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Subsequent Events
3 Months Ended
Feb. 29, 2016
Subsequent Events [Abstract]  
Subsequent Events

Note 15. Subsequent Events

 

The Partnership declared a first quarter distribution for its Class A shares of $0.2246 per share for the period from December 1, 2015 to February 29, 2016. The first quarter distribution will be paid on April 14, 2016 to shareholders of record as of April 5, 2016.

 

On March 28, 2016, OpCo entered into an Amendment and Waiver to Right of First Offer Agreement (the “Waiver”) with First Solar. Pursuant to the Waiver, OpCo waived certain of its rights under the Right of First Offer Agreement, dated as of June 24, 2015, between OpCo and First Solar (the “First Solar ROFO Agreement”), and First Solar and OpCo agreed to amend certain provisions of the First Solar ROFO Agreement.

Pursuant to the First Solar ROFO Agreement, First Solar previously granted to OpCo a right of first offer to purchase certain solar energy generating facilities for a period of five years. Such solar projects included the 300 MWac Stateline facility in San Bernardino County, California (“Stateline”). Pursuant to the Waiver, OpCo waived its rights under the First Solar ROFO Agreement with respect to 24% of the aggregate interest in Stateline. Concurrently, OpCo’s rights under the First Solar ROFO Agreement were expanded to cover First Solar’s 100 MWac Switch Station 1 and 79-MW Switch Station 2 facilities in Clark County, Nevada (collectively, “Switch Station”), which had not previously been subject to the First Solar ROFO Agreement. Additionally, OpCo and First Solar agreed to impose certain limitations on First Solar’s right to offer projects to OpCo under the First Solar ROFO Agreement (each, a “ROFO Offer”). These limitations include commitments by First Solar (i) to not make ROFO Offers in respect of Switch Station or Stateline before February 1, 2017 and October 1, 2016, respectively, and (ii) during the period between October 1, 2016 and December 31, 2016, to limit all ROFO Offers in respect of Stateline to either (A) an offer for 50% of First Solar’s remaining indirect interest or (B) an offer pursuant to which OpCo may elect to purchase either 50% or 100% of First Solar’s remaining indirect interest.

On March 30, 2016, in connection with the Kingbird Purchase Agreement and the Hooper Contribution Agreement (each as described below), OpCo drew down $40.0 million from its revolving credit facility and $25.0 million from its delayed draw term loan facility.  

On March 31, 2016, OpCo entered into a Purchase and Sale Agreement (the “Kingbird Purchase Agreement”) with First Solar and First Solar Asset Management, LLC, a wholly-owned subsidiary of First Solar (“Kingbird Seller”), to acquire an interest in two 20 MWac photovoltaic solar generating projects located in Kern County, California (together, the “Kingbird Project”) for aggregate consideration of approximately $60.0 million in cash (the “Kingbird Acquisition”). Consideration for the Kingbird Acquisition comprises a $42.9 million payment at closing to Kingbird Seller and a $17.1 million contribution to be made at one or more future dates to FSAM Kingbird Solar Holdings, LLC, the acquired company, which will be paid to an affiliate of First Solar for the remaining balance due under the Kingbird Project’s Engineering, Procurement and Construction contract. Ownership and cash flows of the Kingbird Project are subject to a tax equity financing arrangement with State Street Bank and Trust Company. The closing of the Kingbird Acquisition occurred simultaneously with the execution of the Kingbird Purchase Agreement and OpCo funded 100% of the approximately $42.9 million payment for the Kingbird Project with a combination of cash on hand, drawings under OpCo’s revolver and drawings under OpCo’s delayed draw facility.

Also on March 31, 2016, OpCo entered into a Contribution Agreement (the “Hooper Contribution Agreement”) with SunPower and SunPower AssetCo, LLC, a wholly-owned subsidiary of SunPower (“Hooper Seller”), to acquire an interest in the 50 MWac photovoltaic solar generating project located in Alamosa County, Colorado (the “Hooper Project”) for $53.5 million in cash (the “Hooper Acquisition”). Ownership and cash flows of the Hooper Project are subject to a tax equity financing arrangement with an affiliate of Wells Fargo & Company. The Hooper Acquisition closed on April 1, 2016 and OpCo funded 100% of the purchase price for the Hooper Project with a combination of cash on hand, drawings under OpCo’s revolver and drawings under OpCo’s delayed draw facility.

The allocation of the $60.0 million purchase price and $53.5 million purchase price of the Kingbird Acquisition and Hooper Acquisition, respectively, for assets acquired and liabilities assumed is subject to completion of a formal valuation process and review by management, which has not yet been completed.  Pro forma results of operations for the acquisitions have not been presented as the impact of the acquisitions are not material to the Partnership's consolidated results of operations for the current or prior periods. The results of operations of the Kingbird Project and Hooper Project will be included in the Partnership’s consolidated results of operations beginning March 31, 2016.

Also on March 31, 2016, in connection with the Kingbird Acquisition, the Partnership entered into Amendment No. 4 to Omnibus Agreement (the “Kingbird Omnibus Amendment”) with the General Partner, Holdings, First Solar, SunPower and OpCo. The Kingbird Omnibus Amendment amends the schedules to the parties’ existing Omnibus Agreement to include the Kingbird Project for all purposes, except for certain tax indemnities which are included in the Kingbird Purchase Agreement.

On April 1, 2016, in connection with the Hooper Acquisition, the Partnership entered into Amendment No. 5 to Omnibus Agreement (the “Hooper Omnibus Amendment”) with the General Partner, Holdings, First Solar, SunPower and OpCo. The Hooper Omnibus Amendment amends the schedules to the parties’ existing Omnibus Agreement to include the Hooper Project for all purposes, except for certain tax indemnities which are included in the Hooper Contribution Agreement.

On April 6, 2016, the Partnership amended and restated its existing Omnibus Agreement dated as of June 24, 2015 (as amended and restated, the “Amended and Restated Omnibus Agreement”) with its Sponsors, the General Partner, OpCo and Holdings (i) to expand each sponsor’s tax equity indemnification obligations (as further discussed below), (ii) to provide that the sponsors’ obligation to cover costs required to achieve commercial operation (as further discussed below) will be reduced to the extent OpCo and its affiliates receive alternate funds that are contemplated to be used to pay project expenses, and such funds are applied accordingly, and (iii) to integrate changes from prior amendments to the Omnibus Agreement, including the Kingbird Omnibus Amendment and the Hooper Omnibus Amendment. The material provisions of the Amended and Restated Omnibus Agreement are as follows: (a) each Sponsor was granted an exclusive right to perform certain services not otherwise covered by an O&M agreement or an AMA on behalf of the Project Entities contributed by such Sponsor; (b) with respect to any project in the Portfolio that has not achieved commercial operation, the Sponsor who contributed such project will pay to OpCo all costs required to complete such project, subject to certain exclusions; (c) with respect to any project in the Portfolio that did not achieve commercial operation as of the closing of the IPO, the Sponsor who contributed such project will pay to OpCo certain liquidated damages in the event such project fails to achieve operability pursuant to an agreed schedule; (d) with respect to the Quinto Project and the North Star Project, the Sponsor who contributed such project will pay to OpCo the difference, if any, between the amount of network upgrade refunds projected to be received in respect of such sponsor’s project at the time of contribution and the amount of network upgrade refunds projected to be received given the actual amount of upgrade costs incurred in respect of such project; (e) certain undertakings on the part of each Sponsor’s affiliates who act as a manager of any Project Entity or who provide asset management, construction, operating and maintenance and other services to the Project Entities contributed by such Sponsor; (f) to the extent a Sponsor continues to post credit support on behalf of a Project Entity after it has been contributed to OpCo, OpCo agreed to reimburse such Sponsor upon any demand or draw under such credit support, and the Sponsor agreed to maintain such support pursuant to the applicable underlying contractual or regulatory requirements; (g) each Sponsor agreed to indemnify OpCo for any costs it incurs with respect to certain tax-related events and events in connection with tax equity financing arrangements; and (h) the parties agreed to a mutual undertaking regarding confidentiality and use of names, trademarks, trade names and other insignias.

Also on April 6, 2016, the Partnership entered into the First Amendment and Consent to Credit and Guaranty Agreement (the “Credit Agreement Amendment”) with OpCo, certain subsidiaries of OpCo, various lenders party thereto and Credit Agricole Corporate and Investment Bank, as administrative agent and collateral agent. The Credit Agreement Amendment amends the parties’ existing Credit and Guaranty Agreement (i) to provide for the lenders’ consent to the Amended and Restated Omnibus Agreement, to expand OpCo’s ability to further amend the Amended and Restated Omnibus Agreement without lender consent in the future, subject to certain conditions, (iii) to permit certain customary restrictions on transfers of the equity interests of certain Project Entities, which are jointly owned, indirectly, by OpCo and SunPower, (iv) to supplement the Pledge and Security Agreement between the parties in light of the foregoing amendment, and (v) to make certain clarifying modifications to definitions and cross references.