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SEC Filings

10-K
TERRAFORM GLOBAL, INC. filed this Form 10-K on 06/15/2017
Entire Document
 

adversely affected our rights under a number of important agreements with SunEdison at the corporate and project levels in a number of respects.
The liability of SunEdison under the MSA is limited, and we have agreed to indemnify SunEdison against claims that it may face in connection with the MSA.
In the event the Brookfield Transaction is not completed or if the Settlement Agreement is terminated for any reason, we will continue to be subject to certain risks related to the MSA. Under the MSA, SunEdison will not assume any responsibility other than to provide or arrange for the provision of the services described in the MSA in good faith. In addition, under the MSA, the liability of SunEdison and its affiliates will be limited to the fullest extent permitted by law to conduct involving bad faith, fraud, willful misconduct or gross negligence or, in the case of a criminal matter, action that was known to have been unlawful. In addition, we have agreed to indemnify SunEdison to the fullest extent permitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by an indemnified person or threatened in connection with our operations, investments and activities or in respect of or arising from the MSA or the services provided by SunEdison, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct in respect of which such persons have liability as described above. These protections may result in SunEdison tolerating greater risks when making decisions than otherwise would be the case. The indemnification arrangements in favor of SunEdison may also give rise to legal claims by SunEdison for indemnification from us that are adverse to us or holders of our Class A common stock.
Risks Related to our Delayed Exchange Act Filings
Continued delays in the filing of our periodic reports with the SEC, as well as further delays in the preparation of audited financial statements at the project level, could have a material adverse effect.
We are continuing our efforts to regain compliance with Nasdaq’s continued listing requirements with respect to our delayed SEC periodic reports. However, due to the time and resources required to complete our delayed SEC periodic reports, including our Form 10-K for the year ended December 31, 2015, and our Forms 10-Q for the first, second and third quarters of 2016, we experienced delays in our ongoing efforts to complete all steps and tasks necessary to finalize our financial statements and other disclosures required to be in this Form 10-K for the year ended December 31, 2016 and subsequent quarterly reports. There can be no assurance that our future periodic reports will not be delayed for similar reasons.
On March 20, 2017, we received an extension from Nasdaq until June 30, 2017 to regain compliance with Nasdaq’s continued listing requirements with respect to our Form 10-K for the year ended December 31, 2016, our Form 10-Q for the first quarter of 2017 and our delinquency in holding our annual meeting during the year ended December 31, 2016. In the event the filing of the Form 10-Q for the first quarter of 2017 or any future periodic report is delayed or if we are unable to hold our annual meeting before June 30, 2017, there is no assurance that we will be able to obtain extensions from Nasdaq to regain compliance with Nasdaq’s continued listing requirements with respect to any such delayed periodic report or annual meeting. If we fail to obtain such extensions from Nasdaq, our Class A common stock would likely be delisted from the Nasdaq Global Select Market.
The indenture governing the Senior Notes requires the Company to file, or make publicly available, our Form 10-K for the year ended December 31, 2016 and our Form 10-Q for the first quarter of 2017 no later than 60 days following the date required by the SEC's rules and regulations (including extensions thereof), with a 90-day grace period upon written notice from the trustee or the requisite holders of the Senior Notes in accordance with the indenture governing the Senior Notes. If an event of default occurs under the indenture governing the Senior Notes, the trustee or the holders of at least 25% in aggregate principal amount of notes outstanding could accelerate the Senior Notes. The Company would likely not have sufficient liquidity to meet this obligation, which could have a material adverse effect on our business, results of operations, financial condition and ability to pay dividends.
The delays in filing our Forms 10-K, our Forms 10-Q and related financial statements are likely to impair our ability to obtain financing and access the capital markets. For example, as a result of the delayed filing of our periodic reports with the SEC, we will not be eligible to register the offer and sale of our securities using a short-form registration statement on Form S-3 until we have timely filed all periodic reports required under the Exchange Act for one year. Should we wish to register the offer and sale of our securities to the public prior to the time that we regain eligibility to use Form S-3, our transaction costs and the amount of time required to complete financing transactions could increase. An inability to obtain financing is likely to have a material adverse effect on our ability to grow our business, acquire assets through acquisitions or optimize our portfolio and capital structure. Additionally, the delay in financial statements may reduce the comfort of the Board with approving the payment of dividends.


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