1023-00001 · Ironside Capital Management LP · Financing

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CALDERWOOD & HARKNESS LLP Attorneys at Law

125 Broad Street, 44th Floor New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

September 6, 2022

C&H Matter No. 1023-00001

VIA EMAIL AND OVERNIGHT COURIER

Charles A. Delacroix, Esq. Breckenridge Sloane & Pratt LLP One Federal Street, Suite 3600 Boston, MA 02110

For delivery to:

Atlas National Bank, N.A. 383 Madison Avenue New York, NY 10179

Attention: Acquisition Finance Group

Re: Credit Agreement Term Sheet — Proposed Acquisition of Cascadia Renewables Holdings, Inc. by Cascadia Acquisition Corp.; Comments on Behalf of ICM Cascadia Co-Invest, LP

cc: Marcus J. Calloway, Ironside Capital Management LP Renata Obasi, Ironside Capital Management LP Pamela Cross, Calderwood & Harkness LLP Nicholas Stern, Calderwood & Harkness LLP

Dear Mr. Delacroix:

I. Introduction and Purpose

Calderwood & Harkness LLP ("C&H" or "we") represents Ironside Capital Management LP ("Ironside"), a Delaware limited partnership and the sole limited partner (holding a 99.99% limited partnership interest, representing a capital commitment of $299,970,000) in ICM Cascadia Co-Invest, LP ("ICM Co-Invest" or the "Co-Investment Vehicle"), EIN 88-3921457, a Delaware limited partnership formed on July 22, 2022 for the purpose of co-investing alongside Meridian Infrastructure Partners Fund IV, LP ("Fund IV") in the proposed acquisition described herein.

ICM Co-Invest has committed Three Hundred Million Dollars ($300,000,000) to co-invest alongside Fund IV in the acquisition of one hundred percent (100%) of the issued and outstanding equity interests of Cascadia Renewables Holdings, Inc. ("Cascadia" or the "Target"), an Oregon corporation, through Cascadia Acquisition Corp. ("AcquisitionCo"), a newly formed Delaware corporation organized as the acquisition vehicle for purposes of the proposed transaction. The Co-Investment Vehicle's commitment represents approximately 28.57% of the total equity capitalization of $1,050,000,000, with Fund IV providing the remaining 71.43%, or $750,000,000, of total equity. Together, ICM Co-Invest and Fund IV will collectively own all of the equity interests in AcquisitionCo upon the closing of the proposed acquisition.

We write with reference to the debt commitment letter executed on August 30, 2022 (the "Commitment Letter") by Atlas National Bank, N.A. ("Atlas"), as lead arranger and administrative agent, and Pinnacle Credit Partners LLC ("Pinnacle"), as co-lender (collectively, the "Lenders"), which provides for (i) a $975,000,000 senior secured term loan facility (with Atlas committing $650,000,000 and Pinnacle committing $325,000,000) and (ii) a $150,000,000 revolving credit facility (the "Revolving Facility," and together with the term loan facility, the "Credit Facilities"). The aggregate enterprise value of Cascadia is $1,950,000,000, with total sources of $2,025,000,000 comprised of $1,050,000,000 in equity contributions and $975,000,000 under the term loan facility. Total uses are expected to comprise $1,950,000,000 for the acquisition enterprise value, approximately $50,000,000 in estimated transaction costs (including legal, advisory, insurance, and regulatory filing fees), and $25,000,000 for a working-capital adjustment escrow to be held pending post-closing true-up.

The purpose of this letter is to set forth our comments and requests for structural protections in the credit agreement term sheet (the "Term Sheet") on behalf of ICM Co-Invest and its sole limited partner, Ironside. These comments are intended to ensure that the interests of the Co-Investment Vehicle and Ironside are adequately protected in the acquisition financing documentation, and that the Credit Facilities do not impose obligations, restrictions, or consent requirements that are incompatible with the governance framework and economic arrangements applicable to the co-investment.

We note that these comments are being transmitted through Breckenridge Sloane & Pratt LLP ("BSP"), counsel to Meridian Infrastructure Partners LP ("Meridian" or the "Sponsor"), with Meridian's knowledge and consent. Nothing in this letter should be construed as a waiver of or limitation on any rights of Ironside or ICM Co-Invest, and we reserve all such rights as set forth more fully in Section VI below.

II. Overview of Co-Investment Structure and Rationale for Comments

Before turning to our specific comments on the Term Sheet, we believe it is useful to provide an overview of the co-investment structure to ensure that Atlas and its counsel have a complete understanding of the governance dynamics and contractual arrangements that inform our requests.

Structure. Meridian Infrastructure GP IV LLC ("Meridian GP IV" or the "General Partner") serves as the general partner of both Fund IV and ICM Co-Invest. In ICM Co-Invest, the General Partner holds a 0.01% general partnership interest, representing a capital commitment of $30,000. Ironside holds the remaining 99.99% limited partnership interest, representing a capital commitment of $299,970,000. ICM Co-Invest and Fund IV will collectively own all of the equity of AcquisitionCo, with the allocation of equity between them governed by the Co-Investment Allocation Agreement dated July 29, 2022 (the "Allocation Agreement"). A summary of the Co-Investment Vehicle's structure is set forth in Appendix A attached hereto.

Capital Calls. As of the date hereof, ICM Co-Invest has funded a single capital call in the amount of $22,500,000, issued on August 15, 2022, representing 7.5% of the total commitment. The remaining unfunded capital commitment of $277,500,000 is subject to future calls by the General Partner in accordance with the procedures set forth in Section 4.01 of the Amended and Restated Agreement of Limited Partnership of ICM Cascadia Co-Invest, LP, dated July 29, 2022 (the "LP Agreement"). The mechanics governing capital calls — including notice periods, pro rata contribution requirements, and default remedies — are described in greater detail in Appendix B attached hereto.

Governance and Wind-Down. The LP Agreement, together with the Side Letter between Ironside and Meridian GP IV dated July 29, 2022 (the "Side Letter"), contains specific governance provisions that are integral to the Co-Investment Vehicle's operation. Of particular relevance to the credit agreement, the LP Agreement provides in Section 7.04 for dormancy and wind-down mechanics in the event of a Material Impediment Event (as defined therein). Under Section 7.04(c), if a Material Impediment Event has been declared by the General Partner and the Co-Investment Vehicle has been in a state of dormancy for a period of eighteen (18) consecutive months, ICM Co-Invest (acting through Ironside) has the right to elect to commence a wind-down of the Co-Investment Vehicle. These provisions must be compatible with, and not be impaired by, covenants and default provisions in the credit agreement.

Economic Terms. The economic terms of the Co-Investment Vehicle differ in important respects from those of Fund IV's main partnership structure. ICM Co-Invest bears no management fee and is subject to a carried interest of 10% of profits above an 8% preferred return (compounded quarterly), compared to the 20% carried interest applicable to Fund IV. These differences may implicate distinct treatment under credit agreement provisions governing distributions, restricted payments, and the definition of equity contributions.

Rationale for Comments. As a minority equity co-investor holding 28.57% of the total equity, ICM Co-Invest has a distinct interest in ensuring that the credit agreement does not impose obligations, restrictions, or consent requirements that disproportionately affect or bind the Co-Investment Vehicle without appropriate protections. While we expect that the interests of ICM Co-Invest and Fund IV will be aligned on most issues, the structural differences between the vehicles, including their respective economic terms, governance arrangements, and wind-down provisions, warrant specific attention in the credit agreement to ensure that the co-investor's rights are preserved.

III. Specific Comments on Credit Agreement Term Sheet

We turn now to our specific comments on the Term Sheet. Each comment is organized by subject matter and identifies the relevant section or concept in the Term Sheet to which it relates. Where applicable, we have cross-referenced the governing provisions of the LP Agreement and other transaction documents.

A. Equity Cure Rights

We request that the credit agreement include an express equity cure right permitting the equity sponsors (including ICM Co-Invest on a pro rata basis) to contribute additional equity to AcquisitionCo for the purpose of curing financial covenant defaults. Equity cure rights are a standard feature in sponsor-led acquisition financings and are of particular importance to ICM Co-Invest, which — as a co-investor with a discrete capital commitment structure — requires certainty regarding its cure obligations and rights.

Specifically, we request the following provisions:

1. Pro Rata Cure Contributions. ICM Co-Invest's equity cure contributions should be limited to its pro rata share (28.57%) of any required cure amount. ICM Co-Invest should not be required to fund more than its proportionate share of any equity cure, and the credit agreement should not condition the effectiveness of a cure on funding by both equity sponsors if one is willing and able to cure.

2. Frequency and Availability. The equity cure right should be available for a minimum of two (2) consecutive fiscal quarters and should be exercisable no more than two (2) times in any rolling four-quarter period. This frequency limitation is consistent with market precedent for sponsor-backed acquisition financings and provides adequate flexibility while appropriately protecting the Lenders' interests.

3. Treatment of Cure Contributions. Equity cure contributions should be treated as additions to EBITDA (as defined in the credit agreement) for purposes of calculating the leverage ratio and any other financial covenant that is the subject of the cure. This treatment ensures that the cure has the intended economic effect and is consistent with the methodology commonly employed in comparable transactions.

4. Cure Period. The equity sponsors should have a period of fifteen (15) business days following delivery of the compliance certificate that evidences the financial covenant breach within which to fund the equity cure contribution. This period provides sufficient time for the equity sponsors to coordinate internally, process capital calls (including under the notice and funding procedures set forth in Section 4.01 of the LP Agreement), and fund the required amounts.

5. Binding Effect and Preclusion of Remedies. The exercise of an equity cure right by either Fund IV or ICM Co-Invest (or both) should be binding on the Lenders and should preclude any acceleration of the obligations under the credit agreement, any exercise of remedies against the collateral, and any declaration of an event of default based on the cured covenant breach, in each case during the pendency of the cure period and upon timely completion of the cure.

6. Independent Cure Right. The credit agreement should expressly confirm that the failure by Fund IV to fund its pro rata share of a required equity cure does not impair or extinguish ICM Co-Invest's ability to cure the covenant breach on its own by funding its pro rata share (or, if it so elects, a greater amount). Conversely, the failure by ICM Co-Invest to fund its pro rata share should not impair Fund IV's independent cure right. Each equity sponsor should be entitled to exercise the cure right independently, and a cure funded by one sponsor alone should be effective to the extent of the amount funded.

B. Information Covenants and Reporting

Ironside, as the sole economic participant in the Co-Investment Vehicle, requires access to the financial and operational information that the credit agreement will obligate the Borrower to deliver to the Lenders. This information is essential both for Ironside's internal investment monitoring and for ICM Co-Invest's compliance with its own reporting obligations under the LP Agreement and the Side Letter.

We request that the credit agreement designate ICM Co-Invest (or its designee, Ironside) as a permitted recipient of all financial reporting deliverables, including the following:

(a) Quarterly unaudited financial statements of AcquisitionCo and Cascadia, including consolidated balance sheets, income statements, cash flow statements, and management discussion and analysis;

(b) Annual audited financial statements of AcquisitionCo and Cascadia, audited by Halstead & Greer LLP (200 Market Street, Suite 1500, Portland, OR 97201), including the auditor's report and any management letters;

(c) Compliance certificates demonstrating compliance with financial covenants, including calculations of the leverage ratio, interest coverage ratio, and any other applicable financial maintenance covenants;

(d) Prompt written notice of any event of default or potential event of default under the credit agreement, including any notice delivered to or received from the administrative agent;

(e) Prompt written notice of any material litigation, arbitration, governmental investigation, or regulatory proceeding affecting Cascadia or any of its subsidiaries, including matters relating to any of the fourteen (14) hydroelectric generation facilities, six (6) wind farm operations, and three (3) water-treatment concession agreements operated by Cascadia and its subsidiaries; and

(f) Prompt written notice of any material adverse change (as defined in the credit agreement) affecting Cascadia, its subsidiaries, or the business, operations, assets, or financial condition of the consolidated enterprise.

All such information should be delivered to ICM Co-Invest simultaneously with delivery to Fund IV and without additional request or administrative burden. We further request that the credit agreement expressly provide that ICM Co-Invest's receipt of such information does not constitute a waiver of any rights of ICM Co-Invest or Ironside under the LP Agreement, the Side Letter, or any other transaction document, including any right to request additional information or to conduct independent inquiries.

ICM Co-Invest and Ironside are prepared to be bound by customary confidentiality protections as a condition to receiving such information, consistent with the confidentiality obligations set forth in the LP Agreement and the Side Letter, and we anticipate that the credit agreement will contain a standard provision permitting disclosure to equity sponsors subject to such protections.

C. Consent Provisions Affecting the Co-Investment Vehicle

Given ICM Co-Invest's significant economic stake in the acquisition and the structural differences between the Co-Investment Vehicle and Fund IV, we request that the credit agreement require the affirmative consent of ICM Co-Invest (or its designee, Ironside) — in addition to any consent required of the majority equity holders, the Sponsor, or any other party — for the following actions:

(a) Amendments Affecting Equity Sponsors. Any amendment, modification, supplement, or restatement of the credit agreement (or any ancillary financing document) that materially and adversely affects the rights, obligations, economics, or governance protections of the equity sponsors or the equity contribution structure, including any change to financial covenants, equity cure rights, restricted payments provisions, or change of control definitions;

(b) Waiver of Conditions Precedent. Any waiver of conditions precedent to the funding of the Credit Facilities that would alter the timing, amount, or sequence of equity contributions by the equity sponsors, or that would otherwise change the expected contribution mechanics described in the LP Agreement and the Allocation Agreement;

(c) Additional Indebtedness. The incurrence of additional indebtedness (whether secured or unsecured) by AcquisitionCo, Cascadia, or any subsidiary of Cascadia beyond the amounts permitted under the credit agreement as executed at closing, including any incremental term loan facilities, second lien facilities, mezzanine facilities, or permitted debt baskets in excess of the amounts set forth in the Term Sheet;

(d) Change of Control Triggers. Any amendment to, or waiver of, any change of control provision or springing maturity provision that would be triggered by transfers or reorganizations among the equity sponsors — specifically, transfers between Fund IV and ICM Co-Invest, or internal restructurings of either vehicle, should not constitute a change of control, and any modification to this principle should require ICM Co-Invest's consent;

(e) Distribution Mechanics. Any modification to the distribution waterfall, cash sweep mechanics, or excess cash flow prepayment provisions that would affect the timing, amount, or priority of distributions to the equity sponsors, including any modification that would subordinate or defer distributions to ICM Co-Invest relative to Fund IV or any other party;

(f) Hedging and Derivatives. Entry by AcquisitionCo, Cascadia, or any subsidiary into any hedging, swap, or derivative arrangement beyond those contemplated in the original financing documentation, to the extent such arrangements could affect the credit profile of the consolidated enterprise or the availability of cash for distributions to the equity sponsors.

We recognize that certain of these consent rights may overlap with protections available to the Sponsor under the credit agreement. Our request is that ICM Co-Invest's consent right be independent and not conditioned upon, or deemed satisfied by, the Sponsor's consent. This independence is necessary to protect ICM Co-Invest's distinct economic and governance interests.

D. Change of Control Definition

The definition of "Change of Control" in the credit agreement is of critical importance to the Co-Investment Vehicle. An overly broad or imprecise definition could inadvertently trigger a mandatory prepayment or event of default in circumstances that do not represent a genuine change in the economic ownership or management of the enterprise. We request that the definition be drafted to address the following points:

(a) Permitted Holders. Both Fund IV and ICM Co-Invest should be expressly recognized as "Permitted Holders" (or the equivalent defined term) for all purposes under the credit agreement. The Permitted Holders definition should also encompass Meridian Infrastructure Partners LP, Meridian Infrastructure GP IV LLC, and their respective affiliates.

(b) Inter-Sponsor Transfers. Transfers of equity interests in AcquisitionCo between Fund IV and ICM Co-Invest (in either direction) should be expressly excluded from the Change of Control definition. Such transfers are internal reorganizations among the equity sponsors and do not alter the fundamental credit profile of the enterprise.

(c) LP Interest Transfers. Transfers by Ironside of its limited partnership interest in ICM Co-Invest to affiliates of Ironside (including affiliated funds, parallel vehicles, and successor entities) should not trigger a Change of Control, provided that such transfers comply with applicable securities laws and the transferee assumes all obligations of Ironside under the LP Agreement.

(d) Wind-Down and Dormancy. The exercise by ICM Co-Invest of its wind-down election right under Section 7.04(c) of the LP Agreement (available after eighteen (18) months of dormancy following the declaration of a Material Impediment Event) should not be treated as a Change of Control. Similarly, any restructuring, reorganization, or orderly dissolution of the Co-Investment Vehicle undertaken as part of such a wind-down should not constitute a Change of Control, provided that the equity interest held by ICM Co-Invest is transferred to Fund IV, Ironside, or a replacement co-investor acceptable to the Lenders (such acceptance not to be unreasonably withheld, conditioned, or delayed).

(e) Management Rollover. The Change of Control definition should appropriately address the management rollover pool. It is anticipated that approximately twenty percent (20%) of Cascadia's equity will be held by approximately twenty-five (25) members of the management team, with an expected rollover of approximately fifty percent (50%) of such management equity into the post-acquisition capital structure. The Change of Control definition should account for these arrangements and should not be triggered by changes in management equity participation at or below the anticipated levels, or by customary transfers among management participants (including upon termination of employment).

E. Restricted Payments and Distributions

The restricted payments covenant in the credit agreement must be consistent with the economic arrangements among the equity sponsors and, in particular, with the carried interest, preferred return, and expense reimbursement provisions applicable to the Co-Investment Vehicle. We request that the restricted payments covenant include the following protections:

(a) Pro Rata Distributions. The credit agreement should expressly permit pro rata distributions to the equity sponsors — Fund IV at 71.43% and ICM Co-Invest at 28.57% — in accordance with the Allocation Agreement and the LP Agreement. Any distribution basket or builder basket should be available to fund such distributions without additional restrictions.

(b) Carried Interest and Preferred Return. The credit agreement should expressly permit the payment of carried interest (10% to Meridian GP IV LLC on profits above an 8% preferred return, compounded quarterly) and should not treat such payments as restricted payments subject to general basket limitations. These are contractually required payments under the LP Agreement and are fundamental to the economics of the co-investment.

(c) Organizational and Operating Expenses. The credit agreement should permit the payment of vehicle-level operating expenses, including during any period of dormancy or reduced activity. ICM Co-Invest's estimated annual operating expenses are approximately $185,000, consisting of fund administration services provided by Kendrick Thorne & Associates LLP, Delaware franchise taxes, registered agent fees (paid to Cascade Systems, 160 Greentree Drive, Suite 101, Dover, DE 19904), annual audit fees, and K-1 preparation costs. These are de minimis amounts relative to the size of the Credit Facilities and should be carved out from any restricted payments limitations.

(d) Return of Unfunded Commitments. The restricted payments covenant should not impose restrictions that would impair ICM Co-Invest's ability to return unfunded capital commitments to Ironside in a wind-down scenario. In the event that the wind-down mechanics under Section 7.04 of the LP Agreement are activated, ICM Co-Invest must be able to release Ironside from its unfunded commitment obligation and, if applicable, return any funded but uninvested capital without triggering a restricted payments violation.

F. Guarantor and Security Matters

The credit agreement should not impose guaranty, pledge, or security obligations on the Co-Investment Vehicle or its limited partner. ICM Co-Invest is a passive investment vehicle with no operating assets, and its sole asset will be its equity interest in AcquisitionCo. Requiring ICM Co-Invest to guaranty the acquisition indebtedness or to pledge assets beyond its equity interest in AcquisitionCo would be inconsistent with the structural protections negotiated in the LP Agreement and the Side Letter. Specifically, we request confirmation of the following:

(a) ICM Co-Invest will not be required to provide a guaranty of AcquisitionCo's obligations under the credit agreement or any ancillary financing document. Guaranty obligations should be limited to AcquisitionCo and the direct and indirect operating subsidiaries of Cascadia, consistent with the collateral package described in the Commitment Letter.

(b) No pledge of Ironside's limited partnership interest in ICM Co-Invest will be required as collateral for the Credit Facilities. Ironside's interest in ICM Co-Invest is governed by the LP Agreement and the Side Letter, and any pledge of that interest would implicate complex intercreditor issues and could impair the wind-down and transfer mechanics that are fundamental to the Co-Investment Vehicle's governance framework.

(c) The provisions of the LP Agreement regarding capital call obligations (Section 4.01) and capital call suspension (Section 7.04) will remain unaffected by any security or guarantee requirements in the credit agreement. In particular, the Lenders should not have the right to compel capital calls, to override a suspension of capital calls declared under Section 7.04, or to direct the General Partner in the exercise of its capital call authority.

(d) No lien, security interest, or encumbrance of any kind will be placed on ICM Co-Invest's unfunded capital commitment, which stands at $277,500,000 as of the date hereof. The unfunded commitment is an obligation of Ironside to ICM Co-Invest, not an asset of the Borrower or the guarantors, and should not be included in the collateral package.

G. Conditions Precedent to Funding

The conditions precedent to the initial funding of the Credit Facilities must be coordinated with the capital call mechanics set forth in the LP Agreement and with the regulatory approval timeline for the proposed acquisition. We request that the following matters be addressed in the credit agreement:

(a) Consistency with Capital Call Mechanics. The equity contribution conditions in the credit agreement should be consistent with the capital call procedures set forth in Section 4.01 of the LP Agreement, including the notice periods applicable to capital calls and the requirement that capital calls be made on a pro rata basis to all partners of ICM Co-Invest. The credit agreement should not impose equity contribution timing requirements that conflict with, or are more restrictive than, the LP Agreement's capital call provisions.

(b) Certain Funds Protections. The "certain funds" or "SunGard" provisions in the credit agreement should be structured to ensure that the failure to satisfy a condition to funding that is not within the reasonable control of the equity sponsors does not result in forfeiture of equity contributions already funded. In particular, if equity contributions have been funded into escrow or directly to AcquisitionCo and a condition to debt funding subsequently fails, the equity sponsors should be entitled to the return of their funded contributions, subject to appropriate mechanics for coordination with the Lenders.

(c) Regulatory Conditions. The following regulatory approvals are required as conditions to consummation of the proposed acquisition, and we request that they be included as conditions to both debt and equity funding with appropriate long-stop mechanics:

(i) FERC Section 203 approval — Docket No. EC22-143-000, to be filed on October 19, 2022;

(ii) Oregon Public Utility Commission (OPUC) approval — Docket No. UM-2287, to be filed on October 14, 2022; and

(iii) CFIUS clearance — voluntary notice was acknowledged by the Committee on September 20, 2022, and the review period is ongoing.

The long-stop date for satisfaction of regulatory conditions should be consistent with the outside date currently set forth in the Equity Purchase Agreement (the "EPA"), which is December 31, 2022. If the EPA outside date is extended by agreement of the parties, the credit agreement long-stop date should be extended correspondingly.

(d) R&W Insurance. We note that a representations and warranties insurance policy has been bound by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814, coverage limit of $195,000,000 — representing 10% of the aggregate enterprise value — bound on September 1, 2022, with a premium deposit of $4,875,000 paid on September 2, 2022). While we understand that the R&W policy is an important element of the transaction, it should not be a standalone condition to the funding of the debt facilities. The failure to maintain or the lapse of the R&W policy should be addressed, if at all, through the representations and covenants framework rather than as a discrete condition precedent to initial funding.

H. Events of Default — Carve-Outs for Co-Invest

The events of default provision in the credit agreement must account for the unique structural features of the Co-Investment Vehicle, including the dormancy and wind-down mechanics under Section 7.04 of the LP Agreement. We request the following carve-outs:

(a) Material Impediment Event. A declaration of a Material Impediment Event by Meridian GP IV LLC under Section 7.04 of the LP Agreement — which triggers a suspension of capital call obligations and may result in a period of dormancy — should not constitute an event of default under the credit agreement, provided that the underlying acquisition has not yet closed and the declaration does not adversely affect the Borrower's ability to satisfy its obligations under the Credit Facilities. A Material Impediment Event is a pre-closing risk allocation mechanism specific to the co-investment structure and does not reflect upon the creditworthiness of the Borrower or the operating performance of Cascadia.

(b) Capital Call Suspension. The failure by ICM Co-Invest to fund a capital call during a period of capital call suspension under Section 7.04 of the LP Agreement should not constitute a cross-default or an event of default under the credit agreement. Capital call suspension is a contractual right of the Co-Investment Vehicle triggered by circumstances beyond its control, and any cross-default that penalizes the exercise of that right would be inconsistent with the LP Agreement's governance framework.

(c) Wind-Down of Co-Investment Vehicle. The wind-down of ICM Co-Invest following an eighteen (18)-month dormancy period under Section 7.04(c) of the LP Agreement should not trigger an event of default or a mandatory prepayment obligation, provided that Fund IV (or a replacement co-investor acceptable to the Lenders, acting reasonably) assumes ICM Co-Invest's equity commitment in AcquisitionCo. The wind-down is an orderly process that results in the transfer of the Co-Investment Vehicle's equity interest, not in a loss of equity support for the enterprise.

I. Assignment and Transfer Provisions

The credit agreement should provide appropriate flexibility for transfers of ICM Co-Invest's equity interest in AcquisitionCo and for the replacement of the Co-Investment Vehicle in certain restructuring scenarios:

(a) Transfers to Affiliates. ICM Co-Invest should be permitted to assign or transfer its equity interest in AcquisitionCo to Ironside or any affiliate of Ironside without the consent of the Lenders or the administrative agent, subject to compliance with applicable securities laws and the delivery of customary transfer documentation. Such transfers among affiliates do not alter the economic substance of the equity contribution and should not be subject to lender approval requirements.

(b) Replacement Vehicles. In a reactivation or restructuring scenario (including following a period of dormancy or a wind-down election), the replacement of ICM Co-Invest with a successor co-investment vehicle managed or controlled by Ironside should be permitted without constituting a Change of Control or requiring Lender consent, provided that the replacement vehicle assumes all of ICM Co-Invest's obligations with respect to the equity contribution and provides customary representations and certifications to the administrative agent.

J. Market Flex Provisions

We understand that the Commitment Letter may contain market flex provisions permitting Atlas and Pinnacle to adjust certain terms of the Credit Facilities in connection with the syndication process. While we recognize that market flex is a standard feature of commitment letters, the exercise of flex should not be used to alter the structural protections negotiated for the benefit of the equity sponsors. We request the following:

(a) No Material Adverse Alteration. Any market flex exercised by Atlas or Pinnacle should not materially and adversely alter the economics of the equity sponsors' investment, including by significantly increasing pricing or original issue discount, by imposing additional equity contribution requirements beyond the committed $1,050,000,000, or by modifying financial covenants in a manner that would materially increase the likelihood of a covenant breach.

(b) Prior Notice. The exercise of any market flex should be subject to prior written notice to ICM Co-Invest (or its counsel, Calderwood & Harkness LLP), with a reasonable opportunity for review and comment before the flex is implemented. We request a minimum of five (5) business days' advance notice, which is consistent with practice in comparable co-investment transactions.

(c) No Flex to Impose Additional Burdens on Co-Invest. Market flex should not include the right to impose additional guaranty, collateral, or security requirements on the Co-Investment Vehicle or its limited partner, to limit or reduce equity cure rights, or to impose consent or governance requirements on ICM Co-Invest that are not contained in the Term Sheet as currently drafted.

IV. Coordination with Transaction Documents

We wish to highlight several matters relating to the coordination of the credit agreement with other transaction documents that are relevant to our comments.

The Equity Purchase Agreement for the acquisition is expected to be executed on or about September 15, 2022. Certain closing conditions in the credit agreement — including the regulatory conditions described in Section III.G above — should be cross-referenced to the corresponding conditions in the EPA to ensure consistency and to avoid the possibility of divergent closing condition regimes. In particular, the representations, warranties, and covenants in the credit agreement that relate to the Target's business should be informed by, and not more expansive than, the corresponding provisions of the EPA, to the extent that they serve as conditions to funding.

The Co-Investment Allocation Agreement dated July 29, 2022 is the governing document for the allocation of equity between Fund IV and ICM Co-Invest. The credit agreement should acknowledge the existence of the Allocation Agreement and should not contain provisions that conflict with or override the allocation mechanics set forth therein, including the pro rata allocation of capital contributions, distributions, and equity cure obligations.

We further request that the credit agreement expressly acknowledge, and not conflict with, the Side Letter between Ironside and Meridian GP IV LLC dated July 29, 2022. The Side Letter contains enhanced reporting obligations, most-favored-nation provisions, and specific wind-down rights that are integral to Ironside's decision to participate in the co-investment. Any credit agreement provision that would impair or override the Side Letter protections would be unacceptable to Ironside.

Finally, we note that Blackthorn Advisory Group LLC serves as financial advisor to Meridian in connection with the proposed acquisition and may be involved in communications with the Lenders and their counsel regarding syndication and other financing matters. We request that ICM Co-Invest's counsel (Calderwood & Harkness LLP) be copied on all material communications between the financial advisor, the Sponsor, and the Lenders or their counsel relating to the credit agreement, the Term Sheet, or the syndication process, to the extent such communications relate to matters that could affect the rights or obligations of ICM Co-Invest.

V. Process and Next Steps

We respectfully request that Atlas and its counsel prepare and circulate a revised Term Sheet incorporating the comments set forth in this letter within ten (10) business days of the date hereof, i.e., on or before September 20, 2022.

Prior to the preparation and turn of the full credit agreement draft, we request a call or meeting among counsel — including representatives of Calderwood & Harkness LLP, Breckenridge Sloane & Pratt LLP, and Atlas's legal advisors — to discuss the comments set forth herein and to resolve any open points. We are available at your convenience during the weeks of September 12 and September 19 and would welcome the opportunity to address any questions or concerns that Atlas or its counsel may have regarding the co-investment structure or the specific protections we have requested.

Upon receipt of the full credit agreement draft, Calderwood & Harkness LLP will conduct a comprehensive review for consistency with the comments set forth in this letter and for any additional co-investment protections that may be warranted in light of the detailed terms of the credit agreement. We anticipate providing a full mark-up of the credit agreement within a reasonable period following receipt.

We confirm our willingness to coordinate with BSP to present a unified sponsor position where possible, and we appreciate BSP's cooperation in transmitting this letter. We do, however, reserve ICM Co-Invest's right to raise separate issues, take independent positions, and pursue distinct protections as warranted by the interests of the Co-Investment Vehicle and its limited partner.

VI. Reservation of Rights

This letter does not constitute, and shall not be construed as, a waiver of any rights of Ironside, ICM Co-Invest, or any of their respective affiliates under the LP Agreement, the Side Letter, the Co-Investment Allocation Agreement, or any other transaction document executed or to be executed in connection with the proposed acquisition.

Ironside and ICM Co-Invest expressly reserve the right to raise additional comments, objections, and requests upon review of the full credit agreement and any related financing documentation, including any intercreditor agreement, security agreement, pledge agreement, guaranty agreement, or syndication-related documentation. The comments set forth in this letter are based on our review of the Term Sheet and the Commitment Letter and are not intended to be exhaustive.

Ironside's participation in the co-investment, and the comments set forth herein, are in all respects subject to the continued satisfaction of all conditions set forth in the LP Agreement and the Side Letter, including any conditions to the funding of capital calls, the receipt of required regulatory approvals, and the absence of a Material Impediment Event.

Nothing in this letter shall create any obligation on the part of Ironside or ICM Co-Invest to fund any capital call, contribute any equity, or consummate the proposed acquisition except as expressly set forth in the LP Agreement and the Allocation Agreement.

VII. Closing

We appreciate your attention to the foregoing comments and look forward to working with you and with Atlas's counsel to finalize the credit agreement on terms that are acceptable to all parties. Please do not hesitate to contact us if you have any questions or wish to discuss any aspect of this letter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Pamela Cross Partner

Direct Telephone: (212) 558-4217

Email: pamela.cross@calderwoodharkness.com

By: ________

Nicholas Stern Partner

Direct Telephone: (212) 558-4389

Email: nicholas.stern@calderwoodharkness.com

Enclosures:

• Appendix A: Summary of Co-Investment Vehicle Structure

• Appendix B: Summary of Key LP Agreement Provisions Relevant to Credit Agreement

APPENDIX A

Summary of Co-Investment Vehicle Structure ICM Cascadia Co-Invest, LP

APPENDIX B

Summary of Key LP Agreement Provisions Relevant to Credit Agreement

The following is a summary of selected provisions of the Amended and Restated Agreement of Limited Partnership of ICM Cascadia Co-Invest, LP, dated July 29, 2022 (the "LP Agreement"), that are relevant to the structuring of the credit agreement for the proposed acquisition financing. This summary is provided for reference purposes only and is qualified in its entirety by the full text of the LP Agreement.

Section 4.01 — Capital Calls

Section 4.01 of the LP Agreement governs the mechanics by which the General Partner may call capital from the partners of ICM Co-Invest. Key provisions include:

• The General Partner may issue capital calls from time to time in its sole discretion, in each case by delivering written notice to each partner not less than ten (10) business days prior to the applicable funding date.

• Each capital call shall be made on a pro rata basis to all partners in proportion to their respective unfunded capital commitments.

• Capital contributions shall be made in immediately available funds to the account designated by the General Partner in the capital call notice.

• Failure by a partner to fund a capital call when due constitutes a "Default Event" under the LP Agreement, subject to a five (5) business day cure period following written notice from the General Partner.

• A partner that commits a Default Event is subject to the default remedies set forth in Section 4.02 of the LP Agreement, including reduction of its partnership interest, forfeiture of a portion of its capital account, and forced transfer of its interest.

Section 7.04 — Material Impediment Event; Dormancy; Wind-Down

Section 7.04 of the LP Agreement addresses the procedures that apply in the event that the proposed acquisition cannot be consummated due to circumstances beyond the reasonable control of the parties. Key provisions include:

• Section 7.04(a) — Declaration of Material Impediment Event. The General Partner may declare a "Material Impediment Event" if it determines, in its reasonable judgment, that a material regulatory, legal, or commercial impediment exists that prevents or materially delays the consummation of the proposed acquisition. A Material Impediment Event declaration triggers an immediate suspension of all capital call obligations under Section 4.01.

• Section 7.04(b) — Dormancy. Following a Material Impediment Event declaration, the Co-Investment Vehicle enters a period of "dormancy" during which no capital calls may be issued, no investments may be made, and the General Partner's activities are limited to maintaining the vehicle's existence, paying operating expenses, and taking such actions as are necessary to preserve the partners' rights and interests. The dormancy period continues until the earlier of (i) the resolution of the Material Impediment Event and reactivation of the vehicle by the General Partner, or (ii) the commencement of a wind-down under Section 7.04(c).

• Section 7.04(c) — Wind-Down Election. If the Co-Investment Vehicle has been in a state of dormancy for a period of eighteen (18) consecutive months following the declaration of a Material Impediment Event, the limited partner (Ironside) has the right, upon thirty (30) days' prior written notice to the General Partner, to elect to commence an orderly wind-down of the Co-Investment Vehicle. Upon such election, the General Partner shall take all actions necessary to wind down the vehicle, including the return of funded capital to the partners, the release of unfunded capital commitments, and the dissolution and liquidation of the partnership in accordance with the LP Agreement and applicable law.

CONFIDENTIAL — This letter and its appendices contain confidential information provided for the sole use of the addressees and their counsel in connection with the proposed acquisition of Cascadia Renewables Holdings, Inc. Any unauthorized use, disclosure, or distribution is strictly prohibited.

Item	Detail
Vehicle Name	ICM Cascadia Co-Invest, LP
Jurisdiction of Formation	State of Delaware
Formation Date	July 22, 2022
Entity Type	Limited Partnership
Delaware SOS File No.	7439218
EIN	88-3921457
General Partner	Meridian Infrastructure GP IV LLC
GP Interest	0.01%
GP Capital Commitment	$30,000
Limited Partner	Ironside Capital Management LP
LP Interest	99.99%
LP Capital Commitment	$299,970,000
Total Commitment	$300,000,000
Capital Called to Date	$22,500,000 (single capital call dated August 15, 2022)
Unfunded Commitment	$277,500,000
Governing Agreement	Amended and Restated Agreement of Limited Partnership dated July 29, 2022 (the "LP Agreement")
Side Letter	Side Letter between Ironside Capital Management LP and Meridian Infrastructure GP IV LLC dated July 29, 2022
Co-Investment Allocation Agreement	Co-Investment Allocation Agreement dated July 29, 2022, between Fund IV and ICM Co-Invest
Carried Interest	10% above 8% preferred return (compounded quarterly)
Management Fee	None
Registered Agent	Cascade Systems, 160 Greentree Drive, Suite 101, Dover, DE 19904
Fund Administrator	Kendrick Thorne & Associates LLP

CALDERWOOD & HARKNESS LLP Attorneys at Law
125 Broad Street, 44th Floor New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
September 6, 2022
C&H Matter No. 1023-00001
VIA EMAIL AND OVERNIGHT COURIER
Charles A. Delacroix, Esq. Breckenridge Sloane & Pratt LLP One Federal Street, Suite 3600 Boston, MA 02110
For delivery to:
Atlas National Bank, N.A. 383 Madison Avenue New York, NY 10179
Attention: Acquisition Finance Group
Re: Credit Agreement Term Sheet — Proposed Acquisition of Cascadia Renewables Holdings, Inc. by Cascadia Acquisition Corp.; Comments on Behalf of ICM Cascadia Co-Invest, LP
cc: Marcus J. Calloway, Ironside Capital Management LP Renata Obasi, Ironside Capital Management LP Pamela Cross, Calderwood & Harkness LLP Nicholas Stern, Calderwood & Harkness LLP
Dear Mr. Delacroix:
I. Introduction and Purpose
Calderwood & Harkness LLP ("C&H" or "we") represents Ironside Capital Management LP ("Ironside"), a Delaware limited partnership and the sole limited partner (holding a 99.99% limited partnership interest, representing a capital commitment of $299,970,000) in ICM Cascadia Co-Invest, LP ("ICM Co-Invest" or the "Co-Investment Vehicle"), EIN 88-3921457, a Delaware limited partnership formed on July 22, 2022 for the purpose of co-investing alongside Meridian Infrastructure Partners Fund IV, LP ("Fund IV") in the proposed acquisition described herein.
ICM Co-Invest has committed Three Hundred Million Dollars ($300,000,000) to co-invest alongside Fund IV in the acquisition of one hundred percent (100%) of the issued and outstanding equity interests of Cascadia Renewables Holdings, Inc. ("Cascadia" or the "Target"), an Oregon corporation, through Cascadia Acquisition Corp. ("AcquisitionCo"), a newly formed Delaware corporation organized as the acquisition vehicle for purposes of the proposed transaction. The Co-Investment Vehicle's commitment represents approximately 28.57% of the total equity capitalization of $1,050,000,000, with Fund IV providing the remaining 71.43%, or $750,000,000, of total equity. Together, ICM Co-Invest and Fund IV will collectively own all of the equity interests in AcquisitionCo upon the closing of the proposed acquisition.
We write with reference to the debt commitment letter executed on August 30, 2022 (the "Commitment Letter") by Atlas National Bank, N.A. ("Atlas"), as lead arranger and administrative agent, and Pinnacle Credit Partners LLC ("Pinnacle"), as co-lender (collectively, the "Lenders"), which provides for (i) a $975,000,000 senior secured term loan facility (with Atlas committing $650,000,000 and Pinnacle committing $325,000,000) and (ii) a $150,000,000 revolving credit facility (the "Revolving Facility," and together with the term loan facility, the "Credit Facilities"). The aggregate enterprise value of Cascadia is $1,950,000,000, with total sources of $2,025,000,000 comprised of $1,050,000,000 in equity contributions and $975,000,000 under the term loan facility. Total uses are expected to comprise $1,950,000,000 for the acquisition enterprise value, approximately $50,000,000 in estimated transaction costs (including legal, advisory, insurance, and regulatory filing fees), and $25,000,000 for a working-capital adjustment escrow to be held pending post-closing true-up.
The purpose of this letter is to set forth our comments and requests for structural protections in the credit agreement term sheet (the "Term Sheet") on behalf of ICM Co-Invest and its sole limited partner, Ironside. These comments are intended to ensure that the interests of the Co-Investment Vehicle and Ironside are adequately protected in the acquisition financing documentation, and that the Credit Facilities do not impose obligations, restrictions, or consent requirements that are incompatible with the governance framework and economic arrangements applicable to the co-investment.
We note that these comments are being transmitted through Breckenridge Sloane & Pratt LLP ("BSP"), counsel to Meridian Infrastructure Partners LP ("Meridian" or the "Sponsor"), with Meridian's knowledge and consent. Nothing in this letter should be construed as a waiver of or limitation on any rights of Ironside or ICM Co-Invest, and we reserve all such rights as set forth more fully in Section VI below.
II. Overview of Co-Investment Structure and Rationale for Comments
Before turning to our specific comments on the Term Sheet, we believe it is useful to provide an overview of the co-investment structure to ensure that Atlas and its counsel have a complete understanding of the governance dynamics and contractual arrangements that inform our requests.
Structure. Meridian Infrastructure GP IV LLC ("Meridian GP IV" or the "General Partner") serves as the general partner of both Fund IV and ICM Co-Invest. In ICM Co-Invest, the General Partner holds a 0.01% general partnership interest, representing a capital commitment of $30,000. Ironside holds the remaining 99.99% limited partnership interest, representing a capital commitment of $299,970,000. ICM Co-Invest and Fund IV will collectively own all of the equity of AcquisitionCo, with the allocation of equity between them governed by the Co-Investment Allocation Agreement dated July 29, 2022 (the "Allocation Agreement"). A summary of the Co-Investment Vehicle's structure is set forth in Appendix A attached hereto.
Capital Calls. As of the date hereof, ICM Co-Invest has funded a single capital call in the amount of $22,500,000, issued on August 15, 2022, representing 7.5% of the total commitment. The remaining unfunded capital commitment of $277,500,000 is subject to future calls by the General Partner in accordance with the procedures set forth in Section 4.01 of the Amended and Restated Agreement of Limited Partnership of ICM Cascadia Co-Invest, LP, dated July 29, 2022 (the "LP Agreement"). The mechanics governing capital calls — including notice periods, pro rata contribution requirements, and default remedies — are described in greater detail in Appendix B attached hereto.
Governance and Wind-Down. The LP Agreement, together with the Side Letter between Ironside and Meridian GP IV dated July 29, 2022 (the "Side Letter"), contains specific governance provisions that are integral to the Co-Investment Vehicle's operation. Of particular relevance to the credit agreement, the LP Agreement provides in Section 7.04 for dormancy and wind-down mechanics in the event of a Material Impediment Event (as defined therein). Under Section 7.04(c), if a Material Impediment Event has been declared by the General Partner and the Co-Investment Vehicle has been in a state of dormancy for a period of eighteen (18) consecutive months, ICM Co-Invest (acting through Ironside) has the right to elect to commence a wind-down of the Co-Investment Vehicle. These provisions must be compatible with, and not be impaired by, covenants and default provisions in the credit agreement.
Economic Terms. The economic terms of the Co-Investment Vehicle differ in important respects from those of Fund IV's main partnership structure. ICM Co-Invest bears no management fee and is subject to a carried interest of 10% of profits above an 8% preferred return (compounded quarterly), compared to the 20% carried interest applicable to Fund IV. These differences may implicate distinct treatment under credit agreement provisions governing distributions, restricted payments, and the definition of equity contributions.
Rationale for Comments. As a minority equity co-investor holding 28.57% of the total equity, ICM Co-Invest has a distinct interest in ensuring that the credit agreement does not impose obligations, restrictions, or consent requirements that disproportionately affect or bind the Co-Investment Vehicle without appropriate protections. While we expect that the interests of ICM Co-Invest and Fund IV will be aligned on most issues, the structural differences between the vehicles, including their respective economic terms, governance arrangements, and wind-down provisions, warrant specific attention in the credit agreement to ensure that the co-investor's rights are preserved.
III. Specific Comments on Credit Agreement Term Sheet
We turn now to our specific comments on the Term Sheet. Each comment is organized by subject matter and identifies the relevant section or concept in the Term Sheet to which it relates. Where applicable, we have cross-referenced the governing provisions of the LP Agreement and other transaction documents.
A. Equity Cure Rights
We request that the credit agreement include an express equity cure right permitting the equity sponsors (including ICM Co-Invest on a pro rata basis) to contribute additional equity to AcquisitionCo for the purpose of curing financial covenant defaults. Equity cure rights are a standard feature in sponsor-led acquisition financings and are of particular importance to ICM Co-Invest, which — as a co-investor with a discrete capital commitment structure — requires certainty regarding its cure obligations and rights.
Specifically, we request the following provisions:
1. Pro Rata Cure Contributions. ICM Co-Invest's equity cure contributions should be limited to its pro rata share (28.57%) of any required cure amount. ICM Co-Invest should not be required to fund more than its proportionate share of any equity cure, and the credit agreement should not condition the effectiveness of a cure on funding by both equity sponsors if one is willing and able to cure.
2. Frequency and Availability. The equity cure right should be available for a minimum of two (2) consecutive fiscal quarters and should be exercisable no more than two (2) times in any rolling four-quarter period. This frequency limitation is consistent with market precedent for sponsor-backed acquisition financings and provides adequate flexibility while appropriately protecting the Lenders' interests.
3. Treatment of Cure Contributions. Equity cure contributions should be treated as additions to EBITDA (as defined in the credit agreement) for purposes of calculating the leverage ratio and any other financial covenant that is the subject of the cure. This treatment ensures that the cure has the intended economic effect and is consistent with the methodology commonly employed in comparable transactions.
4. Cure Period. The equity sponsors should have a period of fifteen (15) business days following delivery of the compliance certificate that evidences the financial covenant breach within which to fund the equity cure contribution. This period provides sufficient time for the equity sponsors to coordinate internally, process capital calls (including under the notice and funding procedures set forth in Section 4.01 of the LP Agreement), and fund the required amounts.
5. Binding Effect and Preclusion of Remedies. The exercise of an equity cure right by either Fund IV or ICM Co-Invest (or both) should be binding on the Lenders and should preclude any acceleration of the obligations under the credit agreement, any exercise of remedies against the collateral, and any declaration of an event of default based on the cured covenant breach, in each case during the pendency of the cure period and upon timely completion of the cure.
6. Independent Cure Right. The credit agreement should expressly confirm that the failure by Fund IV to fund its pro rata share of a required equity cure does not impair or extinguish ICM Co-Invest's ability to cure the covenant breach on its own by funding its pro rata share (or, if it so elects, a greater amount). Conversely, the failure by ICM Co-Invest to fund its pro rata share should not impair Fund IV's independent cure right. Each equity sponsor should be entitled to exercise the cure right independently, and a cure funded by one sponsor alone should be effective to the extent of the amount funded.
B. Information Covenants and Reporting
Ironside, as the sole economic participant in the Co-Investment Vehicle, requires access to the financial and operational information that the credit agreement will obligate the Borrower to deliver to the Lenders. This information is essential both for Ironside's internal investment monitoring and for ICM Co-Invest's compliance with its own reporting obligations under the LP Agreement and the Side Letter.
We request that the credit agreement designate ICM Co-Invest (or its designee, Ironside) as a permitted recipient of all financial reporting deliverables, including the following:
(a) Quarterly unaudited financial statements of AcquisitionCo and Cascadia, including consolidated balance sheets, income statements, cash flow statements, and management discussion and analysis;
(b) Annual audited financial statements of AcquisitionCo and Cascadia, audited by Halstead & Greer LLP (200 Market Street, Suite 1500, Portland, OR 97201), including the auditor's report and any management letters;
(c) Compliance certificates demonstrating compliance with financial covenants, including calculations of the leverage ratio, interest coverage ratio, and any other applicable financial maintenance covenants;
(d) Prompt written notice of any event of default or potential event of default under the credit agreement, including any notice delivered to or received from the administrative agent;
(e) Prompt written notice of any material litigation, arbitration, governmental investigation, or regulatory proceeding affecting Cascadia or any of its subsidiaries, including matters relating to any of the fourteen (14) hydroelectric generation facilities, six (6) wind farm operations, and three (3) water-treatment concession agreements operated by Cascadia and its subsidiaries; and
(f) Prompt written notice of any material adverse change (as defined in the credit agreement) affecting Cascadia, its subsidiaries, or the business, operations, assets, or financial condition of the consolidated enterprise.
All such information should be delivered to ICM Co-Invest simultaneously with delivery to Fund IV and without additional request or administrative burden. We further request that the credit agreement expressly provide that ICM Co-Invest's receipt of such information does not constitute a waiver of any rights of ICM Co-Invest or Ironside under the LP Agreement, the Side Letter, or any other transaction document, including any right to request additional information or to conduct independent inquiries.
ICM Co-Invest and Ironside are prepared to be bound by customary confidentiality protections as a condition to receiving such information, consistent with the confidentiality obligations set forth in the LP Agreement and the Side Letter, and we anticipate that the credit agreement will contain a standard provision permitting disclosure to equity sponsors subject to such protections.
C. Consent Provisions Affecting the Co-Investment Vehicle
Given ICM Co-Invest's significant economic stake in the acquisition and the structural differences between the Co-Investment Vehicle and Fund IV, we request that the credit agreement require the affirmative consent of ICM Co-Invest (or its designee, Ironside) — in addition to any consent required of the majority equity holders, the Sponsor, or any other party — for the following actions:
(a) Amendments Affecting Equity Sponsors. Any amendment, modification, supplement, or restatement of the credit agreement (or any ancillary financing document) that materially and adversely affects the rights, obligations, economics, or governance protections of the equity sponsors or the equity contribution structure, including any change to financial covenants, equity cure rights, restricted payments provisions, or change of control definitions;
(b) Waiver of Conditions Precedent. Any waiver of conditions precedent to the funding of the Credit Facilities that would alter the timing, amount, or sequence of equity contributions by the equity sponsors, or that would otherwise change the expected contribution mechanics described in the LP Agreement and the Allocation Agreement;
(c) Additional Indebtedness. The incurrence of additional indebtedness (whether secured or unsecured) by AcquisitionCo, Cascadia, or any subsidiary of Cascadia beyond the amounts permitted under the credit agreement as executed at closing, including any incremental term loan facilities, second lien facilities, mezzanine facilities, or permitted debt baskets in excess of the amounts set forth in the Term Sheet;
(d) Change of Control Triggers. Any amendment to, or waiver of, any change of control provision or springing maturity provision that would be triggered by transfers or reorganizations among the equity sponsors — specifically, transfers between Fund IV and ICM Co-Invest, or internal restructurings of either vehicle, should not constitute a change of control, and any modification to this principle should require ICM Co-Invest's consent;
(e) Distribution Mechanics. Any modification to the distribution waterfall, cash sweep mechanics, or excess cash flow prepayment provisions that would affect the timing, amount, or priority of distributions to the equity sponsors, including any modification that would subordinate or defer distributions to ICM Co-Invest relative to Fund IV or any other party;
(f) Hedging and Derivatives. Entry by AcquisitionCo, Cascadia, or any subsidiary into any hedging, swap, or derivative arrangement beyond those contemplated in the original financing documentation, to the extent such arrangements could affect the credit profile of the consolidated enterprise or the availability of cash for distributions to the equity sponsors.
We recognize that certain of these consent rights may overlap with protections available to the Sponsor under the credit agreement. Our request is that ICM Co-Invest's consent right be independent and not conditioned upon, or deemed satisfied by, the Sponsor's consent. This independence is necessary to protect ICM Co-Invest's distinct economic and governance interests.
D. Change of Control Definition
The definition of "Change of Control" in the credit agreement is of critical importance to the Co-Investment Vehicle. An overly broad or imprecise definition could inadvertently trigger a mandatory prepayment or event of default in circumstances that do not represent a genuine change in the economic ownership or management of the enterprise. We request that the definition be drafted to address the following points:
(a) Permitted Holders. Both Fund IV and ICM Co-Invest should be expressly recognized as "Permitted Holders" (or the equivalent defined term) for all purposes under the credit agreement. The Permitted Holders definition should also encompass Meridian Infrastructure Partners LP, Meridian Infrastructure GP IV LLC, and their respective affiliates.
(b) Inter-Sponsor Transfers. Transfers of equity interests in AcquisitionCo between Fund IV and ICM Co-Invest (in either direction) should be expressly excluded from the Change of Control definition. Such transfers are internal reorganizations among the equity sponsors and do not alter the fundamental credit profile of the enterprise.
(c) LP Interest Transfers. Transfers by Ironside of its limited partnership interest in ICM Co-Invest to affiliates of Ironside (including affiliated funds, parallel vehicles, and successor entities) should not trigger a Change of Control, provided that such transfers comply with applicable securities laws and the transferee assumes all obligations of Ironside under the LP Agreement.
(d) Wind-Down and Dormancy. The exercise by ICM Co-Invest of its wind-down election right under Section 7.04(c) of the LP Agreement (available after eighteen (18) months of dormancy following the declaration of a Material Impediment Event) should not be treated as a Change of Control. Similarly, any restructuring, reorganization, or orderly dissolution of the Co-Investment Vehicle undertaken as part of such a wind-down should not constitute a Change of Control, provided that the equity interest held by ICM Co-Invest is transferred to Fund IV, Ironside, or a replacement co-investor acceptable to the Lenders (such acceptance not to be unreasonably withheld, conditioned, or delayed).
(e) Management Rollover. The Change of Control definition should appropriately address the management rollover pool. It is anticipated that approximately twenty percent (20%) of Cascadia's equity will be held by approximately twenty-five (25) members of the management team, with an expected rollover of approximately fifty percent (50%) of such management equity into the post-acquisition capital structure. The Change of Control definition should account for these arrangements and should not be triggered by changes in management equity participation at or below the anticipated levels, or by customary transfers among management participants (including upon termination of employment).
E. Restricted Payments and Distributions
The restricted payments covenant in the credit agreement must be consistent with the economic arrangements among the equity sponsors and, in particular, with the carried interest, preferred return, and expense reimbursement provisions applicable to the Co-Investment Vehicle. We request that the restricted payments covenant include the following protections:
(a) Pro Rata Distributions. The credit agreement should expressly permit pro rata distributions to the equity sponsors — Fund IV at 71.43% and ICM Co-Invest at 28.57% — in accordance with the Allocation Agreement and the LP Agreement. Any distribution basket or builder basket should be available to fund such distributions without additional restrictions.
(b) Carried Interest and Preferred Return. The credit agreement should expressly permit the payment of carried interest (10% to Meridian GP IV LLC on profits above an 8% preferred return, compounded quarterly) and should not treat such payments as restricted payments subject to general basket limitations. These are contractually required payments under the LP Agreement and are fundamental to the economics of the co-investment.
(c) Organizational and Operating Expenses. The credit agreement should permit the payment of vehicle-level operating expenses, including during any period of dormancy or reduced activity. ICM Co-Invest's estimated annual operating expenses are approximately $185,000, consisting of fund administration services provided by Kendrick Thorne & Associates LLP, Delaware franchise taxes, registered agent fees (paid to Cascade Systems, 160 Greentree Drive, Suite 101, Dover, DE 19904), annual audit fees, and K-1 preparation costs. These are de minimis amounts relative to the size of the Credit Facilities and should be carved out from any restricted payments limitations.
(d) Return of Unfunded Commitments. The restricted payments covenant should not impose restrictions that would impair ICM Co-Invest's ability to return unfunded capital commitments to Ironside in a wind-down scenario. In the event that the wind-down mechanics under Section 7.04 of the LP Agreement are activated, ICM Co-Invest must be able to release Ironside from its unfunded commitment obligation and, if applicable, return any funded but uninvested capital without triggering a restricted payments violation.
F. Guarantor and Security Matters
The credit agreement should not impose guaranty, pledge, or security obligations on the Co-Investment Vehicle or its limited partner. ICM Co-Invest is a passive investment vehicle with no operating assets, and its sole asset will be its equity interest in AcquisitionCo. Requiring ICM Co-Invest to guaranty the acquisition indebtedness or to pledge assets beyond its equity interest in AcquisitionCo would be inconsistent with the structural protections negotiated in the LP Agreement and the Side Letter. Specifically, we request confirmation of the following:
(a) ICM Co-Invest will not be required to provide a guaranty of AcquisitionCo's obligations under the credit agreement or any ancillary financing document. Guaranty obligations should be limited to AcquisitionCo and the direct and indirect operating subsidiaries of Cascadia, consistent with the collateral package described in the Commitment Letter.
(b) No pledge of Ironside's limited partnership interest in ICM Co-Invest will be required as collateral for the Credit Facilities. Ironside's interest in ICM Co-Invest is governed by the LP Agreement and the Side Letter, and any pledge of that interest would implicate complex intercreditor issues and could impair the wind-down and transfer mechanics that are fundamental to the Co-Investment Vehicle's governance framework.
(c) The provisions of the LP Agreement regarding capital call obligations (Section 4.01) and capital call suspension (Section 7.04) will remain unaffected by any security or guarantee requirements in the credit agreement. In particular, the Lenders should not have the right to compel capital calls, to override a suspension of capital calls declared under Section 7.04, or to direct the General Partner in the exercise of its capital call authority.
(d) No lien, security interest, or encumbrance of any kind will be placed on ICM Co-Invest's unfunded capital commitment, which stands at $277,500,000 as of the date hereof. The unfunded commitment is an obligation of Ironside to ICM Co-Invest, not an asset of the Borrower or the guarantors, and should not be included in the collateral package.
G. Conditions Precedent to Funding
The conditions precedent to the initial funding of the Credit Facilities must be coordinated with the capital call mechanics set forth in the LP Agreement and with the regulatory approval timeline for the proposed acquisition. We request that the following matters be addressed in the credit agreement:
(a) Consistency with Capital Call Mechanics. The equity contribution conditions in the credit agreement should be consistent with the capital call procedures set forth in Section 4.01 of the LP Agreement, including the notice periods applicable to capital calls and the requirement that capital calls be made on a pro rata basis to all partners of ICM Co-Invest. The credit agreement should not impose equity contribution timing requirements that conflict with, or are more restrictive than, the LP Agreement's capital call provisions.
(b) Certain Funds Protections. The "certain funds" or "SunGard" provisions in the credit agreement should be structured to ensure that the failure to satisfy a condition to funding that is not within the reasonable control of the equity sponsors does not result in forfeiture of equity contributions already funded. In particular, if equity contributions have been funded into escrow or directly to AcquisitionCo and a condition to debt funding subsequently fails, the equity sponsors should be entitled to the return of their funded contributions, subject to appropriate mechanics for coordination with the Lenders.
(c) Regulatory Conditions. The following regulatory approvals are required as conditions to consummation of the proposed acquisition, and we request that they be included as conditions to both debt and equity funding with appropriate long-stop mechanics:
(i) FERC Section 203 approval — Docket No. EC22-143-000, to be filed on October 19, 2022;
(ii) Oregon Public Utility Commission (OPUC) approval — Docket No. UM-2287, to be filed on October 14, 2022; and
(iii) CFIUS clearance — voluntary notice was acknowledged by the Committee on September 20, 2022, and the review period is ongoing.
The long-stop date for satisfaction of regulatory conditions should be consistent with the outside date currently set forth in the Equity Purchase Agreement (the "EPA"), which is December 31, 2022. If the EPA outside date is extended by agreement of the parties, the credit agreement long-stop date should be extended correspondingly.
(d) R&W Insurance. We note that a representations and warranties insurance policy has been bound by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814, coverage limit of $195,000,000 — representing 10% of the aggregate enterprise value — bound on September 1, 2022, with a premium deposit of $4,875,000 paid on September 2, 2022). While we understand that the R&W policy is an important element of the transaction, it should not be a standalone condition to the funding of the debt facilities. The failure to maintain or the lapse of the R&W policy should be addressed, if at all, through the representations and covenants framework rather than as a discrete condition precedent to initial funding.
H. Events of Default — Carve-Outs for Co-Invest
The events of default provision in the credit agreement must account for the unique structural features of the Co-Investment Vehicle, including the dormancy and wind-down mechanics under Section 7.04 of the LP Agreement. We request the following carve-outs:
(a) Material Impediment Event. A declaration of a Material Impediment Event by Meridian GP IV LLC under Section 7.04 of the LP Agreement — which triggers a suspension of capital call obligations and may result in a period of dormancy — should not constitute an event of default under the credit agreement, provided that the underlying acquisition has not yet closed and the declaration does not adversely affect the Borrower's ability to satisfy its obligations under the Credit Facilities. A Material Impediment Event is a pre-closing risk allocation mechanism specific to the co-investment structure and does not reflect upon the creditworthiness of the Borrower or the operating performance of Cascadia.
(b) Capital Call Suspension. The failure by ICM Co-Invest to fund a capital call during a period of capital call suspension under Section 7.04 of the LP Agreement should not constitute a cross-default or an event of default under the credit agreement. Capital call suspension is a contractual right of the Co-Investment Vehicle triggered by circumstances beyond its control, and any cross-default that penalizes the exercise of that right would be inconsistent with the LP Agreement's governance framework.
(c) Wind-Down of Co-Investment Vehicle. The wind-down of ICM Co-Invest following an eighteen (18)-month dormancy period under Section 7.04(c) of the LP Agreement should not trigger an event of default or a mandatory prepayment obligation, provided that Fund IV (or a replacement co-investor acceptable to the Lenders, acting reasonably) assumes ICM Co-Invest's equity commitment in AcquisitionCo. The wind-down is an orderly process that results in the transfer of the Co-Investment Vehicle's equity interest, not in a loss of equity support for the enterprise.
I. Assignment and Transfer Provisions
The credit agreement should provide appropriate flexibility for transfers of ICM Co-Invest's equity interest in AcquisitionCo and for the replacement of the Co-Investment Vehicle in certain restructuring scenarios:
(a) Transfers to Affiliates. ICM Co-Invest should be permitted to assign or transfer its equity interest in AcquisitionCo to Ironside or any affiliate of Ironside without the consent of the Lenders or the administrative agent, subject to compliance with applicable securities laws and the delivery of customary transfer documentation. Such transfers among affiliates do not alter the economic substance of the equity contribution and should not be subject to lender approval requirements.
(b) Replacement Vehicles. In a reactivation or restructuring scenario (including following a period of dormancy or a wind-down election), the replacement of ICM Co-Invest with a successor co-investment vehicle managed or controlled by Ironside should be permitted without constituting a Change of Control or requiring Lender consent, provided that the replacement vehicle assumes all of ICM Co-Invest's obligations with respect to the equity contribution and provides customary representations and certifications to the administrative agent.
J. Market Flex Provisions
We understand that the Commitment Letter may contain market flex provisions permitting Atlas and Pinnacle to adjust certain terms of the Credit Facilities in connection with the syndication process. While we recognize that market flex is a standard feature of commitment letters, the exercise of flex should not be used to alter the structural protections negotiated for the benefit of the equity sponsors. We request the following:
(a) No Material Adverse Alteration. Any market flex exercised by Atlas or Pinnacle should not materially and adversely alter the economics of the equity sponsors' investment, including by significantly increasing pricing or original issue discount, by imposing additional equity contribution requirements beyond the committed $1,050,000,000, or by modifying financial covenants in a manner that would materially increase the likelihood of a covenant breach.
(b) Prior Notice. The exercise of any market flex should be subject to prior written notice to ICM Co-Invest (or its counsel, Calderwood & Harkness LLP), with a reasonable opportunity for review and comment before the flex is implemented. We request a minimum of five (5) business days' advance notice, which is consistent with practice in comparable co-investment transactions.
(c) No Flex to Impose Additional Burdens on Co-Invest. Market flex should not include the right to impose additional guaranty, collateral, or security requirements on the Co-Investment Vehicle or its limited partner, to limit or reduce equity cure rights, or to impose consent or governance requirements on ICM Co-Invest that are not contained in the Term Sheet as currently drafted.
IV. Coordination with Transaction Documents
We wish to highlight several matters relating to the coordination of the credit agreement with other transaction documents that are relevant to our comments.
The Equity Purchase Agreement for the acquisition is expected to be executed on or about September 15, 2022. Certain closing conditions in the credit agreement — including the regulatory conditions described in Section III.G above — should be cross-referenced to the corresponding conditions in the EPA to ensure consistency and to avoid the possibility of divergent closing condition regimes. In particular, the representations, warranties, and covenants in the credit agreement that relate to the Target's business should be informed by, and not more expansive than, the corresponding provisions of the EPA, to the extent that they serve as conditions to funding.
The Co-Investment Allocation Agreement dated July 29, 2022 is the governing document for the allocation of equity between Fund IV and ICM Co-Invest. The credit agreement should acknowledge the existence of the Allocation Agreement and should not contain provisions that conflict with or override the allocation mechanics set forth therein, including the pro rata allocation of capital contributions, distributions, and equity cure obligations.
We further request that the credit agreement expressly acknowledge, and not conflict with, the Side Letter between Ironside and Meridian GP IV LLC dated July 29, 2022. The Side Letter contains enhanced reporting obligations, most-favored-nation provisions, and specific wind-down rights that are integral to Ironside's decision to participate in the co-investment. Any credit agreement provision that would impair or override the Side Letter protections would be unacceptable to Ironside.
Finally, we note that Blackthorn Advisory Group LLC serves as financial advisor to Meridian in connection with the proposed acquisition and may be involved in communications with the Lenders and their counsel regarding syndication and other financing matters. We request that ICM Co-Invest's counsel (Calderwood & Harkness LLP) be copied on all material communications between the financial advisor, the Sponsor, and the Lenders or their counsel relating to the credit agreement, the Term Sheet, or the syndication process, to the extent such communications relate to matters that could affect the rights or obligations of ICM Co-Invest.
V. Process and Next Steps
We respectfully request that Atlas and its counsel prepare and circulate a revised Term Sheet incorporating the comments set forth in this letter within ten (10) business days of the date hereof, i.e., on or before September 20, 2022.
Prior to the preparation and turn of the full credit agreement draft, we request a call or meeting among counsel — including representatives of Calderwood & Harkness LLP, Breckenridge Sloane & Pratt LLP, and Atlas's legal advisors — to discuss the comments set forth herein and to resolve any open points. We are available at your convenience during the weeks of September 12 and September 19 and would welcome the opportunity to address any questions or concerns that Atlas or its counsel may have regarding the co-investment structure or the specific protections we have requested.
Upon receipt of the full credit agreement draft, Calderwood & Harkness LLP will conduct a comprehensive review for consistency with the comments set forth in this letter and for any additional co-investment protections that may be warranted in light of the detailed terms of the credit agreement. We anticipate providing a full mark-up of the credit agreement within a reasonable period following receipt.
We confirm our willingness to coordinate with BSP to present a unified sponsor position where possible, and we appreciate BSP's cooperation in transmitting this letter. We do, however, reserve ICM Co-Invest's right to raise separate issues, take independent positions, and pursue distinct protections as warranted by the interests of the Co-Investment Vehicle and its limited partner.
VI. Reservation of Rights
This letter does not constitute, and shall not be construed as, a waiver of any rights of Ironside, ICM Co-Invest, or any of their respective affiliates under the LP Agreement, the Side Letter, the Co-Investment Allocation Agreement, or any other transaction document executed or to be executed in connection with the proposed acquisition.
Ironside and ICM Co-Invest expressly reserve the right to raise additional comments, objections, and requests upon review of the full credit agreement and any related financing documentation, including any intercreditor agreement, security agreement, pledge agreement, guaranty agreement, or syndication-related documentation. The comments set forth in this letter are based on our review of the Term Sheet and the Commitment Letter and are not intended to be exhaustive.
Ironside's participation in the co-investment, and the comments set forth herein, are in all respects subject to the continued satisfaction of all conditions set forth in the LP Agreement and the Side Letter, including any conditions to the funding of capital calls, the receipt of required regulatory approvals, and the absence of a Material Impediment Event.
Nothing in this letter shall create any obligation on the part of Ironside or ICM Co-Invest to fund any capital call, contribute any equity, or consummate the proposed acquisition except as expressly set forth in the LP Agreement and the Allocation Agreement.
VII. Closing
We appreciate your attention to the foregoing comments and look forward to working with you and with Atlas's counsel to finalize the credit agreement on terms that are acceptable to all parties. Please do not hesitate to contact us if you have any questions or wish to discuss any aspect of this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Pamela Cross Partner
Direct Telephone: (212) 558-4217
Email: pamela.cross@calderwoodharkness.com
By: ________
Nicholas Stern Partner
Direct Telephone: (212) 558-4389
Email: nicholas.stern@calderwoodharkness.com
Enclosures:
• Appendix A: Summary of Co-Investment Vehicle Structure
• Appendix B: Summary of Key LP Agreement Provisions Relevant to Credit Agreement
APPENDIX A
Summary of Co-Investment Vehicle Structure ICM Cascadia Co-Invest, LP
APPENDIX B
Summary of Key LP Agreement Provisions Relevant to Credit Agreement
The following is a summary of selected provisions of the Amended and Restated Agreement of Limited Partnership of ICM Cascadia Co-Invest, LP, dated July 29, 2022 (the "LP Agreement"), that are relevant to the structuring of the credit agreement for the proposed acquisition financing. This summary is provided for reference purposes only and is qualified in its entirety by the full text of the LP Agreement.
Section 4.01 — Capital Calls
Section 4.01 of the LP Agreement governs the mechanics by which the General Partner may call capital from the partners of ICM Co-Invest. Key provisions include:
• The General Partner may issue capital calls from time to time in its sole discretion, in each case by delivering written notice to each partner not less than ten (10) business days prior to the applicable funding date.
• Each capital call shall be made on a pro rata basis to all partners in proportion to their respective unfunded capital commitments.
• Capital contributions shall be made in immediately available funds to the account designated by the General Partner in the capital call notice.
• Failure by a partner to fund a capital call when due constitutes a "Default Event" under the LP Agreement, subject to a five (5) business day cure period following written notice from the General Partner.
• A partner that commits a Default Event is subject to the default remedies set forth in Section 4.02 of the LP Agreement, including reduction of its partnership interest, forfeiture of a portion of its capital account, and forced transfer of its interest.
Section 7.04 — Material Impediment Event; Dormancy; Wind-Down
Section 7.04 of the LP Agreement addresses the procedures that apply in the event that the proposed acquisition cannot be consummated due to circumstances beyond the reasonable control of the parties. Key provisions include:
• Section 7.04(a) — Declaration of Material Impediment Event. The General Partner may declare a "Material Impediment Event" if it determines, in its reasonable judgment, that a material regulatory, legal, or commercial impediment exists that prevents or materially delays the consummation of the proposed acquisition. A Material Impediment Event declaration triggers an immediate suspension of all capital call obligations under Section 4.01.
• Section 7.04(b) — Dormancy. Following a Material Impediment Event declaration, the Co-Investment Vehicle enters a period of "dormancy" during which no capital calls may be issued, no investments may be made, and the General Partner's activities are limited to maintaining the vehicle's existence, paying operating expenses, and taking such actions as are necessary to preserve the partners' rights and interests. The dormancy period continues until the earlier of (i) the resolution of the Material Impediment Event and reactivation of the vehicle by the General Partner, or (ii) the commencement of a wind-down under Section 7.04(c).
• Section 7.04(c) — Wind-Down Election. If the Co-Investment Vehicle has been in a state of dormancy for a period of eighteen (18) consecutive months following the declaration of a Material Impediment Event, the limited partner (Ironside) has the right, upon thirty (30) days' prior written notice to the General Partner, to elect to commence an orderly wind-down of the Co-Investment Vehicle. Upon such election, the General Partner shall take all actions necessary to wind down the vehicle, including the return of funded capital to the partners, the release of unfunded capital commitments, and the dissolution and liquidation of the partnership in accordance with the LP Agreement and applicable law.
CONFIDENTIAL — This letter and its appendices contain confidential information provided for the sole use of the addressees and their counsel in connection with the proposed acquisition of Cascadia Renewables Holdings, Inc. Any unauthorized use, disclosure, or distribution is strictly prohibited.
Item | Detail
Vehicle Name | ICM Cascadia Co-Invest, LP
Jurisdiction of Formation | State of Delaware
Formation Date | July 22, 2022
Entity Type | Limited Partnership
Delaware SOS File No. | 7439218
EIN | 88-3921457
General Partner | Meridian Infrastructure GP IV LLC
GP Interest | 0.01%
GP Capital Commitment | $30,000
Limited Partner | Ironside Capital Management LP
LP Interest | 99.99%
LP Capital Commitment | $299,970,000
Total Commitment | $300,000,000
Capital Called to Date | $22,500,000 (single capital call dated August 15, 2022)
Unfunded Commitment | $277,500,000
Governing Agreement | Amended and Restated Agreement of Limited Partnership dated July 29, 2022 (the "LP Agreement")
Side Letter | Side Letter between Ironside Capital Management LP and Meridian Infrastructure GP IV LLC dated July 29, 2022
Co-Investment Allocation Agreement | Co-Investment Allocation Agreement dated July 29, 2022, between Fund IV and ICM Co-Invest
Carried Interest | 10% above 8% preferred return (compounded quarterly)
Management Fee | None
Registered Agent | Cascade Systems, 160 Greentree Drive, Suite 101, Dover, DE 19904
Fund Administrator | Kendrick Thorne & Associates LLP

CALDERWOOD & HARKNESS LLP Attorneys at Law

VIA EMAIL AND OVERNIGHT COURIER

CALDERWOOD & HARKNESS LLP

APPENDIX A

APPENDIX B

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