Contract analysis

I. Executive Summary This memorandum analyzes whether the proposed transfer of Production Tax Credits ("PTCs") generated by the Ridgeway Wind Project (as defined below) under Section 6418 of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), to Pinnacle Atlantic Partners LP ("Pinnacle") triggers consent requirements under the Credit Agreement, dated as of March 28, 2023 (as amended, restated, supple

II. Background A. The Ridgeway Wind Project The Ridgeway Wind Project (the "Project") is a 250 megawatt ("MW") onshore wind generation facility located on approximately 28,000 acres of leased ranchland situated approximately 14 miles northeast of Miles City, Custer County, Montana. The Project is owned and operated by Ridgeway Wind Energy LLC, a Delaware limited liability company (Delaware Secretary of State file num

III. Analysis of Section 7.14 — Restriction on Transfer of Tax Attributes A. Text of Section 7.14

Section 7.14 of the Credit Agreement, captioned "Tax Attributes," is a negative covenant that imposes a broad restriction on the Borrower's ability to transfer tax-related benefits associated with the Project. The operative language of Section 7.14 provides, in relevant part: "The Borrower shall not, without the prior written consent of the Lender (which consent may be granted or withheld in the Lender's sole and abs

IV. Analysis of Depositary Agreement Waterfall Provisions A. Overview of the Depositary Agreement The Depositary Agreement, dated as of March 28, 2023, between Ridgeway Wind Energy LLC and Redstone Capital Bank, N.A., establishes a comprehensive account structure and cash management framework governing all revenues and expenditures of the Project. The Depositary Agreement creates the following principal accounts (amo

1. Operating Expenses. First, amounts necessary to fund budgeted operating expenses (including O&M costs, insurance premiums, property taxes, land lease payments, and administrative expenses) are transferred to the Operating Account.

2. Debt Service. Second, amounts necessary to pay scheduled principal and interest on the outstanding indebtedness under the Credit Agreement are transferred to the Debt Service Account.

3. Debt Service Reserve Replenishment. Third, to the extent the Debt Service Reserve Account is below its required target balance, amounts necessary to replenish the reserve to the target level are transferred to the Debt Service Reserve Account.

4. Major Maintenance Reserve. Fourth, amounts necessary to fund the Major Maintenance Reserve Account in accordance with the Major Maintenance Reserve budget are transferred to the Major Maintenance Reserve Account.

5. Distribution Conditions Satisfaction. Fifth, a determination is made as to whether the Distribution Conditions (no Event of Default, DSCR above the minimum threshold, all reserve accounts fully funded) have been satisfied.

6. Distribution Account. Sixth, if and only if the Distribution Conditions are satisfied, remaining funds are transferred to the Distribution Account and become available for distribution to Dunmore Renewables Inc. Practical Impact. The estimated Year 1 transfer consideration of $23,271,803 is a substantial sum. If this amount is deposited into the Revenue Account and subjected to the waterfall, a significant portion

V. Other Credit Agreement Provisions Potentially Implicated A. Representations and Warranties The Borrower's consent request under Section 7.14 is likely to trigger a requirement for bring-down representations and warranties. Based on our review of the Credit Agreement and customary lender expectations, Redstone may require the Borrower to represent and warrant, as a condition of consent, the following: • The Project

VI. Recommended Course of Action Based on the analysis set forth above, I recommend the following course of action, which should be coordinated across the engagement team, including the Borrower's in-house counsel, the tax advisors at Grayson Birch & Co. LLP, and the insurance advisors at Corbin Hale & Associates Inc. A. Early Engagement with Redstone Capital Bank I recommend that Calderwood & Harkness, on behalf of

VII. Conclusion Based on the analysis set forth in this memorandum, my conclusions and recommendations are as follows: First, lender consent under Section 7.14 of the Credit Agreement is almost certainly required before Ridgeway Wind Energy LLC may execute an IRC § 6418 transfer of PTCs to Pinnacle Atlantic Partners LP. The broad language of Section 7.14 — encompassing the "transfer, sale, assign[ment], pledge, or ot