Contract analysis

Section 1.01 — Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: "Acquisition" means the acquisition of one hundred percent (100%) of the outstanding equity interests of Cascadia Renewables Holdings, Inc. by AcquisitionCo, on the terms and subject to the conditions set forth in the EPA. "AcquisitionCo" means Cascadia Acquisition Corp., a Delaware corporation formed f

Section 1.02 — Interpretation. Unless the context otherwise requires: (a) Words importing the singular include the plural and vice versa, and words importing any gender include all genders. (b) References to "Sections," "Articles," "Schedules," and "Exhibits" are to sections, articles, schedules, and exhibits of this Agreement, unless otherwise specified. (c) References to any agreement, document, or instrument mean

ARTICLE II — CO-INVESTMENT ALLOCATION

Section 2.01 — Allocation Percentages. The Parties shall participate in the Acquisition in accordance with their respective Pro Rata Shares, as follows: Each Party shall participate in the Acquisition (including, without limitation, the funding of equity contributions, the allocation of transaction costs, the allocation of distributions, and the allocation of risks and benefits) in accordance with its Pro Rata Share,

Section 2.02 — AcquisitionCo Ownership. (a) AcquisitionCo shall be a Delaware corporation wholly owned, directly or indirectly, by Fund IV and the Co-Investment Vehicle in proportion to their respective Pro Rata Shares. The organizational documents of AcquisitionCo (and any intermediate holding entity or entities interposed between AcquisitionCo and the Parties) shall reflect the ownership interests set forth in this

Section 2.03 — Equity Contributions to AcquisitionCo. (a) Each Party shall fund its Pro Rata Share of the Total Equity Commitment to AcquisitionCo (or such intermediate holding entity as the GP may designate) at or prior to the closing of the Acquisition, in accordance with the capital call procedures set forth in Article III. (b) The equity contributions of each Party shall be as follows: (i) Fund IV: Seven Hundred

Section 2.04 — No Adjustment to Allocation Percentages. (a) The allocation percentages set forth in Section 2.01 are fixed as of the date hereof and shall not be adjusted, modified, or varied except with the prior written consent of both Parties. (b) Neither Party may transfer, assign, or otherwise dispose of its allocation percentage or any portion thereof without the other Party's prior written consent, subject to

ARTICLE III — CAPITAL CALLS AND FUNDING

Section 3.01 — Capital Call Mechanics. (a) Capital calls on the Co-Investment Vehicle shall be made by the GP in its capacity as general partner of the Co-Investment Vehicle, in accordance with Section 4.01 of the LP Agreement. Each capital call notice shall specify the amount of the capital call, the purpose for which the capital is required, the funding date, and wire transfer instructions. (b) Capital calls on Fun

Section 3.02 — Timing of Contributions. (a) Each Party shall fund its Capital Contribution within ten (10) business days of receipt of a capital call notice from the GP, or within such shorter period as may be required by the EPA, the Debt Commitment Letter, or applicable law or regulation. In the event that a shorter funding period is required, the GP shall use commercially reasonable efforts to provide each Party w

Section 3.03 — Failure to Fund. (a) If either Party (the "Defaulting Party") fails to fund all or any portion of its Capital Contribution when due in accordance with a capital call notice (the "Default Amount"), the GP shall promptly notify the other Party (the "Non-Defaulting Party") of such failure. (b) Upon the occurrence of a funding default, the following remedies shall be available to the Non-Defaulting Party,

Section 3.04 — Capital Call Suspension. (a) In the event the GP declares a Material Impediment Event under Section 7.04 of the LP Agreement, capital calls on the Co-Investment Vehicle shall be suspended effective immediately upon delivery of written notice to Ironside and the Co-Investment Vehicle. (b) During any period of capital call suspension, Fund IV's parallel capital call obligations with respect to the Acquis

ARTICLE IV — TRANSACTION COSTS AND EXPENSES

Section 4.01 — Shared Transaction Costs. (a) Transaction Costs and expenses incurred in connection with the Acquisition (estimated at Fifty Million Dollars ($50,000,000) in the aggregate) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the Parties: (i) Fund IV: 71.43% of shared Transaction Costs; and (ii) Co-Investment Vehicle: 28.57% of

Section 4.02 — Vehicle-Specific Costs. (a) Costs and expenses that are specific to the formation, organization, and ongoing operation of the Co-Investment Vehicle shall be borne solely by the Co-Investment Vehicle and shall not be allocated to, or shared by, Fund IV. Such vehicle-specific costs include, without limitation: (i) Organizational expenses (including state filing fees, formation legal fees, and related cos

Section 4.03 — Financing Costs. (a) Costs and expenses associated with the Debt Commitment Letter and related financing arrangements (including, without limitation, commitment fees, structuring fees, arrangement fees, legal fees of lenders' counsel, and any extension or amendment fees) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the G

Section 4.04 — R&W Insurance Costs. (a) The Parties acknowledge that the R&W insurance premium deposit of Four Million Eight Hundred Seventy-Five Thousand Dollars ($4,875,000), payable to Northgate Specialty Insurance Co. in connection with the R&W Insurance Policy (Policy No. NSW-RI-2022-09814), was paid on September 2, 2022, and was funded from the Co-Investment Vehicle's initial capital call proceeds referenced in

Section 4.05 — Working-Capital Escrow. The working-capital adjustment escrow of Twenty-Five Million Dollars ($25,000,000), as required under the EPA, shall be funded by the Parties in proportion to their respective Pro Rata Shares as follows: (i) Fund IV: 71.43% = $17,857,500; and (ii) Co-Investment Vehicle: 28.57% = $7,142,500. Any release, return, or distribution from the Working-Capital Escrow shall be allocated t

ARTICLE V — GOVERNANCE AND DECISION-MAKING

Section 5.01 — GP Authority. (a) The GP shall have sole and exclusive authority and responsibility to manage the Acquisition on behalf of both Parties, including, without limitation, the negotiation, execution, and performance of the EPA, the Debt Commitment Letter, and all other transaction documents, subject in each case to the terms and conditions of the LP Agreement, the Side Letter, and this Agreement. (b) The G

Section 5.02 — Major Decisions Requiring Co-Invest Consent. Notwithstanding the authority of the GP set forth in Section 5.01, the following decisions shall require the prior written consent of the Co-Investment Vehicle (acting through Ironside as its sole limited partner), which consent shall not be unreasonably withheld, conditioned, or delayed: (a) Any material amendment, modification, or waiver of any provision o

Section 5.03 — Information Rights. (a) The GP shall provide the Co-Investment Vehicle with quarterly status reports during any period of dormancy (as described in Article VIII), including a summary of (i) the status of the Acquisition and any regulatory proceedings, (ii) the financial condition and operating performance of the Target (to the extent known), (iii) the status of the Debt Commitment Letter and related fi

Section 5.04 — Board Representation. (a) Upon the closing of the Acquisition, the board of directors of AcquisitionCo (and, to the extent within the control of the Parties, the board of directors of the Target) shall be constituted in a manner that reflects the Pro Rata Shares of the Parties. (b) Without limiting the generality of the foregoing, the Co-Investment Vehicle (acting through Ironside) shall have the right

ARTICLE VI — EPA AND REGULATORY MATTERS

Section 6.01 — Equity Purchase Agreement. (a) The Parties acknowledge that the EPA is to be executed on or about September 15, 2022, among the Selling Shareholders, the Target, and AcquisitionCo. The Selling Shareholders under the EPA are: (i) Timberline Growth Equity Fund III, LP, holding sixty-two percent (62%) of the outstanding equity interests of the Target; (ii) Weir Family Trust, holding eighteen percent (18%)

Section 6.02 — Representations and Warranties. (a) Each Party's exposure under the representations and warranties set forth in the EPA (including, without limitation, indemnification obligations arising from breaches thereof) shall be allocated between the Parties in proportion to their respective Pro Rata Shares. (b) The R&W Insurance Policy (Northgate Specialty Insurance Co., Policy No. NSW-RI-2022-09814), with a c

Section 6.03 — Regulatory Approvals. (a) The Parties acknowledge that the following regulatory approvals are required for the consummation of the Acquisition: (i) FERC Approval. Approval under Section 203 of the Federal Power Act for the transfer of the Target's hydroelectric licenses, filed with the Federal Energy Regulatory Commission on October 19, 2022, under FERC Docket No. EC22-143-000; (ii) OPUC Approval. Appr

Section 6.04 — Target Business. (a) The Target, Cascadia Renewables Holdings, Inc., is an Oregon corporation headquartered in Portland, Oregon, that owns and operates a diversified portfolio of infrastructure assets, including: (i) Fourteen (14) hydroelectric generating facilities located in the states of Oregon, Washington, and Idaho; (ii) Six (6) wind farms located in the states of Oregon and Washington; and (iii)

Section 6.05 — Outside Date and Amendments. (a) The original outside date for the closing of the Acquisition under the EPA is December 31, 2022, or such later date as may be agreed by the parties to the EPA in accordance with its terms. (b) The Parties acknowledge that the EPA may be amended from time to time to extend the outside date or to make other modifications to its terms, in each case subject to the consent r

Section 7.01 — Distribution Waterfall. (a) All distributions from AcquisitionCo (or any intermediate holding entity between AcquisitionCo and the Parties) in respect of the Acquisition, including, without limitation, distributions of operating cash flow, proceeds from any disposition, refinancing, or recapitalization of the Target or its assets, and any liquidating distributions, shall be allocated and paid to the Pa

Section 7.02 — Carried Interest. (a) The Co-Investment Vehicle is subject to a carried interest equal to ten percent (10%) of net profits payable to the GP, calculated above a preferred return hurdle of eight percent (8%) per annum, compounded quarterly, on contributed capital, as set forth in the LP Agreement and the Side Letter. (b) Fund IV is subject to a carried interest equal to twenty percent (20%) of net profi

Section 7.03 — Management Fee. No management fee is payable by or on behalf of the Co-Investment Vehicle to the GP or any of its Affiliates, as provided in the Side Letter dated July 29, 2022. The Co-Investment Vehicle shall not bear, directly or indirectly, any portion of the management fee payable by Fund IV or its limited partners to the GP under the Fund IV partnership agreement.

Section 7.04 — Tax Distributions. (a) The GP shall cause AcquisitionCo (or any intermediate holding entity) to make tax distributions to the Parties in amounts sufficient to cover each Party's estimated tax liabilities arising from allocations of taxable income or gain from AcquisitionCo and the Target, to the extent such tax distributions are permitted by applicable credit agreements, the organizational documents of

ARTICLE VIII — DORMANCY AND WIND-DOWN

Section 8.01 — Dormancy. (a) In the event of a Material Impediment Event and the issuance of a capital-call suspension notice by the GP under Section 7.04 of the LP Agreement, the Parties' obligations to fund additional Capital Contributions to AcquisitionCo (or any intermediate holding entity) shall be suspended in accordance with Section 3.04. (b) During any period of dormancy, this Agreement shall remain in full f

Section 8.02 — Wind-Down Election. (a) If the dormancy of the Co-Investment Vehicle exceeds eighteen (18) consecutive months from the date of the initial capital-call suspension notice, Ironside (in its capacity as the sole limited partner of the Co-Investment Vehicle) shall have the right, but not the obligation, to elect a wind-down of the Co-Investment Vehicle in accordance with Section 7.04(c) of the LP Agreement

Section 8.03 — Reactivation. (a) In the event the Parties determine to reactivate the Acquisition following a period of dormancy, this Agreement shall continue to govern the allocation of the co-investment on the same terms and subject to the same conditions as set forth herein, subject to any amendments agreed by the Parties in writing. (b) Reactivation of the Acquisition shall require the prior written consent of t

Section 8.04 — Effect of Termination of EPA. (a) In the event the EPA is terminated, whether by reason of (i) the expiration of the outside date (as may have been extended), (ii) the mutual agreement of the parties to the EPA, (iii) the exercise of a termination right by any party to the EPA, or (iv) any other termination event contemplated by the EPA, the Parties shall cooperate in good faith to wind down the co-inv

ARTICLE IX — TRANSFERS AND ASSIGNMENTS

Section 9.01 — Restrictions on Transfer. (a) Neither Party may transfer, assign, sell, pledge, encumber, or otherwise dispose of, directly or indirectly, its interest in the co-investment, its allocation percentage, or any rights or obligations under this Agreement (whether by operation of law or otherwise) without the prior written consent of the other Party, which consent may be withheld in such other Party's sole

Section 9.02 — Permitted Transfers. (a) Notwithstanding Section 9.01, the following transfers shall be permitted without the consent of the other Party (each, a "Permitted Transfer"): (i) A transfer by a Party of all or any portion of its interest in the co-investment to an Affiliate of such Party, provided that (A) the transferring Party shall have delivered prior written notice of such transfer to the other Party a

ARTICLE X — REPRESENTATIONS AND WARRANTIES

Section 10.01 — Mutual Representations and Warranties. Each Party represents and warrants to the other Party, as of the date of this Agreement, as follows: (a) Organization and Good Standing. Such Party is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease, and operate its properties and to carry

Section 10.02 — Fund IV Representations. In addition to the mutual representations and warranties set forth in Section 10.01, Fund IV represents and warrants to the Co-Investment Vehicle, as of the date of this Agreement, as follows: (a) Fund IV has committed Seven Hundred Fifty Million Dollars ($750,000,000) to the Acquisition, constituting Fund IV's Pro Rata Share of the Total Equity Commitment. (b) Fund IV has the