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EXECUTION VERSION

CO-INVESTMENT ALLOCATION AGREEMENT

by and between

MERIDIAN INFRASTRUCTURE PARTNERS FUND IV, LP a Delaware limited partnership

and

ICM CASCADIA CO-INVEST, LP a Delaware limited partnership (EIN: 88-3921457)

Dated as of July 29, 2022

CO-INVESTMENT ALLOCATION AGREEMENT

This Co-Investment Allocation Agreement (this "Agreement") is entered into as of July 29, 2022, by and between:

(1) Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership ("Fund IV"); and

(2) ICM Cascadia Co-Invest, LP, a Delaware limited partnership (EIN: 88-3921457) (the "Co-Invest" or the "Co-Investment Vehicle").

Fund IV and the Co-Investment Vehicle are referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS:

A. Fund IV is a Delaware limited partnership with total committed capital of Six Billion Two Hundred Million Dollars ($6,200,000,000) (vintage 2021), managed by its general partner, Meridian Infrastructure GP IV LLC, a Delaware limited liability company (the "GP"), and is engaged in the business of targeting and making investments in North American energy, water, transport, and digital infrastructure assets and platforms;

B. The Co-Investment Vehicle is a Delaware limited partnership formed on July 22, 2022 (Delaware Secretary of State File Number 7439218), with the GP serving as general partner (holding a 0.01% general partner interest, representing a commitment of Thirty Thousand Dollars ($30,000)) and Ironside Capital Management LP, a Delaware limited partnership ("Ironside"), serving as sole limited partner (holding a 99.99% limited partner interest, representing a commitment of Two Hundred Ninety-Nine Million Nine Hundred Seventy Thousand Dollars ($299,970,000)), with total committed capital of Three Hundred Million Dollars ($300,000,000);

C. Fund IV and the Co-Investment Vehicle desire to co-invest in the acquisition (the "Acquisition") of one hundred percent (100%) of the outstanding equity interests of Cascadia Renewables Holdings, Inc., an Oregon corporation (the "Target" or "Cascadia"), through a newly formed acquisition subsidiary, Cascadia Acquisition Corp., a Delaware corporation ("AcquisitionCo"), which will be jointly and indirectly owned by Fund IV and the Co-Investment Vehicle in proportion to their respective equity commitments;

D. The aggregate enterprise value of the Target has been agreed at One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) pursuant to the Equity Purchase Agreement to be entered into among the Selling Shareholders, the Target, and AcquisitionCo (the "EPA");

E. The equity value of the Target is estimated at One Billion Fifty Million Dollars ($1,050,000,000), representing the enterprise value of One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) less approximately Nine Hundred Million Dollars ($900,000,000) of net debt at the Target level;

F. The Parties desire to set forth their respective rights and obligations with respect to the allocation of the co-investment, including their respective equity commitments, capital contributions, cost sharing, governance rights, and related matters, all on the terms and subject to the conditions set forth herein; and

G. The Acquisition will be financed in part with (i) a Nine Hundred Seventy-Five Million Dollar ($975,000,000) senior secured term loan facility and (ii) a One Hundred Fifty Million Dollar ($150,000,000) revolving credit facility, in each case arranged by Atlas National Bank, N.A., as lead arranger and administrative agent, with Pinnacle Credit Partners LLC as co-lender, pursuant to a debt commitment letter dated August 30, 2022 (the "Debt Commitment Letter"). The total sources of financing for the Acquisition are Two Billion Twenty-Five Million Dollars ($2,025,000,000), consisting of One Billion Fifty Million Dollars ($1,050,000,000) of equity and Nine Hundred Seventy-Five Million Dollars ($975,000,000) of term loan proceeds. The total uses are Two Billion Twenty-Five Million Dollars ($2,025,000,000), consisting of One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) of enterprise value, Fifty Million Dollars ($50,000,000) of estimated transaction costs, and Twenty-Five Million Dollars ($25,000,000) of working-capital adjustment escrow.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — DEFINITIONS

Section 1.01 — Definitions.

As used in this Agreement, the following terms shall have the meanings set forth below:

"Acquisition" means the acquisition of one hundred percent (100%) of the outstanding equity interests of Cascadia Renewables Holdings, Inc. by AcquisitionCo, on the terms and subject to the conditions set forth in the EPA.

"AcquisitionCo" means Cascadia Acquisition Corp., a Delaware corporation formed for the purpose of consummating the Acquisition and to be wholly owned, directly or indirectly, by Fund IV and the Co-Investment Vehicle in proportion to their respective Pro Rata Shares.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including 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 a Person, whether through the ownership of voting securities, by contract, or otherwise.

"Agreement" means this Co-Investment Allocation Agreement, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.

"Bull Run Concession" means the forty (40)-year water-treatment concession for the Bull Run Filtration Project between the Target and the Portland Metropolitan Water District, originally executed in or about 2018, with annual revenue of approximately Sixty-Four Million Dollars ($64,000,000), as more fully described in Section 6.04.

"Capital Contribution" means any equity capital contributed (or required to be contributed) by a Party to AcquisitionCo (or its direct or indirect parent holding entity) pursuant to a capital call made in accordance with Article III.

"Cascadia" or "Target" means Cascadia Renewables Holdings, Inc., an Oregon corporation, headquartered at 1100 SW Sixth Avenue, Suite 1800, Portland, Oregon 97204.

"Co-Invest Commitment" means Three Hundred Million Dollars ($300,000,000), representing the aggregate equity commitment of the Co-Investment Vehicle to the Acquisition.

"Co-Invest Percentage" means twenty-eight and fifty-seven one-hundredths percent (28.57%), calculated as the Co-Invest Commitment divided by the Total Equity Commitment ($300,000,000 ÷ $1,050,000,000).

"Debt Commitment Letter" means the commitment letter to be dated on or about August 30, 2022, issued by Atlas National Bank, N.A., as lead arranger and administrative agent, and Pinnacle Credit Partners LLC, as co-lender, providing for the Senior Secured Term Loan and the Revolving Credit Facility, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

"Enterprise Value" means One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000), being the aggregate enterprise value of the Target as set forth in the EPA.

"EPA" or "Equity Purchase Agreement" means the equity purchase agreement to be entered into among the Selling Shareholders, the Target, and AcquisitionCo, to be dated on or about September 15, 2022, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and subject to Section 5.02 of this Agreement.

"Equity Value" means One Billion Fifty Million Dollars ($1,050,000,000), representing the Enterprise Value less the Net Debt.

"Fund IV Commitment" means Seven Hundred Fifty Million Dollars ($750,000,000), representing the aggregate equity commitment of Fund IV to the Acquisition.

"Fund IV Percentage" means seventy-one and forty-three one-hundredths percent (71.43%), calculated as the Fund IV Commitment divided by the Total Equity Commitment ($750,000,000 ÷ $1,050,000,000).

"GP" means Meridian Infrastructure GP IV LLC, a Delaware limited liability company, acting in its capacity as general partner of each of Fund IV and the Co-Investment Vehicle.

"Ironside" means Ironside Capital Management LP, a Delaware limited partnership registered as an investment adviser with the Securities and Exchange Commission, acting in its capacity as the sole limited partner of the Co-Investment Vehicle.

"LP Agreement" means the Limited Partnership Agreement of ICM Cascadia Co-Invest, LP, dated as of July 29, 2022, as the same may be amended, restated, supplemented, or otherwise modified from time to time.

"Material Impediment Event" has the meaning given to such term in Section 7.04 of the LP Agreement.

"Net Debt" means the aggregate indebtedness of the Target and its subsidiaries, net of cash and cash equivalents, estimated as of the date hereof to be approximately Nine Hundred Million Dollars ($900,000,000).

"Parties" means Fund IV and the Co-Investment Vehicle, collectively, and "Party" means either of them individually.

"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, governmental authority, or other entity.

"Pro Rata Share" means, with respect to each Party, such Party's percentage of the Total Equity Commitment, as set forth in Section 2.01 and Schedule A (i.e., 71.43% for Fund IV and 28.57% for the Co-Investment Vehicle).

"R&W Insurance Policy" means the representations and warranties insurance policy issued (or to be issued) by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814), with a coverage limit of One Hundred Ninety-Five Million Dollars ($195,000,000), representing ten percent (10%) of the Enterprise Value.

"Revolving Credit Facility" means the One Hundred Fifty Million Dollar ($150,000,000) revolving credit facility to be provided by Atlas National Bank, N.A. pursuant to the Debt Commitment Letter.

"Selling Shareholders" means, collectively, (i) Timberline Growth Equity Fund III, LP, holding sixty-two percent (62%) of the outstanding equity of the Target, (ii) the Weir Family Trust, holding eighteen percent (18%) of the outstanding equity of the Target, and (iii) the Management Rollover Pool, holding twenty percent (20%) of the outstanding equity of the Target (with an expected fifty percent (50%) rollover by the Management Rollover Pool, representing approximately ten percent (10%) of total post-closing equity).

"Senior Secured Term Loan" means the Nine Hundred Seventy-Five Million Dollar ($975,000,000) senior secured term loan to be provided pursuant to the Debt Commitment Letter, with Atlas National Bank, N.A. providing Six Hundred Fifty Million Dollars ($650,000,000) and Pinnacle Credit Partners LLC providing Three Hundred Twenty-Five Million Dollars ($325,000,000).

"Side Letter" means the side letter agreement between Ironside and the GP, dated as of July 29, 2022, setting forth certain supplemental terms applicable to the Co-Investment Vehicle, as the same may be amended, supplemented, or otherwise modified from time to time.

"Total Equity Commitment" means One Billion Fifty Million Dollars ($1,050,000,000), being the aggregate of the Fund IV Commitment and the Co-Invest Commitment.

"Transaction Costs" means all fees, costs, and expenses incurred by or on behalf of the Parties, AcquisitionCo, or the Target in connection with the Acquisition, estimated in the aggregate at Fifty Million Dollars ($50,000,000), including legal fees, accounting and advisory fees, financing fees, filing fees, regulatory counsel fees, insurance premiums, and other customary transaction costs.

"Working-Capital Escrow" means the Twenty-Five Million Dollar ($25,000,000) escrow deposit required under the EPA to secure post-closing working-capital adjustments.

Section 1.02 — Interpretation.

Unless the context otherwise requires:

(a) Words importing the singular include the plural and vice versa, and words importing any gender include all genders.

(b) References to "Sections," "Articles," "Schedules," and "Exhibits" are to sections, articles, schedules, and exhibits of this Agreement, unless otherwise specified.

(c) References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms, unless otherwise expressly provided.

(d) The words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement.

(e) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."

(f) References to "days" mean calendar days unless "business days" is expressly specified, and "business days" means any day other than a Saturday, Sunday, or day on which commercial banks in New York, New York or Boston, Massachusetts are authorized or required by law to close.

(g) References to any statute, rule, or regulation mean such statute, rule, or regulation as amended, modified, supplemented, or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under such statute), and references to any section of any statute, rule, or regulation include any successor to such section.

(h) The headings and captions in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(i) References to "$" or "dollars" are to the lawful currency of the United States of America.

(j) Any term defined in the EPA and used but not otherwise defined herein shall have the meaning assigned to it in the EPA, provided that such term shall be interpreted in accordance with the laws of the State of Delaware.

ARTICLE II — CO-INVESTMENT ALLOCATION

Section 2.01 — Allocation Percentages.

The Parties shall participate in the Acquisition in accordance with their respective Pro Rata Shares, as follows:

Each Party shall participate in the Acquisition (including, without limitation, the funding of equity contributions, the allocation of transaction costs, the allocation of distributions, and the allocation of risks and benefits) in accordance with its Pro Rata Share, except as otherwise expressly provided in this Agreement. The allocation percentages set forth in this Section 2.01 reflect the negotiated agreement of the Parties and have been determined with reference to the Total Equity Commitment of One Billion Fifty Million Dollars ($1,050,000,000).

Section 2.02 — AcquisitionCo Ownership.

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

(b) Fund IV shall hold seventy-one and forty-three one-hundredths percent (71.43%) of the outstanding equity of AcquisitionCo (or its direct parent holding entity, if applicable).

(c) The Co-Investment Vehicle shall hold twenty-eight and fifty-seven one-hundredths percent (28.57%) of the outstanding equity of AcquisitionCo (or its direct parent holding entity, if applicable).

(d) The GP shall take all actions necessary or appropriate to cause the organizational documents of AcquisitionCo (and any intermediate holding entity) to be consistent with and to give effect to the ownership structure and allocation percentages set forth in this Agreement.

Section 2.03 — Equity Contributions to AcquisitionCo.

(a) Each Party shall fund its Pro Rata Share of the Total Equity Commitment to AcquisitionCo (or such intermediate holding entity as the GP may designate) at or prior to the closing of the Acquisition, in accordance with the capital call procedures set forth in Article III.

(b) The equity contributions of each Party shall be as follows:

(i) Fund IV: Seven Hundred Fifty Million Dollars ($750,000,000); and

(ii) Co-Investment Vehicle: Three Hundred Million Dollars ($300,000,000).

(c) All funding shall be made by wire transfer of immediately available funds to such account or accounts as shall be designated by the GP in the applicable capital call notice. The GP shall provide wire transfer instructions to each Party no later than five (5) business days prior to the funding date specified in the applicable capital call notice.

(d) In the event that the Total Equity Commitment is increased or decreased as a result of post-signing adjustments to the EPA (including, without limitation, adjustments to the purchase price, changes in the estimated Net Debt, or changes in Transaction Costs), such increase or decrease shall be allocated between the Parties in proportion to their respective Pro Rata Shares, and each Party's equity contribution shall be adjusted accordingly, subject to Section 2.04.

Section 2.04 — No Adjustment to Allocation Percentages.

(a) The allocation percentages set forth in Section 2.01 are fixed as of the date hereof and shall not be adjusted, modified, or varied except with the prior written consent of both Parties.

(b) Neither Party may transfer, assign, or otherwise dispose of its allocation percentage or any portion thereof without the other Party's prior written consent, subject to the transfer provisions set forth in Article IX.

(c) For the avoidance of doubt, any increase or decrease in the Total Equity Commitment resulting from post-signing adjustments to the EPA shall not alter the allocation percentages, but shall instead be reflected as a proportional increase or decrease in each Party's absolute commitment amount.

ARTICLE III — CAPITAL CALLS AND FUNDING

Section 3.01 — Capital Call Mechanics.

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

(b) Capital calls on Fund IV shall be made by the GP in its capacity as general partner of Fund IV, in accordance with the applicable provisions of the Fund IV limited partnership agreement.

(c) The GP shall use commercially reasonable efforts to coordinate capital calls on both Parties such that each Party funds its Pro Rata Share of any required equity contribution simultaneously or as nearly simultaneously as practicable. In no event shall either Party be required to fund its Pro Rata Share of any equity contribution unless the other Party is simultaneously funding (or has simultaneously funded) its corresponding Pro Rata Share, except as otherwise provided in Section 3.03.

(d) Each capital call notice shall be delivered in writing (including by electronic mail) to each Party at the address set forth in Section 14.05 (or such other address as may have been designated by such Party in accordance with Section 14.05) and shall be deemed effective upon delivery.

Section 3.02 — Timing of Contributions.

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

(b) The Parties acknowledge that an initial capital call of Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000) was issued on the Co-Investment Vehicle on August 15, 2022, representing seven and one-half percent (7.5%) of the Co-Invest Commitment. The proceeds of such initial capital call were applied as follows:

(i) Organizational expenses of the Co-Investment Vehicle: $285,000;

(ii) Placement-agent fee payable to Rivermark Capital Markets Inc.: $1,050,000 (calculated at 0.35% of the Co-Investment Vehicle's committed capital of $300,000,000);

(iii) R&W insurance premium deposit payable to Northgate Specialty Insurance Co.: $4,875,000 (calculated at a 2.5% rate on the $195,000,000 policy limit);

(iv) Due-diligence costs and deposits (including legal, accounting, environmental, engineering, and regulatory advisory fees): $12,790,000; and

(v) Working-capital reserve for the Co-Investment Vehicle: $3,500,000.

(c) The GP shall maintain a detailed record of all Capital Contributions made by each Party and shall make such records available to each Party upon reasonable request. The GP shall provide quarterly statements to each Party summarizing all Capital Contributions made, amounts drawn, and remaining unfunded commitments.

Section 3.03 — Failure to Fund.

(a) If either Party (the "Defaulting Party") fails to fund all or any portion of its Capital Contribution when due in accordance with a capital call notice (the "Default Amount"), the GP shall promptly notify the other Party (the "Non-Defaulting Party") of such failure.

(b) Upon the occurrence of a funding default, the following remedies shall be available to the Non-Defaulting Party, in addition to any other remedies available at law or in equity:

(i) Default Interest. The Default Amount shall accrue interest at a rate equal to the lesser of (A) eighteen percent (18%) per annum compounded monthly and (B) the maximum rate permitted by applicable law, from the date on which such Capital Contribution was due until the date on which it is paid in full.

(ii) Dilution. The allocation percentage of the Defaulting Party may, at the election of the Non-Defaulting Party (with the consent of the GP), be reduced (and the allocation percentage of the Non-Defaulting Party correspondingly increased) to reflect the relative funded capital of the Parties following such default, calculated on a dollar-for-dollar basis.

(iii) Forced Transfer. If the Defaulting Party fails to cure such default within thirty (30) days of receipt of written notice from the GP, the Non-Defaulting Party shall have the right (but not the obligation) to acquire the Defaulting Party's interest in the co-investment at a price equal to the lesser of (A) the Defaulting Party's aggregate funded Capital Contributions less any prior distributions received by the Defaulting Party and (B) the fair market value of the Defaulting Party's interest as reasonably determined by the GP.

(c) The default remedies set forth in this Section 3.03 are in addition to, and not in limitation of, the default provisions set forth in the LP Agreement and the Fund IV limited partnership agreement, as applicable. In the event of any conflict between this Section 3.03 and the applicable partnership agreement, the terms of this Agreement shall control with respect to matters relating to the co-investment allocation.

(d) The Non-Defaulting Party shall not be obligated to fund any portion of the Defaulting Party's unfunded commitment but may elect to do so in its sole discretion, subject to adjustment of the allocation percentages as set forth above.

Section 3.04 — Capital Call Suspension.

(a) In the event the GP declares a Material Impediment Event under Section 7.04 of the LP Agreement, capital calls on the Co-Investment Vehicle shall be suspended effective immediately upon delivery of written notice to Ironside and the Co-Investment Vehicle.

(b) During any period of capital call suspension, Fund IV's parallel capital call obligations with respect to the Acquisition shall also be suspended, and no Party shall be required to fund additional equity contributions to AcquisitionCo or any intermediate holding entity until such time as the suspension is lifted by the GP or the Co-Investment Vehicle is wound down in accordance with Article VIII.

(c) During any period of suspension, the GP shall continue to manage and preserve the assets and interests of the Parties related to the Acquisition in accordance with the applicable standard of care set forth in the LP Agreement and shall keep the Parties informed of material developments in accordance with Section 5.03.

(d) The GP shall have the discretion to lift a capital call suspension at any time upon written notice to the Parties, provided that the circumstances giving rise to the Material Impediment Event have been resolved or sufficiently mitigated to permit the resumption of capital calls without material risk to the Parties. Reactivation of the Acquisition following a period of dormancy shall be subject to the consent requirements of Section 5.02.

ARTICLE IV — TRANSACTION COSTS AND EXPENSES

Section 4.01 — Shared Transaction Costs.

(a) Transaction Costs and expenses incurred in connection with the Acquisition (estimated at Fifty Million Dollars ($50,000,000) in the aggregate) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the Parties:

(i) Fund IV: 71.43% of shared Transaction Costs; and

(ii) Co-Investment Vehicle: 28.57% of shared Transaction Costs.

(b) Shared Transaction Costs shall include, without limitation: (i) legal fees and expenses of counsel to AcquisitionCo and the GP (including Breckenridge Sloane & Pratt LLP); (ii) accounting, tax, and advisory fees (including fees of Halstead & Greer LLP and Blackthorn Advisory Group LLC); (iii) regulatory filing fees and related expenses (including FERC, OPUC, and CFIUS filing fees); (iv) due-diligence costs (including technical, environmental, engineering, and market studies); (v) title and survey costs; (vi) lender-related fees and expenses; (vii) insurance costs allocated on a shared basis; and (viii) any break-up fees, reverse termination fees, or similar payments that may become payable under the EPA.

(c) The GP shall maintain an itemized accounting of all shared Transaction Costs and shall provide each Party with periodic statements (not less frequently than monthly during the active transaction period) summarizing such costs and each Party's allocable share thereof.

Section 4.02 — Vehicle-Specific Costs.

(a) Costs and expenses that are specific to the formation, organization, and ongoing operation of the Co-Investment Vehicle shall be borne solely by the Co-Investment Vehicle and shall not be allocated to, or shared by, Fund IV. Such vehicle-specific costs include, without limitation:

(i) Organizational expenses (including state filing fees, formation legal fees, and related costs);

(ii) Placement-agent fees payable to Rivermark Capital Markets Inc. pursuant to the Placement Agent Agreement;

(iii) Fund administration fees payable to the fund administrator;

(iv) Delaware franchise taxes and annual report fees;

(v) Annual audit fees and tax preparation fees (including fees of Kendrick Thorne & Associates LLP for the preparation of K-1 schedules and related tax returns); and

(vi) Any other costs and expenses that are attributable solely to the Co-Investment Vehicle and are not otherwise shared Transaction Costs.

(b) The Parties acknowledge that during any period of dormancy (as described in Article VIII), the annualized operating expenses of the Co-Investment Vehicle are estimated at approximately One Hundred Eighty-Five Thousand Dollars ($185,000), which amount shall be borne solely by the Co-Investment Vehicle.

Section 4.03 — Financing Costs.

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

(b) The Parties acknowledge that a debt commitment extension fee in the amount of Two Million Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($2,437,500), calculated as 0.25% of the Nine Hundred Seventy-Five Million Dollar ($975,000,000) Senior Secured Term Loan, was paid by Fund IV in connection with an extension of the Debt Commitment Letter. The allocation of such extension fee between the Parties shall be determined by the GP, and to the extent that such fee is determined to be a shared Transaction Cost, the Co-Investment Vehicle shall reimburse Fund IV for its Pro Rata Share (28.57%) of such fee promptly upon written notice from the GP.

(c) For the avoidance of doubt, costs and expenses associated with the Revolving Credit Facility (including, without limitation, unused commitment fees and any drawings thereunder) shall be treated as operating expenses of the Target and AcquisitionCo and shall not be allocated to the Parties under this Agreement.

Section 4.04 — R&W Insurance Costs.

(a) The Parties acknowledge that the R&W insurance premium deposit of Four Million Eight Hundred Seventy-Five Thousand Dollars ($4,875,000), payable to Northgate Specialty Insurance Co. in connection with the R&W Insurance Policy (Policy No. NSW-RI-2022-09814), was paid on September 2, 2022, and was funded from the Co-Investment Vehicle's initial capital call proceeds referenced in Section 3.02(b)(iii).

(b) Any additional R&W insurance premiums, endorsement fees, or related costs that may be incurred in connection with the R&W Insurance Policy (including, without limitation, costs of extending or amending the policy or obtaining additional coverage) shall be allocated between the Parties in proportion to their respective Pro Rata Shares. Fund IV shall reimburse the Co-Investment Vehicle for Fund IV's Pro Rata Share (71.43%) of the initial R&W insurance premium deposit promptly following the GP's allocation determination.

(c) The Parties acknowledge and agree that, pursuant to the Side Letter dated January 20, 2023, the coverage period under the R&W Insurance Policy has been tolled during the period of dormancy. The costs, if any, associated with such tolling arrangement shall be allocated between the Parties in proportion to their respective Pro Rata Shares.

Section 4.05 — Working-Capital Escrow.

The working-capital adjustment escrow of Twenty-Five Million Dollars ($25,000,000), as required under the EPA, shall be funded by the Parties in proportion to their respective Pro Rata Shares as follows:

(i) Fund IV: 71.43% = $17,857,500; and

(ii) Co-Investment Vehicle: 28.57% = $7,142,500.

Any release, return, or distribution from the Working-Capital Escrow shall be allocated to the Parties in proportion to their respective Pro Rata Shares. In the event that any portion of the Working-Capital Escrow is forfeited or applied to satisfy working-capital adjustment claims under the EPA, the resulting loss shall be borne by the Parties in proportion to their respective Pro Rata Shares.

ARTICLE V — GOVERNANCE AND DECISION-MAKING

Section 5.01 — GP Authority.

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

(b) The GP's managers and officers who are authorized to act on behalf of the GP for purposes of decision-making with respect to the Acquisition and the co-investment are:

(i) David R. Hargreaves, Managing Partner;

(ii) Lillian Fong, Partner, Portfolio; and

(iii) Graham Whitfield, Partner, Operations.

(c) The GP shall exercise its authority under this Agreement in good faith, with the care, skill, and diligence that a prudent person acting in a like capacity would exercise under similar circumstances, and in a manner consistent with its fiduciary duties under the LP Agreement, the Fund IV partnership agreement, and applicable law.

Section 5.02 — Major Decisions Requiring Co-Invest Consent.

Notwithstanding the authority of the GP set forth in Section 5.01, the following decisions shall require the prior written consent of the Co-Investment Vehicle (acting through Ironside as its sole limited partner), which consent shall not be unreasonably withheld, conditioned, or delayed:

(a) Any material amendment, modification, or waiver of any provision of the EPA, including any change to the purchase price, the representations and warranties, or the indemnification provisions;

(b) Any material amendment, modification, or waiver of the Debt Commitment Letter or any replacement financing arrangement, including any material change to the pricing, tenor, covenants, or conditions precedent of the Senior Secured Term Loan or the Revolving Credit Facility;

(d) Any settlement, compromise, or resolution of claims, disputes, or litigation relating to the Acquisition in excess of Five Million Dollars ($5,000,000) in the aggregate;

(e) The entry into any post-closing material transaction, contract, or agreement with respect to the Target or its subsidiaries that would disproportionately affect the economic interests or rights of the Co-Investment Vehicle relative to Fund IV;

(f) Any decision to terminate, abandon, or otherwise cease pursuit of the Acquisition, except where such termination is mandatory under the terms of the EPA or is required by applicable law or regulation;

(g) The exercise of any termination right under the EPA, including any right to terminate on account of a failure of a condition precedent or the occurrence of a material adverse effect;

(h) Any decision to reactivate the Acquisition following a period of dormancy, including the lifting of any capital call suspension; and

(i) Any material amendment or modification of this Agreement.

The GP shall provide the Co-Investment Vehicle (through Ironside) with reasonable advance notice of any proposed action requiring consent under this Section 5.02, together with such information as may be reasonably necessary for the Co-Investment Vehicle to evaluate the proposed action. The Co-Investment Vehicle shall respond to any such request for consent within ten (10) business days of receipt of such notice (or such shorter period as may be required by the circumstances), and failure to respond within such period shall be deemed to constitute consent.

Section 5.03 — Information Rights.

(a) The GP shall provide the Co-Investment Vehicle with quarterly status reports during any period of dormancy (as described in Article VIII), including a summary of (i) the status of the Acquisition and any regulatory proceedings, (ii) the financial condition and operating performance of the Target (to the extent known), (iii) the status of the Debt Commitment Letter and related financing, (iv) material developments affecting the Target or the Acquisition, and (v) the Co-Investment Vehicle's funded and unfunded commitments and operating expenses. Such quarterly reports shall be consistent in form and substance with the reporting obligations set forth in the Side Letter.

(b) The GP shall provide prompt written notice to the Co-Investment Vehicle (through Ironside) of any of the following events:

(i) The occurrence or anticipated occurrence of a Material Impediment Event;

(ii) The occurrence of a Material Adverse Effect (as defined in the EPA) with respect to the Target;

(iii) Any material development, proceeding, or event affecting the Acquisition, the EPA, the Debt Commitment Letter, or the regulatory approvals contemplated by Article VI;

(iv) The receipt of any notice of default or termination under the EPA or the Debt Commitment Letter;

(v) Any actual or threatened litigation, regulatory inquiry, or governmental proceeding that would reasonably be expected to have a material effect on the Acquisition or the Target; and

(vi) Any material change in the financial condition or operations of the Target.

(c) Ironside shall have reasonable access, upon reasonable advance notice, to the books, records, and files of the Co-Investment Vehicle maintained by the GP and the fund administrator, subject to customary confidentiality restrictions.

Section 5.04 — Board Representation.

(a) Upon the closing of the Acquisition, the board of directors of AcquisitionCo (and, to the extent within the control of the Parties, the board of directors of the Target) shall be constituted in a manner that reflects the Pro Rata Shares of the Parties.

(b) Without limiting the generality of the foregoing, the Co-Investment Vehicle (acting through Ironside) shall have the right to designate at least one (1) director to serve on the board of directors of AcquisitionCo (and/or the Target, as applicable). Fund IV shall have the right to designate the remaining directors in proportion to its Pro Rata Share.

(c) Each director designated by the Co-Investment Vehicle shall have the same rights, duties, and protections as the other directors, including rights to receive information, attend and participate in board meetings, and vote on matters presented to the board.

(d) The organizational documents of AcquisitionCo (and, to the extent applicable, the Target) shall contain provisions giving effect to the board representation rights set forth in this Section 5.04, including provisions relating to director indemnification and directors' and officers' liability insurance coverage.

ARTICLE VI — EPA AND REGULATORY MATTERS

Section 6.01 — Equity Purchase Agreement.

(a) The Parties acknowledge that the EPA is to be executed on or about September 15, 2022, among the Selling Shareholders, the Target, and AcquisitionCo. The Selling Shareholders under the EPA are:

(i) Timberline Growth Equity Fund III, LP, holding sixty-two percent (62%) of the outstanding equity interests of the Target;

(ii) Weir Family Trust, holding eighteen percent (18%) of the outstanding equity interests of the Target; and

(iii) Management Rollover Pool, holding twenty percent (20%) of the outstanding equity interests of the Target, with the expectation that fifty percent (50%) of such interest (representing approximately ten percent (10%) of total post-closing equity) will be rolled over by members of the Target's management team.

(b) The EPA shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.

(c) The aggregate enterprise value of the Target under the EPA is One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000), which implies an EV/EBITDA multiple of approximately 14.1x based on the Target's fiscal year 2021 EBITDA of One Hundred Thirty-Eight Million Dollars ($138,000,000) (derived from fiscal year 2021 revenue of Four Hundred Eighty-Seven Million Dollars ($487,000,000)), as audited by Halstead & Greer LLP.

(d) The GP shall be responsible for the negotiation, execution, and administration of the EPA on behalf of AcquisitionCo and the Parties, subject to the consent requirements set forth in Section 5.02.

Section 6.02 — Representations and Warranties.

(a) Each Party's exposure under the representations and warranties set forth in the EPA (including, without limitation, indemnification obligations arising from breaches thereof) shall be allocated between the Parties in proportion to their respective Pro Rata Shares.

(b) The R&W Insurance Policy (Northgate Specialty Insurance Co., Policy No. NSW-RI-2022-09814), with a coverage limit of One Hundred Ninety-Five Million Dollars ($195,000,000) (representing ten percent (10%) of the Enterprise Value), shall benefit both Parties on a pro rata basis, and any insurance proceeds received under the R&W Insurance Policy shall be allocated to the Parties in proportion to their respective Pro Rata Shares. Each Party shall cooperate with the other Party and with the GP in connection with the prosecution of any claim under the R&W Insurance Policy.

(c) To the extent that the EPA provides for a retention, deductible, or self-insured retention under the R&W Insurance Policy, such retention amount shall be borne by the Parties in proportion to their respective Pro Rata Shares.

Section 6.03 — Regulatory Approvals.

(a) The Parties acknowledge that the following regulatory approvals are required for the consummation of the Acquisition:

(i) FERC Approval. Approval under Section 203 of the Federal Power Act for the transfer of the Target's hydroelectric licenses, filed with the Federal Energy Regulatory Commission on October 19, 2022, under FERC Docket No. EC22-143-000;

(ii) OPUC Approval. Approval by the Oregon Public Utility Commission for the transfer of utility assets, filed on October 14, 2022, under OPUC Docket No. UM-2287; and

(iii) CFIUS Clearance. A voluntary notice was submitted to the Committee on Foreign Investment in the United States, which was acknowledged on September 20, 2022. Based on the composition of the investors and the nature of the Target's business, the Parties understand that no further action by CFIUS is required, though CFIUS retains the right to initiate a review at any time.

(b) The GP shall be responsible for managing the regulatory approval process on behalf of both Parties, including the preparation, filing, and prosecution of all necessary applications, notices, and filings.

(c) Costs and expenses associated with regulatory filings and related proceedings (including, without limitation, filing fees, regulatory counsel fees, expert witness fees, and costs of responding to information requests) shall be allocated between the Parties in proportion to their respective Pro Rata Shares.

EXECUTION VERSION
CO-INVESTMENT ALLOCATION AGREEMENT
by and between
MERIDIAN INFRASTRUCTURE PARTNERS FUND IV, LP a Delaware limited partnership
and
ICM CASCADIA CO-INVEST, LP a Delaware limited partnership (EIN: 88-3921457)
Dated as of July 29, 2022
CO-INVESTMENT ALLOCATION AGREEMENT
This Co-Investment Allocation Agreement (this "Agreement") is entered into as of July 29, 2022, by and between:
(1) Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership ("Fund IV"); and
(2) ICM Cascadia Co-Invest, LP, a Delaware limited partnership (EIN: 88-3921457) (the "Co-Invest" or the "Co-Investment Vehicle").
Fund IV and the Co-Investment Vehicle are referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS:
A. Fund IV is a Delaware limited partnership with total committed capital of Six Billion Two Hundred Million Dollars ($6,200,000,000) (vintage 2021), managed by its general partner, Meridian Infrastructure GP IV LLC, a Delaware limited liability company (the "GP"), and is engaged in the business of targeting and making investments in North American energy, water, transport, and digital infrastructure assets and platforms;
B. The Co-Investment Vehicle is a Delaware limited partnership formed on July 22, 2022 (Delaware Secretary of State File Number 7439218), with the GP serving as general partner (holding a 0.01% general partner interest, representing a commitment of Thirty Thousand Dollars ($30,000)) and Ironside Capital Management LP, a Delaware limited partnership ("Ironside"), serving as sole limited partner (holding a 99.99% limited partner interest, representing a commitment of Two Hundred Ninety-Nine Million Nine Hundred Seventy Thousand Dollars ($299,970,000)), with total committed capital of Three Hundred Million Dollars ($300,000,000);
C. Fund IV and the Co-Investment Vehicle desire to co-invest in the acquisition (the "Acquisition") of one hundred percent (100%) of the outstanding equity interests of Cascadia Renewables Holdings, Inc., an Oregon corporation (the "Target" or "Cascadia"), through a newly formed acquisition subsidiary, Cascadia Acquisition Corp., a Delaware corporation ("AcquisitionCo"), which will be jointly and indirectly owned by Fund IV and the Co-Investment Vehicle in proportion to their respective equity commitments;
D. The aggregate enterprise value of the Target has been agreed at One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) pursuant to the Equity Purchase Agreement to be entered into among the Selling Shareholders, the Target, and AcquisitionCo (the "EPA");
E. The equity value of the Target is estimated at One Billion Fifty Million Dollars ($1,050,000,000), representing the enterprise value of One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) less approximately Nine Hundred Million Dollars ($900,000,000) of net debt at the Target level;
F. The Parties desire to set forth their respective rights and obligations with respect to the allocation of the co-investment, including their respective equity commitments, capital contributions, cost sharing, governance rights, and related matters, all on the terms and subject to the conditions set forth herein; and
G. The Acquisition will be financed in part with (i) a Nine Hundred Seventy-Five Million Dollar ($975,000,000) senior secured term loan facility and (ii) a One Hundred Fifty Million Dollar ($150,000,000) revolving credit facility, in each case arranged by Atlas National Bank, N.A., as lead arranger and administrative agent, with Pinnacle Credit Partners LLC as co-lender, pursuant to a debt commitment letter dated August 30, 2022 (the "Debt Commitment Letter"). The total sources of financing for the Acquisition are Two Billion Twenty-Five Million Dollars ($2,025,000,000), consisting of One Billion Fifty Million Dollars ($1,050,000,000) of equity and Nine Hundred Seventy-Five Million Dollars ($975,000,000) of term loan proceeds. The total uses are Two Billion Twenty-Five Million Dollars ($2,025,000,000), consisting of One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) of enterprise value, Fifty Million Dollars ($50,000,000) of estimated transaction costs, and Twenty-Five Million Dollars ($25,000,000) of working-capital adjustment escrow.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.01 — Definitions.
As used in this Agreement, the following terms shall have the meanings set forth below:
"Acquisition" means the acquisition of one hundred percent (100%) of the outstanding equity interests of Cascadia Renewables Holdings, Inc. by AcquisitionCo, on the terms and subject to the conditions set forth in the EPA.
"AcquisitionCo" means Cascadia Acquisition Corp., a Delaware corporation formed for the purpose of consummating the Acquisition and to be wholly owned, directly or indirectly, by Fund IV and the Co-Investment Vehicle in proportion to their respective Pro Rata Shares.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including 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 a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Agreement" means this Co-Investment Allocation Agreement, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Bull Run Concession" means the forty (40)-year water-treatment concession for the Bull Run Filtration Project between the Target and the Portland Metropolitan Water District, originally executed in or about 2018, with annual revenue of approximately Sixty-Four Million Dollars ($64,000,000), as more fully described in Section 6.04.
"Capital Contribution" means any equity capital contributed (or required to be contributed) by a Party to AcquisitionCo (or its direct or indirect parent holding entity) pursuant to a capital call made in accordance with Article III.
"Cascadia" or "Target" means Cascadia Renewables Holdings, Inc., an Oregon corporation, headquartered at 1100 SW Sixth Avenue, Suite 1800, Portland, Oregon 97204.
"Co-Invest Commitment" means Three Hundred Million Dollars ($300,000,000), representing the aggregate equity commitment of the Co-Investment Vehicle to the Acquisition.
"Co-Invest Percentage" means twenty-eight and fifty-seven one-hundredths percent (28.57%), calculated as the Co-Invest Commitment divided by the Total Equity Commitment ($300,000,000 ÷ $1,050,000,000).
"Debt Commitment Letter" means the commitment letter to be dated on or about August 30, 2022, issued by Atlas National Bank, N.A., as lead arranger and administrative agent, and Pinnacle Credit Partners LLC, as co-lender, providing for the Senior Secured Term Loan and the Revolving Credit Facility, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Enterprise Value" means One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000), being the aggregate enterprise value of the Target as set forth in the EPA.
"EPA" or "Equity Purchase Agreement" means the equity purchase agreement to be entered into among the Selling Shareholders, the Target, and AcquisitionCo, to be dated on or about September 15, 2022, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and subject to Section 5.02 of this Agreement.
"Equity Value" means One Billion Fifty Million Dollars ($1,050,000,000), representing the Enterprise Value less the Net Debt.
"Fund IV Commitment" means Seven Hundred Fifty Million Dollars ($750,000,000), representing the aggregate equity commitment of Fund IV to the Acquisition.
"Fund IV Percentage" means seventy-one and forty-three one-hundredths percent (71.43%), calculated as the Fund IV Commitment divided by the Total Equity Commitment ($750,000,000 ÷ $1,050,000,000).
"GP" means Meridian Infrastructure GP IV LLC, a Delaware limited liability company, acting in its capacity as general partner of each of Fund IV and the Co-Investment Vehicle.
"Ironside" means Ironside Capital Management LP, a Delaware limited partnership registered as an investment adviser with the Securities and Exchange Commission, acting in its capacity as the sole limited partner of the Co-Investment Vehicle.
"LP Agreement" means the Limited Partnership Agreement of ICM Cascadia Co-Invest, LP, dated as of July 29, 2022, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Material Impediment Event" has the meaning given to such term in Section 7.04 of the LP Agreement.
"Net Debt" means the aggregate indebtedness of the Target and its subsidiaries, net of cash and cash equivalents, estimated as of the date hereof to be approximately Nine Hundred Million Dollars ($900,000,000).
"Parties" means Fund IV and the Co-Investment Vehicle, collectively, and "Party" means either of them individually.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated association, governmental authority, or other entity.
"Pro Rata Share" means, with respect to each Party, such Party's percentage of the Total Equity Commitment, as set forth in Section 2.01 and Schedule A (i.e., 71.43% for Fund IV and 28.57% for the Co-Investment Vehicle).
"R&W Insurance Policy" means the representations and warranties insurance policy issued (or to be issued) by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814), with a coverage limit of One Hundred Ninety-Five Million Dollars ($195,000,000), representing ten percent (10%) of the Enterprise Value.
"Revolving Credit Facility" means the One Hundred Fifty Million Dollar ($150,000,000) revolving credit facility to be provided by Atlas National Bank, N.A. pursuant to the Debt Commitment Letter.
"Selling Shareholders" means, collectively, (i) Timberline Growth Equity Fund III, LP, holding sixty-two percent (62%) of the outstanding equity of the Target, (ii) the Weir Family Trust, holding eighteen percent (18%) of the outstanding equity of the Target, and (iii) the Management Rollover Pool, holding twenty percent (20%) of the outstanding equity of the Target (with an expected fifty percent (50%) rollover by the Management Rollover Pool, representing approximately ten percent (10%) of total post-closing equity).
"Senior Secured Term Loan" means the Nine Hundred Seventy-Five Million Dollar ($975,000,000) senior secured term loan to be provided pursuant to the Debt Commitment Letter, with Atlas National Bank, N.A. providing Six Hundred Fifty Million Dollars ($650,000,000) and Pinnacle Credit Partners LLC providing Three Hundred Twenty-Five Million Dollars ($325,000,000).
"Side Letter" means the side letter agreement between Ironside and the GP, dated as of July 29, 2022, setting forth certain supplemental terms applicable to the Co-Investment Vehicle, as the same may be amended, supplemented, or otherwise modified from time to time.
"Total Equity Commitment" means One Billion Fifty Million Dollars ($1,050,000,000), being the aggregate of the Fund IV Commitment and the Co-Invest Commitment.
"Transaction Costs" means all fees, costs, and expenses incurred by or on behalf of the Parties, AcquisitionCo, or the Target in connection with the Acquisition, estimated in the aggregate at Fifty Million Dollars ($50,000,000), including legal fees, accounting and advisory fees, financing fees, filing fees, regulatory counsel fees, insurance premiums, and other customary transaction costs.
"Working-Capital Escrow" means the Twenty-Five Million Dollar ($25,000,000) escrow deposit required under the EPA to secure post-closing working-capital adjustments.
Section 1.02 — Interpretation.
Unless the context otherwise requires:
(a) Words importing the singular include the plural and vice versa, and words importing any gender include all genders.
(b) References to "Sections," "Articles," "Schedules," and "Exhibits" are to sections, articles, schedules, and exhibits of this Agreement, unless otherwise specified.
(c) References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms, unless otherwise expressly provided.
(d) The words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement.
(e) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(f) References to "days" mean calendar days unless "business days" is expressly specified, and "business days" means any day other than a Saturday, Sunday, or day on which commercial banks in New York, New York or Boston, Massachusetts are authorized or required by law to close.
(g) References to any statute, rule, or regulation mean such statute, rule, or regulation as amended, modified, supplemented, or replaced from time to time (and, in the case of statutes, include any rules and regulations promulgated under such statute), and references to any section of any statute, rule, or regulation include any successor to such section.
(h) The headings and captions in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.
(i) References to "$" or "dollars" are to the lawful currency of the United States of America.
(j) Any term defined in the EPA and used but not otherwise defined herein shall have the meaning assigned to it in the EPA, provided that such term shall be interpreted in accordance with the laws of the State of Delaware.
ARTICLE II — CO-INVESTMENT ALLOCATION
Section 2.01 — Allocation Percentages.
The Parties shall participate in the Acquisition in accordance with their respective Pro Rata Shares, as follows:
Each Party shall participate in the Acquisition (including, without limitation, the funding of equity contributions, the allocation of transaction costs, the allocation of distributions, and the allocation of risks and benefits) in accordance with its Pro Rata Share, except as otherwise expressly provided in this Agreement. The allocation percentages set forth in this Section 2.01 reflect the negotiated agreement of the Parties and have been determined with reference to the Total Equity Commitment of One Billion Fifty Million Dollars ($1,050,000,000).
Section 2.02 — AcquisitionCo Ownership.
(a) AcquisitionCo shall be a Delaware corporation wholly owned, directly or indirectly, by Fund IV and the Co-Investment Vehicle in proportion to their respective Pro Rata Shares. The organizational documents of AcquisitionCo (and any intermediate holding entity or entities interposed between AcquisitionCo and the Parties) shall reflect the ownership interests set forth in this Section 2.02.
(b) Fund IV shall hold seventy-one and forty-three one-hundredths percent (71.43%) of the outstanding equity of AcquisitionCo (or its direct parent holding entity, if applicable).
(c) The Co-Investment Vehicle shall hold twenty-eight and fifty-seven one-hundredths percent (28.57%) of the outstanding equity of AcquisitionCo (or its direct parent holding entity, if applicable).
(d) The GP shall take all actions necessary or appropriate to cause the organizational documents of AcquisitionCo (and any intermediate holding entity) to be consistent with and to give effect to the ownership structure and allocation percentages set forth in this Agreement.
Section 2.03 — Equity Contributions to AcquisitionCo.
(a) Each Party shall fund its Pro Rata Share of the Total Equity Commitment to AcquisitionCo (or such intermediate holding entity as the GP may designate) at or prior to the closing of the Acquisition, in accordance with the capital call procedures set forth in Article III.
(b) The equity contributions of each Party shall be as follows:
(i) Fund IV: Seven Hundred Fifty Million Dollars ($750,000,000); and
(ii) Co-Investment Vehicle: Three Hundred Million Dollars ($300,000,000).
(c) All funding shall be made by wire transfer of immediately available funds to such account or accounts as shall be designated by the GP in the applicable capital call notice. The GP shall provide wire transfer instructions to each Party no later than five (5) business days prior to the funding date specified in the applicable capital call notice.
(d) In the event that the Total Equity Commitment is increased or decreased as a result of post-signing adjustments to the EPA (including, without limitation, adjustments to the purchase price, changes in the estimated Net Debt, or changes in Transaction Costs), such increase or decrease shall be allocated between the Parties in proportion to their respective Pro Rata Shares, and each Party's equity contribution shall be adjusted accordingly, subject to Section 2.04.
Section 2.04 — No Adjustment to Allocation Percentages.
(a) The allocation percentages set forth in Section 2.01 are fixed as of the date hereof and shall not be adjusted, modified, or varied except with the prior written consent of both Parties.
(b) Neither Party may transfer, assign, or otherwise dispose of its allocation percentage or any portion thereof without the other Party's prior written consent, subject to the transfer provisions set forth in Article IX.
(c) For the avoidance of doubt, any increase or decrease in the Total Equity Commitment resulting from post-signing adjustments to the EPA shall not alter the allocation percentages, but shall instead be reflected as a proportional increase or decrease in each Party's absolute commitment amount.
ARTICLE III — CAPITAL CALLS AND FUNDING
Section 3.01 — Capital Call Mechanics.
(a) Capital calls on the Co-Investment Vehicle shall be made by the GP in its capacity as general partner of the Co-Investment Vehicle, in accordance with Section 4.01 of the LP Agreement. Each capital call notice shall specify the amount of the capital call, the purpose for which the capital is required, the funding date, and wire transfer instructions.
(b) Capital calls on Fund IV shall be made by the GP in its capacity as general partner of Fund IV, in accordance with the applicable provisions of the Fund IV limited partnership agreement.
(c) The GP shall use commercially reasonable efforts to coordinate capital calls on both Parties such that each Party funds its Pro Rata Share of any required equity contribution simultaneously or as nearly simultaneously as practicable. In no event shall either Party be required to fund its Pro Rata Share of any equity contribution unless the other Party is simultaneously funding (or has simultaneously funded) its corresponding Pro Rata Share, except as otherwise provided in Section 3.03.
(d) Each capital call notice shall be delivered in writing (including by electronic mail) to each Party at the address set forth in Section 14.05 (or such other address as may have been designated by such Party in accordance with Section 14.05) and shall be deemed effective upon delivery.
Section 3.02 — Timing of Contributions.
(a) Each Party shall fund its Capital Contribution within ten (10) business days of receipt of a capital call notice from the GP, or within such shorter period as may be required by the EPA, the Debt Commitment Letter, or applicable law or regulation. In the event that a shorter funding period is required, the GP shall use commercially reasonable efforts to provide each Party with as much advance notice as practicable under the circumstances.
(b) The Parties acknowledge that an initial capital call of Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000) was issued on the Co-Investment Vehicle on August 15, 2022, representing seven and one-half percent (7.5%) of the Co-Invest Commitment. The proceeds of such initial capital call were applied as follows:
(i) Organizational expenses of the Co-Investment Vehicle: $285,000;
(ii) Placement-agent fee payable to Rivermark Capital Markets Inc.: $1,050,000 (calculated at 0.35% of the Co-Investment Vehicle's committed capital of $300,000,000);
(iii) R&W insurance premium deposit payable to Northgate Specialty Insurance Co.: $4,875,000 (calculated at a 2.5% rate on the $195,000,000 policy limit);
(iv) Due-diligence costs and deposits (including legal, accounting, environmental, engineering, and regulatory advisory fees): $12,790,000; and
(v) Working-capital reserve for the Co-Investment Vehicle: $3,500,000.
(c) The GP shall maintain a detailed record of all Capital Contributions made by each Party and shall make such records available to each Party upon reasonable request. The GP shall provide quarterly statements to each Party summarizing all Capital Contributions made, amounts drawn, and remaining unfunded commitments.
Section 3.03 — Failure to Fund.
(a) If either Party (the "Defaulting Party") fails to fund all or any portion of its Capital Contribution when due in accordance with a capital call notice (the "Default Amount"), the GP shall promptly notify the other Party (the "Non-Defaulting Party") of such failure.
(b) Upon the occurrence of a funding default, the following remedies shall be available to the Non-Defaulting Party, in addition to any other remedies available at law or in equity:
(i) Default Interest. The Default Amount shall accrue interest at a rate equal to the lesser of (A) eighteen percent (18%) per annum compounded monthly and (B) the maximum rate permitted by applicable law, from the date on which such Capital Contribution was due until the date on which it is paid in full.
(ii) Dilution. The allocation percentage of the Defaulting Party may, at the election of the Non-Defaulting Party (with the consent of the GP), be reduced (and the allocation percentage of the Non-Defaulting Party correspondingly increased) to reflect the relative funded capital of the Parties following such default, calculated on a dollar-for-dollar basis.
(iii) Forced Transfer. If the Defaulting Party fails to cure such default within thirty (30) days of receipt of written notice from the GP, the Non-Defaulting Party shall have the right (but not the obligation) to acquire the Defaulting Party's interest in the co-investment at a price equal to the lesser of (A) the Defaulting Party's aggregate funded Capital Contributions less any prior distributions received by the Defaulting Party and (B) the fair market value of the Defaulting Party's interest as reasonably determined by the GP.
(c) The default remedies set forth in this Section 3.03 are in addition to, and not in limitation of, the default provisions set forth in the LP Agreement and the Fund IV limited partnership agreement, as applicable. In the event of any conflict between this Section 3.03 and the applicable partnership agreement, the terms of this Agreement shall control with respect to matters relating to the co-investment allocation.
(d) The Non-Defaulting Party shall not be obligated to fund any portion of the Defaulting Party's unfunded commitment but may elect to do so in its sole discretion, subject to adjustment of the allocation percentages as set forth above.
Section 3.04 — Capital Call Suspension.
(a) In the event the GP declares a Material Impediment Event under Section 7.04 of the LP Agreement, capital calls on the Co-Investment Vehicle shall be suspended effective immediately upon delivery of written notice to Ironside and the Co-Investment Vehicle.
(b) During any period of capital call suspension, Fund IV's parallel capital call obligations with respect to the Acquisition shall also be suspended, and no Party shall be required to fund additional equity contributions to AcquisitionCo or any intermediate holding entity until such time as the suspension is lifted by the GP or the Co-Investment Vehicle is wound down in accordance with Article VIII.
(c) During any period of suspension, the GP shall continue to manage and preserve the assets and interests of the Parties related to the Acquisition in accordance with the applicable standard of care set forth in the LP Agreement and shall keep the Parties informed of material developments in accordance with Section 5.03.
(d) The GP shall have the discretion to lift a capital call suspension at any time upon written notice to the Parties, provided that the circumstances giving rise to the Material Impediment Event have been resolved or sufficiently mitigated to permit the resumption of capital calls without material risk to the Parties. Reactivation of the Acquisition following a period of dormancy shall be subject to the consent requirements of Section 5.02.
ARTICLE IV — TRANSACTION COSTS AND EXPENSES
Section 4.01 — Shared Transaction Costs.
(a) Transaction Costs and expenses incurred in connection with the Acquisition (estimated at Fifty Million Dollars ($50,000,000) in the aggregate) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the Parties:
(i) Fund IV: 71.43% of shared Transaction Costs; and
(ii) Co-Investment Vehicle: 28.57% of shared Transaction Costs.
(b) Shared Transaction Costs shall include, without limitation: (i) legal fees and expenses of counsel to AcquisitionCo and the GP (including Breckenridge Sloane & Pratt LLP); (ii) accounting, tax, and advisory fees (including fees of Halstead & Greer LLP and Blackthorn Advisory Group LLC); (iii) regulatory filing fees and related expenses (including FERC, OPUC, and CFIUS filing fees); (iv) due-diligence costs (including technical, environmental, engineering, and market studies); (v) title and survey costs; (vi) lender-related fees and expenses; (vii) insurance costs allocated on a shared basis; and (viii) any break-up fees, reverse termination fees, or similar payments that may become payable under the EPA.
(c) The GP shall maintain an itemized accounting of all shared Transaction Costs and shall provide each Party with periodic statements (not less frequently than monthly during the active transaction period) summarizing such costs and each Party's allocable share thereof.
Section 4.02 — Vehicle-Specific Costs.
(a) Costs and expenses that are specific to the formation, organization, and ongoing operation of the Co-Investment Vehicle shall be borne solely by the Co-Investment Vehicle and shall not be allocated to, or shared by, Fund IV. Such vehicle-specific costs include, without limitation:
(i) Organizational expenses (including state filing fees, formation legal fees, and related costs);
(ii) Placement-agent fees payable to Rivermark Capital Markets Inc. pursuant to the Placement Agent Agreement;
(iii) Fund administration fees payable to the fund administrator;
(iv) Delaware franchise taxes and annual report fees;
(v) Annual audit fees and tax preparation fees (including fees of Kendrick Thorne & Associates LLP for the preparation of K-1 schedules and related tax returns); and
(vi) Any other costs and expenses that are attributable solely to the Co-Investment Vehicle and are not otherwise shared Transaction Costs.
(b) The Parties acknowledge that during any period of dormancy (as described in Article VIII), the annualized operating expenses of the Co-Investment Vehicle are estimated at approximately One Hundred Eighty-Five Thousand Dollars ($185,000), which amount shall be borne solely by the Co-Investment Vehicle.
Section 4.03 — Financing Costs.
(a) Costs and expenses associated with the Debt Commitment Letter and related financing arrangements (including, without limitation, commitment fees, structuring fees, arrangement fees, legal fees of lenders' counsel, and any extension or amendment fees) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the GP.
(b) The Parties acknowledge that a debt commitment extension fee in the amount of Two Million Four Hundred Thirty-Seven Thousand Five Hundred Dollars ($2,437,500), calculated as 0.25% of the Nine Hundred Seventy-Five Million Dollar ($975,000,000) Senior Secured Term Loan, was paid by Fund IV in connection with an extension of the Debt Commitment Letter. The allocation of such extension fee between the Parties shall be determined by the GP, and to the extent that such fee is determined to be a shared Transaction Cost, the Co-Investment Vehicle shall reimburse Fund IV for its Pro Rata Share (28.57%) of such fee promptly upon written notice from the GP.
(c) For the avoidance of doubt, costs and expenses associated with the Revolving Credit Facility (including, without limitation, unused commitment fees and any drawings thereunder) shall be treated as operating expenses of the Target and AcquisitionCo and shall not be allocated to the Parties under this Agreement.
Section 4.04 — R&W Insurance Costs.
(a) The Parties acknowledge that the R&W insurance premium deposit of Four Million Eight Hundred Seventy-Five Thousand Dollars ($4,875,000), payable to Northgate Specialty Insurance Co. in connection with the R&W Insurance Policy (Policy No. NSW-RI-2022-09814), was paid on September 2, 2022, and was funded from the Co-Investment Vehicle's initial capital call proceeds referenced in Section 3.02(b)(iii).
(b) Any additional R&W insurance premiums, endorsement fees, or related costs that may be incurred in connection with the R&W Insurance Policy (including, without limitation, costs of extending or amending the policy or obtaining additional coverage) shall be allocated between the Parties in proportion to their respective Pro Rata Shares. Fund IV shall reimburse the Co-Investment Vehicle for Fund IV's Pro Rata Share (71.43%) of the initial R&W insurance premium deposit promptly following the GP's allocation determination.
(c) The Parties acknowledge and agree that, pursuant to the Side Letter dated January 20, 2023, the coverage period under the R&W Insurance Policy has been tolled during the period of dormancy. The costs, if any, associated with such tolling arrangement shall be allocated between the Parties in proportion to their respective Pro Rata Shares.
Section 4.05 — Working-Capital Escrow.
The working-capital adjustment escrow of Twenty-Five Million Dollars ($25,000,000), as required under the EPA, shall be funded by the Parties in proportion to their respective Pro Rata Shares as follows:
(i) Fund IV: 71.43% = $17,857,500; and
(ii) Co-Investment Vehicle: 28.57% = $7,142,500.
Any release, return, or distribution from the Working-Capital Escrow shall be allocated to the Parties in proportion to their respective Pro Rata Shares. In the event that any portion of the Working-Capital Escrow is forfeited or applied to satisfy working-capital adjustment claims under the EPA, the resulting loss shall be borne by the Parties in proportion to their respective Pro Rata Shares.
ARTICLE V — GOVERNANCE AND DECISION-MAKING
Section 5.01 — GP Authority.
(a) The GP shall have sole and exclusive authority and responsibility to manage the Acquisition on behalf of both Parties, including, without limitation, the negotiation, execution, and performance of the EPA, the Debt Commitment Letter, and all other transaction documents, subject in each case to the terms and conditions of the LP Agreement, the Side Letter, and this Agreement.
(b) The GP's managers and officers who are authorized to act on behalf of the GP for purposes of decision-making with respect to the Acquisition and the co-investment are:
(i) David R. Hargreaves, Managing Partner;
(ii) Lillian Fong, Partner, Portfolio; and
(iii) Graham Whitfield, Partner, Operations.
(c) The GP shall exercise its authority under this Agreement in good faith, with the care, skill, and diligence that a prudent person acting in a like capacity would exercise under similar circumstances, and in a manner consistent with its fiduciary duties under the LP Agreement, the Fund IV partnership agreement, and applicable law.
Section 5.02 — Major Decisions Requiring Co-Invest Consent.
Notwithstanding the authority of the GP set forth in Section 5.01, the following decisions shall require the prior written consent of the Co-Investment Vehicle (acting through Ironside as its sole limited partner), which consent shall not be unreasonably withheld, conditioned, or delayed:
(a) Any material amendment, modification, or waiver of any provision of the EPA, including any change to the purchase price, the representations and warranties, or the indemnification provisions;
(b) Any material amendment, modification, or waiver of the Debt Commitment Letter or any replacement financing arrangement, including any material change to the pricing, tenor, covenants, or conditions precedent of the Senior Secured Term Loan or the Revolving Credit Facility;
(c) Any change to the allocation percentages set forth in Section 2.01 of this Agreement;
(d) Any settlement, compromise, or resolution of claims, disputes, or litigation relating to the Acquisition in excess of Five Million Dollars ($5,000,000) in the aggregate;
(e) The entry into any post-closing material transaction, contract, or agreement with respect to the Target or its subsidiaries that would disproportionately affect the economic interests or rights of the Co-Investment Vehicle relative to Fund IV;
(f) Any decision to terminate, abandon, or otherwise cease pursuit of the Acquisition, except where such termination is mandatory under the terms of the EPA or is required by applicable law or regulation;
(g) The exercise of any termination right under the EPA, including any right to terminate on account of a failure of a condition precedent or the occurrence of a material adverse effect;
(h) Any decision to reactivate the Acquisition following a period of dormancy, including the lifting of any capital call suspension; and
(i) Any material amendment or modification of this Agreement.
The GP shall provide the Co-Investment Vehicle (through Ironside) with reasonable advance notice of any proposed action requiring consent under this Section 5.02, together with such information as may be reasonably necessary for the Co-Investment Vehicle to evaluate the proposed action. The Co-Investment Vehicle shall respond to any such request for consent within ten (10) business days of receipt of such notice (or such shorter period as may be required by the circumstances), and failure to respond within such period shall be deemed to constitute consent.
Section 5.03 — Information Rights.
(a) The GP shall provide the Co-Investment Vehicle with quarterly status reports during any period of dormancy (as described in Article VIII), including a summary of (i) the status of the Acquisition and any regulatory proceedings, (ii) the financial condition and operating performance of the Target (to the extent known), (iii) the status of the Debt Commitment Letter and related financing, (iv) material developments affecting the Target or the Acquisition, and (v) the Co-Investment Vehicle's funded and unfunded commitments and operating expenses. Such quarterly reports shall be consistent in form and substance with the reporting obligations set forth in the Side Letter.
(b) The GP shall provide prompt written notice to the Co-Investment Vehicle (through Ironside) of any of the following events:
(i) The occurrence or anticipated occurrence of a Material Impediment Event;
(ii) The occurrence of a Material Adverse Effect (as defined in the EPA) with respect to the Target;
(iii) Any material development, proceeding, or event affecting the Acquisition, the EPA, the Debt Commitment Letter, or the regulatory approvals contemplated by Article VI;
(iv) The receipt of any notice of default or termination under the EPA or the Debt Commitment Letter;
(v) Any actual or threatened litigation, regulatory inquiry, or governmental proceeding that would reasonably be expected to have a material effect on the Acquisition or the Target; and
(vi) Any material change in the financial condition or operations of the Target.
(c) Ironside shall have reasonable access, upon reasonable advance notice, to the books, records, and files of the Co-Investment Vehicle maintained by the GP and the fund administrator, subject to customary confidentiality restrictions.
Section 5.04 — Board Representation.
(a) Upon the closing of the Acquisition, the board of directors of AcquisitionCo (and, to the extent within the control of the Parties, the board of directors of the Target) shall be constituted in a manner that reflects the Pro Rata Shares of the Parties.
(b) Without limiting the generality of the foregoing, the Co-Investment Vehicle (acting through Ironside) shall have the right to designate at least one (1) director to serve on the board of directors of AcquisitionCo (and/or the Target, as applicable). Fund IV shall have the right to designate the remaining directors in proportion to its Pro Rata Share.
(c) Each director designated by the Co-Investment Vehicle shall have the same rights, duties, and protections as the other directors, including rights to receive information, attend and participate in board meetings, and vote on matters presented to the board.
(d) The organizational documents of AcquisitionCo (and, to the extent applicable, the Target) shall contain provisions giving effect to the board representation rights set forth in this Section 5.04, including provisions relating to director indemnification and directors' and officers' liability insurance coverage.
ARTICLE VI — EPA AND REGULATORY MATTERS
Section 6.01 — Equity Purchase Agreement.
(a) The Parties acknowledge that the EPA is to be executed on or about September 15, 2022, among the Selling Shareholders, the Target, and AcquisitionCo. The Selling Shareholders under the EPA are:
(i) Timberline Growth Equity Fund III, LP, holding sixty-two percent (62%) of the outstanding equity interests of the Target;
(ii) Weir Family Trust, holding eighteen percent (18%) of the outstanding equity interests of the Target; and
(iii) Management Rollover Pool, holding twenty percent (20%) of the outstanding equity interests of the Target, with the expectation that fifty percent (50%) of such interest (representing approximately ten percent (10%) of total post-closing equity) will be rolled over by members of the Target's management team.
(b) The EPA shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.
(c) The aggregate enterprise value of the Target under the EPA is One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000), which implies an EV/EBITDA multiple of approximately 14.1x based on the Target's fiscal year 2021 EBITDA of One Hundred Thirty-Eight Million Dollars ($138,000,000) (derived from fiscal year 2021 revenue of Four Hundred Eighty-Seven Million Dollars ($487,000,000)), as audited by Halstead & Greer LLP.
(d) The GP shall be responsible for the negotiation, execution, and administration of the EPA on behalf of AcquisitionCo and the Parties, subject to the consent requirements set forth in Section 5.02.
Section 6.02 — Representations and Warranties.
(a) Each Party's exposure under the representations and warranties set forth in the EPA (including, without limitation, indemnification obligations arising from breaches thereof) shall be allocated between the Parties in proportion to their respective Pro Rata Shares.
(b) The R&W Insurance Policy (Northgate Specialty Insurance Co., Policy No. NSW-RI-2022-09814), with a coverage limit of One Hundred Ninety-Five Million Dollars ($195,000,000) (representing ten percent (10%) of the Enterprise Value), shall benefit both Parties on a pro rata basis, and any insurance proceeds received under the R&W Insurance Policy shall be allocated to the Parties in proportion to their respective Pro Rata Shares. Each Party shall cooperate with the other Party and with the GP in connection with the prosecution of any claim under the R&W Insurance Policy.
(c) To the extent that the EPA provides for a retention, deductible, or self-insured retention under the R&W Insurance Policy, such retention amount shall be borne by the Parties in proportion to their respective Pro Rata Shares.
Section 6.03 — Regulatory Approvals.
(a) The Parties acknowledge that the following regulatory approvals are required for the consummation of the Acquisition:
(i) FERC Approval. Approval under Section 203 of the Federal Power Act for the transfer of the Target's hydroelectric licenses, filed with the Federal Energy Regulatory Commission on October 19, 2022, under FERC Docket No. EC22-143-000;
(ii) OPUC Approval. Approval by the Oregon Public Utility Commission for the transfer of utility assets, filed on October 14, 2022, under OPUC Docket No. UM-2287; and
(iii) CFIUS Clearance. A voluntary notice was submitted to the Committee on Foreign Investment in the United States, which was acknowledged on September 20, 2022. Based on the composition of the investors and the nature of the Target's business, the Parties understand that no further action by CFIUS is required, though CFIUS retains the right to initiate a review at any time.
(b) The GP shall be responsible for managing the regulatory approval process on behalf of both Parties, including the preparation, filing, and prosecution of all necessary applications, notices, and filings.
(c) Costs and expenses associated with regulatory filings and related proceedings (including, without limitation, filing fees, regulatory counsel fees, expert witness fees, and costs of responding to information requests) shall be allocated between the Parties in proportion to their respective Pro Rata Shares.
(d) Each Party shall cooperate with the other Party and with the GP in connection with the regulatory approval process, including by providing information reasonably requested by regulatory authorities and by refraining from taking any action that could reasonably be expected to delay or jeopardize the receipt of regulatory approvals.
Section 6.04 — Target Business.
(a) The Target, Cascadia Renewables Holdings, Inc., is an Oregon corporation headquartered in Portland, Oregon, that owns and operates a diversified portfolio of infrastructure assets, including:
(i) Fourteen (14) hydroelectric generating facilities located in the states of Oregon, Washington, and Idaho;
(ii) Six (6) wind farms located in the states of Oregon and Washington; and
(iii) Three (3) water-treatment concessions, including the Bull Run Concession, located in the state of Oregon.
(b) The Target's revenue is derived primarily from long-term power-purchase agreements with public utilities and municipal entities and municipal water-service contracts, with remaining weighted-average contract lives of approximately twenty-two (22) years.
(c) The Bull Run Filtration Project concession, which was entered into between the Target (or its predecessor) and the Portland Metropolitan Water District in or about 2018, is a forty (40)-year concession with annual revenue of approximately Sixty-Four Million Dollars ($64,000,000) and is a material contract of the Target. The Bull Run Concession is subject to specific regulatory and operational requirements, and the transfer of such concession in connection with the Acquisition may require the consent or approval of the Portland Metropolitan Water District.
(d) Each Party acknowledges that it has had the opportunity to conduct due diligence on the Target and its business, operations, assets, liabilities, and financial condition, and that its decision to participate in the Acquisition has been made on the basis of its own independent analysis and judgment.
Section 6.05 — Outside Date and Amendments.
(a) The original outside date for the closing of the Acquisition under the EPA is December 31, 2022, or such later date as may be agreed by the parties to the EPA in accordance with its terms.
(b) The Parties acknowledge that the EPA may be amended from time to time to extend the outside date or to make other modifications to its terms, in each case subject to the consent requirements set forth in Section 5.02 of this Agreement. The GP shall provide prompt written notice to the Co-Investment Vehicle of any proposed amendment to the EPA, together with copies of any proposed amendments or modifications, and shall not execute or deliver any such amendment without complying with Section 5.02.
(c) In the event that the outside date is extended, the GP shall review the continued availability and terms of the Debt Commitment Letter and the R&W Insurance Policy and shall promptly notify the Parties of any material changes, limitations, or expiration of coverage resulting from such extension.
ARTICLE VII — DISTRIBUTIONS
Section 7.01 — Distribution Waterfall.
(a) All distributions from AcquisitionCo (or any intermediate holding entity between AcquisitionCo and the Parties) in respect of the Acquisition, including, without limitation, distributions of operating cash flow, proceeds from any disposition, refinancing, or recapitalization of the Target or its assets, and any liquidating distributions, shall be allocated and paid to the Parties in proportion to their respective Pro Rata Shares:
(i) Fund IV: 71.43%; and
(ii) Co-Investment Vehicle: 28.57%.
(b) The GP shall cause AcquisitionCo (or any intermediate holding entity) to make distributions to the Parties at such times and in such amounts as the GP shall determine, consistent with applicable law, the organizational documents of AcquisitionCo, and the terms of any applicable credit agreements or other contractual obligations, including any restrictions on distributions contained in the Senior Secured Term Loan or the Revolving Credit Facility.
(c) No distribution shall be made to one Party without a corresponding distribution to the other Party in accordance with their respective Pro Rata Shares, except as expressly provided in this Agreement.
Section 7.02 — Carried Interest.
(a) The Co-Investment Vehicle is subject to a carried interest equal to ten percent (10%) of net profits payable to the GP, calculated above a preferred return hurdle of eight percent (8%) per annum, compounded quarterly, on contributed capital, as set forth in the LP Agreement and the Side Letter.
(b) Fund IV is subject to a carried interest equal to twenty percent (20%) of net profits payable to the GP, in accordance with the terms of the Fund IV partnership agreement.
(c) Distributions to each Party shall be net of their respective carried interest obligations, and the calculation and payment of carried interest shall be determined separately for each Party in accordance with the applicable partnership agreement.
(d) Nothing in this Agreement shall modify, alter, or affect the terms of the carried interest applicable to either Party under its respective partnership agreement, the LP Agreement, or the Side Letter.
Section 7.03 — Management Fee.
No management fee is payable by or on behalf of the Co-Investment Vehicle to the GP or any of its Affiliates, as provided in the Side Letter dated July 29, 2022. The Co-Investment Vehicle shall not bear, directly or indirectly, any portion of the management fee payable by Fund IV or its limited partners to the GP under the Fund IV partnership agreement.
Section 7.04 — Tax Distributions.
(a) The GP shall cause AcquisitionCo (or any intermediate holding entity) to make tax distributions to the Parties in amounts sufficient to cover each Party's estimated tax liabilities arising from allocations of taxable income or gain from AcquisitionCo and the Target, to the extent such tax distributions are permitted by applicable credit agreements, the organizational documents of AcquisitionCo, and other contractual obligations.
(b) Tax distributions shall be treated as advances against, and shall reduce, future distributions otherwise payable to the applicable Party under Section 7.01.
(c) The GP shall use commercially reasonable efforts to cause AcquisitionCo to make tax distributions in advance of the applicable estimated tax payment dates for each Party.
ARTICLE VIII — DORMANCY AND WIND-DOWN
Section 8.01 — Dormancy.
(a) In the event of a Material Impediment Event and the issuance of a capital-call suspension notice by the GP under Section 7.04 of the LP Agreement, the Parties' obligations to fund additional Capital Contributions to AcquisitionCo (or any intermediate holding entity) shall be suspended in accordance with Section 3.04.
(b) During any period of dormancy, this Agreement shall remain in full force and effect, and the rights and obligations of the Parties hereunder shall continue to be binding on the Parties, subject only to the suspension of capital call obligations as set forth in Section 3.04 and any specific dormancy provisions contained in the LP Agreement and the Side Letter.
(c) Neither Party may unilaterally terminate this Agreement during any period of dormancy. Termination of this Agreement during a period of dormancy shall require the mutual written consent of both Parties.
(d) During any period of dormancy, the GP shall continue to perform its obligations under Section 5.03 (Information Rights) and shall take such actions as are reasonably necessary to preserve and protect the interests of the Parties in connection with the Acquisition, including maintaining the effectiveness of the EPA, the Debt Commitment Letter, the R&W Insurance Policy, and any regulatory filings or approvals.
Section 8.02 — Wind-Down Election.
(a) If the dormancy of the Co-Investment Vehicle exceeds eighteen (18) consecutive months from the date of the initial capital-call suspension notice, Ironside (in its capacity as the sole limited partner of the Co-Investment Vehicle) shall have the right, but not the obligation, to elect a wind-down of the Co-Investment Vehicle in accordance with Section 7.04(c) of the LP Agreement (a "Wind-Down Election").
(b) A Wind-Down Election shall be exercised by Ironside by delivery of written notice to the GP (with a copy to Fund IV), specifying Ironside's election to wind down the Co-Investment Vehicle.
(c) Upon the exercise of a Wind-Down Election, the GP shall cause the Co-Investment Vehicle to wind down its affairs in an orderly manner, including (i) the disposition or transfer of any assets held by the Co-Investment Vehicle, (ii) the payment of all outstanding liabilities and obligations of the Co-Investment Vehicle, and (iii) the return of remaining capital to Ironside (and the GP, in respect of its general partner interest) in accordance with the LP Agreement and this Agreement.
(d) The allocation of remaining assets and the return of capital upon a Wind-Down Election shall be determined in accordance with this Agreement and the LP Agreement. Fund IV's obligations under this Agreement shall continue in full force and effect following a Wind-Down Election to the extent necessary to give effect to the wind-down and to settle any outstanding obligations between the Parties.
Section 8.03 — Reactivation.
(a) In the event the Parties determine to reactivate the Acquisition following a period of dormancy, this Agreement shall continue to govern the allocation of the co-investment on the same terms and subject to the same conditions as set forth herein, subject to any amendments agreed by the Parties in writing.
(b) Reactivation of the Acquisition shall require the prior written consent of the Co-Investment Vehicle (acting through Ironside) in accordance with Section 5.02(h), and the GP shall not lift any capital call suspension or issue new capital calls on the Co-Investment Vehicle without obtaining such consent.
(c) Upon reactivation, the GP shall promptly provide the Parties with an updated status report covering all material developments during the dormancy period, including the status of the EPA, the Debt Commitment Letter, the R&W Insurance Policy, and all regulatory proceedings.
Section 8.04 — Effect of Termination of EPA.
(a) In the event the EPA is terminated, whether by reason of (i) the expiration of the outside date (as may have been extended), (ii) the mutual agreement of the parties to the EPA, (iii) the exercise of a termination right by any party to the EPA, or (iv) any other termination event contemplated by the EPA, the Parties shall cooperate in good faith to wind down the co-investment arrangement in an orderly manner.
(b) Upon termination of the EPA, the GP shall promptly notify each Party and shall prepare a plan for the orderly wind-down of the co-investment, including the return of unfunded commitments, the distribution of any remaining assets, and the settlement of any outstanding obligations.
(c) Costs and expenses associated with the wind-down of the co-investment (including, without limitation, legal fees, accounting fees, regulatory de-filing costs, break-up fees, and reverse termination fees, if any) shall be allocated between the Parties in proportion to their respective Pro Rata Shares, unless otherwise agreed in writing by the Parties.
(d) Each Party shall be entitled to the return of its unfunded commitments and its Pro Rata Share of any remaining assets of the co-investment, net of wind-down costs and expenses, in accordance with this Agreement and the LP Agreement.
ARTICLE IX — TRANSFERS AND ASSIGNMENTS
Section 9.01 — Restrictions on Transfer.
(a) Neither Party may transfer, assign, sell, pledge, encumber, or otherwise dispose of, directly or indirectly, its interest in the co-investment, its allocation percentage, or any rights or obligations under this Agreement (whether by operation of law or otherwise) without the prior written consent of the other Party, which consent may be withheld in such other Party's sole and absolute discretion.
(b) Any purported transfer, assignment, sale, pledge, encumbrance, or other disposition in violation of this Section 9.01 shall be null and void ab initio and of no force or effect, and shall not bind or be recognized by the Parties, the GP, or AcquisitionCo.
(c) No consent to any transfer shall constitute a waiver of the requirement of consent with respect to any subsequent transfer.
Section 9.02 — Permitted Transfers.
(a) Notwithstanding Section 9.01, the following transfers shall be permitted without the consent of the other Party (each, a "Permitted Transfer"):
(i) A transfer by a Party of all or any portion of its interest in the co-investment to an Affiliate of such Party, provided that (A) the transferring Party shall have delivered prior written notice of such transfer to the other Party and the GP at least fifteen (15) business days in advance of the effective date of such transfer, (B) the transferee Affiliate shall have executed a joinder or assumption agreement in form and substance reasonably satisfactory to the other Party, pursuant to which the transferee Affiliate agrees to be bound by all of the terms and conditions of this Agreement, and (C) such transfer complies with all applicable securities laws and regulations; and
(ii) A transfer effected in connection with a restructuring, reorganization, or succession of a Party's investment program, provided that the resulting entity is controlled by the same Person or Persons that controlled the transferring Party immediately prior to such transfer, and the conditions set forth in clause (i)(A) through (C) above are satisfied.
(b) Notwithstanding any Permitted Transfer, the transferring Party shall remain jointly and severally liable with the transferee for all obligations of the transferring Party under this Agreement, including, without limitation, the obligation to fund Capital Contributions, the obligation to bear its Pro Rata Share of Transaction Costs, and any indemnification obligations under Article XII. Such continuing liability shall remain in effect unless and until the other Party provides a written release.
(c) Each Party shall promptly notify the other Party and the GP of any change in the ownership or control of such Party or any of its Affiliates that could reasonably be expected to affect the regulatory status of the Acquisition or the Parties' obligations under applicable law.
ARTICLE X — REPRESENTATIONS AND WARRANTIES
Section 10.01 — Mutual Representations and Warranties.
Each Party represents and warrants to the other Party, as of the date of this Agreement, as follows:
(a) Organization and Good Standing. Such Party is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease, and operate its properties and to carry on its business as presently conducted.
(b) Authority and Capacity. Such Party has full limited partnership power and authority to enter into, execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance of this Agreement by such Party have been duly authorized by all necessary partnership action on the part of such Party (including any required approval by its general partner or limited partners, as applicable).
(c) No Conflict. The execution, delivery, and performance by such Party of this Agreement do not and will not (i) conflict with, violate, or result in a breach of any provision of such Party's certificate of limited partnership, limited partnership agreement, or other organizational documents, (ii) conflict with, violate, or result in a breach of, or constitute a default (with or without notice or lapse of time or both) under, any applicable law, statute, regulation, rule, judgment, order, decree, or injunction binding upon such Party, or (iii) conflict with, violate, or result in a breach of, or constitute a default under, any material contract, agreement, or instrument to which such Party is a party or by which such Party or its properties are bound.
(d) Valid and Binding Obligation. This Agreement has been duly executed and delivered by such Party and constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity (whether considered in a proceeding at law or in equity).
(e) No Governmental Approval. No governmental approval, consent, authorization, order, registration, filing, or qualification is required to be obtained or made by such Party in connection with the execution, delivery, or performance of this Agreement, other than the regulatory approvals required for the consummation of the Acquisition as described in Section 6.03 and other filings and registrations that may be required under applicable securities laws.
Section 10.02 — Fund IV Representations.
In addition to the mutual representations and warranties set forth in Section 10.01, Fund IV represents and warrants to the Co-Investment Vehicle, as of the date of this Agreement, as follows:
(a) Fund IV has committed Seven Hundred Fifty Million Dollars ($750,000,000) to the Acquisition, constituting Fund IV's Pro Rata Share of the Total Equity Commitment.
(b) Fund IV has the ability and the financial capacity to fund its commitment of Seven Hundred Fifty Million Dollars ($750,000,000) in accordance with the terms of this Agreement and its limited partnership agreement, and the funding of such commitment has been approved by the GP and, to the extent required, by the advisory committee of Fund IV.
(c) The investment in the Acquisition by Fund IV is within the investment guidelines and rest

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CO-INVESTMENT ALLOCATION AGREEMENT

CO-INVESTMENT ALLOCATION AGREEMENT

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