Contract analysis

I. Background — Capital Contribution Structure and First Tranche Funding The JV Agreement establishes total committed capital contributions of Eighteen Million Dollars ($18,000,000), which represents the equity component of the Forty-Five Million Dollar ($45,000,000) total project cost for the Facility. The remaining Twenty-Seven Million Dollars ($27,000,000) of the total project cost is to be funded through project

II. The Capital Call and Pinnacle's Failure to Fund the Second Tranche On March 1, 2023, the Governing Board of CBWTP duly issued a capital call notice (the "Capital Call Notice") to both members, calling the Second Tranche capital contributions in accordance with Article IV and Section 4.3 of the JV Agreement. A copy of the Capital Call Notice is enclosed herewith for reference. The Capital Call Notice was delivered

III. Declaration of Default Under the JV Agreement Pinnacle's failure to fund the Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 payment deadline constitutes a "Member Default" as defined under Article VIII of the JV Agreement. Specifically, Section 8.1 of the JV Agreement provides, in pertinent part: "A 'Member Default' shall be deemed to have occurred w

IV. Commencement of the Sixty-Day Cure Period Under Section 8.2 Pursuant to Section 8.2 of the JV Agreement, upon delivery of this Default Notice, Pinnacle is afforded a cure period of sixty (60) calendar days within which to cure the Member Default by funding its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) in full, together with any accrued default interest as may be appli

V. Reservation of Rights and Available Remedies CSIA expressly reserves all of its rights, remedies, and elections under the JV Agreement, at law, and in equity, arising from or related to Pinnacle's Member Default, including without limitation the following remedies available to CSIA as the non-defaulting member upon expiration of the sixty-day cure period without cure, as set forth in Section 8.2 of the JV Agreemen

VI. Demand for Immediate Action CSIA hereby demands that Pinnacle immediately take all steps necessary to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) within the sixty-day cure period established by this Default Notice — that is, no later than June 13, 2023. Time is of the essence with respect to the cure of this Member Default. CSIA further requests that Pinnacle,

VII. Governing Law This Default Notice is delivered pursuant to, and shall be governed by and construed in accordance with, the laws of the State of Washington, without regard to its conflict of laws principles, consistent with the governing law provision set forth in Section 12.8 of the JV Agreement.

VIII. Direction of Communications All communications regarding this matter should be directed to the undersigned at the following address: Oliver Mackenzie, Partner Calderwood & Harkness LLP 901 Fifth Avenue, Suite 3200 Seattle, WA 98164 Telephone: (206) 448-7200 Email: omackenzie@calderwoodharkness.com CSIA's General Counsel, David Tanaka, should be copied on all correspondence directed to or concerning CSIA, at the