CONFIDENTIAL — NOT FOR DISTRIBUTION
SUBSCRIPTION AGREEMENT
ICM Cascadia Co-Invest, LP A Delaware Limited Partnership
Subscriber: Ironside Capital Management LP Capital Commitment: $299,970,000 Percentage Interest: 99.99% Limited Partner Interest
July 29, 2022
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is entered into as of July 29, 2022 (the "Effective Date"), by and among:
(i) ICM Cascadia Co-Invest, LP, a Delaware limited partnership (the "Partnership"), with Employer Identification Number 88-3921457 and Delaware Secretary of State File Number 7439218, having its registered office at c/o Cascade Systems, 160 Greentree Drive, Suite 101, Dover, Delaware 19904;
(ii) Meridian Infrastructure GP IV LLC, a Delaware limited liability company, in its capacity as the general partner of the Partnership (the "General Partner" or "GP"), having its principal office at 200 Clarendon Street, Suite 4200, Boston, Massachusetts 02116; and
(iii) Ironside Capital Management LP, a Delaware limited partnership, as subscriber (the "Subscriber" or the "Limited Partner"), having its principal office at 590 Madison Avenue, 38th Floor, New York, New York 10022.
The Partnership, the General Partner, and the Subscriber are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Partnership was formed as a Delaware limited partnership pursuant to a Certificate of Limited Partnership filed with the Secretary of State of the State of Delaware on July 22, 2022, under File Number 7439218;
WHEREAS, the Partnership is governed by that certain Amended and Restated Agreement of Limited Partnership 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, the "LP Agreement"), by and among the General Partner and the limited partners party thereto;
WHEREAS, the sole purpose of the Partnership is to co-invest alongside Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership ("Fund IV"), in the acquisition of one hundred percent (100%) of the issued and outstanding equity interests of Cascadia Renewables Holdings, Inc., an Oregon corporation ("Cascadia" or the "Target"), through a newly formed acquisition subsidiary, Cascadia Acquisition Corp., a Delaware corporation (the "Acquisition Subsidiary"), pursuant to the terms of an Equity Purchase Agreement to be entered into by and among the Acquisition Subsidiary, the Target, and the stockholders of the Target (the "Equity Purchase Agreement");
WHEREAS, the aggregate enterprise value of the Target is One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000) as set forth in the Equity Purchase Agreement;
WHEREAS, the total equity capital required to consummate the acquisition of the Target is One Billion Fifty Million Dollars ($1,050,000,000), of which Fund IV will contribute Seven Hundred Fifty Million Dollars ($750,000,000), representing approximately seventy-one and forty-three hundredths percent (71.43%) of the total equity, and the Partnership will contribute Three Hundred Million Dollars ($300,000,000), representing approximately twenty-eight and fifty-seven hundredths percent (28.57%) of the total equity;
WHEREAS, the total committed capital of the Partnership is Three Hundred Million Dollars ($300,000,000), consisting of the General Partner's capital commitment of Thirty Thousand Dollars ($30,000), representing one hundredth of one percent (0.01%) of the total committed capital, and the Subscriber's capital commitment of Two Hundred Ninety-Nine Million Nine Hundred Seventy Thousand Dollars ($299,970,000), representing ninety-nine and ninety-nine hundredths percent (99.99%) of the total committed capital; and
WHEREAS, the Subscriber desires to subscribe for a limited partner interest in the Partnership on the terms and conditions set forth herein and in the LP Agreement, and the General Partner desires to accept such subscription, subject to the terms and conditions herein set forth.
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
SUBSCRIPTION
Section 1.1 Subscription and Capital Commitment.
(a) The Subscriber hereby irrevocably subscribes for a limited partner interest in the Partnership (the "Limited Partner Interest") and commits to contribute capital to the Partnership in the aggregate amount of Two Hundred Ninety-Nine Million Nine Hundred Seventy Thousand Dollars ($299,970,000) (the "Capital Commitment"), representing a ninety-nine and ninety-nine hundredths percent (99.99%) interest in the Partnership (the "Percentage Interest"), on the terms and subject to the conditions set forth in this Agreement and the LP Agreement.
(b) The Subscriber's Capital Commitment shall be drawn down by the General Partner from time to time in one or more capital calls (each, a "Capital Call"), in accordance with the capital call provisions set forth in Section 4.01 of the LP Agreement. Each Capital Call shall be made by written notice from the General Partner to the Subscriber (a "Capital Call Notice") specifying the aggregate amount called, the Subscriber's pro rata share thereof, the purpose for which such capital is being called, and the date on which such capital is due, which date shall be no earlier than the minimum notice period specified in the LP Agreement. The Subscriber shall fund each Capital Call in immediately available funds by wire transfer to the Partnership's account specified in the applicable Capital Call Notice.
(c) The Subscriber acknowledges and agrees that the Capital Commitment is binding and irrevocable, subject only to the limited exceptions set forth in the LP Agreement, including the capital-call suspension provisions of Section 7.04 thereof and the wind-down provisions of Section 7.04(c) thereof. The Subscriber shall have no right to withdraw, reduce, or cancel the Capital Commitment except as expressly permitted under the LP Agreement.
Section 1.2 Acceptance of Subscription.
(a) This subscription is subject to acceptance by the General Partner in its sole and absolute discretion. The General Partner shall have no obligation to accept this subscription, in whole or in part, and may reject it for any reason or for no reason at all.
(b) Upon acceptance of this subscription by the General Partner, the General Partner shall countersign this Agreement, and the Subscriber shall thereupon be admitted as a Limited Partner of the Partnership effective as of the date of such acceptance. The General Partner's execution of this Agreement shall constitute conclusive evidence of the acceptance of the Subscriber's subscription and the Subscriber's admission as a Limited Partner of the Partnership.
(c) The details of the Subscriber's admission, including the Subscriber's Capital Commitment, Percentage Interest, and other relevant information, are set forth on Schedule A attached hereto and incorporated herein by reference.
Section 1.3 Admission as Limited Partner.
(a) Upon acceptance of this subscription by the General Partner, the Subscriber shall become a Limited Partner of the Partnership and shall be bound by all of the terms, conditions, provisions, and obligations of (i) the LP Agreement, (ii) the Side Letter dated as of July 29, 2022, by and between the Subscriber and the General Partner (the "Side Letter"), and (iii) this Agreement. In the event of any conflict between the terms of this Agreement and the terms of the LP Agreement, the LP Agreement shall control, except to the extent that the Side Letter expressly modifies any provision of the LP Agreement with respect to the Subscriber.
(b) The Subscriber hereby acknowledges that it has received a true and complete copy of the LP Agreement and the Side Letter, and has had a full and adequate opportunity to review and discuss the same with its own legal counsel, financial advisors, and tax advisors. The Subscriber further acknowledges that it understands the terms and conditions of the LP Agreement and the Side Letter and agrees to be bound thereby.
Section 1.4 Partnership Terms.
(a) Management Fee. No management fee shall be payable by the Partnership to the General Partner or any of its affiliates, as set forth in the Side Letter.
(b) Carried Interest. The General Partner shall be entitled to a carried interest equal to ten percent (10%) of net profits of the Partnership allocated to the Limited Partner in excess of an eight percent (8%) per annum preferred return on contributed capital (compounded quarterly) (the "Carried Interest"), calculated and distributed in accordance with the distribution waterfall provisions set forth in the LP Agreement.
(c) Preferred Return. The Subscriber shall be entitled to a preferred return equal to eight percent (8%) per annum on its contributed capital, compounded quarterly (the "Preferred Return"), as more fully described in the LP Agreement.
(d) Distribution Waterfall. Distributions of available cash by the Partnership shall be made in accordance with the distribution waterfall provisions set forth in the LP Agreement, which generally provide for (i) a return of contributed capital to the partners, (ii) payment of the Preferred Return to the Limited Partner, (iii) a catch-up allocation to the General Partner until the General Partner has received its Carried Interest share, and (iv) a split of remaining profits between the General Partner (at the Carried Interest percentage) and the Limited Partner. The General Partner's Carried Interest is subject to a clawback obligation as set forth in the LP Agreement.
(e) Material Impediment Event and Dormancy Governance. Material Impediment Events and dormancy governance provisions shall be as set forth in Section 7.04 of the LP Agreement. Without limiting the foregoing, the Subscriber shall have the right, pursuant to Section 7.04(c) of the LP Agreement, to elect to commence a wind-down of the Partnership in the event of eighteen (18) months of continuous dormancy (as defined in Section 7.04 of the LP Agreement), upon written notice to the General Partner in accordance with the procedures specified therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER
The Subscriber hereby represents and warrants to the Partnership and the General Partner as of the date hereof and as of the date of each Capital Call, as follows:
Section 2.1 Organization and Authority.
(a) The Subscriber is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the full legal right, power, capacity, and authority to execute, deliver, and perform this Agreement and to make the Capital Commitment set forth herein.
(b) The execution, delivery, and performance of this Agreement by the Subscriber, and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary partnership action on the part of the Subscriber, including any required approvals of the Subscriber's general partner and limited partners, and no further authorization, consent, or approval is required in connection therewith.
(c) This Agreement has been duly executed and delivered by the Subscriber and constitutes the legal, valid, and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, and (ii) general principles of equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 2.2 No Conflicts.
The execution, delivery, and performance of this Agreement by the Subscriber, and the consummation of the transactions contemplated hereby, do not and will not (a) violate, conflict with, or result in a breach of the Subscriber's agreement of limited partnership, certificate of limited partnership, or any other organizational or governing document of the Subscriber, (b) violate any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, regulatory body, administrative agency, or governmental authority applicable to the Subscriber, or (c) conflict with, result in a breach or default under (with or without notice, lapse of time, or both), give rise to a right of termination, amendment, acceleration, or cancellation of, or result in the creation of any lien or encumbrance upon any of the properties or assets of the Subscriber under, any material contract, agreement, indenture, mortgage, deed of trust, license, permit, or other instrument to which the Subscriber is a party or by which any of its properties or assets are bound.
Section 2.3 Accredited Investor Status.
(a) The Subscriber represents and warrants that it is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act").
(b) Without limiting the generality of the foregoing, the Subscriber qualifies as an accredited investor on the basis that (i) it is an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a) of Regulation D, and/or (ii) it has total assets in excess of Five Million Dollars ($5,000,000). The Subscriber's total assets under management are approximately Fourteen Billion Eight Hundred Million Dollars ($14,800,000,000) across its equity long/short, credit, and infrastructure investment strategies.
(c) The Subscriber further represents that such accredited investor status is expected to continue for the duration of the Subscriber's investment in the Partnership.
Section 2.4 Qualified Purchaser Status.
(a) The Subscriber represents and warrants that it is a "qualified purchaser" as such term is defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations promulgated thereunder.
(b) Without limiting the foregoing, the Subscriber represents that it owns not less than Twenty-Five Million Dollars ($25,000,000) in "investments" as such term is defined in Rule 2a51-1 promulgated under the 1940 Act. The Subscriber acknowledges that the Partnership is relying upon the exemption from registration as an investment company provided by Section 3(c)(7) of the 1940 Act, and that the Subscriber's representation as to its qualified purchaser status is a material inducement to the Partnership's and the General Partner's willingness to accept this subscription and admit the Subscriber as a Limited Partner.
(c) The Subscriber understands that if the Subscriber does not qualify as a qualified purchaser, the Partnership's reliance on the exemption from registration as an investment company under Section 3(c)(7) of the 1940 Act may be jeopardized, and the General Partner may be required to reject this subscription or take such other action as may be necessary to ensure continued compliance with the 1940 Act.
Section 2.5 Qualified Eligible Person.
The Subscriber represents and warrants that it is a "qualified eligible person" as such term is defined in Rule 4.7 of the Commodity Futures Trading Commission (the "CFTC"), to the extent applicable. The Subscriber acknowledges that this representation is made for the purpose of enabling the General Partner and any commodity pool operator or commodity trading advisor associated with the Partnership to rely on exemptions available under CFTC regulations with respect to qualified eligible persons.
Section 2.6 Investment Intent.
(a) The Subscriber is acquiring the Limited Partner Interest solely for its own account, for investment purposes only, and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act. The Subscriber does not presently have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, pledge, hypothecate, or grant participations in the Limited Partner Interest, in whole or in part, to any third party.
(b) The Subscriber understands and acknowledges that (i) the limited partner interests in the Partnership, including the Limited Partner Interest, have not been registered under the Securities Act or under the securities laws or "blue sky" laws of any state or other jurisdiction, (ii) such interests are being offered and sold in reliance upon exemptions from the registration requirements of the Securities Act and applicable state securities laws, and (iii) there is no public market for the limited partner interests and none is expected to develop.
(c) The Subscriber agrees that it will not sell, assign, pledge, transfer, encumber, or otherwise dispose of all or any part of its Limited Partner Interest, or any interest therein, except in compliance with (i) the transfer restrictions set forth in the LP Agreement, (ii) the Securities Act and the rules and regulations promulgated thereunder, and (iii) any applicable state securities or "blue sky" laws. The Subscriber understands that the Partnership and the General Partner have no obligation to register the limited partner interests under the Securities Act or any state securities laws.
Section 2.7 Sophistication and Experience.
(a) The Subscriber, by reason of its business and financial experience, and the business and financial experience of those persons retained by the Subscriber to advise it with respect to its investment in the Partnership, has such knowledge, sophistication, and experience in financial, tax, and business matters as to be capable of evaluating the merits and risks of an investment in the Partnership, and has the capacity to protect its own interests in connection with its investment in the Partnership.
(b) The Subscriber has been afforded the opportunity to ask questions of, and receive answers from, the General Partner, Meridian Infrastructure Partners LP, and their respective officers, directors, managers, employees, agents, and representatives concerning the terms and conditions of the investment in the Partnership and the business, financial condition, operations, assets, liabilities, and prospects of the Target, and has received and reviewed such information as the Subscriber has deemed necessary or appropriate for the purpose of making an informed investment decision.
(c) The Subscriber has conducted its own independent investigation, due diligence, and analysis of the Partnership, the Target, the proposed acquisition, and the risks associated therewith, and has made its own assessment of the merits and suitability of an investment in the Partnership.
(d) The Subscriber's infrastructure investment strategy was launched in 2019 and currently manages approximately Three Billion Two Hundred Million Dollars ($3,200,000,000) in infrastructure-related assets across three investment vehicles. The Subscriber's infrastructure investment team is led by Renata Obasi, Senior Managing Director, Infrastructure, and the Subscriber has substantial experience evaluating, structuring, and managing co-investment opportunities in the renewable energy and infrastructure sectors.
Section 2.8 Ability to Bear Loss; Liquidity.
(a) The Subscriber is financially able to bear the economic risk of its investment in the Partnership for an indefinite period of time, including the risk of a total loss of such investment, and has no need for liquidity with respect to its investment in the Partnership.
(b) The Subscriber has adequate means of providing for its current needs and contingent financial obligations and has no present or anticipated need to dispose of all or any portion of its Limited Partner Interest to satisfy any existing or anticipated undertaking, obligation, or indebtedness.
(c) The Subscriber understands that its investment in the Partnership is illiquid and that there are substantial restrictions on the transferability of its Limited Partner Interest as set forth in the LP Agreement and applicable securities laws.
Section 2.9 No Government Plan / ERISA Representations.
(a) The Subscriber represents and warrants that (i) it is not an "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), whether or not subject to the provisions of Title I of ERISA, (ii) it is not a "plan" as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), and (iii) it is not an entity whose underlying assets include "plan assets" by reason of an employee benefit plan's or a plan's investment in the entity.
(b) The Subscriber further represents and warrants that the assets used by the Subscriber to fund its Capital Commitment do not and will not constitute "plan assets" within the meaning of the regulations of the U.S. Department of Labor codified at 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA (the "Plan Asset Regulations"), and that the Subscriber's investment in the Partnership will not cause or result in the assets of the Partnership being deemed "plan assets" under ERISA or the Plan Asset Regulations.
(c) The Subscriber acknowledges that Drummond & Fenwick LLP has prepared an ERISA and Benefit Plan Investor Analysis with respect to the Partnership confirming that the Partnership is not subject to the plan-asset rules under ERISA, and the Subscriber represents that its investment in the Partnership is consistent with the assumptions and conclusions set forth in such analysis.
Section 2.10 Registered Investment Adviser.
(a) The Subscriber represents and warrants that it is duly registered as an investment adviser with the U.S. Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and that such registration is in full force and effect.
(b) The Subscriber's founder and Chief Investment Officer is Marcus J. Calloway. The Subscriber has adopted and maintains policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules and regulations promulgated thereunder, including policies and procedures relating to the prevention of insider trading, conflicts of interest, and the allocation of investment opportunities.
Section 2.11 Anti-Money Laundering and OFAC Representations.
The Subscriber represents and warrants as follows:
(a) Neither the Subscriber nor, to the Subscriber's knowledge, any of its direct or indirect beneficial owners, partners, officers, directors, managers, or controlling persons (collectively, "Related Persons") is a person or entity (i) named on the List of Specially Designated Nationals and blocked Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"), the Sectoral Sanctions Identifications List maintained by OFAC, or any similar list maintained by the U.S. Department of State, the U.S. Department of Commerce, or any other governmental authority (collectively, "Sanctions Lists"), or (ii) owned or controlled by, or acting on behalf of, any person or entity named on any Sanctions List.
(b) The Subscriber is not located in, organized under the laws of, or a resident of any country or territory that is the subject of comprehensive, country-wide, or territory-wide sanctions administered or enforced by OFAC, the U.S. Department of State, the European Union, or the United Nations Security Council (each, a "Sanctioned Jurisdiction"), including, as of the date hereof, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine.
(c) The funds used by the Subscriber to fund its Capital Commitment are not derived from, and do not otherwise represent the proceeds of, any activity that is illegal or would be illegal if conducted in the United States, and the Subscriber will not, directly or indirectly, use such funds or the proceeds of any distribution from the Partnership in furtherance of any illegal activity.
(d) The Subscriber is in compliance with, and will continue to comply with, all applicable anti-money laundering laws and regulations, including, without limitation, the Currency and Foreign Transactions Reporting Act of 1970, as amended (commonly known as the "Bank Secrecy Act"), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act"), and the rules and regulations promulgated thereunder and any applicable orders issued pursuant thereto.
The Subscriber acknowledges that the AML/KYC Certification prepared for ICM Cascadia Co-Invest, LP, dated July 28, 2022, has been separately completed and delivered to the General Partner, and the representations made therein are incorporated herein by reference and deemed restated as of the date hereof.
Section 2.12 Tax Representations.
(a) The Subscriber represents and warrants that it is a "United States person" within the meaning of Section 7701(a)(30) of the Code and will provide to the Partnership a properly completed and executed Internal Revenue Service Form W-9 (or any successor form) promptly upon request.
(b) The Subscriber acknowledges that it will receive a Schedule K-1 (Form 1065) from the Partnership's fund administrator, Kendrick Thorne & Associates LLP, located at One Liberty Plaza, Suite 4100, New York, New York 10006, for each taxable year (or portion thereof) during which the Subscriber is a limited partner of the Partnership. The Subscriber further acknowledges that the issuance of Schedule K-1s may be delayed and that the Subscriber may be required to file extensions of its federal and state income tax returns.
(c) The Subscriber has consulted with, and has been fully advised by, its own tax advisors regarding the U.S. federal, state, local, and foreign income tax consequences of its investment in the Partnership, including without limitation the consequences of (i) the allocation of income, gain, loss, deduction, and credit among the partners, (ii) the receipt of distributions from the Partnership, (iii) the disposition of its Limited Partner Interest, and (iv) the treatment of the Partnership as a partnership for U.S. federal income tax purposes. The Subscriber is not relying on the General Partner, the Partnership, or any of their affiliates, advisors, or representatives for any tax advice.
Section 2.13 No Reliance on General Partner or Placement Agent.
(a) The Subscriber has not relied upon the General Partner, Meridian Infrastructure Partners LP, Rivermark Capital Markets Inc. (the "Placement Agent"), or any of their respective affiliates, officers, directors, managers, employees, agents, advisors, or representatives in making its investment decision with respect to the Partnership. The Subscriber has made its own independent decision to invest in the Partnership based upon its own analysis, judgment, and due diligence.
(b) The Subscriber acknowledges that Rivermark Capital Markets Inc. acted as placement agent for the co-investment opportunity represented by the Partnership and received, or will receive, a fee equal to thirty-five basis points (0.35%) of committed capital, or One Million Fifty Thousand Dollars ($1,050,000), in connection therewith. The Subscriber understands that the Placement Agent is not acting as an advisor to the Subscriber and has no fiduciary duty or other obligation to the Subscriber.
(c) The Subscriber acknowledges that the General Partner and its affiliates may have interests that differ from those of the Subscriber and that the General Partner is simultaneously acting as the general partner of Fund IV and other investment vehicles managed by Meridian Infrastructure Partners LP.
Section 2.14 No Brokers.
The Subscriber has not engaged, retained, or authorized any broker, dealer, finder, commission agent, or other intermediary in connection with the Subscriber's subscription for the Limited Partner Interest and its investment in the Partnership, other than Rivermark Capital Markets Inc. in its capacity as placement agent for the Partnership, and the Subscriber is not aware of any claims for brokerage commissions, finder's fees, or similar compensation in connection with the transactions contemplated by this Agreement.
Section 2.15 Binding Commitment.
The Subscriber understands and acknowledges that the Capital Commitment is binding and irrevocable upon acceptance of this subscription by the General Partner, subject to and in accordance with the terms of the LP Agreement, including the capital-call suspension provisions of Section 7.04 thereof and the wind-down provisions of Section 7.04(c) thereof. The Subscriber further acknowledges that it has no right to withdraw from the Partnership or receive a return of its Capital Contributions (as defined in the LP Agreement), except as expressly provided in the LP Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNER
The General Partner hereby represents and warrants to the Subscriber as of the date hereof as follows:
Section 3.1 Organization and Authority.
(a) The General Partner is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the full legal right, power, capacity, and authority to execute, deliver, and perform this Agreement on behalf of itself and on behalf of the Partnership in its capacity as general partner thereof.
(b) The execution, delivery, and performance of this Agreement by the General Partner, on its own behalf and on behalf of the Partnership, have been duly and validly authorized by all necessary limited liability company action on the part of the General Partner, including the approval of its managers: David R. Hargreaves, Managing Partner; Lillian Fong, Partner, Portfolio; and Graham Whitfield, Partner, Operations.
(c) This Agreement has been duly executed and delivered by the General Partner and constitutes the legal, valid, and binding obligation of the General Partner and the Partnership, enforceable against each of them in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and general principles of equity.
Section 3.2 Formation of Partnership.
(a) The Partnership has been duly formed as a limited partnership under the laws of the State of Delaware by the filing of the Certificate of Limited Partnership with the Secretary of State of the State of Delaware on July 22, 2022, under File Number 7439218.
(b) The Partnership has been assigned Employer Identification Number 88-3921457 by the Internal Revenue Service.
(c) The Partnership is validly existing and in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act, and has all requisite power and authority to carry on its business as presently proposed to be conducted.
Section 3.3 No Conflicts.
The execution, delivery, and performance of this Agreement by the General Partner, on its own behalf and on behalf of the Partnership, and the consummation of the transactions contemplated hereby, do not and will not (a) violate, conflict with, or result in a breach of the operating agreement or certificate of formation of the General Partner or the LP Agreement or the certificate of limited partnership of the Partnership, (b) violate any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, regulatory body, administrative agency, or governmental authority applicable to the General Partner or the Partnership, or (c) conflict with, result in a breach or default under, or give rise to a right of termination of, any material contract, agreement, or instrument to which the General Partner or the Partnership is a party.
Section 3.4 LP Agreement.
(a) The LP Agreement has been duly authorized, executed, and delivered by the General Partner and is in full force and effect as of the date hereof.
(b) The General Partner has provided, or caused to be provided, to the Subscriber a true, correct, and complete copy of the LP Agreement, including all schedules and exhibits thereto. There are no amendments, modifications, or supplements to the LP Agreement as of the date hereof other than as set forth therein.
Section 3.5 Purpose of Partnership.
(a) The sole and exclusive purpose of the Partnership is to co-invest alongside Fund IV in the acquisition of one hundred percent (100%) of the issued and outstanding equity of Cascadia Renewables Holdings, Inc. through Cascadia Acquisition Corp., and to engage in all activities incidental or ancillary thereto, including the holding, management, and disposition of such investment and the making of temporary investments pending deployment or distribution of capital.
(b) The Partnership will not engage in any other business, trade, or investment activity other than as described in the preceding paragraph, and the General Partner confirms that the Partnership is structured as a single-purpose co-investment vehicle with no authority to make additional or follow-on investments outside of the Cascadia transaction.
ARTICLE IV
ADDITIONAL COVENANTS OF THE SUBSCRIBER
Section 4.1 Capital Calls.
(a) The Subscriber covenants and agrees to fund its pro rata share of each Capital Call made by the General Partner in accordance with Section 4.01 of the LP Agreement, promptly upon receipt of a Capital Call Notice and within the time period specified therein. Each Capital Call Notice shall specify the aggregate amount being called from all partners, the Subscriber's pro rata share thereof, the purpose for which such capital is being called, the date on which payment is due, and the wire transfer instructions for the Partnership's account.
(b) The Subscriber acknowledges that Capital Calls may be made at any time and from time to time, in one or more installments, by the General Partner, up to the total amount of the Subscriber's undrawn Capital Commitment, subject to the terms and conditions of the LP Agreement.
(c) The Subscriber further acknowledges that Capital Call #1 is expected to be issued in August 2022 for an aggregate amount of approximately Twenty-Two Million Five Hundred Thousand Dollars ($22,500,000), representing approximately seven and one-half percent (7.5%) of the total Partnership commitment of Three Hundred Million Dollars ($300,000,000), to fund the following purposes:
(i) organizational expenses of the Partnership in the approximate amount of Two Hundred Eighty-Five Thousand Dollars ($285,000);
(ii) the placement-agent fee payable to Rivermark Capital Markets Inc. in the amount of One Million Fifty Thousand Dollars ($1,050,000);
(iii) the deposit for the representations and warranties insurance policy (Policy No. NSW-RI-2022-09814, Northgate Specialty Insurance Co.) in the amount of Four Million Eight Hundred Seventy-Five Thousand Dollars ($4,875,000);
(iv) due-diligence costs and deposits in the approximate amount of Twelve Million Seven Hundred Ninety Thousand Dollars ($12,790,000); and
(v) a working-capital reserve in the approximate amount of Three Million Five Hundred Thousand Dollars ($3,500,000).
Section 4.2 Default.
If the Subscriber fails to fund all or any portion of any Capital Call within the time period required under the LP Agreement, the Subscriber shall be in default (a "Defaulting Limited Partner"), and the default remedies set forth in the LP Agreement shall apply. Such default remedies include, without limitation, (a) forfeiture of up to fifty percent (50%) of the Subscriber's then-existing interest in the Partnership, (b) penalty interest on the unpaid amount at a rate per annum equal to the lesser of (i) the prime rate as published in The Wall Street Journal on the date of default plus five percent (5%) and (ii) the maximum rate permitted by applicable law, and (c) the right of the General Partner to effect a forced sale of all or a portion of the Subscriber's Limited Partner Interest, all as more fully described in the LP Agreement. The rights and remedies of the General Partner and the Partnership under the LP Agreement with respect to a default by the Subscriber are cumulative and in addition to any other rights or remedies available at law or in equity.
Section 4.3 Transfer Restrictions.
(a) The Subscriber shall not sell, transfer, assign, pledge, hypothecate, encumber, or otherwise dispose of all or any part of its Limited Partner Interest, or any interest therein, except in strict compliance with the provisions of the LP Agreement governing transfers and applicable federal and state securities laws.
(b) Any purported sale, transfer, assignment, pledge, hypothecation, encumbrance, or other disposition of all or any part of the Subscriber's Limited Partner Interest in violation of the LP Agreement or this Agreement shall be null and void ab initio and of no force or effect, and neither the Partnership nor the General Partner shall be required to recognize or give effect thereto.
Section 4.4 Confidentiality.
(a) The Subscriber agrees to treat as confidential and to maintain the confidentiality of all non-public information relating to the Partnership, the General Partner, the Target, the proposed acquisition, the LP Agreement, the Side Letter, this Agreement, and the terms and conditions thereof (collectively, "Confidential Information"), and shall not disclose, publish, or otherwise disseminate any Confidential Information to any person without the prior written consent of the General Partner, except as provided below.
(b) The foregoing confidentiality obligation shall not apply to disclosures of Confidential Information (i) to the Subscriber's partners, officers, directors, managers, employees, legal advisors, accountants, auditors, tax advisors, and other professional advisors who have a need to know such information in connection with the Subscriber's investment in the Partnership and who are bound by obligations of confidentiality, (ii) to any regulatory authority or governmental agency having jurisdiction over the Subscriber in connection with an examination, investigation, or other regulatory action, (iii) as required by applicable law, regulation, subpoena, civil investigative demand, or judicial or administrative order, provided that the Subscriber shall, to the extent legally permissible, promptly notify the General Partner of such requirement and cooperate with any efforts by the General Partner to obtain a protective order or other appropriate remedy, or (iv) as otherwise permitted under the LP Agreement or the Side Letter.
Section 4.5 Further Assurances.
The Subscriber agrees to execute and deliver such additional documents, instruments, agreements, and certificates, and to take such further actions, as may be reasonably requested by the General Partner from time to time to carry out the purposes and intent of this Agreement and the LP Agreement, to evidence the Subscriber's Capital Commitment and Limited Partner Interest, and to consummate the transactions contemplated hereby, including without limitation any filings or registrations required by any governmental authority.
Section 4.6 Notification of Changes.
The Subscriber agrees to promptly notify the General Partner in writing of (a) any material change in any of the representations, warranties, or certifications made by the Subscriber in this Agreement or in the Investor Questionnaire/Certification attached hereto as Exhibit C, (b) any change in the Subscriber's legal name, organizational form, jurisdiction of organization, principal office address, or authorized representative, and (c) any event or development that could reasonably be expected to affect the Subscriber's ability to perform its obligations under this Agreement or the LP Agreement, including any material adverse change in the Subscriber's financial condition.
ARTICLE V
INDEMNIFICATION
Section 5.1 Subscriber Indemnification.
The Subscriber agrees to indemnify, defend, and hold harmless the Partnership, the General Partner, and their respective affiliates, members, partners, officers, directors, managers, employees, agents, advisors, and representatives (each, an "Indemnified Person") from and against any and all losses, claims, demands, damages, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses and costs of investigation) (collectively, "Losses") arising out of, relating to, resulting from, or in connection with (a) any breach or inaccuracy of any representation, warranty, or certification made by the Subscriber in this Agreement or in the Investor Questionnaire/Certification attached hereto as Exhibit C, (b) any failure by the Subscriber to perform, comply with, or fulfill any covenant, agreement, or obligation of the Subscriber under this Agreement, or (c) any claim, action, suit, or proceeding brought by any third party arising from or relating to any such breach, inaccuracy, or failure. The indemnification obligations of the Subscriber under this Section 5.1 shall be in addition to, and not in limitation of, any other indemnification obligations of the Subscriber under the LP Agreement.
Section 5.2 Survival.
All representations, warranties, covenants, and agreements of the Subscriber set forth in this Agreement (including the representations, warranties, and certifications set forth in the Investor Questionnaire/Certification attached hereto as Exhibit C) shall survive the execution and delivery of this Agreement, the admission of the Subscriber as a Limited Partner of the Partnership, and the funding of the Capital Commitment, and shall remain in full force and effect for so long as the Subscriber is a limited partner of the Partnership and, to the extent of the Subscriber's indemnification obligations under Section 5.1, for a period of three (3) years following the date on which the Subscriber ceases to be a limited partner of the Partnership.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Governing Law.
This Agreement and the rights, obligations, and liabilities of the Parties hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules, provisions, or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 6.2 Dispute Resolution.
Any dispute, controversy, claim, or disagreement arising out of, relating to, or in connection with this Agreement, including any dispute regarding its existence, validity, interpretation, performance, breach, or termination, shall be resolved in accordance with the dispute resolution provisions set forth in the LP Agreement, which are hereby incorporated by reference as though fully set forth herein.
Section 6.3 Entire Agreement.
This Agreement, together with the LP Agreement, the Side Letter dated as of July 29, 2022, and the Co-Investment Allocation Agreement dated as of July 29, 2022, by and among Meridian Infrastructure Partners LP, Meridian Infrastructure Partners Fund IV, LP, Meridian Infrastructure GP IV LLC, and the Subscriber (the "Co-Investment Allocation Agreement"), and all schedules and exhibits attached hereto and thereto, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, and communications, whether oral or written, between or among any of the Parties relating to the subject matter hereof.
Section 6.4 Amendment.
This Agreement may not be amended, modified, supplemented, or restated except by a written instrument duly executed by each of the Parties hereto. No oral agreement, understanding, or course of dealing shall constitute or be deemed to constitute an amendment, modification, or supplement to this Agreement.
Section 6.5 Severability.
If any provision of this Agreement, or the application of any such provision to any person, entity, or circumstance, is held to be invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect the validity, legality, or enforceability of any other provision of this Agreement or the application of such provision to any other person, entity, or circumstance. Upon any determination that any provision of this Agreement is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner, consistent with applicable law, so that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
Section 6.6 Counterparts.
This Agreement may be executed in one or more counterparts (including by means of facsimile or portable document format (.pdf) transmission), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (.pdf) transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 6.7 Notices.
All notices, requests, demands, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered personally, (b) one (1) business day after being sent by nationally recognized overnight courier service, (c) upon confirmation of receipt when sent by email (provided that a copy is promptly sent by overnight courier), or (d) three (3) business days after being mailed by certified or registered mail, return receipt requested, postage prepaid, to the Parties at the following addresses (or at such other addresses as may be designated by a Party by notice given in accordance with this Section):
If to the Partnership or the General Partner:
Meridian Infrastructure GP IV LLC 200 Clarendon Street, Suite 4200 Boston, Massachusetts 02116
Attention: David R. Hargreaves, Managing Partner
Email: d.hargreaves@meridianinfra.com
With a copy (which shall not constitute notice) to:
Breckenridge Sloane & Pratt LLP One Federal Street, Suite 3600 Boston, Massachusetts 02110
Attention: Charles A. Delacroix
Email: cdelacroix@breckenridgesloane.com
If to the Subscriber:
Ironside Capital Management LP 590 Madison Avenue, 38th Floor New York, New York 10022
Attention: Marcus J. Calloway, Founder & Chief Investment Officer
Email: mcalloway@ironsidecapital.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 125 Broad Street, 44th Floor New York, New York 10004
Attention: Pamela Cross
Email: pcross@calderwoodharkness.com
Section 6.8 Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of each of the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, obligations, or interests hereunder may be assigned by any Party without the prior written consent of the other Parties, except as expressly provided in the LP Agreement with respect to permitted transfers of limited partner interests.
Section 6.9 No Third-Party Beneficiaries.
This Agreement is entered into solely for the benefit of the Parties hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person, entity, or group of persons or entities, other than the Parties hereto and their respective permitted successors and assigns, any rights, remedies, obligations, or liabilities of any nature whatsoever, including any third-party beneficiary rights.
Section 6.10 Waiver.
No failure or delay by any Party in exercising any right, power, or remedy under this Agreement, and no course of dealing between or among the Parties, shall operate as a waiver of any such right, power, or remedy. No single or partial exercise of any right, power, or remedy under this Agreement by any Party shall preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument duly executed by the Party against whom enforcement of the waiver is sought. Any such waiver shall be limited to the specific provision and specific circumstances waived and shall not be deemed a waiver of any other provision or of the same provision in connection with any other circumstances.
[SIGNATURE PAGES FOLLOW]
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT ICM CASCADIA CO-INVEST, LP
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the date first written above.
SUBSCRIBER:
IRONSIDE CAPITAL MANAGEMENT LP
By: ________
Name: Marcus J. Calloway
Title: Founder & Chief Investment Officer
Date: July 29, 2022
SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT ICM CASCADIA CO-INVEST, LP
IN WITNESS WHEREOF, the undersigned have executed this Subscription Agreement as of the date first written above.
ACCEPTED AND AGREED:
THE PARTNERSHIP:
ICM CASCADIA CO-INVEST, LP
By: Meridian Infrastructure GP IV LLC, its General Partner
By: ________
Name: David R. Hargreaves