Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the contractual rights and remedies available to Ironside Capital Management LP ("Ironside" or the "LP") under the Amended and Restated Limited Partnership Agreement of ICM Cascadia Co-Invest, LP (the "Vehicle" or the "Co-Invest"), dated July 29, 2022 (the "LP Agreement"), in connection with recent material adverse developments affecting the proposed a

II. Background and Context A. The Co-Investment Vehicle ICM Cascadia Co-Invest, LP (the "Vehicle" or the "Co-Invest") is a Delaware limited partnership formed on July 22, 2022, by the filing of a Certificate of Limited Partnership with the Delaware Secretary of State (Delaware Secretary of State File Number 7439218; Federal Employer Identification Number 88-3921457). The Vehicle was formed for the specific and sole p

III. Scenario Analysis: Ironside's Rights and Remedies This Section III presents a detailed analysis of Ironside's rights and remedies under the LP Agreement and related transaction documents across three principal scenarios. Each scenario reflects a plausible path that the transaction may take in light of the Bull Run concession renegotiation and the broader uncertainty surrounding the closing. A. Scenario 1: Materi

1. MAE as a Closing Condition Under Article VII of the EPA, the obligation of Cascadia Acquisition Corp. (and by extension, the equity investors — Fund IV and the Co-Invest — standing behind it) to consummate the closing of the acquisition is subject to a series of conditions precedent. Among the most significant of these conditions is the requirement set forth in EPA §7.02(a) that, as of the closing date, no Materia

2. Impact on Co-Invest Vehicle Upon EPA Termination for MAE If the EPA is terminated as a result of a Material Adverse Effect (or for any other reason resulting in non-closing of the acquisition), the LP Agreement provides a structured mechanism for addressing the consequences to the Vehicle and its partners. LP Agreement §7.02 — Consequences of Transaction Failure. Section 7.02 of the LP Agreement provides that if t

3. Recoverability of Capital Called A central concern for Ironside in a non-closing scenario is the recoverability of the $22,500,000 already called and funded. As detailed in Section II.D above, the capital call proceeds have been deployed to specific uses, each of which presents a different recoverability profile. We address each category in turn. Organizational Expenses ($285,000). Organizational expenses — includ

4. Unfunded Commitment LP Agreement §4.01(d) — Limitation on Capital Calls Following EPA Termination. Section 4.01(d) of the LP Agreement provides an important protection for Ironside in the event of a failed transaction. Under this provision, following termination of the EPA, the GP may not issue further capital calls to the LP except for the following limited purposes: (i) payment of Vehicle-level expenses and wind

1. Regulatory Failure The acquisition is subject to regulatory approvals from multiple federal and state agencies, each of which constitutes a separate condition precedent to closing under the EPA. FERC §203 Approval. Because Cascadia owns and operates hydroelectric facilities subject to the jurisdiction of the Federal Energy Regulatory Commission, the change in ownership effected by the acquisition requires approval

2. Financing Failure The debt financing for the acquisition consists of a $975 million senior secured term loan and a $150 million revolving credit facility, as evidenced by the debt commitment letter executed on August 30, 2022, by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC. The conditions precedent to funding under the debt commitment letter are separate and distinct from the conditions precedent to

3. Buyer Default / Reverse Termination Fee A scenario that warrants careful attention is one in which the acquisition fails to close due to a default by the buyer parties — i.e., Cascadia Acquisition Corp. and its equity sponsors — in circumstances where all conditions precedent to closing have been satisfied. In such a case, the EPA may provide for the payment of a reverse termination fee by the buyer parties to the

1. Definition of Material Impediment Event

Section 7.04(a) of the LP Agreement introduces a concept that is tailored specifically to single-purpose co-investment vehicles: the "Material Impediment Event." This provision recognizes that there may be circumstances in which the underlying acquisition neither closes nor is definitively terminated, but instead enters a period of uncertainty during which the investment thesis is materially impaired but not yet aban

2. GP's Powers During Dormancy Upon a declaration by the GP that a Material Impediment Event has occurred, the LP Agreement activates a set of dormancy provisions that govern the management and operation of the Vehicle during the period of uncertainty. The principal features of the dormancy regime are as follows: Suspension of Capital Calls and Investment Activity (§7.04(b)). The GP is authorized, but not required, t

3. Wind-Down Election Right — §7.04(c) The single most important protection available to Ironside in the dormancy scenario is the wind-down election right set forth in LP Agreement §7.04(c). This provision, which was specifically negotiated by Calderwood & Harkness on Ironside's behalf during the LP Agreement drafting process, provides Ironside with the unilateral right to compel an orderly wind-down of the Vehicle i

4. Interaction with EPA Outside Date and Standstill The dormancy regime under §7.04 does not exist in a vacuum; it interacts in important ways with the EPA, the debt commitment letter, and the regulatory approval process. EPA Outside Date. During dormancy, the EPA outside date may be extended by agreement of the parties. As noted above, a First Amendment extending the outside date from December 31, 2022 to March 31,

IV. Expense Allocation A. Vehicle-Level Expenses All expenses of the Vehicle — whether incurred during the investment period, the dormancy period, or the wind-down period — are borne by the Vehicle and are therefore allocated between the partners in proportion to their respective partnership interests: 99.99% to Ironside (as LP) and 0.01% to Meridian GP IV (as GP). In practical terms, the economic burden of Vehicle-l

V. GP Liability and Fiduciary Duties A. Standard of Care The LP Agreement establishes the standard of care applicable to the GP in the performance of its duties. Section 8.01 of the LP Agreement provides that the GP's standard of care is one of "good faith and commercially reasonable judgment." This standard is common in Delaware limited partnership agreements and reflects the parties' negotiated understanding of the

Section 8.02 of the LP Agreement provides broad exculpation for the GP. The GP is not liable to the Vehicle or to any partner for any losses, damages, or expenses arising from the GP's actions or inactions in connection with the Vehicle's activities, except to the extent that such losses, damages, or expenses are determined by a court of competent jurisdiction (by final, non-appealable judgment) to have resulted from