Contract analysis

I. Executive Summary This memorandum presents Calderwood & Harkness LLP's ("C&H") review and analysis of the quarterly status report for the second quarter of 2024 (the "Q2 Report") delivered by Meridian Infrastructure GP IV LLC (the "GP") to Ironside Capital Management LP ("Ironside" or the "LP") in its capacity as the sole limited partner holding a 99.99% limited partnership interest in ICM Cascadia Co-Invest, LP (

1. FERC §203 Approval Lapsed. The Federal Energy Regulatory Commission ("FERC") approval under Section 203 of the Federal Power Act, originally granted December 15, 2022 (Docket No. EC22-143-000) and subsequently extended by FERC staff letter, lapsed as of June 15, 2024 because the transaction did not close and no further extension was sought by the parties. A fresh FERC §203 application will be required for any reac

2. Tentative Concession Framework Reached. On June 30, 2024, the Portland Metropolitan Water District and Cascadia Renewables Holdings, Inc. ("Cascadia" or "CRH") reached a tentative, non-binding framework on revised terms for the Bull Run Filtration Project water-treatment concession—the dispute that gave rise to the Material Impediment Event. The GP characterizes this as the most significant positive development si

II. Compliance Review: Delivery and Format of Q2 Report A. Timeliness. Section 7.04(b) of the LP Agreement requires the GP to deliver quarterly status reports to the LP within fifteen (15) business days after the end of each calendar quarter during any period of dormancy. For purposes of this calculation, business days exclude Saturdays, Sundays, and federal holidays recognized under the LP Agreement. The second cale

Section 3(a) of the Side Letter specifies minimum content requirements for quarterly status reports delivered during dormancy. These requirements supplement and particularize the more general reporting obligations set forth in LP Agreement §7.04(b). The Side Letter was negotiated by C&H on Ironside's behalf and is binding on the GP. The five required content areas, and our assessment of the Q2 Report's compliance wit

III. Summary of GP's Q2 2024 Report Content Set forth below is a detailed summary of the substantive content of the Q2 Report, organized by subject matter. This section is intended to provide Ironside's investment team with a comprehensive record of the GP's disclosures and representations, supplemented by C&H's observations where relevant. A. Transaction Status Overview The GP reports that the proposed acquisition o

1. FERC §203 Approval — Lapsed. The acquisition of Cascadia's hydroelectric facilities requires prior approval from FERC under Section 203 of the Federal Power Act (16 U.S.C. §824b), which governs the disposition or acquisition of jurisdictional facilities, including any transfer of FERC hydroelectric licenses. The GP obtained FERC §203 approval on December 15, 2022, under FERC Docket No. EC22-143-000. The approval w

2. Oregon PUC (OPUC) — Stayed. The acquisition also requires approval from the Oregon Public Utility Commission under Oregon Revised Statutes Chapter 757, given Cascadia's status as the holder of regulated water-treatment concessions in Oregon. The OPUC application was filed on October 14, 2022 and assigned Docket No. UM-2287. The proceedings have been stayed at the joint request of the transaction parties since Febr

3. CFIUS — Cleared. A voluntary notice was submitted to the Committee on Foreign Investment in the United States in connection with the acquisition. CFIUS acknowledged receipt of the voluntary notice on September 20, 2022. The review concluded without the Committee identifying any unresolved national security concerns. No foreign ownership issues were identified, which is consistent with the domestic ownership struct

1. Concession Renegotiation — Tentative Framework Reached. The concession dispute that precipitated the Material Impediment Event and the Vehicle's dormancy is the most consequential issue bearing on the transaction's viability. The background and current status are summarized below. Background. On October 28, 2022, the Portland Metropolitan Water District (the "Water District") formally notified Cascadia of its inte

2. Cascadia Operating Performance. The GP provides limited updated financial information regarding Cascadia's operating performance during Q2 2024. The Q2 Report notes that Cascadia's management team—led by Chief Executive Officer Jonathan M. Weir and Chief Financial Officer Sandra K. Llewellyn—has continued to operate the business in the ordinary course during the standstill period, consistent with the obligations o

1. Capital Account Summary. The GP reports the following capital account summary for ICM Cascadia Co-Invest, LP as of June 30, 2024: The single capital call of $22,500,000 was issued on August 15, 2022, prior to the declaration of the Material Impediment Event. Capital call suspension has been in effect since January 9, 2023. No capital calls were issued during Q2 2024, and none have been issued during the entire dor

2. Application of Called Capital (Recap). The GP provides a recap of the application of the $22,500,000 in called capital, consistent with the breakdown reported in prior quarters: This breakdown is unchanged from prior quarters. The due-diligence costs and deposits of $12,790,000 include legal fees, accounting and tax advisory fees, technical and environmental consultants' fees, regulatory filing fees, and earnest-m

3. Dormancy Period Expenses. The GP reports that the annualized dormancy operating expenses of the Vehicle are estimated at approximately $185,000 per year. These expenses consist of: • Fund administration services provided by Kendrick Thorne & Associates LLP; • Delaware registered agent maintenance through Cascade Systems; • Delaware franchise tax; • Annual audit of the Vehicle's financial statements; and • Preparat

4. No Investment Activity. The GP confirms that no capital has been deployed by the Vehicle. There have been no acquisitions, dispositions, or other investment activity of any kind. The Vehicle's assets consist solely of cash (the working-capital reserve less cumulative dormancy expenses), held in the Vehicle's account at Atlas National Bank, N.A. E. Status of Key Transaction Documents and Insurance

1. Equity Purchase Agreement and Standstill. As noted above, the EPA (as amended through the Third Amendment) has an expired outside date of December 31, 2023. No party has exercised termination rights under the EPA, and the Mutual Standstill and Preservation Agreement, executed February 15, 2024, remains in full force and effect. The counterparties to the EPA on the sell side are: • Timberline Growth Equity Fund III

2. Debt Commitment Letter — Expired. The debt financing for the acquisition was to be provided under a commitment letter dated August 30, 2022, pursuant to which: • Atlas National Bank, N.A. (as lead arranger) committed to provide $650,000,000 of the $975,000,000 senior secured term loan facility; and • Pinnacle Credit Partners LLC committed to provide the remaining $325,000,000. In addition, a $150,000,000 revolving

3. R&W Insurance. Northgate Specialty Insurance Co. issued a representations and warranties insurance policy (Policy No. NSW-RI-2022-09814) with a coverage limit of $195,000,000. The premium deposit of $4,875,000 was funded from the initial capital call. The policy was bound on September 1, 2022. Due to the dormancy, Northgate and the insured parties entered into a tolling side letter dated January 20, 2023, which to

4. D&O Tail Policy. A directors' and officers' liability insurance tail policy was arranged with Sentinel Directors & Officers Underwriters Inc. for the benefit of Cascadia's management team in connection with the anticipated change of control. This D&O tail policy remains in standby status pursuant to the standstill arrangements. No claims have been made under the policy, and the standby status does not impose mater

IV. C&H Analysis: Key Issues for Ironside Based on our review of the Q2 Report and the relevant transaction documents, C&H has identified the following key issues for Ironside's consideration. Each is discussed in detail below. A. 18-Month Wind-Down Election Right (LP Agreement §7.04(c)) The 18-month dormancy threshold established in LP Agreement §7.04(c) was reached on July 9, 2024, calculated as eighteen (18) month

V. Status Summary Table The following table summarizes the status of key items as of June 30, 2024, compared to the prior quarter:

VI. Recommendations Based on our review of the Q2 Report and analysis of the key issues identified above, C&H makes the following recommendations:

1. Wind-Down Election — Defer for Limited Period. C&H recommends that Ironside defer exercise of the wind-down election right under LP Agreement §7.04(c) for a limited period, in order to assess the implications of the tentative concession framework and to review the GP's forthcoming reactivation feasibility memorandum. The wind-down election right, once ripened, does not expire under the LP Agreement (it remains exe

2. Information Requests. C&H recommends that Ironside deliver a formal information request to the GP, pursuant to its information rights under LP Agreement §7.02 and Side Letter §3(b), requesting the following: (a) Detailed terms of the tentative concession framework, including the full text of any term sheet, memorandum of understanding, or other written documentation reflecting the framework agreement between the W

3. Deadline Monitoring. C&H will continue to actively monitor all relevant deadlines and dates, including (a) the wind-down election window, (b) any termination or notice deadlines under the Standstill Agreement (sixty-day notice period), (c) the status of the R&W insurance tolling arrangement, and (d) regulatory matters, including any developments at FERC or OPUC. C&H will promptly advise Ironside of any date-sensit

4. Reactivation Preparedness. In parallel with the foregoing, C&H will prepare (a) a reactivation conditions checklist identifying all legal, regulatory, and documentary steps, approvals, and amendments that would be required if the decision is made to reactivate the transaction, and (b) a parallel wind-down analysis setting forth the mechanics and expected recovery of invested capital in a wind-down scenario, includ

VII. Limitations and Privilege Notice This memorandum has been prepared by Calderwood & Harkness LLP for the sole use of Ironside Capital Management LP and its authorized personnel. It is protected by the attorney-client privilege and constitutes attorney work product under applicable law. This memorandum should not be disclosed to any third party, including the GP, other co-investors, or any regulatory authority, wi

VIII. Signature block We are available to discuss the contents of this memorandum and the recommendations set forth herein at your convenience. Please do not hesitate to contact us with any questions. Respectfully submitted, CALDERWOOD & HARKNESS LLP By: ________ Theresa Kim Lead Associate, Funds & Asset Management Calderwood & Harkness LLP 125 Broad Street, 44th Floor New York, NY 10004 Direct: (212) 555-4823 tkim@c