description of the A&R PEGH 2 LPA does not purport
to be complete and is qualified in its entirety by reference to such exhibit.
Joint Venture Agreement
On June 16, 2017, we entered into a Joint
Venture Agreement (the “
Joint Venture Agreement
”) with PSP Investments, pursuant to which, among other things,
(a) PSP Investments will have the right to co-invest up to an aggregate amount of approximately $500,000,000 (the “
PSP
Investments Co-Investment Amount
”) alongside us in energy projects we may acquire pursuant to our rights under the A&R
PRAs (with PSP Investments acquiring, at its election on a project-by-project basis, either (x) 30% or (y) a greater percentage
that we may elect to offer to PSP Investments, of our combined ownership interest in such project); (b) PSP Investments will reasonably
cooperate with us to complete third party acquisitions and to arrange for or provide bridge loans and construction financing for
certain projects that PSP Investments will invest in alongside us (although PSP Investments has no commitment to provide any such
financing) and (c) we may add a person that has been designated by PSP Investments to our Board of Directors promptly following
the PSP Compliance Date (as defined therein). The purchase price paid by PSP Investments under each of the Meikle PSA, the MSM
PSA and the PH2 PSA (each defined below) will be applied towards the PSP Investments Co-Investment Amount. Under the Joint Venture
Agreement we have also agreed to, in certain limited circumstances, allow PSP Investments to cause the early termination of contracts
between PEGI and a jointly owned project, including the Sponsor Services Agreement (defined below) and the applicable MOMAs and
PAAs (as defined therein) and have waived any early termination fees in those circumstances. In connection with the Joint Venture
Agreement and the PEGI Share Acquisition (defined below), PSP Investments also agreed to a customary “standstill” for
a period of twelve months.
The Joint Venture Agreement was recommended
by the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board
of Directors, and was subsequently approved by our Board of Directors.
A copy of the Joint Venture Agreement is
attached as Exhibit 10.6 hereto and is incorporated by reference herein. The foregoing description of the Joint Venture Agreement
does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Sponsor Services Agreement
On
June 16, 2017
, we entered into a Sponsor Services Agreement with PSP Investments (the “
Sponsor Services Agreement
”),
pursuant to which we will provide certain mutually agreed services to PSP Investments and its affiliates with respect to the administration
of the joint ownership of the project companies that PSP Investments invests in alongside us pursuant to the Joint Venture Agreement
in exchange for certain fees set forth in the Sponsor Services Agreement.
The Sponsor Services Agreement was recommended
by the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board
of Directors, and was subsequently approved by our Board of Directors.
A copy of the Sponsor Services Agreement
is attached as Exhibit 10.7 hereto and is incorporated by reference herein. The foregoing description of the Sponsor Services Agreement
does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Meikle and MSM Purchase and Sale
Agreements
On June 16, 2017, we entered into (a) a
Purchase and Sale Agreement (the “
Meikle PSA
”) by and among the Company, Vertuous Energy Canada Inc. (“
Vertuous
Canada
”) (a wholly owned subsidiary of PSP Investments) and Pattern Development 1.0 and (b) a Purchase and Sale Agreement
(the “
MSM PSA
”) by and among the Company, Vertuous Canada and Pattern Development 1.0.
Upon
the terms and subject to the conditions set forth in the Meikle PSA, at the closing (a) we (or one of our wholly owned subsidiaries)
will purchase from affiliates of Pattern Development 1.0 a 50.99% limited partner interest in Meikle Wind Energy Limited Partnership
(the “
Meikle Project Company
”) and 70% of the issued and outstanding shares of Meikle Wind Energy Corp. (“
Meikle
Corp
”) (which holds a 0.02% general partner interest in the Meikle Project Company) in exchange for aggregate consideration
of CAD $85,425,000 (subject to certain adjustments) and (b) Vertuous Canada will purchase from affiliates of Pattern Development
1.0 a 48.99% limited partner interest in the Meikle Project Company and 30% of the issued and outstanding shares of Meikle Corp
in exchange for aggregate consideration of
CAD $82,075,000 (subject to certain adjustments)
.
The Meikle Project Company operates the approximately 179 megawatt wind farm located in the Peace River Regional District of British
Columbia, Canada, which achieved commercial operations in the first quarter of 2017. Immediately after the closing, our owned
capacity with respect to the wind farm will be approximately 91 megawatts.
Upon
the terms and subject to the conditions set forth in the MSM PSA, at the closing (a) we (or one of our wholly owned subsidiaries)
will purchase from affiliates of Pattern Development 1.0 (i) a 50.99% limited partner interest in a newly-formed limited partnership
(“
New MSM LP Holdco
”) (which, following closing, will hold 100% of the economic interests in Mont Sainte-Marguerite
Wind Farm LP (the “
MSM Project Company
”)), (ii) 70% of the issued and outstanding shares of Pattern MSM GP Holdings
Inc. (“
MSM Corp
”) (which, following the closing, will hold a 0.02% general partner interest in New MSM LP Holdco)
and (iii) a 70% interest in Pattern Development MSM Management ULC (“
MSM ULC
”), in exchange for aggregate consideration
of CAD $53,040,000
(subject to certain adjustments)
and (b) Vertuous
Canada will purchase from affiliates of Pattern Development 1.0 (i) a 48.99% limited partner interest in New MSM LP Holdco, (ii)
30% of the issued and outstanding shares of MSM Corp and (iii) a 30% interest in MSM ULC, in exchange for aggregate consideration
of
CAD $50,960,000 (subject to certain adjustments). The MSM Project Company operates the approximately 143 megawatt
wind farm located in the Chaudière-Appalaches region south of Québec City, Canada, which is expected to achieve commercial
operation in late 2017. Immediately after the closing, our owned capacity with respect to the wind farm will be approximately
73 megawatts.
The parties’ obligations to consummate
the transactions contemplated by each of the Meikle PSA and the MSM PSA, respectively, are subject to the satisfaction or waiver
of various customary conditions, including, among others (a) approval under the
Competition Act
(Canada) and of the counterparties
to power purchase agreements to which the Meikle Project Company and the MSM Project Company are parties, (b) no violation of governmental
rules, and no order of any court or administrative agency being in effect which restrains or prohibits the transactions contemplated
thereby and (c) subject to certain exceptions, the accuracy of the representations of the parties set forth therein.
Each of the Meikle PSA and the MSM PSA,
respectively, includes customary representations by the parties thereto, including as to due authorization, non-contravention,
governmental consents and approvals, enforceability, ownership and title, no litigation or adverse claims, tax matters and with
respect to the underlying wind farm. Each of the Meikle PSA and the MSM PSA, respectively, provides for customary indemnification
by the parties thereto for breaches of representations or covenants, which indemnification is subject to customary limitations
including, among other things, a cap and time limits.
Each of the Meikle PSA and the MSM PSA,
respectively, was recommended by the Conflicts Committee of our Board of Directors, which is comprised solely of independent directors,
for approval by our Board of Directors, and was subsequently approved by our Board of Directors.
A copy of the Meikle PSA is attached as
Exhibit 10.8 hereto and is incorporated by reference, and a copy of the MSM PSA is attached as Exhibit 10.9 hereto and is incorporated
by reference. The foregoing description of each of the Meikle PSA and the MSM PSA, respectively, does not purport to be complete
and is qualified in its entirety by reference to the applicable exhibit.
PH2 Purchase and Sale Agreement
On June 16, 2017, we entered into a Purchase
and Sale Agreement (the “
PH2 PSA
”) with Vertuous Energy LLC (“
Vertuous
”) (a wholly owned
subsidiary of PSP Investments).
Upon the terms and subject to the conditions
set forth in the PH2 PSA, at the closing, we (or one or more of our affiliates) will sell to Vertuous a 98% membership interest
in a newly-formed limited liability company that will hold 50% of the Class B membership interests in Panhandle Wind Holdings 2
LLC (“
PH2 Holdings
”) (which holds 100% of the membership interests in Pattern Panhandle Wind 2 LLC (the “
PH2
Project Company
”)) for consideration of $58,800,000 (subject to certain adjustments). The PH2 Project Company operates
the approximately 182 megawatt wind farm located in Carson County, Texas, which achieved commercial operation in the fourth quarter
of 2014. Immediately after the closing, our owned capacity with respect to the wind farm will be approximately 75 megawatts.
The parties’ obligations to consummate
the transactions contemplated by the PH2 PSA are subject to the satisfaction or waiver of various customary conditions, including,
among others (a) approval by the Committee on Foreign Investment in the United States and the Public Utility Commission of Texas
and the holders of the Class A membership interests in PH2 Holdings, (b) no violation of governmental rules, and no order of any
court or administrative agency being in effect which restrains or prohibits the transactions contemplated thereby and (c) subject
to certain exceptions, the accuracy of the representations of the parties set forth therein.
The PH2 PSA includes customary representations
by the parties thereto, including as to due authorization, non-contravention, governmental consents and approvals, enforceability,
ownership and title, no litigation or adverse claims, tax matters and with respect to the underlying wind farm. The PH2 PSA
provides for customary indemnification by the parties thereto for breaches of representations or covenants, which indemnification
is subject to customary limitations including, among other things, a cap and time limits.
The PH2 PSA was recommended by the Conflicts
Committee of our Board of Directors, which is comprised solely of independent directors, for approval by our Board of Directors,
and was subsequently approved by our Board of Directors.
A copy of the PH2 PSA is attached as Exhibit
10.10 hereto and is incorporated by reference. The foregoing description of the PH2 PSA does not purport to be complete and
is qualified in its entirety by reference to such exhibit.