1015-00004 · Calloway-Briggs Renewables Inc · Memos & Analyses/Regulatory

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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-4800 Facsimile: (713) 555-4801

Matter No.: 48172.001 Date: October 5, 2023

MEMORANDUM

TO: James Prentice, Responsible Partner, Mergers & Acquisitions (Houston) Megan Chu, Lead Associate, Mergers & Acquisitions (Houston)

FROM: Derek Okonkwo, Associate, Mergers & Acquisitions (Houston)

RE: Hart-Scott-Rodino Antitrust Improvements Act — Analysis of Filing Obligations for Formation of Joint Venture Between Calloway-Briggs Renewables Inc. and Lumen Ridge Infrastructure Partners LLC

PRIVILEGE DESIGNATION: This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation and in furtherance of the rendition of legal advice. It is intended solely for the use of the named recipients and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.

I. EXECUTIVE SUMMARY

Calderwood & Harkness LLP has been retained by Calloway-Briggs Renewables Inc. ("CBR"), a Texas corporation headquartered at 2300 Travis Street, Suite 4200, Houston, Texas 77006, in connection with the proposed formation of a 50/50 joint venture with Lumen Ridge Infrastructure Partners LLC ("Lumen Ridge"), a Delaware limited liability company headquartered at 301 Tresser Boulevard, Suite 1400, Stamford, Connecticut 06901. The joint venture entity, to be known as Solstice Plateau Energy Holdings LLC (the "JV Entity" or "Solstice Plateau"), will be organized as a newly formed Delaware limited liability company for the purpose of developing, constructing, financing, owning, and operating a portfolio of utility-scale solar energy generation projects.

The total aggregate equity commitment to the JV Entity is $300,000,000, with each member contributing $150,000,000 in value. Specifically, CBR's contribution consists of $60,000,000 in cash plus an in-kind contribution of a portfolio of eight utility-scale solar development projects valued at $90,000,000 (agreed valuation based on preliminary indications in the non-binding term sheet signed September 25, 2023, with final valuation to be confirmed by a fairness analysis from Ridgeline Barrow & Co. dated November 15, 2023, which has not yet been delivered as of the date of this memorandum). Lumen Ridge's contribution consists of $150,000,000 in cash.

This memorandum analyzes whether the formation of the JV Entity triggers a pre-merger notification requirement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, and the implementing regulations promulgated by the Federal Trade Commission ("FTC") at 16 C.F.R. Parts 801–803.

Conclusion: Based on the analysis set forth below, an HSR filing is required. The transaction exceeds the applicable size-of-transaction threshold of $111.4 million (as adjusted for 2023). Both parties satisfy the size-of-person test. The commerce requirement is met. No available exemption applies. We recommend an expedited filing to seek early termination of the statutory waiting period.

Recommended HSR Filing Date: On or about October 18, 2023, which is designed to allow sufficient time for early termination of the 30-day waiting period before the targeted signing date for definitive transaction documents in late November or early December 2023. We anticipate that the FTC may grant early termination within approximately 15 to 25 days of filing, given the complementary nature of the joint venture and the absence of competitive overlap between the parties.

II. BACKGROUND — TRANSACTION STRUCTURE

A. The Parties

1. Calloway-Briggs Renewables Inc. ("CBR")

CBR is a Texas corporation (EIN 46-2837451; Texas Secretary of State File Number 0801647392) founded in 2011. CBR is one of the largest privately held independent solar energy developers in the southern United States, with an active development and operating portfolio of approximately 3.8 gigawatts ("GW") of solar projects located across Texas, New Mexico, Arizona, and Nevada. CBR's operations encompass the full lifecycle of utility-scale solar energy project development, including site identification and land acquisition, permitting and interconnection, engineering and procurement, construction management, and long-term asset management.

For the fiscal year ended December 31, 2022, CBR reported revenues of approximately $412 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $98 million. CBR's corporate leadership includes Margaret "Meg" Calloway, who serves as Chairwoman of the Board and Chief Executive Officer, and Thomas R. Briggs, who serves as President. Ms. Calloway and Mr. Briggs are the co-founders of CBR and together hold a majority ownership stake in the company. An approximately 22% minority stake in CBR is held by Cascadia Growth Equity Fund III, L.P. (Owen Charbonneau, Managing Director), a Delaware limited partnership based in Portland, Oregon. CBR's General Counsel is Rebecca Whitfield, and its Chief Financial Officer is Priya Narayanan.

2. Lumen Ridge Infrastructure Partners LLC ("Lumen Ridge")

Lumen Ridge is a Delaware limited liability company (EIN 83-1924076) that serves as a dedicated renewable-energy infrastructure investment platform. Lumen Ridge was formed in 2018 and is managed by Lumen Ridge Capital Advisors LLC ("LRCA"), also a Delaware limited liability company. Lumen Ridge has approximately $4.2 billion in assets under management deployed across wind, solar, and battery-storage projects located throughout North America. The investment strategy of Lumen Ridge focuses on mid-to-late-stage development and construction-ready renewable energy assets with contracted revenue streams, typically through long-term power purchase agreements with investment-grade offtakers.

The key principals of Lumen Ridge and LRCA include Nathaniel "Nate" Forsythe (Co-Founder and Managing Partner), Carolyn J. Delaney (Partner and Head of Solar Investments), Victor Osei (Chief Financial Officer), and Amanda Prescott (General Counsel and Chief Compliance Officer). Lumen Ridge is represented in connection with this transaction by Haverford, Quinn & Steele LLP, with Gregory Haverford III serving as Lead Partner and Joanna Kline serving as Senior Associate.

3. Solstice Plateau Energy Holdings LLC (the "JV Entity")

The JV Entity, Solstice Plateau Energy Holdings LLC, is to be formed as a Delaware limited liability company for the exclusive purpose of developing, constructing, financing, owning, and operating the contributed portfolio of utility-scale solar projects. The JV Entity does not currently exist and will be organized contemporaneously with the closing of the transaction. It will have no operations, employees, assets, or liabilities prior to the initial capital contributions by CBR and Lumen Ridge.

B. Transaction Description

The proposed transaction involves the formation of a 50/50 joint venture structured as a Delaware limited liability company, with a total aggregate initial equity commitment of $300,000,000. The key terms of the transaction, as reflected in the non-binding term sheet signed on September 25, 2023 by Margaret Calloway on behalf of CBR and Nathaniel Forsythe on behalf of Lumen Ridge, are as follows:

CBR's Contribution. CBR will contribute to the JV Entity a portfolio of eight permitted-but-unbuilt utility-scale solar development projects totaling approximately 1,200 megawatts ("MW") (1.2 GW) of nameplate direct-current ("DC") capacity, valued at $90,000,000, plus $60,000,000 in cash. The contributed projects are located across three states:

• Texas: Five projects with aggregate nameplate DC capacity of approximately 780 MW;

• New Mexico: Two projects with aggregate nameplate DC capacity of approximately 260 MW; and

• Arizona: One project with nameplate DC capacity of approximately 160 MW.

The $90,000,000 valuation for the in-kind contribution is based on the agreed valuation set forth in the non-binding term sheet, which references preliminary indications from the ongoing fairness analysis being prepared by Ridgeline Barrow & Co. The final fairness analysis, expected to be dated November 15, 2023, has not yet been delivered as of the date of this memorandum. The total value of CBR's contribution is therefore $150,000,000 ($60,000,000 cash plus $90,000,000 in-kind).

Lumen Ridge's Contribution. Lumen Ridge will contribute $150,000,000 in cash to the JV Entity. In addition, Lumen Ridge will be responsible for arranging project-level debt financing for the individual solar projects held by the JV Entity, with anticipated total non-recourse project debt of up to $480,000,000 to be provided by Trident National Bank, N.A.

Additional Capital Calls. Under the proposed LLC Agreement, additional capital calls of up to $200,000,000 per member (for an aggregate of $400,000,000 in additional capital) will be authorized, subject to supermajority approval of the Management Committee (five of six votes required, as described below). This brings the total potential equity capitalization of the JV Entity to $700,000,000, inclusive of the initial $300,000,000 commitment.

Membership Interests. Upon formation and the initial capital contributions, each of CBR and Lumen Ridge will hold a 50% membership interest in the JV Entity. These membership interests will entitle each member to 50% of the profits, losses, and distributions of the JV Entity, subject to the terms of the LLC Agreement.

Timeline. The non-binding term sheet was signed on September 25, 2023. The parties are targeting the signing of definitive transaction documents (including the LLC Agreement, contribution agreements, and related ancillary documents) in late November or early December 2023.

C. Governance and Control

The governance of the JV Entity is expected to be structured as follows, based on the terms reflected in the non-binding term sheet:

Management Committee. The JV Entity will be governed by a six-member Management Committee, with three members appointed by CBR and three members appointed by Lumen Ridge. The Management Committee will have authority over all significant business decisions of the JV Entity.

Supermajority Vote. A supermajority of five of six Management Committee votes will be required for major decisions, including but not limited to:

• Approval of the annual budget and business plan;

• Capital calls in excess of $25,000,000 per call;

• Incurrence of indebtedness;

• Disposition of material assets;

• Admission of new members;

• Amendments to the LLC Agreement; and

• Dissolution of the JV Entity.

Officer Appointments. CBR will be appointed as the development and construction manager for all projects held by the JV Entity. The Chief Executive Officer of the JV Entity will be appointed by CBR (Daniel Estrada), and the Chief Financial Officer will be appointed by Lumen Ridge (Victor Osei).

Ownership and Profit Sharing. Each member will hold a 50% ownership interest in the JV Entity, entitling each member to an equal share of all economic benefits and obligations associated with the JV Entity's operations.

The governance structure described above is significant for HSR purposes because it confirms that neither CBR nor Lumen Ridge will be a passive investor in the JV Entity. Both parties will exercise active governance rights through the Management Committee, officer appointments, and supermajority voting provisions. As discussed in Section V below, this precludes reliance on the investment-only exemption set forth in 16 C.F.R. § 802.4.

III. HSR ACT — STATUTORY AND REGULATORY FRAMEWORK

A. Overview of HSR Requirements

The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the "HSR Act"), and the implementing regulations promulgated thereunder by the FTC (16 C.F.R. Parts 801–803), establish a pre-merger notification program that requires parties to certain acquisitions and mergers to notify both the FTC and the Antitrust Division of the Department of Justice ("DOJ") before consummating the transaction. The purpose of the HSR Act is to give the federal antitrust enforcement agencies an opportunity to review proposed transactions for potential anticompetitive effects before they are completed.

A transaction subject to the HSR Act requires the filing of an HSR Notification and Report Form by both the acquiring and acquired persons. Filing triggers a mandatory waiting period during which the transaction may not be consummated. The standard waiting period is 30 calendar days from the date on which both parties' filings are received by the FTC and DOJ (or 15 days in the case of cash tender offers or certain bankruptcy-related acquisitions). During the waiting period, the reviewing agency may determine that the transaction does not warrant further investigation and may grant early termination of the waiting period, or it may issue a request for additional information (commonly known as a "second request"), which extends the waiting period until 30 days after both parties have substantially complied with the second request.

Failure to comply with the HSR Act's filing and waiting-period requirements can result in civil penalties of up to $50,120 per day of violation (as adjusted for 2023) and may also provide grounds for injunctive relief.

B. Applicability to Joint Venture Formations

The HSR Act and implementing regulations apply not only to traditional mergers and acquisitions of existing businesses but also to the formation of joint ventures and other new entities. Under the FTC's regulations, the formation of a joint venture or new entity may be reportable as an acquisition of voting securities (in the case of a corporation) or non-corporate interests (in the case of a limited liability company, partnership, or other non-corporate entity).

Specifically, 16 C.F.R. § 801.40 addresses the formation of joint ventures and other entities. Under this provision, contributions to a newly formed entity in exchange for membership interests or similar equity interests can constitute "acquisitions" that are subject to HSR reporting requirements, provided the applicable jurisdictional thresholds are met. The regulations treat each participant's acquisition of interests in the newly formed entity as a separate acquisition, and each participant is analyzed independently to determine whether its acquisition triggers the filing obligation.

With respect to the acquisition of interests in limited liability companies, the FTC's revised guidance treats the acquisition of membership interests in a newly formed LLC analogously to the acquisition of non-corporate interests. Under this framework, the acquisition of LLC membership interests may be reportable if the acquiring person will hold interests that either (a) confer the right to 50% or more of the profits of the entity, or (b) are valued in excess of the applicable size-of-transaction threshold. Where both conditions are satisfied, as is the case here, the analysis is straightforward.

In the present transaction, each of CBR and Lumen Ridge will acquire a 50% membership interest in Solstice Plateau Energy Holdings LLC. Each member's interest will confer the right to 50% of the profits of the JV Entity, and each member's capital contribution is valued at $150,000,000. Both the value of the interests being acquired and the profit/control percentages are relevant to the determination of whether the HSR Act's filing requirements are triggered. As discussed below, the size-of-transaction and size-of-person thresholds are clearly exceeded.

C. Size-of-Transaction Test

Under the HSR Act and implementing regulations, a transaction is potentially reportable if the "size of the transaction" exceeds the applicable threshold. For calendar year 2023, the size-of-transaction threshold, as adjusted annually by the FTC based on changes in the gross national product, is $111.4 million. See 88 Fed. Reg. 5,572 (Jan. 27, 2023).

The "size of the transaction" is measured by the greater of (a) the acquisition price, or (b) the fair market value of the interests being acquired. See 16 C.F.R. § 801.10. In the context of a joint venture formation, the "acquisition price" for each participant's interest in the newly formed entity is generally measured by the value of the consideration contributed by such participant in exchange for its membership interest.

In the present transaction:

• CBR is acquiring a 50% membership interest in the JV Entity. The value of that interest, measured by CBR's total capital contribution, is $150,000,000 ($60,000,000 in cash plus an in-kind contribution of solar development projects valued at $90,000,000). This amount clearly exceeds the $111.4 million size-of-transaction threshold.

• Lumen Ridge is acquiring a 50% membership interest in the JV Entity. The value of that interest, measured by Lumen Ridge's total capital contribution, is $150,000,000 in cash. This amount likewise clearly exceeds the $111.4 million size-of-transaction threshold.

The total aggregate transaction value is $300,000,000. Each member's individual interest exceeds the $111.4 million threshold by a substantial margin.

Conclusion: The size-of-transaction test is satisfied for both parties' acquisitions of interests in the JV Entity.

D. Size-of-Person Test

Where the size of the transaction exceeds $111.4 million but does not exceed $445.5 million (2023 thresholds), the size-of-person test also applies. Under this test, the transaction is reportable only if one party (i.e., one "person" as defined in the HSR regulations) has total assets or annual net sales of $222.7 million or more, and the other party has total assets or annual net sales of $22.3 million or more. See 15 U.S.C. § 18a(a)(2); 88 Fed. Reg. 5,572 (Jan. 27, 2023).

The "person" for HSR purposes includes the ultimate parent entity ("UPE") and all entities that the UPE controls. See 16 C.F.R. § 801.1(a). The relevant financial data for the size-of-person test is based on the most recent annual statement of income and balance sheet (i.e., the most recent regularly prepared annual financial statements).

• CBR: For the fiscal year ended December 31, 2022, CBR reported revenues of approximately $412 million. This figure exceeds the higher size-of-person threshold of $222.7 million. CBR's total assets, while not specified precisely in the materials available to us at this time, are understood to be substantial given the scale of its development and operating portfolio. Even absent precise total asset figures, CBR's revenues alone satisfy the higher threshold.

• Lumen Ridge: Lumen Ridge has approximately $4.2 billion in assets under management deployed across wind, solar, and battery-storage projects in North America. The "person" for HSR purposes likely includes the ultimate parent entity (LRCA and its controlled entities), and the total assets held by the Lumen Ridge platform are well in excess of $222.7 million. Even under the lower threshold of $22.3 million, Lumen Ridge's total assets easily qualify.

Because both parties exceed even the higher $222.7 million threshold, the size-of-person test is satisfied regardless of which party is measured against which threshold. However, for the avoidance of doubt, we note that the test requires only that one party meet the $222.7 million threshold and the other meet the $22.3 million threshold; both parties here satisfy the higher threshold, making this determination straightforward.

Conclusion: The size-of-person test is satisfied by both parties.

E. Commerce Requirement

The HSR Act applies to acquisitions by persons engaged in commerce or in any activity affecting commerce. See 15 U.S.C. § 18a(a). At least one of the parties to the transaction must satisfy this requirement.

• CBR develops and operates solar energy projects across multiple states (Texas, New Mexico, Arizona, and Nevada) and sells electricity under long-term power purchase agreements with utility offtakers and other counterparties. CBR's operations clearly constitute engagement in interstate commerce.

• Lumen Ridge invests in renewable energy infrastructure across North America, deploying capital into projects in multiple states and managing assets that generate and transmit electricity in interstate commerce. Lumen Ridge's activities clearly constitute engagement in, or activities affecting, interstate commerce.

Conclusion: The commerce requirement is satisfied. Both parties are engaged in interstate commerce.

IV. DETERMINATION OF FILING PARTIES ("PERSONS")

A critical step in the HSR filing process is the identification of the "ultimate parent entity" ("UPE") for each filing party. Under the HSR regulations, the "person" that must file an HSR notification is defined to include the UPE and all entities that the UPE controls. See 16 C.F.R. § 801.1(a)(1). The UPE is the entity that is not controlled by any other entity. See 16 C.F.R. § 801.1(a)(3). Control is generally defined as holding 50% or more of an entity's outstanding voting securities (for corporations) or having the right to 50% or more of the profits or assets on dissolution (for non-corporate entities). See 16 C.F.R. § 801.1(b).

A. CBR Filing Person

CBR is a Texas corporation. The UPE for HSR purposes is the entity (or natural person) at the top of the ownership chain that is not itself controlled by any other entity or natural person. As noted above, CBR is majority-owned by its co-founders, Margaret Calloway and Thomas Briggs. An approximately 22% minority stake is held by Cascadia Growth Equity Fund III, L.P.

The critical question is whether CBR itself constitutes the UPE, or whether one of its co-founders — by virtue of holding 50% or more of CBR's outstanding voting securities — constitutes the UPE. If, for example, Ms. Calloway holds 50% or more of CBR's voting stock, then Ms. Calloway (as a natural person) would be the UPE, and the "person" filing the HSR notification would encompass Ms. Calloway and all entities she controls. Conversely, if no single individual holds 50% or more of CBR's voting securities, then CBR itself would be the UPE.

Based on the information currently available to us, the co-founders together hold a majority of CBR's equity, but we do not have confirmation of the precise allocation of shares between Ms. Calloway and Mr. Briggs. We understand that the co-founders may hold their shares in varying proportions, and it is possible that one of them holds 50% or more of the outstanding voting securities. Accordingly, we recommend confirming the precise share ownership breakdown with CBR's General Counsel, Rebecca Whitfield, and CFO, Priya Narayanan, in order to finalize the UPE determination.

For purposes of this analysis, we assume that no single individual holds 50% or more of CBR's voting securities, and therefore that CBR (the corporation) is the UPE and the filing person. This assumption should be verified before the HSR filing is submitted. If CBR's ownership structure results in a natural person being the UPE, the scope of the "person" filing the HSR notification would need to be expanded to include all entities controlled by that individual, and additional financial data and revenue information for such entities may need to be included in the filing.

B. Lumen Ridge Filing Person

Lumen Ridge Infrastructure Partners LLC is a Delaware LLC managed by Lumen Ridge Capital Advisors LLC ("LRCA"), also a Delaware LLC. The UPE determination for Lumen Ridge turns on the ownership and control structure of LRCA. Specifically, we need to determine whether LRCA is the UPE, or whether a natural person (or another entity) holds 50% or more of the profits or assets-on-dissolution interests in LRCA and therefore constitutes the UPE.

We do not have sufficient information regarding the internal ownership structure of LRCA at this time to make a definitive UPE determination for Lumen Ridge. We recommend that Megan Chu coordinate with counterparty counsel — Amanda Prescott, Lumen Ridge's General Counsel, and Haverford, Quinn & Steele LLP (Gregory Haverford III, Lead Partner; Joanna Kline, Senior Associate) — to confirm the ownership and control chain of Lumen Ridge and LRCA as part of the filing process.

We note that counterparty's HSR filing obligations and UPE determination will be handled independently by Haverford, Quinn & Steele LLP on behalf of Lumen Ridge. However, because both parties must file simultaneously and the HSR forms must contain consistent descriptions of the transaction, coordination between counsel for both sides is essential. In particular, the parties should agree on the description of the transaction, the valuation of the interests being acquired, and the target filing date.

V. EXEMPTIONS ANALYSIS

A. Potential Exemptions Considered

The HSR Act regulations set forth a number of exemptions that, if applicable, would relieve the parties of the obligation to file. We have considered each of the potentially relevant exemptions in light of the facts of this transaction and have concluded that none applies.

1. Section 802.4 — Acquisitions Solely for Investment Purposes. Under 16 C.F.R. § 802.4, an acquisition of voting securities or non-corporate interests is exempt from the HSR filing requirement if the acquiring person holds or will hold 10% or less of the outstanding securities of the issuer, and the acquisition is made solely for the purpose of investment, with no intent to participate in the formulation, determination, or direction of the basic business decisions of the entity.

This exemption is not applicable to the present transaction. Both CBR and Lumen Ridge will hold 50% membership interests in the JV Entity, far exceeding the 10% threshold. Moreover, both parties will exercise active governance rights through the six-member Management Committee, including the appointment of officers, supermajority voting on major business decisions (annual budgets, capital calls, debt incurrence, asset dispositions, new member admissions, LLC Agreement amendments, and dissolution), and the appointment of CBR as development and construction manager. The acquisition of interests in the JV Entity is unambiguously not solely for investment purposes — both parties will actively participate in the formulation and direction of the JV Entity's basic business decisions.

2. Section 802.30 — Intra-Person Transactions. Under 16 C.F.R. § 802.30, an acquisition is exempt if it is a transaction within a single "person" — i.e., a transfer of assets or interests between entities that are part of the same UPE's corporate family. This exemption is not applicable here. CBR and Lumen Ridge are not under common control and are not part of the same "person" as defined in the HSR regulations. They are independent, unaffiliated entities entering into a joint venture.

3. Section 802.1 — De Minimis Acquisitions ($50 Million or Less). Under 16 C.F.R. § 802.1, the acquisition of assets or non-corporate interests valued at $50 million or less (as adjusted) is exempt from the HSR filing requirement. This exemption is not applicable. The value of the interests being acquired by each party ($150,000,000) far exceeds the $50 million de minimis threshold.

4. Section 802.35 — Acquisitions by Certain Regulated Entities. Under 16 C.F.R. § 802.35, certain acquisitions by banks, savings institutions, or other regulated entities are exempt from the HSR filing requirement. This exemption is not applicable to the facts of this transaction. Neither CBR nor Lumen Ridge is a bank, savings institution, or other regulated entity within the meaning of this provision.

5. Section 802.51 — Acquisitions of Foreign Assets or Entities. Under 16 C.F.R. § 802.51, certain acquisitions of foreign assets or interests in foreign entities are exempt from the HSR filing requirement. This exemption is not applicable. All assets to be contributed to the JV Entity are located within the United States (Texas, New Mexico, and Arizona), the JV Entity will be organized as a domestic (Delaware) LLC, and both CBR and Lumen Ridge are domestic entities. There is no foreign element to this transaction that would implicate the foreign-assets exemption.

Conclusion: No available exemption applies to this transaction. An HSR filing is required by both parties.

VI. FILING MECHANICS AND TIMING

A. Filing Form and Content

Each filing party must submit an HSR Notification and Report Form (the "HSR Form") to the Premerger Notification Office of the FTC and the Antitrust Division of the DOJ. The HSR Form is a multi-part form that requires detailed information from each filing party, including:

• Identification of the filing person, the UPE, and the entity or entities whose interests are being acquired;

• A description of the transaction, including the structure, consideration, and material terms;

• Revenue data organized by North American Industry Classification System ("NAICS") code for the filing person and all entities within the filing person's corporate family;

• Financial statements and annual reports;

• Copies of certain documents, including the non-binding term sheet, any definitive agreements relating to the transaction (to the extent executed at the time of filing), internal analyses or board presentations prepared in connection with the transaction that discuss competition, market share, or efficiencies, and certain additional documents as specified in the HSR Form instructions; and

• Minority shareholdings and other interests held by the filing person.

The filing must be accompanied by the applicable filing fee, as described below. Both CBR's and Lumen Ridge's filings must be submitted simultaneously, and the statutory waiting period does not commence until both filings have been received.

Filing Fee. The filing fee is determined based on the aggregate total value of the transaction. For the formation of a joint venture, the FTC has indicated that the aggregate value of all contributions to the JV Entity is used to determine the applicable filing fee tier. Here, the aggregate value of the transaction is $300,000,000. Under the 2023 fee schedule, the applicable tier for transactions valued above $111.4 million but not greater than $500 million carries a filing fee of $125,000 per filing. Because each party must file, the total filing fees will be $250,000 ($125,000 for CBR's filing and $125,000 for Lumen Ridge's filing).

We need to confirm with CBR management — specifically Priya Narayanan, CFO — whether CBR will bear its own filing fee of $125,000 or whether the parties have agreed to share filing costs. The allocation of filing fees between the parties should be addressed in the definitive transaction documents (typically the LLC Agreement or a side letter).

B. Recommended Filing Date

We recommend that both parties file the HSR Form on or about October 18, 2023. This target date is designed to achieve the following objectives:

• Allow sufficient preparation time. The period between the date of this memorandum (October 5, 2023) and the proposed filing date provides approximately 13 days to finalize the UPE determinations for both parties, gather required documents and revenue data, prepare the draft HSR Forms, coordinate with counterparty counsel, and obtain client approval of the filing.

• Maximize the likelihood of waiting-period clearance before signing. If both filings are received on October 18, 2023, the 30-day statutory waiting period will expire on approximately November 17, 2023. This provides a buffer of approximately two weeks before the targeted signing date in late November or early December 2023. If early termination is granted (which we anticipate, as discussed below), clearance could be obtained as early as late October or early November 2023, providing even greater margin.

• Coordinate with counterparty. The simultaneous filing by both parties requires advance coordination with Haverford, Quinn & Steele LLP. We recommend that contact be initiated promptly to align on the October 18 filing date and to begin exchanging the information necessary for form completion.

For internal tracking purposes within the firm's docketing system, we propose the reference number 20231018-CBR-LRI for this filing. The HSR Transaction Number will be assigned by the FTC upon receipt of the filing.

C. Early Termination Request

We recommend requesting early termination of the statutory waiting period at the time of filing. The FTC routinely grants early termination for transactions that do not raise competitive concerns, and the grant of early termination is published on the FTC's website.

This transaction is well-suited for early termination for several reasons:

• The transaction involves the formation of a joint venture to develop greenfield solar energy projects — an activity that is unlikely to raise horizontal or vertical competition concerns.

• The U.S. utility-scale solar development market is highly fragmented, with numerous developers, independent power producers, and utility-affiliated entities competing for project opportunities. Neither CBR nor Lumen Ridge holds a dominant market position.

• The joint venture combines a developer (CBR) with a financial sponsor (Lumen Ridge) in a classic "complementary JV" structure. CBR contributes development expertise and a project pipeline; Lumen Ridge contributes capital and project finance capabilities. There is no meaningful horizontal overlap between the parties' existing operations.

• Neither CBR nor Lumen Ridge has been the subject of prior antitrust enforcement actions or investigations.

Based on these factors, we anticipate that early termination could be granted within approximately 15 to 25 days of filing, i.e., by approximately early to mid-November 2023.

D. Waiting Period

The statutory waiting period under the HSR Act commences upon the receipt of both parties' filings by the FTC and DOJ. The standard waiting period is 30 calendar days. During this period, the transaction may not be consummated — i.e., the initial capital contributions may not be funded and the JV membership interests may not be issued.

The waiting period may be terminated in three ways:

1. Expiration: The waiting period expires automatically at 11:59 p.m. Eastern Time on the 30th day following the filing (or the next business day if the 30th day falls on a weekend or federal holiday).

2. Early termination: The FTC and DOJ may grant early termination of the waiting period at any time before its expiration, upon the request of any filing party.

3. Extension by second request: If either the FTC or DOJ determines that additional information is necessary to evaluate the competitive implications of the transaction, it may issue a "second request" — a formal request for additional information and documentary material under 15 U.S.C. § 18a(e). The issuance of a second request extends the waiting period until 30 days after both parties have substantially complied with the request. Compliance with a second request can be time-consuming and expensive, often requiring months of document production and review.

As discussed in Section VII below, we assess the risk of a second request as low in this transaction. Nevertheless, the parties should be prepared for the possibility, however remote, that the reviewing agency may seek additional information.

VII. SUBSTANTIVE ANTITRUST ASSESSMENT

A. Market Definition and Competitive Analysis

While the HSR filing is a procedural requirement that does not itself require a formal competitive analysis, it is prudent to assess the likelihood of an agency challenge or a second request by considering the substantive antitrust implications of the transaction. The following analysis provides a preliminary assessment of the relevant markets and competitive dynamics.

Relevant Product Market. The relevant product market is the development, construction, and operation of utility-scale solar energy generation facilities. This market encompasses the full lifecycle of solar project development, from site identification and land acquisition through permitting, interconnection, engineering, procurement, construction, commissioning, and long-term asset management. The market may also include the sale of electricity generated by utility-scale solar facilities under long-term power purchase agreements, as well as the sale of renewable energy credits and other environmental attributes.

Relevant Geographic Market. The relevant geographic market for CBR's contributed portfolio encompasses Texas and the Desert Southwest (New Mexico and Arizona), where the eight contributed projects are located. More broadly, CBR operates across Texas, New Mexico, Arizona, and Nevada, and Lumen Ridge invests in renewable energy infrastructure throughout North America. The geographic market for utility-scale solar development may be defined at the national level, the regional level (e.g., the Southwest), or at the state or electric grid level (e.g., the ERCOT market in Texas, the Western Interconnection for Arizona and New Mexico).

Market Structure and Competitive Dynamics. The U.S. utility-scale solar energy market is highly fragmented. According to publicly available industry reports, there are hundreds of active solar developers, independent power producers, and utility-affiliated entities competing for project development opportunities in the United States. Major participants include large publicly traded companies (such as NextEra Energy, Pinnacle Holdings, Invenergy, Enel Green Power, and Recurrent Energy), mid-size independent developers, and a growing number of financial sponsors and infrastructure funds.

CBR, while one of the largest privately held solar developers in the southern United States with an approximately 3.8 GW pipeline, holds a modest share of the overall U.S. and regional utility-scale solar market. The total U.S. utility-scale solar pipeline is estimated to exceed 700 GW as of mid-2023, meaning that CBR's share of the national pipeline is well below 1%. Even in the regional markets of Texas and the Desert Southwest, CBR's market share is modest given the large number of competing developers.

Lumen Ridge is an infrastructure investment platform, not a direct competitor in solar project development. Lumen Ridge's role is capital provision and project finance — it invests in and provides financial backing for renewable energy projects but does not independently develop, construct, or operate solar generation facilities. Accordingly, the formation of the JV Entity does not result in any horizontal overlap between the parties' existing operations.

Complementary Nature of the JV. The proposed joint venture is a classic example of a "complementary JV" — a collaboration between a developer (CBR) and a financial sponsor (Lumen Ridge) that combines complementary capabilities to pursue a joint business objective. CBR contributes its development expertise, technical capabilities, relationships with landowners and utilities, and a pipeline of permitted development-stage projects. Lumen Ridge contributes capital, project finance expertise, and relationships with project lenders. This type of developer-sponsor joint venture is commonplace in the renewable energy industry and is generally viewed favorably by antitrust enforcement agencies because it creates efficiencies and facilitates the development of new generation capacity that might not otherwise be built.

Vertical Integration Concerns. Neither party controls inputs (such as solar panel manufacturing, inverter supply, or EPC contracting services) or outputs (such as utility offtakers or transmission infrastructure) in a manner that would foreclose competitors from access to necessary supplies or customers. CBR procures equipment and construction services from third-party vendors, and the JV Entity's solar projects will sell electricity to unaffiliated utility offtakers under competitively negotiated power purchase agreements. There are no significant vertical integration concerns arising from this transaction.

B. Risk of Second Request

Based on the foregoing analysis, we assess the risk of a second request from either the FTC or the DOJ as low. The relevant factors supporting this assessment include:

• The transaction involves a complementary joint venture combining a developer and a financial sponsor, with no horizontal overlap between the parties' existing operations.

• The U.S. utility-scale solar market is highly fragmented, with neither party holding a significant market share at the national or regional level.

• There are no vertical integration concerns arising from the transaction.

• Neither CBR nor Lumen Ridge has been the subject of prior antitrust enforcement actions, consent decrees, or merger challenges.

• The formation of developer-sponsor joint ventures in the renewable energy sector is routine and has not historically attracted antitrust scrutiny.

Notwithstanding this low risk assessment, we recommend that CBR prepare a voluntary submission of additional background information to be included with the HSR filing. This submission would provide the reviewing agency with a concise description of the transaction rationale, the market context, and the complementary nature of the parties' contributions, which may facilitate rapid review and the grant of early termination. Such voluntary submissions are a common practice in HSR filings and are generally viewed favorably by the agencies.

VIII. COORDINATION WITH COUNTERPARTY COUNSEL

Both CBR and Lumen Ridge must make simultaneous HSR filings. Accordingly, it is essential that Calderwood & Harkness LLP coordinate closely with Lumen Ridge's outside counsel, Haverford, Quinn & Steele LLP, located at 599 Lexington Avenue, 28th Floor, New York, New York 10022. The primary contacts at Haverford, Quinn & Steele are Gregory Haverford III (Lead Partner) and Joanna Kline (Senior Associate).

The areas of coordination between the two firms will include:

1. Filing Date Alignment. Both parties must agree on a target filing date. We recommend October 18, 2023, and this date should be confirmed with counterparty counsel as soon as practicable.

2. Consistency of Transaction Description. The transaction description in each party's HSR Form should be consistent to avoid confusion or delay in the reviewing agency's assessment. We should exchange draft descriptions of the transaction with Haverford, Quinn & Steele and agree on consistent language before filing.

3. Exchange of Necessary Information. Each party will need certain information from the other to complete its HSR Form, including NAICS code revenue data, UPE determinations, and identifying information for affiliated entities. We should initiate this information exchange promptly to ensure adequate time for form preparation.

4. Joint Early Termination Request. Although either party may independently request early termination, a joint request (or at least coordinated requests) is more likely to result in a prompt grant of early termination. We should coordinate with Haverford, Quinn & Steele to ensure that both filings include a request for early termination.

5. Filing Fee Allocation. The allocation of filing fees between the parties ($125,000 per filing, for a total of $250,000) should be confirmed by the respective clients. This is typically addressed in the definitive transaction documents, but the parties should reach an understanding before filing so that each party can arrange payment of its respective fee.

We recommend that Megan Chu initiate contact with Joanna Kline at Haverford, Quinn & Steele at the earliest opportunity to begin this coordination process.

IX. ACTION ITEMS AND NEXT STEPS

Based on the foregoing analysis, we recommend the following action items, which should be completed expeditiously in order to meet the target filing date of October 18, 2023:

1. Confirm UPE Determination for CBR. Obtain from Rebecca Whitfield (General Counsel) and/or Priya Narayanan (CFO) the precise share ownership breakdown of CBR, including the respective ownership percentages of Margaret Calloway, Thomas Briggs, Cascadia Growth Equity Fund III, L.P., and any other shareholders, in order to confirm the ultimate parent entity for HSR filing purposes. If any individual holds 50% or more of CBR's voting securities, the UPE designation and scope of the filing person will need to be adjusted accordingly.

Responsible: Megan Chu / Derek Okonkwo Target Completion Date: October 9, 2023

2. Contact Counterparty Counsel. Megan Chu to reach out to Joanna Kline at Haverford, Quinn & Steele LLP to coordinate filing logistics, confirm the target filing date of October 18, 2023, initiate the exchange of information necessary for form completion, and discuss filing fee allocation.

Responsible: Megan Chu Target Completion Date: October 6, 2023

3. Prepare HSR Form for CBR. Derek Okonkwo to prepare the draft HSR Notification and Report Form for CBR, including the transaction description, NAICS code revenue breakdowns, UPE identification, and all required schedules and attachments. The draft form will be submitted to James Prentice and Megan Chu for review before filing.

Responsible: Derek Okonkwo Target Completion Date: October 13, 2023 (draft); October 16, 2023 (final review by J. Prentice and M. Chu)

4. Gather Required Documents. Assemble copies of all documents required to be filed with the HSR Form, including:

• The executed non-binding term sheet dated September 25, 2023;

• Any internal CBR analyses, board presentations, or memoranda relating to the transaction that discuss competition, competitors, market share, or potential efficiencies (Item 4(c) and 4(d) documents);

• NAICS code revenue breakdowns for CBR and all entities within the CBR corporate family; and

• CBR's most recent regularly prepared annual financial statements.

Responsible: Derek Okonkwo (with assistance from CBR — Rebecca Whitfield / Priya Narayanan) Target Completion Date: October 12, 2023

5. Filing Fee Approval and Payment. Confirm with CBR (Priya Narayanan, CFO) approval of the $125,000 filing fee for CBR's HSR filing and arrange for payment to the FTC's Premerger Notification Office. Payment may be made by certified check, wire transfer, or electronic payment through the FTC's e-filing system.

Responsible: Megan Chu / Derek Okonkwo Target Completion Date: October 16, 2023

6. Calendar Waiting Period. Upon filing (target October 18, 2023), calendar the 30-day waiting period expiration date (approximately November 17, 2023) in the firm's docketing system and monitor the FTC's public docket for early termination notices. Set internal reminders at 10-day, 20-day, and 30-day marks following filing.

Responsible: Derek Okonkwo Target Completion Date: Immediately upon filing

7. Post-Filing Monitoring. Following the filing, monitor for any inquiries, requests for additional information, or second requests from the FTC or DOJ. If any communications are received from the reviewing agency, notify James Prentice and Megan Chu immediately and prepare to respond promptly. In the unlikely event of a second request, a separate action plan will be developed at that time.

Responsible: Derek Okonkwo (primary); Megan Chu (oversight) Target Completion Date: Ongoing through expiration or early termination of the waiting period

X. CONCLUSION

Based on the foregoing analysis, the formation of Solstice Plateau Energy Holdings LLC as a 50/50 joint venture between Calloway-Briggs Renewables Inc. and Lumen Ridge Infrastructure Partners LLC requires pre-merger notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the implementing regulations at 16 C.F.R. Parts 801–803, for the following reasons:

(a) The transaction exceeds the applicable size-of-transaction threshold of $111.4 million (each party's acquisition of a 50% membership interest in the JV Entity is valued at $150,000,000, and the aggregate transaction value is $300,000,000);

(b) Both parties satisfy the size-of-person test (CBR's 2022 revenues of approximately $412 million and Lumen Ridge's total assets under management of approximately $4.2 billion each exceed the applicable thresholds);

(c) No available exemption applies (the investment-only exemption is inapplicable given the parties' active governance rights, and no other exemption is applicable to the facts of this transaction); and

(d) The commerce requirement is met (both parties are engaged in interstate commerce through their respective renewable energy development and investment activities).

The risk of a second request or substantive antitrust challenge is assessed as low, given the complementary nature of the joint venture, the absence of horizontal overlap between the parties, and the highly fragmented structure of the U.S. utility-scale solar energy market.

We recommend filing the HSR Notification and Report Form on or about October 18, 2023, with a concurrent request for early termination of the statutory waiting period. This timeline is designed to clear the regulatory condition well in advance of the targeted signing date for definitive transaction documents in late November or early December 2023.

This memorandum will be supplemented if there are material changes to the transaction structure, the parties' ownership or control chains, or the applicable HSR thresholds or regulatory guidance. Please do not hesitate to contact me with any questions or if additional analysis is required.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

Prepared by:

________________________________________

Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP (Houston) Direct: (713) 555-4837 dokonkwo@calderwoodharkness.com

Reviewed by:

________________________________________

James Prentice Responsible Partner, Mergers & Acquisitions Calderwood & Harkness LLP (Houston)

________________________________________

Megan Chu Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP (Houston)

Distribution: James Prentice, Megan Chu (Calderwood & Harkness LLP, Houston — internal only)

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-4800 Facsimile: (713) 555-4801
Matter No.: 48172.001 Date: October 5, 2023
MEMORANDUM
TO: James Prentice, Responsible Partner, Mergers & Acquisitions (Houston) Megan Chu, Lead Associate, Mergers & Acquisitions (Houston)
FROM: Derek Okonkwo, Associate, Mergers & Acquisitions (Houston)
RE: Hart-Scott-Rodino Antitrust Improvements Act — Analysis of Filing Obligations for Formation of Joint Venture Between Calloway-Briggs Renewables Inc. and Lumen Ridge Infrastructure Partners LLC
PRIVILEGE DESIGNATION: This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation and in furtherance of the rendition of legal advice. It is intended solely for the use of the named recipients and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
I. EXECUTIVE SUMMARY
Calderwood & Harkness LLP has been retained by Calloway-Briggs Renewables Inc. ("CBR"), a Texas corporation headquartered at 2300 Travis Street, Suite 4200, Houston, Texas 77006, in connection with the proposed formation of a 50/50 joint venture with Lumen Ridge Infrastructure Partners LLC ("Lumen Ridge"), a Delaware limited liability company headquartered at 301 Tresser Boulevard, Suite 1400, Stamford, Connecticut 06901. The joint venture entity, to be known as Solstice Plateau Energy Holdings LLC (the "JV Entity" or "Solstice Plateau"), will be organized as a newly formed Delaware limited liability company for the purpose of developing, constructing, financing, owning, and operating a portfolio of utility-scale solar energy generation projects.
The total aggregate equity commitment to the JV Entity is $300,000,000, with each member contributing $150,000,000 in value. Specifically, CBR's contribution consists of $60,000,000 in cash plus an in-kind contribution of a portfolio of eight utility-scale solar development projects valued at $90,000,000 (agreed valuation based on preliminary indications in the non-binding term sheet signed September 25, 2023, with final valuation to be confirmed by a fairness analysis from Ridgeline Barrow & Co. dated November 15, 2023, which has not yet been delivered as of the date of this memorandum). Lumen Ridge's contribution consists of $150,000,000 in cash.
This memorandum analyzes whether the formation of the JV Entity triggers a pre-merger notification requirement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), 15 U.S.C. § 18a, and the implementing regulations promulgated by the Federal Trade Commission ("FTC") at 16 C.F.R. Parts 801–803.
Conclusion: Based on the analysis set forth below, an HSR filing is required. The transaction exceeds the applicable size-of-transaction threshold of $111.4 million (as adjusted for 2023). Both parties satisfy the size-of-person test. The commerce requirement is met. No available exemption applies. We recommend an expedited filing to seek early termination of the statutory waiting period.
Recommended HSR Filing Date: On or about October 18, 2023, which is designed to allow sufficient time for early termination of the 30-day waiting period before the targeted signing date for definitive transaction documents in late November or early December 2023. We anticipate that the FTC may grant early termination within approximately 15 to 25 days of filing, given the complementary nature of the joint venture and the absence of competitive overlap between the parties.
II. BACKGROUND — TRANSACTION STRUCTURE
A. The Parties
1. Calloway-Briggs Renewables Inc. ("CBR")
CBR is a Texas corporation (EIN 46-2837451; Texas Secretary of State File Number 0801647392) founded in 2011. CBR is one of the largest privately held independent solar energy developers in the southern United States, with an active development and operating portfolio of approximately 3.8 gigawatts ("GW") of solar projects located across Texas, New Mexico, Arizona, and Nevada. CBR's operations encompass the full lifecycle of utility-scale solar energy project development, including site identification and land acquisition, permitting and interconnection, engineering and procurement, construction management, and long-term asset management.
For the fiscal year ended December 31, 2022, CBR reported revenues of approximately $412 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $98 million. CBR's corporate leadership includes Margaret "Meg" Calloway, who serves as Chairwoman of the Board and Chief Executive Officer, and Thomas R. Briggs, who serves as President. Ms. Calloway and Mr. Briggs are the co-founders of CBR and together hold a majority ownership stake in the company. An approximately 22% minority stake in CBR is held by Cascadia Growth Equity Fund III, L.P. (Owen Charbonneau, Managing Director), a Delaware limited partnership based in Portland, Oregon. CBR's General Counsel is Rebecca Whitfield, and its Chief Financial Officer is Priya Narayanan.
2. Lumen Ridge Infrastructure Partners LLC ("Lumen Ridge")
Lumen Ridge is a Delaware limited liability company (EIN 83-1924076) that serves as a dedicated renewable-energy infrastructure investment platform. Lumen Ridge was formed in 2018 and is managed by Lumen Ridge Capital Advisors LLC ("LRCA"), also a Delaware limited liability company. Lumen Ridge has approximately $4.2 billion in assets under management deployed across wind, solar, and battery-storage projects located throughout North America. The investment strategy of Lumen Ridge focuses on mid-to-late-stage development and construction-ready renewable energy assets with contracted revenue streams, typically through long-term power purchase agreements with investment-grade offtakers.
The key principals of Lumen Ridge and LRCA include Nathaniel "Nate" Forsythe (Co-Founder and Managing Partner), Carolyn J. Delaney (Partner and Head of Solar Investments), Victor Osei (Chief Financial Officer), and Amanda Prescott (General Counsel and Chief Compliance Officer). Lumen Ridge is represented in connection with this transaction by Haverford, Quinn & Steele LLP, with Gregory Haverford III serving as Lead Partner and Joanna Kline serving as Senior Associate.
3. Solstice Plateau Energy Holdings LLC (the "JV Entity")
The JV Entity, Solstice Plateau Energy Holdings LLC, is to be formed as a Delaware limited liability company for the exclusive purpose of developing, constructing, financing, owning, and operating the contributed portfolio of utility-scale solar projects. The JV Entity does not currently exist and will be organized contemporaneously with the closing of the transaction. It will have no operations, employees, assets, or liabilities prior to the initial capital contributions by CBR and Lumen Ridge.
B. Transaction Description
The proposed transaction involves the formation of a 50/50 joint venture structured as a Delaware limited liability company, with a total aggregate initial equity commitment of $300,000,000. The key terms of the transaction, as reflected in the non-binding term sheet signed on September 25, 2023 by Margaret Calloway on behalf of CBR and Nathaniel Forsythe on behalf of Lumen Ridge, are as follows:
CBR's Contribution. CBR will contribute to the JV Entity a portfolio of eight permitted-but-unbuilt utility-scale solar development projects totaling approximately 1,200 megawatts ("MW") (1.2 GW) of nameplate direct-current ("DC") capacity, valued at $90,000,000, plus $60,000,000 in cash. The contributed projects are located across three states:
• Texas: Five projects with aggregate nameplate DC capacity of approximately 780 MW;
• New Mexico: Two projects with aggregate nameplate DC capacity of approximately 260 MW; and
• Arizona: One project with nameplate DC capacity of approximately 160 MW.
The $90,000,000 valuation for the in-kind contribution is based on the agreed valuation set forth in the non-binding term sheet, which references preliminary indications from the ongoing fairness analysis being prepared by Ridgeline Barrow & Co. The final fairness analysis, expected to be dated November 15, 2023, has not yet been delivered as of the date of this memorandum. The total value of CBR's contribution is therefore $150,000,000 ($60,000,000 cash plus $90,000,000 in-kind).
Lumen Ridge's Contribution. Lumen Ridge will contribute $150,000,000 in cash to the JV Entity. In addition, Lumen Ridge will be responsible for arranging project-level debt financing for the individual solar projects held by the JV Entity, with anticipated total non-recourse project debt of up to $480,000,000 to be provided by Trident National Bank, N.A.
Additional Capital Calls. Under the proposed LLC Agreement, additional capital calls of up to $200,000,000 per member (for an aggregate of $400,000,000 in additional capital) will be authorized, subject to supermajority approval of the Management Committee (five of six votes required, as described below). This brings the total potential equity capitalization of the JV Entity to $700,000,000, inclusive of the initial $300,000,000 commitment.
Membership Interests. Upon formation and the initial capital contributions, each of CBR and Lumen Ridge will hold a 50% membership interest in the JV Entity. These membership interests will entitle each member to 50% of the profits, losses, and distributions of the JV Entity, subject to the terms of the LLC Agreement.
Timeline. The non-binding term sheet was signed on September 25, 2023. The parties are targeting the signing of definitive transaction documents (including the LLC Agreement, contribution agreements, and related ancillary documents) in late November or early December 2023.
C. Governance and Control
The governance of the JV Entity is expected to be structured as follows, based on the terms reflected in the non-binding term sheet:
Management Committee. The JV Entity will be governed by a six-member Management Committee, with three members appointed by CBR and three members appointed by Lumen Ridge. The Management Committee will have authority over all significant business decisions of the JV Entity.
Supermajority Vote. A supermajority of five of six Management Committee votes will be required for major decisions, including but not limited to:
• Approval of the annual budget and business plan;
• Capital calls in excess of $25,000,000 per call;
• Incurrence of indebtedness;
• Disposition of material assets;
• Admission of new members;
• Amendments to the LLC Agreement; and
• Dissolution of the JV Entity.
Officer Appointments. CBR will be appointed as the development and construction manager for all projects held by the JV Entity. The Chief Executive Officer of the JV Entity will be appointed by CBR (Daniel Estrada), and the Chief Financial Officer will be appointed by Lumen Ridge (Victor Osei).
Ownership and Profit Sharing. Each member will hold a 50% ownership interest in the JV Entity, entitling each member to an equal share of all economic benefits and obligations associated with the JV Entity's operations.
The governance structure described above is significant for HSR purposes because it confirms that neither CBR nor Lumen Ridge will be a passive investor in the JV Entity. Both parties will exercise active governance rights through the Management Committee, officer appointments, and supermajority voting provisions. As discussed in Section V below, this precludes reliance on the investment-only exemption set forth in 16 C.F.R. § 802.4.
III. HSR ACT — STATUTORY AND REGULATORY FRAMEWORK
A. Overview of HSR Requirements
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the "HSR Act"), and the implementing regulations promulgated thereunder by the FTC (16 C.F.R. Parts 801–803), establish a pre-merger notification program that requires parties to certain acquisitions and mergers to notify both the FTC and the Antitrust Division of the Department of Justice ("DOJ") before consummating the transaction. The purpose of the HSR Act is to give the federal antitrust enforcement agencies an opportunity to review proposed transactions for potential anticompetitive effects before they are completed.
A transaction subject to the HSR Act requires the filing of an HSR Notification and Report Form by both the acquiring and acquired persons. Filing triggers a mandatory waiting period during which the transaction may not be consummated. The standard waiting period is 30 calendar days from the date on which both parties' filings are received by the FTC and DOJ (or 15 days in the case of cash tender offers or certain bankruptcy-related acquisitions). During the waiting period, the reviewing agency may determine that the transaction does not warrant further investigation and may grant early termination of the waiting period, or it may issue a request for additional information (commonly known as a "second request"), which extends the waiting period until 30 days after both parties have substantially complied with the second request.
Failure to comply with the HSR Act's filing and waiting-period requirements can result in civil penalties of up to $50,120 per day of violation (as adjusted for 2023) and may also provide grounds for injunctive relief.
B. Applicability to Joint Venture Formations
The HSR Act and implementing regulations apply not only to traditional mergers and acquisitions of existing businesses but also to the formation of joint ventures and other new entities. Under the FTC's regulations, the formation of a joint venture or new entity may be reportable as an acquisition of voting securities (in the case of a corporation) or non-corporate interests (in the case of a limited liability company, partnership, or other non-corporate entity).
Specifically, 16 C.F.R. § 801.40 addresses the formation of joint ventures and other entities. Under this provision, contributions to a newly formed entity in exchange for membership interests or similar equity interests can constitute "acquisitions" that are subject to HSR reporting requirements, provided the applicable jurisdictional thresholds are met. The regulations treat each participant's acquisition of interests in the newly formed entity as a separate acquisition, and each participant is analyzed independently to determine whether its acquisition triggers the filing obligation.
With respect to the acquisition of interests in limited liability companies, the FTC's revised guidance treats the acquisition of membership interests in a newly formed LLC analogously to the acquisition of non-corporate interests. Under this framework, the acquisition of LLC membership interests may be reportable if the acquiring person will hold interests that either (a) confer the right to 50% or more of the profits of the entity, or (b) are valued in excess of the applicable size-of-transaction threshold. Where both conditions are satisfied, as is the case here, the analysis is straightforward.
In the present transaction, each of CBR and Lumen Ridge will acquire a 50% membership interest in Solstice Plateau Energy Holdings LLC. Each member's interest will confer the right to 50% of the profits of the JV Entity, and each member's capital contribution is valued at $150,000,000. Both the value of the interests being acquired and the profit/control percentages are relevant to the determination of whether the HSR Act's filing requirements are triggered. As discussed below, the size-of-transaction and size-of-person thresholds are clearly exceeded.
C. Size-of-Transaction Test
Under the HSR Act and implementing regulations, a transaction is potentially reportable if the "size of the transaction" exceeds the applicable threshold. For calendar year 2023, the size-of-transaction threshold, as adjusted annually by the FTC based on changes in the gross national product, is $111.4 million. See 88 Fed. Reg. 5,572 (Jan. 27, 2023).
The "size of the transaction" is measured by the greater of (a) the acquisition price, or (b) the fair market value of the interests being acquired. See 16 C.F.R. § 801.10. In the context of a joint venture formation, the "acquisition price" for each participant's interest in the newly formed entity is generally measured by the value of the consideration contributed by such participant in exchange for its membership interest.
In the present transaction:
• CBR is acquiring a 50% membership interest in the JV Entity. The value of that interest, measured by CBR's total capital contribution, is $150,000,000 ($60,000,000 in cash plus an in-kind contribution of solar development projects valued at $90,000,000). This amount clearly exceeds the $111.4 million size-of-transaction threshold.
• Lumen Ridge is acquiring a 50% membership interest in the JV Entity. The value of that interest, measured by Lumen Ridge's total capital contribution, is $150,000,000 in cash. This amount likewise clearly exceeds the $111.4 million size-of-transaction threshold.
The total aggregate transaction value is $300,000,000. Each member's individual interest exceeds the $111.4 million threshold by a substantial margin.
Conclusion: The size-of-transaction test is satisfied for both parties' acquisitions of interests in the JV Entity.
D. Size-of-Person Test
Where the size of the transaction exceeds $111.4 million but does not exceed $445.5 million (2023 thresholds), the size-of-person test also applies. Under this test, the transaction is reportable only if one party (i.e., one "person" as defined in the HSR regulations) has total assets or annual net sales of $222.7 million or more, and the other party has total assets or annual net sales of $22.3 million or more. See 15 U.S.C. § 18a(a)(2); 88 Fed. Reg. 5,572 (Jan. 27, 2023).
The "person" for HSR purposes includes the ultimate parent entity ("UPE") and all entities that the UPE controls. See 16 C.F.R. § 801.1(a). The relevant financial data for the size-of-person test is based on the most recent annual statement of income and balance sheet (i.e., the most recent regularly prepared annual financial statements).
• CBR: For the fiscal year ended December 31, 2022, CBR reported revenues of approximately $412 million. This figure exceeds the higher size-of-person threshold of $222.7 million. CBR's total assets, while not specified precisely in the materials available to us at this time, are understood to be substantial given the scale of its development and operating portfolio. Even absent precise total asset figures, CBR's revenues alone satisfy the higher threshold.
• Lumen Ridge: Lumen Ridge has approximately $4.2 billion in assets under management deployed across wind, solar, and battery-storage projects in North America. The "person" for HSR purposes likely includes the ultimate parent entity (LRCA and its controlled entities), and the total assets held by the Lumen Ridge platform are well in excess of $222.7 million. Even under the lower threshold of $22.3 million, Lumen Ridge's total assets easily qualify.
Because both parties exceed even the higher $222.7 million threshold, the size-of-person test is satisfied regardless of which party is measured against which threshold. However, for the avoidance of doubt, we note that the test requires only that one party meet the $222.7 million threshold and the other meet the $22.3 million threshold; both parties here satisfy the higher threshold, making this determination straightforward.
Conclusion: The size-of-person test is satisfied by both parties.
E. Commerce Requirement
The HSR Act applies to acquisitions by persons engaged in commerce or in any activity affecting commerce. See 15 U.S.C. § 18a(a). At least one of the parties to the transaction must satisfy this requirement.
• CBR develops and operates solar energy projects across multiple states (Texas, New Mexico, Arizona, and Nevada) and sells electricity under long-term power purchase agreements with utility offtakers and other counterparties. CBR's operations clearly constitute engagement in interstate commerce.
• Lumen Ridge invests in renewable energy infrastructure across North America, deploying capital into projects in multiple states and managing assets that generate and transmit electricity in interstate commerce. Lumen Ridge's activities clearly constitute engagement in, or activities affecting, interstate commerce.
Conclusion: The commerce requirement is satisfied. Both parties are engaged in interstate commerce.
IV. DETERMINATION OF FILING PARTIES ("PERSONS")
A critical step in the HSR filing process is the identification of the "ultimate parent entity" ("UPE") for each filing party. Under the HSR regulations, the "person" that must file an HSR notification is defined to include the UPE and all entities that the UPE controls. See 16 C.F.R. § 801.1(a)(1). The UPE is the entity that is not controlled by any other entity. See 16 C.F.R. § 801.1(a)(3). Control is generally defined as holding 50% or more of an entity's outstanding voting securities (for corporations) or having the right to 50% or more of the profits or assets on dissolution (for non-corporate entities). See 16 C.F.R. § 801.1(b).
A. CBR Filing Person
CBR is a Texas corporation. The UPE for HSR purposes is the entity (or natural person) at the top of the ownership chain that is not itself controlled by any other entity or natural person. As noted above, CBR is majority-owned by its co-founders, Margaret Calloway and Thomas Briggs. An approximately 22% minority stake is held by Cascadia Growth Equity Fund III, L.P.
The critical question is whether CBR itself constitutes the UPE, or whether one of its co-founders — by virtue of holding 50% or more of CBR's outstanding voting securities — constitutes the UPE. If, for example, Ms. Calloway holds 50% or more of CBR's voting stock, then Ms. Calloway (as a natural person) would be the UPE, and the "person" filing the HSR notification would encompass Ms. Calloway and all entities she controls. Conversely, if no single individual holds 50% or more of CBR's voting securities, then CBR itself would be the UPE.
Based on the information currently available to us, the co-founders together hold a majority of CBR's equity, but we do not have confirmation of the precise allocation of shares between Ms. Calloway and Mr. Briggs. We understand that the co-founders may hold their shares in varying proportions, and it is possible that one of them holds 50% or more of the outstanding voting securities. Accordingly, we recommend confirming the precise share ownership breakdown with CBR's General Counsel, Rebecca Whitfield, and CFO, Priya Narayanan, in order to finalize the UPE determination.
For purposes of this analysis, we assume that no single individual holds 50% or more of CBR's voting securities, and therefore that CBR (the corporation) is the UPE and the filing person. This assumption should be verified before the HSR filing is submitted. If CBR's ownership structure results in a natural person being the UPE, the scope of the "person" filing the HSR notification would need to be expanded to include all entities controlled by that individual, and additional financial data and revenue information for such entities may need to be included in the filing.
B. Lumen Ridge Filing Person
Lumen Ridge Infrastructure Partners LLC is a Delaware LLC managed by Lumen Ridge Capital Advisors LLC ("LRCA"), also a Delaware LLC. The UPE determination for Lumen Ridge turns on the ownership and control structure of LRCA. Specifically, we need to determine whether LRCA is the UPE, or whether a natural person (or another entity) holds 50% or more of the profits or assets-on-dissolution interests in LRCA and therefore constitutes the UPE.
We do not have sufficient information regarding the internal ownership structure of LRCA at this time to make a definitive UPE determination for Lumen Ridge. We recommend that Megan Chu coordinate with counterparty counsel — Amanda Prescott, Lumen Ridge's General Counsel, and Haverford, Quinn & Steele LLP (Gregory Haverford III, Lead Partner; Joanna Kline, Senior Associate) — to confirm the ownership and control chain of Lumen Ridge and LRCA as part of the filing process.
We note that counterparty's HSR filing obligations and UPE determination will be handled independently by Haverford, Quinn & Steele LLP on behalf of Lumen Ridge. However, because both parties must file simultaneously and the HSR forms must contain consistent descriptions of the transaction, coordination between counsel for both sides is essential. In particular, the parties should agree on the description of the transaction, the valuation of the interests being acquired, and the target filing date.
V. EXEMPTIONS ANALYSIS
A. Potential Exemptions Considered
The HSR Act regulations set forth a number of exemptions that, if applicable, would relieve the parties of the obligation to file. We have considered each of the potentially relevant exemptions in light of the facts of this transaction and have concluded that none applies.
1. Section 802.4 — Acquisitions Solely for Investment Purposes. Under 16 C.F.R. § 802.4, an acquisition of voting securities or non-corporate interests is exempt from the HSR filing requirement if the acquiring person holds or will hold 10% or less of the outstanding securities of the issuer, and the acquisition is made solely for the purpose of investment, with no intent to participate in the formulation, determination, or direction of the basic business decisions of the entity.
This exemption is not applicable to the present transaction. Both CBR and Lumen Ridge will hold 50% membership interests in the JV Entity, far exceeding the 10% threshold. Moreover, both parties will exercise active governance rights through the six-member Management Committee, including the appointment of officers, supermajority voting on major business decisions (annual budgets, capital calls, debt incurrence, asset dispositions, new member admissions, LLC Agreement amendments, and dissolution), and the appointment of CBR as development and construction manager. The acquisition of interests in the JV Entity is unambiguously not solely for investment purposes — both parties will actively participate in the formulation and direction of the JV Entity's basic business decisions.
2. Section 802.30 — Intra-Person Transactions. Under 16 C.F.R. § 802.30, an acquisition is exempt if it is a transaction within a single "person" — i.e., a transfer of assets or interests between entities that are part of the same UPE's corporate family. This exemption is not applicable here. CBR and Lumen Ridge are not under common control and are not part of the same "person" as defined in the HSR regulations. They are independent, unaffiliated entities entering into a joint venture.
3. Section 802.1 — De Minimis Acquisitions ($50 Million or Less). Under 16 C.F.R. § 802.1, the acquisition of assets or non-corporate interests valued at $50 million or less (as adjusted) is exempt from the HSR filing requirement. This exemption is not applicable. The value of the interests being acquired by each party ($150,000,000) far exceeds the $50 million de minimis threshold.
4. Section 802.35 — Acquisitions by Certain Regulated Entities. Under 16 C.F.R. § 802.35, certain acquisitions by banks, savings institutions, or other regulated entities are exempt from the HSR filing requirement. This exemption is not applicable to the facts of this transaction. Neither CBR nor Lumen Ridge is a bank, savings institution, or other regulated entity within the meaning of this provision.
5. Section 802.51 — Acquisitions of Foreign Assets or Entities. Under 16 C.F.R. § 802.51, certain acquisitions of foreign assets or interests in foreign entities are exempt from the HSR filing requirement. This exemption is not applicable. All assets to be contributed to the JV Entity are located within the United States (Texas, New Mexico, and Arizona), the JV Entity will be organized as a domestic (Delaware) LLC, and both CBR and Lumen Ridge are domestic entities. There is no foreign element to this transaction that would implicate the foreign-assets exemption.
Conclusion: No available exemption applies to this transaction. An HSR filing is required by both parties.
VI. FILING MECHANICS AND TIMING
A. Filing Form and Content
Each filing party must submit an HSR Notification and Report Form (the "HSR Form") to the Premerger Notification Office of the FTC and the Antitrust Division of the DOJ. The HSR Form is a multi-part form that requires detailed information from each filing party, including:
• Identification of the filing person, the UPE, and the entity or entities whose interests are being acquired;
• A description of the transaction, including the structure, consideration, and material terms;
• Revenue data organized by North American Industry Classification System ("NAICS") code for the filing person and all entities within the filing person's corporate family;
• Financial statements and annual reports;
• Copies of certain documents, including the non-binding term sheet, any definitive agreements relating to the transaction (to the extent executed at the time of filing), internal analyses or board presentations prepared in connection with the transaction that discuss competition, market share, or efficiencies, and certain additional documents as specified in the HSR Form instructions; and
• Minority shareholdings and other interests held by the filing person.
The filing must be accompanied by the applicable filing fee, as described below. Both CBR's and Lumen Ridge's filings must be submitted simultaneously, and the statutory waiting period does not commence until both filings have been received.
Filing Fee. The filing fee is determined based on the aggregate total value of the transaction. For the formation of a joint venture, the FTC has indicated that the aggregate value of all contributions to the JV Entity is used to determine the applicable filing fee tier. Here, the aggregate value of the transaction is $300,000,000. Under the 2023 fee schedule, the applicable tier for transactions valued above $111.4 million but not greater than $500 million carries a filing fee of $125,000 per filing. Because each party must file, the total filing fees will be $250,000 ($125,000 for CBR's filing and $125,000 for Lumen Ridge's filing).
We need to confirm with CBR management — specifically Priya Narayanan, CFO — whether CBR will bear its own filing fee of $125,000 or whether the parties have agreed to share filing costs. The allocation of filing fees between the parties should be addressed in the definitive transaction documents (typically the LLC Agreement or a side letter).
B. Recommended Filing Date
We recommend that both parties file the HSR Form on or about October 18, 2023. This target date is designed to achieve the following objectives:
• Allow sufficient preparation time. The period between the date of this memorandum (October 5, 2023) and the proposed filing date provides approximately 13 days to finalize the UPE determinations for both parties, gather required documents and revenue data, prepare the draft HSR Forms, coordinate with counterparty counsel, and obtain client approval of the filing.
• Maximize the likelihood of waiting-period clearance before signing. If both filings are received on October 18, 2023, the 30-day statutory waiting period will expire on approximately November 17, 2023. This provides a buffer of approximately two weeks before the targeted signing date in late November or early December 2023. If early termination is granted (which we anticipate, as discussed below), clearance could be obtained as early as late October or early November 2023, providing even greater margin.
• Coordinate with counterparty. The simultaneous filing by both parties requires advance coordination with Haverford, Quinn & Steele LLP. We recommend that contact be initiated promptly to align on the October 18 filing date and to begin exchanging the information necessary for form completion.
For internal tracking purposes within the firm's docketing system, we propose the reference number 20231018-CBR-LRI for this filing. The HSR Transaction Number will be assigned by the FTC upon receipt of the filing.
C. Early Termination Request
We recommend requesting early termination of the statutory waiting period at the time of filing. The FTC routinely grants early termination for transactions that do not raise competitive concerns, and the grant of early termination is published on the FTC's website.
This transaction is well-suited for early termination for several reasons:
• The transaction involves the formation of a joint venture to develop greenfield solar energy projects — an activity that is unlikely to raise horizontal or vertical competition concerns.
• The U.S. utility-scale solar development market is highly fragmented, with numerous developers, independent power producers, and utility-affiliated entities competing for project opportunities. Neither CBR nor Lumen Ridge holds a dominant market position.
• The joint venture combines a developer (CBR) with a financial sponsor (Lumen Ridge) in a classic "complementary JV" structure. CBR contributes development expertise and a project pipeline; Lumen Ridge contributes capital and project finance capabilities. There is no meaningful horizontal overlap between the parties' existing operations.
• Neither CBR nor Lumen Ridge has been the subject of prior antitrust enforcement actions or investigations.
Based on these factors, we anticipate that early termination could be granted within approximately 15 to 25 days of filing, i.e., by approximately early to mid-November 2023.
D. Waiting Period
The statutory waiting period under the HSR Act commences upon the receipt of both parties' filings by the FTC and DOJ. The standard waiting period is 30 calendar days. During this period, the transaction may not be consummated — i.e., the initial capital contributions may not be funded and the JV membership interests may not be issued.
The waiting period may be terminated in three ways:
1. Expiration: The waiting period expires automatically at 11:59 p.m. Eastern Time on the 30th day following the filing (or the next business day if the 30th day falls on a weekend or federal holiday).
2. Early termination: The FTC and DOJ may grant early termination of the waiting period at any time before its expiration, upon the request of any filing party.
3. Extension by second request: If either the FTC or DOJ determines that additional information is necessary to evaluate the competitive implications of the transaction, it may issue a "second request" — a formal request for additional information and documentary material under 15 U.S.C. § 18a(e). The issuance of a second request extends the waiting period until 30 days after both parties have substantially complied with the request. Compliance with a second request can be time-consuming and expensive, often requiring months of document production and review.
As discussed in Section VII below, we assess the risk of a second request as low in this transaction. Nevertheless, the parties should be prepared for the possibility, however remote, that the reviewing agency may seek additional information.
VII. SUBSTANTIVE ANTITRUST ASSESSMENT
A. Market Definition and Competitive Analysis
While the HSR filing is a procedural requirement that does not itself require a formal competitive analysis, it is prudent to assess the likelihood of an agency challenge or a second request by considering the substantive antitrust implications of the transaction. The following analysis provides a preliminary assessment of the relevant markets and competitive dynamics.
Relevant Product Market. The relevant product market is the development, construction, and operation of utility-scale solar energy generation facilities. This market encompasses the full lifecycle of solar project development, from site identification and land acquisition through permitting, interconnection, engineering, procurement, construction, commissioning, and long-term asset management. The market may also include the sale of electricity generated by utility-scale solar facilities under long-term power purchase agreements, as well as the sale of renewable energy credits and other environmental attributes.
Relevant Geographic Market. The relevant geographic market for CBR's contributed portfolio encompasses Texas and the Desert Southwest (New Mexico and Arizona), where the eight contributed projects are located. More broadly, CBR operates across Texas, New Mexico, Arizona, and Nevada, and Lumen Ridge invests in renewable energy infrastructure throughout North America. The geographic market for utility-scale solar development may be defined at the national level, the regional level (e.g., the Southwest), or at the state or electric grid level (e.g., the ERCOT market in Texas, the Western Interconnection for Arizona and New Mexico).
Market Structure and Competitive Dynamics. The U.S. utility-scale solar energy market is highly fragmented. According to publicly available industry reports, there are hundreds of active solar developers, independent power producers, and utility-affiliated entities competing for project development opportunities in the United States. Major participants include large publicly traded companies (such as NextEra Energy, Pinnacle Holdings, Invenergy, Enel Green Power, and Recurrent Energy), mid-size independent developers, and a growing number of financial sponsors and infrastructure funds.
CBR, while one of the largest privately held solar developers in the southern United States with an approximately 3.8 GW pipeline, holds a modest share of the overall U.S. and regional utility-scale solar market. The total U.S. utility-scale solar pipeline is estimated to exceed 700 GW as of mid-2023, meaning that CBR's share of the national pipeline is well below 1%. Even in the regional markets of Texas and the Desert Southwest, CBR's market share is modest given the large number of competing developers.
Lumen Ridge is an infrastructure investment platform, not a direct competitor in solar project development. Lumen Ridge's role is capital provision and project finance — it invests in and provides financial backing for renewable energy projects but does not independently develop, construct, or operate solar generation facilities. Accordingly, the formation of the JV Entity does not result in any horizontal overlap between the parties' existing operations.
Complementary Nature of the JV. The proposed joint venture is a classic example of a "complementary JV" — a collaboration between a developer (CBR) and a financial sponsor (Lumen Ridge) that combines complementary capabilities to pursue a joint business objective. CBR contributes its development expertise, technical capabilities, relationships with landowners and utilities, and a pipeline of permitted development-stage projects. Lumen Ridge contributes capital, project finance expertise, and relationships with project lenders. This type of developer-sponsor joint venture is commonplace in the renewable energy industry and is generally viewed favorably by antitrust enforcement agencies because it creates efficiencies and facilitates the development of new generation capacity that might not otherwise be built.
Vertical Integration Concerns. Neither party controls inputs (such as solar panel manufacturing, inverter supply, or EPC contracting services) or outputs (such as utility offtakers or transmission infrastructure) in a manner that would foreclose competitors from access to necessary supplies or customers. CBR procures equipment and construction services from third-party vendors, and the JV Entity's solar projects will sell electricity to unaffiliated utility offtakers under competitively negotiated power purchase agreements. There are no significant vertical integration concerns arising from this transaction.
B. Risk of Second Request
Based on the foregoing analysis, we assess the risk of a second request from either the FTC or the DOJ as low. The relevant factors supporting this assessment include:
• The transaction involves a complementary joint venture combining a developer and a financial sponsor, with no horizontal overlap between the parties' existing operations.
• The U.S. utility-scale solar market is highly fragmented, with neither party holding a significant market share at the national or regional level.
• There are no vertical integration concerns arising from the transaction.
• Neither CBR nor Lumen Ridge has been the subject of prior antitrust enforcement actions, consent decrees, or merger challenges.
• The formation of developer-sponsor joint ventures in the renewable energy sector is routine and has not historically attracted antitrust scrutiny.
Notwithstanding this low risk assessment, we recommend that CBR prepare a voluntary submission of additional background information to be included with the HSR filing. This submission would provide the reviewing agency with a concise description of the transaction rationale, the market context, and the complementary nature of the parties' contributions, which may facilitate rapid review and the grant of early termination. Such voluntary submissions are a common practice in HSR filings and are generally viewed favorably by the agencies.
VIII. COORDINATION WITH COUNTERPARTY COUNSEL
Both CBR and Lumen Ridge must make simultaneous HSR filings. Accordingly, it is essential that Calderwood & Harkness LLP coordinate closely with Lumen Ridge's outside counsel, Haverford, Quinn & Steele LLP, located at 599 Lexington Avenue, 28th Floor, New York, New York 10022. The primary contacts at Haverford, Quinn & Steele are Gregory Haverford III (Lead Partner) and Joanna Kline (Senior Associate).
The areas of coordination between the two firms will include:
1. Filing Date Alignment. Both parties must agree on a target filing date. We recommend October 18, 2023, and this date should be confirmed with counterparty counsel as soon as practicable.
2. Consistency of Transaction Description. The transaction description in each party's HSR Form should be consistent to avoid confusion or delay in the reviewing agency's assessment. We should exchange draft descriptions of the transaction with Haverford, Quinn & Steele and agree on consistent language before filing.
3. Exchange of Necessary Information. Each party will need certain information from the other to complete its HSR Form, including NAICS code revenue data, UPE determinations, and identifying information for affiliated entities. We should initiate this information exchange promptly to ensure adequate time for form preparation.
4. Joint Early Termination Request. Although either party may independently request early termination, a joint request (or at least coordinated requests) is more likely to result in a prompt grant of early termination. We should coordinate with Haverford, Quinn & Steele to ensure that both filings include a request for early termination.
5. Filing Fee Allocation. The allocation of filing fees between the parties ($125,000 per filing, for a total of $250,000) should be confirmed by the respective clients. This is typically addressed in the definitive transaction documents, but the parties should reach an understanding before filing so that each party can arrange payment of its respective fee.
We recommend that Megan Chu initiate contact with Joanna Kline at Haverford, Quinn & Steele at the earliest opportunity to begin this coordination process.
IX. ACTION ITEMS AND NEXT STEPS
Based on the foregoing analysis, we recommend the following action items, which should be completed expeditiously in order to meet the target filing date of October 18, 2023:
1. Confirm UPE Determination for CBR. Obtain from Rebecca Whitfield (General Counsel) and/or Priya Narayanan (CFO) the precise share ownership breakdown of CBR, including the respective ownership percentages of Margaret Calloway, Thomas Briggs, Cascadia Growth Equity Fund III, L.P., and any other shareholders, in order to confirm the ultimate parent entity for HSR filing purposes. If any individual holds 50% or more of CBR's voting securities, the UPE designation and scope of the filing person will need to be adjusted accordingly.
Responsible: Megan Chu / Derek Okonkwo Target Completion Date: October 9, 2023
2. Contact Counterparty Counsel. Megan Chu to reach out to Joanna Kline at Haverford, Quinn & Steele LLP to coordinate filing logistics, confirm the target filing date of October 18, 2023, initiate the exchange of information necessary for form completion, and discuss filing fee allocation.
Responsible: Megan Chu Target Completion Date: October 6, 2023
3. Prepare HSR Form for CBR. Derek Okonkwo to prepare the draft HSR Notification and Report Form for CBR, including the transaction description, NAICS code revenue breakdowns, UPE identification, and all required schedules and attachments. The draft form will be submitted to James Prentice and Megan Chu for review before filing.
Responsible: Derek Okonkwo Target Completion Date: October 13, 2023 (draft); October 16, 2023 (final review by J. Prentice and M. Chu)
4. Gather Required Documents. Assemble copies of all documents required to be filed with the HSR Form, including:
• The executed non-binding term sheet dated September 25, 2023;
• Any internal CBR analyses, board presentations, or memoranda relating to the transaction that discuss competition, competitors, market share, or potential efficiencies (Item 4(c) and 4(d) documents);
• NAICS code revenue breakdowns for CBR and all entities within the CBR corporate family; and
• CBR's most recent regularly prepared annual financial statements.
Responsible: Derek Okonkwo (with assistance from CBR — Rebecca Whitfield / Priya Narayanan) Target Completion Date: October 12, 2023
5. Filing Fee Approval and Payment. Confirm with CBR (Priya Narayanan, CFO) approval of the $125,000 filing fee for CBR's HSR filing and arrange for payment to the FTC's Premerger Notification Office. Payment may be made by certified check, wire transfer, or electronic payment through the FTC's e-filing system.
Responsible: Megan Chu / Derek Okonkwo Target Completion Date: October 16, 2023
6. Calendar Waiting Period. Upon filing (target October 18, 2023), calendar the 30-day waiting period expiration date (approximately November 17, 2023) in the firm's docketing system and monitor the FTC's public docket for early termination notices. Set internal reminders at 10-day, 20-day, and 30-day marks following filing.
Responsible: Derek Okonkwo Target Completion Date: Immediately upon filing
7. Post-Filing Monitoring. Following the filing, monitor for any inquiries, requests for additional information, or second requests from the FTC or DOJ. If any communications are received from the reviewing agency, notify James Prentice and Megan Chu immediately and prepare to respond promptly. In the unlikely event of a second request, a separate action plan will be developed at that time.
Responsible: Derek Okonkwo (primary); Megan Chu (oversight) Target Completion Date: Ongoing through expiration or early termination of the waiting period
X. CONCLUSION
Based on the foregoing analysis, the formation of Solstice Plateau Energy Holdings LLC as a 50/50 joint venture between Calloway-Briggs Renewables Inc. and Lumen Ridge Infrastructure Partners LLC requires pre-merger notification under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the implementing regulations at 16 C.F.R. Parts 801–803, for the following reasons:
(a) The transaction exceeds the applicable size-of-transaction threshold of $111.4 million (each party's acquisition of a 50% membership interest in the JV Entity is valued at $150,000,000, and the aggregate transaction value is $300,000,000);
(b) Both parties satisfy the size-of-person test (CBR's 2022 revenues of approximately $412 million and Lumen Ridge's total assets under management of approximately $4.2 billion each exceed the applicable thresholds);
(c) No available exemption applies (the investment-only exemption is inapplicable given the parties' active governance rights, and no other exemption is applicable to the facts of this transaction); and
(d) The commerce requirement is met (both parties are engaged in interstate commerce through their respective renewable energy development and investment activities).
The risk of a second request or substantive antitrust challenge is assessed as low, given the complementary nature of the joint venture, the absence of horizontal overlap between the parties, and the highly fragmented structure of the U.S. utility-scale solar energy market.
We recommend filing the HSR Notification and Report Form on or about October 18, 2023, with a concurrent request for early termination of the statutory waiting period. This timeline is designed to clear the regulatory condition well in advance of the targeted signing date for definitive transaction documents in late November or early December 2023.
This memorandum will be supplemented if there are material changes to the transaction structure, the parties' ownership or control chains, or the applicable HSR thresholds or regulatory guidance. Please do not hesitate to contact me with any questions or if additional analysis is required.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
Prepared by:
________________________________________
Derek Okonkwo Associate, Mergers & Acquisitions Calderwood & Harkness LLP (Houston) Direct: (713) 555-4837 dokonkwo@calderwoodharkness.com
Reviewed by:
________________________________________
James Prentice Responsible Partner, Mergers & Acquisitions Calderwood & Harkness LLP (Houston)
________________________________________
Megan Chu Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP (Houston)
Distribution: James Prentice, Megan Chu (Calderwood & Harkness LLP, Houston — internal only)
Copy to File: Matter No. 48172.001
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and constitutes attorney work product. It is intended solely for the use of the named recipients and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

I. EXECUTIVE SUMMARY

V. EXEMPTIONS ANALYSIS

VI. FILING MECHANICS AND TIMING

VII. SUBSTANTIVE ANTITRUST ASSESSMENT

VIII. COORDINATION WITH COUNTERPARTY COUNSEL

IX. ACTION ITEMS AND NEXT STEPS

X. CONCLUSION

CALDERWOOD & HARKNESS LLP

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