Sunedison Memo

7/24/2019 Sunedison Memo

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IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE

IN RE TERRAFORM POWER, INC.DERIVATIVE LITIGATION

) CONSOLIDATED) C.A. NO. 11898-CB

SUNEDISON DEFENDANTS’ MEMORANDUM IN OPPOSITION TO

PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION

OF COUNSEL:

Gregory P. JosephPamela Jarvis

Mara LeventhalHoney KoberGregory O. Tuttle

Roman Asudulayev

Joseph Hage Aaronson LLC

485 Lexington Avenue

30th Floor

New York, New York 10017 (212) 407-1210

Dated: February 12, 2016

Thomas A. Beck (#2086) Raymond J. DiCamillo (#3188)

Sarah A. Clark (#5872)

Ryan P. Durkin (#6149)

Richards, Layton & Finger, P.A. 920 North King Street Wilmington, Delaware 19801

(302) 651-7700

Attorneys for Defendants SunEdison, Inc. and SunEdison Holdings

Corporation

EFiled: Feb 19 2016 04:53PM EST

Transaction ID 58601559

Case No. 11898-CB

REDACTED VERSION--

FILED: February 19, 2016



i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .................................................................................... ii

PRELIMINARY STATEMENT ............................................................................... 1

FACTS ....................................................................................................................... 4

ARGUMENT ........................................................................................................... 33

THE INJUNCTION PLAINTIFF SEEKS IS EFFECTIVELY PERMANENT ..... 33

I. SUNEDISON HONORED ITS FIDUCIARY DUTIES .......................... 35

A. Plaintiff Lacks Standing to Object to CoreFeatures of the Challenged TransactionWhich Predate Its Acquisition of Stock ......................................... 35

B. The December Amendments Are Entirely Fair ............................. 38

1. The December Amendments Are the Product ofFair Dealing ......................................................................... 39

2. The Economic Terms of the December AmendmentsAre Fair to TERP ................................................................. 49

II. PLAINTIFF HAS NOT DEMONSTRATED

IRREPARABLE INJURY ........................................................................ 52

A. TERP’s Hypothetical Is Speculative ........................... 52

B. SunEdison Could Pay Any Money Damages ................................ 54

C. The Court Could Enjoin the Take/Pay Agreement in the Future .. 56

III. THE BALANCE OF EQUITIES WEIGHS HEAVILY AGAINSTINJUNCTIVE RELIEF ............................................................................ 56

CONCLUSION ........................................................................................................ 58

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ii

TABLE OF AUTHORITIES

Page(s)Cases

7547 Partners v. Beck ,682 A.2d 160 (Del. 1996) .............................................................................. 37

AB Value Partners, LP v. Kreisler Mfg. Corp.,2014 WL 7150465 (Del. Ch. Dec. 16, 2014) ................................................ 34

AM Gen. Holdings LLC v. Renco Grp.,2012 WL 6681994 (Del. Ch. Dec. 21, 2012) ................................................ 59

Angelo, Gordon & Co. v. Allied Riser Commc’ns Corp.,

805 A.2d 221 (Del. Ch. 2002) ......................................................... 52 n.11, 55

Bayard v. Martin,101 A.2d 329 (Del. 1953) ...................................................................... 55 n.12

Braunschweiger v. Am. Home Shield Corp.,1989 WL 128571 (Del. Ch. Oct. 26, 1989) ................................................... 58

Brown v. Automated Mktg. Sys., Inc,1982 WL 8782 (Del. Ch. Mar. 22, 1982) ...................................................... 37

Cantor Fitzgerald, L.P. v. Cantor ,724 A.2d 571 (Del. Ch. 1998) ....................................................................... 58

Del. Open MRI Radiology Assocs., P.A. v. Kessler ,898 A.2d 290 (Del. Ch. 2006) ....................................................................... 49

Emerald Partners v. Berlin, 2003 WL 21003437 (Del. Ch. Apr. 28, 2003),

aff’d , 2003 WL 23019210 (Del. Dec. 23, 2003) ..................................... 40, 47

Gesoff v. IIC Indus., Inc.,902 A.2d 1130 (Del. Ch. 2006) ..................................................................... 45



iii

Gotham Partners, L.P. v. Hallwood Realty Partners, L.P.,855 A.2d 1059 (Del. Ch. 2003),aff’d , 840 A.2d 641 (Del. 2003) .................................................................... 50

H.F. Ahmanson & Co. v. Great W. Fin. Corp.,1997 WL 305824 (Del. Ch. June 3, 1997) .................................................... 54

Hexion Specialty Chems., Inc. v. Huntsman Corp.,965 A.2d 715 (Del. Ch. 2008) ....................................................................... 19

Hillsboro Energy, LLC v. Secure Energy, Inc.,2008 WL 4561227 (Del. Ch. Oct. 3, 2008) ................................................... 55

In re AbbVie Inc. S’holder Deriv. Litig.,

2015 WL 4464505 (Del. Ch. July 21, 2015) ................................................. 36

In re Appraisal of Dole Food Co.,114 A.3d 541 (Del. Ch. 2014) ....................................................................... 51

In re Beatrice Cos. Litig.,1987 WL 36708 (Del. Feb. 20, 1987) ........................................................... 37

In re Cysive, Inc. S’holder Litig .,836 A.2d 531 (Del. Ch. 2003) ....................................................................... 40

In re Family Dollar Stores, Inc. S’holder Litig.,2014 WL 7246436 (Del. Ch. Dec. 19, 2014) ................................................ 33

In re Gen. Motors (Hughes) S’holder Litig.,2005 WL 1089021 (Del. Ch. May 4, 2005),aff’d , 897 A.2d 162 (Del. 2006) .................................................................... 42

In re Goldman Sachs Grp., Inc. S’holder Litig.,

2011 WL 4826104 (Del. Ch. Oct. 12, 2011) ................................................. 42

In re Hanover Direct, Inc. S’holders Litig.,2010 WL 3959399 (Del. Ch. Sept. 24, 2010) ................................................ 49

In re KMC Real Estate Inv’rs, LLC ,518 B.R. 505 (S.D. Ind. 2014) ....................................................................... 56



iv

In re Loral Space & Commc’ns., Inc.,2008 WL 4293781 (Del. Ch. Sept. 19, 2008) ................................................ 43

In re MFW S’holders Litig.,67 A.3d 496 (Del. Ch. 2013),aff’d sub nom. Kahn v. M&F Worldwide Corp.,88 A.3d 635 (Del. 2014) ................................................................................ 42

In re S. Peru Copper Corp. S’holder Deriv. Litig.,52 A.3d 761 (Del. Ch. 2011) ......................................................................... 48

In re Trados, Inc. S’holder Litig.,73 A.3d 17 (Del. Ch. 2013) ..................................................................... 40, 49

In re W. Nat’l Corp. S’holders Litig.,2000 WL 710192 (Del. Ch. May 22, 2000) ............................................ 44, 45

Jedwab v. MGM Grand Hotels, Inc.,509 A.2d 584 (Del. Ch. 1986) ....................................................................... 43

Kahn v. M&F Worldwide Corp.,88 A.3d 635 (Del. 2014) .......................................................................... 20, 42

Kahn v. Tremont Corp.,694 A.2d 422 (Del. 1997) .............................................................................. 44

Kansas City S. v. Grupo TMM, S.A.,2003 WL 22659332 (Del. Ch. Nov. 4, 2003) ................................................ 55

Kumar v. Racing Corp. of Am., Inc.,1991 WL 67083 (Del. Ch. Apr. 26, 1991) ............................................... 43-44

La. Mun. Police Emps. Ret. Sys. v. Crawford ,

918 A.2d 1172 (Del. Ch. 2007) ..................................................................... 36

Lennane v. ASK Comp. Sys., Inc.,1990 WL 154150 (Del. Ch. Oct. 11, 1990),appeal refused , 1990 WL 169078 (Del. Oct. 19, 1990) ................................ 56



v

Lonergan v. EPE Holdings, LLC ,5 A.3d 1008 (Del. Ch. 2010) ......................................................................... 51

Loppert v. WindsorTech, Inc.,865 A.2d 1282 (Del. Ch. 2004),aff’d , 867 A.2d 903 (Del. 2005) .............................................................. 21, 46

Polygon Glob. Opportunities Master Fund v. W. Corp.,2006 WL 2947486 (Del. Ch. Oct. 12, 2006) ................................................. 36

Roseton OL, LLC v. Dynegy Holdings Inc.,2011 WL 3275965 (Del. Ch. July 29, 2011) ................................................. 53

Ryan v. Gifford ,

918 A.2d 341 (Del. Ch. 2007) ....................................................................... 36

S. Muoio & Co. v. Hallmark Entm’t Invs. Co. ,2011 WL 863007 (Del. Ch. Mar. 9, 2011) .................................................... 51

Sanofi-Synthelabo v. Apotex Inc.,488 F. Supp. 2d 317 (S.D.N.Y. 2006),aff’d , 470 F.3d 1368 (Fed. Cir. 2006) ............................................................ 59

Sawabeh Info. Servs. Co. v. Brody,832 F. Supp. 2d 280 (S.D.N.Y. 2011) ..................................................... 21, 46

Schreiber v. Bryan,396 A.2d 512 (Del. Ch. 1978) ................................................................. 37-38

Seagraves v. Urstadt Prop. Co.,1989 WL 137918 (Del. Ch. Nov. 13, 1989) .................................................. 48

SIGA Techs., Inc. v. PharmAthene, Inc.,

67 A.3d 330 (Del. 2013) .......................................................................... 21, 46

Solar Cells, Inc. v. True N. Partners, LLC ,2002 WL 749163 (Del. Ch. Apr. 25, 2002) ................................................... 58

Stahl v. Apple Bancorp, Inc.,579 A.2d 1115 (Del. Ch. 1990) ..................................................................... 34



vi

Theravectys SA v. Immune Design Corp.,2015 WL 1308273 (Del. Ch. Mar. 9, 2015) .................................................. 52

TW Servs., Inc. v. SWT Acq. Corp.,1989 WL 20290 (Del. Ch. Mar. 2, 1989) ...................................................... 34

Weichert Co. v. Young ,2007 WL 4372823 (Del. Ch. Dec. 7, 2007) .................................................. 34

Weldin Farms, Inc. v. Glassman,414 A.2d 500 (Del. 1980) ...................................................................... 52 n.11

Rules & Statutes

8 Del. C. §327 .......................................................................................................... 36



1

Defendants SunEdison, Inc. and SunEdison Holdings Corporation

(“SunEdison”) respectfully submit this memorandum in opposition to the motion

by Plaintiff Appaloosa Investment Limited Partnership I (“Appaloosa”) for a

preliminary injunction.

PRELIMINARY STATEMENT1

Appaloosa’s attack on TerraForm Power, Inc.’s (“TERP’s”) acquisition of

the assets of Vivint Solar, Inc. (“Vivint”) is irreconcilable with the factual record

and inadequate to warrant injunctive relief.

Injunctive relief is unwarranted for three independent reasons:

First ,

Appaloosa

conspicuously fails to quantify the potential damages it claims SunEdison could

not satisfy in the absence of an injunction. In fact,

1 “Pl. Mem.” refers to Plaintiff’s February 8th Memorandum in Support of itsMotion. “1/12/16 Pl. Mem.” refers to Plaintiff’s TRO brief. “Ex.” designatesexhibits to the accompanying Affidavit of Sarah A. Clark. “Compl.” refers toPlaintiff’s Complaint, and “¶__ ” refers to paragraphs thereof . “Take/Pay

Agreement” refers to the take/pay agreement between SunEdison and TERP.

“Litvak Report” and “Karcanias Report” refer to the accompanying ExpertReports of Jeff Litvak and Aris Karcanias, submitted herewith as Exhibits A and B,respectively, to the Affidavit of Ryan P. Durkin. “PX-_ ” refers to exhibits to theFebruary 8th Affidavit of Elizabeth Sloan. “Atkins Aff.” refers to the February8th Affirmation of John Akins. Emphasis is added to, and internal quotations,

brackets and citations omitted from, quoted material in this brief, except asindicated.

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$185 million, and that amount shrinks quarterly once the loan secured by the

Take/Pay Agreement issues. This amount is well within SunEdison’s capacity to

pay. Litvak Report at ¶¶11, 90-91.

Second , Appaloosa seeks an injunction to prevent supposed harm to TERP

from the Take/Pay Agreement, but that harm is both speculative and could occur

only in the future, depending on whether or when TERP’s obligation to purchase

arises, the price of the assets to be purchased, the condition of the capital markets

and numerous other variables, including how long the Take/Pay remains in effect.

An injunction would, however, immediately harm Vivint, SunEdison and TERP.

Vivint and its shareholders would lose the merger.

SunEdison would be subject to a potentially catastrophic lawsuit fromVivint.

The resulting harm to SunEdison

Third , Plaintiff is not entitled to injunctive relief on the merits. Appaloosa’s

papers ignore critical facts establishing that the December 9 Take/Pay Agreement

it challenges was the product of fair dealing and fair price, including:

TERP’s entry into the preexisting July 20 Take/Pay Agreement wasapproved by a Conflicts Committee whose independence Appaloosaconcedes and in all events has no standing to challenge.

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The December 9 Take/Pay Agreement is objectively far better forTERP than its July 20 predecessor. The December 9 Take/Pay is bydefinition entirely fair, reducing TERP’s obligations by up tohundreds of millions of dollars and potentially

— and it was coupled with additional price reductions to TERP of nearly $150 million under theaccompanying amended Purchase Agreement and the Operations &Management Support (“O&M”) Agreement. Litvak Report ¶¶22-26.

TERP’s business objective from its inception — as reflected in its S-1,its 10-Ks, and the testimony of every witness questioned on thesubject in this proceeding — was to expand into residential solar.Residential is part of one of the largest and most important solarmarkets in the United States. Karcanias Report ¶2.14 and Table 2-1.

Both TERP and SunEdison wanted to acquire Vivint — the secondlargest provider of residential solar in the U.S. —

The Vivint acquisition followed the template of the January 2015 FirstWind acquisition, in which SunEdison bought First Wind’sdevelopment platform and TERP bought its operating assets.

renegotiated better terms for itself and

proposed substantially improved terms to TERP.

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SunEdison’s steps to add directors and reconstitute the Conflicts

Committee

The reconstituted Conflicts Committee

Appaloosa’s motion is predicated on a fundamentally untenable theory —

that SunEdison so desired the Vivint development platform it was willing to force

TERP to take substandard residential solar assets. But the development platform is

nothing more than the organization that develops the assets. PX-42 at 28:19-29:7.

If the assets are not valuable, neither is the platform, and there is no point in

acquiring it. The unrebutted evidence shows that the Vivint residential assets are

valuable — multiple bidders have expressed interest in them. Appaloosa’s motion

is devoid of merit and should be denied.

FACTS

SunEdison and TERP. SunEdison is one of the world’s leading developers

of solar energy projects. Ex. 2 at 1. It is a development company, or DevCo, and

formed TERP as a YieldCo on January 15, 2014. Id. at 10. TERP became a public

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company on July 23, 2014. Ex. 3 at 10. As a YieldCo, TERP’s “ primary business

objective is to increase the cash dividends we pay to our shareholders over time. ”

Ex. 3 at 8. SunEdison is a controlling shareholder of TERP and has the right to

specifically designate two TERP directors in addition to its voting power to elect

other directors. Id. at 3 at 42; Ex. 4 at 8.

Individual Defendants. Since November 20, 2015, Peter Blackmore, Jack

Jenkins-Stark and Christopher Compton (“Individual Defendants”) have served

as independent directors on TERP’s board and members of its Corporate

Governance and Conflicts Committee (“Conflicts Committee” or “Committee”),

which “review[s] and approve[s] potential conflict transactions” between TERP

and SunEdison. Ex. 9 at ¶2(b). Blackmore previously served as an independent

director of SunEdison.

Appaloosa. Plaintiff, a hedge fund,

DevCo/YieldCo Structure. The DevCo/YieldCo structure is a recent

phenomenon, devised in 2013 to finance growth in the renewable energy sector

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(Karcanias Report ¶1.15, ¶¶2.1-2.9). The industry remains in its infancy with only

15 YieldCos publicly traded worldwide.

The relationship between SunEdison and TERP is governed by agreements

that confer many benefits on TERP and which Plaintiff concedes “historically have

been fair to TERP.” 1/12/16 Pl. Mem. 3. These include (1) a Management

Services Agreement (“MSA”) (Ex. 7) requiring SunEdison to provide TERP “a

dedicated team of professionals to serve as [its] executive officers and other key

officers,” “to support the operational, financial, legal and regulatory aspects of

[TERP’s] business,” to “monitor[ ] and/or overs[ee]” “legal counsel and...other

independent experts,” and to recommend “candidates to serve” on TERP’s board

and board committees (Ex. 1 at 157, 197; Ex. 7 ¶¶1.1.16, 2.1, 3.1); (2) a Project

Support Agreement (“PSA”) (Ex. 8) committing SunEdison to offer TERP

“sufficient Call Right Projects” (i.e., power plants) to generate at least $75 million

and $100 million of cash available for distribution (“CAFD”) in 2015 and 2016,

respectively, and giving TERP a right of first refusal for those assets (Ex. 1 at 1-2;

Ex. 8 ¶¶2.1, 2.2(a), 2.4, 2.5); and (3) additional agreements pursuant to which

SunEdison guarantees TERP obligations and otherwise subsidizes TERP. E.g ., Ex.

3 at 81 (SunEdison to pay up to $48 million in interest on certain TERP notes for 3

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years following IPO). SunEdison provides TERP nearly all of its employees,

operations, and administrative support.

Given the DevCo/YieldCo relationship and SunEdison’s ownership interest

in TERP,

As detailed in TERP’s public disclosures, harm to

SunEdison may cause material harm to TERP. E.g.:

Certain of TERP’s power purchase agreements (“PPAs”) and project-

level financing arrangements “include provisions that would permitthe counterparty to terminate the contract or accelerate maturity in theevent SunEdison ceases to control” TERP and the termination oracceleration of any of these agreements “could have a materialadverse effect” on TERP. Ex. 3 at 25.

Any failure by SunEdison “to effectively manage [TERP’s]operations,” or “the failure by [TERP] to identify and contract withreplacement service providers,” could have a “material adverse effectthe operation of [TERP’s] facilities.” Id. at 43.

Any failure by SunEdison to continue to provide solar projects toTERP could “have a material adverse effect on [TERP’s] business,financial condition, results of operations and cash flow.” Id .

See generally Ex. 3 at 42-46.

TERP Targets Residential Assets. From its inception, TERP’s business

objective has been “to acquire high-quality contracted cash flows, primarily from

owning solar generation assets serving utility, commercial and residential

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customers.” Ex. 1 at 1.

TERP Enthusiastically Pursued Vivint. Plaintiff’s contention that

SunEdison used the July Vivint Transaction to “force[ ]” “low quality assets” on

TERP (e.g., ¶¶2, 30, 73(f), 106; Pl. Mem. 3, 53) is groundless. TERP

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TERP was intimately involved in negotiating the structure and terms of the

Vivint transaction and financing.

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10

As Vivint requested,

the transaction was structured as a merger agreement between SunEdison and

Vivint (“July Merger Agreement”) (Ex. 22), pursuant to which SunEdison would

acquire Vivint for $2.2 billion, payable in cash, stock and convertible notes, to be

funded in part by (a) the concurrent sale of Vivint’s rooftop solar portfolio of 523

megawatts (“MW”) to TERP (the initial “Drop Down Transaction”) for $922

million, pursuant to the July 20, 2015 Purchase Agreement between SunEdison and

Terra LLC (“July Purchase Agreement”) (Compl. Ex. 1), and (b) a $500 million

loan provided by Goldman Sachs Bank USA to SunEdison

(the “Goldman Loan” or “Term Facility,” and with the July Merger and Purchase

Agreements, the “July Vivint Transaction”). Ex. 24.

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11

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12

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13

It was ultimately agreed that the price of Future Drop Downs would be at the

lesser of fair market value (to be determined by an appraisal) or a guaranteed

return to TERP. Ex. 21 at Ex. B at 1578-79.

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15

Plaintiff does not,

and could not, assert a claim for breach of fiduciary duty based on the July Vivint

Transaction or claim that Conflicts Committee acted as a rubber stamp. See ¶¶137-

146; PX-47 at 205:12-19.

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17

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TERP Announcement. In a press release issued on July 20, 2015, TERP

announced:

[TERP] is excited to expand our residential solar portfolio with

the acquisition of Vivint Solar assets, including 523 MW, whichwill accelerate our growth in this segment... With immediate

accretion to our stockholders at initial drop down and the

predictable flow of drop down assets into the future, we see thisacquisition as creating substantial value for our stockholders.

Ex. 24 at 27959.

TERP raised its prior 2016 DPS guidance of $1.70 to $1.75, a 30% year-

over-year increase compared to 2015 guidance. Id .

Adverse Developments. The market reacted negatively to the July Vivint

Transaction. PX-44 at 42:21-23; PX-42 at 83:9-13. General turmoil in the energy

and YieldCo markets ( see Karcanias Report ¶1.23) also put downward pressure on

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TERP and SunEdison stock. PX-41 at 53:6-20; PX-35 at 90:21-23; PX-42 at

81:14-15. Vivint also began missing projections. PX-42 at 81:18-23; Ex. 37.

No MAE. None of these adverse developments constituted a Material

Adverse Effect (“MAE”) within the July Merger Agreement. Section 8.03(l )

specifically excluded from the definition of a “Company Material Adverse Effect”

any “changes in the economy or the financial or securities markets ...or the

industry...in which [Vivint] operates” and “any failure in and of itself of [Vivint] to

meet any internal or published projections....” Ex. 22 §8.03(l ). This Court has

held that where, as here, a purchaser agrees that a seller’s failure to meet

projections does not constitute an MAE, the parties have “specifically allocated the

risk to [the purchaser] that [the seller’s] performance would not live up to

management’s expectations.” Hexion Specialty Chems., Inc. v. Huntsman Corp.,

965 A.2d 715, 741 (Del. Ch. 2008). No Delaware court has ever found an MAE in

the context of a merger agreement, nor could one be expected to do so on grounds

expressly disavowed in the MAE definition.

The July Merger Agreement authorized Vivint to seek injunctive relief to

compel specific performance. Ex. 22 §8.11. As early as October 23, 2015,

Vivint’s board began preparing for, and threatening, litigation to compel specific

performance of the July Merger Agreement. Ex. 5 at 61, 63, 67. Accordingly,

non-performance by SunEdison threatened an injunctive proceeding by Vivint



20

against which SunEdison had no persuasive contractual defense

None of the reasons Plaintiff advances to establish that “TERP was not

bound by the original deal,” Pl. Mem. 19, withstands analysis.

Plaintiff asserts that SunEdison breached its fiduciary duty by entering

into the July transaction with TERP, Pl. Mem. 19,

Plaintiff cannot and does not establish that thetransaction was unfair in July. Kahn v. M&F Worldwide Corp., 88A.3d 635, 653 (Del. 2014) (approval by independent committee shifts

burden of proving unfairness to plaintiff).

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It is true that the November Committee could withhold consent to an

amendment to the July Merger Agreement and threaten non- performance of the July Purchase Agreement, Pl. Mem. 19-20, but

Hence, Vivint kept threatening litigation.

Plaintiff maintains that “TERP was never actually bound to [the]Take/Pay Arrangement” because “TERP had never signed a definitivecontract.” Pl. Mem. 21. The Take/Pay Agreement is set out in adetailed, enforceable term sheet, and it was made final and binding as

part of the Interim Agreement between SunEdison and TERP in July.Ex. 21 at ¶1.8 (“Concurrently with the Closing, [SunEdison]…andTERP…shall enter into a long-term framework agreement for thedropdown of a certain number of US residential and small commercial

solar projects...all based on the terms set forth on Exhibit B hereto.”). Loppert v. WindsorTech, Inc., 865 A.2d 1282, 1289 (Del. Ch. 2004),aff’d , 867 A.2d 903 (Del. 2005) (TABLE) (contract is binding oncethere is “assent on the essential terms”); Sawabeh Info. Servs. Co. v.

Brody, 832 F. Supp. 2d 280, 307 (S.D.N.Y. 2011) (under New Yorklaw, term sheet is binding contract where there is “mutual intent tocommit to its terms”); SIGA Techs., Inc. v. PharmAthene, Inc., 67A.3d 330, 343-44 (Del. 2013) (“an express contractual obligation tonegotiate in good faith is binding on the contracting parties”).

Plaintiff ’s assertion that “Vivint’s litigation threat[s] [againstSunEdison] w[ere] hollow,” Pl. Mem. 21, ignores

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Renegotiation. REDACTED



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24

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25

SunEdison Designates Two TERP Directors.

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On November 20, prior to a Special Meeting of TERP’s Board of Directors,

Martin Truong, acting on behalf of SunEdison as majority Class B common

stockholder, sent notice to the secretary of TERP appointing Blackmore and

Jenkins-Stark to the TERP board pursuant to Article 4, §3(e) of TER P’s Certificate

of Incorporation. Ex. 39 at 6512. Blackmore, who resigned as an independent

SunEdison director that day, was designated because he brought to TERP strong

leadership expertise, including significant public company experience, and a

proven track record of driving performance.3 Ex. 42 at Ex. 99.1. Jenkins-Stark

was appointed because he had substantial financial expertise, having served as

CFO for multiple public and private companies, and a long history in the energy

industry.4 Id .

3 Plaintiff attacks Blackmore’s independence based on his “substantial

business ties to SunEdison,” the sum total of which comprise his prior independentservice as a SunEdison board member and compensation he received therefor. Pl.Mem. 28.4 Plaintiff claims that Jenkins-Stark had “substantial business ties toSunEdison” (Pl. Mem. 28), but those ties are limited to Jenkins-Stark’semployment with a company in which SunEdison own a minuscule (3.3%) amountof stock and from which SunEdison acquired two systems for “an aggregate

purchase price of $253,000.” PX-17 at 6.

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At the TERP board meeting,

5 Compton, an outside director whose independence is unchallenged, hasextensive financial experience from his tenure with a large public company and acorporate finance background. Ex. 42 at Ex. 99.1.

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SunEdison’s

actions were intended to — and ultimately did —

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The December Amendments Are Fair.

The Boards of SunEdison and TERP approved the Amended

Purchase Agreement on December 9. Ex. 72.

The amended agreements were memorialized in the Amended Purchase

Agreement, the Amended and Restated Interim Agreement (“Amended Interim

Agreement”), and the Term Facility, Take/Pay and IDR Letter Agreement

(“Letter Agreement”) (together, the “December Amendments,” or in Plaintiff’s

words, the “Challenged Transaction”).

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31

Improvements to the Take/Pay Agreement included:

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Purported Harm Absent Injunction. Plaintiff posits three possible harms

that will result absent an injunction, each of which is meritless. First, Plaintiff

claims that REDACTED

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Third, Plaintiff claims that it will be impossible to undo the transaction if the

transaction is not enjoined (Pl. Mem. 58-59), but nothing will prevent the Court

from enjoining the Take/Pay in the future if any dropdown should prove unfair to

TERP.

ARGUMENT

THE INJUNCTION PLAINTIFF SEEKS IS EFFECTIVELY PERMANENT

Plaintiff ’s motion seeks a preliminary injunction, an “extraordinary remedy”

that “will never be granted unless earned.” In re Family Dollar Stores, Inc.

S ’ holder Litig., 2014 WL 7246436, at *12 (Del. Ch. Dec. 19, 2014). In fact, there

is nothing preliminary about the relief Plaintiff seeks. The injunction would have

the effect of finally quashing the Vivint merger because it would prevent the

merger from closing before the March 18, 2016 termination date. Ex. 22 at

§7.01(c). This is precisely what Plaintiff intends. PX-47 at 210:21-211:25.

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Under these circumstances, it is not enough for Plaintiff to demonstrate a

“likelihood” of success. Plaintiff bears the burden of proving it is in fact entitled to

relief on a summary judgment standard. See, e.g., Stahl v. Apple Bancorp, Inc.,

579 A.2d 1115, 1120 (Del. Ch. 1990) (where a preliminary injunction would afford

“final relief — in the sense that a result after trial could not practically reverse the

grant of preliminary relief — then absent an extraordinary circumstance, the court

ought not to grant such relief where material facts are in substantial dispute.”); AB

Value Partners, LP v. Kreisler Mfg. Corp., 2014 WL 7150465, at *2 (Del. Ch.

Dec. 16, 2014). In the words of Chancellor Allen, if a preliminary injunction

would afford Plaintiff “final relief, the relief now sought ought not be granted

unless [Plaintiff] satisfies the standards applicable to a grant of summary

judgment.” TW Servs., Inc. v. SWT Acq. Corp., 1989 WL 20290, at *6 (Del. Ch.

Mar. 2, 1989).

This is an exacting standard, requiring that Plaintiff show: “(a) actual

success on the merits, (b) irreparable harm,…(c) that, on balance, the equities

weigh in favor of issuing the injunction” and (d) that the movant is entitled to

judgment as a matter of law, “view[ing] the evidence presented in the light most

favorable to the non-moving party.” Weichert Co. v. Young , 2007 WL 4372823, at

*2 (Del. Ch. Dec. 7, 2007) (considering injunction application under summary

judgment standard).



35

Plaintiff cannot satisfy these standards — or even the lesser standards for a

preliminary injunction. The record refutes Plaintiff’s claim that SunEdison used its

control to force TERP into the Challenged Transaction.

I.

SUNEDISON HONORED ITS FIDUCIARY DUTIES

A. Plaintiff Lacks Standing to Object to Core Features of the

Challenged Transaction Which Predate Its Acquisition of Stock

Plaintiff pegs its fiduciary breach claim on several core features of the

Challenged Transaction that are supposedly unfair — that (a) the Vivint assets are

residential (¶¶105-06; Pl. Mem. 52); (b) TERP would provide financing for the

merger through the initial Drop Down (¶111; Pl. Br. 51); and (c)

(¶¶104, 107,109-10; Pl. Br. 51-

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36

52). But even if any of these objections had merit, and none does,8 Plaintiff lacks

standing to raise them because each of those features was an agreed term before

Plaintiff ever became a stockholder. 8 Del. C. §327; La. Mun. Police Emps. Ret.

Sys. v. Crawford , 918 A.2d 1172, 1184 (Del. Ch. 2007) (“[W]ell-settled law

precludes plaintiffs from challenging a board decision that occurred before

plaintiffs’ stock ownership arose.”); accord Ryan v. Gifford , 918 A.2d 341, 358-59

(Del. Ch. 2007).

Section 327 furthers Delaware’s longstanding “public policy against the evil

of purchasing stock in order to attack a transaction which occurred prior to the

purchase of the stock.” Polygon Glob. Opportunities Master Fund v. W. Corp.,

2006 WL 2947486, at *5 (Del. Ch. Oct. 12, 2006); see also, e.g., In re AbbVie Inc.

S ’ holder Deriv. Litig., 2015 WL 4464505, at *4 (Del. Ch. July 21, 2015).

A plaintiff who buys into a disclosed corporate transaction “has not been

injured in her expectation and...she has no grounds to complain as to the judgment

of the defendants in determining the...price o[r] as to the purpose which motivated

8 As shown in the Karcanias Report (¶3.4), there is precedent for a take/payarrangement in the renewable energy industry. As shown above (pp. 7-8), TERP

always sought to be in the residential solar business; its provision of some of themerger consideration was the only way both companies could get the benefit of theVivint acquisition — and this is the same funding mechanism used in the FirstWind acquisition, which the market applauded; and while the Take/Pay may have

been unprecedented among YieldCos in particular, the YieldCo industry is in itsinfancy, and Take/Pay arrangements are not unusual in the energy industry andothers. Karcanias Report ¶1.15; Litvak Report ¶69.



37

the board....” Brown v. Automated Mktg. Sys., Inc, 1982 WL 8782, at *2 (Del. Ch.

Mar. 22, 1982). A plaintiff challenging a “proposed merger ...must have been a

stockholder at the time the terms of the merger were agreed upon because it is the

terms of the merger, rather than the technicality of its consummation, which are

challenged.” In re Beatrice Cos. Litig., 1987 WL 36708, at *3 (Del. Feb. 20,

1987); accord 7547 Partners v. Beck , 682 A.2d 160, 162-63 (Del. 1996).

Appaloosa did not own any TERP stock until

It correctly omits the July Agreements from its

definition of “Challenged Transaction.” ¶¶1, 102-113. But the same rule that

denies Plaintiff standing to contest the July Agreements also precludes it from

taking issue with those aspects of the Challenged Transaction that do not embody a

change implemented after

In Schreiber v. Bryan, 396 A.2d 512 (Del. Ch. 1978), the plaintiff bought

Pennzoil Offshore Gas Operators, Inc. stock in 1971, and then challenged the 1972

amendment of contracts executed in 1970. The Court denied standing to sue on the

agreement amended after the plaintiff became a shareholder because the amended

agreements only reconfirmed the ones finalized prior to that purchase. Id. at 517.

The Court observed that §327 was “designed principally to prevent the purchasing

of stock to be used for the purpose of filing a derivative action attacking

transactions occurring prior to such purchase,” 396 A.2d at 516, and reasoned:

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38

[I]n one sense every wrongful transaction constitutes a continuingwrong to the corporation until remedied, and yet clearly such a resultis not only unrealistic but moreover would defeat the statutory policy.Therefore, what must be decided is when the specific acts of allegedwrongdoing occur, and not when their effect is felt.

Id.

As in Schreiber , Plaintiff lacks standing to object to those aspects of the

Challenged Transaction that were disclosed before Plaintiff bought TERP stock

Plaintiff concedes

B.

The December Amendments Are Entirely Fair

Plaintiff’s attempt to demonstrate the “unfairness” of the December

Amendments promotes the fiction that

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39

Plaintiff’s “archetype of self -dealing by a controlling

stockholder ,” Pl. Mem. 52, is not only unsupported by the record, it is, in every

detail, contrary to uncontested evidence.

As set forth below, none of the supposed procedural “flaws” Plaintiff

purports to identify remotely undermine the substance or efficacy of the process,

much less evince an unfair result.

1. The December Amendments Are the Product of Fair Dealing

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40

A process involving a special committee

composed of independent directors who act as “vigorous negotiator[s]” and

“bargain[] hard” to get a higher price is a fair process. In re Cysive, Inc. S’holder

Litig ., 836 A.2d 531, 548, 554-56 (Del. Ch. 2003).

Moreover, the price achieved was — by hundreds of millions of dollars —

better than the price of the preexisting July transaction, which Plaintiff has not

challenged and has no standing to challenge. By definition, that improved

transaction is fair.

Delaware law is clear that “perfection is not possible or expected.” In re

Trados , Inc. S’ holder Litig., 73 A.3d 17, 56 (Del. Ch. 2013). If a flaw is detected,

“the magnitude of process flaw” required to find an unfair process “must be one

that would be likely to lead to an unfair result.” Emerald Partners v. Berlin, 2003

WL 21003437, at *28 (Del. Ch. Apr. 28, 2003), aff’d , 2003 WL 23019219 (Del.

Dec. 23, 2003). There are no such flaws here.

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41

The brief submitted by the Individual Defendants demonstrates that the

Plaintiff labels this process

“corrupt,” and identif ies six supposed “flaws.” Pl. Mem. 43-49. Plaintiff’s claims

are meritless and the purported flaws immaterial under Delaware law.

First , Plaintiff contends that the reconstitution of the Committee “effectively

remov[ed] any pretense of arms-length bargaining between SunEdison and TERP.”

Pl. Mem. 43.

The reconstituted Committee demonstrated

its independence by the results it achieved.

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42

Third , Plaintiff argues Committee chairman Blackmore was compromised

by his previous service as an independent SunEdison director and the

compensation he received in that capacity,

Blackmore’s prior connections to SunEdison are immaterial. He was an

independent director of SunEdison and became an independent director of TERP.

To show lack of independence, “a plaintiff must demonstrate that the director is

beholden to the controlling party or so under [the controller’s] influence that [the

director’s] discretion would be sterilized.” In re MFW S ’ holders Litig., 67 A.3d

496, 509-10 (Del. Ch. 2013), aff’d sub nom. Kahn v. M&F Worldwide Corp., 88

A.3d 635 (Del. 2014); see also In re Gen. Motors (Hughes) S’holder Litig., 2005

WL 1089021, at *8 (Del. Ch. May 4, 2005) (amount of salary insufficient), aff’d ,

897 A.2d 162 (Del. 2006); In re Goldman Sachs Grp., Inc. S’holder Litig., 2011

WL 4826104, at *11-12 (Del. Ch. Oct. 12, 2011) (holding independent CEO of

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43

entity and advisor to a fund in which Goldman invested €464 million and $600

million, respectively). In re Loral Space & Commc’n s., Inc., 2008 WL 4293781,

at *5, *20 (Del. Ch. Sept. 19, 2008), on which Plaintiff relies (Pl. Mem. 47), is

inapposite — the director was a “long-time friend[]” of the CEO who was

responsible for the CEO’s appointment and had been the CEO’s rent-free tenant

and “advisor .”

Fourth, Plaintiff contends that SunEdison “pressur[ed] the New Committee

for a quick approval,” and that “haste” deprived the Committee of a full

opportunity to digest all available material information, which often may require

several meetings.” Pl. Mem. 46.

Moreover, an allegation that the “timing” of a transaction was influenced by

a controlling shareholder does not generate an inference of unfair dealing without a

showing that the minority shareholders were financially injured by the timing and

that the controlling shareholder gained from it. Jedwab v. MGM Grand Hotels,

Inc., 509 A.2d 584, 599-600 (Del. Ch. 1986); see also Kumar v. Racing Corp. of

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44

Am., Inc., 1991 WL 67083, at *5 (Del. Ch. Apr. 26, 1991). No such showing has

been, or can be, made here.

Fifth,

But Truong is also on TERP’s board, see Ex. 40, and SunEdison is

obligated to “arrange for” advisors, expressly including legal advisors or at the

Committee’s request. Ex. 7 ¶¶3.1, 3.2.

Precisely the same

challenge was rejected by In re Western National Corp. Shareholders Litigation,

2000 WL 710192, at *22 (Del. Ch. May 22, 2000),

“for the perfectly appropriate reasons that they were highly qualified and

independent.” In Western National , the special committee members

interviewed firm representatives, inquired as to their experience and independence,

and selected the firm because they concurred with the inside directors.

That is “a substantively and procedurally

sound manner” of selecting advisors. W. Nat’l , 2000 WL 710192, at *22.

Western National distinguished Kahn v. Tremont Corp., 694 A.2d 422, 429

(Del. 1997), on which Plaintiff relies (Pl. Mem. 48), for the same reason Kahn is

inapposite here — the challenged law firm in Kahn “had strong financial

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45

connections to the controlling shareholder,” whereas here “management merely

arranged for the committee to interview [financial and legal] advisors that appeared

qualified and did not have any connection” to either the corporation or its

controlling shareholder.” Western National , 2000 WL 710192, at *22. Similarly,

Gesoff v. IIC Indus., Inc., 902 A.2d 1130, 1151 (Del. Ch. 2006) (Pl. Mem. 48), is

distinguishable because the supposed “independent counsel” to the special

committee was (1) outside counsel to the entity and (2) had been advising its

parent company on the transaction at issue.

Plaintiff’s suggestion that should also have

advised the Committee it was not bound to the Take/Pay because it was only an

“unsigned term sheet” is legally infirm.

Plaintiff claims the Take/Pay Agreement is “an unsigned term sheet that

purported to set forth only ‘certain terms’ and was far short of a definitive, binding

agreement,” and that “TERP was never actually bound.” Id. But the Interim

Agreement, which is signed , provides that the parties “shall enter into a long-term

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46

framework agreement…for the dropdown of a certain number of US residential

and small commercial solar projects ... all based on the terms set forth on Exhibit

B hereto” and “shall negotiate in good faith to finalize the forms of the [Take/Pay

Agreement].” §§1.8, 1.9. Such “an express contractual obligation to negotiate in

good faith is binding on the contracting parties.” SIGA Techs., 67 A.3d at 343-44.

Moreover, the detailed term sheet set forth the essential terms of the agreement,

concluding with the requirement that “Pricing Assumptions shall generally be

consistent with and...not be more restrictive, when taken as a whole, with

customary practices for Seller’s and Purchaser’s existing tax equity funds.” Ex. 67

at Ex. B, at 1168. This is a binding agreement under Delaware law. Loppert , 865

A.2d at 1289; see also Sawabeh, 832 F.Supp. 2d at 307 (same under New York

law).

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47

Emerald is instructive. In Emerald , independent directors considering a

merger failed to insist that a director and controlling shareholder “absent

themselves from their deliberations,” but the Court held this was not a “process

deficiency” that would lead to an “unfair result” because:

No adverse consequence resulted from those procedural lapses....[A]lthough Hall and Berlin should not have been permitted to be

present at meetings of these three directors, the credible evidenceestablishes that neither Hall nor Berlin influenced the non-affiliateddirectors’ decisions in any significant way.

2003 WL 21003437 at *8, *28.

Sixth,

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48

But the absence of a fairness opinion creates no

inference of unfair dealing. “To be sure, our case law recognizes that establishing

an independent negotiating committee, and obtaining an investment banker

fairness opinion (or asset appraisal), are indicia of ‘fair dealing’ in a merger. But

those authorities do not impose an affirmative fiduciary duty to implement one or

more of these procedural safeguards, with the result that a failure to do so would

constitute actionable unfair dealing.” Seagraves v. Urstadt Prop. Co., 1989 WL

137918, at *4 (Del. Ch. Nov. 13, 1989) (fairness opinion is an indication of fair

dealing in a merger, but failure to do so does not constitute actionable unfair

dealing).

An entire fairness “inquiry must focus on how the special committee

actually negotiated the deal” and “the substance, and efficacy, of the special

committee’s negotiations.” In re S. Peru Copper Corp. S ’ holder Deriv. Litig., 52

A.3d 761, 789 (Del. Ch. 2011).

That is the essence of procedural fairness.

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49

2. The Economic Terms of the December Amendments Are Fair to

TERP

Even if there had been flaws in the Conflicts Committee process rising to the

level of “unfair dealing” — and there were none — the economic terms the

Committee negotiated were fair and should thus be upheld. See, e.g., Trados, 73

A.3d at 76, 78 (fiduciaries did not breach their duties when they failed to follow a

fair process yet nevertheless approved a transaction that yielded a fair price); Del.

Open MRI Radiology Assocs., P.A. v. Kessler , 898 A.2d 290, 310 (Del. Ch. 2006)

(“[T]he bottom line outcome of the case…turns on whether the merger was

financially fair.”); In re Hanover Direct, Inc. S’holders Litig., 2010 WL 3959399,

at *2 (Del. Ch. Sept. 24, 2010) (“The issue of fair process is secondary to the

ultimate import of fair price....”).

Each of Plaintiff’s economic unfairness arguments is refuted by evidence

adduced during expedited discovery.

Residential Asset Base. Plaintiff continues to press its unsupported

allegation that the economic terms of the December Amendments are unfair

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50

because the new residential assets “fundamentally change[] TERP’s business

model...from a purchaser of high-quality commercial and utility assets into a

purchaser of primarily (riskier) residential rooftop solar assets.” Pl. Mem. 52

(repeating, without a shred of evidence, ¶¶11, 23, 73, 106, 139).

“In the real world, market prices matter and are usually

considered the best evidence of value.” Gotham Partners, L.P. v. Hallwood Realty

9 PX-35 at 25:9-23; PX-36 at 57:14-58:9; PX-37 at 20:4-23:7, 26:21-27:10;PX-38 at 23:12-25:24; PX-40 at 18:20-19:18; PX-41 at 18:11-19:10, 21:16-25;PX-44 at 36:11-24.10 See Ex.13 at 4604.

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51

Partners, L.P., 855 A.2d 1059, 1080 (Del. Ch. 2003), aff ’ d , 840 A.2d 641 (Del.

2003); see also In re Appraisal of Dole Food Co., 114 A.3d 541, 558 (Del. Ch.

2014).

Take/Pay. The record amply demonstrates strong business reasons for

TERP’s decision to enter into a Take/Pay Agreement in July, to achieve the well-

documented benefits to TERP of the entire transaction. S. Muoio & Co. v.

Hallmark Entm’t Invs. Co., 2011 WL 863007, at *16 (Del. Ch. Mar. 9, 2011) (“the

court asks whether the transaction was one that a reasonable seller, under all of the

circumstances, would regard as within a range of fair value; one that such a seller

could reasonably accept”); Lonergan v. EPE Holdings, LLC , 5 A.3d 1008, 1020

(Del. Ch. 2010) (“a Delaware court “determines entire fairness based on all aspects

of the entire transaction”). That decision is one that Plaintiff has neither standing

— nor evidence — to challenge. REDACTED



52

For reasons set forth in nominal defendant TERP’s brief and in

Section II, Plaintiff’s concerns about the impact of the Take/Pay are speculative

and insufficient to support injunctive relief.

II.

PLAINTIFF HAS NOT DEMONSTRATED IRREPARABLE INJURY

The plaintiff “must establish both a threat of irreparable harm and that such

harm is imminent.” Theravectys SA v. Immune Design Corp., 2015 WL 1308273,

at *9 (Del. Ch. Mar. 9, 2015).11 Appaloosa can satisfy neither of these elements.

A.

TERP’s Hypothetical Is Speculative

Plaintiff seeks an injunction on the grounds that

11 See also Weldin Farms, Inc. v. Glassman, 414 A.2d 500, 505 (Del. 1980)

(“[A]n injunction will not issue by reason of mere apprehension of uncertainspeculative damage at an indefinite time in the future.”); Angelo, Gordon & Co. v. Allied Riser Commc’ ns Corp., 805 A.2d 221, 231 (Del. Ch. 2002) (no irreparableharm where injuries are “both speculative and [would] not result from the Mergeritself but [would] only be felt, if at all, with the passage of time after the Merger”).

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53

The brief submitted by nominal defendant TERP in

opposition to the pending motion spells out in detail the speculative nature of

Plaintiff’s concern Even if Plaintiff’s scenario is

possible, it cannot support an injunction. Roseton OL, LLC v. Dynegy Holdings

Inc., 2011 WL 3275965, at *19 (Del. Ch. July 29, 2011) (finding insufficient “a

speculative claim that if various contingencies occur” plaintiff will suffer

irreparable harm).

But there is no way to predict when or if that may ever happen:

The quantity of future dropdowns is unknown.

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54

The duration of TERP’s obligations may be less than a year.

Its sufficiency cannot bedetermined without knowing when TERP’s dropdown obligations willmaterialize, their cost, whether SunEdison or TERP will sell theassets, whether TERP can sell any of its other assets, and whatfinancing TERP will be able to obtain.

“[A]n event that might or might not occur” does not show irreparable harm.

H.F. Ahmanson & Co. v. Great W. Fin. Corp., 1997 WL 305824, at *11 (Del. Ch.

June 3, 1997). Plaintiff’s claim of a possible 2017 “insolvency” of TERP is purely

conjectural.

B.

SunEdison Could Pay Any Money Damages

Plaintiff asserts that TERP would be unable to collect money damages were

it to prevail against SunEdison in trial. Pl. Mem. 56-59; ¶¶133-35. There is no

basis for this assertion. Plaintiff does not quantify the amount that SunEdison

would theoretically be unable to pay. As shown above, that amount cannot exceed

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55

Hillsboro, 2008 WL 4561227, at *3;

Kansas City S ., 2003 WL 22659332, at *5.12

12 The other case Plaintiff cites, Bayard v. Martin, 101 A.2d 329, 335 (Del.1953), also establishes that Plaintiff’s failure to “make an affirmative showing” ofSunEdison’s future insolvency is insufficient.

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56

C. The Court Could Enjoin the Take/Pay Agreement in the Future

Plaintiff last argues that because the Vivint merger is to be effectuated

through multiple interrelated transactions, the Court would not be able to undo the

transaction once the merger closes. Pl. Mem. 58-60. But the only transaction

Plaintiff attacks as irreparably injurious is the Take/Pay Agreement. If in the

future the Take/Pay were to prove unfair to TERP, nothing would prevent the

Court from exercising its equitable powers to enjoin the agreement at the time.

There would be no need to undo the Vivint merger. “[T]he Court would be able to

fashion an appropriate remedy...without, in the words of Judge Easterbrook, having

to ‘unscramble an egg.’” In re KMC Real Estate Inv’ rs, LLC , 518 B.R. 505, 510

(S.D. Ind. 2014).

III. THE BALANCE OF EQUITIES WEIGHS HEAVILY AGAINST

INJUNCTIVE RELIEF

“[A] court must be cautious that its injunctive order does not threaten more

harm than good.” Lennane v. ASK Comp. Sys., Inc., 1990 WL 154150, at *6 (Del.

Ch. Oct. 11, 1990), appeal refused , 1990 WL 169078 (Del. Oct. 19, 1990) (Del.

Oct. 19, 1990).

An injunction would preclude the Vivint merger by disabling SunEdison’s

ability to finance it with cash from the Goldman Loan or proceeds of the Amended

Purchase Agreements. That will harm Vivint, SunEdison, TERP and their

shareholders.



57

Plaintiff argues that the duty to close the Vivint merger would be suspended

by entry of an injunction, citing §6.01(b) of the Amended Merger Agreement. Pl.

Mem. 60. But the only immediate effect of the injunction would be to prevent

SunEdison from accessing its financing, which is dependent on the existence of the

Take/Pay. SunEdison’s duty to close under the Amended Merger Agreement is not

conditioned on financing. Ex. 69 at §4.05(a) (“obligations to perform...including

to consummate the Closing...are not conditioned on...the Debt Financing or any

other financing”). On entry of an injunction, Vivint can be expected to sue

SunEdison immediately because March 18, 2016 is the merger “termination date.”

Id . at §7.01(c).

If Vivint were to sue and prevail on its reading of the contract — that an

injunction preventing the financing does not excuse closing because financing is

expressly carved out of the conditions to closing — SunEdison would be forced

into the impossible position of having to close anyway (which it will be unable to

do) or paying damages, which contractually include the losses suffered by Vivint

shareholders for not receiving the merger consideration. Id. at §7.02.

(Shareholders separately have the right to sue for the merger consideration, id . at

§8.06(iii).) REDACTED



58

It is appropriate for the Court to consider that issuance of an injunction

would harm Vivint as well. See Cantor Fitzgerald, L.P. v. Cantor , 724 A.2d 571,

588 (Del. Ch. 1998) (considering “impact on more business entities and individuals

than the parties to this litigation”); accord Braunschweiger v. Am. Home Shield

Corp., 1989 WL 128571, at *5 (Del. Ch. Oct. 26, 1989); Solar Cells, Inc. v. True

N. Partners, LLC , 2002 WL 749163, at *8 (Del. Ch. Apr. 25, 2002).

The merger offers Vivint shareholders substantial benefits — a 21.1% price

premium and “near-term value and liquidity.” Ex. 5 at 79.

CONCLUSION

For the forgoing reasons, Plaintiff’s motion for a preliminary injunction

should be denied. If the Court grants an injunction, it should require the Plaintiff

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59

to post a bond commensurate with the extreme harm that may result. See AM Gen.

Holdings LLC v. Renco Grp., 2012 WL 6681994, at *7 (Del. Ch. Dec. 21, 2012);

Sanofi-Synthelabo v. Apotex Inc., 488 F. Supp. 2d 317, 349 (S.D.N.Y. 2006)

(requiring $400 million bond based on “potential lost profits, lost market share and

associated costs of relaunch” stemming from preliminary injunction barring

distribution of prescription drug), aff’d , 470 F.3d 1368 (Fed. Cir. 2006).

Specifically, because a wrongful injunction of the Challenged Transaction would

disable SunEdison from closing the Vivint merger due to lack of financing, would

expose SunEdison to from Vivint and its shareholders,

and

Plaintiff should be compelled to post a bond of REDACTED

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OF COUNSEL:

Gregory P. JosephPamela JarvisMara LeventhalHoney KoberGregory O. TuttleRoman AsudulayevJoseph Hage Aaronson LLC485 Lexington Avenue30th Floor

New York, New York 10017(212) 407-1210

Dated: February 12, 2016

/s/ Thomas A. Beck

Thomas A. Beck (#2086)Raymond J. DiCamillo (#3188)Sarah A. Clark (#5872)Richards, Layton & Finger, P.A.920 North King StreetWilmington, Delaware 19801(302) 651-7700

Attorneys for Defendants SunEdison,

Inc. and SunEdison Holdings

Corporation

Documents

Sunedison Memo