FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT
Dated as of November 22, 2022
by and among
TIMBERLINE GROWTH EQUITY FUND III, LP,
WEIR FAMILY TRUST,
THE MANAGEMENT SELLERS LISTED ON SCHEDULE A TO THE PURCHASE AGREEMENT,
CASCADIA RENEWABLES HOLDINGS, INC.,
and
CASCADIA ACQUISITION CORP.
with the acknowledgment and agreement of
MERIDIAN INFRASTRUCTURE PARTNERS FUND IV, LP
and
ICM CASCADIA CO-INVEST, LP
FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT
This FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT (this "First Amendment") is made and entered into as of November 22, 2022, by and among:
(i) Timberline Growth Equity Fund III, LP, a Delaware limited partnership ("Timberline"), acting by and through its general partner, Timberline Growth Partners LLC, a Delaware limited liability company, with its principal office located at 900 SW Fifth Avenue, Suite 2600, Portland, Oregon 97204;
(ii) Weir Family Trust ("WFT"), Jonathan M. Weir, as Trustee;
(iii) The Management Sellers listed on Schedule A to the Purchase Agreement (as defined below) (collectively with Timberline and WFT, the "Sellers");
(iv) Cascadia Renewables Holdings, Inc., an Oregon corporation, with its principal office at 1100 SW Sixth Avenue, Suite 1800, Portland, Oregon 97204 (the "Company"); and
(v) Cascadia Acquisition Corp., a Delaware corporation ("Buyer"), formed as a wholly owned subsidiary of Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership ("Fund IV"), and ICM Cascadia Co-Invest, LP, a Delaware limited partnership ("Co-Investor").
Each of the Sellers, the Company, and Buyer is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Parties entered into that certain Equity Purchase Agreement, dated as of September 15, 2022 (the "Purchase Agreement"), pursuant to which Buyer agreed to acquire one hundred percent (100%) of the issued and outstanding equity interests of the Company for an aggregate enterprise value of One Billion Nine Hundred Fifty Million Dollars ($1,950,000,000), on the terms and subject to the conditions set forth therein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement;
WHEREAS, the Purchase Agreement currently provides that the "Outside Date" (as defined in Article I of the Purchase Agreement) is December 31, 2022;
WHEREAS, on October 28, 2022, the Portland Metropolitan Water District (the "Water District") notified the Company of its intention to renegotiate the forty (40)-year water-treatment concession for the Bull Run Filtration Project (the "Concession"), originally executed in 2018, citing changed regulatory requirements under Oregon SB 1567 (2022), and such renegotiation process commenced in November 2022 (the "Concession Renegotiation");
WHEREAS, the Concession Renegotiation has resulted in uncertainty regarding the satisfaction of certain conditions precedent to the Closing under the Purchase Agreement prior to the current Outside Date;
WHEREAS, the application for approval under Section 203 of the Federal Power Act filed with the Federal Energy Regulatory Commission ("FERC") (FERC Docket No. EC22-143-000) on October 19, 2022 remains pending as of the date hereof, and FERC has not yet issued a final order with respect to such application;
WHEREAS, the application filed with the Oregon Public Utility Commission ("OPUC") (OPUC Docket No. UM-2287) on October 14, 2022 remains pending as of the date hereof, and OPUC has not yet issued a final order with respect to such application;
WHEREAS, the Parties desire to amend the Purchase Agreement to (a) extend the Outside Date from December 31, 2022 to March 31, 2023, to allow additional time for the satisfaction of the conditions to Closing, including, without limitation, the receipt of regulatory approvals and the resolution of issues arising in connection with the Concession Renegotiation, and (b) make certain related modifications, in each case as set forth herein; and
WHEREAS, Section 11.5 of the Purchase Agreement provides that the Purchase Agreement may be amended, modified, or supplemented only by a written instrument duly executed by each of the Parties thereto.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. All capitalized terms used but not defined in this First Amendment shall have the respective meanings ascribed to such terms in the Purchase Agreement. In addition, the following terms shall have the meanings set forth below:
(a) "First Amendment" means this First Amendment to the Equity Purchase Agreement, dated as of November 22, 2022, by and among the Parties.
(b) "First Amendment Effective Date" means November 22, 2022.
(c) "Original Outside Date" means December 31, 2022, which was the "Outside Date" as defined in the Purchase Agreement prior to giving effect to this First Amendment.
(d) "Extended Outside Date" means March 31, 2023. From and after the First Amendment Effective Date, each reference to the "Outside Date" in the Purchase Agreement shall be deemed to be a reference to the Extended Outside Date, unless the context otherwise requires.
ARTICLE II
AMENDMENTS TO THE PURCHASE AGREEMENT
Section 2.1 Extension of Outside Date.
(a) The definition of "Outside Date" set forth in Section 1.1 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
"'Outside Date' means March 31, 2023."
(b) All references in the Purchase Agreement to the "Outside Date" shall, from and after the First Amendment Effective Date, be deemed to refer to March 31, 2023, as set forth herein, including, without limitation, references in Article IX (Termination) and Article X (Effect of Termination) of the Purchase Agreement.
(c) For the avoidance of doubt, the extension of the Outside Date pursuant to this Section 2.1 shall not affect, limit, or waive any Party's rights to terminate the Purchase Agreement under Section 9.1 thereof or any other provision of the Purchase Agreement, except as expressly modified by this First Amendment. Each Party retains all of its termination rights that would accrue upon or after the Extended Outside Date in the same manner and to the same extent as such termination rights would have accrued upon or after the Original Outside Date under the Purchase Agreement as in effect prior to this First Amendment. Nothing in this First Amendment shall be construed to create any new termination right not otherwise existing under the Purchase Agreement.
Section 2.2 Corresponding Amendments.
(a) Any and all provisions of the Purchase Agreement that reference the date "December 31, 2022" in connection with (i) the termination rights of any Party, (ii) the lapse or expiration of the Parties' obligations under the Purchase Agreement, or (iii) any deadline, milestone, or other date that is expressly conditioned upon or calculated by reference to the Outside Date, are hereby amended to reference "March 31, 2023" in lieu thereof.
(b) No amendment is made by this First Amendment to any other date, deadline, milestone, or time period set forth in the Purchase Agreement unless such date, deadline, milestone, or time period is expressly referenced in this First Amendment or is, by its terms in the Purchase Agreement, calculated by reference to the Outside Date. All other dates, deadlines, and time periods in the Purchase Agreement shall remain in full force and effect and unchanged by this First Amendment.
Section 2.3 Regulatory Updates Acknowledgment.
(a) The Parties acknowledge and agree that, as of the First Amendment Effective Date, the following regulatory matters relating to the transactions contemplated by the Purchase Agreement remain outstanding or have been resolved, as applicable:
(i) FERC Section 203 Approval. The application for approval under Section 203 of the Federal Power Act (16 U.S.C. § 824b), filed with FERC on October 19, 2022, and assigned FERC Docket No. EC22-143-000, remains pending. FERC has not issued a final order approving, denying, or conditioning the application as of the date hereof. The Parties acknowledge that the receipt of FERC approval on terms satisfactory to the conditions set forth in Section 7.1(c) of the Purchase Agreement remains a condition to Closing.
(ii) OPUC Approval. The application filed with the Oregon Public Utility Commission on October 14, 2022, and assigned OPUC Docket No. UM-2287, remains pending. OPUC has not issued a final order approving, denying, or conditioning the application as of the date hereof. The Parties acknowledge that the receipt of OPUC approval on terms satisfactory to the conditions set forth in Section 7.1(c) of the Purchase Agreement remains a condition to Closing.
(iii) CFIUS. The voluntary notice submitted to the Committee on Foreign Investment in the United States ("CFIUS") was acknowledged by CFIUS on September 20, 2022. As of the First Amendment Effective Date, CFIUS has not taken any further action with respect to the voluntary notice, and no further action is required from CFIUS at this time. The CFIUS condition to Closing set forth in Section 7.1(d) of the Purchase Agreement has been satisfied.
(iv) Concession Renegotiation. The Concession Renegotiation between the Company and the Portland Metropolitan Water District is ongoing as of the First Amendment Effective Date. No resolution or definitive amended agreement has been reached between the Company and the Water District with respect to the Concession as of the date hereof.
(b) Nothing in this Section 2.3 shall constitute a waiver by any Party of any closing condition set forth in Article VII of the Purchase Agreement, or any representation, warranty, covenant, or agreement under the Purchase Agreement. The acknowledgments set forth in this Section 2.3 are provided solely for informational purposes and shall not be deemed to modify, amend, or supplement any representation, warranty, or covenant set forth in the Purchase Agreement.
Section 2.4 Financing Commitment.
(a) The Parties acknowledge that the debt commitment letter dated August 30, 2022 (the "Debt Commitment Letter"), executed by Atlas National Bank, N.A., a national banking association (as lead arranger and administrative agent), and Pinnacle Credit Partners LLC, a Delaware limited liability company (as co-lender), providing for (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 on the terms and subject to the conditions set forth therein, remains in full force and effect as of the First Amendment Effective Date and has not been amended, modified, supplemented, replaced, or terminated.
(b) Buyer hereby represents and warrants to the Sellers and the Company that, as of the First Amendment Effective Date, Buyer has not received any written or oral notice from Atlas National Bank, N.A. or Pinnacle Credit Partners LLC of any intention to (i) terminate or not perform under the Debt Commitment Letter, (ii) reduce the aggregate commitment amounts available thereunder, (iii) impose any additional conditions to funding not set forth in the Debt Commitment Letter as of August 30, 2022, or (iv) otherwise modify the terms of the Debt Commitment Letter in any manner that would reasonably be expected to prevent, impede, or delay the consummation of the transactions contemplated by the Purchase Agreement. To the knowledge of Buyer, no event has occurred that, with or without notice, lapse of time, or both, would constitute a default or breach under the Debt Commitment Letter or that would give rise to a right of termination thereunder by any financing source.
(c) Buyer acknowledges and confirms its continuing obligations under Section 6.12 of the Purchase Agreement with respect to the maintenance and, if necessary, the replacement of the Debt Commitment Letter, and nothing in this First Amendment shall be deemed to modify or limit such obligations.
Section 2.5 No Other Amendments.
(a) Except as expressly set forth in this First Amendment, the Purchase Agreement shall remain in full force and effect and is hereby ratified, approved, and confirmed in all respects. The amendments set forth herein are limited precisely as written and shall not be deemed to be an amendment to, or waiver of, any other term, condition, or provision of the Purchase Agreement.
(b) In the event of any conflict or inconsistency between the terms and provisions of this First Amendment and the terms and provisions of the Purchase Agreement, the terms and provisions of this First Amendment shall control and prevail.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to each other Party, as of the First Amendment Effective Date, as follows:
(a) Power and Authority. Such Party has full corporate, limited partnership, trust, or other organizational power and authority, as applicable, to execute, deliver, and perform its obligations under this First Amendment. In the case of Timberline, the execution and delivery of this First Amendment has been duly authorized by Timberline Growth Partners LLC, as general partner of Timberline. In the case of WFT, Jonathan M. Weir, as Trustee, has full power and authority under the governing instruments of WFT to execute and deliver this First Amendment on behalf of WFT. In the case of the Company, the execution and delivery of this First Amendment has been duly authorized by the board of directors of the Company. In the case of Buyer, the execution and delivery of this First Amendment has been duly authorized by the board of directors of Buyer.
(b) Due Authorization. The execution, delivery, and performance of this First Amendment by such Party has been duly authorized by all necessary corporate, limited partnership, trust, or other organizational action on the part of such Party, and no other proceedings or approvals on the part of such Party are necessary to authorize the execution, delivery, and performance of this First Amendment.
(c) Valid and Binding Obligation. This First Amendment constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies 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).
(d) No Conflicts. The execution, delivery, and performance of this First Amendment by such Party does not and will not (i) conflict with, or result in a breach or violation of, the organizational documents of such Party, (ii) conflict with, or result in a breach, violation, or default (or an event that, with notice or lapse of time or both, would constitute a default) under any contract, agreement, indenture, mortgage, lease, license, permit, or other instrument or obligation to which such Party is a party or by which such Party or any of its properties or assets is bound, or (iii) violate any applicable law, statute, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to such Party or any of its properties or assets.
Section 3.2 Bring-Down of Purchase Agreement Representations and Warranties.
(a) Each Party hereby confirms that, except as otherwise disclosed in the disclosure schedules to the Purchase Agreement (including any supplements or updates thereto delivered in accordance with Section 6.8 of the Purchase Agreement), the representations and warranties of such Party set forth in the Purchase Agreement are true and correct in all material respects (or, with respect to any representation or warranty qualified by materiality or Material Adverse Effect, true and correct in all respects) as of the First Amendment Effective Date as though made on and as of such date; provided, however, that any representation or warranty that by its terms speaks as of a specific date or period shall be true and correct in all material respects (or, as applicable, in all respects) only as of such specific date or period.
(b) Notwithstanding the foregoing, the Company acknowledges that events and circumstances relating to the Concession Renegotiation have been disclosed to Buyer and Co-Investor pursuant to the notice and update provisions of Section 6.8 of the Purchase Agreement, and the Parties hereby expressly reserve their respective rights, positions, and arguments as to whether such events and circumstances constitute, or may constitute, a "Material Adverse Effect" as defined in the Purchase Agreement. Nothing in this Section 3.2 shall be deemed to constitute a determination, concession, or acknowledgment by any Party as to whether a Material Adverse Effect has occurred or may occur as a result of the Concession Renegotiation, and each Party reserves all rights and remedies available to it under the Purchase Agreement and applicable law with respect to such matters.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Effect of First Amendment.
(a) The Purchase Agreement, as amended by this First Amendment, constitutes the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersedes all prior agreements, understandings, negotiations, and discussions among the Parties, whether oral or written, with respect to the matters addressed in this First Amendment. For the avoidance of doubt, this Section 4.1(a) does not supersede or affect the Purchase Agreement itself (as amended hereby) or any ancillary agreement, document, or instrument delivered in connection therewith.
(b) From and after the First Amendment Effective Date, each reference in the Purchase Agreement to "this Agreement," "herein," "hereof," "hereunder," or words of similar import, and each reference to the "Purchase Agreement" or the "Agreement" in any other Transaction Document (as defined in the Purchase Agreement) or in any certificate, notice, or other document delivered in connection with the Purchase Agreement, shall mean and be a reference to the Purchase Agreement as amended by this First Amendment, unless the context otherwise requires.
Section 4.2 Governing Law. This First Amendment shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions (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. The Parties hereby submit to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction, any state or federal court sitting in Wilmington, Delaware) for the adjudication of any dispute arising out of or relating to this First Amendment, and each Party irrevocably consents to the jurisdiction of such courts in any such suit, action, or proceeding.
Section 4.3 Counterparts. This First Amendment may be executed in any number of counterparts (including by means of facsimile or portable document format (.pdf) signature pages), each of which when so executed and delivered shall be deemed an original, and all of which taken together shall constitute one and the same instrument. The delivery of an executed counterpart of this First Amendment by facsimile or by electronic transmission in portable document format (.pdf) shall be equally as effective as the delivery of an originally executed counterpart of this First Amendment. No Party shall raise the use of facsimile or electronic transmission to deliver a signature, or the fact that any signature or agreement was transmitted or communicated through the use of a facsimile or electronic transmission, as a defense to the formation of this First Amendment.
Section 4.4 Headings. The article, section, and subsection headings contained in this First Amendment are for convenience of reference only, shall not be deemed to be a part of this First Amendment, and shall not be referred to in connection with the construction or interpretation of this First Amendment.
Section 4.5 Severability. If any term, provision, covenant, or restriction of this First Amendment is held by a court of competent jurisdiction or other governmental authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this First Amendment shall remain in full force and effect and shall in no way be affected, impaired, or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a determination, the Parties shall negotiate in good faith to modify this First Amendment so as to effect the original intent of the Parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
Section 4.6 No Waiver.
(a) The extension of the Outside Date from December 31, 2022 to March 31, 2023 pursuant to this First Amendment shall not be deemed a waiver of any right, remedy, power, or privilege of any Party under the Purchase Agreement, at law, or in equity, nor shall it be deemed to establish a custom or course of dealing between the Parties, or to create any obligation, express or implied, on the part of any Party to agree to any further extension of the Outside Date or any other amendment to the Purchase Agreement beyond the terms set forth herein.
(b) No Party shall be deemed, by virtue of its execution of this First Amendment or the extension of the Outside Date effected hereby, to have waived any right to terminate the Purchase Agreement pursuant to Section 9.1 thereof or any other applicable provision, including, without limitation, any termination right that may arise upon the occurrence of the Extended Outside Date if the Closing has not theretofore been consummated.
(c) No failure or delay on the part of any Party in exercising any right, power, or privilege under this First Amendment or the Purchase Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 4.7 Expenses. Each Party shall bear its own costs and expenses (including, without limitation, fees and disbursements of legal counsel, financial advisors, accountants, and other professional advisors) incurred in connection with the negotiation, preparation, execution, and delivery of this First Amendment. Nothing in this Section 4.7 shall modify or limit any expense reimbursement or indemnification obligations of the Parties set forth in the Purchase Agreement.
Section 4.8 Successors and Assigns. This First Amendment shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns under the Purchase Agreement. No Party may assign or delegate any of its rights or obligations under this First Amendment except in accordance with the assignment provisions of the Purchase Agreement. Any purported assignment in contravention of this Section 4.8 shall be null and void.
Section 4.9 Further Assurances. Each Party agrees to execute and deliver, or cause to be executed and delivered, such additional documents, instruments, conveyances, and assurances, and to take such additional actions, as may be reasonably necessary or appropriate to effectuate the provisions and purposes of this First Amendment.
[Signature Pages Follow]
SIGNATURE PAGES TO FIRST AMENDMENT TO EQUITY PURCHASE AGREEMENT
IN WITNESS WHEREOF, each of the undersigned Parties has caused this First Amendment to the Equity Purchase Agreement to be duly executed and delivered as of the date first written above.
SELLERS:
TIMBERLINE GROWTH EQUITY FUND III, LP
By: Timberline Growth Partners LLC, its General Partner
By: ________
Name: Hugh Callister
Title: Managing Partner
Date: November 22, 2022
WEIR FAMILY TRUST
By: ________
Name: Jonathan M. Weir
Title: Trustee
Date: November 22, 2022
THE MANAGEMENT SELLERS (acting through the Management Sellers' Representative pursuant to the Purchase Agreement)
By: ________
Name: Jonathan M. Weir
Title: Management Sellers' Representative
Date: November 22, 2022
COMPANY:
CASCADIA RENEWABLES HOLDINGS, INC.
By: ________
Name: Jonathan M. Weir
Title: Chief Executive Officer
Date: November 22, 2022
BUYER:
CASCADIA ACQUISITION CORP.
By: ________
Name: David R. Hargreaves
Title: President
Date: November 22, 2022
ACKNOWLEDGED AND AGREED (solely for purposes of Sections 2.3 and 2.4 of this First Amendment):
MERIDIAN INFRASTRUCTURE PARTNERS FUND IV, LP
By: Meridian Infrastructure GP IV LLC, its General Partner
By: ________
Name: David R. Hargreaves
Title: Managing Partner
Date: November 22, 2022
ICM CASCADIA CO-INVEST, LP
By: Meridian Infrastructure GP IV LLC, its General Partner
By: ________
Name: David R. Hargreaves
Title: Managing Partner
Date: November 22, 2022
[End of First Amendment to Equity Purchase Agreement]