David Tepper Sends Another Letter To TerraForm Power

TerraForm  – Please accept this as a revised demand for access to corporate books and records pursuant to Section 220 of the General Corporation Law of the State of Delaware (the “DGCL”) designed to address the objections contained in the letter, dated December 31, 2015, from Michael G. Bongiorno, Esq. to Steven Siesser, Esq. and Lawrence M. Rolnick, Esq., a copy of which is attached hereto as Exhibit C. Appaloosa LP, a Delaware limited partnership (“ALP”), is the investment adviser to the following funds:

(i) Appaloosa Investment Limited Partnership I, a Delaware limited partnership (“AILP”); and

(ii) Palomino Master Ltd., a British Virgin Islands company (“Palomino” and collectively with AILP, the “Funds”).

As publicly disclosed, the Funds collectively own 7,600,000 shares, or 9.5%, of the outstanding Class A common stock, par value $0.01 per share (the “Common Stock”) of TerraForm Power, Inc. (the “Company”), in the applicable amounts set forth on Schedule A, annexed hereto and made part hereof. Enclosed with this letter as Exhibit A is a true and correct copy of documentary evidence of the Funds’ respective ownership of the Common Stock set forth on Schedule A. Also enclosed as Exhibit B is a Power of Attorney executed by the Funds, which designates ALP as the Funds’ agent for purposes of pursuing this Section 220 demand.


Pursuant to Section 220 of the DGCL, on behalf of the Funds, ALP hereby demands that it and its attorneys, representatives and agents be given, during usual business hours, the opportunity to inspect the following books and records of the Company:

1. All minutes of meetings and written consents of the Company’s board of directors (the “Board”) or any committee thereof relating to the Company’s and/or its controlled subsidiaries’ transactions with SunEdison Inc. (“SUNE”) regarding Vivint Solar Inc. (“Vivint”), and any modifications thereto, announced on or after June 1, 2015 (including the take/pay arrangement referred to in paragraph 5 hereof) (the “Subject Transactions”), and all documents or other materials presented to the Board or any committee at such meetings relating to those transactions. This shall include any minutes or written consents related to the financing of the Subject Transactions, including any purported warehouse facilities or the assumption of debt at the acquired companies.

2. All minutes or other records of meetings of the Corporate Governance and Conflicts Committee of the Board (the “Committee”) related to the Subject Transactions, including, all materials provided to any Committee members in connection with any such meetings, all records of any negotiations conducted by or on behalf of the Committee with SUNE in connection with the Subject Transactions, and all opinions or analyses received by the Committee from professionals concerning the fairness of the Subject Transactions to the Company.

3. Fully executed copies of all transaction documents, including any related financings, related to the Subject Transactions, which have not been publicly filed.

4. All records reflecting the analysis, if any, conducted by the Board and/or the Committee related to the Subject Transactions, including, but not limited to, any valuation of the renewable assets constituting Vivint’s rooftop solar portfolio (the “Rooftop Assets”) to be acquired by TerraForm Power, LLC, a controlled subsidiary of the Company (“Terra LLC”).

5. All records reflecting the Board’s and/or the Committee’s consideration, discussion and acceptance of the terms of that certain agreement, dated as of July 20, 2015 and amended as of December 9, 2015, by and among SUNE, SEV Merger Sub Inc., a wholly-owned subsidiary of SUNE, and Terra LLC (the “Interim Agreement”), particularly as it relates to the decision to enter into the take/pay arrangement with SUNE and its subsidiaries for the sale of residential solar systems (the “Solar Residential Systems”), rather than a right of first refusal (“ROFR”) pursuant to standard industry custom and practice.

6. All bids, term sheets, letters of intent or other offers examined by the Board and/or the Committee (as part of its analysis of the Subject Transactions) that were made by third parties for the purchase of assets comparable to the Rooftop Assets or Solar Residential Systems (collectively, the “Asset Bids”).

7. All minutes of meetings of the Board or any committee thereof at which the Asset Bids were discussed and all documents or other materials presented to the Board or any committee thereof (including without limitation, the Committee) at such meetings relating to the Asset Bids.

8. All minutes from the meeting of the Board held on November 20, 2015 and any and all documents or other materials relating thereto, including any correspondence prior to or after such meeting, relating to the changes made to the Board and the Committee.

9. All minutes of meetings and written consents of the Board or any committee thereof relating to the departure of Cleary Gottlieb Steen & Hamilton LLP as counsel to the Committee and its replacement with Greenberg Traurig LLP and all documents or other materials presented to the Board or any committee at such meetings relating to that subject.

10. Complete copies of all of the Company’s current directors’ and officers’ liability (or equivalent) insurance policies, binders, supplements and agreements.

ALP also demands the right to make copies or extracts from the foregoing.

ALP further demands the right to inspect all information referred to in this letter that is within the legal possession, custody or control of the Company, including, but not limited to, such information that is within the possession, custody or control of the Company’s subsidiaries or the Company’s outside legal counsel, accountants, auditors, financial advisors and other agents, representatives and advisors.

ALP demands that all modifications, additions or deletions to any and all information referred to above be immediately furnished to ALP as such modifications, additions or deletions become available to the Company or its agents, representatives or advisors.

All of the foregoing requested items constitute part of the Company’s books and records as set forth in Section 220(b)(1) of the DGCL.

Upon presentment of appropriate documentation therefor, ALP will bear the reasonable costs incurred by the Company, in connection with the production of the information demanded.


The purpose of this demand is to enable ALP and the Funds to investigate potential wrongdoing by SUNE and/or the Board in connection with the Subject Transactions and the Interim Agreement. As explained below, this potential wrongdoing consists of breaches of Delaware common and statutory law and breaches of fiduciary duties owed to the Funds and other stockholders of the Company by SUNE, the Board and certain of the Company’s officers arising from these recent business decisions and corporate actions.

SUNE is the Company’s controlling shareholder. By virtue of its ownership of Class B shares, SUNE controls a majority of the Company’s shareholder voting power and has the power to appoint the entire Board of Directors. In addition, the Company has virtually no operating employees of its own, and depends on SUNE to provide the human resources and expertise necessary to run its business. As a controlling shareholder, SUNE owes the Company’s minority shareholders fiduciary duties when it exercises control over the Company’s affairs.

As we understand the Subject Transactions and take/pay arrangement, SUNE has agreed to acquire Vivint in a multi-billion dollar stock and cash deal. In connection with that merger, SUNE is forcing Terra LLC to immediately purchase from