Contract analysis

Section 2.1. Agreement to Purchase and Sell Upon the terms and subject to the conditions set forth in this Agreement, the Underwriters hereby agree to purchase from CSIA, and CSIA hereby agrees to sell and deliver to the Underwriters, all (but not less than all) of the Two Hundred Twenty Million Dollars ($220,000,000) in aggregate principal amount of the Bonds. The obligation of the Underwriters to purchase the Bonds

Section 2.2. Purchase Price The aggregate purchase price for the Bonds shall be Two Hundred Seventeen Million Three Hundred Sixty Thousand Dollars ($217,360,000) (the "Purchase Price"), calculated as follows: The Bonds shall be priced at 99.25% of par value, resulting in an aggregate original issue discount of One Million Six Hundred Fifty Thousand Dollars ($1,650,000) (calculated as $220,000,000 multiplied by 0.0075

Section 2.3. Terms of the Bonds The Bonds shall have the following terms: (a) Bond Title. Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A . (b) Aggregate Principal Amount. Two Hundred Twenty Million Dollars ($220,000,000). (c) Tax Status. Interest on the Bonds shall be excludable from gross income of the owners thereof for federal income tax purposes pursuant to Section 103 of the

Section 2.4. Security for the Bonds (a) Revenue Pledge. The Bonds shall be secured by a pledge of net water-treatment revenues under the Revenue Pledge Agreement, on a parity basis with all other outstanding revenue bonds of CSIA that are secured by such net water-treatment revenues. (b) Pledged Revenues. The pledged revenues securing the Bonds include: (i) wholesale water treatment service charges payable by the fou

Section 2.5. Ratings The Bonds have received the following ratings from the Rating Agencies: The maintenance of such ratings in effect as of the Closing Date is a condition to the obligations of the Underwriters under this Agreement.

Section 2.6. Use of Proceeds The net Bond proceeds of Two Hundred Seventeen Million Three Hundred Sixty Thousand Dollars ($217,360,000) shall be applied as follows: In addition, an amount of Four Million Five Hundred Ten Thousand Dollars ($4,510,000) shall be deposited into the Capitalized Interest Fund (included within the costs of issuance allocation under the Indenture) to pay interest on the Bonds during the cons

Section 2.7. Delivery The Bonds shall be delivered in book-entry form through the facilities of DTC on the Closing Date. The Bonds shall be authenticated by the Trustee prior to delivery. Payment of the Purchase Price shall be made by to or for the account of the Trustee, in accordance with wire instructions to be provided by PNTC to the Representative not later than two (2) business days prior to the Closing Date. D

Section 3.1. Organization and Authority CSIA is a CSIA has full legal right, power, and authority under applicable law to: (a) adopt Resolution No. 2023-014; (b) enter into this Agreement, the Indenture, the First Supplemental Indenture, the Revenue Pledge Agreement, the Continuing Disclosure Agreement, the Tax Regulatory Agreement, the Escrow Deposit Agreement, and the DSRF Surety Bond Agreement (collectively, the "

Section 3.2. Authorization The Board of CSIA duly adopted Resolution No. 2023-014 on May 9, 2023, at a regular meeting duly called and held, at which a quorum was present and acting throughout, authorizing the issuance of the Bonds and the execution and delivery of all Transaction Documents in connection therewith. The Resolution remains in full force and effect and has not been amended, modified, supplemented, or re

Section 3.3. No Conflicts or Violations The execution and delivery by CSIA of the Transaction Documents, the issuance, sale, and delivery of the Bonds, the pledge of net water-treatment revenues, and the performance by CSIA of its obligations under the Transaction Documents will not: (a) conflict with or constitute a breach of or default under CSIA's enabling statute (Chapter 43.160A RCW); (b) conflict with or result

Section 3.4. Governmental Approvals and Permits All governmental approvals, authorizations, consents, licenses, and permits required for the issuance and sale of the Bonds, the execution and delivery of the Transaction Documents, and the construction of the Project have been obtained, are in full force and effect, and are not subject to any pending or, to CSIA's knowledge, threatened proceeding for revocation, modifi

Section 3.5. Litigation There is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, public board, or body, pending or, threatened against or affecting CSIA, that: (a) would in any manner challenge or seek to restrain or enjoin the issuance, sale, or delivery of the Bonds; (b) would in any way contest or affect the validity of the Bonds, this Agreement, or any other Tr

Section 3.6. Financial Statements and Information The audited financial statements of CSIA for the fiscal year ended December 31, 2022 (the "FY 2022 Financial Statements"), audited by Hargrove & Associates CPAs, PLLC (engagement partner: Victoria L. Fong, CPA), have been prepared in accordance with generally accepted accounting principles ("GAAP") as applicable to governmental entities, consistently applied, and the

Section 3.7. Official Statement (a) Preliminary Official Statement. The Preliminary Official Statement dated June 26, 2023, as of its date and as of the date hereof, did not and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 3.8. Tax-Exempt Status CSIA has complied and will continue to comply with the requirements of and the Treasury Regulations promulgated thereunder, as are necessary to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes. Without limiting the generality of the foregoing, CSIA shall comply with the covenants, representations, and procedures set forth in the Tax Regul

Section 3.9. Compliance with Rate Covenant CSIA's FY 2022 net pledged revenues of Four Hundred Twelve Million Six Hundred Thousand Dollars ($412,600,000) satisfy the rate covenant requirement of at least one hundred forty percent (1.40x) of annual aggregate parity debt service of Two Hundred Seventy-Eight Million Four Hundred Thousand Dollars ($278,400,000), producing a debt service coverage ratio of The additional b

Section 3.10. The Project (a) Design-Build Contract. CSIA has entered into the Design-Build Contract with Northtide Environmental Engineering, Inc. (Garrett L. Henriksen, Chief Executive Officer), executed on March 10, 2023, under GMP Contract No. CSIA-DB-2023-001, establishing a guaranteed maximum price of One Hundred Ninety-Three Million Five Hundred Thousand Dollars ($193,500,000) for the design, engineering, and

Section 3.11. No Default CSIA is not, and to its knowledge has never been, in default under any Transaction Document, any existing bond indenture or resolution, any material agreement to which it is a party, or any order, rule, regulation, or decree of any court or governmental authority. No event has occurred and is continuing that constitutes, or with the passage of time or the giving of notice (or both) would cons

Section 3.12. Continuing Disclosure CSIA has complied in all material respects with all prior continuing disclosure undertakings entered into pursuant to SEC Rule 15c2-12 during the five-year period preceding the date hereof. CSIA has timely filed all required annual financial information and operating data with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system ("EMMA") and has tim

Section 4.1. Organization and Authority Meridian Capital Partners LLC is a duly organized and validly existing limited liability company formed under the laws of the State of Delaware, is registered as a broker-dealer with the SEC and the Financial Industry Regulatory Authority ("FINRA"), and is registered as a municipal securities dealer with the MSRB. Dralvecen Fenn & Co., Inc. is a duly organized and validly exist

Section 4.2. No Conflicts The execution and delivery of this Agreement by the Underwriters and the performance by the Underwriters of their obligations hereunder will not: (a) violate any provision of the organizational documents of either Underwriter; (b) violate any law, rule, regulation, order, or decree of any governmental body or agency having jurisdiction over either Underwriter; or (c) constitute a breach of,

Section 4.3. Public Offering The Underwriters intend to make a bona fide public offering of all of the Bonds at the initial offering prices or yields set forth in Exhibit A hereto. The Underwriters reserve the right to change such initial offering prices as they may deem necessary or advisable in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers (including dealers depositin

Section 4.4. MSRB Rule G-17 Disclosure The Representative has provided to CSIA, in a letter delivered to CSIA's Executive Director and General Counsel prior to the date hereof, the disclosures required by Municipal Securities Rulemaking Board Rule G-17, including disclosures regarding the roles and responsibilities of the Underwriters, the nature of the arm's-length commercial relationship between CSIA and the Underw

Section 4.5. Receipt of Official Statement The Underwriters have received and reviewed the Preliminary Official Statement dated June 26, 2023, and acknowledge that CSIA has deemed such POS "final" within the meaning of SEC Rule 15c2-12(b)(1), subject to permitted omissions. The Underwriters will receive the Final Official Statement dated September 5, 2023, and will distribute copies thereof to purchasers and potentia

Section 5.1. General Conditions The obligation of the Underwriters to purchase, accept delivery of, and pay for the Bonds on the Closing Date shall be subject to the due performance by CSIA of its obligations and agreements to be performed hereunder on or prior to the Closing Date and to the satisfaction (or waiver by the Representative) of each of the following conditions on or prior to the Closing Date. In the even

Section 5.2. Documents to Be Delivered at Closing At or prior to the Closing, CSIA shall cause the following documents to be delivered to the Underwriters: (a) Approving Legal Opinion of Bond Counsel. The joint approving legal opinion of and Calderwood & Harkness LLP, as Co-Bond Counsel, dated the Closing Date, addressed to CSIA, in form and substance satisfactory to the Underwriters and Underwriters' Counsel, opinin

Section 5.3. No Material Adverse Change Since the date of the most recent audited financial statements of CSIA ( ), there shall not have occurred any material adverse change in the financial condition, results of operations, properties, or prospects of CSIA, or in the amount or availability of the pledged revenues, that would materially adversely affect the ability of CSIA to perform its obligations under the Transac

Section 5.4. No Litigation As of the Closing Date, no litigation, proceeding, or investigation shall have been instituted, pending, or, to CSIA's knowledge, threatened before any court, public board, or body that would: (a) seek to restrain or enjoin the issuance, sale, or delivery of the Bonds; (b) contest the validity, legality, or enforceability of the Bonds or any Transaction Document; (c) contest the power or au

Section 5.5. Market Conditions No event shall have occurred, and no condition shall exist, that, in the of the Representative, would make it impracticable or inadvisable to proceed with the public offering or sale of the Bonds or the enforcement of contracts for the sale of the Bonds at the contemplated offering prices, including, without limitation, any of the following: (a) a general banking moratorium declared by

Section 5.6. Accuracy of Official Statement As of the Closing Date, the Official Statement shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and no event shall have occurred since the date of the Official Statement that would

Section 6.1. Official Statement CSIA shall provide or cause to be provided to the Representative, copies of the Final Official Statement dated September 5, 2023, in such quantity as the Representative shall reasonably request (but not fewer than two hundred (200) copies), in order to enable the Underwriters to comply with SEC Rule 15c2-12 and the rules of the MSRB. CSIA hereby authorizes and consents to the use and d

Section 6.2. Amendments to Official Statement If, at any time prior to the earlier of (i) twenty-five (25) days after the end of the Underwriting Period or (ii) the Closing Date plus sixty (60) days, any event occurs, or any fact or condition becomes known to CSIA, that would cause the Official Statement (as then amended or supplemented) to contain any untrue statement of a material fact or to omit to state a materia

Section 6.3. Blue Sky / Legal Investment CSIA shall cooperate with the Underwriters and Underwriters' Counsel in qualifying or registering the Bonds for offer and sale under the applicable securities or "blue sky" laws of such jurisdictions as the Representative may reasonably request, and shall use reasonable efforts to continue such qualification in effect so long as required for the distribution of the Bonds; prov

Section 6.4. Continuing Disclosure CSIA hereby covenants and agrees that it will comply with and carry out all of its obligations under the Continuing Disclosure Agreement dated as of the Closing Date, entered into by CSIA and PNTC, as Dissemination Agent, for the benefit of the beneficial owners of the Bonds, in accordance with SEC Rule 15c2-12. Without limiting the generality of the foregoing, CSIA shall: (a) file

Section 6.5. Tax Covenant CSIA hereby covenants to comply with the Tax Regulatory Agreement and Certificate executed on October 15, 2023, and to take all actions necessary or desirable to maintain the exclusion of interest on the Bonds from gross income for federal income tax purposes under Section 103 of the IRC. Without limiting the foregoing, CSIA shall: (a) not take or permit any action that would cause the Bonds

Section 6.6. Use of Proceeds CSIA shall apply the proceeds of the Bonds solely for the purposes described in the Official Statement and the Indenture, specifically: (a) the financing of the design, engineering, construction, equipping, and commissioning of the Project; and (b) the payment of costs of issuance, including capitalized interest. CSIA shall not use or permit the use of Bond proceeds for any purpose other

Section 6.7. Rate Covenant Compliance CSIA hereby covenants to establish, fix, prescribe, revise, and collect rates, fees, and charges for its water treatment services that, together with other available pledged revenues, will produce net pledged revenues in each fiscal year equal to not less than one hundred forty percent (1.40x) of annual aggregate parity debt service payable in such fiscal year. In the event that

Section 7.1. Indemnification by the Issuer CSIA agrees to indemnify, defend, and hold harmless the Underwriters and their respective officers, directors, members, managers, employees, agents, and each person who controls an Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (each, an "Underwriter Indemnified Party"),

Section 7.2. Indemnification by the Underwriters The Underwriters, in their respective proportions set forth below, agree to indemnify, defend, and hold harmless CSIA and its officers, Board members, employees, agents, and each person who controls CSIA within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (each, an "Issuer Indemnif

Section 7.3. Procedures for Indemnification (a) Notice. Any party seeking indemnification under this Section 7 (the "Indemnified Party") shall promptly notify the party from whom indemnification is sought (the "Indemnifying Party") in writing of any claim, action, suit, or proceeding with respect to which indemnification is sought; provided, however, that the failure to give such prompt notice shall not relieve the I

Section 7.4. Contribution (a) General. If the indemnification provided for in Sections 7.1 or 7.2 is unavailable or insufficient (other than by reason of the exceptions provided therein) to hold harmless any Indemnified Party, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative ben

Section 8.1. Issuer's Expenses CSIA shall pay or cause to be paid, from Bond proceeds or other available funds, the following expenses incurred in connection with the issuance and sale of the Bonds: (a) Costs of issuance in an estimated aggregate amount of One Million Eight Hundred Seventy Thousand Dollars ($1,870,000), including the following: (i) Bond Counsel fees and expenses (Pryor Crestfield LLP and Calderwood &