LIMITED LIABILITY COMPANY AGREEMENT

LIMITED LIABILITY COMPANY AGREEMENT
OF
SOLSTICE PLATEAU ENERGY HOLDINGS LLC
A Delaware Limited Liability Company
Dated as of December 4, 2023
by and between
CALLOWAY-BRIGGS RENEWABLES INC.
and
LUMEN RIDGE INFRASTRUCTURE PARTNERS LLC
LIMITED LIABILITY COMPANY AGREEMENT
OF
SOLSTICE PLATEAU ENERGY HOLDINGS LLC
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LIMITED LIABILITY COMPANY AGREEMENT
OF
SOLSTICE PLATEAU ENERGY HOLDINGS LLC
This LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") of Solstice Plateau Energy Holdings LLC, a Delaware limited liability company (the "Company"), is entered into as of December 4, 2023 (the "Signing Date"), by and between:
(1) Calloway-Briggs Renewables Inc., a Texas corporation ("CBR"), having its principal offices at 2300 Travis Street, Suite 4200, Houston, Texas 77006; and
(2) Lumen Ridge Infrastructure Partners LLC, a Delaware limited liability company ("Lumen Ridge"), having its principal offices at 301 Tresser Boulevard, Suite 1400, Stamford, Connecticut 06901.
Each of CBR and Lumen Ridge is sometimes referred to herein individually as a "Member" and collectively as the "Members."
RECITALS
WHEREAS, the Company is a Delaware limited liability company to be formed by the filing of a Certificate of Formation with the Secretary of State of the State of Delaware (the "Delaware Secretary of State") pursuant to the Delaware Limited Liability Company Act, 6 Del. C. §18-101 et seq. (the "Act");
WHEREAS, the Company is being formed for the exclusive purpose of developing, constructing, financing, owning, operating, maintaining, and ultimately disposing of a portfolio of utility-scale solar energy projects consisting of approximately 1,200 megawatts (DC) of nameplate capacity across the states of Texas, New Mexico, and Arizona (the "Project Portfolio"), as more fully described in Schedule A attached hereto;
WHEREAS, CBR and Lumen Ridge desire to form the Company as a fifty-fifty (50/50) joint venture to pursue the development and commercialization of the Project Portfolio, and to establish their respective rights, obligations, and the terms and conditions governing the management and operation of the Company;
WHEREAS, CBR will contribute to the Company (a) cash in the amount of Sixty Million Dollars ($60,000,000) and (b) certain solar development project assets constituting the Project Portfolio, having an agreed value of Ninety Million Dollars ($90,000,000), for an aggregate Initial Capital Contribution of One Hundred Fifty Million Dollars ($150,000,000), pursuant to the terms of the Contribution Agreement dated as of the date hereof between CBR and the Company;
WHEREAS, Lumen Ridge will contribute to the Company cash in the amount of One Hundred Fifty Million Dollars ($150,000,000) as its Initial Capital Contribution;
WHEREAS, the Members desire to set forth in this Agreement their respective rights and obligations with respect to the Company, including the governance structure, capital contributions, allocations, distributions, transfer restrictions, and all other matters pertaining to the Company;
WHEREAS, the Certificate of Formation of the Company is to be filed with the Delaware Secretary of State in connection with the transactions contemplated hereby (subsequently filed on February 19, 2024; Delaware Secretary of State File Number 7849312); and
WHEREAS, the Company's registered agent in the State of Delaware shall be Peachtree Corporate Services, Inc., located at 1209 Orange Street, Suite 300, Wilmington, Delaware 19801.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members hereby agree as follows:
ARTICLE I — DEFINITIONS AND CONSTRUCTION
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Act" means the Delaware Limited Liability Company Act, 6 Del. C. §18-101 et seq., as the same may be amended from time to time.
"Additional Capital Contribution" means any Capital Contribution made by a Member to the Company after the Closing Date, pursuant to a Capital Call authorized under Section 5.3.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. For purposes of this definition, "Control" (including the correlative meanings of the terms "Controlled by" and "under common Control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Limited Liability Company Agreement of the Company, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Appraised Value" means the fair market value of a Membership Interest (or any portion thereof) as determined by an Independent Appraiser in accordance with the procedures set forth in Section 12.2 or as otherwise specified herein.
"Brazos Point Project" means the utility-scale solar development project located in Wharton County, Texas, having an approximate nameplate capacity of 120 MW (DC), as more fully described in Schedule A.
"Budget" means the annual budget of the Company for each Fiscal Year, as approved by Supermajority Vote of the Management Committee in accordance with Section 8.6(a) and Section 10.2.
"Built-In Gain" means the excess of the Agreed Value of any Contributed Property over its adjusted tax basis at the time of contribution to the Company. As of the Closing Date, the Built-In Gain with respect to the Project Portfolio is Fifty-Five Million Eight Hundred Thousand Dollars ($55,800,000), representing the difference between the agreed book value of Ninety Million Dollars ($90,000,000) and the adjusted tax basis of Thirty-Four Million Two Hundred Thousand Dollars ($34,200,000).
"Business Day" means any day other than a Saturday, a Sunday, or any day on which banking institutions in Houston, Texas, or New York, New York, are authorized or required by law, regulation, or executive order to be closed.
"Buy-Sell Notice" has the meaning set forth in Section 12.3(a).
"Buy-Sell Response Period" has the meaning set forth in Section 12.3(b).
"Capital Account" means, with respect to each Member, the capital account established and maintained for such Member in accordance with Section 5.4.
"Capital Call" means a call for Additional Capital Contributions from the Members authorized by the Management Committee pursuant to Section 5.3.
"Capital Contribution" means any contribution of cash, property, or services (or obligations to contribute cash, property, or services) made by a Member to the Company, including both Initial Capital Contributions and Additional Capital Contributions.
"CBR" means Calloway-Briggs Renewables Inc., a Texas corporation.
"CBR Appointed Members" means the three (3) members of the Management Committee appointed by CBR pursuant to Section 8.2.
"Certificate of Formation" means the Certificate of Formation of the Company filed with the Delaware Secretary of State, as the same may be amended, restated, or supplemented from time to time.
"Chairperson" means the chairperson of the Management Committee, as determined in accordance with Section 8.3. CBR shall hold the initial Chairperson position.
"Cimarron Flats Project" means the utility-scale solar development project located in Crockett County, Texas, having an approximate nameplate capacity of 150 MW (DC), as more fully described in Schedule A.
"Closing" means the consummation of the transactions contemplated by this Agreement, including the funding of the Initial Capital Contributions, as described in Section 4.2.
"Closing Date" means the date on which the Closing actually occurs, being the date on which all conditions precedent to Closing set forth in Section 4.1 have been satisfied or waived and the Initial Capital Contributions have been funded. The actual Closing Date was February 20, 2024.
"Code" means the Internal Revenue Code of 1986, as amended from time to time, or any corresponding provisions of any succeeding law.
"Company" means Solstice Plateau Energy Holdings LLC, a Delaware limited liability company.
"Contributed Property" means the Project Portfolio contributed by CBR to the Company pursuant to the Contribution Agreement, and any other property contributed by a Member to the Company.
"Contribution Agreement" means the Contribution Agreement dated as of December 4, 2023, between CBR and the Company, pursuant to which CBR contributes the Project Portfolio to the Company, as the same may be amended from time to time.
"Deadlock" has the meaning set forth in Section 8.7.
"Defaulting Member" has the meaning set forth in Section 5.5.
"Delaware Secretary of State" means the Secretary of State of the State of Delaware.
"Development and Construction Management Agreement" means the Development and Construction Management Agreement dated as of December 4, 2023, between CBR and the Company, pursuant to which CBR serves as the development and construction manager for the Projects, as the same may be amended from time to time.
"Distribution" means any distribution of cash or property by the Company to a Member in such Member's capacity as a Member, including distributions under the Distribution Waterfall set forth in Section 7.2 and tax distributions under Section 7.4.
"Distribution Waterfall" has the meaning set forth in Section 7.2.
"Drag-Along Right" has the meaning set forth in Section 12.5.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Escrow Agent" means Continental Fiduciary Trust Company.
"Escrow Agreement" means the Escrow Agreement dated as of December 4, 2023, among CBR, Lumen Ridge, and the Escrow Agent, pursuant to which the Initial Capital Contributions are held in escrow pending satisfaction of the conditions precedent to Closing.
"Fiscal Year" means the calendar year, or such shorter period beginning on the date of formation of the Company or ending on the date of dissolution of the Company.
"GAAP" means generally accepted accounting principles in the United States, consistently applied.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"ICC" means the International Chamber of Commerce.
"ICC Rules" means the Rules of Arbitration of the International Chamber of Commerce, as in effect from time to time.
"Indebtedness" means, with respect to any Person, without duplication, all obligations of such Person for borrowed money, all obligations evidenced by notes, bonds, debentures, or similar instruments, all capitalized lease obligations, and all guarantees of any of the foregoing.
"Independent Appraiser" means a nationally recognized independent appraisal firm with substantial experience in the valuation of renewable energy assets, mutually agreed upon by the Members, or, failing such agreement within fifteen (15) Business Days of a request by either Member, appointed by the ICC in accordance with its rules for the appointment of experts.
"Initial Capital Contribution" means the Capital Contribution made by each Member at or prior to the Closing, as set forth in Section 5.1 and Schedule B.
"Initiating Member" has the meaning set forth in Section 12.3(a).
"Interest" or "Membership Interest" means a Member's entire ownership interest in the Company, including such Member's right to receive allocations and distributions, such Member's right to vote or otherwise participate in the management of the Company (to the extent provided herein), and such Member's right to information and inspection as provided herein.
"Investment Tax Credit" or "ITC" means the investment tax credit available under Section 48 of the Code (or any successor provision), including any bonus credits applicable to the Projects.
"IRR" means the internal rate of return, calculated on an annualized, compounded basis, on contributed capital, taking into account the timing and amounts of all Capital Contributions and Distributions to the applicable Member, using the XIRR methodology (or equivalent) and assuming monthly compounding.
"Lone Star Prairie Project" means the utility-scale solar development project located in Webb County, Texas, having an approximate nameplate capacity of 130 MW (DC), as more fully described in Schedule A.
"Lock-Up Period" means the period of three (3) years commencing on the Closing Date and expiring on February 20, 2027.
"Lumen Ridge" means Lumen Ridge Infrastructure Partners LLC, a Delaware limited liability company.
"Lumen Ridge Appointed Members" means the three (3) members of the Management Committee appointed by Lumen Ridge pursuant to Section 8.2.
"Management Committee" means the six-member governing body of the Company, constituted and operating in accordance with Article VIII.
"Member" means each of CBR and Lumen Ridge, and any Person hereafter admitted as a member of the Company in accordance with this Agreement, but only for so long as such Person holds a Membership Interest.
"Net Cash Flow" means, for any period, the gross cash receipts of the Company from all sources (including operating revenues, proceeds from capital events, insurance proceeds, and investment income), less (a) all operating expenses, (b) all debt service payments (including principal and interest on the project-level credit facility and any other Indebtedness), (c) capital expenditures funded from operating cash flow, (d) reasonable reserves established by the Management Committee, and (e) any other cash outlays approved by the Management Committee, in each case determined on a cash basis.
"Non-Defaulting Member" has the meaning set forth in Section 5.5.
"Non-Offering Member" has the meaning set forth in Section 12.2(a).
"Offer Price" has the meaning set forth in Section 12.3(a).
"Offering Member" has the meaning set forth in Section 12.2(a).
"Officers" means the officers of the Company appointed by the Management Committee pursuant to Article IX.
"Partnership Representative" means the Person designated to serve as the "partnership representative" of the Company within the meaning of Section 6223 of the Code, as set forth in Section 11.4.
"Percentage Interest" means, with respect to each Member, such Member's percentage ownership interest in the Company, as set forth in Section 3.2 and as may be adjusted from time to time in accordance with this Agreement. As of the Closing Date, CBR's Percentage Interest is fifty percent (50%) and Lumen Ridge's Percentage Interest is fifty percent (50%).
"Permitted Transfer" means a Transfer of all or any portion of a Membership Interest to an Affiliate of the transferring Member, subject to compliance with the conditions set forth in Section 12.6.
"Person" means any natural person, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated organization, association, governmental authority, or any other entity.
"Project" or "Projects" means each or all of the eight (8) utility-scale solar development projects described in Schedule A, as the context requires.
"Project Portfolio" means the eight (8) utility-scale solar development projects contributed by CBR to the Company, having an aggregate nameplate capacity of approximately 1,200 MW (DC), as more fully described in Schedule A.
"Red Mesa Solar I Project" means the utility-scale solar development project located in Pecos County, Texas, having an approximate nameplate capacity of 200 MW (DC), as more fully described in Schedule A.
"Red Mesa Solar II Project" means the utility-scale solar development project located in Pecos County, Texas, having an approximate nameplate capacity of 180 MW (DC), as more fully described in Schedule A.
"Regulatory Allocations" means the allocations required by the Treasury Regulations as set forth in Section 6.2, including qualified income offsets, minimum gain chargebacks, and member nonrecourse debt minimum gain chargebacks.
"Related Party Transaction" means any transaction, contract, or arrangement between the Company, on the one hand, and any Member or any Affiliate of any Member, on the other hand.
"Remedial Allocation Method" means the allocation method described in Treasury Regulations Section 1.704-3(d).
"Reserved Matter" means any matter requiring Supermajority Vote of the Management Committee, as listed in Section 8.6.
"Responding Member" has the meaning set forth in Section 12.3(a).
"ROFO" or "Right of First Offer" has the meaning set forth in Section 12.2.
"ROFO Notice" has the meaning set forth in Section 12.2(a).
"ROFO Period" means the sixty (60)-day period following delivery of a ROFO Notice, as set forth in Section 12.2(b).
"Sangre del Sol I Project" means the utility-scale solar development project located in Doña Ana County, New Mexico, having an approximate nameplate capacity of 150 MW (DC), as more fully described in Schedule A.
"Sangre del Sol II Project" means the utility-scale solar development project located in Doña Ana County, New Mexico, having an approximate nameplate capacity of 110 MW (DC), as more fully described in Schedule A.
"Scheduled Closing Date" means February 15, 2024.
"Section 704(c)" means Section 704(c) of the Code and the Treasury Regulations promulgated thereunder.
"Signing Date" means December 4, 2023, the date of execution of this Agreement.
"SOFR" means the Secured Overnight Financing Rate as published by the Federal Reserve Bank of New York (or any successor administrator) on the applicable date of determination.
"Sonoran Ridge Project" means the utility-scale solar development project located in Pinal County, Arizona, having an approximate nameplate capacity of 160 MW (DC), as more fully described in Schedule A.
"Supermajority Vote" means the affirmative vote of at least five (5) of the six (6) members of the Management Committee.
"Tag-Along Right" has the meaning set forth in Section 12.4.
"Tax Matters" means the matters relating to tax elections, tax allocations, tax reporting, and tax proceedings set forth in Article XI.
"Tax Protection Agreement" means the Tax Protection Agreement dated as of December 4, 2023, between the Company and CBR, providing certain protections to CBR against the recognition of Built-In Gain on the Contributed Property, as the same may be amended from time to time.
"Transfer" means, with respect to a Membership Interest (or any portion thereof), any direct or indirect sale, assignment, transfer, conveyance, gift, pledge, hypothecation, encumbrance, or other disposition, whether voluntary, involuntary, or by operation of law. The terms "Transferee," "Transferor," and "Transferred" shall have correlative meanings.
"Treasury Regulations" means the regulations promulgated under the Code by the U.S. Department of the Treasury, as the same may be amended from time to time, including corresponding provisions of any succeeding regulations.
Section 1.2 — Rules of Construction
(a) The headings and captions contained in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.
(b) Whenever the context so requires, words in the singular shall include the plural and vice versa, and words in any gender shall include all genders.
(c) The word "including" (and words of similar import such as "include" and "includes") shall mean "including without limitation" and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.
(d) References herein to any statute, law, or regulation shall include all amendments thereto, all successor statutes, laws, or regulations, and all rules, regulations, and guidance promulgated thereunder, in each case as in effect from time to time.
(e) All references herein to "$" or "dollars" shall mean United States dollars.
(f) Whenever any action is required to be taken on or by a date that is not a Business Day, such action shall be taken on or by the next succeeding Business Day.
(g) References to "Articles," "Sections," "Schedules," and "Exhibits" shall refer to Articles, Sections, Schedules, and Exhibits of or to this Agreement, unless otherwise expressly indicated.
(h) References to any agreement or instrument (including this Agreement) shall mean such agreement or instrument as amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms.
(i) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, as set forth more fully in Section 16.1.
(j) The parties acknowledge that each party has been represented by counsel in the negotiation and drafting of this Agreement, and no presumption or rule of construction shall apply against any party as the drafter of this Agreement or any particular provision hereof.
ARTICLE II — FORMATION AND ORGANIZATION
Section 2.1 — Formation
The Company has been or shall be formed as a Delaware limited liability company by the filing of the Certificate of Formation with the Delaware Secretary of State in accordance with the Act. The Certificate of Formation was subsequently filed with the Delaware Secretary of State on February 19, 2024, and assigned Delaware Secretary of State File Number 7849312. The Company has been assigned Employer Identification Number (EIN) 93-4158203 by the Internal Revenue Service. The registered agent of the Company in the State of Delaware is Peachtree Corporate Services, Inc., located at 1209 Orange Street, Suite 300, Wilmington, Delaware 19801. The rights and obligations of the Members and the administration, dissolution, and termination of the Company shall be governed by this Agreement and, to the extent not inconsistent herewith, by the Act.
Section 2.2 — Name
The Company shall conduct its business under the name "Solstice Plateau Energy Holdings LLC" or such other name as the Management Committee may approve by Supermajority Vote. The Management Committee shall have the authority to file or cause to be filed any assumed name or trade name certificates and similar filings, and to take such other action as may be necessary or desirable to permit the Company to conduct business under any such name.
Section 2.3 — Principal Office
The principal business office of the Company shall be located at 2300 Travis Street, Suite 4210, Houston, Texas 77006, or at such other location as the Management Committee may determine by resolution from time to time. The Management Committee shall provide written notice to each Member of any change in the location of the Company's principal office within ten (10) Business Days following such change.
Section 2.4 — Registered Office and Registered Agent
The registered office of the Company in the State of Delaware shall be at c/o Peachtree Corporate Services, Inc., 1209 Orange Street, Suite 300, Wilmington, Delaware 19801, and the registered agent of the Company for service of process at such address shall be Peachtree Corporate Services, Inc. The Management Committee may change the registered office and registered agent of the Company from time to time in accordance with the Act by filing appropriate documentation with the Delaware Secretary of State.
Section 2.5 — Term
The Company shall have perpetual existence and shall continue until dissolved in accordance with the provisions of Article XIV of this Agreement and the Act. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation in accordance with Section 14.3.
Section 2.6 — Purpose
The exclusive purpose of the Company is to develop, construct, finance, own, operate, maintain, and ultimately dispose of the Projects, and to engage in all activities necessary, incidental, or reasonably related thereto, including (a) acquiring, holding, improving, and disposing of real property and personal property associated with the Projects, (b) entering into power purchase agreements, interconnection agreements, engineering, procurement, and construction contracts, and other agreements relating to the Projects, (c) obtaining debt and equity financing for the Projects, (d) applying for and obtaining all governmental approvals, permits, and licenses necessary for the development, construction, and operation of the Projects, and (e) engaging in any other lawful activities incidental to or in furtherance of the foregoing.
The Projects consist of eight (8) utility-scale solar energy development projects located in the states of Texas, New Mexico, and Arizona, having an aggregate nameplate capacity of approximately one thousand two hundred megawatts (1,200 MW) (DC), as more fully described in Schedule A attached hereto. The Company shall not engage in any business or activity other than as set forth in this Section 2.6 without the prior Supermajority Vote of the Management Committee.
Section 2.7 — Authority
The Company shall have the authority and power to carry out its purposes as described in Section 2.6 and to take all actions and engage in all activities permitted by the Act, this Agreement, and applicable law. The Company shall have all of the powers of a limited liability company under the Act, subject to the limitations set forth in this Agreement.
Section 2.8 — Qualification in Other Jurisdictions
The Management Committee shall cause the Company to qualify to do business as a foreign limited liability company in the State of Texas, the State of New Mexico, the State of Arizona, and such other jurisdictions in which the nature of the Company's business or the ownership of its property requires such qualification. Each Member agrees to execute, acknowledge, and deliver all certificates, documents, and other instruments that may be necessary or appropriate to effect such qualification.
Section 2.9 — Title to Property
All property owned by the Company, whether real, personal, or mixed, and whether tangible or intangible, shall be owned by the Company as an entity, and no Member, individually or collectively, shall have any ownership interest in any Company property in such Member's individual name. Each Member's Membership Interest in the Company shall constitute personal property for all purposes. The Company's interest in all Projects and associated assets, including land leases, permits, interconnection rights, power purchase agreements, and development rights, shall be held solely in the name of the Company or its wholly-owned subsidiaries, and no Member shall have any individual right, title, or interest therein except through such Member's Membership Interest.
ARTICLE III — MEMBERS
Section 3.1 — Members
The Members of the Company, their addresses, and their employer identification numbers are as follows:
(a) Calloway-Briggs Renewables Inc. (CBR), a Texas corporation, having its principal offices at 2300 Travis Street, Suite 4200, Houston, Texas 77006; EIN: 46-2837451.
(b) Lumen Ridge Infrastructure Partners LLC (Lumen Ridge), a Delaware limited liability company, having its principal offices at 301 Tresser Boulevard, Suite 1400, Stamford, Connecticut 06901; EIN: 83-1924076.
Section 3.2 — Percentage Interests
The Percentage Interests of the Members as of the Closing Date are as follows:
The Percentage Interests of the Members may be adjusted from time to time as provided in this Agreement, including pursuant to Section 5.5 in the event of a default on a Capital Call.
Section 3.3 — Representations and Warranties of the Members
(a) Mutual Representations and Warranties. Each Member hereby represents and warrants to the other Member and to the Company as of the Signing Date and as of the Closing Date as follows:
(i) Due Organization and Good Standing. Such Member is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization, and has all requisite power and authority to own its properties, to carry on its business as presently conducted, and to execute, deliver, and perform its obligations under this Agreement and the transactions contemplated hereby.
(ii) Authorization. The execution, delivery, and performance by such Member of this Agreement and all ancillary agreements to which it is a party have been duly authorized by all necessary corporate or limited liability company action, as applicable, on the part of such Member.
(iii) No Conflicts. The execution, delivery, and performance of this Agreement by such Member does not and will not (A) violate or conflict with the organizational documents of such Member, (B) violate or conflict with any material agreement, instrument, or obligation to which such Member is a party or by which it is bound, or (C) violate any applicable law, rule, regulation, order, judgment, or decree applicable to such Member.
(iv) Binding Agreement. This Agreement constitutes the legal, valid, and binding obligation of such Member, enforceable against such Member in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting creditors' rights generally and to general equitable principles.
(v) No Consents Required. No consent, approval, authorization, order, registration, filing, or qualification of or with any court, governmental authority, or other Person is required for the execution, delivery, and performance by such Member of this Agreement, other than those that have already been obtained. In the case of CBR, the consent of Cascadia Growth Equity Fund III, L.P. (a minority investor in CBR) was obtained on November 20, 2023.
(vi) No Litigation. There is no action, suit, proceeding, or investigation pending or, to such Member's knowledge, threatened against such Member that would materially and adversely affect such Member's ability to consummate the transactions contemplated by this Agreement.
(vii) Investment Intent. Such Member is acquiring its Membership Interest for its own account for investment purposes and not with a view to the distribution or resale thereof in violation of applicable securities laws. Such Member acknowledges that the Membership Interests have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be Transferred except in compliance with applicable securities laws and the provisions of this Agreement.
(b) Additional Representations of CBR. CBR hereby makes the additional representations and warranties set forth in the Contribution Agreement with respect to the Project Portfolio, including representations regarding title to the Projects, the status of permits and governmental approvals, the validity and enforceability of land leases and other material project contracts, the absence of liens and encumbrances (other than permitted liens), environmental compliance, and the accuracy of project-level financial information. Such representations are incorporated herein by reference and shall be deemed to have been made to both Lumen Ridge and the Company as of the Signing Date and as of the Closing Date.
Section 3.4 — Admission of New Members
No new Member shall be admitted to the Company except upon the Supermajority Vote of the Management Committee (requiring the affirmative vote of at least five (5) of six (6) members of the Management Committee). As a condition to admission, any new Member shall be required to execute and deliver a joinder to this Agreement in the form attached hereto as Exhibit B, pursuant to which such new Member agrees to be bound by all the terms and conditions of this Agreement. The admission of a new Member shall not be effective until such joinder has been duly executed and delivered, and the books and records of the Company have been updated to reflect the admission. No admission of a new Member shall cause the Company to be treated as a "publicly traded partnership" under Section 7704 of the Code.
Section 3.5 — Liability of Members
No Member shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a Member of the Company. Each Member shall be entitled to the full protection and benefit of the exculpation provisions of Section 18-303 of the Act, which provides that a member of a limited liability company shall not be obligated personally for any debt, obligation, or liability of the limited liability company solely by reason of being a member. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this Agreement or the Act shall not be grounds for imposing personal liability on any Member for liabilities of the Company.
Section 3.6 — No Withdrawal
No Member may voluntarily resign, retire, or withdraw from the Company except as expressly permitted by Article XII (Transfer Restrictions) or Article XIV (Dissolution and Winding Up) of this Agreement. Any purported withdrawal in contravention of this Section 3.6 shall be null and void, and the withdrawing Member shall remain liable for all obligations arising under this Agreement.
ARTICLE IV — CLOSING
Section 4.1 — Conditions Precedent to Closing
The obligations of each Member to consummate the transactions contemplated by this Agreement and to make its Initial Capital Contribution are subject to the satisfaction (or waiver by both Members) of the following conditions precedent:
(a) Execution of Agreements. Each of the following agreements shall have been duly executed and delivered by the applicable parties thereto: (i) this Agreement, (ii) the Contribution Agreement, (iii) the Development and Construction Management Agreement, (iv) the Tax Protection Agreement, and (v) the Escrow Agreement.
(b) Certificate of Formation. The Certificate of Formation of the Company shall have been duly filed with the Delaware Secretary of State and shall be in full force and effect.
(c) Governmental Approvals. All required governmental approvals shall have been obtained, including clearance under the HSR Act. Early termination of the waiting period under the HSR Act was granted on November 8, 2023 (HSR Transaction Number 20231018-CBR-LRI).
(d) Project Permits. All material permits and governmental authorizations required for the development and construction of the Projects shall have been obtained, including without limitation the conditional use permit for the Brazos Point Project in Wharton County, Texas, which was received on January 10, 2024.
(e) Legal Opinions. Each Member shall have delivered a legal opinion from its outside counsel addressed to the other Member and the Company, in form and substance reasonably satisfactory to the receiving party, confirming due organization, authority, enforceability, and no conflicts.
(f) Officer's Certificates. Each Member shall have delivered to the other Member an officer's certificate, dated as of the Closing Date, certifying as to (i) the accuracy of such Member's representations and warranties as of the Closing Date, (ii) such Member's compliance with all covenants required to be performed by it at or prior to the Closing, and (iii) the absence of any event that would constitute a material adverse effect on such Member or its ability to consummate the transactions contemplated hereby.
(g) Secretary's Certificates. Each Member shall have delivered a secretary's certificate (or equivalent) certifying true and correct copies of (i) the resolutions of the board of directors (or equivalent governing body) of such Member authorizing the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, (ii) the organizational documents of such Member, and (iii) the incumbency and signatures of the officers of such Member executing this Agreement and the other transaction documents.
(h) Good Standing Certificates. Each Member shall have delivered a certificate of good standing (or equivalent) from the secretary of state of such Member's jurisdiction of organization, dated no more than five (5) Business Days prior to the Closing Date.
(i) Escrow Funding. The cash portions of the Initial Capital Contributions shall have been deposited into the escrow account maintained by the Escrow Agent at Continental Fiduciary Trust Company (escrow account reference CFT-2024-00847). Funding of the escrow account was completed on February 5, 2024.
(j) Credit Facility Commitment. The commitment letter for the project-level credit facility with Trident National Bank, N.A. (reference TNB-EIF-2024-0193) shall have been duly executed and delivered and shall be in full force and effect. The commitment letter was executed on January 22, 2024.
(k) No Material Adverse Effect. Since the Signing Date, there shall not have occurred any event, change, circumstance, or condition that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on either Member or on the Projects.
(l) Accuracy of Representations and Warranties. The representations and warranties of each Member contained in Section 3.3 shall be true and correct in all material respects as of the Closing Date (or, if qualified by materiality, in all respects) with the same effect as though made on and as of the Closing Date.
Section 4.2 — Closing
The Closing shall occur on the Closing Date, which shall be the later of (a) the Scheduled Closing Date (February 15, 2024) and (b) the date on which all conditions precedent set forth in Section 4.1 have been satisfied or waived by both Members. The Closing shall take place at the offices of Calderwood & Harkness LLP, 1000 Louisiana Street, Suite 5500, Houston, Texas 77002, or remotely by the exchange of executed documents in counterparts, as the Members may agree. The actual Closing Date was February 20, 2024.
Section 4.3 — Closing Deliverables
(a) CBR Deliverables. At or prior to the Closing, CBR shall deliver (or cause to be delivered) to Lumen Ridge and the Company the following:
(i) Executed counterparts of this Agreement and all ancillary agreements to which CBR is a party;
(ii) An officer's certificate executed by Margaret Calloway, Chief Executive Officer of CBR, dated as of the Closing Date, certifying as to the satisfaction of the applicable conditions precedent;
(iii) A secretary's certificate executed by the corporate secretary of CBR, certifying true and correct copies of the board resolutions authorizing the transactions, the organizational documents of CBR, and the incumbency and signatures of authorized officers;
(iv) A certificate of good standing for CBR from the Texas Secretary of State (Texas Secretary of State File Number 0801647392), dated no more than five (5) Business Days prior to the Closing Date;
(v) A legal opinion from Calderwood & Harkness LLP, executed by James Prentice, in form and substance reasonably satisfactory to Lumen Ridge;
(vi) All instruments and documents necessary to effectuate the contribution of the Project Portfolio to the Company, including assignments of land leases, permits, interconnection rights, power purchase agreements, and all other Project-related contracts and agreements, duly executed and in recordable form where required;
(vii) Evidence of the funding of CBR's cash Capital Contribution in the amount of Sixty Million Dollars ($60,000,000) into the escrow account at Continental Fiduciary Trust Company; and
(viii) Such other certificates, instruments, and documents as Lumen Ridge or the Company may reasonably request.
(b) Lumen Ridge Deliverables. At or prior to the Closing, Lumen Ridge shall deliver (or cause to be delivered) to CBR and the Company the following:
(i) Executed counterparts of this Agreement and all ancillary agreements to which Lumen Ridge is a party;
(ii) An officer's certificate executed by an authorized officer of Lumen Ridge, dated as of the Closing Date, certifying as to the satisfaction of the applicable conditions precedent;
(iii) A certificate executed by the secretary or an authorized representative of Lumen Ridge, certifying true and correct copies of the resolutions (or written consents) of the governing body of Lumen Ridge authorizing the transactions, the organizational documents of Lumen Ridge, and the incumbency and signatures of authorized signatories;
(iv) A certificate of good standing for Lumen Ridge from the Delaware Secretary of State, dated no more than five (5) Business Days prior to the Closing Date;
(v) A legal opinion from Haverford, Quinn & Steele LLP, executed by Gregory Haverford III, in form and substance reasonably satisfactory to CBR;
(vi) Evidence of the funding of Lumen Ridge's cash Capital Contribution in the amount of One Hundred Fifty Million Dollars ($150,000,000) into the escrow account at Continental Fiduciary Trust Company; and
(vii) Such other certificates, instruments, and documents as CBR or the Company may reasonably request.
ARTICLE V — CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
Section 5.1 — Initial Capital Contributions
(a) CBR Initial Capital Contribution. CBR shall make an Initial Capital Contribution to the Company in an aggregate amount of One Hundred Fifty Million Dollars ($150,000,000), consisting of:
(i) Cash in the amount of Sixty Million Dollars ($60,000,000), to be wired from the escrow account at Continental Fiduciary Trust Company to the Company's operating account at Trident National Bank, N.A. upon the satisfaction of the conditions precedent to Closing; and
(ii) The Project Portfolio, contributed in-kind pursuant to the Contribution Agreement, having an agreed value of Ninety Million Dollars ($90,000,000). The basis for the agreed value of the Project Portfolio is the fairness analysis prepared by Ridgeline Barrow & Co., dated November 15, 2023, which valued the Project Portfolio in the range of Eighty-Seven Million Dollars ($87,000,000) to Ninety-Six Million Dollars ($96,000,000). The parties agreed to a value of Ninety Million Dollars ($90,000,000), representing approximately the midpoint of such range.
(b) Lumen Ridge Initial Capital Contribution. Lumen Ridge shall make an Initial Capital Contribution to the Company in cash in the amount of One Hundred Fifty Million Dollars ($150,000,000), to be wired from the escrow account at Continental Fiduciary Trust Company to the Company's operating account at Trident National Bank, N.A. upon the satisfaction of the conditions precedent to Closing.
(c) Aggregate Initial Capital Contributions. The aggregate Initial Capital Contributions to the Company shall be Three Hundred Million Dollars ($300,000,000), as further described in Schedule B attached hereto.
(d) Release from Escrow. The cash portions of the Initial Capital Contributions deposited by each Member into the escrow account at Continental Fiduciary Trust Company (account reference CFT-2024-00847) shall be released and transferred to the Company's operating account at Trident National Bank, N.A. upon the satisfaction or waiver of all conditions precedent to Closing set forth in Section 4.1 and the joint written authorization of the Members (or their respective counsel) to the Escrow Agent.
Section 5.2 — Use of Capital Contributions
Capital Contributions shall be used exclusively for the development, construction, financing, and operation of the Projects and for working capital and general corporate purposes of the Company. Without limiting the foregoing, Capital Contributions may be used for (a) pre-development and development expenditures, (b) engineering, procurement, and construction costs, (c) land acquisition and lease payments, (d) interconnection costs, (e) permitting and environmental costs, (f) legal, accounting, and advisory fees, (g) insurance premiums, (h) debt service payments, (i) working capital reserves, and (j) such other purposes as approved by the Management Committee in the annual Budget or otherwise in accordance with this Agreement.
Section 5.3 — Additional Capital Contributions
(a) Authorization. From time to time after the Closing Date, the Management Committee may authorize Capital Calls requiring the Members to make Additional Capital Contributions to the Company on a pro rata basis in proportion to their respective Percentage Interests (fifty percent (50%) from each Member).
(b) Maximum Aggregate Additional Capital Contributions. The maximum aggregate Additional Capital Contributions that may be called from the Members under this Section 5.3 shall not exceed Two Hundred Million Dollars ($200,000,000) per Member, or Four Hundred Million Dollars ($400,000,000) in the aggregate. For the avoidance of doubt, the total potential equity capitalization of the Company is Seven Hundred Million Dollars ($700,000,000), consisting of Three Hundred Million Dollars ($300,000,000) in Initial Capital Contributions and up to Four Hundred Million Dollars ($400,000,000) in Additional Capital Contributions.
(c) Approval Thresholds. Any Capital Call in excess of Twenty-Five Million Dollars ($25,000,000) per Member (Fifty Million Dollars ($50,000,000) in the aggregate) shall require the Supermajority Vote of the Management Committee (at least five (5) of six (6) votes). Capital Calls of Twenty-Five Million Dollars ($25,000,000) or less per Member (Fifty Million Dollars ($50,000,000) or less in the aggregate) may be approved by a simple majority of the Management Committee members present at a duly convened meeting at which a quorum is present.
(d) Capital Call Notices. Written notice of each Capital Call shall be delivered to each Member at least thirty (30) Business Days in advance of the funding date, substantially in the form attached hereto as Exhibit A. Each Capital Call notice shall specify (i) the aggregate amount of the Capital Call, (ii) each Member's pro rata share thereof, (iii) the purpose for which the funds will be used, (iv) the funding date, and (v) wire transfer instructions for the Company's bank account.
Section 5.4 — Capital Accounts
(a) Establishment. A separate Capital Account shall be established and maintained for each Member in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) and the rules and principles set forth in this Section 5.4.
(b) Credits to Capital Accounts. The Capital Account of each Member shall be increased by (i) the amount of any cash contributed by such Member to the Company, (ii) the agreed value (net of liabilities assumed or taken subject to by the Company) of any property contributed by such Member to the Company, and (iii) such Member's allocable share of Net Income, items of income, and items of gain allocated to such Member pursuant to Article VI.
(c) Debits to Capital Accounts. The Capital Account of each Member shall be decreased by (i) the amount of any cash distributed to such Member by the Company, (ii) the agreed value (net of liabilities assumed or taken subject to by such Member) of any property distributed to such Member by the Company, and (iii) such Member's allocable share of Net Loss, items of deduction, and items of loss allocated to such Member pursuant to Article VI.
(d) Contributed Property. The Contributed Property (i.e., the Project Portfolio contributed by CBR) shall be reflected in the Capital Accounts at its agreed value of Ninety Million Dollars ($90,000,000), rather than at its adjusted tax basis of Thirty-Four Million Two Hundred Thousand Dollars ($34,200,000). Any subsequent adjustments to the book value of Company assets under Treasury Regulations Section 1.704-1(b)(2)(iv)(f) or (g) (including revaluations upon the admission of a new Member or a substantial capital event) shall also be reflected in the Capital Accounts.
(e) Compliance with Treasury Regulations. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Treasury Regulations. The Management Committee shall make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of Company capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(q).
Section 5.5 — Default on Capital Call
If any Member (a "Defaulting Member") fails to fund its pro rata share of any duly authorized Capital Call within fifteen (15) Business Days after the due date specified in the Capital Call notice, the other Member (the "Non-Defaulting Member") shall have the following remedies, in addition to any other remedies available at law or in equity:
(a) Funding as a Loan. The Non-Defaulting Member may, in its sole discretion, fund the Defaulting Member's unfunded portion of the Capital Call as a loan to the Defaulting Member. Any such loan shall bear interest at a rate equal to SOFR (as of the date of such advance) plus five hundred (500) basis points per annum, compounded quarterly, from the date of the advance until the date of repayment in full. The Defaulting Member shall repay such loan, together with all accrued interest, within ninety (90) days of the date of the advance. During the pendency of any such loan, the Company shall be authorized to set off distributions otherwise payable to the Defaulting Member against the outstanding loan balance (including accrued interest).
(b) Conversion to Equity. If the Defaulting Member fails to repay the loan described in Section 5.5(a) within ninety (90) days of the date of the advance, the Non-Defaulting Member may, by written notice to the Defaulting Member, elect to convert the outstanding loan amount (including accrued interest) into an Additional Capital Contribution by the Non-Defaulting Member. Upon such conversion, the Percentage Interests of the Members shall be adjusted to reflect the additional capital contributed by the Non-Defaulting Member, such that each Member's Percentage Interest shall be proportional to its aggregate Capital Contributions to the Company (valued at the time of contribution). Any such dilution shall be calculated in good faith by the Company's independent auditor, and the determination of the independent auditor shall be binding on both Members absent manifest error.
(c) Suspension of Voting Rights. During any period in which a Member is a Defaulting Member (i.e., from the expiration of the fifteen (15) Business Day cure period until such time as the default has been fully cured, whether by repayment of the loan or otherwise), the Management Committee members appointed by the Defaulting Member shall not have the right to vote on any matter before the Management Committee, and the quorum and voting requirements shall be adjusted accordingly.
Section 5.6 — No Interest on Capital Contributions
No Member shall be entitled to receive interest on its Capital Contributions, except as otherwise expressly provided in Section 5.5 with respect to loans advanced by a Non-Defaulting Member.
Section 5.7 — Return of Capital Contributions
Except as otherwise provided in Article XIV (Dissolution and Winding Up), no Member shall have the right to demand or receive the return of all or any portion of its Capital Contributions. Under circumstances requiring a return of Capital Contributions, no Member shall have the right to receive property other than cash except as determined by the Management Committee.
Section 5.8 — No Obligation to Restore Deficit Capital Account
No Member shall have any obligation to restore a deficit balance in its Capital Account, whether upon dissolution of the Company, liquidation of such Member's Membership Interest, or otherwise, except to the extent required by a non-waivable provision of the Act. The provisions of this Section 5.8 shall not be construed to relieve any Member of its obligation to fund Capital Calls duly authorized under Section 5.3.
ARTICLE VI — ALLOCATIONS
Section 6.1 — Allocation of Net Income and Net Loss
After giving effect to the Regulatory Allocations set forth in Section 6.2 and the Section 704(c) allocations set forth in Section 6.3, Net Income and Net Loss of the Company for each Fiscal Year (or other applicable period) shall be allocated among the Members in a manner that, as nearly as possible, causes each Member's Capital Account balance at the end of such Fiscal Year (or other applicable period) to equal the amount that would be distributed to such Member pursuant to Section 7.2 (Distribution Waterfall) if the Company were dissolved and liquidated at that time, all Company assets were sold for their book values, all Company liabilities were satisfied in full, and the remaining proceeds were distributed to the Members in accordance with Section 14.2(c) (i.e., in accordance with positive Capital Account balances). To the extent that Net Income or Net Loss cannot be allocated in a manner that precisely achieves the target Capital Account balances, such items shall be allocated in a manner that, as nearly as possible, achieves such result.
Section 6.2 — Special Allocations
The following special allocations shall be made in the order of priority set forth below and, to the extent applicable, shall take priority over the allocations set forth in Section 6.1:
(a) Qualified Income Offset. If any Member unexpectedly receives any adjustment, allocation, or distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) that causes or increases a deficit balance in such Member's Capital Account (in excess of such Member's share of partnership minimum gain and member nonrecourse debt minimum gain, if any), then items of income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible. This provision is intended to constitute a "qualified income offset" within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith.
(b) Minimum Gain Chargeback. Notwithstanding any other provision of this Article VI, if there is a net decrease in partnership minimum gain during any Fiscal Year, each Member shall be specially allocated items of income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member's share of the net decrease in partnership minimum gain, determined in accordance with Treasury Regulations Section 1.704-2(g). Allocations pursuant to the preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.2(b) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(c) Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other provision of this Article VI (other than Section 6.2(b)), if there is a net decrease in member nonrecourse debt minimum gain attributable to a member nonrecourse debt during any Fiscal Year, each Member who has a share of the member nonrecourse debt minimum gain attributable to such member nonrecourse debt, determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall be specially allocated items of income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member's share of the net decrease in member nonrecourse debt minimum gain attributable to such member nonrecourse debt, determined in the manner described in Treasury Regulations Section 1.704-2(i)(4). Allocations pursuant to the preceding sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. This Section 6.2(c) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(d) Nonrecourse Deductions. Nonrecourse deductions (as defined in Treasury Regulations Section 1.704-2(b)(1)) for any Fiscal Year shall be allocated fifty percent (50%) to CBR and fifty percent (50%) to Lumen Ridge, in accordance with their respective Percentage Interests.
(e) Member Nonrecourse Deductions. Any member nonrecourse deductions (as defined in Treasury Regulations Section 1.704-2(i)(1)) for any Fiscal Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the member nonrecourse debt to which such member nonrecourse deductions are attributable, in accordance with Treasury Regulations Section 1.704-2(i)(1).
(f) Curative Allocations. The Regulatory Allocations set forth in Sections 6.2(a) through 6.2(e) (the "Regulatory Allocations") are intended to comply with certain requirements of the Treasury Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss, or deduction pursuant to this Section 6.2(f). Therefore, notwithstanding any other provision of this Article VI (other than the Regulatory Allocations), subsequent allocations of income, gain, loss, and deduction shall be made so as to offset the Regulatory Allocations and cause each Member's Capital Account balance to be, as nearly as possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of this Agreement. In exercising its discretion under this Section 6.2(f), the Management Committee shall take into account future Regulatory Allocations under Sections 6.2(a) through 6.2(e) that, although not yet made, are likely to offset previously made Regulatory Allocations.
The Regulatory Allocations set forth in Sections 6.2(a) through 6.2(e) shall, to the extent applicable, take priority over the allocations set forth in Section 6.1 and any other allocations under this Agreement.
Section 6.3 — Section 704(c) Allocations
(a) Remedial Allocation Method. In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, the Company shall use the Remedial Allocation Method under Treasury Regulations Section 1.704-3(d) for all allocations with respect to Contributed Property. This election shall apply to the Project Portfolio contributed by CBR, which has an agreed book value of Ninety Million Dollars ($90,000,000) and an adjusted tax basis of Thirty-Four Million Two Hundred Thousand Dollars ($34,200,000), resulting in Built-In Gain of Fifty-Five Million Eight Hundred Thousand Dollars ($55,800,000) as of the Closing Date.
(b) Allocation of Tax Items. Tax items of income, gain, loss, and deduction with respect to Contributed Property shall be allocated among the Members so as to take into account the variation between the agreed book value and the adjusted tax basis of such property, in accordance with the requirements of Section 704(c) of the Code and the Treasury Regulations thereunder. To the extent that the ceiling rule would otherwise limit the allocation of tax depreciation deductions to Lumen Ridge, the Company shall create remedial allocations of tax depreciation deductions to Lumen Ridge and corresponding offsetting remedial allocations of taxable income to CBR, in each case in accordance with Treasury Regulations Section 1.704-3(d).
(c) Tax Depreciation. Dep