1023-00001 · Ironside Capital Management LP · Transaction Documents/Standstill

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT

I. Executive Summary

This memorandum analyzes the final-form Mutual Standstill and Preservation Agreement (the "MSPA" or the "Agreement") currently scheduled for execution on or about February 15, 2024, among the parties to the Equity Purchase Agreement dated September 15, 2022, as amended (the "EPA"). We have reviewed the MSPA in its entirety, together with the underlying transactional documents, regulatory filings, and side agreements, and provide below our assessment of the Agreement's key provisions and their implications for Ironside Capital Management LP ("Ironside") and the co-investment vehicle ICM Cascadia Co-Invest, LP ("ICM Co-Invest").

By way of context, the EPA's outside date expired on December 31, 2023, following three successive amendments that extended the original outside date of December 31, 2022. No party exercised termination rights upon expiration. The debt commitment letter issued by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC, which provided for a $975 million senior secured term loan facility and a $150 million revolving credit facility, expired on October 31, 2023, and has not been renewed or replaced. The co-investment vehicle, ICM Cascadia Co-Invest, LP, has been dormant since January 9, 2023, when Meridian Infrastructure GP IV LLC (the "GP") issued a capital-call suspension notice following its declaration of a Material Impediment Event under Section 7.04 of the LP Agreement.

The MSPA was drafted by Calderwood & Harkness LLP ("C&H") on behalf of ICM Co-Invest's interests. We coordinated the drafting and negotiation process with Breckenridge Sloane & Pratt LLP, counsel to Meridian Infrastructure Partners Fund IV, LP ("Fund IV"), whose lead partner on this matter is Charles A. Delacroix; Ridgeway, Ashford & Malone PC, counsel to Cascadia Renewables Holdings, Inc. ("Cascadia") and the selling shareholders, whose lead partner is Nina R. Castellano; and Garvey Lennox LLP, counsel to Timberline Growth Equity Fund III, LP ("Timberline"), whose lead partner is Steven F. Yun. The negotiation was conducted over a period of approximately seven weeks, with principal areas of discussion centering on the scope of the standstill provisions, the treatment of regulatory approvals, the reactivation framework, and — most critically for Ironside — the express preservation of Ironside's independent rights under the LP Agreement and the Side Letter.

Overall Assessment. The MSPA adequately preserves Ironside's rights while maintaining optionality for either a reactivation of the transaction or an orderly wind-down of the co-investment vehicle. The Agreement strikes an appropriate balance: it prevents sellers from seeking alternative buyers and prevents buyer parties from walking away unilaterally, while simultaneously ensuring that Ironside is not locked into an indefinite commitment. Certain provisions merit ongoing monitoring, particularly those relating to the preservation of the FERC Section 203 approval (which is at risk of lapsing on June 15, 2024), the status of the R&W insurance policy tolling arrangement, and the approaching 18-month dormancy trigger date under the LP Agreement (July 9, 2024), which will ripen Ironside's independent wind-down election right. We address each of these matters in detail below.

II. Background and Procedural Context

A. Transaction Overview

The transaction at issue involves the proposed acquisition of 100% of the outstanding equity interests of Cascadia Renewables Holdings, Inc. ("Cascadia" or the "Target"), an Oregon corporation that owns and operates a diversified portfolio of renewable energy and water infrastructure assets throughout the Pacific Northwest. Cascadia's asset base comprises fourteen hydroelectric generating facilities, six wind farm installations, and three water-treatment concession operations located across the states of Oregon, Washington, and Idaho. The acquisition was to be effected through Cascadia Acquisition Corp. (the "Buyer"), a Delaware corporation formed for the purpose of the transaction and owned jointly by Fund IV and ICM Co-Invest.

The aggregate enterprise value established under the EPA is $1,950,000,000, representing an implied EV/EBITDA multiple of approximately 14.1x based on Cascadia's fiscal year 2021 EBITDA of approximately $138 million. This valuation was established following extensive due diligence conducted between March and August 2022, including independent appraisals of the hydroelectric and wind assets by Morin Paulson Energy Advisors LLC, a market study of the Pacific Northwest renewable energy landscape prepared by Corinth Infrastructure Research, and an analysis of the water-treatment concession portfolio prepared by Clearwater Municipal Advisory Group.

The total equity commitment under the transaction structure was $1,050,000,000, allocated between the two buyer vehicles as follows:

• Meridian Infrastructure Partners Fund IV, LP: $750,000,000 (representing 71.43% of total equity)

• ICM Cascadia Co-Invest, LP: $300,000,000 (representing 28.57% of total equity)

The remainder of the enterprise value ($900,000,000 in debt financing plus approximately $75,000,000 in cash on Cascadia's balance sheet) was to be funded through a senior secured credit facility arranged by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC, consisting of a $975,000,000 senior secured term loan and a $150,000,000 revolving credit facility.

The selling shareholders are:

• Timberline Growth Equity Fund III, LP (62% of Cascadia's equity), a growth equity fund managed by Timberline Capital Partners LLC, with Hugh Callister as Managing Partner;

• Weir Family Trust (18% of Cascadia's equity), with Jonathan M. Weir, Cascadia's Chief Executive Officer, serving as trustee; and

• Management Rollover Pool (20% of Cascadia's equity), consisting of approximately fifteen members of Cascadia's senior management team, of whom approximately 50% were expected to roll over a portion of their equity into the post-acquisition capital structure.

The Co-Investment Allocation Agreement dated July 29, 2022 (the "Allocation Agreement") governs the economic relationship between Fund IV and ICM Co-Invest, including the allocation of costs, expenses, and economic returns on a pro rata basis (71.43%/28.57%). ICM Co-Invest was established as a single-purpose co-investment vehicle with Ironside as its 99.99% limited partner, structured to provide Ironside's institutional investors with direct exposure to the Cascadia opportunity at favorable economics (no management fee, no carried interest to Meridian GP IV LLC, as set forth in the Side Letter dated July 29, 2022).

B. Concession Renegotiation and Dormancy

The transaction's progression toward closing was materially disrupted by an unforeseen regulatory development affecting one of Cascadia's core concession assets.

On October 28, 2022, approximately six weeks after execution of the EPA, the Portland Metropolitan Water District (the "PMWD") issued formal written notice to Cascadia of its intent to renegotiate the terms of the Bull Run Filtration Project water-treatment concession. This concession, originally executed in approximately 2018, is a 40-year agreement under which Cascadia operates and maintains the Bull Run Water Filtration Plant, one of the largest municipal water-treatment facilities in the Pacific Northwest. The concession generates annual revenue of approximately $64 million, representing a significant component of Cascadia's overall revenue base.

The PMWD's notice cited the enactment of Oregon Senate Bill 1567 (2022) ("SB 1567"), which amended certain provisions of Oregon's public utility contracting framework and granted municipal water districts enhanced authority to renegotiate concession terms upon a finding that existing terms are inconsistent with revised public interest standards. SB 1567 was signed into law on July 15, 2022, approximately two months before the EPA was executed, but its implications for existing concession agreements were not fully analyzed in the initial due diligence period. The PMWD's notice indicated that the District's Board of Commissioners had voted to invoke SB 1567's renegotiation provisions and that the District expected to commence good-faith negotiations with Cascadia within 90 days.

On November 10, 2022, Meridian Infrastructure GP IV LLC notified Ironside of the PMWD's renegotiation notice, characterizing the development as a material adverse development with the potential to affect the enterprise value of the Target and the economics of the proposed acquisition. In the ensuing weeks, the parties to the EPA entered into discussions regarding the appropriate course of action. Ironside, through C&H, emphasized the need for a thorough analysis of the concession renegotiation's potential financial impact before proceeding to closing.

On January 9, 2023, Meridian GP IV LLC formally declared a Material Impediment Event under Section 7.04 of the LP Agreement of ICM Cascadia Co-Invest, LP, and simultaneously issued a capital-call suspension notice, effective immediately. The declaration cited the uncertainty surrounding the Bull Run concession renegotiation and its potential impact on the Target's financial projections and enterprise value. Upon the issuance of the capital-call suspension notice, ICM Co-Invest entered a state of dormancy, with no further capital calls permitted until the Material Impediment Event is resolved or waived.

The EPA was subsequently amended on three occasions to extend the outside date and preserve the transaction framework:

• First Amendment (November 22, 2022): Extended the outside date from December 31, 2022 to March 31, 2023, to allow time for initial assessment of the concession renegotiation.

• Second Amendment (March 15, 2023): Extended the outside date from March 31, 2023 to June 30, 2023, in light of ongoing uncertainty regarding the scope and timeline of the PMWD's renegotiation demands.

• Third Amendment (June 28, 2023): Extended the outside date from June 30, 2023 to December 31, 2023, reflecting the parties' continued desire to preserve the transaction while the concession renegotiation remained unresolved. This amendment also included updated bring-down representations from the sellers regarding Cascadia's financial condition and ordinary-course operations.

Despite these extensions, the concession renegotiation between Cascadia and the PMWD remained unresolved as of December 31, 2023, and the EPA's outside date was permitted to expire without further extension and without any party exercising its termination rights.

C. Expiration of Key Transaction Documents

The period following the Third Amendment saw the expiration of several key transaction documents, creating the legal and commercial circumstances that necessitated the MSPA:

Debt Commitment Letter. On October 31, 2023, the commitment letter issued by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC expired. The commitment letter, which provided for a $975,000,000 senior secured term loan facility and a $150,000,000 revolving credit facility, had been extended once on April 30, 2023, at a cost of an extension fee of $2,437,500 (paid by Fund IV). Atlas National Bank and Pinnacle Credit Partners declined to extend the commitment letter a second time, citing changes in credit market conditions and the continued uncertainty regarding the concession renegotiation. As of the date of this memorandum, no replacement financing has been arranged, and any reactivation of the transaction would require a new debt commitment on terms reflecting current market conditions.

EPA Outside Date. On December 31, 2023, the EPA's outside date, as most recently extended by the Third Amendment, expired. No party delivered a termination notice pursuant to the EPA's termination provisions. The failure of any party to exercise termination rights created a degree of legal ambiguity regarding the status of the EPA — specifically, whether the agreement remains operative but with an expired closing deadline, or whether it should be treated as having lapsed. The MSPA is designed, in part, to address this ambiguity by establishing a mutually agreed framework for the treatment of the EPA during the standstill period.

FERC Section 203 Approval. The Federal Energy Regulatory Commission ("FERC") granted approval of the proposed acquisition under Section 203 of the Federal Power Act on December 15, 2022, in Docket No. EC22-143-000. FERC approvals of this nature are typically valid for a limited period, and the original approval was set to expire on December 15, 2023. Following a request by counsel, FERC staff issued a letter extending the effectiveness of the approval to June 15, 2024. As of the date of this memorandum, no further extension has been requested. If the FERC approval lapses, a new application would need to be filed, which would entail additional filing fees, regulatory counsel costs, and an estimated timeline of six to twelve months for new approval. The MSPA addresses this risk by imposing obligations on the parties to use reasonable efforts to seek a further extension or prepare for re-filing.

OPUC Proceedings. The Oregon Public Utility Commission ("OPUC") proceeding related to the transaction (Docket No. UM-2287, filed October 14, 2022) has been stayed at the joint request of the parties since February 2023. The stay remains in effect as of the date of this memorandum. The MSPA provides that the stay shall continue and that no party shall withdraw the underlying application.

CFIUS Clearance. The Committee on Foreign Investment in the United States ("CFIUS") review process was completed in the fourth quarter of 2022, with CFIUS effectively granting clearance by allowing the statutory review period to expire without initiating a formal investigation. No further action is required with respect to CFIUS, and the clearance status is preserved.

D. Need for the MSPA

The expiration of the EPA's outside date, coupled with the lapse of the debt commitment letter and the ongoing uncertainty surrounding the Bull Run concession renegotiation, created a situation in which the transaction was neither clearly alive nor clearly dead. Without a formal agreement among the parties, any party could have attempted to walk away from the transaction, sought alternative counterparties, or initiated litigation to recover sunk costs or enforce perceived rights under the EPA. This legal vacuum posed particular risks for Ironside:

• Risk of Unilateral Seller Action. Absent a standstill, the selling shareholders — and in particular Timberline, as the 62% majority holder — could have sought alternative acquirers for Cascadia's equity or assets, potentially depriving Ironside and Fund IV of the opportunity to consummate the transaction on favorable terms if the concession renegotiation reached a satisfactory resolution.

• Risk of Unilateral Meridian Action. Without a clear framework, Meridian GP IV LLC could have taken steps to terminate or restructure the co-invest vehicle in a manner that was adverse to Ironside's interests, including potentially seeking to reallocate the co-invest commitment to Fund IV's own account.

• Regulatory Preservation. The FERC approval, OPUC proceeding, and R&W insurance tolling arrangement all required affirmative action to preserve, and the absence of a governing agreement created a risk that one or more parties might fail to take the necessary steps.

The MSPA is designed to address each of these risks by creating a structured framework that preserves the transaction while providing a clear pathway for either reactivation or orderly unwinding.

Ironside's key concerns entering the MSPA negotiations, as communicated to C&H, were: (a) preservation of the $22,500,000 in capital already called and deployed; (b) protection against unfunded commitment exposure of $277,500,000; and (c) preservation of optionality to pursue wind-down of the co-invest vehicle under LP Agreement Section 7.04(c), which provides for an 18-month dormancy trigger — a period that will expire on July 9, 2024. As discussed in detail below, the MSPA adequately addresses each of these concerns.

III. Parties to the MSPA

The MSPA is entered into among the following parties, each of which is a signatory to the Agreement:

1. Cascadia Acquisition Corp., a Delaware corporation formed as the buyer entity for the purposes of the transaction, wholly owned by Fund IV and ICM Co-Invest in proportion to their respective equity commitments (71.43% and 28.57%, respectively). Cascadia Acquisition Corp. has had no material operations since its formation and serves solely as the acquisition vehicle.

2. Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership, acting through its general partner, Meridian Infrastructure GP IV LLC, a Delaware limited liability company. The authorized representatives of Meridian Infrastructure GP IV LLC for purposes of the MSPA are David R. Hargreaves (Managing Partner), Lillian Fong (Partner, Infrastructure Investments), and Graham Whitfield (Partner, Legal & Compliance).

3. ICM Cascadia Co-Invest, LP, a Delaware limited partnership formed as the co-investment vehicle for the transaction. Ironside Capital Management LP is the 99.99% limited partner of ICM Co-Invest. The general partner of ICM Co-Invest is Meridian Infrastructure GP IV LLC, acting in its capacity as general partner pursuant to the LP Agreement dated July 29, 2022.

4. Cascadia Renewables Holdings, Inc., an Oregon corporation and the Target of the proposed acquisition. Cascadia is represented for purposes of the MSPA by its Chief Executive Officer, Jonathan M. Weir, and its Chief Financial Officer, Sandra K. Llewellyn.

5. Timberline Growth Equity Fund III, LP, a Delaware limited partnership and the 62% majority selling shareholder of Cascadia. Timberline is managed by Timberline Capital Partners LLC, with Hugh Callister serving as Managing Partner.

6. Weir Family Trust, a trust organized under the laws of the State of Oregon, holding 18% of Cascadia's equity, with Jonathan M. Weir serving as trustee.

7. Management Rollover Participants, consisting of certain members of Cascadia's senior management team who hold, in the aggregate, 20% of Cascadia's equity. The management rollover participants are party to the MSPA collectively, pursuant to a joinder agreement executed by each participant and attached to the MSPA as Exhibit A.

Each party's execution of the MSPA is subject to customary corporate and partnership authorization requirements, and the representations and warranties in the MSPA include confirmations of due authority, valid existence, and absence of conflicts with other material agreements.

IV. Analysis of Key Provisions

A. Standstill Period and Duration

The MSPA establishes an initial standstill period of twelve (12) months from the date of execution. Assuming execution occurs as currently scheduled on February 15, 2024, the initial standstill period would run through approximately February 15, 2025.

The Agreement provides for an automatic six-month extension of the standstill period if any party delivers a Reactivation Notice (as discussed in Section IV.D below) prior to the expiration of the initial twelve-month period. If a Reactivation Notice is delivered and the automatic extension is triggered, the standstill period would extend through approximately August 15, 2025, unless earlier terminated in accordance with the Agreement's termination provisions.

With respect to early termination, the MSPA distinguishes between the initial twelve-month period and any extension period. During the initial twelve-month period, termination of the MSPA may be effected only by mutual written consent of all parties. This "lock-up" provision ensures that no single party can unilaterally withdraw from the standstill framework during the initial period, providing stability and predictability for all parties during the critical window in which the concession renegotiation may resolve. Following the expiration of the initial twelve-month period (including during any automatic extension), any party may terminate the MSPA upon ninety (90) days' prior written notice to all other parties. This notice period is designed to provide an orderly transition out of the standstill framework and to permit the parties to take protective action with respect to regulatory approvals, insurance arrangements, and entity maintenance before the standstill terminates.

Analysis for Ironside. The twelve-month initial standstill period is appropriately calibrated to preserve the transaction framework while the concession renegotiation between Cascadia and the Portland Metropolitan Water District proceeds toward resolution. We note that the PMWD's renegotiation process has now been underway for approximately sixteen months, and while we understand from Meridian's most recent quarterly report (Q3 2023) that discussions are ongoing, no tentative framework or revised terms have been disclosed to the buyer parties. The twelve-month standstill period provides sufficient time for a resolution to emerge, but also ensures that the standstill does not extend indefinitely.

Critically, Ironside should be aware that its independent wind-down election right under LP Agreement Section 7.04(c) will ripen on July 9, 2024 — approximately five months after the anticipated MSPA execution date and approximately seven months before the expiration of the initial twelve-month standstill period. As discussed in detail in Section IV.F below, the MSPA contains an express carve-out preserving this right. Accordingly, Ironside's wind-down election right operates independently of and is not subordinated to the MSPA's standstill provisions. This gives Ironside the ability to exit the co-invest vehicle even during the initial standstill period if the transaction remains stalled and Ironside determines that wind-down is in its best interest.

B. Mutual Standstill on Termination Rights

The core operative provision of the MSPA is the mutual standstill on termination rights. Under this provision, all parties agree, during the standstill period, not to:

(a) exercise, purport to exercise, or threaten to exercise any termination right under the EPA (as amended by the First, Second, and Third Amendments), whether arising from the expiration of the outside date or otherwise;

(b) assert, claim, or argue in any forum that the EPA has terminated by reason of the expiration of the outside date on December 31, 2023, or by reason of any other circumstance arising prior to the date of the MSPA;

(d) commence, threaten, or participate in any litigation, arbitration, mediation, or other dispute resolution proceeding with respect to the EPA, the transactions contemplated thereby, or the rights and obligations of any party thereunder, except for proceedings commenced solely to enforce the terms of the MSPA itself.

The MSPA characterizes the EPA as preserved in a "suspended" state during the standstill period. In this suspended state, the representations, warranties, covenants, and conditions set forth in the EPA (as amended) remain operative in principle, such that they could be reinstated and relied upon in the event of a reactivation. However, the parties' performance obligations under the EPA — including, most significantly, the obligation to consummate the closing — are tolled for the duration of the standstill period. The tolling of performance obligations means that no party is in breach of the EPA by reason of failure to close or failure to satisfy closing conditions during the standstill period.

Ironside Observation. This provision is, on its face, balanced and bilateral. The practical effect is that Ironside (through ICM Co-Invest) cannot force a closing or termination of the EPA during the standstill period. However, the corresponding benefit is substantial: the selling shareholders — and in particular Timberline, which holds 62% of Cascadia and which, in the absence of the MSPA, could have sought alternative acquirers — cannot walk away from the transaction or solicit competing offers during the same period. This is an important protection for the buyer parties' transaction opportunity and for the value of the diligence and regulatory work already completed.

We also note that the mutual litigation standstill provision in subparagraph (d) above is expressly limited to disputes arising under or with respect to the EPA. It does not affect Ironside's separate contractual rights under the LP Agreement vis-à-vis Meridian GP IV LLC, including Ironside's right to enforce the GP's reporting obligations, to challenge any GP action that exceeds the scope of its authority under the LP Agreement, or to exercise the wind-down election right under Section 7.04(c). This distinction is reinforced by the express carve-out discussed in Section IV.F below.

C. Preservation of Transaction Documents and Regulatory Approvals

The MSPA contains a comprehensive set of preservation obligations designed to maintain the integrity of the transaction framework and the regulatory approvals that have been obtained or are pending.

Transaction Documents. All parties agree to use commercially reasonable efforts to preserve all executed transaction documents, including the EPA (as amended), the disclosure schedules, all ancillary agreements (including the management equity plan, the transition services agreement, and the escrow agreement), and all third-party consents and estoppel certificates obtained in connection with the transaction. The parties further agree not to take any action that would impair the validity or enforceability of any such document, and to cooperate in good faith with any reasonable requests by other parties to maintain or update such documents as necessary to preserve their effectiveness.

Regulatory Preservation. The MSPA addresses the status of each regulatory approval or proceeding as follows:

FERC Section 203 Approval (Docket EC22-143-000). The parties acknowledge that FERC granted approval of the proposed acquisition under Section 203 of the Federal Power Act on December 15, 2022, and that this approval was extended by FERC staff letter to June 15, 2024. The MSPA requires Meridian (as the lead buyer party) and Cascadia (as the Target) to use reasonable efforts to seek a further extension of the FERC approval beyond June 15, 2024, and, in the event that an extension is not obtainable, to prepare for and submit a new application for FERC approval. The costs of any such extension request or re-filing are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis in accordance with the Allocation Agreement.

OPUC (Docket UM-2287). The parties acknowledge that the OPUC proceeding related to the transaction has been stayed at the joint request of the parties since February 2023. The MSPA provides that the parties shall take all reasonable actions to maintain the stay in effect for the duration of the standstill period and shall not withdraw the underlying application or take any action that would result in the dismissal of the proceeding. The parties further agree that, in the event the OPUC signals an intent to dismiss the proceeding for lack of prosecution or inactivity, the parties shall cooperate in filing such motions or responses as may be necessary to preserve the proceeding.

CFIUS. The parties acknowledge that no further CFIUS action is required. CFIUS clearance was effectively obtained in the fourth quarter of 2022 when the statutory review period expired without CFIUS initiating a formal investigation or imposing any mitigation conditions. The MSPA preserves the clearance status by confirming that no party has taken or will take any action that would trigger a new CFIUS review.

R&W Insurance Policy. The MSPA addresses the status of the representations and warranties insurance policy issued by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814), which provides coverage of up to $195 million. The policy was placed on a tolling basis pursuant to a tolling side letter executed on January 20, 2023, at approximately the time ICM Co-Invest entered dormancy. Under the tolling arrangement, the policy's coverage period and claims reporting deadlines are suspended for the duration of the tolling period, effectively preserving the availability of coverage in the event the transaction is reactivated and closed. The MSPA requires ICM Co-Invest (as the named insured) to continue to maintain the tolling arrangement with Northgate Specialty and to notify Northgate of the execution of the MSPA and the terms of the standstill. The MSPA further requires that the tolling arrangement be renewed or confirmed on at least an annual basis for the duration of the standstill period.

D&O Tail Policy. The directors' and officers' liability tail policy issued by Sentinel Directors & Officers Underwriters Inc. in connection with the transaction remains in effect. The MSPA provides that Cascadia shall be responsible for maintaining this policy and shall not allow it to lapse during the standstill period.

Analysis for Ironside. The FERC approval lapse risk is the most significant regulatory concern during the standstill period. The current extended approval is effective through June 15, 2024, which is only approximately four months after the anticipated MSPA execution date. The MSPA's "reasonable efforts" standard for FERC extension or re-filing is appropriate — a "best efforts" standard would have been preferable from Ironside's perspective, but would have been resisted by Meridian and the sellers as overly burdensome given the uncertainty surrounding the transaction's future. Ironside should monitor the June 15, 2024 deadline closely and should request that Meridian provide specific updates on FERC extension efforts in its next quarterly report (expected March 2024). In the event that the FERC approval lapses and a new application is required, the estimated cost to Ironside (at its 28.57% share) would be meaningful, and the additional timeline of six to twelve months for new approval could extend the standstill period and delay any potential reactivation significantly.

We also note that the R&W insurance tolling arrangement, while currently in effect at no additional premium cost, may require renewal or result in additional premium obligations as the tolling period extends. Ironside should be prepared for the possibility that Northgate Specialty may impose additional conditions or fees upon learning of the MSPA and the continued dormancy of the transaction. Any such costs would be allocated pro rata between Fund IV and ICM Co-Invest under the MSPA's expense provisions.

D. Reactivation Framework and Triggers

The MSPA establishes a structured framework for the potential reactivation of the transaction. Under this framework, any party to the MSPA may deliver a written notice (a "Reactivation Notice") proposing the resumption of the transaction, subject to the satisfaction or waiver of the following conditions:

(a) Resolution or Material Advancement of the Bull Run Concession Renegotiation. The Reactivation Notice must demonstrate that the renegotiation between Cascadia and the Portland Metropolitan Water District with respect to the Bull Run Filtration Project concession has been resolved, or that the renegotiation has advanced to a stage at which the parties can reasonably assess the financial impact of the revised concession terms on Cascadia's enterprise value and projected cash flows. This condition may be waived by the buyer parties (Fund IV and ICM Co-Invest, each acting in their sole discretion) if they determine, in good faith, that the status of the concession renegotiation does not preclude proceeding with the transaction.

(b) Identification of Replacement Debt Financing. The Reactivation Notice must identify a source or sources of replacement debt financing on commercially reasonable terms sufficient to fund the debt component of the acquisition. The original debt commitment from Atlas National Bank and Pinnacle Credit Partners expired on October 31, 2023, and any reactivation would require a new financing arrangement. The MSPA does not specify the terms on which replacement financing must be obtained, but the requirement that such financing be on "commercially reasonable terms" provides a meaningful threshold that must be met before the parties can be required to proceed.

(c) Confirmation of Regulatory Approvals. The Reactivation Notice must confirm that all required regulatory approvals (including FERC Section 203 approval, OPUC approval, and any other federal, state, or local approvals required for the closing) remain valid and in effect, or that such approvals can reasonably be expected to be obtained within a reasonable timeframe. This condition recognizes the risk that one or more regulatory approvals may have lapsed during the standstill period and ensures that the parties are not required to proceed with a closing in the absence of necessary regulatory clearances.

(d) Agreement on Updated Economic Terms. The Reactivation Notice must be accompanied by a proposal for any updates or adjustments to the economic terms of the transaction that the delivering party believes are warranted in light of changed circumstances since the execution of the EPA. This may include adjustments to the aggregate enterprise value (for example, if Cascadia's financial performance has deteriorated or the revised concession terms reduce expected future cash flows), adjustments to the equity/debt split, or adjustments to the economics of the co-invest structure. The requirement that all parties agree on any updated economic terms effectively provides each party with a consent right over material changes to the deal.

Upon delivery of a Reactivation Notice, all parties have sixty (60) calendar days in which to negotiate and agree on a comprehensive reactivation plan addressing each of the foregoing conditions. If the parties are unable to reach agreement on a reactivation plan within this sixty-day period, the Reactivation Notice lapses without effect, and any party may thereafter deliver a new Reactivation Notice or, if the initial standstill period has expired, exercise its termination rights under the MSPA.

Analysis for Ironside. The reactivation framework is appropriately structured to protect Ironside's interests in several important respects. First, the conditions to reactivation — particularly the requirement of resolution or material advancement of the concession renegotiation and the identification of replacement debt financing — ensure that Ironside's capital cannot be called or committed until substantive commercial and financing conditions have been satisfied. The MSPA does not permit a reactivation to proceed on the basis of vague assurances or preliminary indications; rather, it requires concrete demonstrable progress on the key issues that have caused the transaction to stall.

Second, and critically, the reactivation framework does not automatically reinstate capital-call obligations against Ironside. Even if a Reactivation Notice is delivered and a reactivation plan is agreed upon, any new capital call against ICM Co-Invest would need to comply with the requirements of the LP Agreement, including Section 4.01 (governing capital-call procedures and notices), and would require the lifting of the Material Impediment Event declaration made by the GP on January 9, 2023. Ironside is not obligated to fund additional capital merely because a reactivation plan has been agreed upon; the LP Agreement's capital-call protections remain fully operative.

Third, the requirement that all parties agree on any updated economic terms effectively gives Ironside a de facto veto over any material changes to the transaction economics. If, for example, Meridian were to propose a reactivation on terms that significantly reduced the expected return to ICM Co-Invest — whether through a reduced enterprise value, less favorable debt terms, or a restructured equity split — Ironside would have the right to withhold its consent and effectively block the reactivation on those terms. This consent right, combined with Ironside's independent wind-down election right under LP Agreement Section 7.04(c), gives Ironside substantial leverage in any reactivation negotiation.

E. Expense Allocation During Standstill

The MSPA establishes the following framework for the allocation of costs and expenses during the standstill period:

Party-Specific Costs. Each party to the MSPA bears its own legal, advisory, and administrative costs incurred during the standstill period, including counsel fees, financial advisory fees, and internal costs. This is consistent with the general principle that each party is responsible for its own transaction costs, as set forth in the EPA.

Entity Maintenance Costs. Ongoing entity-maintenance costs for Cascadia Acquisition Corp. and ICM Cascadia Co-Invest, LP are borne by their respective partners and members. For ICM Co-Invest, the estimated annual cost of maintaining the vehicle in dormancy is approximately $185,000, broken down as follows:

• Fund administration services (Kendrick Thorne & Associates LLP): approximately $75,000 per annum

• Delaware registered agent fees (Cascade Systems): approximately $2,500 per annum

• Delaware franchise tax: approximately $15,000 per annum

• Annual audit (conducted by Albright Pearce LLP): approximately $65,000 per annum

• K-1 preparation and tax compliance: approximately $27,500 per annum

These costs are modest in the context of Ironside's overall investment program and represent the minimum expenditure necessary to maintain the co-invest vehicle in good standing and in compliance with its reporting and tax obligations.

R&W Insurance Tolling Costs. If Northgate Specialty Insurance Co. imposes any additional premium, tolling fee, or other charge in connection with the continued tolling of the R&W insurance policy, such costs are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis (71.43% and 28.57%, respectively), consistent with the Allocation Agreement.

Regulatory Re-Filing Costs. If it becomes necessary to re-file for FERC approval or to take any action with respect to the OPUC proceeding during the standstill period, the associated costs (including regulatory filing fees, regulatory counsel fees, and any required expert or consultant fees) are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis (71.43%/28.57%), consistent with the Allocation Agreement.

Analysis for Ironside. The expense allocation framework is consistent with the existing Allocation Agreement and the Side Letter and does not impose any disproportionate cost burden on Ironside or ICM Co-Invest. Ironside's direct dormancy costs remain modest at approximately $185,000 per annum. The potential incremental costs from regulatory re-filings (FERC or OPUC) or insurance tolling charges are proportionally shared between Fund IV and ICM Co-Invest, which is appropriate given the co-investment structure.

However, we note that the MSPA does not specifically address the allocation of costs associated with obtaining a new debt commitment letter in the event of a reactivation. The original debt commitment letter was obtained by Meridian on behalf of the buyer parties, and the extension fee of $2,437,500 was paid by Fund IV. If a reactivation were to proceed and a new debt commitment were required, the associated arrangement fees, commitment fees, and other costs could be substantial — potentially in the range of $15 million to $25 million or more, based on current market conditions. Ironside should ensure that any such costs are allocated proportionally in accordance with the Allocation Agreement and are not borne disproportionately by the co-invest. C&H raised this issue during the MSPA negotiation, and while Breckenridge Sloane (Meridian's counsel) indicated that the Allocation Agreement would govern such costs, we recommend that Ironside seek an express confirmation from Meridian on this point in connection with any reactivation discussion.

F. Preservation of Ironside's LP Agreement Rights

This provision is the single most important protection for Ironside in the MSPA and was the subject of extensive negotiation by C&H on Ironside's behalf.

The MSPA contains an express provision (Section 8.03 of the Agreement) stating that nothing in the Agreement shall be deemed to modify, waive, amend, supplement, or impair any rights, remedies, or protections of any limited partner of ICM Cascadia Co-Invest, LP under the LP Agreement of ICM Cascadia Co-Invest, LP (dated July 29, 2022) or the Side Letter (dated July 29, 2022, between Meridian Infrastructure GP IV LLC and Ironside Capital Management LP), in each case as may be amended from time to time. The provision further specifies, without limitation, that the following rights are expressly preserved:

(a) Wind-Down Election Right (LP Agreement §7.04(c)). Ironside's right to elect the wind-down of ICM Cascadia Co-Invest, LP if the vehicle has been dormant (as defined in the LP Agreement) for a continuous period of eighteen (18) months. The 18-month dormancy period commenced on January 9, 2023 (the date of the GP's capital-call suspension notice) and will ripen on July 9, 2024.

(b) Quarterly Reporting Rights. Ironside's right to receive quarterly status reports from the GP, including reports on the status of the transaction, the financial condition of the co-invest vehicle, and any material developments affecting the vehicle's investments or commitments.

(c) Information and Audit Rights. Ironside's right to access the books and records of ICM Co-Invest, to request information from the GP regarding the vehicle's operations and investments, and to cause an independent audit of the vehicle's financial statements.

(d) Capital-Call Protections. Ironside's protection against additional capital calls during the pendency of a Material Impediment Event, as declared by the GP on January 9, 2023. The GP may not issue a capital call to the limited partners of ICM Co-Invest until the Material Impediment Event has been resolved or waived in accordance with the procedures set forth in the LP Agreement.

The MSPA further provides that the standstill obligations imposed by the Agreement do not create, and shall not be construed to create, any obligation on the part of Ironside (or any other limited partner of ICM Co-Invest) to participate in a reactivated transaction on modified terms, or to consent to any modification of the co-invest economics (including without limitation the carried interest allocation, preferred return, commitment amount, or investment scope) that would require limited partner consent under the LP Agreement or the Side Letter.

Analysis for Ironside. This carve-out is the cornerstone of the MSPA from Ironside's perspective. Without it, Ironside would risk being locked into the standstill framework for up to eighteen months (twelve months initial period plus the six-month automatic extension) without the ability to pursue a wind-down or exit from the co-invest vehicle. The express preservation of the Section 7.04(c) wind-down election right ensures that Ironside retains ultimate leverage: if the transaction remains stalled and the concession renegotiation does not resolve in a satisfactory manner, Ironside can elect to wind down the co-invest vehicle beginning on July 9, 2024, regardless of the status of the MSPA standstill period.

We note that this carve-out was the subject of significant negotiation. Breckenridge Sloane, on behalf of Meridian, initially proposed language that would have subordinated Ironside's LP Agreement rights to the MSPA during the initial standstill period, arguing that permitting Ironside to exercise the wind-down election during the standstill would undermine the stability of the transaction framework. C&H rejected this position, noting that Ironside's wind-down election right is a fundamental protection negotiated at the time of the co-invest formation and that subordinating it to the MSPA would represent a material diminution of Ironside's rights without consideration. After several rounds of negotiation, Meridian's counsel agreed to the express carve-out in its current form, with the understanding that Ironside would provide Meridian with reasonable advance notice (not less than thirty days) before delivering a wind-down election notice under the LP Agreement.

G. Confidentiality and Non-Solicitation

The MSPA incorporates standard mutual confidentiality provisions that are substantially consistent with the confidentiality obligations set forth in the EPA. All parties agree to maintain the confidentiality of the terms of the MSPA, the existence and terms of the standstill arrangement, and all information exchanged among the parties during the standstill period, subject to customary exceptions for disclosures required by law, regulation, or legal process, disclosures to professional advisors, and disclosures to limited partners and investors in the ordinary course of fund reporting.

In addition, the MSPA contains reciprocal non-solicitation provisions:

Seller-Side Non-Solicitation. During the standstill period, the selling shareholders (Timberline, the Weir Family Trust, and the management rollover participants) agree not to, directly or indirectly, solicit, initiate, encourage, or entertain any inquiry, proposal, or offer from any third party relating to the acquisition, disposition, or transfer of Cascadia's equity securities or all or substantially all of Cascadia's assets. The selling shareholders further agree to promptly notify the buyer parties of any unsolicited inquiry or approach and to refrain from providing any confidential information to third parties in connection with any such inquiry.

Buyer-Side Non-Solicitation. During the standstill period, the buyer parties (Fund IV, ICM Co-Invest, and Cascadia Acquisition Corp.) agree not to pursue, negotiate, or enter into any alternative investment transaction in the Pacific Northwest renewable energy and water infrastructure sector that would directly compete with the Cascadia opportunity. This restriction is expressly limited to the Pacific Northwest geographic region (defined for this purpose as the states of Oregon, Washington, and Idaho) and to the specific sectors in which Cascadia operates (hydroelectric generation, wind energy, and water-treatment concessions).

Analysis for Ironside. The seller-side non-solicitation provision provides meaningful protection for the buyer parties' transaction opportunity. In the absence of this provision, Timberline — which, as a growth equity fund, may be under pressure from its own investors to realize value and return capital — could have sought alternative acquirers for its 62% stake in Cascadia during the standstill period. The non-solicitation effectively preserves the buyer parties' exclusivity with respect to the Cascadia opportunity.

The buyer-side non-solicitation is narrow in scope and should not materially affect Ironside's broader infrastructure investment program, which encompasses approximately $3.2 billion in committed capital across three co-investment vehicles spanning multiple geographies and asset classes. The restriction is limited to directly competing investments in Pacific Northwest renewable energy and water infrastructure, and does not extend to investments in other geographies, other infrastructure sub-sectors (e.g., transportation, telecommunications, social infrastructure), or passive portfolio holdings.

H. Governing Law and Dispute Resolution

The MSPA is governed by the laws of the State of Delaware, without regard to conflicts-of-law principles. This is consistent with the governing law provisions of the EPA, the LP Agreement, and the other key transaction documents, all of which are governed by Delaware law.

Any dispute arising under or in connection with the MSPA is subject to the exclusive jurisdiction of the Delaware Court of Chancery, or, if the Court of Chancery declines to accept jurisdiction, the Complex Commercial Litigation Division of the Delaware Superior Court. Each party irrevocably consents to personal jurisdiction in such courts and waives any objection to venue. The parties have not agreed to arbitration, which is also consistent with the dispute resolution framework of the EPA.

The MSPA includes an express provision acknowledging that a breach of the standstill obligations by any party would cause irreparable harm to the non-breaching parties that would not be adequately compensable by monetary damages, and each party agrees that specific performance, injunctive relief, and other equitable remedies are appropriate remedies for any such breach, without the necessity of proving actual damages or posting a bond.

Analysis for Ironside. The governing law and dispute resolution provisions are consistent with the existing contractual framework and present no concerns for Ironside. Delaware is a familiar and predictable forum for complex commercial disputes, and the Court of Chancery has extensive experience adjudicating disputes involving private equity transactions, co-investment structures, and standstill agreements. The specific performance provision is a standard feature of standstill agreements and ensures that any breach — for example, a seller's decision to entertain a competing offer in violation of the non-solicitation, or a buyer party's attempt to terminate the EPA in violation of the standstill — can be restrained by court order.

I. Representations and Warranties in the MSPA

The MSPA contains a limited set of representations and warranties from each party, appropriate for an agreement of this nature:

All Parties Represent. Each party to the MSPA represents and warrants that: (i) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization; (ii) it has full power and authority to execute, deliver, and perform its obligations under the MSPA; (iii) the execution, delivery, and performance of the MSPA have been duly authorized by all necessary corporate, partnership, or trust action; (iv) the MSPA constitutes a legal, valid, and binding obligation of such party, enforceable against it in accordance with its terms, subject to customary bankruptcy and equitable exceptions; and (v) the execution, delivery, and performance of the MSPA do not conflict with or result in a breach of any material agreement to which such party is bound or any applicable law, regulation, or order.

Selling Shareholders Represent. In addition to the foregoing, each selling shareholder represents and warrants that: (i) as of the date of the MSPA, no negotiations, discussions, or other communications are pending or in progress with any third party regarding the potential acquisition, disposition, or transfer of Cascadia's equity securities or assets; (ii) no selling shareholder has entered into any agreement, letter of intent, or term sheet with any third party regarding any such transaction; and (iii) Cascadia continues to conduct its business in the ordinary course, consistent with past practice.

Buyer Parties Represent. Fund IV and ICM Co-Invest each represent and warrant that: (i) the co-investment vehicle remains in good standing under the laws of the State of Delaware and has not been dissolved or wound down; and (ii) the capital called to date ($22,500,000 for ICM Co-Invest) remains available within the vehicle and has not been returned, distributed, or otherwise disposed of, except as applied to organizational expenses, placement fees, insurance premiums, due-diligence costs, and working-capital reserves as previously disclosed and authorized.

Analysis for Ironside. The selling shareholder representations regarding the absence of competing negotiations and the continued ordinary-course operation of Cascadia's business provide additional comfort that the transaction opportunity remains viable and has not been compromised by unauthorized seller activity during the period since the EPA's outside date expired. The buyer-side representation regarding the availability of called capital is accurate: the $22.5 million called from ICM Co-Invest on August 15, 2022, has been applied to the uses described in the capital-call notice and the GP's subsequent reports, and the working-capital reserve of $3.5 million remains on deposit in ICM Co-Invest's account at Atlas National Bank.

V. Financial Exposure Summary During Standstill

A. Capital Position of ICM Cascadia Co-Invest, LP

The following table summarizes the current capital position of ICM Cascadia Co-Invest, LP as of the anticipated MSPA execution date:

Capital calls have been suspended since January 9, 2023, pursuant to the GP's declaration of a Material Impediment Event and issuance of a capital-call suspension notice. The MSPA does not reinstate or authorize any additional capital calls during the standstill period. Any future capital call would require the lifting of the Material Impediment Event declaration and compliance with the LP Agreement's capital-call procedures (Section 4.01), including the provision of at least ten business days' advance written notice to limited partners.

The $22,500,000 in capital called has been applied as follows:

B. Ongoing Costs

During the standstill period, ICM Co-Invest's annualized dormancy and standstill operating expenses are estimated at approximately $185,000, consisting of the items detailed in Section IV.E above. These costs are funded from the working-capital reserve held by the vehicle, which currently stands at approximately $3,500,000 (net of approximately $215,000 in expenses incurred since the commencement of dormancy on January 9, 2023, through year-end 2023).

At the current expense rate, the working-capital reserve is sufficient to fund approximately 17.8 years of dormancy operating expenses, which is more than adequate for any plausible standstill scenario. The working-capital reserve is held in a money market account at Atlas National Bank, N.A. and is earning interest at current money market rates.

With respect to the R&W insurance tolling arrangement, no additional premium is currently required under the January 20, 2023 tolling side letter with Northgate Specialty Insurance Co. However, as discussed in Section IV.C above, the MSPA requires ICM Co-Invest to notify Northgate of the MSPA and to confirm the tolling arrangement on at least an annual basis. Ironside should be prepared for the possibility that Northgate may impose a tolling fee or premium adjustment in connection with the annual renewal, particularly as the tolling period extends beyond two years.

Legal fees incurred by C&H in connection with the MSPA negotiation, ongoing monitoring, and the forthcoming wind-down election analysis are billed as incurred and allocated to Ironside's account under the existing engagement letter.

C. Sunk Costs and Recovery

Of the $22,500,000 in capital called, the following amounts are considered sunk costs and are non-recoverable in a wind-down scenario:

• Placement-agent fee ($1,050,000): Fully earned and paid to Rivermark Capital Markets Inc. upon the initial capital call. Non-refundable under the terms of the placement-agent agreement.

• Organizational expenses ($285,000): Consisting of legal fees, filing fees, and other costs associated with the formation of ICM Co-Invest. Fully expensed and non-recoverable.

• Due-diligence costs and deposits ($12,790,000): Consisting of fees paid to consultants, experts, and advisors retained in connection with the due diligence of Cascadia, including environmental consultants, engineering firms, market research analysts, regulatory counsel, and title/survey providers. These amounts have been fully expensed and are non-recoverable, except to the extent that any refundable deposits remain outstanding (we understand from the GP's records that the refundable deposit component is de minimis).

The following amounts may be partially or fully recoverable in a wind-down scenario:

• Working-capital reserve ($3,500,000): The working-capital reserve is held in cash and is expected to be fully recoverable in a wind-down, net of any remaining operating expenses incurred through the date of dissolution and any wind-down costs (legal fees, accounting fees, final tax filings, etc.). Based on current expense levels, we estimate that the recoverable amount would be approximately $3.0 million to $3.3 million, depending on the timing and duration of the wind-down process.

• R&W insurance premium deposit ($4,875,000): The recoverability of the R&W premium deposit depends on the terms of the Northgate Specialty policy and the tolling side letter. Under certain policy structures, a portion of the premium may be refundable if the underlying transaction is never consummated and the policy is cancelled within a specified period. C&H has reviewed the policy and the tolling side letter and believes that a partial refund may be available, but the amount and timing of any such refund would need to be negotiated with Northgate. We estimate a potential recovery in the range of $1.5 million to $3.0 million, subject to Northgate's underwriting and claims practices.

Total Potentially Recoverable in Wind-Down Scenario. Approximately $3,500,000 (working-capital reserve) plus a potential partial R&W premium refund of $1,500,000 to $3,000,000, for a total estimated recovery in the range of $5,000,000 to $6,500,000 out of $22,500,000 called. The balance of approximately $16,000,000 to $17,500,000 would represent sunk costs in a wind-down scenario.

VI. Interaction of MSPA with Other Key Agreements

The MSPA is one of several interrelated agreements governing the transaction and the co-investment vehicle. This section analyzes the interaction between the MSPA and each of the other key agreements to identify any conflicts, gaps, or areas requiring clarification.

A. LP Agreement of ICM Cascadia Co-Invest, LP

As discussed at length in Section IV.F above, the MSPA expressly preserves all of Ironside's rights under the LP Agreement of ICM Cascadia Co-Invest, LP (dated July 29, 2022). The LP Agreement governs the internal affairs of the co-invest vehicle, including capital-call procedures, distribution mechanics, GP authority and limitations, limited partner protections, and dissolution and wind-down provisions.

The wind-down election right under Section 7.04(c) remains Ironside's paramount protection. Under this provision, if the co-invest vehicle has been dormant for a continuous period of eighteen months, the limited partners holding a majority in interest of the unfunded commitments may elect to wind down the vehicle, in which case the GP is obligated to take all steps necessary to dissolve the vehicle in an orderly manner, distribute any remaining assets to the limited partners, and terminate the vehicle's existence. Because Ironside holds 99.99% of the limited partnership interests in ICM Co-Invest, Ironside can unilaterally trigger the wind-down election.

The GP's quarterly reporting obligations under Section 5.02 of the LP Agreement continue unaffected by the MSPA. Meridian GP IV LLC is required to provide quarterly reports to the limited partners of ICM Co-Invest, including reports on the status of the underlying transaction, the financial condition of the vehicle, any material developments, and the status of all regulatory and insurance matters. Ironside should continue to review these reports carefully and should request supplemental information from th

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
I. Executive Summary
This memorandum analyzes the final-form Mutual Standstill and Preservation Agreement (the "MSPA" or the "Agreement") currently scheduled for execution on or about February 15, 2024, among the parties to the Equity Purchase Agreement dated September 15, 2022, as amended (the "EPA"). We have reviewed the MSPA in its entirety, together with the underlying transactional documents, regulatory filings, and side agreements, and provide below our assessment of the Agreement's key provisions and their implications for Ironside Capital Management LP ("Ironside") and the co-investment vehicle ICM Cascadia Co-Invest, LP ("ICM Co-Invest").
By way of context, the EPA's outside date expired on December 31, 2023, following three successive amendments that extended the original outside date of December 31, 2022. No party exercised termination rights upon expiration. The debt commitment letter issued by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC, which provided for a $975 million senior secured term loan facility and a $150 million revolving credit facility, expired on October 31, 2023, and has not been renewed or replaced. The co-investment vehicle, ICM Cascadia Co-Invest, LP, has been dormant since January 9, 2023, when Meridian Infrastructure GP IV LLC (the "GP") issued a capital-call suspension notice following its declaration of a Material Impediment Event under Section 7.04 of the LP Agreement.
The MSPA was drafted by Calderwood & Harkness LLP ("C&H") on behalf of ICM Co-Invest's interests. We coordinated the drafting and negotiation process with Breckenridge Sloane & Pratt LLP, counsel to Meridian Infrastructure Partners Fund IV, LP ("Fund IV"), whose lead partner on this matter is Charles A. Delacroix; Ridgeway, Ashford & Malone PC, counsel to Cascadia Renewables Holdings, Inc. ("Cascadia") and the selling shareholders, whose lead partner is Nina R. Castellano; and Garvey Lennox LLP, counsel to Timberline Growth Equity Fund III, LP ("Timberline"), whose lead partner is Steven F. Yun. The negotiation was conducted over a period of approximately seven weeks, with principal areas of discussion centering on the scope of the standstill provisions, the treatment of regulatory approvals, the reactivation framework, and — most critically for Ironside — the express preservation of Ironside's independent rights under the LP Agreement and the Side Letter.
Overall Assessment. The MSPA adequately preserves Ironside's rights while maintaining optionality for either a reactivation of the transaction or an orderly wind-down of the co-investment vehicle. The Agreement strikes an appropriate balance: it prevents sellers from seeking alternative buyers and prevents buyer parties from walking away unilaterally, while simultaneously ensuring that Ironside is not locked into an indefinite commitment. Certain provisions merit ongoing monitoring, particularly those relating to the preservation of the FERC Section 203 approval (which is at risk of lapsing on June 15, 2024), the status of the R&W insurance policy tolling arrangement, and the approaching 18-month dormancy trigger date under the LP Agreement (July 9, 2024), which will ripen Ironside's independent wind-down election right. We address each of these matters in detail below.
II. Background and Procedural Context
A. Transaction Overview
The transaction at issue involves the proposed acquisition of 100% of the outstanding equity interests of Cascadia Renewables Holdings, Inc. ("Cascadia" or the "Target"), an Oregon corporation that owns and operates a diversified portfolio of renewable energy and water infrastructure assets throughout the Pacific Northwest. Cascadia's asset base comprises fourteen hydroelectric generating facilities, six wind farm installations, and three water-treatment concession operations located across the states of Oregon, Washington, and Idaho. The acquisition was to be effected through Cascadia Acquisition Corp. (the "Buyer"), a Delaware corporation formed for the purpose of the transaction and owned jointly by Fund IV and ICM Co-Invest.
The aggregate enterprise value established under the EPA is $1,950,000,000, representing an implied EV/EBITDA multiple of approximately 14.1x based on Cascadia's fiscal year 2021 EBITDA of approximately $138 million. This valuation was established following extensive due diligence conducted between March and August 2022, including independent appraisals of the hydroelectric and wind assets by Morin Paulson Energy Advisors LLC, a market study of the Pacific Northwest renewable energy landscape prepared by Corinth Infrastructure Research, and an analysis of the water-treatment concession portfolio prepared by Clearwater Municipal Advisory Group.
The total equity commitment under the transaction structure was $1,050,000,000, allocated between the two buyer vehicles as follows:
• Meridian Infrastructure Partners Fund IV, LP: $750,000,000 (representing 71.43% of total equity)
• ICM Cascadia Co-Invest, LP: $300,000,000 (representing 28.57% of total equity)
The remainder of the enterprise value ($900,000,000 in debt financing plus approximately $75,000,000 in cash on Cascadia's balance sheet) was to be funded through a senior secured credit facility arranged by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC, consisting of a $975,000,000 senior secured term loan and a $150,000,000 revolving credit facility.
The selling shareholders are:
• Timberline Growth Equity Fund III, LP (62% of Cascadia's equity), a growth equity fund managed by Timberline Capital Partners LLC, with Hugh Callister as Managing Partner;
• Weir Family Trust (18% of Cascadia's equity), with Jonathan M. Weir, Cascadia's Chief Executive Officer, serving as trustee; and
• Management Rollover Pool (20% of Cascadia's equity), consisting of approximately fifteen members of Cascadia's senior management team, of whom approximately 50% were expected to roll over a portion of their equity into the post-acquisition capital structure.
The Co-Investment Allocation Agreement dated July 29, 2022 (the "Allocation Agreement") governs the economic relationship between Fund IV and ICM Co-Invest, including the allocation of costs, expenses, and economic returns on a pro rata basis (71.43%/28.57%). ICM Co-Invest was established as a single-purpose co-investment vehicle with Ironside as its 99.99% limited partner, structured to provide Ironside's institutional investors with direct exposure to the Cascadia opportunity at favorable economics (no management fee, no carried interest to Meridian GP IV LLC, as set forth in the Side Letter dated July 29, 2022).
B. Concession Renegotiation and Dormancy
The transaction's progression toward closing was materially disrupted by an unforeseen regulatory development affecting one of Cascadia's core concession assets.
On October 28, 2022, approximately six weeks after execution of the EPA, the Portland Metropolitan Water District (the "PMWD") issued formal written notice to Cascadia of its intent to renegotiate the terms of the Bull Run Filtration Project water-treatment concession. This concession, originally executed in approximately 2018, is a 40-year agreement under which Cascadia operates and maintains the Bull Run Water Filtration Plant, one of the largest municipal water-treatment facilities in the Pacific Northwest. The concession generates annual revenue of approximately $64 million, representing a significant component of Cascadia's overall revenue base.
The PMWD's notice cited the enactment of Oregon Senate Bill 1567 (2022) ("SB 1567"), which amended certain provisions of Oregon's public utility contracting framework and granted municipal water districts enhanced authority to renegotiate concession terms upon a finding that existing terms are inconsistent with revised public interest standards. SB 1567 was signed into law on July 15, 2022, approximately two months before the EPA was executed, but its implications for existing concession agreements were not fully analyzed in the initial due diligence period. The PMWD's notice indicated that the District's Board of Commissioners had voted to invoke SB 1567's renegotiation provisions and that the District expected to commence good-faith negotiations with Cascadia within 90 days.
On November 10, 2022, Meridian Infrastructure GP IV LLC notified Ironside of the PMWD's renegotiation notice, characterizing the development as a material adverse development with the potential to affect the enterprise value of the Target and the economics of the proposed acquisition. In the ensuing weeks, the parties to the EPA entered into discussions regarding the appropriate course of action. Ironside, through C&H, emphasized the need for a thorough analysis of the concession renegotiation's potential financial impact before proceeding to closing.
On January 9, 2023, Meridian GP IV LLC formally declared a Material Impediment Event under Section 7.04 of the LP Agreement of ICM Cascadia Co-Invest, LP, and simultaneously issued a capital-call suspension notice, effective immediately. The declaration cited the uncertainty surrounding the Bull Run concession renegotiation and its potential impact on the Target's financial projections and enterprise value. Upon the issuance of the capital-call suspension notice, ICM Co-Invest entered a state of dormancy, with no further capital calls permitted until the Material Impediment Event is resolved or waived.
The EPA was subsequently amended on three occasions to extend the outside date and preserve the transaction framework:
• First Amendment (November 22, 2022): Extended the outside date from December 31, 2022 to March 31, 2023, to allow time for initial assessment of the concession renegotiation.
• Second Amendment (March 15, 2023): Extended the outside date from March 31, 2023 to June 30, 2023, in light of ongoing uncertainty regarding the scope and timeline of the PMWD's renegotiation demands.
• Third Amendment (June 28, 2023): Extended the outside date from June 30, 2023 to December 31, 2023, reflecting the parties' continued desire to preserve the transaction while the concession renegotiation remained unresolved. This amendment also included updated bring-down representations from the sellers regarding Cascadia's financial condition and ordinary-course operations.
Despite these extensions, the concession renegotiation between Cascadia and the PMWD remained unresolved as of December 31, 2023, and the EPA's outside date was permitted to expire without further extension and without any party exercising its termination rights.
C. Expiration of Key Transaction Documents
The period following the Third Amendment saw the expiration of several key transaction documents, creating the legal and commercial circumstances that necessitated the MSPA:
Debt Commitment Letter. On October 31, 2023, the commitment letter issued by Atlas National Bank, N.A. and Pinnacle Credit Partners LLC expired. The commitment letter, which provided for a $975,000,000 senior secured term loan facility and a $150,000,000 revolving credit facility, had been extended once on April 30, 2023, at a cost of an extension fee of $2,437,500 (paid by Fund IV). Atlas National Bank and Pinnacle Credit Partners declined to extend the commitment letter a second time, citing changes in credit market conditions and the continued uncertainty regarding the concession renegotiation. As of the date of this memorandum, no replacement financing has been arranged, and any reactivation of the transaction would require a new debt commitment on terms reflecting current market conditions.
EPA Outside Date. On December 31, 2023, the EPA's outside date, as most recently extended by the Third Amendment, expired. No party delivered a termination notice pursuant to the EPA's termination provisions. The failure of any party to exercise termination rights created a degree of legal ambiguity regarding the status of the EPA — specifically, whether the agreement remains operative but with an expired closing deadline, or whether it should be treated as having lapsed. The MSPA is designed, in part, to address this ambiguity by establishing a mutually agreed framework for the treatment of the EPA during the standstill period.
FERC Section 203 Approval. The Federal Energy Regulatory Commission ("FERC") granted approval of the proposed acquisition under Section 203 of the Federal Power Act on December 15, 2022, in Docket No. EC22-143-000. FERC approvals of this nature are typically valid for a limited period, and the original approval was set to expire on December 15, 2023. Following a request by counsel, FERC staff issued a letter extending the effectiveness of the approval to June 15, 2024. As of the date of this memorandum, no further extension has been requested. If the FERC approval lapses, a new application would need to be filed, which would entail additional filing fees, regulatory counsel costs, and an estimated timeline of six to twelve months for new approval. The MSPA addresses this risk by imposing obligations on the parties to use reasonable efforts to seek a further extension or prepare for re-filing.
OPUC Proceedings. The Oregon Public Utility Commission ("OPUC") proceeding related to the transaction (Docket No. UM-2287, filed October 14, 2022) has been stayed at the joint request of the parties since February 2023. The stay remains in effect as of the date of this memorandum. The MSPA provides that the stay shall continue and that no party shall withdraw the underlying application.
CFIUS Clearance. The Committee on Foreign Investment in the United States ("CFIUS") review process was completed in the fourth quarter of 2022, with CFIUS effectively granting clearance by allowing the statutory review period to expire without initiating a formal investigation. No further action is required with respect to CFIUS, and the clearance status is preserved.
D. Need for the MSPA
The expiration of the EPA's outside date, coupled with the lapse of the debt commitment letter and the ongoing uncertainty surrounding the Bull Run concession renegotiation, created a situation in which the transaction was neither clearly alive nor clearly dead. Without a formal agreement among the parties, any party could have attempted to walk away from the transaction, sought alternative counterparties, or initiated litigation to recover sunk costs or enforce perceived rights under the EPA. This legal vacuum posed particular risks for Ironside:
• Risk of Unilateral Seller Action. Absent a standstill, the selling shareholders — and in particular Timberline, as the 62% majority holder — could have sought alternative acquirers for Cascadia's equity or assets, potentially depriving Ironside and Fund IV of the opportunity to consummate the transaction on favorable terms if the concession renegotiation reached a satisfactory resolution.
• Risk of Unilateral Meridian Action. Without a clear framework, Meridian GP IV LLC could have taken steps to terminate or restructure the co-invest vehicle in a manner that was adverse to Ironside's interests, including potentially seeking to reallocate the co-invest commitment to Fund IV's own account.
• Regulatory Preservation. The FERC approval, OPUC proceeding, and R&W insurance tolling arrangement all required affirmative action to preserve, and the absence of a governing agreement created a risk that one or more parties might fail to take the necessary steps.
The MSPA is designed to address each of these risks by creating a structured framework that preserves the transaction while providing a clear pathway for either reactivation or orderly unwinding.
Ironside's key concerns entering the MSPA negotiations, as communicated to C&H, were: (a) preservation of the $22,500,000 in capital already called and deployed; (b) protection against unfunded commitment exposure of $277,500,000; and (c) preservation of optionality to pursue wind-down of the co-invest vehicle under LP Agreement Section 7.04(c), which provides for an 18-month dormancy trigger — a period that will expire on July 9, 2024. As discussed in detail below, the MSPA adequately addresses each of these concerns.
III. Parties to the MSPA
The MSPA is entered into among the following parties, each of which is a signatory to the Agreement:
1. Cascadia Acquisition Corp., a Delaware corporation formed as the buyer entity for the purposes of the transaction, wholly owned by Fund IV and ICM Co-Invest in proportion to their respective equity commitments (71.43% and 28.57%, respectively). Cascadia Acquisition Corp. has had no material operations since its formation and serves solely as the acquisition vehicle.
2. Meridian Infrastructure Partners Fund IV, LP, a Delaware limited partnership, acting through its general partner, Meridian Infrastructure GP IV LLC, a Delaware limited liability company. The authorized representatives of Meridian Infrastructure GP IV LLC for purposes of the MSPA are David R. Hargreaves (Managing Partner), Lillian Fong (Partner, Infrastructure Investments), and Graham Whitfield (Partner, Legal & Compliance).
3. ICM Cascadia Co-Invest, LP, a Delaware limited partnership formed as the co-investment vehicle for the transaction. Ironside Capital Management LP is the 99.99% limited partner of ICM Co-Invest. The general partner of ICM Co-Invest is Meridian Infrastructure GP IV LLC, acting in its capacity as general partner pursuant to the LP Agreement dated July 29, 2022.
4. Cascadia Renewables Holdings, Inc., an Oregon corporation and the Target of the proposed acquisition. Cascadia is represented for purposes of the MSPA by its Chief Executive Officer, Jonathan M. Weir, and its Chief Financial Officer, Sandra K. Llewellyn.
5. Timberline Growth Equity Fund III, LP, a Delaware limited partnership and the 62% majority selling shareholder of Cascadia. Timberline is managed by Timberline Capital Partners LLC, with Hugh Callister serving as Managing Partner.
6. Weir Family Trust, a trust organized under the laws of the State of Oregon, holding 18% of Cascadia's equity, with Jonathan M. Weir serving as trustee.
7. Management Rollover Participants, consisting of certain members of Cascadia's senior management team who hold, in the aggregate, 20% of Cascadia's equity. The management rollover participants are party to the MSPA collectively, pursuant to a joinder agreement executed by each participant and attached to the MSPA as Exhibit A.
Each party's execution of the MSPA is subject to customary corporate and partnership authorization requirements, and the representations and warranties in the MSPA include confirmations of due authority, valid existence, and absence of conflicts with other material agreements.
IV. Analysis of Key Provisions
A. Standstill Period and Duration
The MSPA establishes an initial standstill period of twelve (12) months from the date of execution. Assuming execution occurs as currently scheduled on February 15, 2024, the initial standstill period would run through approximately February 15, 2025.
The Agreement provides for an automatic six-month extension of the standstill period if any party delivers a Reactivation Notice (as discussed in Section IV.D below) prior to the expiration of the initial twelve-month period. If a Reactivation Notice is delivered and the automatic extension is triggered, the standstill period would extend through approximately August 15, 2025, unless earlier terminated in accordance with the Agreement's termination provisions.
With respect to early termination, the MSPA distinguishes between the initial twelve-month period and any extension period. During the initial twelve-month period, termination of the MSPA may be effected only by mutual written consent of all parties. This "lock-up" provision ensures that no single party can unilaterally withdraw from the standstill framework during the initial period, providing stability and predictability for all parties during the critical window in which the concession renegotiation may resolve. Following the expiration of the initial twelve-month period (including during any automatic extension), any party may terminate the MSPA upon ninety (90) days' prior written notice to all other parties. This notice period is designed to provide an orderly transition out of the standstill framework and to permit the parties to take protective action with respect to regulatory approvals, insurance arrangements, and entity maintenance before the standstill terminates.
Analysis for Ironside. The twelve-month initial standstill period is appropriately calibrated to preserve the transaction framework while the concession renegotiation between Cascadia and the Portland Metropolitan Water District proceeds toward resolution. We note that the PMWD's renegotiation process has now been underway for approximately sixteen months, and while we understand from Meridian's most recent quarterly report (Q3 2023) that discussions are ongoing, no tentative framework or revised terms have been disclosed to the buyer parties. The twelve-month standstill period provides sufficient time for a resolution to emerge, but also ensures that the standstill does not extend indefinitely.
Critically, Ironside should be aware that its independent wind-down election right under LP Agreement Section 7.04(c) will ripen on July 9, 2024 — approximately five months after the anticipated MSPA execution date and approximately seven months before the expiration of the initial twelve-month standstill period. As discussed in detail in Section IV.F below, the MSPA contains an express carve-out preserving this right. Accordingly, Ironside's wind-down election right operates independently of and is not subordinated to the MSPA's standstill provisions. This gives Ironside the ability to exit the co-invest vehicle even during the initial standstill period if the transaction remains stalled and Ironside determines that wind-down is in its best interest.
B. Mutual Standstill on Termination Rights
The core operative provision of the MSPA is the mutual standstill on termination rights. Under this provision, all parties agree, during the standstill period, not to:
(a) exercise, purport to exercise, or threaten to exercise any termination right under the EPA (as amended by the First, Second, and Third Amendments), whether arising from the expiration of the outside date or otherwise;
(b) assert, claim, or argue in any forum that the EPA has terminated by reason of the expiration of the outside date on December 31, 2023, or by reason of any other circumstance arising prior to the date of the MSPA;
(c) take any action inconsistent with the continued existence of the EPA in a "suspended" state, as described below; or
(d) commence, threaten, or participate in any litigation, arbitration, mediation, or other dispute resolution proceeding with respect to the EPA, the transactions contemplated thereby, or the rights and obligations of any party thereunder, except for proceedings commenced solely to enforce the terms of the MSPA itself.
The MSPA characterizes the EPA as preserved in a "suspended" state during the standstill period. In this suspended state, the representations, warranties, covenants, and conditions set forth in the EPA (as amended) remain operative in principle, such that they could be reinstated and relied upon in the event of a reactivation. However, the parties' performance obligations under the EPA — including, most significantly, the obligation to consummate the closing — are tolled for the duration of the standstill period. The tolling of performance obligations means that no party is in breach of the EPA by reason of failure to close or failure to satisfy closing conditions during the standstill period.
Ironside Observation. This provision is, on its face, balanced and bilateral. The practical effect is that Ironside (through ICM Co-Invest) cannot force a closing or termination of the EPA during the standstill period. However, the corresponding benefit is substantial: the selling shareholders — and in particular Timberline, which holds 62% of Cascadia and which, in the absence of the MSPA, could have sought alternative acquirers — cannot walk away from the transaction or solicit competing offers during the same period. This is an important protection for the buyer parties' transaction opportunity and for the value of the diligence and regulatory work already completed.
We also note that the mutual litigation standstill provision in subparagraph (d) above is expressly limited to disputes arising under or with respect to the EPA. It does not affect Ironside's separate contractual rights under the LP Agreement vis-à-vis Meridian GP IV LLC, including Ironside's right to enforce the GP's reporting obligations, to challenge any GP action that exceeds the scope of its authority under the LP Agreement, or to exercise the wind-down election right under Section 7.04(c). This distinction is reinforced by the express carve-out discussed in Section IV.F below.
C. Preservation of Transaction Documents and Regulatory Approvals
The MSPA contains a comprehensive set of preservation obligations designed to maintain the integrity of the transaction framework and the regulatory approvals that have been obtained or are pending.
Transaction Documents. All parties agree to use commercially reasonable efforts to preserve all executed transaction documents, including the EPA (as amended), the disclosure schedules, all ancillary agreements (including the management equity plan, the transition services agreement, and the escrow agreement), and all third-party consents and estoppel certificates obtained in connection with the transaction. The parties further agree not to take any action that would impair the validity or enforceability of any such document, and to cooperate in good faith with any reasonable requests by other parties to maintain or update such documents as necessary to preserve their effectiveness.
Regulatory Preservation. The MSPA addresses the status of each regulatory approval or proceeding as follows:
FERC Section 203 Approval (Docket EC22-143-000). The parties acknowledge that FERC granted approval of the proposed acquisition under Section 203 of the Federal Power Act on December 15, 2022, and that this approval was extended by FERC staff letter to June 15, 2024. The MSPA requires Meridian (as the lead buyer party) and Cascadia (as the Target) to use reasonable efforts to seek a further extension of the FERC approval beyond June 15, 2024, and, in the event that an extension is not obtainable, to prepare for and submit a new application for FERC approval. The costs of any such extension request or re-filing are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis in accordance with the Allocation Agreement.
OPUC (Docket UM-2287). The parties acknowledge that the OPUC proceeding related to the transaction has been stayed at the joint request of the parties since February 2023. The MSPA provides that the parties shall take all reasonable actions to maintain the stay in effect for the duration of the standstill period and shall not withdraw the underlying application or take any action that would result in the dismissal of the proceeding. The parties further agree that, in the event the OPUC signals an intent to dismiss the proceeding for lack of prosecution or inactivity, the parties shall cooperate in filing such motions or responses as may be necessary to preserve the proceeding.
CFIUS. The parties acknowledge that no further CFIUS action is required. CFIUS clearance was effectively obtained in the fourth quarter of 2022 when the statutory review period expired without CFIUS initiating a formal investigation or imposing any mitigation conditions. The MSPA preserves the clearance status by confirming that no party has taken or will take any action that would trigger a new CFIUS review.
R&W Insurance Policy. The MSPA addresses the status of the representations and warranties insurance policy issued by Northgate Specialty Insurance Co. (Policy No. NSW-RI-2022-09814), which provides coverage of up to $195 million. The policy was placed on a tolling basis pursuant to a tolling side letter executed on January 20, 2023, at approximately the time ICM Co-Invest entered dormancy. Under the tolling arrangement, the policy's coverage period and claims reporting deadlines are suspended for the duration of the tolling period, effectively preserving the availability of coverage in the event the transaction is reactivated and closed. The MSPA requires ICM Co-Invest (as the named insured) to continue to maintain the tolling arrangement with Northgate Specialty and to notify Northgate of the execution of the MSPA and the terms of the standstill. The MSPA further requires that the tolling arrangement be renewed or confirmed on at least an annual basis for the duration of the standstill period.
D&O Tail Policy. The directors' and officers' liability tail policy issued by Sentinel Directors & Officers Underwriters Inc. in connection with the transaction remains in effect. The MSPA provides that Cascadia shall be responsible for maintaining this policy and shall not allow it to lapse during the standstill period.
Analysis for Ironside. The FERC approval lapse risk is the most significant regulatory concern during the standstill period. The current extended approval is effective through June 15, 2024, which is only approximately four months after the anticipated MSPA execution date. The MSPA's "reasonable efforts" standard for FERC extension or re-filing is appropriate — a "best efforts" standard would have been preferable from Ironside's perspective, but would have been resisted by Meridian and the sellers as overly burdensome given the uncertainty surrounding the transaction's future. Ironside should monitor the June 15, 2024 deadline closely and should request that Meridian provide specific updates on FERC extension efforts in its next quarterly report (expected March 2024). In the event that the FERC approval lapses and a new application is required, the estimated cost to Ironside (at its 28.57% share) would be meaningful, and the additional timeline of six to twelve months for new approval could extend the standstill period and delay any potential reactivation significantly.
We also note that the R&W insurance tolling arrangement, while currently in effect at no additional premium cost, may require renewal or result in additional premium obligations as the tolling period extends. Ironside should be prepared for the possibility that Northgate Specialty may impose additional conditions or fees upon learning of the MSPA and the continued dormancy of the transaction. Any such costs would be allocated pro rata between Fund IV and ICM Co-Invest under the MSPA's expense provisions.
D. Reactivation Framework and Triggers
The MSPA establishes a structured framework for the potential reactivation of the transaction. Under this framework, any party to the MSPA may deliver a written notice (a "Reactivation Notice") proposing the resumption of the transaction, subject to the satisfaction or waiver of the following conditions:
(a) Resolution or Material Advancement of the Bull Run Concession Renegotiation. The Reactivation Notice must demonstrate that the renegotiation between Cascadia and the Portland Metropolitan Water District with respect to the Bull Run Filtration Project concession has been resolved, or that the renegotiation has advanced to a stage at which the parties can reasonably assess the financial impact of the revised concession terms on Cascadia's enterprise value and projected cash flows. This condition may be waived by the buyer parties (Fund IV and ICM Co-Invest, each acting in their sole discretion) if they determine, in good faith, that the status of the concession renegotiation does not preclude proceeding with the transaction.
(b) Identification of Replacement Debt Financing. The Reactivation Notice must identify a source or sources of replacement debt financing on commercially reasonable terms sufficient to fund the debt component of the acquisition. The original debt commitment from Atlas National Bank and Pinnacle Credit Partners expired on October 31, 2023, and any reactivation would require a new financing arrangement. The MSPA does not specify the terms on which replacement financing must be obtained, but the requirement that such financing be on "commercially reasonable terms" provides a meaningful threshold that must be met before the parties can be required to proceed.
(c) Confirmation of Regulatory Approvals. The Reactivation Notice must confirm that all required regulatory approvals (including FERC Section 203 approval, OPUC approval, and any other federal, state, or local approvals required for the closing) remain valid and in effect, or that such approvals can reasonably be expected to be obtained within a reasonable timeframe. This condition recognizes the risk that one or more regulatory approvals may have lapsed during the standstill period and ensures that the parties are not required to proceed with a closing in the absence of necessary regulatory clearances.
(d) Agreement on Updated Economic Terms. The Reactivation Notice must be accompanied by a proposal for any updates or adjustments to the economic terms of the transaction that the delivering party believes are warranted in light of changed circumstances since the execution of the EPA. This may include adjustments to the aggregate enterprise value (for example, if Cascadia's financial performance has deteriorated or the revised concession terms reduce expected future cash flows), adjustments to the equity/debt split, or adjustments to the economics of the co-invest structure. The requirement that all parties agree on any updated economic terms effectively provides each party with a consent right over material changes to the deal.
Upon delivery of a Reactivation Notice, all parties have sixty (60) calendar days in which to negotiate and agree on a comprehensive reactivation plan addressing each of the foregoing conditions. If the parties are unable to reach agreement on a reactivation plan within this sixty-day period, the Reactivation Notice lapses without effect, and any party may thereafter deliver a new Reactivation Notice or, if the initial standstill period has expired, exercise its termination rights under the MSPA.
Analysis for Ironside. The reactivation framework is appropriately structured to protect Ironside's interests in several important respects. First, the conditions to reactivation — particularly the requirement of resolution or material advancement of the concession renegotiation and the identification of replacement debt financing — ensure that Ironside's capital cannot be called or committed until substantive commercial and financing conditions have been satisfied. The MSPA does not permit a reactivation to proceed on the basis of vague assurances or preliminary indications; rather, it requires concrete demonstrable progress on the key issues that have caused the transaction to stall.
Second, and critically, the reactivation framework does not automatically reinstate capital-call obligations against Ironside. Even if a Reactivation Notice is delivered and a reactivation plan is agreed upon, any new capital call against ICM Co-Invest would need to comply with the requirements of the LP Agreement, including Section 4.01 (governing capital-call procedures and notices), and would require the lifting of the Material Impediment Event declaration made by the GP on January 9, 2023. Ironside is not obligated to fund additional capital merely because a reactivation plan has been agreed upon; the LP Agreement's capital-call protections remain fully operative.
Third, the requirement that all parties agree on any updated economic terms effectively gives Ironside a de facto veto over any material changes to the transaction economics. If, for example, Meridian were to propose a reactivation on terms that significantly reduced the expected return to ICM Co-Invest — whether through a reduced enterprise value, less favorable debt terms, or a restructured equity split — Ironside would have the right to withhold its consent and effectively block the reactivation on those terms. This consent right, combined with Ironside's independent wind-down election right under LP Agreement Section 7.04(c), gives Ironside substantial leverage in any reactivation negotiation.
E. Expense Allocation During Standstill
The MSPA establishes the following framework for the allocation of costs and expenses during the standstill period:
Party-Specific Costs. Each party to the MSPA bears its own legal, advisory, and administrative costs incurred during the standstill period, including counsel fees, financial advisory fees, and internal costs. This is consistent with the general principle that each party is responsible for its own transaction costs, as set forth in the EPA.
Entity Maintenance Costs. Ongoing entity-maintenance costs for Cascadia Acquisition Corp. and ICM Cascadia Co-Invest, LP are borne by their respective partners and members. For ICM Co-Invest, the estimated annual cost of maintaining the vehicle in dormancy is approximately $185,000, broken down as follows:
• Fund administration services (Kendrick Thorne & Associates LLP): approximately $75,000 per annum
• Delaware registered agent fees (Cascade Systems): approximately $2,500 per annum
• Delaware franchise tax: approximately $15,000 per annum
• Annual audit (conducted by Albright Pearce LLP): approximately $65,000 per annum
• K-1 preparation and tax compliance: approximately $27,500 per annum
These costs are modest in the context of Ironside's overall investment program and represent the minimum expenditure necessary to maintain the co-invest vehicle in good standing and in compliance with its reporting and tax obligations.
R&W Insurance Tolling Costs. If Northgate Specialty Insurance Co. imposes any additional premium, tolling fee, or other charge in connection with the continued tolling of the R&W insurance policy, such costs are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis (71.43% and 28.57%, respectively), consistent with the Allocation Agreement.
Regulatory Re-Filing Costs. If it becomes necessary to re-file for FERC approval or to take any action with respect to the OPUC proceeding during the standstill period, the associated costs (including regulatory filing fees, regulatory counsel fees, and any required expert or consultant fees) are to be allocated between Fund IV and ICM Co-Invest on a pro rata basis (71.43%/28.57%), consistent with the Allocation Agreement.
Analysis for Ironside. The expense allocation framework is consistent with the existing Allocation Agreement and the Side Letter and does not impose any disproportionate cost burden on Ironside or ICM Co-Invest. Ironside's direct dormancy costs remain modest at approximately $185,000 per annum. The potential incremental costs from regulatory re-filings (FERC or OPUC) or insurance tolling charges are proportionally shared between Fund IV and ICM Co-Invest, which is appropriate given the co-investment structure.
However, we note that the MSPA does not specifically address the allocation of costs associated with obtaining a new debt commitment letter in the event of a reactivation. The original debt commitment letter was obtained by Meridian on behalf of the buyer parties, and the extension fee of $2,437,500 was paid by Fund IV. If a reactivation were to proceed and a new debt commitment were required, the associated arrangement fees, commitment fees, and other costs could be substantial — potentially in the range of $15 million to $25 million or more, based on current market conditions. Ironside should ensure that any such costs are allocated proportionally in accordance with the Allocation Agreement and are not borne disproportionately by the co-invest. C&H raised this issue during the MSPA negotiation, and while Breckenridge Sloane (Meridian's counsel) indicated that the Allocation Agreement would govern such costs, we recommend that Ironside seek an express confirmation from Meridian on this point in connection with any reactivation discussion.
F. Preservation of Ironside's LP Agreement Rights
This provision is the single most important protection for Ironside in the MSPA and was the subject of extensive negotiation by C&H on Ironside's behalf.
The MSPA contains an express provision (Section 8.03 of the Agreement) stating that nothing in the Agreement shall be deemed to modify, waive, amend, supplement, or impair any rights, remedies, or protections of any limited partner of ICM Cascadia Co-Invest, LP under the LP Agreement of ICM Cascadia Co-Invest, LP (dated July 29, 2022) or the Side Letter (dated July 29, 2022, between Meridian Infrastructure GP IV LLC and Ironside Capital Management LP), in each case as may be amended from time to time. The provision further specifies, without limitation, that the following rights are expressly preserved:
(a) Wind-Down Election Right (LP Agreement §7.04(c)). Ironside's right to elect the wind-down of ICM Cascadia Co-Invest, LP if the vehicle has been dormant (as defined in the LP Agreement) for a continuous period of eighteen (18) months. The 18-month dormancy period commenced on January 9, 2023 (the date of the GP's capital-call suspension notice) and will ripen on July 9, 2024.
(b) Quarterly Reporting Rights. Ironside's right to receive quarterly status reports from the GP, including reports on the status of the transaction, the financial condition of the co-invest vehicle, and any material developments affecting the vehicle's investments or commitments.
(c) Information and Audit Rights. Ironside's right to access the books and records of ICM Co-Invest, to request information from the GP regarding the vehicle's operations and investments, and to cause an independent audit of the vehicle's financial statements.
(d) Capital-Call Protections. Ironside's protection against additional capital calls during the pendency of a Material Impediment Event, as declared by the GP on January 9, 2023. The GP may not issue a capital call to the limited partners of ICM Co-Invest until the Material Impediment Event has been resolved or waived in accordance with the procedures set forth in the LP Agreement.
The MSPA further provides that the standstill obligations imposed by the Agreement do not create, and shall not be construed to create, any obligation on the part of Ironside (or any other limited partner of ICM Co-Invest) to participate in a reactivated transaction on modified terms, or to consent to any modification of the co-invest economics (including without limitation the carried interest allocation, preferred return, commitment amount, or investment scope) that would require limited partner consent under the LP Agreement or the Side Letter.
Analysis for Ironside. This carve-out is the cornerstone of the MSPA from Ironside's perspective. Without it, Ironside would risk being locked into the standstill framework for up to eighteen months (twelve months initial period plus the six-month automatic extension) without the ability to pursue a wind-down or exit from the co-invest vehicle. The express preservation of the Section 7.04(c) wind-down election right ensures that Ironside retains ultimate leverage: if the transaction remains stalled and the concession renegotiation does not resolve in a satisfactory manner, Ironside can elect to wind down the co-invest vehicle beginning on July 9, 2024, regardless of the status of the MSPA standstill period.
We note that this carve-out was the subject of significant negotiation. Breckenridge Sloane, on behalf of Meridian, initially proposed language that would have subordinated Ironside's LP Agreement rights to the MSPA during the initial standstill period, arguing that permitting Ironside to exercise the wind-down election during the standstill would undermine the stability of the transaction framework. C&H rejected this position, noting that Ironside's wind-down election right is a fundamental protection negotiated at the time of the co-invest formation and that subordinating it to the MSPA would represent a material diminution of Ironside's rights without consideration. After several rounds of negotiation, Meridian's counsel agreed to the express carve-out in its current form, with the understanding that Ironside would provide Meridian with reasonable advance notice (not less than thirty days) before delivering a wind-down election notice under the LP Agreement.
G. Confidentiality and Non-Solicitation
The MSPA incorporates standard mutual confidentiality provisions that are substantially consistent with the confidentiality obligations set forth in the EPA. All parties agree to maintain the confidentiality of the terms of the MSPA, the existence and terms of the standstill arrangement, and all information exchanged among the parties during the standstill period, subject to customary exceptions for disclosures required by law, regulation, or legal process, disclosures to professional advisors, and disclosures to limited partners and investors in the ordinary course of fund reporting.
In addition, the MSPA contains reciprocal non-solicitation provisions:
Seller-Side Non-Solicitation. During the standstill period, the selling shareholders (Timberline, the Weir Family Trust, and the management rollover participants) agree not to, directly or indirectly, solicit, initiate, encourage, or entertain any inquiry, proposal, or offer from any third party relating to the acquisition, disposition, or transfer of Cascadia's equity securities or all or substantially all of Cascadia's assets. The selling shareholders further agree to promptly notify the buyer parties of any unsolicited inquiry or approach and to refrain from providing any confidential information to third parties in connection with any such inquiry.
Buyer-Side Non-Solicitation. During the standstill period, the buyer parties (Fund IV, ICM Co-Invest, and Cascadia Acquisition Corp.) agree not to pursue, negotiate, or enter into any alternative investment transaction in the Pacific Northwest renewable energy and water infrastructure sector that would directly compete with the Cascadia opportunity. This restriction is expressly limited to the Pacific Northwest geographic region (defined for this purpose as the states of Oregon, Washington, and Idaho) and to the specific sectors in which Cascadia operates (hydroelectric generation, wind energy, and water-treatment concessions).
Analysis for Ironside. The seller-side non-solicitation provision provides meaningful protection for the buyer parties' transaction opportunity. In the absence of this provision, Timberline — which, as a growth equity fund, may be under pressure from its own investors to realize value and return capital — could have sought alternative acquirers for its 62% stake in Cascadia during the standstill period. The non-solicitation effectively preserves the buyer parties' exclusivity with respect to the Cascadia opportunity.
The buyer-side non-solicitation is narrow in scope and should not materially affect Ironside's broader infrastructure investment program, which encompasses approximately $3.2 billion in committed capital across three co-investment vehicles spanning multiple geographies and asset classes. The restriction is limited to directly competing investments in Pacific Northwest renewable energy and water infrastructure, and does not extend to investments in other geographies, other infrastructure sub-sectors (e.g., transportation, telecommunications, social infrastructure), or passive portfolio holdings.
H. Governing Law and Dispute Resolution
The MSPA is governed by the laws of the State of Delaware, without regard to conflicts-of-law principles. This is consistent with the governing law provisions of the EPA, the LP Agreement, and the other key transaction documents, all of which are governed by Delaware law.
Any dispute arising under or in connection with the MSPA is subject to the exclusive jurisdiction of the Delaware Court of Chancery, or, if the Court of Chancery declines to accept jurisdiction, the Complex Commercial Litigation Division of the Delaware Superior Court. Each party irrevocably consents to personal jurisdiction in such courts and waives any objection to venue. The parties have not agreed to arbitration, which is also consistent with the dispute resolution framework of the EPA.
The MSPA includes an express provision acknowledging that a breach of the standstill obligations by any party would cause irreparable harm to the non-breaching parties that would not be adequately compensable by monetary damages, and each party agrees that specific performance, injunctive relief, and other equitable remedies are appropriate remedies for any such breach, without the necessity of proving actual damages or posting a bond.
Analysis for Ironside. The governing law and dispute resolution provisions are consistent with the existing contractual framework and present no concerns for Ironside. Delaware is a familiar and predictable forum for complex commercial disputes, and the Court of Chancery has extensive experience adjudicating disputes involving private equity transactions, co-investment structures, and standstill agreements. The specific performance provision is a standard feature of standstill agreements and ensures that any breach — for example, a seller's decision to entertain a competing offer in violation of the non-solicitation, or a buyer party's attempt to terminate the EPA in violation of the standstill — can be restrained by court order.
I. Representations and Warranties in the MSPA
The MSPA contains a limited set of representations and warranties from each party, appropriate for an agreement of this nature:
All Parties Represent. Each party to the MSPA represents and warrants that: (i) it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization; (ii) it has full power and authority to execute, deliver, and perform its obligations under the MSPA; (iii) the execution, delivery, and performance of the MSPA have been duly authorized by all necessary corporate, partnership, or trust action; (iv) the MSPA constitutes a legal, valid, and binding obligation of such party, enforceable against it in accordance with its terms, subject to customary bankruptcy and equitable exceptions; and (v) the execution, delivery, and performance of the MSPA do not conflict with or result in a breach of any material agreement to which such party is bound or any applicable law, regulation, or order.
Selling Shareholders Represent. In addition to the foregoing, each selling shareholder represents and warrants that: (i) as of the date of the MSPA, no negotiations, discussions, or other communications are pending or in progress with any third party regarding the potential acquisition, disposition, or transfer of Cascadia's equity securities or assets; (ii) no selling shareholder has entered into any agreement, letter of intent, or term sheet with any third party regarding any such transaction; and (iii) Cascadia continues to conduct its business in the ordinary course, consistent with past practice.
Buyer Parties Represent. Fund IV and ICM Co-Invest each represent and warrant that: (i) the co-investment vehicle remains in good standing under the laws of the State of Delaware and has not been dissolved or wound down; and (ii) the capital called to date ($22,500,000 for ICM Co-Invest) remains available within the vehicle and has not been returned, distributed, or otherwise disposed of, except as applied to organizational expenses, placement fees, insurance premiums, due-diligence costs, and working-capital reserves as previously disclosed and authorized.
Analysis for Ironside. The selling shareholder representations regarding the absence of competing negotiations and the continued ordinary-course operation of Cascadia's business provide additional comfort that the transaction opportunity remains viable and has not been compromised by unauthorized seller activity during the period since the EPA's outside date expired. The buyer-side representation regarding the availability of called capital is accurate: the $22.5 million called from ICM Co-Invest on August 15, 2022, has been applied to the uses described in the capital-call notice and the GP's subsequent reports, and the working-capital reserve of $3.5 million remains on deposit in ICM Co-Invest's account at Atlas National Bank.
V. Financial Exposure Summary During Standstill
A. Capital Position of ICM Cascadia Co-Invest, LP
The following table summarizes the current capital position of ICM Cascadia Co-Invest, LP as of the anticipated MSPA execution date:
Capital calls have been suspended since January 9, 2023, pursuant to the GP's declaration of a Material Impediment Event and issuance of a capital-call suspension notice. The MSPA does not reinstate or authorize any additional capital calls during the standstill period. Any future capital call would require the lifting of the Material Impediment Event declaration and compliance with the LP Agreement's capital-call procedures (Section 4.01), including the provision of at least ten business days' advance written notice to limited partners.
The $22,500,000 in capital called has been applied as follows:
B. Ongoing Costs
During the standstill period, ICM Co-Invest's annualized dormancy and standstill operating expenses are estimated at approximately $185,000, consisting of the items detailed in Section IV.E above. These costs are funded from the working-capital reserve held by the vehicle, which currently stands at approximately $3,500,000 (net of approximately $215,000 in expenses incurred since the commencement of dormancy on January 9, 2023, through year-end 2023).
At the current expense rate, the working-capital reserve is sufficient to fund approximately 17.8 years of dormancy operating expenses, which is more than adequate for any plausible standstill scenario. The working-capital reserve is held in a money market account at Atlas National Bank, N.A. and is earning interest at current money market rates.
With respect to the R&W insurance tolling arrangement, no additional premium is currently required under the January 20, 2023 tolling side letter with Northgate Specialty Insurance Co. However, as discussed in Section IV.C above, the MSPA requires ICM Co-Invest to notify Northgate of the MSPA and to confirm the tolling arrangement on at least an annual basis. Ironside should be prepared for the possibility that Northgate may impose a tolling fee or premium adjustment in connection with the annual renewal, particularly as the tolling period extends beyond two years.
Legal fees incurred by C&H in connection with the MSPA negotiation, ongoing monitoring, and the forthcoming wind-down election analysis are billed as incurred and allocated to Ironside's account under the existing engagement letter.
C. Sunk Costs and Recovery
Of the $22,500,000 in capital called, the following amounts are considered sunk costs and are non-recoverable in a wind-down scenario:
• Placement-agent fee ($1,050,000): Fully earned and paid to Rivermark Capital Markets Inc. upon the initial capital call. Non-refundable under the terms of the placement-agent agreement.
• Organizational expenses ($285,000): Consisting of legal fees, filing fees, and other costs associated with the formation of ICM Co-Invest. Fully expensed and non-recoverable.
• Due-diligence costs and deposits ($12,790,000): Consisting of fees paid to consultants, experts, and advisors retained in connection with the due diligence of Cascadia, including environmental consultants, engineering firms, market research analysts, regulatory counsel, and title/survey providers. These amounts have been fully expensed and are non-recoverable, except to the extent that any refundable deposits remain outstanding (we understand from the GP's records that the refundable deposit component is de minimis).
The following amounts may be partially or fully recoverable in a wind-down scenario:
• Working-capital reserve ($3,500,000): The working-capital reserve is held in cash and is expected to be fully recoverable in a wind-down, net of any remaining operating expenses incurred through the date of dissolution and any wind-down costs (legal fees, accounting fees, final tax filings, etc.). Based on current expense levels, we estimate that the recoverable amount would be approximately $3.0 million to $3.3 million, depending on the timing and duration of the wind-down process.
• R&W insurance premium deposit ($4,875,000): The recoverability of the R&W premium deposit depends on the terms of the Northgate Specialty policy and the tolling side letter. Under certain policy structures, a portion of the premium may be refundable if the underlying transaction is never consummated and the policy is cancelled within a specified period. C&H has reviewed the policy and the tolling side letter and believes that a partial refund may be available, but the amount and timing of any such refund would need to be negotiated with Northgate. We estimate a potential recovery in the range of $1.5 million to $3.0 million, subject to Northgate's underwriting and claims practices.
Total Potentially Recoverable in Wind-Down Scenario. Approximately $3,500,000 (working-capital reserve) plus a potential partial R&W premium refund of $1,500,000 to $3,000,000, for a total estimated recovery in the range of $5,000,000 to $6,500,000 out of $22,500,000 called. The balance of approximately $16,000,000 to $17,500,000 would represent sunk costs in a wind-down scenario.
VI. Interaction of MSPA with Other Key Agreements
The MSPA is one of several interrelated agreements governing the transaction and the co-investment vehicle. This section analyzes the interaction between the MSPA and each of the other key agreements to identify any conflicts, gaps, or areas requiring clarification.
A. LP Agreement of ICM Cascadia Co-Invest, LP
As discussed at length in Section IV.F above, the MSPA expressly preserves all of Ironside's rights under the LP Agreement of ICM Cascadia Co-Invest, LP (dated July 29, 2022). The LP Agreement governs the internal affairs of the co-invest vehicle, including capital-call procedures, distribution mechanics, GP authority and limitations, limited partner protections, and dissolution and wind-down provisions.
The wind-down election right under Section 7.04(c) remains Ironside's paramount protection. Under this provision, if the co-invest vehicle has been dormant for a continuous period of eighteen months, the limited partners holding a majority in interest of the unfunded commitments may elect to wind down the vehicle, in which case the GP is obligated to take all steps necessary to dissolve the vehicle in an orderly manner, distribute any remaining assets to the limited partners, and terminate the vehicle's existence. Because Ironside holds 99.99% of the limited partnership interests in ICM Co-Invest, Ironside can unilaterally trigger the wind-down election.
The GP's quarterly reporting obligations under Section 5.02 of the LP Agreement continue unaffected by the MSPA. Meridian GP IV LLC is required to provide quarterly reports to the limited partners of ICM Co-Invest, including reports on the status of the underlying transaction, the financial condition of the vehicle, any material developments, and the status of all regulatory and insurance matters. Ironside should continue to review these reports carefully and should request supplemental information from th

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