Contract analysis

I. Financial Position of CBWTP. As of June 30, 2023, based on the unaudited financial statements prepared by Hargrove & Tillman, CPAs, CBWTP had: (i) total assets of approximately Nine Million Eight Hundred Forty-Seven Thousand Dollars ($9,847,000), consisting of Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) in cash held in CBWTP's operating account at Pacific Cascade Bank, N.A., Three Hundred Eight

Section 1.1. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below: "Agreement" means this Voluntary Dissolution Agreement of Columbia Basin Water Treatment Partners, LLC, as it may be amended, modified, or supplemented from time to time in accordance with its terms. "Capital Accounts" means the capital accounts of the Members as established and maintained in accordance

Section 1.2. Terms Defined in the JV Agreement. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the JV Agreement, unless the context clearly requires otherwise.

Section 1.3. Rules of Construction. The following rules of construction shall apply to this Agreement: (a) The headings and captions of the Articles and Sections of this Agreement are inserted for convenience of reference only and shall not be considered a part of this Agreement or affect in any way the meaning or interpretation hereof. (b) Words importing the singular number shall include the plural and vice versa,

ARTICLE II DISSOLUTION VOTE AND AUTHORIZATION

Section 2.1. Governing Board Approval. The Members acknowledge and agree that the voluntary dissolution of CBWTP constitutes a "Major Decision" as defined in Section 5.4 of the JV Agreement, requiring the affirmative vote of at least four (4) of the five (5) members of the Governing Board at a duly noticed special meeting or by unanimous written consent in lieu of such meeting. Each Member hereby agrees to cause its

Section 2.2. Member Consent. Each Member, in its capacity as a member of CBWTP holding its respective membership interest in the Company (CSIA: 55%; Pinnacle: 45%), hereby irrevocably consents to the voluntary dissolution of the Company on the terms and conditions set forth in this Agreement. Such consent shall be deemed given as of the Dissolution Date and shall be irrevocable upon execution of this Agreement by bot

Section 2.3. Authorization. Each Member hereby represents and warrants to the other Member that it has obtained all internal authorizations, approvals, and consents necessary under its governing documents and applicable law to execute and deliver this Agreement and to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing: (a) CSIA represents and warrants that it has duly au

ARTICLE III FILING OF CERTIFICATE OF DISSOLUTION

Section 3.1. Certificate of Dissolution. Within ten (10) business days following the Dissolution Date, the Winding-Up Agent shall prepare and file a Certificate of Dissolution with the Washington Secretary of State in accordance with the applicable provisions of the Washington Limited Liability Company Act (Chapter 25.15 RCW), in substantially the form attached hereto as Exhibit A. The Winding-Up Agent shall use comm

Section 3.2. EIN and Tax Filings. The Winding-Up Agent shall be responsible for the timely preparation and filing of all final federal and state tax returns for CBWTP (EIN 88-3421076), including the Company's final Form 1065 (U.S. Return of Partnership Income) and any corresponding Washington State excise tax returns and business and occupation tax returns. The Winding-Up Agent shall also take such other actions as m

Section 3.3. Notification to Third Parties. Promptly following the filing of the Certificate of Dissolution, and in any event within fifteen (15) business days following the Effective Date, the Winding-Up Agent shall provide written notice of the dissolution of the Company to all known creditors, contract counterparties, governmental agencies, and other Persons with whom the Company has material business relationship

ARTICLE IV APPOINTMENT OF WINDING-UP AGENT

Section 4.1. Designation. The Members hereby appoint [__] as the Winding-Up Agent to administer the orderly dissolution, winding up, and liquidation of the Company's affairs in accordance with the terms of this Agreement, the JV Agreement, and the Washington Limited Liability Company Act (Chapter 25.15 RCW). [Drafting Note for CSIA's Review: Calderwood & Harkness proposes that the Winding-Up Agent be CSIA or a CSIA-d

Section 4.2. Powers and Duties. The Winding-Up Agent shall have full power and authority to take any and all actions that are necessary, appropriate, or advisable to wind down the Company's affairs in an orderly and expeditious manner, including, without limitation, the authority to: (a) collect, marshal, and take possession of all Company assets, wherever located, including the approximately Eight Million Four Hundr

Section 4.3. Compensation. The Winding-Up Agent shall be entitled to receive reasonable compensation for services rendered during the Winding-Up Period, in an amount to be agreed upon by the Members, which compensation shall be paid from Company assets as an expense of the wind-down prior to any distributions to the Members under Article VII. If the Winding-Up Agent is CSIA or a CSIA-designated representative, such c

Section 4.4. Standard of Care; Liability. The Winding-Up Agent shall discharge its duties hereunder in good faith and with the care that a reasonably prudent person in a like position would exercise under similar circumstances. The Winding-Up Agent shall not be liable to any Member for any action taken or omitted to be taken in good faith in connection with the performance of its duties hereunder, except for liabilit

Section 4.5. Term. The Winding-Up Agent's authority and appointment hereunder shall terminate upon the completion of all wind-down activities contemplated by this Agreement, including the making of all final distributions to the Members under Article VII and the filing of all final tax returns, but in no event later than one hundred eighty (180) days after the Dissolution Date, unless such period is extended by mutua

ARTICLE V TERMINATION OF GROUND LEASE AND REVERSION TO CSIA

Section 5.1. Termination of Ground Lease. Effective upon the Effective Date, the Ground Lease dated as of November 2, 2021, by and between CSIA, as lessor, and CBWTP, as lessee, for the 14.7-acre Facility Site located at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, recorded with the Thurston County Auditor as Recording No. 2021-1102-004788, shall automatically terminate in accordance with t

Section 5.2. Reversion to CSIA. Upon the termination of the Ground Lease as provided in Section 5.1, all right, title, and interest of the Company in and to the Facility Site, including any improvements, fixtures, or appurtenances thereon or thereto (to the extent any exist), shall automatically revert to CSIA, free and clear of any claims, liens, encumbrances, or other interests of Pinnacle, CBWTP, or any third part

Section 5.3. Recording of Termination. The Winding-Up Agent shall, within thirty (30) days following the Effective Date, cause a Memorandum of Termination of Ground Lease, in substantially the form attached hereto as Exhibit C, or, alternatively, a quitclaim deed from CBWTP to CSIA, to be duly executed, acknowledged, and recorded with the Thurston County Auditor, at the Company's expense, evidencing the termination o

Section 5.4. Pinnacle's Acknowledgment. Pinnacle hereby acknowledges and irrevocably agrees that: (a) it has no right, title, or interest, whether legal or equitable, in the Facility Site, the Ground Lease, or the real property subject thereto; (b) the Facility Site is, and at all times has been, owned by CSIA in its capacity as a Washington state governmental authority; and (c) the Facility Site shall not be treated

ARTICLE VI SETTLEMENT OF PINNACLE FUNDING DEFAULT

Section 6.1. Acknowledgment of Default. Pinnacle hereby acknowledges and agrees that it failed to fund its Second Tranche capital contribution of Four Million Fifty Thousand Dollars ($4,050,000) by the March 31, 2023 deadline established by the Governing Board's capital call notice dated March 1, 2023, and that the sixty (60) day cure period provided under Section 8.2 of the JV Agreement expired on June 13, 2023, wit

Section 6.2. Settlement Amount. In full and final settlement of all claims, demands, and causes of action arising from or related to Pinnacle's failure to fund the Second Tranche capital contribution (the "Pinnacle Default Amount" of Four Million Fifty Thousand Dollars ($4,050,000)), including any claims for interest, penalties, consequential damages, lost profits, or other damages, Pinnacle shall [pay to CSIA / have

Section 6.3. Offset Right. CSIA shall have the right, without further action or consent of Pinnacle, to offset the Settlement Amount against any distributions otherwise payable to Pinnacle under Article VII of this Agreement. To the extent the Settlement Amount exceeds the distributions that would otherwise be payable to Pinnacle, Pinnacle shall pay the excess to CSIA in immediately available funds within ten (10) bu

Section 6.4. Withdrawal of Force Majeure Claim. Pinnacle hereby withdraws, and irrevocably agrees not to reassert in any forum, its claim that force majeure under Section 11.4 of the JV Agreement excused Pinnacle's obligation to fund the Second Tranche capital contribution. Pinnacle acknowledges that Section 11.4 of the JV Agreement expressly excludes from the definition of "Force Majeure Events" any "delays in obtai

Section 6.5. Waiver of §8.2 Remedies. Solely in connection with, and contingent upon the consummation of, the dissolution and settlement contemplated by this Agreement, and only upon Pinnacle's payment in full of the Settlement Amount (whether by direct payment or offset under Section 6.3), CSIA hereby waives its rights under Section 8.2 of the JV Agreement to: (a) dilute Pinnacle's membership interest on a pro rata

ARTICLE VII DISTRIBUTION OF COMPANY ASSETS

Section 7.1. Payment of Liabilities. Prior to any distribution to the Members, the Winding-Up Agent shall pay, or make adequate provision for the payment of, all debts, liabilities, and obligations of the Company, including, without limitation: (a) all outstanding accounts payable, including the approximately Two Hundred Fourteen Thousand Dollars ($214,000) in accounts payable to Westmark Environmental Consulting, In

Section 7.2. Reserves. The Winding-Up Agent may, in its reasonable discretion, establish and maintain a reserve fund in an amount that the Winding-Up Agent determines to be reasonably necessary to provide for the payment of contingent, conditional, or unknown liabilities of the Company that may arise during or after the Winding-Up Period. Such reserve shall not exceed Three Hundred Thousand Dollars ($300,000), and sh

Section 7.3. Distribution in Accordance with Capital Accounts. Following the payment of all Company liabilities pursuant to Section 7.1, the establishment of any reserves pursuant to Section 7.2, and the deduction of the Settlement Amount from Pinnacle's share in accordance with Article VI, the remaining Company assets shall be distributed to the Members in proportion to their respective positive Capital Account bala

Section 7.4. Form of Distribution. All distributions to the Members shall be made in cash by wire transfer of immediately available funds from the Company's operating account at Pacific Cascade Bank, N.A. (which held a balance of approximately Eight Million Four Hundred Twelve Thousand Dollars ($8,412,000) as of June 30, 2023) to accounts designated in writing by each Member. In the event that Company cash assets are

Section 7.5. Final Distribution. The Winding-Up Agent shall make final distributions to the Members within thirty (30) days following the completion of all wind-down activities contemplated by this Agreement, including the payment or adequate provision for all Company liabilities, the release of any reserves established under Section 7.2, and the finalization of all Capital Account adjustments. Upon the making of fin

ARTICLE VIII TERMINATION OF MANAGEMENT FEE AND PINNACLE'S ROLE AS MANAGER

Section 8.1. Termination of Manager Designation. Effective as of the Dissolution Date, Pinnacle's designation as Manager of CBWTP under Article IV of the JV Agreement is hereby terminated in all respects. From and after the Dissolution Date, Pinnacle shall have no management authority, operational responsibility, decision-making power, or fiduciary duty with respect to the Company, its assets, or its affairs. All man

Section 8.2. Management Fee. The Management Fee, as defined in Section 4.5 of the JV Agreement, calculated at three percent (3%) of total construction costs of the Facility (which, based on estimated total construction costs of Forty-Five Million Dollars ($45,000,000), would have equaled One Million Three Hundred Fifty Thousand Dollars ($1,350,000)), shall not be payable to Pinnacle. The Members acknowledge and agree

Section 8.3. Transition of Records. Within fifteen (15) business days following the Dissolution Date, Pinnacle shall deliver to the Winding-Up Agent, at Pinnacle's sole cost and expense, complete and accurate copies of all Company books, records, documents, files, correspondence, and data in Pinnacle's possession, custody, or control, whether in physical or electronic form, including, without limitation: (a) all envi

ARTICLE IX TERMINATION OF THIRD-PARTY CONTRACTS AND ENGAGEMENTS

Section 9.1. Environmental Consulting Agreement. The engagement of Westmark Environmental Consulting, Inc. (principal consultant: Dr. Anita Farooq), retained by the Company as of January 10, 2022, for the provision of environmental consulting services in connection with the Facility, including the Phase I Environmental Site Assessment, soil sampling, groundwater analysis, and support for the Phase II Environmental Im

Section 9.2. Accounting Engagement. The engagement of Hargrove & Tillman, CPAs (engagement partner: Laura Svensson, CPA) shall continue beyond the Dissolution Date for the limited purposes of: (a) preparing the Company's final federal and state tax returns, including the final Form 1065 and corresponding Schedule K-1s; (b) preparing the final capital account reconciliation and any adjusted Capital Account calculation

Section 9.3. Project Finance Commitment. The Members acknowledge and confirm that the Twenty-Seven Million Dollar ($27,000,000) project finance credit facility commitment issued by Pacific Cascade Bank, N.A. (Reference No. PCB-PF-2022-0417, lead banker: Thomas Rennick, Senior Vice President, Public Finance Division) expired by its terms on August 15, 2023, without any draws having been made thereunder. No principal,

Section 9.4. Permitting Applications. Any and all pending applications, submissions, or filings with the Thurston County Department of Environmental Health, including the stalled Phase II Environmental Impact Determination for the Facility Site, and any other governmental agencies relating to the Facility or the Facility Site, shall be formally withdrawn by the Winding-Up Agent promptly following the Dissolution Date

Section 9.5. No Other Material Contracts. The Members represent and warrant that, to the best of their knowledge, the contracts and engagements described in Sections 9.1 through 9.4 and listed on Exhibit D constitute all material contracts, engagements, and commitments to which the Company is a party as of the date hereof. Neither Member has entered into, or authorized the Company to enter into, any construction cont

ARTICLE X SURVIVAL OF NON-COMPETE COVENANT

Section 10.1. Continuation of Non-Compete. Notwithstanding the dissolution of CBWTP, the termination of the JV Agreement, and the consummation of the transactions contemplated by this Agreement, the non-competition covenant set forth in Section 9.1 of the JV Agreement (the "Non-Compete Covenant"), which restricts Pinnacle and its affiliates from engaging in competing water-treatment projects within a seventy-five (75

Section 10.2. Enforcement. CSIA shall retain the right to enforce the Non-Compete Covenant directly against Pinnacle, including Pinnacle's officers Richard Prumvane and Cynthia Voss to the extent such individuals are bound by the Non-Compete Covenant under the JV Agreement or any ancillary agreement, and against Pinnacle's affiliates, including Ridgeline Capital Partners, LP and its portfolio companies, in accordance

Section 10.3. Scope. For the avoidance of doubt, the surviving Non-Compete Covenant shall apply within a seventy-five (75) mile radius measured from the Facility Site at 2480 Capitol Boulevard SE, Tumwater, Thurston County, Washington 98501, and shall encompass the design, engineering, construction, ownership, management, and operation of water treatment facilities and wastewater treatment facilities, including advan

Section 11.1. CSIA Release of Pinnacle. Effective upon Pinnacle's payment in full of the Settlement Amount (whether by direct payment or offset under Section 6.3) and Pinnacle's satisfaction of all other obligations under this Agreement, CSIA, on behalf of itself and its officers, directors, board members, employees, agents, representatives, successors, and assigns, hereby irrevocably and unconditionally releases and

Section 11.2. Pinnacle Release of CSIA. Effective upon execution of this Agreement and CSIA's satisfaction of all obligations hereunder, Pinnacle, on behalf of itself, its members (including Ridgeline Capital Partners, LP and Jonathan Kreider), managers, officers (including Richard Prumvane and Cynthia Voss), directors, employees, agents, representatives, attorneys, successors, and assigns, hereby irrevocably and unc